Geopolitical
Many has argued that the world is becoming a riskier place to do business based upon the prevailing dynamic environment of political tensions, price volatility, fiscal instability, resource nationalism, strong competition from cash-rich national companies and sovereign wealth fund. Without an appetite for risk and the vision to see a substantial resource opportunities that exist internationally in the oil and gas industry few companies venture far into large international projects along the oil and gas supply chain.
Geopolitics is the study of the effects of geography (both human and physical) on international politics and international relations or the method of foreign policy analysis which seeks to understand, explain, and predict international political behavior primarily in terms of geographical variables.
One important geopolitical consequence of shifts in international political power in the last 15years is the rise of intense political and commercial competition for control of the world’s vast oil and gas resources and infrastructure. Energy resources have in fact reshaped the geopolitical map of the world over the last 60years. The control of the development of oil and gas resources, combined with control and influence in pipeline routings, has and continues to determine the political and economic future of many nations.
Oil is the world’s most important and politically sensitive commodity and without oil and gas, today’s industrial society in developed countries would not be possible. Geopolitical trend continues to have significant impact on petroleum production, prices and trade. Geopolitics, politics and businesses are intimately entwines. Politicians establish the legislation, fiscal terms, rules, guidel...
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...and enact new law to remove the stabilisation provision in the earlier contract. Algeria in 2005 reverses the liberalisation law and introduced windfall tax and enhances state participation. Venezuela saw state participation and control of commercialisation as new legislation was formulated and changes to existing contracts together with modification to the fiscal regime. Some of the IOCs agreed to the new contracts while others like Exxon Mobil and ConocoPhillips have challenged the move at international arbitration.
In conclusion, the discussion has reveal how the phenomena involving geopolitics, resources nationalism, population growth and GDP has influence the design of fiscal regimes, policies, regulations and petroleum contracts. These phenomena have introduced some kind of flexibility in petroleum agreements and regulations to the benefit of the state.
This paper will discuss the effects of Keystone XL Pipeline project and how the findings of the research might be beneficial to the United States. The first point of argument will be the negative impact of the Keystone Pipeline to America’s economy and the environment. The second point of view will be the positive impact of Keystone Pipeline to America’s economy. Keystone XL Pipeline is TransCanada’s tar-sand transportation project. The pipeline is supposed to cut across America to be linked with Canada’s tar-sand mines. It is aimed at increasing energy security in America. However, the project has received a lot of criticism from both the citizens and environmentalists for climate reasons (Mendelsohn and Dinar 154). To understand the implications of Keystone XL Pipeline, it is important to look at its environmental and economic impacts to the United States.
Almost every single nation in our world today, the United States included, is extremely reliant on oil and how much of it we can obtain. Wars have started between countries vying for control of this valuable natural resource. The United States as a whole has been trying to reduce its reliance on foreign oil and has had some success, especially with the discovery of the Bakken formation and projects like the Keystone Pipeline. Projects like the Keystone Pipeline are important as they will allow us to transport more oil than we would be able to in train cars, and grant larger access to oil reserves in the United States and Canada. The Keystone Pipeline itself is an oil pipeline which runs from the western Canadian sedimentary basin in Alberta, Canada to refineries in the United States.
America is dependent on other nations for their ability to create energy. The United States is the world’s largest consumer of oil at 18.49 million barrels of oil per day. And it will continue to be that way for the foreseeable future considering the next largest customer of oil only consumes about 60% of what the U.S. does. This makes the U.S. vulnerable to any instability that may arise in the energy industry. In 2011, the world’s top three oil companies were Saudi Aramco (12%), National Iranian Oil Company (5%), and China National Petroleum Corp (4%). The risk associated with these countries being the top oil producers is twofold. One, they are located half way around the world making it an expensive to transport the product logistically to a desired destination. And two, the U.S. has weak, if not contentious,...
Pratt, Joseph A. “Exxon and the Control of Oil.” Journal of American History. 99.1 (2012): 145-154. Academic search elite. Web. 26. Jan. 2014.
Not only does oil development pose a huge threat to the environment, but it also poses a huge threat to human development if it is not managed in a way that enriches the human development indicators of all people in the region. The USA is one of the key interventionist states in International Politics. Yet, when one considers the lack of positive intervention New Orleans in the wake of the storm, the rationale for interventionist role the United States becomes questionable. How can one country expect to help another if they cannot protect the rights and liberties of their own people? It is often argued that fact of interventionism is likely highly linked to oil and oil wealth. Coincidentally, Hurricane Katrina occurred at the peak of the Iraq war. This might suggest that the resources necessary for the correct investment in the preparation for the storm may have been tied up in the United States economic priority in oil extraction. Oil developments in the OCS began in the 20th century. The first offshore drilling on the OCS began in 1966, a period of time which was associated with huge Hurricane damage and serial accidents including blowouts, injuries to workers and helicopter crashes. This illustrates a need for the oversight of a stringent environmental policy. The 1978
The numbers presented about trade outside of the united states is impressive. What is even more impressive is that there are less than 1% of companies in the U.S. that export, which is the lowest level of active exporters in the industrialized world and 70% of the world’s purchasing power exists outside of the U.S. This means that export in America is virtually an untapped market and many businesses are overlooking the opportunity to service a majority of their consumers. There is no reason to let fear, uncertainty, and doubt prevent a business from growth. Knowledge is the most useful resource to any individual and business, therefore if knowledge is obtained regarding the matters that bring about fear, uncertainty, and doubt it can easily be determined whether these thought are substantiated or not. Prior to watching this video, I too believed that in order to be successful in the global markets a company had to reach the level of becoming a large, reputable corporation, however, now that I have been equipped with this knowledge I have a new perspective on the growth of a business’s finances and organization. As Scott Szwast stated “In
The U.S dependency on foreign oil presents many negative impacts on the nation’s economy. The cost for crude oil represents about 36% of the U.S balance of payment deficit. (Wright, R. T., & Boorse, D. F. 2011). This does not affect directly the price of gas being paid by consumers, but the money paid circulates in the country’s economy and affects areas such as; the job market and production facilities. (Wright, R. T., & Boorse, D. F. 2011). In addition to the rise in prices, another negative aspect of the U.S dependency on foreign crude oil is the risk of supply disruptions caused by political instability of the Middle East. According to Rebecca Lefton and Daniel J. Weiss in the Article “Oil Dependence Is a Dangerous Habit” in 2010, the U.S imported 4 million barrels of oil a day or 1.5 billion barrels per year from “dangerous or unstable” countries. The prices in which these barrels are being purchased at are still very high, and often lead to conflict between the U.S and Middle Eastern countries. Lefton and Weiss also add that the U.S reliance on oil from countries ...
Oil-Led Development: Social, Political, and Economic Consequences. CDDRL Working Paper 80. Robinson, J. A., Torvik, R. & Verdier, T. (2006). Political Foundations of the Resource Curse. Journal of Development Economics, 79, 447-468.
Investing or venturing into the international market involves critical analysis of the internal and external environment in which the company operates. Usually, a company will decide to venture internationally due to a saturated market or fierce competition in the current country of operation. The demand for a company’s products may have diminished as a result of an economic crisis thus the company will target a foreign market to sustain its sales. In other words, the firms expand internationally to seek new customers for its products. For example, the current Euro zone crisis led to low demand in Europe and many companies extended their businesses to emerging markets where demand was high. A company may also venture in the international market to enhance the cost-effectiveness of its operations especially for manufacturing companies that will benefit from low costs of production in developing world. Global expansion is a long term project as it involves demanding logistics to be successful. Thorough research must be undertaken to ensure that the expansion will create value for share...
In conclusion, OPEC's monopoly of the petroleum industry has been a strong one since the 1960's since its members enjoy economies of scale. Its decisions concerning the output of petrol have always been strong affecting the rest of the world. This monopoly is socially inefficient due to the output and the deadweight loss that results. Interestingly enough, to break this monopoly, the new Iraq has the potential to turn the market power around.
Industry examination found that a large number of the conventional worldwide players tumbled to the base of their appraisals list. Chevron, BP, Occidental, Exxon Mobil, Petrochina and Murphy Oil all scored inadequately in the investigation. MSCI, a budgetary investigation firm with extraordinary aptitude in surveying the estimation of intangibles like carbon hazard, examined the petroleum business ' execution in five key classifications: operations, wellbeing and security; capacity to get to assets in developing markets; carbon discharges; interest in option vitality; and interest in unpredictable fossil powers like oil sands and oil shale, coal bed methane and coal crease gas, and both gas-to-fluid and coal-to-fluid energizes.
The measure of petroleum abundance and production in Nigeria is measured by the United States. According to the statistical data and the U.S. measures, Nigeria reserves make the country the tenth petroleum-richest nation, and by far, one of the most affluent countries in Africa. In the middle of 2001 its crude oil production was averaging around 2.2 million barrels per day. Though, there is a very prominent market for offshore rigs, nearly all of Nigeria’s primary reserves are in and around the delta of the Niger river. Ever since Nigeria became independent, it is one of the few oil producing countries that can increase its oil output drastically. The g...
Furthermore met more than 60% of worldwide vitality request by the oil and gas industry. Advancement undertakings and foundation as far and wide as possible, depend on the business. The oil and gas industry is a basic industry globally. The business might be isolated into five parts:
Expansion across seas can be very advantageous and lucrative for many companies; however, there are many risks associated with doing business overseas, and companies that intend to expand internationally should be careful and strategic when doing so. Not only do companies run the risk of experiencing a product fail due to differences in cultures, they also face severe political and economic risks as well.
The oil & gas sector faces specific risks affecting its financial performances. The main variables affecting the industry are political, geological, price, fiscal, supply and demand as well as cost risks. Given the specific risks, the demand for energy is still gr...