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Geopolitics / International

  • Global Energy Advisory - 26th September 2014

    Geopolitical & Conflict UpdatesIraqFor August 2014, Iraq’s oil export revenues were down to $7.1 billion, from $7.8 billion in July. Exports for August were at 73.6 million barrels, and the selling price for Iraqi crude was at $97.4 per barrel, down from $102.8 per barrel in July. This reflects the cutoff of exports from the oilfields in northern Kirkuk since the beginning of March due to the Islamic State’s (IS) overrunning of the area and attack on a pipeline to Turkey, while production continues unimpeded in Iraq’s major-exporting southern fields.This is just a sneak preview, though of the geopolitical quagmire…

  • Global Energy Advisory - 19th September 2014

    Geopolitical & Conflict UpdatesCentral AsiaWe are closely watching the spillover effect of the Russia-Ukraine crisis, as Central Asian states become more disillusioned with Moscow. Russia is also provoking discontent in Central Asia by making vague references to Kazakhstan’s statehood that have not been well-received, while Uzbekistan now has more justification for its long-running skepticism of Moscow’s intentions. We expect continued provocations by Moscow and moves by Kazakhstan, Uzbekistan and Tajikistan to assert their administrations’ control over foreign policy. IraqReports are emerging that the Islamic State (IS) was earning around $3 million per day in July from oil sales related to…

  • Global Energy Advisory - 12th September 2014

    Geopolitical & Conflict UpdatesUkraine•    Ukraine has only about 20% of its oil demand filled at this time, with only 2 of its 6 refineries operating. Typically it buys oil from Belarus, Lithuania, Poland and Russia but is now in talks with Azerbaijan•    Poland has stopped reverse-flow deliveries of natural gas to Ukraine, claiming that Russia has reduced flow of its gas to Poland. The Polish oil and gas corporation (PGNiG) claims that deliveries of Russian gas had fallen 20% to 24% in the past two days, but Gazprom insists that flows remain unchanged. This cat and mouse game has to…

  • Eliminating The Scourge Of Islamic State In Iraq

    A rise in sectarian violence in Iraq is complicating the struggle to form a national unity government, the first and vital step in combatting the jihadist Islamic State of Iraq and al-Sham, which is now calling itself Islamic State.US airstrikes against Islamic State seem to have slowed the group’s momentum. When it captured Mosul, Baiji, and Tikrit in quick succession last June, Islamic State’s stunning advance was made possible by a virtually nonexistent Iraqi air force and an Iraqi army that offered no real resistance. Remarkably, two Iraqi divisions – 30,000 soldiers – capitulated to a jihadist force of just…

  • Global Energy Advisory - 5th September 2014

    Regulations & ComplianceA new real estate law in Egypt will require companies to pay taxes on oil fields. The law was amended in late August, but criteria are still being developed by the relevant ministries and there is a three-month deadline for this before implementation, though the Finance Ministry is hoping to speed up the process. The new real estate tax base will apply to industrial, petroleum and tourism industries, along with ports, mines, quarries and similar facilities. With the new amendments, the property tax will be set at 10% of a unit’s rental value and 3% of a unit’s…

  • Global Energy Advisory - 29th August 2014

    Geopolitical/Conflict DevelopmentsIraqi Oil UpdateIraqi government forces have reportedly thwarted another attempt by the Islamic State (IS) to take over the Baiji refinery in northern Iraq. This refinery accounts for around one-third of Iraq’s total production, but produces for the domestic market, not exports. Key producing fields, for exports, in the south remain unaffected so far by the IS advance. In the meantime, Iran has come out with clear support for new Iraqi Prime Minister, Shi’ite Haider al-Abadi, after the ouster of Nouri al-Maliki.  Iran has also been providing Iraqi Kurdish forces with weapons to fight back IS in the north,…

  • Russia‚Äôs Nuclear Revival And Its Challenges

    Russia is slowly but surely replacing its aging stockpile of Soviet-era nuclear weapons with an arsenal that’s fit-for-purpose in the 21st century. Richard Weitz reminds us, however, that a weakening Russian economy and less-than-favorable international climate may yet derail Moscow’s efforts to revive its nuclear prowess.Although attention is naturally focused on the role of Russia’s conventional forces in the Ukraine conflict, we should not overlook the modernization of the country’s nuclear forces. The last few years has seen Moscow make great progress in stabilizing Russia’s decaying nuclear arsenal. The Russian government considers its nuclear weapons as its best tool of…

  • Global Energy Advisory - 22nd August 2014

    Regulatory AlertsA new tax law granting tax credits to oil companies appears to have survived a close referendum battle on Wednesday, with partial vote counts in showing that efforts to repeal the legislation trailing behind. The legislation, Senate Bill 21, only narrowly made it through the Senate last year, advertising itself as a way to attract investment for new wells to produce more for the trans-Alaska pipeline. However, critics say it provides no guarantees that oil companies will invest in Alaska.Mozambique has approved favorable new petroleum laws that open the way for new oil and gas bids as well as…

  • 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…

  • 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…