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Geopolitics

  • 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…

  • Israel’s Oil Platforms in Jeopardy and the Samson Syndrome

    Are Hezbollah and Israel preparing for the next war? Everything seems to indicate that they are, despite the fact that all logic dictates that they should not. A number of intelligence sources who make it their business to monitor Hezbollah are saying that the Lebanese Shi'ite organization is preparing for its next war with Israel. The sources maintain that in recent weeks there has been disturbing news coming out from south Lebanon indicating that the risk of a renewed showdown between Hezbollah and the Israeli army is growing. According to a Wall Street Journal report last month, Hezbollah has successfully smuggled and disbursed…

  • Nigerian Company to Sue Total, Samsung

    An indigenous Nigerian oil company is suing major foreign players for allegedly plotting to exclude the local company from a $3.8 billion floating production vessel that was intended to be a local component of the project. Lagos Deep Offshore Logistics (LADOL) is taking Korea’s Samsung Heavy Industries, Total Upstream Nigeria Limited, the Nigerian Content Development and Monitoring Board (NCDMB) and the Nigerian Ministry of Petroleum Resources before a federal high court over the issue. LADOL accuses the parties of plotting to keep it from engaging in the local component of the $3.8 billion Egina Floating Production Storage Offshore (FPSO) vessel.…

  • Southeastern Europe Energy Advisory

    This week we are focusing on some potential opportunities opening up in an area that gets little attention and largely flies under the oil and gas radar. Croatia to offer up offshore Adriatic blocksCroatia, which joined the European Union in July, is preparing to publish tenders for offshore oil and gas exploration in the central and southern Adriatic Sea in the second quarter of this year, with the first drilling permits likely to be awarded in 2015. The government plans to open the data room in February for interested companies.Norway’s Spectrum just completed a five-month seismic survey of 15,000 kilometers…

  • China’s Careful Days

    The Chinese believe that they can achieve their objective of acquiring islands throughout the South and East China Seas without a fight.  It worked against the Philippines.  If they try the same strategy against Japan over the Senkaku Islands, they just may get a bloody surprise.The Reference to the "String of Pearls" first appeared in a 2005 intelligence report about the emergence of China as a regional power.  The String of Pearls is a number of Chinese built port facilities in Myanmar, Sri Lanka, Bangladesh, and Pakistan and were constructed by Chinese state owned corporations.  That is to say that…

  • How OPEC Could be Threatened by Iraq’s Re-Emergence as a Major Oil Producer

    Iraq is returning to an energy market which is radically different than the one it was forced to leave years ago, and its OPEC partners now also have a different view on Iraq’s participation. A new paper by Sammy Six and Lucia van Geuns of the Clingendael International Energy Programme (CIEP) assesses how current market developments impact the strategic position of Iraq – and vice versa: how Iraq is likely to impact the global oil market. The authors conclude that although Iraq will help to ease the oil market in the short term, many tensions and uncertainties remain. One thing…