Tag: Oil

Oil in South Sudan: Turning Crisis Into Opportunity

This article was originally published May 5 2014, by New Security Beat, the blog of the Environmental Change and Security Program (ECSP) at the Wilson Center.

Outside of donor and humanitarian aid, South Sudan’s economy is almost entirely dependent on the oil sector – and that sector is in crisis.

After a unilateral shutdown of the industry by the government in January 2012 that lasted 15 months, and ongoing partial shutdowns due to internal conflict, not only are current oil revenues drying up, but the prospects for new investment have been nearly destroyed.

As a result, demands on the donor community will grow rather than tail off in coming years. However, looking further afield, and if geology allows, a reformed South Sudan has the potential to turn what has until now been a developmentally detrimental oil industry – generating the finance and providing incentives for violent conflict – into one that generates positive change for its war-torn people.

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Why Further Sanctions Against Iran will be Counterproductive

A June 6, 2013, article from Reuters is titled, “Lawmakers in new drive to slash Iran’s oil sales to a trickle.” According to it,

U.S. lawmakers are embarking this summer on a campaign to deal a deeper blow to Iran’s diminishing oil exports, and while they are still working out the details, analysts say the ultimate goal could be a near total cut-off.

My concern is that the new sanctions, if they work, will put the United States and Europe in a worse financial position than they were before the sanctions, mostly because of a spike in oil prices.

How much reduction in oil exports are we talking about? According to both the EIA and BP, Iranian oil exports were in the 2.5 million barrels a day range, for most years in the 1992 to 2011 period. In 2012, Iran’s oil exports dropped to 1.7 or 1.8 million barrels a day. Recent data from OPEC suggests Iranian oil exports (crude + products) have recently dropped to about 1.5 million barrels a day in May 2013.

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Rhetoric Increases as Falkland Referendum Looms

A sign in Argentina reads: 'The Falklands are Argentinian.'
A sign in Argentina reads: ‘The Falklands are Argentinian.’ Photo: Gilmar Mattos/flickr

Next month will determine the eventual fate of the Falkland Islands—and the 1.4 billion barrels of oil so far discovered there—when a referendum on self-determination is held.

In the run-up to that referendum, Argentina has stepped up the rhetoric, most recently with the Argentine Foreign Minister claiming that within 20 years, the Falkland Islands will be entirely under Argentina’s control.

UK Foreign Secretary William Hague has responded by calling this a counterproductive “fantasy”. Hague says the government of Argentine President Cristina Fernandez de Kirchner has refused diplomatic dialogue and chosen instead a path of “bullying”.

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Big Oil in the Arctic Council?

A tugboat towing an oil drilling platform into the Alaskan Arctic. Photo: anyaku2419/flickr

 

Drilling for oil is almost always risky business. Deposits are rarely found in convenient places and drilling is expensive. Even if alternative energies are slowly taking over the energy market, most experts agree that we still need oil. As current wells dry up, therefore, we must also drill in new, more challenging places, like the Arctic seas.

The US Geological Survey estimates that the Arctic holds ninety billion barrels of undiscovered oil. This is almost three times annual global consumption and could be as much as thirteen percent of the world’s undiscovered reserves. The vast majority of Arctic oil, however, lies offshore – protected by fierce weather conditions that make drilling almost impossible, or at least very dangerous.

Commercial interest in the Arctic is nonetheless high. As recently as September the Norwegian government announced that forty-two companies had applied for drilling permissions in the Norwegian Arctic. Statoil alone applied for drilling in seventy-two new blocks and will drill nine new exploration wells next year. Meanwhile, Royal Dutch Shell (finally) received permission to drill to shallow depths at the Beaufort and Chukchi wells in Alaska, US.

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Zambia Donates Five Million Liters of Fuel to Malawi

Zambian President Sata meets Malawian President Mutharika
Zambian President Sata meets Malawian President Mutharika in South Africa. Picture courtesy of ZodiakOnline

Years of diplomatic incidents between Malawi and Zambia culminated recently in Zambia’s donation of five million liters of fuel to Malawi. The gift was ostensibly for the funeral of the country’s late President Bingu wa Mutharika, who died on 5 April 2012, after a heart attack. The political wrangling that has led up to this gesture, however, has a complicated backstory.

In 2007, Michael Sata – then the Zambian opposition leader – travelled to Malawi for a private visit, but was deported on arrival at Chileka Airport and driven 400 kilometers back to Zambia. Four years later, Sata was elected Zambia’s president.

At the time of his deportation from Malawi, Sata reportedly joked that Bingu had given him a fully fueled Lexus GX with a private chauffer (i.e., the immigration officer) for the journey, which was far more than Levy Mwanawasa, then the President of Zambia and Sata’s political opponent, had ever done.

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