Germany: chairman of industry association warns: gas network ill-equipped for LNG flows

 The chairman of Federation of German Industries (Bundesverband der Deutschen Industrie) issues a warning about a complete embargo on oil and gas from Russia. This could, according to his statement, generate a severe recession in Germany and Europe. Furthermore the european gas network is not ready for transporting LNG through Europe, SPON:

Forgoing imports of Russian gas and oil in the short term would cause massive damage to European industrial companies, according to the Federation of German Industries (BDI). "The EU is not prepared for a short-term, comprehensive energy embargo," BDI President Siegfried Russwurm told SPIEGEL. “In doing so, it would jeopardize its unity and ability to act economically and politically.” If there were no energy supplies, production stops threatened with unforeseeable consequences for supply chains and employment.

A boycott of Russian gas supplies would threaten the entire EU with a "structural test," Russwurm continued. Because the European gas network has not yet been designed for gas flows from West to East. "It is unclear whether, if Russian gas supplies are stopped, liquefied gas that ends up in the Netherlands or Belgium will find its way to the Czech Republic or Slovakia," said Russwurm. A gas embargo would cause disruption to production, loss of employment and, in some cases, massive damage to production facilities. A number of other business associations had already warned of this.

A boycott of Russian gas supplies would threaten the entire EU with a "structural test," Russwurm continued. Because the European gas network has not yet been designed for gas flows from West to East. "It is unclear whether, if Russian gas supplies are stopped, liquefied gas that ends up in the Netherlands or Belgium will find its way to the Czech Republic or Slovakia," said Russwurm. A gas embargo would cause disruption to production, loss of employment and, in some cases, massive damage to production facilities. A number of other business associations had already warned of this.

"We support the sanctions imposed on Russia by the western allies," said BDI President Russwurm. »We are aware that further harsh and unequivocal reactions may have to follow.«

Russia: is Surgutneftegaz the Kremlin's secret thrift?

 The mysterious company refuses to reveal their owners and hoards a tremendous amount of foreign currency. Insights from german newspaper WELT in this curious business.

Only now and then does the Russian oil company Surgutneftegaz make a name for itself. But then all of a sudden and quite sensational, to remind everyone again, as it were, that he does exist after all. Most recently in mid-November of this year. The stock soared 49 percent in three days. That would be extreme for a young company that has become the plaything of speculative investors. And it is even more so with a traditional company.

But Surgutneftegaz with its 111,800 employees is no ordinary case. The group, which accounts for eleven percent of all Russian oil production and seven percent of oil processing, is different. Although the third largest oil company in the country, it still poses great puzzles to this day.

The biggest: Why is Surgutneftegaz, based in the West Siberian lowlands on the Ob River, hoarding so much free money? And on foreign exchange accounts, which at least bring stable interest income and thus contribute a whopping 20 percent to earnings before taxes and over 40 percent to free cash flow.

The bottom line is now 3.8 trillion rubles (46 billion euros). That is 82.5 billion rubles more than at the end of the second quarter. Certainly, compared to a US technology company like Apple, that's just a quarter. But within Russia and within the classic industrial sector also across Europe, there is hardly any company that could even come close to Surgutneftegaz in this respect.

For the market and its experts, it is and remains largely incomprehensible what this financial behavior and this strategy are actually supposed to be. All the more so since the group - apart from the quarterly company figures, to which it is obliged due to the stock exchange listing - discloses almost no information about itself.

The analysts of the Russian investment company BKS recently stated succinctly in a comment for the business portal RBK.

A few years ago, Vladimir Bogdanov, who took over the management of the once state oil company at the age of 33 at the time of the Soviet perestroika in 1984 and retained it after its privatization in 1993 together with his manager colleagues, once suggested that the reason for the - almost obsessive - frugality lay in the extreme hardship of the 1990s.

“This money is a security mechanism,” the now 70-year-old replied to a question at a shareholders' meeting. “Nobody knows what will happen to the oil price. We need the money so that our workforce can live quietly. Because what will we do if a situation like 1998 occurs again? ”At that time, the ruble crash caused turmoil.

Bogdanov is estimated by Forbes magazine to have a fortune of two billion dollars and is also called the "Siberian hermit" because of his seclusion and media aversion.

“This money is a security mechanism,” the now 70-year-old replied to a question at a shareholders' meeting. “Nobody knows what will happen to the oil price. We need the money so that our workforce can live quietly. Because what will we do if a situation like 1998 occurs again? ”At that time, the ruble crash caused turmoil.

Bogdanov is estimated by Forbes magazine to have a fortune of two billion dollars and is also called the "Siberian hermit" because of his seclusion and media aversion.

Accordingly, Bogdanov's statement, which is supposed to come across as sympathetic, is anything but plausible for the market. Let alone satisfying.

Over the years, the "hermit" Bogdanov, who like many top Russian business representatives and politicians has been on the US sanctions list since 2018, has managed to disguise the real owners of Surgutneftegaz despite being listed on the stock exchange.

Even in 2009, when the group bought 21.1 percent of the Hungarian gas company Mol in its only attempt to expand abroad and Mol demanded disclosure of the real owners, Bogdanow remained tough: he simply gave up his involvement with Mol after a short time.

All of this has led to a lot of speculation and conflicting information over the years. The group itself stated in 2005 that 15.7 percent of the shares were held by ING-Bank and 7.7 percent by the International Bank of Moscow.

The Moscow political scientist Stanislaw Belkowskij leaned furthest in his speculations, and he said in an interview with WELT at the end of 2007: “Putin is also a great businessman. He controls 37 percent of the shares in Surgutneftegaz ”.

This assessment is largely correct, according to the British magazine "Times" once confirmed by the US secret service CIA under US President George Bush. Putin himself, on the other hand, made it clear in the meantime that many of the shares in Surgutneftegaz are simply held by the people who work there.

Nobody believes that the oil company really leads its own life and is not close to the Kremlin. On the one hand, the oil trader Gunvor, who was half held for a long time by Putin's Petersburg intimate and businessman Gennady Timchenko, owes its establishment to its proximity to Surgutneftegaz.

On the other hand, there has always been a strict ban in Russia's financial circles on using financial instruments such as derivatives on the Surgutneftegaz share, WELT learned some time ago from an investment banker with an assurance of anonymity. This shows that the company is something special for the Russian rulers and that it is controlled from the very top.

So the public didn't really get any further on the subject of ownership over the years. And the fact mentioned at the beginning that the Surgutneftegaz share suddenly went through the roof in November and the daily trading volume in Moscow meanwhile rose a whopping 3900 percent, while the overall market fell in double digits in November, was not clarified.

There is talk in the Moscow investment scene that Surgutneftegaz could participate in a major acquisition or merger with his fat financial pillow. Such speculation is not new, of course. There was a rumor once before that Surgutneftegaz could swallow the second largest and private Russian oil company Lukoil - the epitome of transparency compared to Surgutneftegaz. The share soared back then too. But both companies denied it.

Another explanation for the stock's jump in November is that the ruble fell over five percent against the dollar in November, and the subsequent revaluation of Surgutneftegaz's foreign exchange accounts suggests an increase in corporate earnings.

In the first nine months of the year, sales were positive, but the bottom line was that profits fell by two thirds to 297 billion rubles (3.6 billion euros), which was partly due to the relative strength of the ruble, which was unfavorable for the company.

The company's shares could rise 400 percent if it finally implemented a substantial reform in its corporate governance, wrote Ronald P. Smith, oil and gas analyst at BCS Global Markets in Moscow, recently. The curiosity is that the market capitalization of the group is only half as high as the fat financial pillow on the accounts.

The three reforms mentioned by Smith include, on the one hand, shifting the notorious financial cushion into more lucrative asset classes or distributing it, and on the other hand, bringing order to the rumored “phantom” of high state participation.

EU: impact of COVID-19 pandemic on EU energy supply in 2020

Since early 2020, restrictive measures have been taken to slow down the spread of COVID-19. These measures included the closure of factories, schools and restaurants, and required people to confine themselves in their homes. In late spring, many EU Member States began removing some restrictions following the first signs of recovery. By late autumn, however, the second COVID-19 wave had started and restrictive measures were again put in place. The EU’s fuel supply was adversely affected by these measures.

Inland deliveries of petroleum products

The oil industry was affected most by the pandemic and striking differences between 2020 and 2019 were evident. The most dramatic differences were seen in the deliveries of fuels for transport. In April 2020, deliveries of kerosene-type jet fuel dropped by more than 80% compared to the same month in 2019, while motor gasoline recorded a drop of nearly 50%. Gas oil and diesel oil also recorded a decrease of 20% over the same period. The reintroduction of restrictions by many Member States in autumn 2020 did not influence the deliveries of these fuels as much.

You can read the rest of the piece via the below link:

https://ec.europa.eu/eurostat/en/web/products-eurostat-news/-/ddn-20210506-1

Cyber attack forces US pipeline to shutdown

 CNBC:

The operator of the country’s largest fuel pipeline, Colonial Pipeline, fell victim to a cybersecurity attack on Friday that involved ransomware, forcing it to temporarily shut down all pipeline operations, the company said in a statement on Saturday.

The firm has hired a third-party cybersecurity firm to launch a probe into the incident and has contacted law enforcement and other federal agencies. The cyberattack has affected some of its IT systems too.

Colonial Pipeline, which transports nearly half of the East Coast’s fuel supply, said it is “taking steps to understand and resolve this issue.”

You can read the rest of the piece via the below link:

https://www.cnbc.com/2021/05/08/colonial-pipeline-shuts-pipeline-operations-after-cyberattack.html

See also:

via

Gloomy outlook for shale oile

For oil analysts and advisers Goehring & Rozencwajg the prospects for oil and especially shale oil will be murky in the forseeable future:

We believe we are on the cusp of a global energy crisis. Like most crises, the fundamental causes for this crisis have been brewing for several years but have lacked a catalyst to bring them to the attention of the public or to the average investor. The looming energy crisis is rooted in the underlying depletion of the US shales along with the chronic disappointments in non-OPEC supply in the rest of the world. The catalyst is the coronavirus.

The initial phase of the crisis that took prices negative is behind us and the next phase which, should take prices much higher, is in its infancy. Global energy markets in general, and oil markets in particular, are slipping into a structural deficit as we speak. We believe energy will be the most important investment theme of the next several years and the biggest unintended consequence of the coronavirus.

 

Investors’ focus has shifted to how quickly supply can be brought back to meet recovering demand. While most investors believe the lost production will be easily brought back online, our models tell us something vastly different. While OPEC+ production will likely rebound, non-OPEC+ supply will be extremely challenged. Instead of recovering, our models tell us that non-OPEC+ production is about to decline dramatically from today’s already low levels.

 

You can read the rest of the piece via the below link:

http://blog.gorozen.com/blog/setting-the-stage-for-an-oil-crisis

Iran supports Venezuela with fuel, gets crude in exchange

Bloomberg writes:

Iran is sending its biggest fleet yet of tankers to Venezuela in defiance of U.S. sanctions to help the isolated nation weather a crippling fuel shortage, according to people with knowledge of the matter.

Some of the flotilla of about 10 Iranian vessels will also help export Venezuelan crude after discharging fuel, the people said, asking not to be named because the transaction is not public.

You can read the rest of the piece via the below link:

https://finance.yahoo.com/news/biggest-iranian-flotilla-yet-en-025239653.html?guce_referrer=aHR0cDovL3dhcm5ld3N1cGRhdGVzLmJsb2dzcG90LmNvbS8&guce_referrer_sig=AQAAALdIxjVDFln7MCX9qFcYfvLvcg-pNn4rBsjF7KZCQwSy1-O2_0FrtxUWeL6hgFlcpwEqJPrwLY_zTxv8Qbg1XWslxiXjsZkbye5ItD42VEZfADFPAIANUJUaAOTgvPyNueGkk1KJkvKZhYXIMfAqUCvzXMrfh9-MyfZuI4JzJu-C&_guc_consent_skip=1607428839

Middle East Oil Producers Under Pressure

Arab Gulf oil producers are losing billions of U.S. dollars from oil revenues this year due to the pandemic that crippled oil demand and oil prices. Because of predominantly oil-dependent government incomes, budget deficits across the region are soaring.  

Middle East’s oil exporters rushed to raise taxes and cut spending earlier this year, but these measures were insufficient to contain the damage.

The major oil producers in the Gulf then rushed to raise debt via sovereign and corporate debt issuance. Bond issues in the region have already hit US$100 billion, exceeding the previous record amount of bonds issued in 2019.

Thanks to low-interest rates and high appetite from investors, the petrostates are binging on debt raising to try to fill the widening gaps in their balance sheets that oil prices well below their fiscal break-evens leave.

You can read the rest of the piece via the below link:

https://oilprice.com/Energy/Energy-General/Middle-East-Oil-Producers-Are-Drowning-In-Debt.html

EU: work on the safety of offshore oil and gas operations directive moves on

EU press service reports on the Safety of Offshore Oil and Gas Operations Directive:

There are clear indications that the aims of the Directive on the Safety of Offshore Oil and Gas Operations [2013/30/EC] have been met thanks to its transposition by EU Member States, according to the Commission’s report, published today, on the assessment of the directive. Member States and industry are closely following requirements, it concludes, although with some differences of interpretation. Most of the open issues can be handled under existing work and communication channels with Member States’ authorities and stakeholders, and specifically through the European Union Offshore Authorities Group (EUOAG).

Member States and industry have largely welcomed the introduction of the Directive in its current scope, the report states, while environmental non-governmental organisations (NGOs) are more nuanced in their assessment, calling for further tightening of some measures. All stakeholders point to the depth and intensity of the changes brought about and say that more time and monitoring is required before considering legislative changes. 

You can read the rest of the piece via the below link:

https://ec.europa.eu/info/news/progress-safety-offshore-oil-and-gas-operations-report-confirms-2020-nov-16_en

Destination China: Iran secretly transfers oil to other vessels on the high seas

 Radiofarda writes: 

"TankerTrackers.com, a company that tracks and reports shipments and storage of crude oil says Iran probably exports twice as much oil as estimated.
In its latest report, the online service has referred to India's tanker Giessel that recently received its cargo from an Iranian oil tanker in the Sea of Oman and delivered it to China.
Various cases of transferring Iranian oil shipments to other tankers in the middle of oceans have been reported. Such operations are aimed at covering up the source of oil shipments and movements of tankers.
Based on the data provided by Kpler, an international data intelligence company, Giessel's case was first reported by Radio Farda on August 6.2

 You can read the rest of the piece via the below link:

https://en.radiofarda.com/a/iran-s-real-oil-exports-might-be-much-higher-than-estimated/30773893.html

Egypt: oil export from Sumed pipeline suffers from lack of demand

"The destruction of European lifting of crude from Sumed was particularly pronounced in June and there has been a slight revival in July. Demand may be helping. Data from the TomTom Traffic Index show congestion remaining well below normal levels in cities in Spain and Italy, key markets for Sumed crude, but a slow pick-up in run rates at the region’s refineries is beginning to draw more crude from the pipeline."

writes Bloomberg.

You can read the rest of the piece via the below link:

https://www.bloomberg.com/news/articles/2020-07-27/egypt-s-giant-oil-pipeline-toward-europe-slows-to-a-trickle

China: Record oil imports from KSA

Reuters writes: 

"Saudi, however, delivered bigger oil cuts from June and raised crude prices as a plunge in oil prices weighed on the kingdom’s budget.

China, the world’s biggest crude oil importer, took in a record 53.18 million tonnes last month, according to customs data.

China also boosted inflows from Brazil, Norway and Angola, said Emma Li, analyst from Refinitiv. 

Brazil, whose massive offshore projects are coming online, offered Asian refiners competitive deals on relatively high-quality oil just as China and other Asian countries contained the coronavirus and reopened their economies.

Analysts expect China to see another record amount of crude imports in July as some May-loading cargoes are still underway while swelling oil inventory at major Chinese ports slows new arrivals."

   

Mexico: energy and oil industry perturbed by cartel activity

A feature about the situation in the state of Tamaulipas in the north-east of Mexico by Argus:

 "Over the past seven months, security experts working with oil, gas and renewable energy companies in the region have documented 15 deaths from cross-fire, seven assaults by cartel members fleeing confrontation with a rival gang, 25 kidnappings to extract money or extort information about rival gangs or for fuel theft, as well as numerous cases of vehicle theft and telephone extortion. Despite the high level of criminal activity, charging companies a fee to operate in the state, known as derecho de piso, is not common practice in Tamaulipas as it is in other part of the country.

A handful of illegitimate oil services companies, suspected of being fronts for laundering the profits of fuel theft, are also thought to be responsible for widely documented theft of heavy machinery, valves and pipes from oil field sites.

"Tamaulipas has a very specific security dynamic circled around criminal lookouts," Garcia said. "The groups are not necessarily tracking the companies themselves but are trying to keep track of rival organizations."

Companies operating in the state employ a range of protocols to protect their staff and operations, including daylight-only working hours, maintaining a high industrial profile through the use of vehicles and uniforms clearly marked with company logos, kidnap training for personnel, the use of hotels and apartment complexes that commit to anti-kidnap protocols, and the sharing of real-time data on criminal incidents in order to plan daily personnel movements."

You can read the rest of the piece via the below link:

https://www.argusmedia.com/en/news/2125516-tamaulipas-turf-war-creates-nogo-zone-for-energy?backToResults=true 

You might also check out the very interesting blog "Borderlandbeat" about narcos and cartels in Mexico.

Russian governement tries to steady battered oil industry

Oilprice.com writes:

"Russia’s President Vladimir Putin has tasked the government with implementing a set of measures aimed at supporting the oil industry for the duration of the OPEC+ production cut agreement.

According to a document published on the website of the Russian presidency, the measures include a prescription not to sanction companies that stray outside their production quotas and a temporary lifting of penalties for state oil companies for not sticking to their 2020/2021 investment programs.

The document also lists “special rates” to be implemented by pipeline operator Transneft and Russian Railways for transporting crude oil and oil products for the duration of the OPEC+ deal."

You can read the rest of the piece via the below link:

https://oilprice.com/Energy/Crude-Oil/Putin-To-Bail-Out-Russian-Oil-Industry.html 

    

China buys up cheap oil in large amount

Oilprice.com reports:

"While the rest of the world is tentatively coming out of lockdowns, China is taking advantage of the cheapest crude oil in years to stock up as demand is starting to return in the world’s largest oil importer, Bloomberg reported on Friday, citing tanker-tracking data it has compiled. At present, a total of 117 very large crude carriers (VLCCs) – each capable of shipping 2 million barrels of oil – are traveling to China for unloading at its ports between the middle of May and the middle of August. If those supertankers transport standard-size crude oil cargoes, it could mean that China expects at least 230 million barrels of oil over the next three months, according to Bloomberg. The fleet en route to China could be the largest number of supertankers traveling to the world’s top oil importer at one time, ever, Bloomberg News’ Firat Kayakiran says.

Many of the crude oil cargoes are likely to have been bought in April, when prices were lower than the current price and when WTI Crude futures even dipped into negative territory for a day."

You can read the rest of the piece via the below link:

https://oilprice.com/Energy/Energy-General/A-Huge-Fleet-Of-117-Tankers-Is-Bringing-Super-Cheap-Crude-To-China.html 

The consequences of saturated oil storage on US production

Goehring & Rozencwajg give a gloomy forecast on US oil production:

"According to the EIA weekly inventory figures, US production has fallen by nearly 1 mm b/d or 7% in only five weeks – the second-sharpest decline in US production ever outside of hurricane-related activity.

Most of these “involuntary” cuts will never come back online. In some cases, shutting in a well for a prolonged period will irreparably damage the wellbore or reservoir. The stripper wells meanwhile were only marginally economic to begin with on an operating basis and would never justify the capital cost to drill through the cement plugs used to cap them. While offshore production is accustomed to shutting in production for short periods during hurricanes, longer-term curtailment requires the well to be permanently sealed making re-entry nearly impossible."

You can read the rest of the piece via the below link:

http://blog.gorozen.com/blog/oil-production-cuts-and-their-long-lasting-repercussions 

Syria receives Iranian oil in large amounts

Radio Farda reports that tankers delivers oil in large quantities to Syria:

"Tanker tracking sources say Iran’s oil exports to Syria have increased substantially in recent weeks and currently several cargoes have reached the Baniyas port in Syria.

Tanker Trackers reported on Tuesday April 28 that several Iranian vessels are near port in Syria and the Middle East Economic Survey (MEES) reports that these tankers are carrying 6.8 million barrels of oil.

Since full U.S. sanctions were imposed on Iran in May 2019, Syria has been receiving an average of around 2 million barrels of crude monthly from Iran, and now more than three times is being delivered at once.

In January and February, Iran’s biggest oil customer, China reduced its imports and with this large cargo arriving in Syria, that country has become the largest oil importer from Iran.

There can be several reasons why this is happening. Excess oil stocks in the midst of sanctions and a global oil glut is forcing Iran to ship and perhaps store the oil in a friendly country. Another reason is that Bashar Assad’s government and Hezbollah can be conduits to sell the oil on the black market. One place Hezbollah can manage to do this is Lebanon, where it has sway over the government."

Saudi Arabia's crownprince's miscalculations

An interesting article by David Hearst about MBS's bad decisions and misperceptions that may lead to an economic downturn of the kindom:

"Both pillars of Mohammed bin Salman’s plan to modernise and reform his country are crumbling. His plan to generate foreign investment by selling off five percent of Aramco on foreign stock exchanges has gone and now PIF, the main vehicle for diversifying his economy away from oil, is in chaos too.  

Many in the region would cheer MBS's demise. He has simply done so much harm to so many people, particularly in Egypt. In a post-oil era, MBS would lose his power of patronage, the power of an oligarch who can spend a billion pounds a minute and not blink.  

But the collapse of Saudi Arabia’s economy, which for decades has been the engine room of the economy of the whole region, would quickly be felt in Egypt, Sudan, Jordan, Lebanon, Syria, Tunisia - all of which send millions of their workers and professionals to the kingdom and whose economies have grown to depend on their remittances."

Oil war: Russia hit by threefold calamity

Russia is afflicted by the low oil prices but also by the economic downturn due to the Covid-19-pandemia and the stagnation of the national economy that ist hurt by sanctions; russian business leaders are becoming impatient writes german newpaper Die Welt:

"The fact that Vladimir Putin was so quick after a phone call with his counterpart Donald Trump to participate in an oil cut together with Opec and other oil countries speaks volumes. Just a month earlier, he had the Saudis blown away with this request - and thus triggered an unprecedented drop in prices from $ 66 to $ 22 per barrel of the Brent variety, because Riyadh flooded the market out of anger.

Maybe he had simply underestimated the Saudis. Just as he had underestimated the corona virus. For a long time, the Kremlin had been unimpressed and kept relatively quiet. On March 17, Putin had declared in Crimea that everything was actually under control.

In the meantime, like many other countries, things blow up in his face. More precisely: in contrast to most countries even more. It is now becoming clear that Russia is getting a triple blow. On the one hand, the economy was stagnating, among other things because of the Western sanctions and the associated isolation, with growth of 1.3 percent."

Saudi Arabias dangerous bet

After an agreement with Russia about the reduction of the oil production failed, KSA took the decision to flood the marked with cheap oil and start a price war.
The plan is to eliminate competitors, especially american shale oil producer. The plan is audacious and dangerous things french specialized blog "Transitions énergies":

"So it all started on March 4. Prince Abdulaziz ben Salman, Saudi Minister of Petroleum, is preparing in his suite at the Park Hyatt hotel what is arguably the most important negotiation of his career. He is experienced in exercise, subtle diplomacy as well as power relations and agreements negotiated in the anterooms. Oil producers are hated rivals and often have conflicting political interests, but they have something in common, their addiction to petrodollars.

But when Prince Abdulaziz meets his Russian counterpart, Alexander Novak, to negotiate a further joint drop in production to limit the fall in prices, the latter does not want to hear about it. And this will lead to one of the biggest earthquakes in the oil market since the shocks of the 1970s. Because Saudi Arabia then decides to launch its plan B, no longer limiting the quantities to keep the prices, but breaking the market to better control it afterwards.

The Kingdom has thus decided to monetize its gigantic reserves as quickly as possible rather than seeking to enhance them over time. It is also an indication that Saudi Arabia believes that the future of oil is bleak over the next few decades due to the energy transition. The world's leading oil exporter therefore deliberately chose to change the situation. He prefers to sell a lot of oil at low prices rather than a little oil at high prices. And can also bet that cheap oil will slow the energy transition. The Kingdom is the third producer (see below) but holds 25% of the world reserves, 70% of the additional production capacities and is by far the first exporter."

Oil discoveries: will Guyana close up to the wealthiest countries on the planet?

Recent ample oil finds in Guyana aliment hopes that the south american country could fill in for declining Venezuela.
Observers whisper that international oil corporations pulled the guyanes president over the barrel at negotiations, also the previously poor and corrupt country might be overchallenged with the sudden prosperity writes german newspaper "Welt":

"Because Guyana has been an oil exporter for four weeks. Although the oil is still flowing sparingly, production is to be expanded rapidly within a very short time. The country then becomes an important player in the global oil market, and a poor, largely jungle-covered area can quickly become the richest nation on earth.

According to forecasts by the International Monetary Fund (IMF), economic growth is expected to reach over 85 percent this year alone. But whether and to what extent all of this benefits the population remains to be seen.

Guyana is located in the north of the South American continent, framed by Venezuela, Brazil and Suriname. It is about the size of Belarus, but only 775,000 people live there.

It was a British colony until 1966, after which Guyana only made the international headlines once: through the Jonestown massacre in 1978, when cult leader Jim Jones ordered his supporters, who had settled in the rainforest of Guyana, to commit suicide , This cost 900 people their lives, the pictures of corpses in the middle of the jungle went around the world.

Otherwise, life in the country has been going at a leisurely pace over the past decades. Mining - bauxite, manganese, gold - only benefited a small upper class, making Guyana one of the poorest countries on the continent.

By contrast, neighboring Venezuela has been at the forefront of prosperity in South America for decades, not least because of the almost inexhaustible oil reserves. But even though countless explorations were carried out in Guyana, there were simply no major oil fields there. Until 2015.

At that time, Exxon Mobil announced that it had found a huge oil field in the Starbroek Block, some 190 kilometers off the coast of Guyana. And after four years of preparation in a consortium with the US group Hess and the Chinese CNOOC, the black gold was pumped to the surface for the first time on December 20.

“Euphoric, Guyana's President David Granger promptly declared December 20 to be the new national holiday. Oil production gives the country the prospect of a better life, he said and promised: "Every Guyan will benefit from the oil production, nobody will be left behind." The oil field that is now being developed is to deliver 120,000 barrels a day by the end of the year, by 2025 it will According to forecasts by the International Monetary Fund, funding will rise to 424,000 barrels, other estimates assume up to 750,000 barrels or even one million barrels.

That would be more than neighboring Venezuela is currently funding. Production there has declined dramatically in recent years, which Guyana could now at least partially compensate for.

Another figure, however, is much more impressive and important for Guyana, namely oil production per capita. Because 750,000 barrels per day would correspond to around one barrel of oil per inhabitant that would be taken from the Starbroek block.

That would be far ahead of all other oil producing countries, even Kuwait only has 0.8 barrels per capita, Qatar 0.7 and Saudi Arabia 0.3. And that's not all: Exxon Mobil has now announced further oil discoveries off the coast of Guyana.

Almost overnight, the small, sleepy country in the South American rainforest thus became an oil nation, and the petrodollars patter on it from then on. The IMF therefore sees the economy growing by around 85 percent this year alone. By 2024, the country's economic power is expected to almost quadruple from around $ 4 billion a year to $ 15 billion a year.

Per capita income would then rise from just over $ 5,000, which is roughly the same level as Albania, to almost $ 20,000 - just a little behind Saudi Arabia. And a few years later, Guyana could compete with the rich Emirates in the Gulf.

But the big question is what people really get out of this new wealth. In any case, far too little, says the international non-governmental organization Global Witness, which takes action against human rights violations and environmental pollution in connection with the extraction of raw materials. She accuses Exxon Mobil of ripping off the inexperienced government of Guyana."

You can read the rest of the piece via the below link:

https://www.welt.de/wirtschaft/plus206053821/Oel-Guyana-koennte-das-reichste-Land-der-Welt-werden.html?source=k239_control.panorama.3.206053821