The Geopolitics of Shale

The Geopolitics of Shale, an interesting Stratfor analysis, outlining the importance of considering the natural resources as part of any foreign affairs evaluations.

Different realities and the international aid

I participated recently at an interesting discussion about some of the Western projects developed in far-away part of the world, many of them included in the category of 'sustainable development'. In the last decades, there are many important supporters of such developments, mainly from countries interested in creating their own local networks of access to rich natural resources. On the other hand, China is for a long time already there and even though it is not more efficient that, let's say, Germany, it moves faster and less bureaucratically.

However, going beyond the paradigm of 'who's the first to discover the oil field', many of the 'big' investors in Africa or Latin America are faced with the same problem. They may think too big compared with the local realities. For instance, one would be keen in providing access to mobile communications in Nigeria, but why one may need mobile phones when you don't have current water to wash your hands or drink. It may be helpful to use the cell phone to call an ambulance when some severe maladies are out of control, but 1. there are no ambulances around and 2. even if there are, the village is too far away and impossible to reach in the rainy season. 

Add to this an aspect that was not mentioned at this discussion, but which is permeating the experience of the Western investors in areas far away of the EU borders: corruption - that flourishes in many EU countries as well - but that is endemic in Africa, often with the benevolent help of the rich Westerners. 

Still, I don't think that the race is lost for ever, but I hope that within the next decade, the small and medium-sized entreprises with economic interests in those areas will claim for a significant change and will turn themselves into engines for a sustainable change. 

What about replacing 'sustainable development' with 'sustainable change'?

Is Angola ready for the elections?

On August 31, Angola will organize parliamentary elections, for the first time since the end of the civil war. For 27 years after Angola became independent from Portugal, the country was revaged by a civil war that made over 300,000 victims. 

The current president, Jose Eduardo dos Santos is in power for 33 years and the Popular Movement for the Liberation of Angola (MPLA) - which is expected to win again - is in power since 1975. During the Cold War, MPLA benefited from the support of Cuba and the Soviet Union. The main opposition is represented by the Union for the Total Liberation of Angola (UNITA) which includes former Army rebels and which is very active in the oil-rich enclave of Cabinda. Cabinda is an important source of oil for the US and China. Angola is rich in other natural resources, as gold, uranium, diamonds and gas.

In 2001, a young movement was created following the model of the 'Arab spring', but the organizers are usually harassed by the police and the representatives of the security forces - and the so-called 'caenches', muscle men. A new Constitution was adopted in 2010, but the level of application depends at a great extent by the good will of the Santos regime. 

According to a recent report by Human Rights Watch, there are a couple of problems that the authorities in Luanda should consider seriously in order to guarantee a free and fair choice. 

The main observations of HRW are:

- the need to limit the political and security forces involvement in harassing media and the political oppositions;

- the need to clarify the situation of organizers of anti-governmental protests that disappeared since March;

- the National Election Commission should guarantee the impartiality of the electoral process.

Even though the results of the elections are predictable, the content of change depends at a great extent of the change taking place till the next elections is hard to predict. 

Book Review: Crude World

As a direct consequence of the previous book I wrote about, the world of those involved with various transactions with raw materials is crude, at least immoral and violent: A crude world. Among all the resources, oil benefited of a triple attention and was introduced as actor in various evaluations of political and geopolitical moves. The war in Iraq? Of course, the cause is the oil, many answered automatically with a self-sufficient air. But what about Afghanistan? Wait and see, something have to be there excepting poppy...

What we don't talk too much is the fact that the natural resources, in wrong hands, prove to be lethal weapons turned against the population and democracy. In Iraq, not the American soldiers sold the oil for getting money for building expensive presidential palaces, but Saddam's clique. This is only an example. 

Peter Maass started the documentation  for the book started long before 9/11 and the author visited several countries as Nigeria, Russia, Kuwait, Equatorial Guinea, Saudi Arabia, Azerbaijan, Venezuela, Iraq or Kuwait. The author is following the idea of the "resources curse": natural resources, specifically oil, creates many troubles and it is not the automatic condition for improving the economic status. South Korea and Japan might be good examples in this direction. Among the cases analized - in the Middle East, Africa, Latin America - all the countries are fighting with institutionalized corruption, democratic deficit and economic unbalances. The notable exception: Norway enjoying lots of resources and equally a vibrand economy and a democratic system. In many situations, as it is the case in Russia or Saudi Arabia (who possesses 21% of the world's conventional reserves, p. 17), information about the volume of resources are classified under the category of "state secret", allowing abuses and various infringements of the international legislation.

But, oil also brought know-how, created the need for highly educated specialists becoming part of the local elites and international investments. In the latter case, the big companies adapted very rapidly to the local customs and are eager to pay as many bribes as possible to get their fields or investments. All you need is to ask "What's your number?"

The situation is not deadlocked, even it will be very difficult to challenge the deep culture of abuse and manipulation, lasting for centuries: the creation of monitoring bodies in terms of business ethics, implementation of transparent legislation, the push for democracy and rule of law all over the world. The interest for alternative energies might switch progressively the interest to other kind of energy resources, with a less appetite for arbitrary. By then, I completely agree with this affirmation (p.118):  “Like a nation or nationality, the industry has its particular belief system, its financial and political interests, its social layers and pecking orders. In some ways, it has the hallmarks of a political party and a religious movement”.

Turkmenistan defends right to diversify gas exports

AFP
April 23

Turkmenistan on Thursday defended its "sovereign" right to diversify gas export routes, as the West seeks to loosen Moscow's grip on this energy-rich but reclusive Central Asian nation.

Turkmen President Gurbanguly Berdymukhamedov told foreign energy bosses at a major conference in the nation's flamboyant capital that Turkmenistan, like any energy producer, had every right to look for new customers.

"Today we are looking for conditions to diversify energy routes and the inclusion of new countries and regions into geography of routes," he said, in an apparent snub to Russia which has a near-monopoly on Turkmen gas exports.

"A key component of securing the reliability of international energy deliveries is the diversification of routes, the creation of multi-branched infrastructure for delivery to consumers," he said.

"The diversification of alternative routes today is more than just a beneficial project," he told the packed conference hall.

His comments came after relations between Russia and Turkmenistan soured dramatically in recent weeks.

Earlier this month, Ashgabat, in a rare outburst of emotion, blamed Russian gas giant Gazprom for causing an explosion on a Turkmen pipeline by unexpectedly cutting its imports of natural gas, causing a pressure build-up.

Russia sent Prime Minister Vladimir Putin's influential deputy Igor Sechin to the Ashgabat conference in an apparent effort to contain the fallout.

The United States and European Union, keen to gain access to Turkmenistan's huge gas reserves, also sent their top officials to the gathering.

European Commission President Jose Manuel Barroso praised growing energy ties with Turkmenistan, which has begun opening up to the West since the 2006 death of longtime dictator Saparmurat Niyazov.

"Cooperation in the energy sphere is now well in hand," he said via video link to the conference.

"Our plan is to link up Turkmenistan with the European market through the South Caucasus," he said, adding he hoped to pay the nation a visit in the coming months.

The EU wants to diversify its gas imports and has placed high hopes on the Nabucco pipeline project, which is supposed to supply the bloc with gas from the Caspian Sea region by 2012-2013 while bypassing Russia.

The Kremlin has repeatedly cast doubt on the project.

Some officials at the conference saw signs that Turkmenistan was in favour of Nabucco, including Turkish Energy Minister Hilmi Guler, whose country lies on the route of the planned pipeline.

"There is a chance that Turkmenistan will join Nabucco," said Guler.

The head of Austrian oil and gas giant OMV, Wolfgang Ruttenstorfer, sounded a similar note: "Turkmenistan is expressing support of Nabucco."

Meanwhile Russia's Sechin downplayed any possible rift between Moscow and Ashgabat following the pipeline explosion in Turkmenistan.

"No accident will lead to an accident in relations with Turkmenistan," he said in his only comments to reporters.

Russia earlier this week presented new proposals for energy cooperation that could replace the 1991 Energy Charter, which it considers obsolete.

Secretary General of the Energy Charter Secretariat Andre Mernier defended the treaty at the conference, saying it had the necessary mechanisms to prevent transit disputes such as the Russia-Ukraine gas conflict in January.

Turkmenistan -- an ex-Soviet republic which lies between the Caspian Sea, Afghanistan, Iran, Kazakhstan and Uzbekistan -- is believed to have huge gas reserves beneath its mainly desert territory.

Those reserves languished mostly unexplored during the nearly two-decade rule of Niyazov, or Turkmenbashi as he preferred to be called.

But his successor Berdymukhamedov has shown signs of opening his country up to foreign investment and exploration.

US Deputy Assistant Secretary of State George Krol was scheduled to address the conference Friday.

See also:

The latest Jamestown Foundation reports on Central Asia, Russia and Energy Games

New Energy Weapon of Russia

German-Turkmen Gas Deal

OPEC to keep present output

George Jahn

AP

March 15

OPEC ministers decided Sunday not to directly cut oil output in an effort to raise prices, but to focus instead on stopping individual members from producing above their quotas.

The decision was sure to be welcomed by the U.S. and other major oil consuming countries, because setting lower output limits would have likely resulted in higher crude prices that would jolt the anemic world economy.

Cheap oil has been a rare bright spot in the otherwise gloomy global economic picture, selling in the mid- to upper $30s this week — less than a third of its summer record levels. Those prices have forced many OPEC members to revise government spending and warn that they cannot invest in further oil production.

Some OPEC members had urged direct oil output cuts by setting lower levels, as OPEC usually does when it wants to raise prices. But others, led by OPEC's main producer, Saudi Arabia, had instead favored calling on overproducing members to comply with their quotas as a way of reducing world oil supply without the risk of causing prices to rise rapidly.

Cuts agreed on since September were meant to take a daily 4.2 million barrels off the market. But the 11 members under production quotas are still overshooting their joint daily target level of just under 25 million barrels by more than 800,000 barrels a day, or 21 percent above formal set limits.

While 100 percent compliance to quotas is unlikely, even an additional 10 percent would take more than 400,000 barrels a day off markets, slicing into oversupply while reducing the price shock that an outright cut in existing quotas would have caused.

"We have urged our member countries to comply," said OPEC Secretary-General Abdalla el-Badri. "We have an overhang of 800,000 to 900,000 barrels.

"If we have more compliance, we can reduce it further."

But more drastic measures could be enacted within a few months. The ministers agreed to meet in special session on May 28 to review prices and supply — and possibly decide to reduce the oil producing club's output levels, if they think that crude is too cheap.