This blog is republished here as part of our special holiday selection.
CAMBRIDGE – When President Richard Nixon proclaimed in the early 1970’s that he wanted to secure national energy independence, the United States imported a quarter of its oil. By the decade’s end, after an Arab oil embargo and the Iranian Revolution, domestic production was in decline, Americans were importing half their petroleum needs at 15 times the price, and it was widely believed that the country was running out of natural gas.
Energy shocks contributed to a lethal combination of stagnant economic growth and inflation, and every US president since Nixon likewise has proclaimed energy independence as a goal. But few people took those promises seriously.
There’s a potentially huge story developing in Tajikistan: Central Asia’s poor cousin may be sitting atop a vast pool of oil and natural gas. Yet, no one in Dushanbe – neither government officials, nor energy company executives – seems eager to discuss the prospect of an energy boom.
In July, Tethys Petroleum announced that its development zone in southwestern Tajikistan could hold over 27 billion barrels of recoverable oil equivalent. The estimate, if accurate, would represent more than the remaining oil in United Kingdom’s North Sea field. In a July 19 press release, Tethys boss David Robson asserted that Tajikistan had “super-giant potential.”
It’s not just Tethys – a company listed on both the Toronto and London stock exchanges, and registered in the Cayman Islands – that seems to believe in Tajikistan’s energy-production potential. Russia’s state-controlled conglomerate Gazprom has already started drilling a 6,300-meter well to reach what it hopes to be more than 60 billion cubic meters of natural gas, while Australian-based Santos is starting seismic studies after acquiring a 70-percent share in Tajikistan’s Somon Oil.
But since that initial burst of fanfare announcing its potential oil find back in July, Tethys executives have become tight-lipped. Representatives of the company repeatedly declined to speak on the record to EurasiaNet.org on oil and gas-related issues in Tajikistan. Gazprom and Santos are similarly reticent.
As global energy supplies come under increasing attack by non-state actors and private energy holdings become key targets of political maneuverings and criminal activities, Oilprice.com discusses the nature of the growing threat and how to reverse the risk with “smart power.”
To help us look at these issues we got together with Corporate intelligence specialists Jellyfish Operations and security expert Jennifer Giroux.
Michael Bagley is the president of Jellyfish, a global boutique intelligence firm that combines on-the-ground intelligence collection and analytics with an unprecedented country-to-country economic diplomacy program that helps governments, corporations, institutions and private individuals forge secure partnerships, discover new opportunities and mitigate operational risks.
Jennifer Giroux is a global security expert who specializes in emerging threats to energy infrastructure in conflict-affected regions.
In the Interview Michael & Jennifer talk about the following:
• Why the risk to global energy supplies is increasing • Violent entrepreneurialism: Why piracy is on the rise • The most immediate threats to global energy security • Which countries are most likely to see attacks in the future • Why Saudi Arabia could be the next country to have its energy infrastructure come under attack • Why energy companies assets are becoming key targets. • How energy companies can create opportunities in Conflict-Affected Regions • Why companies need more than just intelligence to operate in hostile environments
BUENOS AIRES – The expropriation of nearly all of the Spanish company Repsol’s stake in Argentina’s energy producer YPF, announced in a vehement speech by President Cristina Fernández de Kirchner, has raised legal alarms worldwide. In fact, the move will not resolve the country’s energy problems in the absence of enormous inflows of investment to the sector.
Repsol acquired complete control of YPF in 1999; in February 2008, it transferred part of its shares to the Petersen Group, which today holds 25%. Repsol currently holds 57%, with the rest owned by stock-market investors. The Argentine government intends to expropriate 51%, leaving Repsol with a 6% stake.
In the 2008 sale of shares, the two majority stockholders agreed to distribute at least 90% of future profits in cash. That decision was intended to allow the Petersen Group to service the debts to banks, and to Repsol itself, that it incurred with its share purchase, for which it made no initial payment.