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| David
Seaton's Energy Links® Editorial
The attack on the Hotel al-Rashid in
Baghdad with US Deputy Defense Secretary Paul Wolfowitz in temporary residence
was audacious and cost effective. It appears that the attackers simply
parked an old generator trailer filled with rockets attached to a timer
pointed at the hotel and left the scene with ample time to escape. According
to the New York Times, twenty rockets hit the hotel and an Army lieutenant
colonel was killed.
The attack was the number one story, all over the world, in all the media, throughout the day. Wolfowitz's trip to Iraq itself was part of a media-propaganda blitz by the American administration aimed at showing that the US occupation was successfully stabilizing the situation in Iraq. It is difficult to estimate what it must have cost to airlift a Deputy Defense Secretary to Iraq with fully coordinated media coverage and to blanket Sadam's hometown, Tikrit with enough security for Wolfowitz to walk its streets, but it must have cost many, many millions of dollars: a public relations tour de force. In contrast the battered old generator trailer, minus generator, was probably taken from a scrap metal yard and a can of blue paint was invested in sprucing it up The rockets employed surely gathered from the seemingly endless ordinance lying around Iraq. A screwdriver, a pair of pliers, some bits of wire and a timing device scrounged off a microwave oven may have completed the "kit". Probably the attackers are spending more money on celebrating the success of their nonchalant attack than they spent on perpetrating it. As to public relations, it would have been better for Wolfowitz to have stayed home in Washington. It would be difficult to find a better illustration of asymmetrical warfare than this. The Iraqi resistance in all probability can find the sufficient resources: an old generator trailer, rockets, wire etc to continue such attacks ad-infinitum. Their effectiveness depends mostly on their choice of target and timing. It would be difficult for the guerillas to become discouraged at this rate of cost effectiveness. The cost of the occupation is astronomic and other counties are not eager to send their troops and as to money, at the Madrid Donor's Conference the United States struggled to find funds for Iraqi reconstruction and a lot of what they got were merely loans. The Madrid Donor's Conference, itself a massive public relations exercise, cost a tremendous amount of money and organization all in order to create a positive impression of progress and normalization. A lot of the positive effect the
Madrid Conference produced was dissipated by something as ludicrous as
an old blue generator trailer filled with rockets.
David Seaton
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| Russia
arrests head of largest oil company - Houston Chronicle
Prosecutors charged Mikhail Khodorkovsky, the head of Russia's largest oil producer, today with tax evasion and fraud after special forces detained the magnate in Siberia and took him to Moscow. For months, Russian prosecutors have been investigating officials at the oil company, Yukos, and its shareholders, looking for evidence of tax evasion and theft of state property. "The head of Yukos is incriminated on committing a series of crimes, including theft by fraud on a large scale, the failure to pay taxes as an organization and as an individual," the Interfax news agency quoted a representative of the prosecutor's office as saying. In addition, Khodorkovsky was charged with failure to abide by a court decision, fraud, forgery and embezzlement, Interfax said. A Yukos spokesman said the oil executive had left the prosecutor's office for a court appearance. Top Russian businessmen and political leaders have expressed deep concern about the developments surrounding Yukos, saying the investigation is damaging the Russian economy and discouraging foreign investment. Special forces dressed in camouflage and black uniforms detained Khodorkovsky at an airport in Siberia and investigators forced him to return to Moscow for questioning, a Yukos press spokesman said. "They used sort of special forces as if they were dealing with a terrorist," Alexander Shadrin, press spokesman for Yukos, told The Associated Press. Click here to read more Contents |
| Oil
and Gas Disorder Ended? - Pravda
The government policy in natural resources extraction is becoming more clearly outlined. To all appearances, Gazprom is not to be reformed; at present analysts are pleased with the first financial statement of the state-run company done according to the world standards. Gazprom has started denying access to the gas pipeline for independent gas producers. The RF Nature Ministry intends to conduct checks not only of foreign oil producers such as ExxonMobil and Shell, but even Russian companies, Yukos, to be more exact. Finally, explored but undeveloped fields that used to be in the focus of attention of Russia's largest oligarchs, have been closed temporarily. What does this mean? Gazprom published its interim financial statement done according to the international standards on Friday. The document has been estimated as extremely positive by analysts who declared that the state-run monopoly had overcome a crisis. At that, Gazprom itself has never admitted it has experienced any crisis at all. Meanwhile, judging from the Gazprom financial statement, the gas monopoly has improved the basic positions in the financial statement and in the profit and loss statement. In other words, Gazprom is developing into a company with increasing money flows. This is obviously a response to the EU that has recently demanded that the gas monopoly must be broken up. Another Gazprom move was performed on Friday: the gas monopolist disconnected independent gas producers from the main pipeline. Independent gas producers, the Union of Independent Gas Producers to be more exact, voiced their resolute protest and blamed Gazprom for unfair competition. To all appearances, small independent gas companies are terribly scared that in exchange for the access to the gas pipelines the gas monopoly will dictate at what price they must sell extracted gas. The situation does not resemble "forced uptake" so far, but if it happens, the small companies will give up their tiny independence. In other words, the situation may be treated as the state control in force. Click here to read more Contents |
| Will
Russia challenge OPEC in global oil supply? Daily Star - Beirut
The surprise decision recently announced by the Organization of Petroleum Exporting Countries (OPEC) to cut daily production by 900,000 barrels starting November is widely expected by energy analysts to tighten the global market and also generate higher revenues for oil producers, especially those from the Gulf. But muddying the situation is what Russia which is the world’s biggest oil producer outside OPEC may do about increasing its exports this winter, the analysts say. Analysts ask if a confrontation between Russia and Saudi Arabia over market share is shaping up. “The Saudi government is concerned about near-term revenue, first and foremost,” Edward L. Morse, founder of the American Petroleum Intelligence Weekly and currently a top analyst with Hess Trading in New York, told The Daily Star. “A battle for market share that sees prices plunging toward or below the $10 level reached in 1998 would punish the kingdom as much as it would other producers.” At the moment, the Saudis and, indeed, other OPEC producers don’t have much to fear. Their oil export revenues so far this year have been the highest since the early 1980s. Saudi oil revenues are estimated to reach at least $85 billion this year. Along with a modest surplus from 2002, that makes for a “substantial war chest,” in Morse’s words, to finance lean years or a price and production showdown with Russia. The Saudi budget for 2003 is some $62 billion, which would leave a healthy surplus of at least $30 billion for the kingdom. Still, OPEC producers are worried about what Russia which currently produces 5 million barrels a day for export might do. Russia’s exports are larger than those of the United Kingdom and Norway combined. It has long aspired to be a global exporter in the oil and gas sectors rather than mainly to Europe, as it is currently. It could well “undermine and stymie” Saudi Arabia’s oil sector objectives, including its ability to manage the market, Morse said. Will a Russia-Saudi market share showdown occur this winter? Because global demand remains sluggish and because Russia has been known to want to balance its interests involving not only OPEC but also the United States and the European Union, analysts say a confrontation may not be imminent. But what if global demand increases? Will the Russians be tempted to enter the fray by producing more? Stay tuned. Click here to read more Contents |
| Sabotage
still threatening Iraqi oil - CNN
Iraq aims to resume post-war exports from its northern crude oil pipeline to Turkey in early November, but sabotage still threatens to undermine Baghdad's efforts, an Iraqi oil ministry source said Wednesday. "The plan is to resume Kirkuk exports in the first week of November after storing five million barrels of oil in Turkey," the ministry source told Reuters. "But these are just plans. I don't think the pipeline can function in the foreseeable future because the sabotage will just continue." The oil ministry source said Iraq would resume testing of the beleaguered pipeline at a rate of 200,000 barrels per day (bpd) by the end of this week. Barring further attacks, the aim was to ramp up the volume to 500,000 bpd, he said. But Baghdad does not feel it can rely on supplies from Kirkuk because of the security threat along the line that runs southwest from Kirkuk to Baiji, north of Baghdad, before heading northwest across the Turkish border to Ceyhan on the Mediterranean. Iraq's first post-war budget, released 10 days ago, assumes total Iraqi exports will average only 1.6 million bpd next year. Southern fields, where the security situation is stable, already are supplying 1.2 million bpd of exports so the authorities appear to have little confidence in reliable Kirkuk sales. The budget assumes Iraq will only return to post-war export capacity of 2.4 million bpd on average in 2005. Sabotage has prevented Iraq from shipping oil through the northern pipeline, which carried about 800,000 bpd before the U.S.-led war. A sabotage blast hit a cluster of four pipelines Tuesday that feed refinery operations, three miles south of Baiji. The oil ministry source said this was the most worrying attack so far. "This was a terrible blast. It hit four pipelines and it was the first time we actually witnessed parts of a pipeline being blown up completely," he said. Click here to read more Contents |
| Iraq-Saudi
oil pipeline unusable - Al Jazeera
The 1.7 million barrel per day crude pipeline which runs from Iraq across Saudi Arabia to the Red Sea is in no condition to be utilised for Iraqi exports. When asked about reports that Iraq was in discussions with Riyadh to re-open the line, a Saudi Aramco official said that the Iraqis "don't know what they are talking about. The pipeline is not in a stage to be utilised." "The pipeline is not in a usable form because of its long-term and sudden closure," he said on Monday on the sidelines of the two-day Middle East Conference on Oil and Gas Pipelines in the Omani capital Muscat on Monday. The IPSA-1 pipeline, which was completed in 1989, was shut the following year after the start of the Gulf War and has remained closed since then. "There is no continuity in the line," the official said, without giving further details. Other delegates at the conference suggested that the pipeline would naturally deteriorate after being closed for such a long time. "There would be a lot of internal corrosion in the pipeline," Sanjiv Dheer, Vice President of Essar Constructions Limited said. Click here to read more Contents |
| Oil
majors plan African push- Finance24 - South Africa
Given the tremendous opportunities that existed for oil and gas exploration and production on the African continent, the world's "big five" energy companies - Total, Chevron Texaco, Exxon Mobil, Shell and BP - were all set to continue to play a major role in African economies for the long-term, bringing with them more sizeable investments into the upstream sector, it emerged on Wednesday. Participants at the tenth annual Africa Upstream Conference in Cape Town were all very positive about Africa's growing role in oil and gas exploration and production (E&P), with Ken Evans, Exxon Mobil Exploration Co's Vice President for Africa saying that the company planned to participate in ongoing and new development projects on the continent with a total value of some $30 billion. "The balance is tipped in favour of African investments," he told conference participants. "Although companies face technical, economic and societal challenges operating in Africa, the tremendous opportunities here are attractive to international investors - they are willing to make the necessary investments." He said African countries were "well-positioned" to capture some of the 80m barrels of oil per day (bpd) supply shortfall that was expected to exist in 2010. While global energy demand was set to grow to 160m bpd in 2010, production from existing fields was set to fall to 80m bpd, so new supplies would have to be found to meet the shortfall, requiring investments of over $1 trillion. "Africa has the potential for many world-class discoveries, and provided they are made attractive by host governments, there is tremendous upside potential," Evans added. Currently 16 countries in Africa produced about 10.5m bpd, or 9% of total world output. Africa also had about 8% of the world's total gas reserves. Click here to read more Contents |
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