Slide 1 What Role for the Middle East In the New Geopolitics of Energy? Prof. Dr Samuele Furfari ULB Brussels, 03 April 2014
1/2/1979
LE problème de l'énergie Oil consumption in the world Energies used in the EU transport sector
World proven oil reserves are still growing
Who owns the reserve? 5
L’« anomalie géologique » du Moyen-Orient Source : BP, 2013
Production de brut de l'Arabie Saoudite 1 to 2$/b But not of best quality Aramco : 285 G$ revenues in 2010
Iran
Iraq
Strategic Crude Oil Export Pipeline Infrastructure Project Haditah
Results of the first call for tender in Iraq after 30 years Origin of Tender Mb/d Mb/d Negotiated price Field Bidders bidders submitted present Prospective ( $/b) ( $/b) BP UK China National Chine 2 Rumaila 1,0 2,85 4 Petroleum Co. (June 09) (CNPC) U.S.A. Exxon 4 1,90 2,1 UK/NL Royal Dutch Shell West (June 09) (Oct. 09) 0,28 Russia Qurna-1 Lukoil 6,49 1,90 USA 1,5 ConocoPhillips (June 09) (Oct. 09) ENI Italia US Occidental U.S.A. Korea Gas Corp Korea 4,80 2 Zubair 0,23 1,1 Iraq's State Oil Iraq (June09) (Oct. 09) Marketing Organization 20 years technical service contracts but possible extension to 25 years
Libya Kaddafi coup Kippur war Rehabilitation of Kaddafi 2004 1988 attacks Revolution of 2011
OPEC Crude export by regions (%) OPEC data Source: OPEC
¾ of ME's oil is flowing to Asia. Asia = 74%
Arab world development and oil production Source: for oil production : BP and www.indexmundi.com for GDP : The Economist http://www.economist.com/blogs/dailychart/2011/02/arab_league_map
A divided OPEC (1) Long term interest Short term interest Member states Saudi A, Kuwait, UAE, Equator, Angola, Algeria, Nigeria, Libya, Iran, Venezuela Qatar (Bahrain, Oman) Reserves Very High Medium (except Venezuela and Iran) Extraction Costs Extremely low Extremely low to higher Population Low High – youth Financing needs Low High Political system Kingdoms Republics Religion Sunni and strong Various opposition to Shiites Kaddafi /Iran : openly anti-Semitism and anti-Christians Iran Shiites and strong opposition to Sunni Saud family statement : " if Iran did not line up on nuclear, Saudi could replace Iranian crude exports " " Anyone who recognizes Israel will burn in the fire of the anger of the Muslim nation. Recognize the Zionist regime is to recognize the defeat of the Muslim world. "The "infect spot" should "be wiped off the face of the earth. " Mahmoud Ahmadinejad, Oct. 26, 2005
A divided OPEC (2) Long term interest Short term interest Relations with USA Quincy pact Venezuela + Iran : open opposition toward USA Iran : Washington Hawks's strategy: embargo on oil export and petroleum products imports (pistachios) Strategy Protect the monopolistic rest Increase as much the revenues now Keep present situation by increasing prices Produce more now Interest to have same price of Avoid development of GTL/CTL GTL/CTL Limit military capacity of Iran Future Oil ?
The end of conventional oil? • Peak? � plateau. 207 G$ in 10 y – Demand will not grow linearly continually. • Markets do not believe in peak-oil – Main oil investors are pension funds « The oil shortage is like the horizon that goes back constantly as we get closer. Oil reserves are unknown, unmeasurable and unimportant » Morris Adelman
La quarantaine 1973-2013 est terminée La contre-révolution énergétique est déjà gagnée car 1. UNCLOSS 2. Nouvelles réserves de pétrole conventionnel 3. Nouvelles réserves de gaz conventionnel 4. Gaz de roche-mère 5. Pétrole de roche-mère
United Nations Convention on the Law of the Sea UNCLOS Just after oil shocks of the 70's Montego Bay, 1982 Entered into force in 1994 It gives coastal States rights they had not before
New regions for oil and gas exploration Source: EIA, IEA World Energy Outlook 2012, BP Statistical Review, Industry Sources
Samuele Furfari 22
Saudi America Source: U.S. Energy Information Administration, Drilling Productivity Repor Source: EIA, Short Term Energy Outlook (oct 2012) The US shale gas is wet and oil produced justify any gas production.
Geopolitical consequences … Malacca Malacca streight streight
Merci pour votre attention sfurfari@ulb.ac.be
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