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Saudi Arabia Arrests 208 in Antiterrorism Sweep
Rasheed Abou-Alsamh, New York Times
Saudi Arabia announced on Wednesday that it had arrested 208 people across the country who were suspected of having ties to Al Qaeda and had been planning attacks on oil facilities in the Eastern Province and assassinations of clerics and security forces.
The Saudi Press Agency quoted a Ministry of Interior statement that said the arrests had taken place over the past several months. The suspects had formed six cells, one of which plotted to attack a logistical oil facility, according to Gen. Mansour Al-Turki, an Interior Ministry spokesman.
“One of the cells was plotting to attack an auxiliary oil facility in the Eastern Province – a logistical facility, not an oil refinery,” he said.
(28 November 2007)
Boom fuels new Saudi spending spree
Terry Macalister, The Guardian
…The soaring oil price has meant Saudi export revenues have more than tripled over the past six years. They are expected to reach $165bn this year.
Upgrading this Empty Quarter facility is one of a number of schemes to raise Saudi output from 11m barrels a day, already 13% of the world’s total and 30% of Opec’s, to 12.5m by the end of 2009. The eventual target is 15m barrels a day. Foreign firms, including Shell, France’s Total and China’s Sinopec, have been given unprecedented access to explore for gas in the hope that new supplies will feed industrial production and help conserve the oil. Saudi Aramco has also signed joint ventures with Total and America’s ConocoPhilips to establish refineries on the east and west coasts to boost exports of oil products.
The exact volume of crude that could be tapped in future is a matter of conjecture. Although the country claims to have 260bn barrels of reserves, many western sceptics feel these numbers are unreliable. They are often the same people who fear the world is past “peak production” and on its way to running out.
Whether it is because the oil is going to run out soon or because it makes sense to diversify an economy that is based almost entirely on one commodity, the Saudi ruling family is spreading its spending around.
Much of the country’s oil windfall is going abroad, with the Saudi Arabian Monetary Agency investing more than $4bn a month mainly in government bonds issued by the G7 western nations. It owns $265bn of foreign debt.
State-owned Saudi companies have also been flexing their muscles abroad this year. Saudi Basic Industries bought General Electric’s plastics business for $11.6bn, Saad Investment Company took a 3% stake in HSBC bank for $6.6bn and Saudi Telecom bought a 25% stake in Malaysia’s mobile phone group Maxis for $3bn.
(28 November 2007)
Iraq’s Uncertain Oil And Political Prospects (Part 1 Of 2)
Issam Chalabi, Middle East Economic Survey
Issam Chalabi, former minister of oil of Iraq (1987-90) and former president of Iraq National Oil Company (1981-87) recently made two presentations covering Iraqi oil and politics. The first was at Princeton University on 13 November and the second at Columbia University on 14 November. The presentations covered a number of related issues that Mr Chalabi decided later to elaborate in the form of a two-part article for MEES. The second part will be published next week.
It is common knowledge that Iraq has the second-largest proven oil reserves in the world, with no less then 115bn barrels, and probable reserves of around 250bn barrels. But why is that Iraqi oil does not account for more than a fraction of global oil supply? In fact Iraq has made an average of no more than 2.0mn b/d of its oil available to the world market for almost 27 years, with the exception of a few spells when production exceeded that.
In order to understand the current situation of the Iraqi oil industry and its future outlook, we need to go back to the past. Iraqi oil was discovered in 1927 when the first oil well was drilled in Kirkuk (after smaller discoveries in 1905 in Naftkhana); but there was much delay in getting it to the world market through the Mediterranean due to conflicts of interest between the British and the French – who held the UN mandates over Iraq and Syria respectively. Later, during the Second World War, Iraq revolted against the British. Exports were in the range of few hundred thousand b/d, but were again halted in the late 1940s during the first war in Palestine. Only after the discovery of Rumaila oilfield in the southern part of Iraq in early 1950s did exports start to rise – and also after the crisis over nationalization in Iran.
During the 1950s, Iraq enjoyed a period of diversified and successful construction programs, covering many projects.
… All indications show that Iraq’s oil production could fall, in the absence of new investment and the overhaul of current producing fields. It would be extremely difficult for Iraq to maintain output of nearly 2mn b/d due to lack of proper maintenance as well as lack of security, corruption, chaotic policies and lack of enthusiasm, according to Muhammad-Ali Zainy of the CGES in London who pointed out that that despite the infusion of hundreds of millions of dollars into the oil sector, the country’s production was not stable and had all but failed to meet pre-war levels (MEES, 29 October). The oil ministry was in turmoil because it could not carry out any of its plans in the years since the US invasion of Iraq. Producing fields were aging, and no measures were being taken to revitalize them. Hence a decline has been the pattern.
So Iraq, with current world oil prices, is losing billions of dollars that might have substituted for the need for grants, loans and accumulating debts. Had Iraq been enable to produce 3mn b/d, it would have been generating over $85mn at $80/B.
(26 November 2007)
