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Energy Information on the Internet
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The American Oil & Gas Historical Society
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From Accenture Read more about functional mastery to achieve high performance. State of the Art Given the level of financial resources and attention required to
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greatest benefit. Outlook Journal, June 2004 EnergyAccenture’s Energy group has been a part of the industry for many years. Our experience spans the entire value chain, including upstream, downstream, oil service and pipeline companies. We collaborate with leading energy companies to help them meet competitive challenges—and shape solutions that advance their journey to high performance.By Subject Downstream
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Global trends in energy 2007 Number 1 Energy and materials companies face a demanding future. They must start preparing for it now. The petroleum industry's prosperity masks a growing uncertainty about the long-term ability of big international oil companies to replenish their energy reserves. They have limited access to the Middle East, which holds half of the world’s known oil and natural-gas reserves, and potential new sources—such as those located in extremely deep water or the Arctic—are difficult and expensive to extract. Big Oil has let its technological leadership lapse over the past decade or so, and it faces increased competition from national oil companies and increasingly global midsize players. The take-awayTo be more attractive as partners to the national governments controlling oil and natural-gas reserves, major international oil companies need to build capabilities that give them a clear advantage over their rivals. Europe and Russia: Charting an energy alliance 2006 Number 4 Europe and Russia must take a more concerted approach to their energy partnership.A cost curve for greenhouse gas reduction 2007 Number 1 A global study of the size and cost of measures to reduce greenhouse gas emissions yields important insights for businesses and policy makers.New horizons in global energy 2007 Number 1 Many problems seem intractable, but energy doesn’t have to be one of them.Leading change: An interview with the CEO of Eni 2006 Number 3 Paolo Scaroni explains how he helped rescue two troubled businesses and now confronts what is in some respects a more challenging task: leading a highly successful one.Capital discipline for Big Oil Web exclusive, December 2005 The oil and gas industry has a history of overinvesting at the top of a cycle. This time it should break the habit.National oil companies: The right way to go abroad Web exclusive, November 2005 Deals with foreign partners can open the door to overseas profits.Preparing for a low-carbon future 2004 Number 4 Tackling carbon exposure is more than good environmental stewardship; it could also protect a company’s share price in the near term and create a long-term competitive advantage.When payback can take decades Web exclusive, December 2004 For capital-intensive businesses, the variables in portfolio decisions can seem overwhelming. Streamlining can help.A new look at diversification 2004 Number 1 In basic materials, only diversified companies approach an efficient portfolio’s risk–return performance, since they can exploit negative correlations among the business cycles of different commodities.Shedding the commodity mind-set 2000 Number 4 No product really has to be a commodity. The trick is to know what services your customers want—and to charge more.
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BCG
Samples of BCG Thinking "Utility M&A: Beating the Odds" "Utility M&A: Beating the Odds" by Michael Finger, Jeff Gell, Gary Morsches, Rick Peters March 1, 2007
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PDF Our Server
12 pages "Unlocking China's Energy Potential" "Unlocking China's Energy Potential" by Vincent Chin, Jim Hemerling, Oliver Steen, Brad Van Tassel September 7, 2006
"Preparing for Fundamental Shifts in Energy: Strategies for a Changing Industry" "Preparing for Fundamental Shifts in Energy: Strategies for a Changing Industry" October 31, 2005
"Stake Out a Winning Position in the Global Gas Market" "Stake Out a Winning Position in the Global Gas Market" by Marc Benayoun, Rick Peters, Chris Phelps August 1, 2005In the next few years, global forces and demand shifts will affect gas markets to an unprecedented degree. Oil majors, national oil companies, and utilities must stake out their places in this increasingly global LNG market, taking into account new competitive and geopolitical factors. New opportunities and threats are emerging as a result of the intersection of the forces explored in this article. Market participants across all sectors must re-evaluate their positions and sources of advantage. PDF Our Server 8 pages
"Create a Winning Strategy for Refining"
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Offices
Industries
Kuwait Kuwait’s economy is heavily dependent on the oil sector. Oil and the refining sector account for an average 55-56% of GDP and more than three quarters of government revenues. As a result, GDP, government accounts, and the balance of payments fluctuate according to variations in oil prices.
Ernst & Young (Al Aiban, Al Osaimi & Partners) was established in Kuwait in 1952 and has eight partners, 23 managers and 95 professional staff. Ernst & Young is the largest professional services firm in Kuwait and audits one-third of all listed companies including all commercial banks. We provide tax services to approximately 70% of the market. Services Offered
We are located on the third floor of Souk As Safat, Abdulla Mubarak Street in Kuwait city. Our office is located opposite to Kuwait Scientific Museum and next to Amiri Divan Social Development Center and only five minutes drive from Meridien and Sheraton hotels.
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Saudi Arabia is the biggest oil producer in the Organization of the Petroleum Exporting Countries (OPEC). With one-fifth of the world's proven oil reserves, some of the lowest production costs, and an aggressive energy sector investment initiative, Saudi Arabia is likely to remain the world's largest net oil exporter. From January-November 2006, Saudi Arabia supplied the United States with 1.4 million barrels per day of crude oil, or approximately 14 percent, of U.S. crude oil imports. Between mid-2003 and mid-2006, Saudi Arabia showed strong economic performance due to high oil prices, increasing oil production and export earnings, paired with structural reforms, economic diversification, and stable macroeconomic policymaking. Saudi Arabia remains heavily dependent on oil and petroleum-related industries, including petrochemicals and petroleum refining. The IMF reported that in 2005, oil export revenues accounted for around 90 percent of total Saudi export earnings, 70-80 percent of state revenues, and 44 percent of the country's gross domestic product (GDP). In order to defend their most significant source of economic growth, national oil company Saudi Aramco is increasing its oil production capacity to 12.5 million barrels per day (bbl/d), by 2009.
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The United Arab Emirates has had strong economic growth due to historically high oil prices. The overall performance of the UAE's economy is heavily dependent on oil exports, which account for over 30 percent of total gross domestic product (GDP). Growth in real GDP was 7.2 percent in 2005, partially due to higher crude oil prices. For 2006, real GDP growth is forecast to slow to 5.1 percent. The non-oil segment of the UAE's economy also is experiencing strong growth, particularly the petrochemicals and financial services sectors.
The UAE is a federation of seven emirates - Abu Dhabi, Dubai,
Sharjah, Ajman, Fujairah, Ras al-Khaimah, and Umm al-Qaiwain.
Political power is concentrated in Abu Dhabi, which controls the
vast majority of the UAE's economic and resource wealth. The two
largest emirates -- Abu Dhabi and Dubai -- provide over 80 percent
of the UAE's income. In June 1996, the UAE’s Federal National
Council approved a permanent constitution for the country. This
replaced a provisional document which had been renewed every five
years since the country’s creation in 1971. The establishment of Abu
Dhabi as the UAE’s permanent capital was one of the new framework’s
main provisions. The current head of state, Sheikh Mohamed bin
Rashid Al Maktoum, took office in January 2006, following the death
of his brother Sheikh Maktoum bin Rashid al-Maktoum.
In recent years, the UAE has undertaken several projects to
diversify its economy and to reduce its dependence on oil and
natural gas revenues. The non-oil sectors of the UAE's economy
presently contribute around 70 percent of the UAE's total GDP, and
about 30 percent of its total exports. The federal government has
invested heavily in sectors such as aluminum production, tourism,
aviation, re-export commerce, and telecommunications. As part of its
strategy to further expand its tourism industry, the UAE is building
new hotels, restaurants and shopping centers, and expanding airports
and duty-free zones. Dubai has become a central Middle East hub for
trade and finance, accounting for about 85 percent of the Emirates’
re-export trade. The UAE has been a member of the World Trade
Organization (WTO) since 1995, and has one of the most open
economies in the region. It began negotiations in March 2005 with
the United States on a possible free trade agreement.
The UAE and Iran continue to dispute the ownership of three islands,
Abu Musa and the Greater and Lesser Tunb Islands, which are
strategically located in the Strait of Hormuz. All three islands
were effectively occupied by Iranian troops in 1992. The Mubarak
field, which is located six miles off Abu Musa, has been producing
oil and associated natural gas since 1974. In 1995, the Iranian
Foreign Ministry claimed that the islands are "an inseparable part
of Iran." Iran rejected a 1996 proposal by the Gulf Cooperation
Council (GCC) for the dispute to be resolved by the International
Court of Justice, an option supported by the UAE. In early 1996,
Iran took further moves to strengthen its hold on the disputed
islands. These actions included starting up a power plant on Greater
Tunb, opening an airport on Abu Musa, and announcing plans for
construction of a new port on Abu Musa. In the dispute, the UAE has
received strong support from the GCC, the United Nations, and the
United States. Although Iran remains a continuing concern for
officials in Abu Dhabi, they have chosen not to escalate the
territorial dispute. Iran is one of Dubai’s major trading partners,
accounting for 20 percent to 30 percent of Dubai’s business.
See also Oil in UAE
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Libya’s economy is heavily reliant on oil exports, but it is attempting to diversify. The country is earning high oil export revenues, but gasoline import costs are also rising rapidly.
Libya’s oil export revenues have increased sharply in recent years,
to $28.3 billion in 2005 and a forecast $31.2 billion in 2006, up
from only $5.9 billion in 1998. The rebound in oil prices since
1999, along with the lifting of U.S. and U.N. sanctions, has
resulted in an improvement in Libya's foreign reserves ($31 billion
as of June 2005), trade balance (a $17 billion surplus in 2005) and
overall economic situation (strong growth; see below). On the other
hand, higher oil earnings may also be removing incentives for Libya
to restrain spending and to implement needed economic reforms.
In part due to higher oil export revenues, Libya experienced strong
economic growth during 2004 and 2005, with real gross domestic
product (GDP) estimated to have grown by about 6.7 percent and 6.5
percent, respectively. For 2006, real GDP is expected to grow 6.7
percent, with consumer price inflation of 3.1 percent. Despite the
country's recent economic growth, unemployment remains high. In
addition, Libya's unclear legal structure, often-arbitrary
government decision making process, bloated public sector (as much
as 60 percent of government spending goes towards paying public
sector employees' salaries), and various structural rigidities have
posed impediments to foreign investment and economic growth.
There are tentative and halting signs that Libya intends to move
towards economic reform, liberalization, and a reduction in the
state's direct role in the economy. In June 2003, President Qadhafi
said that the country's public sector had failed and should be
abolished, and called for privatization of the country's oil sector,
in addition to other areas of the economy. Qadhafi also pledged to
bring Libya into the World Trade Organization (WTO), and appointed
former Trade and Economy Minister Shukri Muhammad Ghanem, a
proponent of privatization, as Prime Minister. In June 2003, Libya
unified its multi-tiered exchange rate system (official, commercial,
black-market) around the IMF's special drawing rights, effectively
devaluing the country's currency. Among other goals, the
devaluation aimed to increase the competitiveness of Libyan firms
and to help attract foreign investment into the country. In October
2003, Prime Minister Ghanem announced a list of 361 firms in a
variety of sectors -- steel, petrochemicals, cement, and agriculture
-- to be privatized in 2004. To date, however, little progress has
been made on this agenda. In July 2005, Libya decided to eliminate
customs duties on 3,500 imported goods
On April 5, 1999, more than 10 years after the 1988 bombing of Pan
Am flight 103 over Lockerbie, Scotland that killed 270 people, Libya
extradited two men suspected in the attack. In response, the United
Nations suspended economic and other
sanctions
against Libya which had been in place since April 1992. In late
April 2003, Libya's foreign minister stated that Libya had "accepted
civil responsibility for the actions of its officials in the
Lockerbie affair," and in September 2003 the UN Security Council
officially lifted its sanctions. On February 26, 2004, following a
declaration by Libya that it would abandon its weapons of mass
destruction (WMD) programs and comply with the Nuclear
Non-Proliferation Treaty (NNPT), the United States rescinded a ban
on travel to Libya and authorized U.S. oil companies with
pre-sanctions holdings in Libya to negotiate on their return to the
country if and when the United States lifted economic sanctions. On
April 23, 2004, the United States eased its economic sanctions
against Libya, with a written statement from the White House Press
Secretary stating, “U.S. companies will be able to buy or invest in
Libyan oil and products. U.S. commercial banks and other financial
service providers will be able to participate in and support these
transactions." On the same day, Libya’s state-owned National Oil
Corporation (NOC) announced its first shipment of oil to the United
States in over 20 years. On June 28, 2004, the United States and
Libya formally resumed diplomatic relations, severed since May 1981.
Finally, on September 20, 2004, President Bush signed Executive
Order 12543, lifting most remaining U.S. sanctions against Libya and
paving the way for U.S. oil companies to try to secure contracts or
revive previous contracts for tapping Libya’s oil reserves. The
Order also revoked any restrictions on importation of oil products
refined in Libya, and unblocked certain formerly blocked assets.
Libya is hoping to reduce its dependency on oil as the country's
sole source of income, and to increase investment in agriculture,
tourism, fisheries, mining, and natural gas. Libya's agricultural
sector is a top governmental priority. Hopes are that the Great Man
Made River (GMR), a five-phase, $30 billion project to bring water
from underground aquifers beneath the Sahara to the Mediterranean
coast, will reduce the country's water shortage and its dependence
on food imports. Libya also is attempting to position itself as a
key economic intermediary between Europe and Africa, becoming more
involved in the Euro-Mediterranean process and pushing for a new
African Union. In April 2001, members of the
Arab Maghreb
Union (Algeria, Libya, Mauritania, Morocco, and Tunisia) agreed
to encourage intra-regional cooperation on trade, customs, banking,
and investment issues.
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Iraq’s economy finds itself in a period of uncertainty, with the future of the critical oil sector still in limbo and the country’s security situation holding back development.
Iraq now finds itself in a period of uncertainty and transition
after more than three decades of Ba'ath party rule. Following the
end of Saddam Hussein's rule in the spring of 2003, Iraq was
governed for a year by the "Coalition Provisional Authority (CPA)"
led by the United States and the United Kingdom. On June 28, 2004,
the CPA transferred power to a sovereign Iraqi interim government,
with national elections held on January 30, 2005. On May 3, 2005,
the new transitional government was sworn in, with a new Prime
Minister. A constitutional referendum was held in October 2005, with
the constitution being approved overwhelmingly. Elections for a
permanent government were held in mid-December 2005. After six
months of debate, a national-unity government emerged, replacing the
former prime minister with Nuri al-Maliki. The constitution
(articles 108-111) addressed the control and distribution of oil
resources in general terms, but many details (e.g., exactly how oil
revenues will be distributed) were not spelled out exactly. Another
question that remains outstanding is whether or not Iraq will form a
new Iraqi National Oil Company (INOC).
Although Iraq's unemployment rate remains high (27-40 percent), the
overall Iraqi economy appears to be recovering after more than a
decade of economic stagnation, sanctions, and war. However, it is
important to note that estimates of economic growth vary widely. For
instance, Iraqi real GDP growth is estimated by
Global Insight at 34 percent
growth for 2005 and 22 percent for 2006. In contrast, the
International Monetary Fund (IMF) recently lowered its Iraq GDP
growth forecast to just 3.7 percent, citing “the continuing sabotage
of oil installations,” with forecast growth of 17 percent for 2006.
On October 15, 2003, a new Iraqi currency -- the "New Iraqi Dinar" (NID)
-- was introduced, replacing the "old dinar" and the "Swiss dinar"
used in the north of the country. Since then, the NID has
appreciated sharply, from around 1,950 NID per $U.S. in October 2003
to around 1,470 NID per $U.S. by mid-December 2005. In early
February 2004, Iraq was granted observer status at the World Trade
Organization (WTO). In late September 2004, Iraq sent the WTO a
formal request for membership.
Total, long-term Iraqi reconstruction costs could run to $100
billion or higher, with an October 2003 donors conference in Madrid
resulting in pledges of $33 billion (channeled partly through the
International Reconstruction Facility Fund for Iraq -- IRFFI). In
mid-October 2004, donor countries meeting in Tokyo agreed on the
need to speed up the disbursement or promised assistance to Iraq. To
date, only a small fraction of the money pledged in Madrid has been
disbursed. In late November 2005, the World Bank approved a $100
million loan (for education projects) to Iraq, the first such loan
in 30 years.
On May 22, 2003, the U.N. Security Council passed Resolution 1483,
lifting sanctions on Iraq, phasing out the 6-year-old U.N.
oil-for-food program over six months (the program ended on November
21, 2003), and designating a U.N. "special representative" to assist
Iraq in its reconstruction efforts. On May 27, 2003, the U.S.
Treasury Department lifted most U.S. sanctions on Iraq, thereby
implementing U.N. Security Council Resolution 1483.
In November 2003, the U.S. Congress authorized $18.4 billion for
Iraq in a "supplemental allocation" aimed at boosting Iraqi
reconstruction and economic development. As of late October 2005,
only around 79 percent of that total had been committed to projects.
About $2 billion reportedly had been spent on oil projects and over
$4 billion on power projects, with mixed results.
Iraq assumed a heavy debt burden during the Saddam Hussein years,
around $100 billion if debts to Gulf states and Russia are counted,
and even more if $250 billion in reparations payment claims stemming
from Iraq's 1990 invasion of Kuwait are included. Under U.N.
Security Council Resolution 1483, Iraq's oil export earnings are
immune from legal proceedings, such as debt collection, until the
end of 2007. In November 2004, the Paris Club group of 19 creditor
nations agreed to forgive, in stages, up to 80 percent on $42
billion worth of loans. The relief is contingent upon Iraq reaching
an economic stabilization program with the IMF.
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Iran’s economy is heavily reliant on oil exports and even though the country is earning high oil export revenues, gasoline import costs are also rising rapidly.
Iran's economy relies heavily on oil export revenues, with such
revenues representing around 80-90 percent of total export earnings
and 40-50 percent of the government budget. Strong oil prices the
past few years have boosted Iran’s oil export revenues and helped
Iran's economic situation. For 2005, Iran's real GDP increased by
around 6.1 percent. Inflation is running at around 16 percent per
year, though unofficial estimates place the figure at 40-50 percent.
Iran’s oil export revenues have increased steadily, from $32 billion
in 2004, to $45.6 billion in 2005, with 2006 estimates at $46.9
billion.
Despite higher oil revenues, Iranian budget deficits remain a
chronic problem, in part due to large-scale state subsidies on
foodstuffs and gasoline. Thus, the country's parliament (the Majlis)
decided in January 2005 to freeze domestic prices for gasoline and
other fuels at 2003 levels. In March 2006, parliament reduced the
government's gasoline subsidy allocation for FY2006/07 to $2.5
billion, compared with a request of $4 billion and costs of over $4
billion for imports last year. As of July 2006, the Iranian
government is still debating how to handle gasoline subsidies. NIOC
has said it has used nearly all of its $2.5 billion budget for
gasoline imports, but legislators have stated their opposition to
providing the additional $3.5 billion necessary to pay for imports
through the end of the fiscal year, in March 2007 (see
Oil section
for more on this subject).
Another problem for Iran is the lack of job opportunities for the
country’s young and rapidly growing population. Unemployment in Iran
is around 11 percent, but is significantly higher among young
people. Iran is attempting to diversify its economy by investing
some of its oil revenues in other areas, including petrochemicals
production. In 2004, non-oil exports rose by a reported 9 percent.
Iran also is hoping to attract billions of dollars worth of foreign
investment to the country through creating a more favorable
investment climate by reducing restrictions and duties on imports
and creating free-trade zones. However, there has not been a great
deal of progress in this area. Foreign investors appear to be
cautious about Iran, due to uncertainties regarding its future
direction under new leadership, as well as the ongoing international
controversy over the country’s nuclear program.
In June 2005, Iran held Presidential elections in which the
conservative mayor of Tehran, Mahmoud Ahmadinejad, won a surprise
victory. Ahmadinejad succeeded Mohammad Khatami, a moderate
reformist, who had been President since August 1997. Ahmadinejad ran
on a populist platform and pledged to share Iran’s oil wealth more
broadly and to reduce the nation’s income gap between rich and poor.
However, policies implemented in the economic realm since President
Ahmadinejad took office are cited by analysts as responsible for
high (unofficial) inflation rates, depressed housing and stock
markets, and rising unemployment. According to FACTS, reduced
confidence in the Iranian economy and the ongoing dispute with the
international community has combined to cause an estimated $50
billion of capital to flow out of Iran in the last year.
Sanctions
Sanctions originally imposed in 1995 by President Clinton have been
continually renewed by President Bush, citing the "unusual and
extraordinary threat" to U.S. national security posed by Iran. The
1995 executive orders prohibit U.S. companies and their foreign
subsidiaries from conducting business with Iran, while banning any
"contract for the financing of the development of petroleum
resources located in Iran." In addition, the U.S. Iran-Libya
Sanctions Act (ILSA) of 1996 (renewed for 5 more years in July 2001)
imposes mandatory and discretionary sanctions on non-U.S. companies
investing more than $20 million annually in the Iranian oil and
natural gas sectors. The ILSA terminates on August 5, 2006, unless
renewed by Congress.
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