Extreme hydrocarbons: Russia returns to Africa and the Middle East
If a country is rich in natural resources, it will not necessarily prosper. Moreover, the presence on its territory of oil, gas, coal, ores, and other minerals can cause serious problems. Such countries often become victims of revolutions, military coups, civil wars, outbreaks of terrorism, foreign invasions. This leads them to ruin, poverty and an increase in the number of refugees.
Therefore, it is not surprising that the Middle East and Africa, possessing the richest resources, are the most distressed regions that have experienced or are now experiencing various adversities. It is the inhabitants of these regions that make up the vast majority of refugees who have flooded Europe.
In solving their problems, the countries of Africa and the Middle East could be helped by the export of hydrocarbons. But to establish their development they are hindered by a commonplace reason - lack of finances. To solve their problems, they have to seek help from more powerful and developed states.
And even if they accuse me of cheering patriotism and throw stones at me, they consider the Russian Federation to be one of such countries in this region. Moreover, some developing countries prefer to do business with Russia, and not with any other countries.
The fact that many third world countries prefer to deal specifically with Russia is a certain logic. It is hard to argue that technologically and financially the countries of the West and China are still ahead of us. But in the Middle East and Africa, many successful examples of cooperation with our country in the Soviet era are still remembered. They understand that the Russians will not become new colonizers for them.
I will not argue that the influence of Russia on this region is stronger than the influence of China, the USA or Western European countries. This is far from the case, but the number of developing countries with which our country cooperates in the oil and gas sector is quite large, and the financial indicators of such interaction are growing steadily.
Cooperation with Western countries for Middle Eastern and African states often threatens their sovereignty and leads to a weakening of power. Supporting opposition movements in order to replace current leaders with “pocket” ones, political pressure, threats of sanctions - everyone knows these methods of work of Western countries with their partners.
As for China, it behaves apolitical and does not try to export its ideology to other countries. But the Chinese are driving their wards into such debts that not only children, but also grandchildren, will not pay.
Russia, despite its geopolitical ambitions, does not encroach on the national sovereignty of the countries with which it works, and is guided for the most part economic considerations, trying to build relationships based on mutual benefits.
As for many other countries in the Arab world, the main troubles of Syria began in 2011, when the so-called “Arab spring” came. Then a destructive and bloody civil war came to this country. Moreover, then radical Islamists raised their heads, taking control of a significant part of the territory of Syria and Iraq and proclaiming the creation of an Islamic state. The activities of this and several other extremist organizations were soon banned in many countries of the world, including Russia.
At the invitation of the government and the lawful president of the country, Bashar al-Assad, Russia provided substantial military assistance to Syria. It was the support of the Russian Federation that helped the country's authorities regain control of most of the country's territory and even begin to restore the economy.
Although the reserves of Syrian oil fields are more than modest by Middle Eastern standards, until 2011 the country was able not only to provide itself with the necessary volume of oil products, but also to export oil. For the most part, Syria has sold hydrocarbons to EU countries. Previously, about 390 thousand barrels of oil and more than five billion cubic meters of gas were produced daily in the country, but after the outbreak of the civil war, almost all oil production had to be curtailed. Its volumes fell to the level of 30-32 thousand barrels. Since the country's needs for “black gold” are more than 100 thousand barrels per day, Damascus was forced to buy oil, mainly from Iran. The country experienced a shortage of oil products.
Today it is too early to talk about the complete stabilization of the situation in Syria, but it is difficult to argue that the country is gradually moving to a peaceful life. Russia helps her in this. Given the contribution of our country to the defeat of ISIS and other radical groups, in 2018 it received exclusive rights to develop oil and gas fields in this Middle Eastern country.
Sometimes this collaboration took, to put it mildly, bizarre forms. For example, the Fontanka publication in 2017, citing a source close to the RF Ministry of Energy, claimed an unusual deal between the Syrian government and Euro Policy, owned by Russian businessman Yevgeny Prigozhin. The deal gave the company rights to 25 percent of the oil and gas produced in Syria. True, the deposits themselves at the time of the conclusion of the contract were in the hands of terrorists, so the Russians had to release them on their own. According to the Fontanka reporters, the liberation and subsequent protection of the deposits was handled by the Wagner private military company well-known in Russia and abroad.
Other Russian companies have also joined the development of oil and gas fields in Syria.
Many of our business people don’t like such activity of our business in this Middle Eastern country. This is especially true for the United States and Turkey, which have their own economic interests.
For the global oil and gas industry, not only Syria’s deposits are of interest, but also its geographical location. The fact is that the ATS could be a transit country between the Gulf countries and Europe. Perhaps through its territory it would be advisable to lay new pipelines. But at the moment it’s too early to think about it, since the situation in the country is still unstable.
Despite similar political and economic problems, the situation in the Iraqi oil and gas industry is fundamentally different from the situation in Syria. If the Syrian oil reserves can be called quite modest, then Iraq is a real treasury. In terms of production of this raw material, it ranks fourth in the world, second only to Saudi Arabia, Russia and the United States.
According to various sources, oil production in Iraq ranges from 4,4 to 4,8 million barrels per day, with 4 million barrels going abroad. Iraqi oil minister Jabbar al-Luaybi argues that this is far from the limit. According to his forecasts, already this year the level of oil production in the country can reach 5 million barrels per day, and by 2024 it can reach 6-7 million.
At the same time, the lion's share of oil production in Iraq belongs to foreign companies. It is engaged in a variety of countries, from the United States and China to Malaysia and Angola. Russia also did not stand aside.
The Russian company Rosneft has entered into a very lucrative contract for the development of oil fields in Iraqi Kurdistan. The Kurds gave Russia the right to purchase up to 70% of the oil produced in this region, and at a very competitive price. In addition, Rosneft received a 60 percent stake in Iraq’s largest oil pipeline, Kirkuk-Ceyhan, which is almost a thousand kilometers long. But after Kurdistan declared independence from Iraq, the Baghdad government declared the contracts concluded with the Kurds illegal. Among them were agreements with Rosneft. And taking into account the fact that the Iraqi government transferred a significant part of the powers in the oil and gas industry to the British corporation BP (British Petroleum), now, probably, it will be necessary to negotiate again, both with Baghdad and BP.
For Kirkuk's oil, a serious fight broke out between Baghdad, the Kurds, Russia, the United States, Britain and Iran. And this is not surprising, because about 8 billion barrels of oil are at stake.
However, the Russian expansion of its presence in the oil and gas sector of Iraq is taking place not only in Kurdistan, but also in other areas. For example, in Western Courna Lukoil is developing 85 percent of the field, with reserves estimated at 13 billion barrels. The remaining 15 percent is managed by the Norwegian company Statoil. And the Badra field, with a volume of about 3 billion barrels, is being developed by the Russian company Gazpromneft together with its Malaysian and South Korean partners.
Despite wars and internal conflicts that have been going on in Iraq for several decades in a row, the oil and gas industry is showing excellent performance. True, the production of oil and gas in this country is mainly carried out by foreign companies. The remaining sectors of the economy of this country are in poor condition. Iraq is experiencing serious difficulties with the supply of electricity and water; it needs to restore infrastructure.
Russia has the closest ties on the African continent in various fields with the Arab countries located in its northern part. This also applies to the oil and gas industry.
These countries also did not pass the "Arab Spring". In northern Africa, Libya suffered the most from it. After the overthrow of the regime of Muammar Gaddafi, the country has been plagued by civil war for many years. Now in it in parallel there are two centers of power, warring with each other.
Officially, Russia does not support either side, maintaining neutrality and calling for an end to the conflict. True, the Ministry of Foreign Affairs of the Russian Federation is in contact with the UN-recognized government of Sarraj, located in Tripoli. On the other hand, Field Marshal Khalifa Haftar, who is trying to capture Tripoli and overthrow Sarraj, is also not offended by the attention of Moscow. He even repeatedly visited the Russian capital, meeting with Foreign Minister Sergei Lavrov and Defense Minister Shoigu. In the West, the point of view is widespread that it is Haftaru that Russia sympathizes with and secretly supports him.
Actually, there is some truth to this. Khalifa Haftar is now a force that, in all likelihood, is able to unite a country torn to shreds.
The political situation in Libya is of interest not only to the leadership of our country, but also to the oil and gas companies of Russia. Although Rosneft in 2017 signed an agreement with the Libyan National Petroleum Corporation (NOC) on investments in the oil industry, primarily in the exploration and development of oil fields, the protracted internal conflict in this North African country impedes its implementation in practice.
To begin to work quietly in Libya, it is necessary to stop hostilities and unite the country. Alas, this is hardly possible in a peaceful way. Recently, Prime Minister Sarraj said he rejects any negotiations with Field Marshal Haftar. This means that peace in this country, unfortunately, can come only after the victory of one of the parties. And the Haftar army’s chances of victory are quite high.
When the conflict calms down in this country, Rosneft will be able to return to the agreement on cooperation with Libya and actively engage in oil production in this country.
Rosneft is engaged not only in oil, but also in natural gas. It came to this segment relatively recently, so it is almost impossible for it to develop this raw material in Russia, where Gazprom and Novatek reign. This makes the company more actively behave abroad. Rosneft has developed great activity in the gas sector on the African continent.
Here, a Russian company often works in cooperation with partners from Western countries. For example, Rosneft is engaged in offshore gas production in Egypt together with the Italian company Eni, is developing three gas blocks in Mozambique along with the US ExxonMobil.
By the way, in Mozambique, Rosneft also has a concession for the exploration of oil and gas fields. It is also known about the company's cooperation with the Nigerian Oranto Petroleum, as well as about joint work with Algerian partners.
Thus, Russia is actively cooperating in the oil and gas sector with countries in Africa and the Middle East, many of which are now considered or in the past were considered hot spots on the planet. At the same time, Russian companies not only benefit from such cooperation, but also contribute to the recovery of the economies of these countries, and in some cases, the resolution of internal conflicts.
Therefore, it is not surprising that the Middle East and Africa, possessing the richest resources, are the most distressed regions that have experienced or are now experiencing various adversities. It is the inhabitants of these regions that make up the vast majority of refugees who have flooded Europe.
In solving their problems, the countries of Africa and the Middle East could be helped by the export of hydrocarbons. But to establish their development they are hindered by a commonplace reason - lack of finances. To solve their problems, they have to seek help from more powerful and developed states.
And even if they accuse me of cheering patriotism and throw stones at me, they consider the Russian Federation to be one of such countries in this region. Moreover, some developing countries prefer to do business with Russia, and not with any other countries.
They trust Russia
The fact that many third world countries prefer to deal specifically with Russia is a certain logic. It is hard to argue that technologically and financially the countries of the West and China are still ahead of us. But in the Middle East and Africa, many successful examples of cooperation with our country in the Soviet era are still remembered. They understand that the Russians will not become new colonizers for them.
I will not argue that the influence of Russia on this region is stronger than the influence of China, the USA or Western European countries. This is far from the case, but the number of developing countries with which our country cooperates in the oil and gas sector is quite large, and the financial indicators of such interaction are growing steadily.
Cooperation with Western countries for Middle Eastern and African states often threatens their sovereignty and leads to a weakening of power. Supporting opposition movements in order to replace current leaders with “pocket” ones, political pressure, threats of sanctions - everyone knows these methods of work of Western countries with their partners.
As for China, it behaves apolitical and does not try to export its ideology to other countries. But the Chinese are driving their wards into such debts that not only children, but also grandchildren, will not pay.
Russia, despite its geopolitical ambitions, does not encroach on the national sovereignty of the countries with which it works, and is guided for the most part economic considerations, trying to build relationships based on mutual benefits.
Syria and oil
As for many other countries in the Arab world, the main troubles of Syria began in 2011, when the so-called “Arab spring” came. Then a destructive and bloody civil war came to this country. Moreover, then radical Islamists raised their heads, taking control of a significant part of the territory of Syria and Iraq and proclaiming the creation of an Islamic state. The activities of this and several other extremist organizations were soon banned in many countries of the world, including Russia.
At the invitation of the government and the lawful president of the country, Bashar al-Assad, Russia provided substantial military assistance to Syria. It was the support of the Russian Federation that helped the country's authorities regain control of most of the country's territory and even begin to restore the economy.
Although the reserves of Syrian oil fields are more than modest by Middle Eastern standards, until 2011 the country was able not only to provide itself with the necessary volume of oil products, but also to export oil. For the most part, Syria has sold hydrocarbons to EU countries. Previously, about 390 thousand barrels of oil and more than five billion cubic meters of gas were produced daily in the country, but after the outbreak of the civil war, almost all oil production had to be curtailed. Its volumes fell to the level of 30-32 thousand barrels. Since the country's needs for “black gold” are more than 100 thousand barrels per day, Damascus was forced to buy oil, mainly from Iran. The country experienced a shortage of oil products.
Today it is too early to talk about the complete stabilization of the situation in Syria, but it is difficult to argue that the country is gradually moving to a peaceful life. Russia helps her in this. Given the contribution of our country to the defeat of ISIS and other radical groups, in 2018 it received exclusive rights to develop oil and gas fields in this Middle Eastern country.
Sometimes this collaboration took, to put it mildly, bizarre forms. For example, the Fontanka publication in 2017, citing a source close to the RF Ministry of Energy, claimed an unusual deal between the Syrian government and Euro Policy, owned by Russian businessman Yevgeny Prigozhin. The deal gave the company rights to 25 percent of the oil and gas produced in Syria. True, the deposits themselves at the time of the conclusion of the contract were in the hands of terrorists, so the Russians had to release them on their own. According to the Fontanka reporters, the liberation and subsequent protection of the deposits was handled by the Wagner private military company well-known in Russia and abroad.
Other Russian companies have also joined the development of oil and gas fields in Syria.
Many of our business people don’t like such activity of our business in this Middle Eastern country. This is especially true for the United States and Turkey, which have their own economic interests.
For the global oil and gas industry, not only Syria’s deposits are of interest, but also its geographical location. The fact is that the ATS could be a transit country between the Gulf countries and Europe. Perhaps through its territory it would be advisable to lay new pipelines. But at the moment it’s too early to think about it, since the situation in the country is still unstable.
Fighting for Iraq's Resources
Despite similar political and economic problems, the situation in the Iraqi oil and gas industry is fundamentally different from the situation in Syria. If the Syrian oil reserves can be called quite modest, then Iraq is a real treasury. In terms of production of this raw material, it ranks fourth in the world, second only to Saudi Arabia, Russia and the United States.
According to various sources, oil production in Iraq ranges from 4,4 to 4,8 million barrels per day, with 4 million barrels going abroad. Iraqi oil minister Jabbar al-Luaybi argues that this is far from the limit. According to his forecasts, already this year the level of oil production in the country can reach 5 million barrels per day, and by 2024 it can reach 6-7 million.
At the same time, the lion's share of oil production in Iraq belongs to foreign companies. It is engaged in a variety of countries, from the United States and China to Malaysia and Angola. Russia also did not stand aside.
The Russian company Rosneft has entered into a very lucrative contract for the development of oil fields in Iraqi Kurdistan. The Kurds gave Russia the right to purchase up to 70% of the oil produced in this region, and at a very competitive price. In addition, Rosneft received a 60 percent stake in Iraq’s largest oil pipeline, Kirkuk-Ceyhan, which is almost a thousand kilometers long. But after Kurdistan declared independence from Iraq, the Baghdad government declared the contracts concluded with the Kurds illegal. Among them were agreements with Rosneft. And taking into account the fact that the Iraqi government transferred a significant part of the powers in the oil and gas industry to the British corporation BP (British Petroleum), now, probably, it will be necessary to negotiate again, both with Baghdad and BP.
For Kirkuk's oil, a serious fight broke out between Baghdad, the Kurds, Russia, the United States, Britain and Iran. And this is not surprising, because about 8 billion barrels of oil are at stake.
However, the Russian expansion of its presence in the oil and gas sector of Iraq is taking place not only in Kurdistan, but also in other areas. For example, in Western Courna Lukoil is developing 85 percent of the field, with reserves estimated at 13 billion barrels. The remaining 15 percent is managed by the Norwegian company Statoil. And the Badra field, with a volume of about 3 billion barrels, is being developed by the Russian company Gazpromneft together with its Malaysian and South Korean partners.
Despite wars and internal conflicts that have been going on in Iraq for several decades in a row, the oil and gas industry is showing excellent performance. True, the production of oil and gas in this country is mainly carried out by foreign companies. The remaining sectors of the economy of this country are in poor condition. Iraq is experiencing serious difficulties with the supply of electricity and water; it needs to restore infrastructure.
Libyan dilemma
Russia has the closest ties on the African continent in various fields with the Arab countries located in its northern part. This also applies to the oil and gas industry.
These countries also did not pass the "Arab Spring". In northern Africa, Libya suffered the most from it. After the overthrow of the regime of Muammar Gaddafi, the country has been plagued by civil war for many years. Now in it in parallel there are two centers of power, warring with each other.
Officially, Russia does not support either side, maintaining neutrality and calling for an end to the conflict. True, the Ministry of Foreign Affairs of the Russian Federation is in contact with the UN-recognized government of Sarraj, located in Tripoli. On the other hand, Field Marshal Khalifa Haftar, who is trying to capture Tripoli and overthrow Sarraj, is also not offended by the attention of Moscow. He even repeatedly visited the Russian capital, meeting with Foreign Minister Sergei Lavrov and Defense Minister Shoigu. In the West, the point of view is widespread that it is Haftaru that Russia sympathizes with and secretly supports him.
Actually, there is some truth to this. Khalifa Haftar is now a force that, in all likelihood, is able to unite a country torn to shreds.
The political situation in Libya is of interest not only to the leadership of our country, but also to the oil and gas companies of Russia. Although Rosneft in 2017 signed an agreement with the Libyan National Petroleum Corporation (NOC) on investments in the oil industry, primarily in the exploration and development of oil fields, the protracted internal conflict in this North African country impedes its implementation in practice.
To begin to work quietly in Libya, it is necessary to stop hostilities and unite the country. Alas, this is hardly possible in a peaceful way. Recently, Prime Minister Sarraj said he rejects any negotiations with Field Marshal Haftar. This means that peace in this country, unfortunately, can come only after the victory of one of the parties. And the Haftar army’s chances of victory are quite high.
When the conflict calms down in this country, Rosneft will be able to return to the agreement on cooperation with Libya and actively engage in oil production in this country.
Russia is walking on the Black Continent
Rosneft is engaged not only in oil, but also in natural gas. It came to this segment relatively recently, so it is almost impossible for it to develop this raw material in Russia, where Gazprom and Novatek reign. This makes the company more actively behave abroad. Rosneft has developed great activity in the gas sector on the African continent.
Here, a Russian company often works in cooperation with partners from Western countries. For example, Rosneft is engaged in offshore gas production in Egypt together with the Italian company Eni, is developing three gas blocks in Mozambique along with the US ExxonMobil.
By the way, in Mozambique, Rosneft also has a concession for the exploration of oil and gas fields. It is also known about the company's cooperation with the Nigerian Oranto Petroleum, as well as about joint work with Algerian partners.
Thus, Russia is actively cooperating in the oil and gas sector with countries in Africa and the Middle East, many of which are now considered or in the past were considered hot spots on the planet. At the same time, Russian companies not only benefit from such cooperation, but also contribute to the recovery of the economies of these countries, and in some cases, the resolution of internal conflicts.
Information