Re: this is about oil. It's always about oil

> The New Great Game: Oil Politics in Central Asia
> Ted Rall, AlterNet October 11, 2001
>
> Nursultan Nazarbayev has a terrible problem. He's the president and
> former Communist Party boss of Kazakhstan, the second-largest
> republic of the former Soviet Union. A few years ago, the giant
> country struck oil in the eastern portion of the Caspian Sea.
> Geologists estimate that sitting beneath the wind-blown steppes of
> Kazakhstan are 50 billion barrels of oil -- by far the biggest
> untapped reserves in the world. (Saudi Arabia, currently the world's
> largest oil producer, is believed to have about 30 billion barrels
> remaining.)

I am very glad that oil politics has been foregrounded but I think we
should avoid overplaying the Bush-Unocal-Taleban story, because it tends to
lead to confusion and conspiracy-theory. Let us not exaggerate:
there is much less oil and gas in Central Asia than people say.

Some of Ted Rall's statistics are wildly wrong. According to Julia Nanay (a
director at The Petroleum Finance Company Ltd. in Washington)D.C., writing
in 1998:

>>Kazakhstan's proven oil reserves are between 8 and 10 billion barrels,
but
estimated onshore oil reserves are between 15 and 30 billion barrels. The
offshore potential is not yet known, but drilling has started this October.
In terms of a comparison: Kazakhstan's proven reserves fall below Norway's
11 billion barrels, but its estimated reserves make it two or three
Norways. What is most striking about Kazakhstan, is that its proven gas
reserves of near 64 trillion cubic feet (tcf) are also enormous and well in
excess of Norway's 48 tcf. With production of about 515,000 b/d in 1997,
Kazakhstan's oil output is but a fraction of Norway's 3 million b/d. Gas
production of about 211 billion cubic feet/year (6 billion cubic
meters/year) is also a fraction of Norway's 1.4 trillion cubic feet/year
(41 billion cubic meters/year).<<

(Middle East Policy Volume VI October 1998 Number 2)

Since then Kazakh reserves have been increased by offshore discoveries,
notably the Kashagan field. Nevertheless total economically-recoverable
Caspian basin reserves are unlikely to be larger than the North Sea; ie,
about a year's world consumption of crude. Not enough to save
capitalism from the effects of declining oil production elsewhere.

According to Opec, Saudi Arabian oil reserves at 260bn bbls are almost ten
times larger than the figure for Saudi reserves which Rall cites, and are
orders of magnitude larger than Kazakh reserves. These are hardly just
details. It's important to get the basic facts right.

These figures are not exactly official secrets. Go to
http://www.opec.com/
or any number of other places, including the US govt's energy information
administration:
www.eia.doe.gov

After years of neglecting Central Asian issues, people are now going
overboard. It is still Middle East oil that matters, above all Saudi and
Iraq/Kuwaiti oil.

Yes, Central Asian oil and gas is important. As time goes by, the huge
geostrategic significance of the former Soviet Union's resources comes
clearer. Other things being equal, Europe will be critically dependent on
gas from the Russian Arctic north, from western Siberia, and from the
Caspian. China, too, will depend on gas from Turkmenistan and oil from the
Caspian.

But what does 'other things being equal' mean? Caspian and ex-Soviet energy
resources are not enough to supply the hole left by the accelerating
decline in other reserves. The North Sea, North America, Venezuela, Nigeria
and many other basins which were important additions to non-Opec supply in
the 1970s and after, are now in terminal decline. There simply is not
enough oil and gas in Central Asia to fill the gap. So something will have
to give. This is true even before you add into the mix the sensational
political instability of Central and South Asia. And the likelihood of
political crisis in Saudi Arabia.


Mark Jones