Browsing by Subject "Oil industry"
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Item Oil politics in the new Iraq(2011-05) Schenke, Joanna Marie; Henry, Clement M., 1937-; Rai, VarunIraq is one of the world’s major oil suppliers, and over ninety percent of its government revenues come from oil exports. Developing an oil management strategy that politicians from all sects and ethnic groups can agree on is therefore paramount to the future political and economic health of the Iraqi state. Yet the new Iraqi government cannot agree on a comprehensive hydrocarbons framework that would allocate oil ownership rights and share revenues eight years after the overthrow of Saddam Hussein. One major political battle preventing Iraq from developing its hydrocarbons industry is over the nature of federalism among all of the sects battling for oil wealth in Iraq. This paper focuses primarily on the issue between Kurds and Arabs, because the Kurds have actively promoted oil exploration. The Kurdistan Regional Government (KRG) is now a constitutionally-protected region, and has signed 37 production sharing agreement contracts with international oil companies. The federal government in Baghdad deems these contracts illegal. The KRG and Baghdad also cannot agree on the borders for the region, as both sides claim oil-rich Kirkuk. This paper analyses major developments in the KRG and Baghdad oil industries since 2003 and examines possible future scenarios for the country’s oil sector. Drawing on international lessons learned from other oil-rich divided societies such as Nigeria, Sudan, Indonesia, and the United Arab Emirates, the paper suggest that oil ownership and revenue allocation should be decentralized to reduce secessionist pressure. The paper concludes with recommendations that the government needs to not only take care of obvious issues such as resolving ambiguities in the constitution and passing comprehensive hydrocarbons legislation, but it also needs to address export agreements and institute measures to ensure transparency. The KRG needs to develop its own oil industry, complete with access to export pipelines, and should be allowed to keep a higher percentage of KRG oil revenue over its current 17%. Iraq needs international mediation to resolve issues on Kirkuk and should also make innovative changes to the structure of its national oil company. These changes will facilitate the proper investing of oil wealth for future generations of Iraqis.Item Optimization of production allocation under price uncertainty : relating price model assumptions to decisions(2011-08) Bukhari, Abdulwahab Abdullatif; Jablonowski, Christopher J.; Lasdon, Leon S.; Dyer, James S.Allocating production volumes across a portfolio of producing assets is a complex optimization problem. Each producing asset possesses different technical attributes (e.g. crude type), facility constraints, and costs. In addition, there are corporate objectives and constraints (e.g. contract delivery requirements). While complex, such a problem can be specified and solved using conventional deterministic optimization methods. However, there is often uncertainty in many of the inputs, and in these cases the appropriate approach is neither obvious nor straightforward. One of the major uncertainties in the oil and gas industry is the commodity price assumption(s). This paper investigates this problem in three major sections: (1) We specify an integrated stochastic optimization model that solves for the optimal production allocation for a portfolio of producing assets when there is uncertainty in commodity prices, (2) We then compare the solutions that result when different price models are used, and (3) We perform a value of information analysis to estimate the value of more accurate price models. The results show that the optimum production allocation is a function of the price model assumptions. However, the differences between models are minor, and thus the value of choosing the “correct” price model, or similarly of estimating a more accurate model, is small. This work falls in the emerging research area of decision-oriented assessments of information value.Item Resource revanchism : the privatization and renationalization of the Russian oil industry(2016-05) Bilodeau, Jason Michael; Spence, David B.; Beach, Fred; Weaver, CatherineThe Russian oil industry has long been one of the most prominent and valuable oil sectors in the world. Under the Soviet Union, the oil industry was subject to tight state control. Prices and production targets were determined by political leaders in Moscow, not market signals. The 1995 industry privatization after the collapse of the Soviet Union resulted in many industry assets being auction at extremely discounted prices to a few connected businessmen. Some of the new oil company owners quickly invited Western companies to partner in Russian plays. The differences in Western business culture, oilfield operations, and profit-seeking behavior created tremendous resentment among the rank-in-file Soviet-era oilmen. They, along with conservatives, believed their skepticism of Western involvement was vindicated by a devastating Russian recession in the late 1990s. This economic crisis paved the way for Vladimir Putin’s election in 2000. A former intelligence officer with a desire to reassert Russian influence on the global stage, Putin quickly sought to recapture state control of the oil sector. By the end of his first term in 2004, Putin had orchestrated the fall of the most prominent oligarch, Mikhail Khodorkovsky, and his oil company Yukos, funneling its most valuable assets into a new state oil champion, Rosneft. The path of the Russian oil industry from fully state-owned enterprises to private companies and back to falling under heavy state influence underscores the importance of oil as a resource to the Russian state and, most importantly, how the long history of strong, autocratic governance in Russia affected its relationship with foreigners, served as the impetus for renationalization in the 2000s, and continues to influence the Kremlin’s view that Russia’s energy industry is, first and foremost, a tool of the state.