Caspian Report - Issue: 07 - Spring 2014

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Why World Oil Prices Should Be High and Stable Luay Al-Khatteeb EXECUTIVE DIRECTOR, IRAQ ENERGY INSTITUTE Luay Al-Khatteeb 106
After a decade of volatile prices, the past three years saw an unusual period of stability in the oil market, with a barrel of crude oil averaging $110 each year. After a decade of volatile prices, the past three years saw an unusual period of stability in the oil market, with a barrel of crude oil averaging $110 each year. However, forecasts for 2014 predict a decline to an average of $105, on the basis of expanding supply and a weaker-thanexpected demand. A combination of geopolitical events in Syria, Libya and Nigeria have prevented oversupply despite the expanding entry of US shale oil into the market. The price has remained high thus far, but how long can prices stay above $100 This coming price drop arrives at a time when the world’s largest consumer is nearing its long-held goal of energy self-sufficiency. The United States embarked on this quest in the aftermath of the 1973 oil crisis, and in recent years has seen the country develop a comprehensive nuclear program, develop biofuels and seek oil from ever-more-expensive sources: the tar sands of Canada, the depths of the Gulf of Mexico and even the wilds of Alaska. Further afield, it drew on oil from Brazil’s deep-water wells and West Africa’s low-sulphur oil deposits, all of which contributes to a reduced dependency on oil from the Middle East. More recently, the development of unconventional sources of oil and gas back in the United States has led to a revolution in energy flows and policies, as the country stands on the verge of becoming a gas exporter. The rapid development of shale oil and gas fields has seemed miraculous at times, but like many of the conventional sources the US relies upon the production is more expensive (costing $60-80 per barrel) and more risky, as output and depletion rates seem less predictable than conventional sources. As a result US domestic and regional supply is quite vulnerable to price fluctuations, as witnessed when work at the tar sands of Canada came to a standstill in 2008 following a price drop. Analysts have claimed that the age of “easy oil” is over, and we are entering a period of expensive extraction and capital-intensive processing. With the shale oil and gas sector currently requiring $1.5 in capital investment 107 CASPIAN REPORT, SPRING 2014
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AHMET YUKLEYEN 16 The second big ch
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Matteo Verda 22 CONTRIBUTION OF Tra
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Matteo Verda 24 TAP will be a 760 k
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SHAREHOLDER STRUCTURE OF TAP Matteo
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Matteo Verda 28 Azerbaijani gas wil
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Matteo Verda 30 In the end, the via
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Aura Sabadus 32 Southern Gas Corrid
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Aura Sabadus 34 Russian-backed riva
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Aura Sabadus 36 The criticism has g
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Aura Sabadus 38 other large rival t
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Aura Sabadus 40 player by selling v
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and possibly further to Europe, alt
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Aura Sabadus 44 The Southern Gas Co
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Davide Tabarelli 46 Environmental e
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Davide Tabarelli 48 evaluate potent
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View of the old town Ostuni, Puglia
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Davide Tabarelli 52 of some 200 mil
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Iran Nuclear Negotiations and Turke
Page 58 and 59: Mehmet AkIf Okur 56 posal stated th
Page 60 and 61: Iranian President Hassan Rouhani an
Page 62 and 63: Mehmet AkIf Okur 60 The steps that
Page 64 and 65: Mehmet AkIf Okur 62 It is possible
Page 66 and 67: Frank Umbach 64 Strategic Perspecti
Page 68 and 69: Frank Umbach 66 Many of the shale g
Page 70 and 71: Frank Umbach 68 are considerably hi
Page 72 and 73: Frank Umbach 70 The UK government i
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Page 76 and 77: Frank Umbach 74 During the last thr
Page 78 and 79: Frank Umbach 76 approved by the gov
Page 80 and 81: Shale gas drilling rig. Frank Umbac
Page 82 and 83: THE IMPORTANCE OF TAP FOR ITALY SOM
Page 84 and 85: AntonIo SIleo 82 the end of 2011, g
Page 86 and 87: AntonIo SIleo 84 Power generation o
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Page 90 and 91: AntonIo SIleo 88 ductant chemical r
Page 92 and 93: AntonIo SIleo 90 emerge as a signif
Page 94 and 95: Radu Dudau 92 Romania’s Energy St
Page 96 and 97: Radu Dudau 94 countries pay for Rus
Page 98 and 99: Radu Dudau 96 This industry, howeve
Page 100 and 101: Radu Dudau 98 de facto monopolies i
Page 102 and 103: Radu Dudau 100 In October 2013, the
Page 104 and 105: Radu Dudau 102 In spite of the ling
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Page 110 and 111: Luay Al-Khatteeb 108 for $1 of reve
Page 112 and 113: emın akhundzada 110 Turkey as an E
Page 114 and 115: emın akhundzada 112 markets. Given
Page 116 and 117: emın akhundzada 114 First, it shou
Page 118 and 119: FatIh Ozbay 116 Discussions about V
Page 120 and 121: FatIh Ozbay 118 The Black Sea is a
Page 122 and 123: FatIh Ozbay 120 these two countries
Page 124 and 125: FatIh Ozbay 122 Montreux is quite s
Page 126 and 127: MUbarIz Hasanov 124 Some Remarks on
Page 128 and 129: Turkey will be USD 37 billion highe
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Caspian Report - Issue: 07 - Spring 2014

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