Falklands : Hydrocarbons Weekend Record (23 and 24 September 2006)
Submitted by Falkland Islands News Network (Juanita Brock) 25.09.2006 (Article Archived on 09.10.2006)
Despite speculative articles in the UK press the Falklands have a bright future for hydrocarbons.
HYDROCARBONS WEEKEND RECORD: 23 AND 24 SEPTEMBER 2006
By J. Brock (FINN)
Over the weekend there has been speculation that falling oil prices could cause OPEC to cut production. At the moment this is just speculation as OPEC has decided recently not to reduce production. Crude, heating fuel and gasoline inventories in the states remain good. Thus far the hurricane season has been kind to the Gulf of Mexico, giving oil companies time to bring damaged infrastructure on line.
DEVELOPING REGIONAL FACTORS:
(Bolivia)
President Evo Morales gained bargaining time in the US when he went on the charm offensive at the UN and with the US media. He came across as deeply passionate for the indigenous people of his country. What is not clear is the outcome of President Morales’ nationalisation programme but he did say at Colombia University’s World Leaders Forum that nationalisation would provide his country with $150Million, enough to buy a 50% share in the hydrocarbons business. Businesses claim that the terms of the contracts are unworkable with Bolivia receiving 82% of hydrocarbons revenue and businesses 18%. Before nationalisation the numbers were switched and it is thought that Bolivia is giving the international investors their own back. During an interview with CNN’s Jim Clancy, President Morales said that he is sure, even with a reduced percentage of the take, that international investors will still make money from Bolivian gas. The outside world waits to see if Bolivia can claw back new money for the benefit of the people, with roads, hospitals and schools needing attention. It is still too early to make any assumptions about money because the period for re-negotiating contracts has not yet expired.
(Venezuela)
While President Chavez has left the United States and has visited President Evo Morales in Bolivia before returning to Venezuela, his Foreign Minister wasn’t so lucky. He turned up 30 minutes late for his flight back to Venezuela and was detained by US Officials for over an hour while he was thoroughly searched and questioned about his alleged terrorist activities. Speculation is ripe that the Foreign Minister was detained for political reasons. President Chavez has warned that he will be seeking alternatives to the US crude market and this could be the trigger to start the process of weaning Venezuela out of the US market.
(Falkland Islands)
Despite speculative articles in the UK press the Falklands hydrocarbons prospects are excellent. Beyond exploration and related activity on the Alternative Investment Market (AIM) there is no hydrocarbons industry in the Falklands. That will take off when commercial quantities of hydrocarbons are found. We know that hydrocarbons have been generated in both the North and South Falkland Basins. It will, however, take five years minimum after economically viable quantities are discovered, to see the first commercial activity to begin. Just like us, people who want to put pressure on our “hydrocarbons industry” will have to wait.
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