oil politics

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engrsajid
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oil politics

Post by engrsajid »

OIL POLITICS
OUTLINES:
INTRODUCTION
• FIRST WELL DRILL
• MOST OIL PRODUCING COUNTRIES
• OPEC
• RESERVES TYPES (CONVENTIONAL OR UN CONVENTIONAL)
POLITICAL BACKGROUND BEHIND OIL CONSUMPTION
• UPPER HANDED SAUDI,S
• MIDDLE EAST REGION(Saudi Arabia, U.A.E, Iran, Iraq, Oman, Qatar)
• WESTERN REGION (U.S.A, England, France, Australia, Germany)
• PAKISTAN PERSENT STATUS
HISTORICAL OVERVIEW OF OIL WARS
• CHARCO WAR
• WORLD WAR II OIL CHAMPGAIN
• AFGHANISTAN WAR
• SADDAM HUSSAIN WARS
• CONFLICT OF NIGERIA
• SOUTH SUDAN-SUDAN BOUNDARY CONFLICT
CURRENT SCENARIO OF OIL
• RUSSIA MILITARY INTERVENTION IN UKRAINE
• MILITARY INTERVENTION AGAINST ISIS
• SHEIKH VS SHALE
• RUSSIA RUBLE DOWN
• CANADA AND DUBAI CURRENCY DOWN
• FIRM INVESTER Of SHALE PROJECT ON RE ANANLYSIS
• LESS REVENUE FOR HIGH EXPORTER OF COUNTRIES
FUTURE IMPACTS OF OIL
• ECOSYSTEM DESTRUCTION
• ARAB COUNTRIES ECONOMY DEPLETION
• DEPLETION OF RESERVES LEADS TO WAR
• EOR METHODS VS SELLING PRIZE

ESSAY:
A century ago, petroleum what we call oil was just an obscure commodity. Todays it is almost as vital to human existence as water (James Buchan)
Control oil and you control nations, control food and you control the people (henry Kissinger)
The complex mixture of hydrocarbon termed as crude oil or black gold has governed a pivotal status in the world. Since from the discovery of the first oil well in Pennsylvania state Titusville in 1859 by Seneca Oil Company which revealed his importance of application in major field like transportation, air travel, electricity, war transportation and its 40 products. From that moment it captured the attention of the nations as channel of becoming rich and economical wealth.
The black gold brought revolution in the politics of 19th century. Internal powerful firms of developed nations urged ruling parties to change their policies and their planning’s to grab the oil resources. It laid the foundation of diplomatic relation and war with most oil reserves containing countries. As a result many war came into existence, some became rich some came under destruction. Those who worked for interest of United States were raised and those who went against their objectives meet the worse socio economic condition. In order to analyze the nature of oil we have to sail through past and by sharply analyze the current scenario of oil politics we would conclude its consequence as blessing or curse.
Basically, there are major two types of reserves:
Conventional reserves are reserves which have permeability greater than 0.1 millidarcy which can easily produce by reservoir to surface simply having potential from sub surface to surface.
Unconventional reserves are those who have the permeability less than 0.1 millidarcy the producing are very tight compacted and they are not easy to recover reserves from reservoir especially shale oil, tight oil, oil sand, thermal DE polymerization and coal beds.
Generally, most oil proven reserves are found in the beds of Venezuela, Saudi Arab, Canada, Iran, Iraq, Kuwait, UAE, Russia, Libya, Nigeria and then onwards to Ethiopia. In order to understand the geographical and geological importance of oil it can be better understood by regions.
The Middle East region is most enrich and oil blessed region in the world which contains one third of the world oil reserves and almost 75% of crude oil production extracted from this region. The reserves are as fallows Saudi Arab (265.4Bbbl), Iran (151.2Bbbl), Iraq (143.1Bbbl), Kuwait (101.5Bbbl), UAE (97.8Bbbl), Libya (47Bbbl) and so on Qatar, Oman and other countries. Almost most reservoirs are conventional especially in Saudi Arab getting production from casing instead of tubing.

However, in south and north America region two country have giant reserves of oil that is Venezuela (296.5Bbbl) and Canada (175Bbbl) where as U.S.A (26.4Bbbl) and Mexico (10.4Bbbl) have the reserves but dreadful situation for this region most of reservoir are unconventional sand oil and shale oil are found in these state. They have to use advance enhance oil recovery (EOR) method to extract the oil from these beds and there operating cost is high and risk factor is there.
Moreover, in Eurasia region Russia and Kazakhstan have the big reserves of oil. Russia (80Bbbl) and Kazakhstan (30Bbbl) and rest of regions asia, Europe and Africa the reserves have been estimated b/w 15 to 1Bbbl
In 1960 when international oil market was largely dominated by big multinational companies like seven sister and other. In these decades profit was governed by these companies and only some share was given to the state. On 14 September 1960 Opec came into existence an international organization having head quarter in Vienna. Significantly, main objective of this organization is to coordinate and purify petroleum policies of its member and makes sure of stabilization and availability of oil in market it have twelve members Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE and Venezuela.
OIL AS LEADING CAUSE OF WAR:
Initially, in 1932-1935 Chaco war was fought between Bolivia and Paraguay over control of the northern part of the Gran Chaco region of South America which was thought to be rich. Both South countries were poor faced lot of contiguous situation in continuing war piece of region. As a result the peace treaty was signed in Paraguay.
Later, during second world war Britain soon realized that Germany was on front in oil supply then Britain choose the strategy of destroying oil assets of Germany that is nazi Germany oil refineries, synthetic oil plants, storage depots, and other chemical works and natural oil was available in northern Germany, Rietberg and Heidi were destroyed it is also an oil war.
Since, 1978 till 2013 Afghanistan become victim at no of time by mean of soviet attack 1979 to 1989. Then 1992 to 1996 civil war after resignation of communist president, after that 1996 to 2001 Taliban came into picture and formed Islamic emirates of Afghanistan. After 9/11 big catastrophic attack USA show their interval of power attack. These all war time by time belongs to oil politics for Middle East oil.
Similarly, in the same decades of 1979 to onwards Saddam Hussain emerged as fifth president of Iraq belonged from Baath party. As a president he portrayed his images Arab extremist and ambiguous leader on first decades of his government he attacked on the Iran (PERSIAN GULF WAR) it was for two reason conflict of boundaries and Iran revolutionary movement of shias, it lasted to 1988 then when Kuwait increased the oil production in 1990 it became alarming situation of losing status in exporting countries then Saddam Hussain attacked about 650 to 730 producing well of Kuwait.
Further, USA and UK accompanied attacked Iraq in 2003 for not handing mass destruction weapon (MDW) to them. There another interest was oil reserves of Iraq they used these reserves for their activities in the Middle East region. It lasted for eight year and ended in 2011.
Likewise, the conflict of Niger delta was a great issue in 1990s decades between the foreign oil cooperation and no of ethnic groups of Niger delta on the oil wealth. which persist to 2013 until democracy introduced in 2013. There was issue of oil wealth has militarized the whole even the police force came in action against these groups.
The Heglig Crisis was an armed conflict between the countries of Sudan and the South Sudan in 2012 over oil-rich regions between the South Sudan's Unity and Sudan's South Kordofan. South Sudan invaded and briefly occupied the small border town of Heglig before being pushed back by the Sudanese army. Small-scale clashes continued until an agreement on borders and natural resources was signed on September 26, resolving most aspects of the conflict.
CURRENT SCENARIO:
Significantly, in this year oil politics is at his peak momentum. No of prospective are abruptly changed, recent enhancement in oil maturity is appreciate able and the current circumstance that large volume of masses are watching are looks so easy to absorb current situation but its internal approach of impact is far behind the analysis of common masses. Yet, the economist and well known analyst have simulated this situation are as fallow.
Saudi Arabia is at his chaos and lust of maintaining oils share around the world because the alarming situation has arisen for Saudi Arab. United State has been developing its shale oil reserves by hydraulic fracturing or fracking job which comes under category of secondary recovery method in oil industry. Almost 20000 wells are developed in northern America till now and under process of production. Similarly, Africa is also step up in oil industry export field they are also thinking to develop their number of wells for increase their economy and GDP from oil exporting.
However, it is one side of the diplomatic strategy to hold crown of big oil exporter country, the next big deal is that house of Saud main targeted zone is Iran, Iraq and Russia and empire of chaos. expressively, it is clear that from this temptation the empire of chaos will be affected because some of them are holding sour and heavy oil which is not easily to purify and recovered from reservoir. The house of Saud is showing their aggression because the promise was not fulfilled bashar al assad must go and USA is looking forward to sign a nuclear deal with the iran, Saudis know that in future Russia, iran and Iraq would bypass the supply quantity of oil. Russia will dominate the Europe region in supplying and iran and Iraq in middle east and Asia regions.

Intentionally, house of Saud’s bravely and wickedly adopt technique of lowering price of crude oil in international market through channel of Opec. This predatory price technique working scheme is that unconventional reservoir needed massive hydraulic fracturing job in order to extract oil from very low permeable shale formations and it is expensive job and its recovery method risk factor is there if Crude oil selling prize is below than cost of production then how USA will produce shale wells. At least the need $100 per barrel selling prize for fractured well and now it is dropped to $60 per barrel, it is heavy loss if they produce shale wells. For Russia it is panic time for
them because Brent crude oil prize is fallen below $60 and for their economic stabilization and for continuing operation in Ukraine the prize should be between $80 to 100. Even rubble is gone to its least position against dollar its 11% depreciation in this currency a night mare situation for Russia.
House of Saud’s believes that this alarming call would force Moscow to abandon its support of Damascus and Washington to scotch a nuclear deal with Tehran. Similarly it will deplete the share of competitor in middle and long term.
So far, its consequence is not pleasant for majority of the countries but for consumer it is golden time to enhance their economy and do work over on their energy crisis which can be easily done by current Brent crude oil introduced by market. Canadian, Dubai Durham, Russian economy is affected. Similarly, less revenue is generated for the Opec countries there economy is also at edge because they are mainly dependent on the revenue comes from oil. However, china and India is enjoying the taste of span of oil glut. They don’t import oil and waiting for clear figure of oil price and least oil prize.
In this whole scenario Pakistan attain wise decision for not importing oil in inflation of prize situation and waiting for exact dip in the situation. As far concerning with oil reserves in Pakistan it is 313MMbbl. But there is another interesting fact Pakistan have third biggest reserves of coal which is another form of hydrocarbon and it is about 185.7 billion tones. By degasification of coal reserve we can produced oil more than Saudi Arab far beyond any ones thought.
FUTURE IMPACT AND REMEDIES:
In future if lot of oil projects would introduce in order to enhance their economy and for war purpose then it also lead to very harmful aspect of health safety environment. The Gulf of Mexico settled spill prime example of marine life damage and other environment damage. Oil Spill will also lead to giant losses for producing company as well as nearby resident will. The harm full chemicals used in refining oil and flaring of unwanted gas during production. Similarly containments of Sulphur and carbon will lead to unsafe environment conditions. In advance fracturing company will use water chemical at high pressurized rate in which there is threat of contamination of air water and also health prospective. So clean and strict HSE policies should be introduced to decrease the risk factor environment damage.
Similarly, Middle East region is in red zone. Internal controversial theories may be revealed in future with respect their reserves. Personal difference between Saudi Arab, Iran, Iraq and Syria might drag him in to hale. They have to stop prevailing in chaos and dominance nature to recognize himself as a king of black gold. Russia will try to occupy same map of Russia before inception of Kazakhstan Kirgizstan Turkmenistan and other sub division. This is because for to reestablish old Russia country and most powerful nuclear country of the world with most nuclear arsenal.
There two possible condition for oil consumption in future, if renewable resource would introduce and oil consumption become less than production than countries having strong agricultural and goods manufacturing background will be in comfort zone and there economy will be stronger then oil countries. Secondly if renewable resource would not introduced then oil countries will be in dominant economical countries and there would be high risk factor to attack and capture the oil reserves of middle east countries and other countries like Canada, Venezuela, Kazakhstan. It responsibility of united nation to introduce such institution and charter who protect assets of oil countries.
When oil will reserves will be depleted and only options that would is to apply enhance oil recovery method to recover remaining oil reserves of the well then in this particular situation crude oil prize will shoot to its highest selling prize of all time. Ultimately we will have not any remedial option on that instead of that to produce tight reserves and implement eor application on the well it will be harmful for health purpose and environment contamination. So big sharp application will be needed to recover oil reserves on secure channels.
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FANARCO
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Re: oil politics

Post by FANARCO »

Thanx sajid,

Great article. I shared it into LinkedIn
engrsajid
Posts: 21
Joined: Sun Feb 09, 2014 10:31 am
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Re: oil politics

Post by engrsajid »

my pleasure sir, its quite difficult to compile all the aspect revolving around the oil industry but i tried my level best to make it some level informative
mehrunisa
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Re: oil politics

Post by mehrunisa »

good analysis
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