For Spanish speakers: below is an article from Tal Cual daily in Venezuela summarizing my blog on Saudi oil minister al-Naimi’s opinons on the “North American tight-oil revolution” and their implications for Venezuela and Iran. The article is by Jose Suarez Nunez.
Para hispano parlantes: Aquí abajo está un artículo en Español publicado en Tal Cual de Caracas, un resumen de mi blog de la última semana que trató en las opiniones del ministro de energía saudita Sr. al-Naimi, y en las implicaciones para Venezuela e Irán. Continue reading
Posted in U.S. oil, Resource conflicts, heavy oil, Faja of the Orinoco, PDVSA, international relations, Hugo Chávez, Iran sanctions, Persian Gulf, Iran nuclear, Chavez lagacy, Saudi Arabit, Aramco, Oil prices, Oil supply, Tight oil, shale oil, Peak Oil, Saudi Arabia
Tagged Venezuela, Saudi Arabia, Iran, Caracas, Latin America, South America, Tight oil, Naimi, saudi oil, u s energy
Al-Naimi at CSIS
Last week in Washington, I attended a talk by Saudi Oil Minister and head of Aramco, Ali al-Naimi, at CSIS. Energy and foreign policy veterans from Daniel Yergin to Brent Scowcroft and Dr. James Schlesinge were on hand to hear al-Naimi’s views. You can read the transcript here, or watch the video embedded below.
Al-Naimi’s contrasted his central theme: “the enduring relevance of oil,” to the predictions made for many years by the adherents of “peak oil”–a theory that he said had itself “peaked in 2009” and has now been shown to be “utterly incorrect.”
Bad News for Venezuela and Iran?
Listening to him describe the global impact that the U.S.A. tight-oil “revolution” will have on the market, plus with Alberta’s heavy oil and so many other new sources from around the globe all coming to market, brought to my mind images of the 1980′s. The 1980′s were the “lost decade” in Latin America. It strikes me that, if he’s right about the trajectory of the global oil sector, the consequences for OPEC’s “price hawk” faction would be sobering. Continue reading
Posted in Aramco, China, Economic Crisis, Energy and Environment, Faja of the Orinoco, heavy oil, international relations, Iran sanctions, Oil prices, Oil supply, OPEC, PDVSA, PDVSA weakness, Peak Oil, Persian Gulf, Resource conflicts, Sanctions, Saudi Arabit, shale oil, The USA, Tight oil, U.S. oil, Venezuelan weak institutions
Tagged Al-Naimi, Ali Al-Naimi, Brent Scowcroft, Daniel Yergin, Saudi, Saudi Arabia, United States, Washington
Groundbreaking, PetroChina-CNPC refinery for PDVSA heavy oil. It is to be China’s largest. (April 2012)
Over the past few weeks, I have been looking at the state of the Venezuelan-Chinese oil alliance that Hugo Chavez has so fervently championed. The picture that emerges is not what one might expect. Here is an overview, in qualitative terms. [Correction: I originally wrote Ramirez reported that PDVSA produced "60,000" new barrels of Faja oil in 2013. He actually said "20,000".]
A. Structural Changes – Vertical Integration with China
Till now, commentators have looked primarily at the obligations of the Bolivarian Republic of Venezuela (BRV) to send oil to China to repay Beijing’s huge loans. However, there are major changes afoot in the structure of this relationship, no matter who succeeds Hugo Chavez. Developments on the ground in both countries show an energy infrastructure buildup will soon bring significant cross-border vertical integration. Soon, Venezuelan oil will not be shipped to China simply to fulfill financial-and-contractual obligations, but also for locked-in infrastructural reasons.
All indications are that the Chinese side is actively fulfilling the obligations it entered into ca. five years ago (esp. December 2007) to build oil tankers, pipelines and refineries in China in order to import and process Venezuelan heavy crude.
Posted in Chavez, Chavezsuccession cancer, China, Faja of the Orinoco, heavy oil, Hugo Chávez, PDVSA, U.S. oil, Uncategorized
Tagged Heavy crude oil, Hugo Chávez, oil sector, People's Republic of China, Petróleos de Venezuela, Rafael Ramírez, United States
Oil pumpjacks in Venezuela (TalCual Digital, Caracas)
Recently, I sent off a proposal for a new course, “Problems of the Global Oil System.” The introduction asks rhetorically: “Why Teach About Oil?”
Debates in the U.S. over oil and energy policy often resemble election campaigns, fought out with factoids and unconstrained partisanship. Of course, deciding technical-scientific policy is inherently political. But there are politics and there are politics. In the proposal, I argue that ”Oil’s persistent domestic & global centrality” will extend at least another 25-to-30 years, so teaching about oil is necessary to empower students to participate in forming energy policy democratically.
But, do the facts actually support the conclusion that petroleum’s central role in society–in both domestic and international affairs–will persist for at least 25-30 years hence? Here is the brief argument in the introduction (and the conceptual outline of the course) for your consideration: Continue reading
Posted in Alternative energy, China, Energy and Environment, Euroepen Union, Faja of the Orinoco, heavy oil, international relations, OPEC, Persian Gulf, Resource conflicts, The USA, Transportation, U.S. oil, Uncategorized
Tagged Oil and Gas, seminar, teaching
Presidents Chavez and Ahmadinejad met in Caracas in January (here) and June 2012
I was cited a number of times yesterday in a Bloomberg News article by Nathan Crooks in Caracas and Paul Burkhardt in NYC. I reprint it below because the authors’ research further illustrates an issue I’ve often stressed here.
That is: in spite of President Chavez’ rhetoric promising to stand by Presidents Ahmadinejad of Iran (and Assad of Syria, and previously Qaddafi of Libya), he is actually in no position to withstand the U.S. sanctions that could be imposed on Venezuela for aiding Iran. Continue reading
Posted in Chavez, Economic Crisis, Energy and Environment, Faja of the Orinoco, Gaddafi, heavy oil, Hugo Chávez, international relations, Iran sanctions, OPEC, PDVSA, Persian Gulf, Sanctions, The USA, U.S. oil, Uncategorized, Venezuela diplomacy
Tagged Chavez, Hugo Chávez, OPEC, Petróleos de Venezuela, Venezuela
Petrodelta,SA rig in the south of Monagas state, Venezuela (PDVSA 2011 Annual Rept)
In March, U.S.-based Harvest Natural Resources (HNR) had disclosed to shareholders it was in exclusive confidential negotiations with a national oil company (NOC) to sell its 32% stake in Petrodelta SA–a lucrative, mature, medium-heavy Faja oil field in the south of Monagas state, in which PDVSA holds a 60% share. Thursday evening, Harvest surprised observers by announcing they had signed an agreement with the Indonesian National Oil company, Pertamina.
The big question immediately being asked was: “Indonesia? Why not China?” I was quoted at length Friday morning on this question by Bloomberg’s Nathan Crooks in Caracas (See:
Posted in Chavez, China, Faja of the Orinoco, Gaddafi, heavy oil, Hugo Chávez, international relations, Iran sanctions, Libya, Maracaibo, PDVSA, Syria, The USA, U.S. oil, Uncategorized, Venezuela diplomacy
For those who read Spanish: Today Tal Cual in Caracas carried a detailed summary in Spanish by Jose Suárez Núñez of my study, “Bolivarian Venezuela’s Oil Policy & Iran: A Failed Energy Alliance” (which appeared in Middle East Economic Survey’s [MEES] Energy and Geopolitical Risk for May 2012).
Suárez Núñez is the Tal Cual oil columnist, and one of Venezuela´s most senior oil journalists. Here are the links: Continue reading
Posted in Chavez, Hugo Chávez, international relations, Iran nuclear, Iran sanctions, PDVSA, Sanctions, The USA, U.S. oil, Uncategorized, Venezuela diplomacy
What are the factors driving up the price of oil? Some cite fundamentals, others over-active speculation,
Persian Gulf & Middle East (UTex Lib. 2008)
and there are certainly major geopolitical issues in OPEC‘s Mideast and North African (MENA) member states–which is what this post is about.
The Present Saudi Pumping Surge is a Key Element of the US & EU Iran Sanctions Strategy
It is certain that the Iran confrontation will only intensify as the mid-summer sanctions deadline approaches. By July, Washington and the EU hope to significantly curtail Iran’s ability to export oil. In this situation, it is perhaps surprising that prices have not gone higher.
This past week, the normally understated Economist, while noting the Saudis’ extraordinary efforts to pump excess capacity, nevertheless warned that the Iran crisis could trigger a worst-ever oil shock:
Posted in China, Economic Crisis, Euroepen Union, international relations, Iran nuclear, Iran sanctions, OPEC, Persian Gulf, Resource conflicts, Sanctions, The USA, U.S. oil, Uncategorized
Tagged China, Iran, Middle East, Obama, OPEC, Saudi, Saudi Arabia, United States
Thus far, Beijing has found little wiggle room to resist the U.S.-E.U.-Saudi common vision that severe sanctions be used to shut down the bulk of Iran’s oil exports by June.
US Treasury Sec Geithner in Beijing with Vice Premier Wang Qishan. NYT Photo Andy Wong
The reality being revealed in this confrontation is that China has much less ability to maneuver independently in the global oil system—whether in the market or in diplomatic and military matters—than most analysts would lead us to believe.
Preface: What are Washington v. Beijing´s strategic objectives here ? Continue reading
(Edited, 20 Jan.) President Ahmadinejad of Iran visited Venezuela on January 9, and then three of President Chavez’ closest Latin American allies, to search for help. His tour was part of a flurry of diplomacy in the New Year leading up to the imposition of severe new U.S. sanctions on Iran’s ability to export oil, beginning in June.
Presidents Ahmadinejad and Chavez in Caracas (Photo: El Universal)
While these two presidents met in Caracas, U.S. Treasury Secretary Geithner was visiting South Korea, Japan and China, and other U.S. officials were Continue reading
Posted in Chavez, China, Euroepen Union, Gaddafi, Hugo Chávez, international relations, Libya, OPEC, PDVSA, The USA, U.S. oil, Uncategorized, Venezuela diplomacy
Tagged Chavez, Iran, Mahmoud Ahmadinejad, Middle East, Nuclear program of Iran, Persian Gulf, United States, Venezuela