Iraq set to get back to its pre-war Market Share

Iraq set to get back to its pre-war Market Share

A piece of information as reported by Reuters yesterday Saturday August 27, 2016 regarding an OPEC member oil producer of importance.  That is Iraq set to get back to its pre-war Market Share.  Its sight is on expanding its production and would not hear of reducing it at the forthcoming September meeting of Algiers.   

A general view shows a lake of oil at Al-Sheiba oil refinery in the southern Iraq city of Basra, in this January 26, 2016 file photo. REUTERS/Essam Al-Sudani/Files

A general view shows a lake of oil at Al-Sheiba oil refinery in the southern Iraq city of Basra, in this January 26, 2016 file photo. REUTERS/Essam Al-Sudani/Files

Iraq set on expanding oil output to gain market share

Flames emerge from a pipeline at the oil fields in Basra, southeast of Baghdad. (Image: Reuters)

Iraq is willing to play an active role within OPEC to support oil prices but will not sacrifice its goal of expanding market share and will continue to ramp up output, its oil minister said on Saturday.

Jabar Ali al-Luaibi, on a visit to the southern oil city of Basra, renewed calls for local and international oil companies in Iraq to increase production and announced plans to double crude storage capacity at the country’s southern export terminals to 24 million barrels in the “coming years” from 12 million barrels currently.

“The ministry has new ambitious plans to develop the oil sector,” he told reporters. “Among them, the most important is to increase crude output to reach a level that suits Iraq’s needs; we don’t want to specify a ceiling for future production like in the past.”

Luaibi, who became oil minister this month, said Iraq wants to “strengthen OPEC’s role in achieving a balance in the oil market,” but his comments on continuing to increase output suggested it was not looking to take part in a possible agreement to freeze output.

“Iraq is seeking to play an active role in order to support oil prices while preserving a share that is proportionate to its reserves,” Luaibi said.

Members of the Organization of the Petroleum Exporting Countries are due to meet informally in Algeria next month on the sidelines of the International Energy Forum (IEF). Russia is also expected to attend the IEF.

Iraq’s production currently stands at around 4.6 to 4.7 million barrels per day for the whole country, including the self-rule Kurdish region in northern Iraq, Luaibi said.

Iraq’s Prime Minister Haider al-Abadi on Tuesday said the country has not yet reached its full oil market share, suggesting his government is not willing to restrain crude output.

OPEC’s second-largest producer, trailing Saudi Arabia, Iraq depends on oil sales for 95 percent of its public spending. Its economy is reeling under the double impact of low oil prices and the rising cost of the war on Islamic State militants.

The government has invited international oil companies to express interest in the country’s plan to expand four of its refineries, oil ministry spokesman Asim Jihad said separately on Saturday.

The government would consider investment offers on a build-own-operate or build-operate-transfer basis for the refineries, which are located in Kirkuk, in northern Iraq, and the southern regions of Samawa, Kut and Basra, the spokesman said.

Sources in OPEC and the oil industry this week told Reuters that Iran, OPEC’s third-largest producer, was sending positive signals that it may support joint action to prop up the oil market.

Tehran refused to join an attempt in April to freeze output at January levels, scuppering those talks because Saudi Arabia said it wanted all producers to join the initiative

By Reuters


Algeria’s Economic Cooperation with Russia

Algeria’s Economic Cooperation with Russia

Algeria’s Economic Cooperation with Russia with all economic exchanges at less than $1 billion in 2015 . . . 

The recent visit of Algeria’s Prime Minister followed the meeting of the 8th session of the Algero-Russian commission on economic, trade, scientific and technical cooperation, held in July 2015.  This had been sanctioned by the signing of an MoU statement reinforcing the bilateral relations of the two countries.  It had notably enabled the signing of other bilateral agreements in order to achieve the Declaration of Strategic Partnership adopted in 2001 in Moscow.  Algeria’s Economic Cooperation with Russia is presently the object of intense scrutiny by the local academics and media alike.

Herewith is that of  Dr. Abderrahmane Mebtoul, University Professor, Expert International, . . .

This cooperation, between Algeria and Russia, is reviewed and it is immediately felt that the historical relations between the two countries are to date and by far merely declarations of intent.

Indeed, trade between Algeria and Russia, excluding armament, reached $530 million in 2014.  The pendulum is clearly in disfavour of Algeria, especially when we know that 523 out of the $530 million represent products imported by Algeria from Russian suppliers.  The remaining $7 million represents the small value of Algerian exports that include $3 million in food products.

What is the reality of this cooperation ?

For purposes of our brief contribution, only existing practical cases not feelings were the underlying facts that were taken into consideration.

We are therefore witnessing a slow development of the volume of bilateral trade that as a matter of fact reached $885 million in 2015, although it was $175 million in 2002.

Would all commercial transactions between Algeria and Russia as per the Central Bank of Algeria be carried out in Rubbles to boost trade?  Even though Algeria’s main partners happen to be (suppliers and customers) mainly Western countries and China.

Trade with the EU surplus though going down in 2015 with current streams decreasing by 27% from 2014, the EU remains the largest trading partner of Algeria with a 36.1% reduction, from $40.4 billion to $25.8 billion (i.e. 68.3% of the total of Algerian exports, against 64.2% in 2014).

Algerian imports from the EU decreased by 14.6%, from $29.7 billion to $25.3 billion (or 49.2% of total imports of Algeria).  The deficit relates also to Asia which being in 2015 the second partner of Algeria, with trade amounting to $14.4 billion (-18.6% YOY).  According to official statistics, these cover 23.0% of imports whilst absorbing only 6.8% of exports, with a trade deficit with this region de $9.3 billion, an increase of 22.6% compared to 2014, when the deficit was only $7.6 billion, because of the imbalance in its relations especially with the imbalance in Algeria against China even more important with the EU requiring a rebalancing economic interests to prevail over political feelings.

Meanwhile, the five algero-russian cooperation agreements that have lately been signed in Moscow on April 27, 2016 appear not to change the above detailed trends.  These agreements are basically, according to the Algerian Press Service (APS) a Memorandum of Understanding (MoU) in the areas of housing, cultural cooperation for 2016 to 2018, a cooperation agreement between the APS and Rossiya Segodnya, a MoU between the Algerian Atomic Energy Commission (COMENA) and its counterpart, the Russian State corporation (ROSATOM), and finally a MoU between the National Agency for the Promotion and Development of Technology Parks (NPTAC) and the Skolkovo.

But both Algeria’s and Russia’s economies appear to be in practical terms not necessarily cooperating rentiers (hydrocarbons oil semi-annuity based economies) but definitely competing (for instance isn’t the Russian giant GAZPROM directly competing with SONATRACH vis-a-vis of the European gas supply market).

Despite that however, and despite a long-standing relationship, the two nations seem to have trouble seeing eye to eye.  There seems to exist some kind of strategic energy related interests in common with a view to stabilize prices.  On the other hand, military imports from Russia being important, presumably to allow the Russians to balance the trade equilibrium and so as to contribute to Algeria setting a military industry in the context of import substitution.  The Russian Foreign Minister during a visit he has recently made to Algiers said that the two countries already had a bilateral commission on military cooperation on armaments (Moscow being the primary caregiver in arms of Algiers).  In January 2015, according to the Russian press, Algeria had ordered from Russia, 12 Sukhoi SU-34 tactical bombers in order to rejuvenate the Algerian fleet.

This command was part of a signed arms contract in 2006 with a value of $7.6 billion for the supply of missile systems, aircraft equipment and maritime and terrestrial defence technologies.  But the most important aspect of this visit concerns the delicate international political and economic juncture, marked by outbreaks of geostrategic conflict that could dangerously mortgage peace in the world.  The threat of transnational terrorism and organized crime constitute a full identity of views and a convergence between Algeria and Russia.  Thus, Russia has supported the Algerian initiatives to resolve the crises in Libya and Mali and, generally in the Sahel region.   The two countries are also in agreement with that the rules of any international crisis should be based on the norms and standards of international law, the Charter of the United Nations and respect for the sovereignty and territorial integrity of all law, the Charter of the United Nations and respect for the sovereignty and territorial integrity of every state.

Situation of the Russian economy

On 22 August 2012, Russia joined the WTO after 18 years of negotiations.  With a view to accession, Russia concluded 39 bilateral agreements on access to the services market and 57 agreements on access to the goods market.  In March 2014, Russia joining the OECD process was frozen in a context of geopolitical tensions.  The in the meantime, the Russian authorities do recognize the need to modernize the economy, to restructure sectors displaying some technology lag and to review the mode of finance of companies.  As Algeria, Russia remains a Keri economy which is largely based on the extraction and export of hydrocarbon oil.

Algero Russian MoU

Gel de la production de pétrole

Gel de la production de pétrole

Selon France 24, quatre des plus importants pays producteurs de pétrole, l’Arabie saoudite, le Qatar, la Russie et le Venezuela, se sont mis d’accord pour un Gel de la production de pétrole temporaire et au niveau de celle de janvier afin de calmer les marchés.

L’Arabie Saoudite et la Russie, le deux premiers producteurs de brut au monde, ont discuté du prix du pétrole à Doha, en compagnie du ministre Qatari de l’Énergie et de leur homologue Vénézuelien. Ensemble, ils ont décidé de geler la production d’or noir à son niveau de janvier, a annoncé mardi 16 février le représentant du Qatar. “Nous pensons, tous les quatre, que le gel de la production à son niveau de janvier est approprié pour le marché”, a déclaré le puissant ministre saoudien du Pétrole, Ali al-Nouaïmi.

Cette information, reprise dans l’Observatoire du Qatar, confirme que le Saoudien, dont le pays est le chef de file de l’OPEP et qui a jusqu’ici exclu toute réduction de l’offre pour soutenir les prix, a ajouté que c’était “le début d’un processus”. “Nous évaluerons dans les tout prochains mois pour décider si d’autres mesures sont nécessaires pour stabiliser le marché”. “Nous ne voulons pas d’importantes variations des prix, nous ne voulons pas réduire l’offre. Nous voulons répondre à la demande et stabiliser les prix” sur les marchés internationaux, a-t-il expliqué. À savoir si les prix bas du pétrole posaient un problème à l’Arabie saoudite, Ali al-Nouaïmi a répondu que ce n’était “pas un problème”, bien que son pays soit confronté à un déficit budgétaire record.

De son côté, le ministre du Qatar a indiqué que son pays, qui assure la présidence de l’Opep, comptait prendre des contacts “intensifs” avec les producteurs membres et non-membres du cartel, soulignant que l’initiative était “destinée à stabiliser le marché, dans l’intérêt non seulement des producteurs et des exportateurs de brut, mais aussi de l’économie mondiale”.

Il s’agissait d’une rare rencontre entre le Saoudien Ali al-Nouaïmi et le Russe Alexander Novak depuis que les prix du pétrole ont chuté pour perdre jusqu’à 70 % de leur valeur depuis la mi-2014. Le royaume wahhabite, qui entendait avec les autres monarchies pétrolières du Golfe défendre des parts de marché face à l’essor du pétrole de schiste américain, exigeait la coopération des producteurs non membres de l’Opep, Russie en tête, pour envisager une réduction de l’offre et tenter de soutenir les prix. La réunion pétrolière à Doha intervient alors que, parallèlement, de vives tensions opposent sur la crise syrienne la Russie, alliée du régime de Damas, et l’Arabie saoudite qui soutient des groupes armés hostiles au président Bachar Al-Assad.

Après l’annonce de l’accord de Doha, le cours du baril de Brent de la mer du Nord, la référence européenne du brut, ralentissait un peu la cadence : il s’échangeant dans la matinée à 34,20 dollars, en hausse de 81 cents par rapport à la clôture de lundi.

Source : France24.