My AQ piece: “Russia Is Beating China to Venezuela’s Oil Fields”

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Russian Production & Stakes in Venezuelan Oil Projects (40% stake is limit)

Last October & November I succeeded in interviewing several people in the Venezuelan private sector directly knowledgeable of Russian oil projects with PDVSA. Many Venezuelans wonder what all the Russians-known for their secrecy-are up to there.  Some of my key findings are in Americas Quarterly‘s Winter 2016 edition. Read on … 

Russia Is Beating China to Venezuela’s Oil Fields – By THOMAS W. O’DONNELL

The profits, politics and luck behind Russia’s growing footprint.

Russian companies produce more oil in joint projects with PDVSA than their Chinese counterparts This article is adapted from our 1st print issue of 2016. 

The late Venezuelan President Hugo Chávez, had long envisioned China becoming Venezuela’s biggest oil-sector production partner. So when Rafael Ramírez, then president of Petróleos de Venezuela, S.A. (PDVSA), announced in January 2013 that Russia would produce enough oil with PDVSA by 2021 to become “the biggest petroleum partner of our country,” very few people believed him. It sounded like empty hype.

Yet it turns out that Ramírez was serious. Three years later, Russian companies are already producing more oil in joint projects with PDVSA than their Chinese counterparts. Official figures are either unreliable or unavailable, but according to field data provided by Global Business Consultants (GBC), a Caracas-based energy consulting firm, Russia-Venezuela production as of late 2015 was 209,000 barrels per day (bpd), compared to China-Venezuela’s at a bit over 171,000 bpd.

Continue reading

“The Road to Paris: COP21 …” Berlin HEEN Conference

heen_logoCOP21 begins soon in Paris.  A very interesting discussion of the issues, with diplomats from EU states and China, takes place tomorrow, Friday evening, at Hertie School of Governance in Berlin to open the Hertie Energy & Environmental Network’s (HEEN) conference. I’ll be moderating the session. The session is open to those interested. Read on:

Opening remarks by German Undersecretary of State, ret. Rolf-Dieter Schnelle, fellows & friends of the Hertie Foundation

Panelists:
• Philippe Etienne, Ambassador of France to Germany
• Friis Arne Petersen, Ambassador of Denmark to Germany
• Wang Tianling, Counsellor, Embassy of the People’s Republic of China in Berlin
• Iwona Jakuszko-Dudka, First Secretary to the Embassy of Poland to Germany
• Dr. Jan Minx, Professor for Science Policy and Sustainable Development, Hertie School of Governance, Head of Working Group on Applied Sustainability Science, Mercator Research Institute on Global Commons and Climate Change

• Moderation by Dr. Thomas O’Donnell, Hertie School of Governance

Please register until 25 November 2015 via the following link https://docs.google.com/f

Background

In December 2015, the COP 21 climate conference in Paris will bring together world leaders, scientists, pressure groups and United Nations agencies, with the task to craft an agreement at the highest political level to tackle global warming. The representatives from 196 countries must reach an agreement to replace the Kyoto protocol. The COP 15 summit in Copenhagen (2009) is remembered more for the difficulty of reaching a global consensus than for tangible progress.

What will the legacy of COP 21 in Paris be?

  •  Is putting a price on carbon worldwide politically feasible?
  •  Is the gap between the cost of energy produced from fossil fuels and energy produced from renewable energy sources narrowing as much as to be a game-changer?
  •  How would policy proposals that raise the cost of energy go down with national leaders from the developing world, under pressure to deliver standard-of-living improvements?
  •  How will Intended Nationally Determined Contributions (INDC) impact the negotiations?
  •  How will China’s early pledge to peak emissions ahead of 2030, and the USA’s commitment to deep reductions by 2025 shape what is globally possible?
  •  Will the European Commission get a critical mass of support for the Paris Protocol?
  •  Will all parties arrive at an robust enough agreement?
  •  What is the future of the Green Climate Fund?
  •  How will the financing volume necessary to keep global warming below 2 degrees be secured?

Speakers will provide their take on the above, and engage in a lively and dynamic discussion with the audience about the major challenges which will be tackled at the COP 21 in Paris in December 2015.

The Hertie Energy and Environment Network (HEEN) is an established platform bringing together fellows of the Gemeinnützige Hertie-Stiftung with professional experience in the field of Energy and Environment (E&E) in the public, private, academic or civil society sector. HEEN’s purpose is to facilitate dialogue, knowledge-sharing and learning, to provide a trust-based environment for career path reflection, and to facilitate the development of lasting professional connections among outstanding individuals of diverse backgrounds who share a common interest and motivation for further professional development in the E&E field.

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Bypass Operation: Nord Stream 2, Russia-to-Germany pipeline deal, raises questions

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Here’s my latest at Berlin Policy Journal (DGAP):  With Nord Stream 2, Russia’s President Vladimir Putin is nearing his goal of cutting Ukraine out of the gas supply picture.  October 20, 2015

On 18 June, during the annual St. Petersburg International Economic Forum, an agreement was signed to build a controversial new “Nord Stream 2” pipeline under the Baltic Sea that would go directly from Russia to northern Germany, with a capacity of 55 billion cubic meters (bcm). The project, which consists of two segments that would run along the same route as the existing two segments of the 55 bcm Nord Stream line, completed in 2011, has met with strong opposition from energy officials in Brussels, as well as leaders in Ukraine and some other EU states.

Indeed, the agreement between Russia’s Gazprom and a consortium of German, Austrian, French,, and Anglo-Dutch companies came as a surprise. After all, in January 2015 Gazprom announced it had abandoned the project, blaming both the falling price of gas over the previous year and anti-monopoly restrictions in the EU’s Third Energy Package, which prohibit suppliers of gas from also owning pipelines delivering it. This provision has prevented Gazprom from ever filling the original North Stream more than half way.[1] In retrospect, the sudden signing of a Nord Stream 2 agreement only six months after the project was supposedly abandoned, plus the fact that the consortium foresees a quick start reveals the prior cancellation to have been a political ruse. Continue reading

Venezuela: Default risks grow (I’m quoted in Platts)

PDVSA president, Eulogio Del Pino, leads a meeting to

PDVSA president, Eulogio Del Pino, meets to “consolidate the new PDVSA.” (‏@delpinoeulogio Aug 11)

Mery Mogollon quotes me several times on PDVSA’s trajectory in Platt’s September Energy Economist.  Here it is:

Venezuela, South America’s biggest oil producer, has seen the value of its oil exports fall to its lowest level since 2004. The economy faces hyperinflation and increasing shortages of basic goods. Debt default seems highly likely. State oil company PDVSA has neither the institutional capacity nor the funds to expand oil production. It is a downward spiral that will lead to political change.  Continue reading

Containing Gazprom: Putin may be overplaying his hand on gas – but no thanks to Berlin and Paris

Russia’s President has used Europe’s dependence on Russian gas as a powerful geopolitical lever. But energy geopolitics is a risky game, especially with the world awash in cheap gas – and Brussels now poised to take advantage of opportunities to permanently slash Gazprom’s market share in Europe.

Russia’s president has used Europe’s dependence on Russian gas as a powerful geopolitical lever. But energy geopolitics is a risky game, especially with the world awash in cheap gas – and Brussels now poised to seize opportunities to permanently slash Gazprom’s market share in Europe.

Here is my article in today’s Berlin Policy Journal. Continue reading

A Strange “No!” Alignment: Greeks, IMF and Washington v. Berlin and Brussels

What a strange rebellion against the international financial order.  On Sunday 5 July, Greece voted “No!” by a resounding 61% to the bailout conditions insisted upon by Berlin, Brussels and “the creditors.”  But, what is truly unique here is the alignment of international forces for renegotiation of Greek debt.

Throughout the post-War era, whenever it came down to imposing “discipline” on other small, debt-defaulting states, the most intrepid champions of the norms of the international financial order have consistently been Washington and the IMF (just ask Argentina’s Mrs. Kirchner, she’ll tell you).

Yet, look who agrees with the Greeks that their debts–in their present magnitude and structure–are impossible and potentially disastrous for the country: Continue reading

MY REPORT | Washington Viewpoints: Assessing Berlin’s Leadership on EU Energy Security

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Merkel and Obama answer questions. 6 June 2014 [Denver Post]

During April and May, I interviewed over a dozen Washington-based experts in European energy and geopolitics.  My report on these interviews–along with some policy proposals in light of Brussels’ “institutional incapacities” and the “fundamental contradictions” of German leadership–is here: [PDF with a Table of Contents for navigation] or at the AICGS website [HTML].

This work was conducted as a resident fellow of the AICGS (American Institute of Contemporary German Studies) in Washington, DC and supported by a generous grant from the German Academic Exchange Office (DAAD) with additional support from the Foreign Office.  My thanks to the AICGS for their collegial support and warm hospitality.

Next, the plan is to interview in Berlin and perhaps Brussels energy experts and officials for their viewpoints on European energy vulnerabilities and on their work with the U.S. side.