中歐貿易角力 鋼管冷煤機熱

《上海證券報》報道，歐盟打算指控中國無縫鋼管商進行反傾銷，並徵收48%至71.5%的懲罰性關稅，石油設備成為歐洲對中國出口業「開砲」的對象，前景並不明朗，反而受到需求帶動的煤機製造商，可看高一線。

無縫鋼管商被歐美指控為反傾銷企業，可說是「公說公有理，婆說婆有理」。這些鋼管商當然不是生產夜總會跳「鋼管舞」所用的鋼管，而是生產跨境運輸的石油管和天然氣管材，多接中石油集團及中海油集團的訂單，獲得國企的補貼，是很自然的事，但這卻被歐美指控為傾銷。

歐美掣肘多 防華企操控

另外，這是由於內地生產商近年技術進步神速，加上內地勞工成本低，漸有生產優勢，銷售額不斷擴大，加上中央於年前便提出了大型輸油管建設，包括由勝利油田輸往中原地區的油管，由哈薩克輸往北京及上海等地的天然氣管道，令到這批鋼管商多了很多訂單。中國企業的興起，卻叫歐美各國感到不安，皆因輸油管對歐美能源供應穩定有戰略作用，歐美各國不願見到石油設備供應操縱在中國企業之手。

故此，歐盟與美國均打出保護主義的旗號，美國早於2009年11月向中國企業徵收99%的懲罰性關稅，涉及32億美元產品。在2008年，山東墨龍（568）輸往美國的產品佔總營業額22.6%，涉及生意額5.7億元人民幣，是中國以外最大市場，及至2009年，山東墨龍輸往美國佔總生意額比率大幅降至11.6%，生意額減至2.4億元（人民幣．下同）。

部分中國廠商為求另覓蹊徑，進軍歐美市場。在美國提出保護條例後，安徽鋼管商安徽天大（839）去年9月便決定引入法國藍籌鋼管製造商Vallourec入股，佔總權益39%。市場人士估計，天大有意利用Vallourec的網絡，其至使用Vallourec的品牌，曲線進入美國。不過，這些中國製的產品能否繞過歐美的貿易壁壘，尚未有定例。

無疑，鋼管商面對歐美的制裁，的確少了一條門路，投資時宜了解歐美市場佔它們的生意比例，主打內地和中東市場的天大管材、珠江鋼管（1938），以及生產有縫鋼管的勝利管道（1080），所受的影響較微。辛思維認為，歐美國家對無縫鋼管有動作，取得甜頭的話，不排除會伸延至海上石油探鑽設備，連鑽石器材也受到牽連，成為不利該行業的一個重要的因素。

在開採資源設備板塊中，煤機股應該是較佳的選擇。除了內地本身的需求外，鄰國蒙古也對煤機需求上升。蒙古焦煤（975）資料顯示，2009年輸往中國的蒙古煤炭的凈額達到2810萬噸，而2008年的數字僅為200萬噸，開採量大幅增長，加上更多蒙古煤企市場化，對機械的需求增加。

打造大煤企 機械化普及

三一國際為內地最大的挖煤機生產商，2010年營業額達到26.8億元，按年增長41%；另一企業國際煤機（1683）的營業額也達到19.4億元，按年增長28%。

內地自2008年起展開煤炭整合，國家銳意打造約十個億噸級產量的煤炭集團，要大規模生產，提高機械化程度不可少。以前，山西一帶煤老闆擁有小煤礦，由於範圍小，地方面積有限，根本不能用上大型的掘進機，對煤機的需求自然小。如今地方煤礦給整合了，變成了較大面積的煤礦，加上大企業資金較穩定，反而機械化符合經濟效益。如此一來，令到煤機擁有廣闊的發展空間。

相對於鋼管企業，煤機商的主要市場為內地及蒙古，內地當然不會貿然對本土企業實行制裁，至於蒙古方面，由於依賴煤炭機械進口，與中國的貿易是和諧合作多於角力，為煤機股創造美好的經營環境，可留意當中的投資潛力。

The oil market The IEA opens the taps

THE International Energy Agency (IEA) rarely intervenes in oil markets. The rich-country energy club keeps its vast reserves of oil to tackle emergencies caused by unforeseen supply disruptions. Yet on June 23rd the IEA surprised oil markets by saying that it would release60m barrels of oil from its stockpile over a 30-day period to ensure a “soft landing for the world economy”. Oil prices duly obliged by tumbling.

Oil has been drawn from the emergency stockpile of 1.6 billion barrels only twice before—in the immediate aftermath of the invasion of Kuwait in 1999 and Hurricane Katrina in 2005. The disruption to supplies as a result of Libya’s internal conflict became apparent some time ago and the 1.4m barrels a day denied to world markets, which all together get through nearly 90m b/d, is hardly the sudden upheaval that the stocks are there to offset.

The IEA says that Libya is the reason for the decision to release stocks. Although its oil has disappeared from the market, the damage has not been fully felt yet, since the world consumes much more oil in the second half of the year as the northern hemisphere's “driving seasons” begin. The IEA reckons on a shortfall of 2m b/d as engines rev up around the globe and that a barrel of Brent crude (which slumped from around $115 to trade at $108 a barrel after the announcement) could climb even higher to wreak appalling damage on a fragile world economy.

Yet there are a couple of reasons to question the IEA’s decision. Firstly, evidence is mounting that the high price is having an effect on demand both in rich countries and even in oil-thirsty Asia and that prices might slip anyway. Second, despite acrimonious disagreement at the recent OPEC meeting between the haves and have nots of spare oil-production capacity, which meant that expected quota increases failed to materialise, Saudi Arabia has promised unilaterally to make up for most of the Libyan shortfall by pumping 1m b/d extra. The IEA says that its intervention (done with Saudi acquiescence, the agency hinted) is designed to plug the gap between now and when that oil might appear on the market.

Cynics are suggesting that Barack Obama is keener than most to tap the stockpiles—he has hinted that this is what he wants several times of late—to protect Americans from the ever more stiff cost of filling up. Indeed America, where the driving season is about to get under way, will contribute half the extra oil. Plugging a supply gap is all very well. But this sets an unfortunate precedent that the stockpiles are there to smooth the ups and downs of the oil price rather than to guard against genuine emergencies. Moreover, any interventions by the IEA cannot be sustained over the long term when (high) prices will be determined by voracious Asian demand and the difficulties of finding and extracting extra barrels from beneath the earth.

Overall, the best solution to a high oil price is a high oil price. Tinkering with that equation is rarely a good idea.

汽油未加價 煉油商叫苦

國際油價自2月份起，已上升了超過一成。不過，內地成品油價格自2月份開始卻沒有加價。近期通脹問題引起中央關注，油價調節機制可能再度「嘆慢板」，以煉油為主的中石化（386），已為高油價叫苦了。

自從今年2月20日全國調升成品油價格起，國際油價已大幅上升。倫敦布蘭特期油價格已由105美元升上118美元一桶，按理汽油、柴油等亦應該加價。不過，3月已經過去，清明節快將來臨，卻未見有加價消息。

根據官方訂明的價格機制，英國布蘭特、中東迪拜 、新加坡三地原油價格在22個工作天內漲幅超過4%以上，便須按幅度調整。但是，內地汽油柴油價格自2月20日加價4%後，已有好一段日子沒有上調價格。

上下游價格脫節造成虧損

在2008年初油價直衝上每桶110美元、120美元的時候，中國汽油價格亦曾有一段時間也跟不上升幅。按目前的形勢，中央對成品油加價，確實要有多重考慮。內地過去兩個月的物價指數增長高企在4.9%水平，非常接近中央5%的警戒線，燃油佔去物價指數的比重不低，容許油價按外圍幅度上調的話，豈非進一步推升通脹？

康師傅（322）早前宣布，旗下產品杯麵每個加價0.5元人民幣，之後卻改變初衷，有傳是被發改委「約談」勸告不要加價，民企非必需品加價，發改委尚且關注，可見中央對調控通脹多麼重視。成品油調節機制「嘆慢板」，最為受損的是中石化（386）。

中石化這家亞洲最大的煉油公司，下游零售業務的銷售數量有約一半原油可自給自足，其他須從海外進口，上游價格上升但下游成品跟不上，將其煉油業務出現虧損。

價格不升 恐供不應求

中石化管理層在剛公布的業績會上，便透露煉油業務經營狀況「慘情」。集團財務總監王新華指出，煉油業務「第一季度的形勢較為險峻」，直言油價高於每桶100美元以上，煉油公司的壓力還是比較大的。

不過，並不是不提升成品油價格，就沒有問題出現，價格被人為地壓下來，供應未必可以到位。例如在2007年尾，國內汽油價格便大幅低於國際市場時，便出現供應短缺的情況，令到北京及廣州等城市的加油站大排長龍，這是均是升斗市民不願見的。

航空股的計時炸彈

國際油價近期急升，內地有航空公司申請重新訂立原油對沖合約，以減少高油價蠶食盈利增長。航空業對原油對沖合約既愛又恨，曾是常用的財務對沖手段，但2008年後卻變成聞風喪膽。只因當時油價大幅波動，令金融危機下的航空公司雪上加霜。如今航空公司再次訂立合約，到底是「救命良藥」還是埋下「重覆犯錯」的計時炸彈？

受利比亞政局持續動蕩影響，國際油價持續向上，紐約期油一度升上每桶105美元的兩年半高位。油價高據不下，航空公司成本上漲。上周國際航空運輸協會（IATA）下調今年全球航空業盈利預測至86億美元，較去年行業約利的160億美元，下跌了46%。協會指出，今年航空燃油價格將較去年升20%，令業界額外多付100億美元。而該協會指出，亞太區航空公司採用原油對沖合約比例低，受高油價影響較深。

因此，東航（670）近日在「兩會」期間透露計劃重新訂立對沖合約。而中國民航局副局長王昌順昨日建議航空公司採取對沖合約減輕燃料成本上升的不利影響，因燃油開支佔內地航空公司總成本超過四成。

無論是內地三大航企或香港的國泰航空（293），2008年財報實在「驚嚇」，全都錄得巨額虧損，只因敗在原油對沖合約手上。

國際油價在2008年7月初報每桶147.5美元後見頂，並急速下滑，至12月底，不足半年暴跌至每桶33.8美元，跌幅近八成。國泰當時訂立的原油對沖合約在2008年底的賬面損失高達76億港元，結果該公司全年埋單勁蝕86億港元。

東航更嚴重，按中國會計準則，蝕139.28億元人民幣，如按國際會計準則，更虧損152.68億元人民幣，同時資不抵債110.65億元人民幣，因此促成了東航與上航合併。由此可見，原油對沖合約的風險。

然而，今次原油價格急升的背後原因，正是利比亞政局不穩，加上流動資金泛濫。政局穩定與否屬短期因素，事件解決後，油價必向下走，恐怕重蹈2008年原油對沖合約的風險。

雖然內地航空市場急速增長，但再次沾手原油對沖合約，可能為盈利埋下計時炸彈。不過，更重要的是航空公司訂立燃油對沖合約，毋須公開條款，投資者不知就裏，直至公布業績或發出盈警才如夢初醒，可惜為時已晚。面對高油價和資料披露不足的風險，投資航空股還是要三思。

內地原油採收僅20% 七成仍深埋地底 火驅採油術料提高開採效能

各國政府對能源的重視與日俱增；中國在十二五規劃中也希望提高開採原油技術，冀物盡其用。目前由於技術限制，內地油田採收率約20%，約20億噸稠油和逾四十億噸低滲透稀油深埋地底。

聯合石油（467）主席兼執行董事張宏偉表示，該公司的火驅採油技術可大大提高油田採收率，並獲得國家發改委的肯定，未來五年料成為最大的民營石油企業。

首家油田開採權民企

聯合能源是最早一批在香港上市的內地民企，惟過去十年默默無聞；公司主席張宏偉身兼數職，包括內地上市的東方集團董事長、錦州港董事長及滬港上市的民生銀行（1988）副董事長。不過他行事低調，甚少接受訪問。

張宏偉上周五在北京接受訪問時表示，該公司憑借火驅採油技術，成為內地第一家擁有油田開採權的民企。他表示，正在開採的高升油田，該公司與中石油（857）分別承擔70%和30%的營運費用，利潤將六四分賬，聯合石油佔六成。

張宏偉介紹，中石油在內地油田的採收率約20%，由於技術和成本限制，近七成原油仍深埋地下。火驅採油是將空氣注入井下，高溫燃燒部分地下原油，可將採收率提升至40%至70%。目前這項技術在國外日益興起，但在國內並無應用。

高升油田日產量大增

張宏偉表示，聯合能源引進國外技術，過去五年一直在中石油遼河高升油田，進行火驅採油的先導性實驗，今年七月通過發改委審批通過，成為首個火驅採油項目，且公司擁有九項專利。上述實驗將高升油田的單井日產量由0.14噸提高至2.8噸。聯合能源現擁有高升油田的獨自開採權，該油田儲量約8000萬噸。

聯合能源常務副總裁林寧補充，公司還與中石油簽訂了稀油的火驅開採合同，這樣可在稀油和重油行業均分得一杯羹。

張宏偉說，未來公司會積極尋覓海外優質油氣田的收購機會，打造成為能源旗艦。至於收購資金來源，他表示可通過在資本市場融資，及大股東（他本人）注資這兩種方式。

Opec eyes OECD demand

Posted by Izabella Kaminska on Dec 22 12:12.

The Organisation of Petroleum Exporting Countries meeting in Luanda, Angola, agreed on Tuesday to leave oil output curbs unchanged, while calling for greater compliance with existing output targets — a signal the cartel currently believes the market to be well supplied.
One of the big debate points in Luanda, however, focused on how quick demand recovery in OECD countries would be in 2010. Remarks from Opec’s opening address highlighted the main issues as follows (our emphasis):
We also saw how crude oil prices had continued to improve from the lows experienced late last year, even though the market was still very volatile. Since then, the economic recovery has gathered pace. More OECD countries are coming out of recession and growth is accelerating in emerging markets, especially in Asia.
However, doubts remain about the dynamics of the recovery. This is not helped by continued uncertainty in the financial sector and worries regarding growth momentum on the back of still-rising unemployment and fears that stimulus measures may come to an end too soon. The weak, fluctuating dollar is adding to the uncertainty.
Turning to oil demand, there is a mixed picture in the market. Demand growth in the emerging economies is improving, but the OECD remains in negative territory. The market continues to be well supplied with crude and inventories are at high levels. Prices have moved up to more comfortable levels. This is good news for investment in production capacity and future supply. Some postponed projects have already been started up again in our Member Countries. However, the fragility remains in the market and we should not forget the detrimental volatility we experienced last year.
This is one of the issues we must again address at today’s meeting. For our part, we will continue our efforts to restore stability and balance to the market, in the interests of producers and consumers alike.
Considering the drop in OECD demand this year proved much stronger than many in the market — especially peak oilists — had expected, it makes sense for Opec to have stressed the issue so prominently in Tuesday’s meeting.
On that note, we’d flag up the following two charts from oil analyst Morgan Downey, auther of Oil 101, which neatly expresses the situation as it stands today (click to enlarge):

Related links:
Goldman warns of near-term downside risk in WTI - FT Alphaville
Goldman still bullish on crude (even in the face of weakness)- FT Alphaville
2009 Oil Market Review as OPEC Meets - Scarce Whales

Introducing financial oil leasing

Posted by Izabella Kaminska on Dec 16 17:15.
The concept of ‘leasing’ commodities has been well established in the gold market for a while.
The lease rate for gold is derived from daily gold forward rates (GOFO) published by the London Bullion Market Association. You arrive at the rate by taking the GOFO rate — the rate at which dealers lend gold on swap against US dollars — from the day’s Libor rate.
The biggest lenders of gold have always been central banks, while gold producers have often been those most keen to borrow for the purpose of pre-selling bullion to cover operating and extraction costs.
But while there’s been much discussion about the financialisation of oil as an asset class, much less has been written about how that transformation would inevitably lead to oil becoming a leased commodity in the gold sense, too.
Among commenters who have observed trends on this front is Chris Cook — an avid watcher of crude and product market developments, a former director at the International Petroleum Exchange and regular FT Alphaville commenter.
As he explained in a recent comment on a post featured on The Oil Drum, where he also contributes (emphasis FT Alphaville’s) :
It was the Goldman Sachs Commodity Index (GSCI) fund – which had a high component of energy – which first introduced the concept of ‘hedging’ energy price inflation.
In other words, people became interested in off-loading dollar price risk in favour of taking on energy price risk. Anyone familiar with futures markets will see that this is directly opposite to the wish of producers wishing to ‘hedge’ energy price risk in favour of taking on dollar price risk.
The point is that the motive of investors in doing this is the complete opposite of speculation, and in my view, the wave of Exchange Traded Funds that have piled into the market are beneficial in the genuine liquidity they provide to the market.
Unfortunately it is they, rather than manipulative producers and speculator intermediaries who have been mistakenly pilloried as the culprits for the ‘Spike’.
Perhaps the most important recent development in recent years was the smart move by Shell in 2005 in entering into a joint venture with ETF Securities. What this enabled Shell to do was to put to work some of their idle capital sitting in the form of oil either in tank, or even in the ground (where storage is free). Essentially investors loan dollars to Shell, and Shell loans oil to investors.
And as Cook goes on, there may be a key macro economic consequence of all this that differentiates it to the gold scenario:
Other players were not slow to pick up on what Shell had done, and it is from this point on that we saw fund money – from 2007 on flying from financial market risk – pouring into the energy market facilitated by a great deal of hype, and an arbitrage taking place opaquely inside and by reference to the global market price set by the BFOE complex of contracts.
Since there are now only about 70 cargoes (of 600,000 bbls) a month coming out of the BFOE oil fields it will be seen that it does not take too much money on the part of anyone so minded to support the price, insofar as it was necessary – and it is of course the case that oil supply and demand are increasingly tight.
I think that some producers came to realise that oil is more valuable in the ground, and that it may be good business to support the price by influencing the BFOE price in a not dissimilar way to that in which the International Tin Council supported the tin price pre 1985 by buying in stocks of tin.
Oil producers’ motivation to do this redoubled after the financial crisis commenced and interest rates went essentially to zero – - the “zero bound”. Why produce oil and exchange it for financial assets yielding 0% ? Producers preferred to lease or lend their oil instead. At this point we were seeing not just oil but all commodities becoming detached from real world supply and demand, and the forward price curve in commodities began mirroring the yield curve.
All of which might help explain the perpetuation of the contango in the oil futures curve.
Related links:The business of oil leasing - FT Long RoomWas Volatility in the Price of Oil a Cause of the 2008 Financial Crisis? – The Oil Drum

The peak-oil debate - 2020 vision

Dec 10th 2009 PARISFrom The Economist print edition
The IEA puts a date on peak oil production

FATIH BIROL, the chief economist of the International Energy Agency (IEA), believes that if no big new discoveries are made, “the output of conventional oil will peak in 2020 if oil demand grows on a business-as-usual basis.” Coming from the band of geologists and former oil-industry hands who believe that the world is facing an imminent shortage of oil, this would be unremarkable. But coming from the IEA, the source of closely watched annual predictions about world energy markets, it is a new and striking claim.
Despite repeated downward revisions in recent years in its forecasts of global oil supply in 2030, the IEA has not until now committed itself to a firm prediction for when oil supplies might cease to grow. Its latest energy outlook, released last month, says only that conventional oil (as opposed to hard-to-extract sources like Canada’s tar sands) is “projected to reach a plateau (高原) sometime before” 2030.
Mr Birol’s willingness to acknowledge that conventional supplies may peak in a decade’s time points to a subtle shift in policymakers’ attitude towards the “peak oil” debate. This debate is not about whether the supply of oil, a finite resource, could some day stop growing. Rather, it hinges on the timing of an end to increases in global oil production, and on what happens next. The most pessimistic peak-oil proponents think that global oil supply has peaked or is about to do so. Given projections of demand increasing well into the future, they fear economic disaster.
By contrast, oil optimists like Cambridge Energy Research Associates (CERA), an energy-research firm based in Boston, argue that high prices will lead to improved technology that will enable oil firms to find new oilfields; make it economically feasible to extract oil under more challenging geological conditions or manufacture it from coal or natural gas; and increase the amount of oil that can be recovered from existing fields. This, they argue, will allow demand to be met for at least a couple of decades. After that, CERA reckons, “supply may well struggle to meet demand, but an undulating plateau(波浪起伏的) rather than a dramatic peak will likely unfold”. Until now official estimates from the IEA were far closer in spirit to those from the likes of CERA than the pessimists. Mr Birol’s statement suggests that the IEA has extended a tentative foot into the other camp.
The reasons are not hard to find. After analysing the historical production trends of 800 individual oilfields in 2008, the IEA came to the conclusion that the decline in annual output from fields that are past their prime could average 8.6% in 2030. “Even if oil demand were to remain flat, the world would need to find more than 40m barrels per day of gross new capacity—equal to four new Saudi Arabias—just to offset this decline,” says Mr Birol.
A daunting(使人氣餒的) task. Peak-oil proponents point out that the average size of new discoveries has been declining since the mid-1960s. Between 1960 and 1989 the world discovered more than twice the oil it produced. But between 1990 and 2006 cumulative oil discoveries have been about half of production. Their opponents argue that long periods of relatively low oil prices blunted the incentives for exploration. A sustained period of higher prices, they argue, should increase discoveries. They point out that the first half of 2009 saw 10 billion barrels of new discoveries, an annual rate higher than any year since 2000. The pessimists retort that recent discoveries are still not enough.
The IEA expects unconventional sources of oil to take up a lot of the slack, as progressively higher prices make them economically viable. But these sources are also much dirtier than conventional oil and require significantly more energy to tap. That sits uneasily with efforts to mitigate climate change, the subject of talks that began in Copenhagen this week.
These negotiations matter hugely for the peak-oil debate. The IEA reckons that co-ordinated action to restrict the increase in global temperatures to 2ºC will restrict global demand for oil to 89m b/d in 2030, compared with 105m b/d if no action is taken. That, Mr Birol says, “could push back the peak of production, as it would take longer to produce the lower-cost oil that remains to be developed.” Action on climate change may yet save the world from an early supply crunch.

Iraq's oil - Crude calculations

Dec 12th 2009
From Economist.com
Will a new auction of fields to foreign firms get Iraq’s oil flowing freely?
A COUNTRY with a shaky economy that sits on huge oil reserves would usually be reckoned wise to pump as much as possible out of the ground as quickly as it can. Western oil companies, desperate for crude that is cheap to produce and refine, should be ready and waiting to help. But arranging such a deal in Iraq is no easy matter. Iraq’s second round of auctions for the rights to develop it oil fields concluded on Saturday December 12th. The first round in June, a televised extravaganza, resulted in the embarrassing outcome that just one of the eight contracts on the block found a taker. By the middle of the day on Friday two big oil fields had attracted winning bids from foreign companies.
On Friday Royal Dutch Shell, in partnership with Malaysia’s Petronas, won the right to develop Majnoon, one of the world’s biggest untapped oilfields. CNPC, China's largest oil and gas producer, with Petronas and France’s Total were also awarded a contract to extract oil from Halfaya beating off competition from other European, American and Asian oil companies. On Saturday Russia's Lukoil and Norway's Statoil got there hands on the biggets prze on offer, West Qurna-2. Although several of the fields under the hammer on Friday and Saturday failed to find buyers this latest auction of Iraq’s oil is already more successful than the previous effort.
Oil companies complained that the terms on offer in June’s auction were too tough. Iraq’s leaders, mindful of claims by nationalists in parliament that they would sell prized assets on the cheap, set terms that only one consortium of foreign oil companies felt able to meet. BP and CNPC won a contract to take over production of the Rumaila oilfield, one of Iraq’s largest oil fields.
Since then Iraq’s government has accepted that it needs to speed up a process that it hopes will lift output from 2.4m barrels a day now to 7m b/d by 2017. This has led to a “clarification” of the investment terms, in effect cutting taxes. This rewriting of the rules led to the acceptance of resubmitted first-round bids from an ENI-led group for the Zubair field and from Exxon Mobil and Shell for West Qurna-1.
The latest auction was always more likely to succeed. The assets on offer in June were oilfields currently in production that would require replacing or refitting antiquated Iraqi equipment and sorting out inefficient management. The fields on the block this time are untapped resources containing oil that is easy to reach and refine. But if big oil companies seem more enthusiastic it is hardly because the immediate rewards are so great.
The Majnoon field produces just 46,000 b/d at the moment but Shell has pledge to increase output to 1.8m b/d. Shell’s winning bid guarantees it a fee of just $1.39 a barrel. But it and the 44 other oil companies taking part in the auction must hope that getting a foot in the door will help when Iraq needs help later to develop other oil fields.
The oil companies’ optimism may be misplaced. Iraq still has no oil law to guarantee and protect foreign oil investment, and will not get one until after elections set for next March. At least the oil companies will not have to start investing before then. And virgin fields require huge infrastructure investments to get the oil from the ground to existing pipelines or coastal ports. Doubts still surround the ability of the Iraqi government to build more pipelines and roads or to repair infrastructure already in place and then keep it secure.
Shell’s investment in Majnoon, a southern field near the Persian Gulf, should make that less of a problem. The fields that attracted little or no interest were the ones located in the more dangerous eastern parts of Iraq, near Baghdad or near Mosul in the north of the country. The Iraqi government may now attempt to develop them without foreign help. At least these fields will not run into another trouble facing foreign oil companies in Iraq—the level of political opposition that persists to allowing foreigners to have access to prized oil fields.