Tag Archives: Iraq

China’s oil troubles in the Middle East

September 21st, 2009

I heard two interesting oil stories from last week’s US visit.

First, Libya has rejected a $417 million bid by China National Petroleum Company (CNPC) for Verenex, a Canadian oil-exploration company with Libyan oil leases. Libya’s national company has since purchased Verenex at 30% less than CNPC’s offer price. I’m not sure if Libya’s response was specific to China itself, or a de-facto attempt to nationalize some of its oil assets. But the response is interesting given that Libya, alongside Algeria, is one of few countries in the Middle East to receive large numbers of Chinese workers. In fact, I heard from a Libyan central bank official in June that 6,000 Chinese workers had applied for visas in the previous month alone. And I wouldn’t be surprised if this has caused some friction.

Second, Iraq may blacklist China’s Sinopec for its purchase of the Geneva-based oil-exploration company Addax, which owns several licenses directly issued by the Kurdish Regional Government. The licenses are in breach of an Iraqi law requiring all oil deals are made in Baghdad.

The Silent Crisis

September 5th, 2009

It is easy to feel giddy about the rise of the Silk Road. But the outcome is far from guaranteed. One threat in particular might yet bring the region to its knees.

Water.

There is no escaping the Silk Road’s water shortages. The region is one of the driest parts of the planet. Yet, water is needed to run everything from textile factories in China, five-star hotels in Dubai, to washing- machines in Cairo.

Let’s start with a few figures. The Silk Road has an average of 2,260 cubic meters of internal renewable water per person. The equivalent figure is 9,300 in the United States. In fact, an abundance of water is an important, but often overlooked, reason why the United States might defy its critics and remain the world’s major power through the end of this century.