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Saturday, 10 October 2009

Profits before principles (Re-post)

The Iraqi oil ministry has signed a deal with Britain's BP and China's CNPC to develop the Rumaila oil field, in southern Iraq, which contains perhaps one-sixth of Iraq's oil reserves.

The deal was initially agreed to back in June, during the ministry's less-than-successful oil auction. The companies will receive $2 per barrel to operate the oil field; they're expected to boost production to 2.8 million barrels per day, almost tripling Rumaila's current output.

The federal government still needs to approve the contract.

What's ironic about this is that the Iraqi government recently barred Sinopec, another Chinese oil company, from doing business in the country. Sinopec and CNPC are different companies, but they're both owned by the Chinese government. Sort of takes the sting out of the blacklisting, doesn't it?END

TURKMENISTAN: MORE EMPTY TALK ABOUT THE RESUMPTION OF GAS EXPORTS TO RUSSIA?

Turkmenistan has proven a fickle energy-export partner for all foreign companies trying to do business there. Yet, a Kremlin spokesperson’s recent statement that Russia would resume natural gas imports as soon as the end of October, confirms that hope springs eternal when it comes to the question of Ashgabat and energy.

Turkmen gas exports to Russia stopped in April following a pipeline explosion. [For background see the Eurasia Insight archive]. Since then, the two sides have haggled about the export price. [For background see the Eurasia Insight archive].

On October 7, Natalia Timakova, Russian President Dmitry Medvedev’s press secretary, announced a political agreement had been reached on the resumption of gas supplies. A Turkmen gas expert subsequently confirmed Ashgabat’s desire to resume exports by the end of October.

PE bigwigs meeting in Dubai, raising money a focus

As the top dogs of private equity gather in Dubai next week for one of the industry's biggest events, the priority will be raising and retaining money from investors in the Middle East rather than spending it in the region.

Just three investments have been made in the Middle East by private equity firms from outside the region so far this year, according to data from Thomson Reuters, and the aggregate value of those is negligible.

That's a stark contrast from the previous four years when there was a total $4.8 billion invested.