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Geopolitics

  • Global Energy Advisory - 15th August 2014

    Geopolitical, Political & Conflict Updates•    High-level industry sources in Ukraine inform us that talk of extending the new gas tax beyond the end of the year is gaining in momentum, though lobbying by a united group of private gas producers plans to match that momentum. In order to convince Kyiv that it will be hanging itself over Russian gas if it goes through with this doubling of taxes on gas producers past 31 December 2014, we have to convince two political-business elite who are benefitting from the taxes. We have already heard from foreign-run industry sources who say they will…

  • U.S. Airstrikes Against IS Won’t Be Enough

    The followers of the new so-called Islamic State, formerly known as ISIS, have been on the rampage again this week, wreaking havoc and sowing death and destruction across Iraq. If U.S. President Barack Obama isn’t clear enough on the dangers presented by the fighters to the people in Iraq and Syria, perhaps he will understand the danger in allowing the Islamists control of Iraq’s and Syria’s oil facilities.The U.S. president made it clear over this past weekend that the American military intervention in Iraq is purely “for humanitarian reasons” and to protect U.S. military personnel deployed in the region. Then…

  • Global Energy Advisory - Ukraine Commits Financial Suicide

    Regulatory/Management AlertsDuring the first week of August, the Ukrainian government has moved to double tax for private gas producers, signaling the first move by key Ukrainian political-business elite to stymie any chance for reform of the energy sector and energy independence. According to our key source in Kiev--Robert Bensh, a partner in Pelicourt LLC, the majority shareholder of Cub Energy, the third-largest private gas producer in Ukraine: “This law is dangerous to the long-term security of Ukraine. It adds little to the budget and discourages drilling and investment in the upstream oil and gas sector as well as calls into…

  • Does UAE Conscription Law Signal the End of the Dream?

    The United Arab Emirates announced in June that it is introducing compulsory military service for all male citizens aged between 18 and 30 and setting up a new national defense and reserve force. The surprising development in the stable country can only be seen as a reaction to the growing unrest in the surrounding region – Iraq, Syria, Israel and the Palestinian territories.Men who have finished secondary school will have to serve nine months, while those who have not will serve two years. Service will be optional for women. Citizens who complete service will enjoy a range of benefits, including…

  • Putin is Losing Eastern European Energy Gamble

    Russian President Vladimir Putin said he doesn't think the European community can do without the natural gas it gets from energy monopoly Gazprom.  With a Russian economy starting to decline, however, it may be Gazprom that's too strongly interconnected to the European market to break free.The narrative over European energy security reaches at least back to 2006 when Gazprom first cut gas supplies through Ukraine. The fallout from the latest disruption in 2009 put opposition darling and former Prime Minister Yulia Tymoshenko in prison, but now the tables have turned for a Ukraine tilting more strongly toward the European Union.Last…

  • How Will Russia’s Annexation of Crimea Affect Energy Markets?

    Russia purportedly intervened in Crimea to protect ethnic Russians from neo-Nazi extremists that Moscow claims have infiltrated the transitional government in Kiev.  The results of the 16 March Crimean referendum are already assumed to be a foregone conclusion, with early figures indicating that the peninsula’s Russian majority voted 93% in favor of unification with Russia.But the reality probably lies in the two seemingly intractable subjects that unite and divide Russia and Ukraine – energy and military issues.The former – Russia’s need of Ukraine’s Soviet-era skein of natural gas pipelines that supply Moscow’s most lucrative European markets. Russia provides approximately a…

  • Iran Takes on the US: Is this Provocation, Defiance or Tomfoolery?

    Responding to the US naval presence in the Gulf, described by the Islamic Republic of Iran as “arrogant,” Iranian leaders have decided to dispatch a naval task force of their own to sail within proximity of US territorial waters. This move is difficult to judge whether it is an act of provocation, an act of defiance or an act of foolishness.And if one wanted to be really Machiavellian, is this a smart manoeuver intended to push the tension up a notch or two and with it the price of oil by a few dollars a barrel?What do you do if…

  • Iran’s Return Prompts Changes to Saudi Arabia Energy Strategy

    As the Iranian nuclear deal begins to take effect and international pressure on the regime continues to diminish, Gulf nations have begun re-establishing diplomatic and economic relations with their once-distant neighbor. The deal has struck an optimistic tone in the Middle East, and officials in the United Arab Emirates are taking the opportunity to settle old disputes and increase energy cooperation with their neighbor across the Gulf.Iran and the UAE are close to reaching an agreement on three long-disputed islands near the Strait of Hormuz, perhaps the world’s most important oil chokepoint. The strait carried roughly 35 percent of all…

  • A Month of Panic in Iraq

    As we have noted on numerous occasions, despite the continued influx of investment in Iraq, the situation is untenable and each month moves closer to an all-out civil war. First, we’ll give you the security run-down, then we’ll get into the oil. •    On 30 December, the Iraqi central government moved to demolish a Sunni protest camp in Ramadi (Anbar province) and negotiated the withdrawal of government forces from the province. •    On 1 January, while those forces were pulling back, Islamic militants (under the umbrella of the Sunni Islamic State of Iraq and the Levant, ISIL) seized key areas…

  • Latin America Energy Advisory – 7th February 2014

    This week we’re stepping back to focus on Latin America again due to the volume of energy developments in the region. This week and last we were debriefed by our partners at Southern Pulse on these latest developments of concern to current and potential investors in the region.PanamaThe Grupo Unidos por el Canal (GUPC) consortium warned on 20 January it would halt expansion work on the Panama Canal unless the government paid the US$1.6 billion in overruns incurred because the canal authority allegedly gave the builders incorrect geological information. Canal administrator Jorge Quijano emphasized that construction would go ahead with…