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Petrodollars greater than ever before
The Economist
MANY American politicians and pundits explain their country’s enormous current-account deficit by pointing at the surpluses of Asian economies, especially China. Undervalued currencies and unfairly cheap labour, they
complain, have undermined America’s competitiveness. In fact, looking at
the world as a whole, the group of countries with the biggest current-account surpluses is no longer Asia but oil exporters, on which high prices have bestowed a gigantic windfall.
This year, oil exporters could haul in $700 billion from selling oil to foreigners. This includes not only the Organisation of Petroleum
Exporting Countries (OPEC) but also Russia and Norway, the world’s second- and third-biggest earners (see chart 1 below). The International Monetary Fund estimates that oil exporters’ current-account surplus could reach $400 billion, more than four times as much as in 2002.
In real terms, this is almost double their dollar surpluses in 1974 and 1980, after the twin oil-price shocks of the 1970s—when Russia’s hard-currency exports were tiny.
The combined current-account surplus of China and other Asian emerging economies is put at only $188 billion this year
(10 November 2005)
Sinopec, CNPC Said to Buy Sudan Oil Block
Associated Press via Forbes
China Petrochemical Corp., or Sinopec Group, plans to partner with its domestic rival China National Petroleum Corp., or CNPC, to acquire drilling rights to an oilfield in Sudan for about US$600 million (euro514 million), Dow Jones Newswires reported Tuesday, citing an individual who did not want to be named.
The two unlisted Chinese oil giants are expected to sign the deal by the end of this year, the report said, quoting an individual close to the deal who declined to be named because of its sensitive nature.
The Sudan government is looking to keep a stake in the oilfield venture, which is expected to produce more than 20,000 barrels of crude oil per day at the initial stage of the development, the person said. …
(15 November 2005)
China-Japan oil rivalry spills into Africa
Joshua Eisenman and Devin T Stewart, Asia Times
China and Japan – the two giants of East Asia – are competing for energy resources around the globe. Their rivalry in the East China Sea, Russia, Central Asia and Southeast Asia has been well documented. Yet little has been written in Washington about the impact of Sino-Japanese rivalry in Africa.
With one-third of its top 15 oil suppliers in Africa, the United States ignores the challenges of this geopolitical dynamic at its peril. As the world’s largest consumer of energy and protector of the sea lanes, the United States plays a critical role in ensuring the free flow of this important commodity. …
Last year, China displaced Japan as the second-largest importer of African oil after the US, according to The Economist newspaper. Despite falling total petroleum imports, Japan’s African supplies grew by nearly 20% in 2004. Over the same period, Chinese imports grew by more than 35%. …
(17 November 2005)
A Combustible Mixture in Nigeria’s Oil-Rich Delta
Robyn Dixon, Los Angeles Times
Unrest grows over the lack of benefits for local people from the region’s wealth. Warlords have access to plenty of arms and fighters. …
With the decline in traditional occupations like fishing and farming because of environmental degradation, many young people are easily recruited into militias or crime cartels, which get their funding from oil “bunkering,” or theft.
[Recently arrested militia leader] Dokubo-Asariopenly admits taking oil from pipelines and selling it. He doesn’t regard it as stealing.
“We take the oil. It’s on our land. We take it and use it the way we want to, and there’s nothing the Nigerian state can do about it. The oil belongs to our people, and we have every right to take it. We sell it,” he said before his arrest for reportedly calling Nigeria an “evil entity.” …
Dokubo-Asari wants to see international oil companies leave the country, because “if they leave, the lifeline for the Nigerian state will be cut off. The Nigerian state would crumble, and the machinery of oppression and environmental degradation would not continue.” …
(14 November 2005)
Iran makes progresss with ‘Energy for peace’
IRNA
Armenian Energy Minister Armen Movsisyan here Wednesday described the level of cooperation between Iran and Armenia, mainly after the country’s independence, in the energy sector as ‘satisfactory’.
Speaking at a special ceremony to sign a contract with Iran’s Export Promotion Bank to meet the finances for the construction of pipeline to transfer Iran’s gas to Armenia, he said in recent days, the high ranking Armenian delegation held various meetings with Iranian officials on expansion of mutual economic cooperation. There are some 13 jointly run projects underway in the energy sector between the two countries, he said.
On Iran’s proposals for expansion of cooperation with neighboring countries titled ‘Energy for Peace’, he evaluated the plan as very significant from the economic standpoint and noted that Iran is the second major supplier of gas to Armenia. …
The Head of Armenian joint economic and border commission, Artashes Tumanxan and Armenia’s Minister of Energy Armen Movsisyan, in a meeting with the Iranian members of the commission, reiterated the need for expansion of mutual economic ties and joint investment in Aras Free Economic Zone. …
(18 November 2005)
North Sea oil output fall hits non-Opec growth
Reuters via Financial Express (India)
LONDON, OCT 20: Rapidly falling North Sea oil output has acted as a drag on non-OPEC growth this year, and analysts say if other mature fields see a similar slowdown producers may struggle to keep pace with world demand. Non-Opec producers, including Britain, Norway, Russia, Angola and north America, supply most of the world’s oil.
But in 2005 non-OPEC countries only just brought enough new oil onstream to compensate for declining output from mature fields. “Decline rates in non-Opec as a whole are accelerating,” said Paul Horsnell, an analyst at Barclays Capital. “Going forward, calculating that decline rate correctly is more crucial for net growth than calculating the increment in non-Opec oil supplies.” “These things are cumulative. Every one percent of non-Opec output that disappears is 500,000 barrels per day, and over time, it all adds up.”
UK North Sea output decline rates at 8-10% per year are among the highest in the world. The rate is well above the five percent per year decline that analysts had expected after UK production peaked in 1999. UK offshore output in June was the lowest since 1989. …
(20 October 2005)
Australian farmers told they will suffer from Govt’s failure to sign Kyoto protocol
ABC
Germany’s Ambassador has told farmers they are being disadvantaged by the Federal Government’s failure to back the Kyoto protocol. Australia and the US are the only developed countries that have not signed the agreement, which sets limits on greenhouse gases.
Ambassador Martin Lutz is touring north-east Victoria this week and says although our produce is environmentally sound, European consumers will ignore it without the protocol. “Australia has a problem when it comes to green image because everybody knows they didn’t join the Kyoto protocol and have the highest capita emissions of greenhouse gases in the world,” he said. “And so it would help very much if Australia improves this image because also the farmers here suffer a little bit from that relatively negative image.”
(16 November 2005)
‘Don’t worry’ line on petrol price isn’t sinking in
Matt Wade, Sydney Morning Herald
The high frequency of our visits to the pump makes us acutely aware of increases in the weekly fuel bill. But we pay up anyway because we are so dependent on our cars. The fluctuations in the consumer sentiment index over past three months show the price of petrol has a disproportionate influence on how we feel about our family finances and even the nation’s economic prospects. …
But the intensity of oil use – the number of barrels of oil consumed per unit of GDP – is around 40 per cent lower than at the end of the 1970s. Overall expenditure on oil consumption peaked at 5-6 per cent of gross domestic product in 1980 but has fallen to just 2 to 2.5 per cent in recent years. …
A demand shock, like the one we are now experiencing, is less problematic because the oil price increase is combined with strong global demand which helps offset any reduction in spending. …
(12 November 2005)
Same old statistics being flexed to show why one shouldn’t worry, no mention of depletion, refining constraints, costs inflation or even the recent and only slightly gloomy ABARE report.. oh well. -LJ
