TARGET: THE PRICE OF OIL

New attacks on oil industry workers in Saudi Arabia confirm that al Qaeda has shifted its focus, via an indirect means, to a new American weakness: oil. These attacks keep the ~$8 per barrel terror premium on oil in place (effectively, a ~$600 m a day "terrorist tax" on the world), however, due to diminishing returns from these tactics, the premium will not increase much from these attacks. There are still some potential long-term returns that can be gained through the departure of foreign workers (particularly oil industry workers and their families) from Saudi Arabia. If these departures occur (Saudi Arabia relies on 6 m expatriot workers, many of them in the oil industry), they will impact the ability of Saudi Arabia to build additional capacity (which will be difficult to do under even ideal conditions) necessary to off-set rapidly rising demand from China (which according to current demand trend lines will suck up all global reserve production capacity in less than two years).

I think it is extremely likely that we will see a continuation of these attacks on personnel, however, the most gratifying feedback loop (for terrorists) is the price of oil. This price will not increase dramatically (with $50 as a target price -- which Stephen Roach indicates will result in a global recession) unless attacks shift to (primarily Saudi, although this isn't the only potential venue for attacks) oil infrastructure. As a result, expect al Qaeda to shift, soon.

To adapt successfully, the western states need to adopt market indicators as a measure of security success. A failure to do this will result in a misallocation of security resources.

Comments

[Watching Them, Watching Us]

So what exactly is the relationship between the spot price of oil and actual terrorist attacks ?

These latest attacks on oil worker personnel and their families cannot have had any actual direct impact on the flow of Saudi oil.

Are the speculators who are making money out of these oil price rises or falls, actually neutral actors ? Or are some of them actively financing terrorism, not due to ideological support, but out of sheer greed ?

The global financial surveillance systems that would be needed to track terrorist sympathisers playing the oil market should also identify "pure" speculators and "greedy" terrorist action funding speculators.

However, there are many dark secrets about who exactly is a speculator e.g.. it would not be a surprise if the left hand of a government or central bank was speculating against the right hand. Perhaps such financial surveillance will never be implemented - after all, information is power.

[Sardar Pishdare]

KURDISTAN OIL DEVELOPMENT
http://www.btinternet.com/~kurd.oil
TE L: 0044 208 378 0928 Fax : 0044 208 378 0928
s.rostam@ntlworld.com

Sardar Pishdare

INTRODUCTION

This proposal concerns the rational and efficient, near-term development of up to 1 Million barrels/day of expanded, made over or new oil production capacity within a period not exceeding 6 months from the foundation of an oil development, production and transportation entity in Kurdistan.

The key elements of this proposal feature the creation, under international guarantee, of a 400-kms Free Zone, extending eastwards from the Syrian-Lebanese border on Mediterranean Sea, and extending to the North, bounded by the currently inactive DORTYOL pipeline and rail line (built and owned by French interests) up to Iraqi Border.

Further to this proposal, a concessionary and operating company will be founded, the Kurdistan Oil France Company (KOF), incorporating Kurdish and French interests on a 50/50 basis, together with allthose necessary, adequate and sufficienct security provisions and structures in the areas concerned by this proposal.

OIL RESERVES AND KURDISTAN

Greater Kurdistan covers a large area of territory currently occupied and/or claimed by Syria, Turkey, Iraq and Iran. Within the effective area of Greater Kurdistan, for example as recognized by the Treaty of Sevres, currently known, proven, inferred and likely oil reserves (and both associated and 'stranded' gas reserves) are very large. Further, and prticularly concerning the area made up by the aforesaid Free Zone, in majority lying in Syrian occupied territory, he development of oil production capacities has been deliberately held at a low level.

Numerous smaller and medium-sized oil fields, generally capable of production volumes in the region of 500 – 3000 barrels/day, each, can be quickly developed and brought into reliable, long-term operation. Other and numerous oil fields, currently producing small volumes and relying on outdated and inadequate or inefficient installations, equipment and management, can be quickly made over, renovated or upgraded to yield much more production, on a reliable and long-term basis.

Overall, it is fully possible on technical grounds to obtain the stated objective, of 1 Mbd of new or expanded production within 6 months following the foundation of the aforesaid KOF entity, of course with adequate and effective international guarantees, and local security, to be provided with majority Kurdish participation.

FOUNDATION OF KOF

The foundation of an internationally reognised operating entity is the first step towardsrelaising the goals of this proposal. KOF, after discussion, gegotiation and appraisal of all interests by all partners, may initially be given the objective of developing and securing reliable oil production capacity, and the transport of oil to the Mediterranean Sea, within Kurdish Iraq.
This will concern the eastern extremity of the proposed Free Zone.

Several advantages may accrue to a programme featuring this element, that is initial oil development, etc, in Kurdish Iraq:

1. Kurdish influence and political control in Kurdish Iraq is now an established an recognized fact.

2. Current oil field operation, and especially the transport of oil, is unsure and inefficient, whether concerning crude or refined products.

3. Establishment of Kurdish control, with provision of adequate and effective security along the DORTYOL line and rail line, through the construction of fortified settlements, will ensure reliable transportation of oil to the Mediterranean Sea.

PROGRAMMING

it. is first necessary to found an international oil concern of a concessionary nature, charged with the development, upgrading, and transportation of Kurdish oil. With French partnership, this would be achieved through founding an entity such as KOF. In the case of other partnering interests, for example US, British or Indian interests expressing interest and wishing to participate in the foundation of an operating entity, the name of the entity will be modified, to become KO Corporation. In all cases, capital ownership and management responsibility will be on a 50/50 basis, Kurdish and International interests.

Following creation of the operating entity, programming will feature the simultaneous development or provision of

1. Secure settlements and security facilities along the DORTYOL line and rail line

2. Oil development, upgrade, renovation and make overall

3. Construction and supply of all installation and ancillary equipment, as required.

Through detailed planning and programming, all the above may be assured within a timeframe not exceeding 6 months, agfter creation of the KOF or KOC, with French or other international partners

FINANCIAL AND ECONOMIC ASPECTS

This proposal concerns the creation of an oil (and associated gas) producing entity with an initial objective of attaining 1 Mbd of oil production capacity within 6 months from the incorporation of a Kurdish-International operating entity, with adequate and full security in the areas concerned by this proposal, notably with regard to transportationfacilities and installations.

At current prices, the turnover value represented by new or increased oil production of 1 Mbd is approximately 18 000 Million US dollars/year. Investment and security provisions may be esimated provisionally at approximately 3 – 4.5 Bn US dollars, with relatively low recurring expenses, costs and charges.

[Sardar Pishdare]

Sardar Pishdare

PROPOSED MODIFICATION - AMK

Independent Kurdistan will benefit everyone

For over a thousand years, we, the Kurds have been ruled, and mostly oppressed by Arabs, Persians and Turks, in particular where the Islamic faith is used as an ideological tool.

The end of the First World War and collapse of the Ottoman Empire brought hope and many expectations to the Kurds. We sought the dawn of a new era, bringing modernization and independence to us and our neighboring peoples. It however only resulted in the Great Powers of the day partitioning Kurdistan.

These powers then began to negotiate and purchase Kurdish oil from the new Arab, Turkish and Persian states which they had created, almost from nothing, causing huge injustice to the Kurds and culminating in the instability and conflicts of today.

The revenues from this oil were later used by the artificial new states to remove the West from the Middle East, and to fuel further conflicts.

For over 80 years we the Kurds have protested to major powers that most of these regimes are terror states, which deny democracy to their people, use religion as a tool, plunder everything in their path and willfully kill any persons who thwart their objective.

Our Kurdish culture and roots are close to Europe. History proves that we, like the Greeks, Phoenicians, Romans, Franks, Saxons and Britons are of Indo-European source.

I can truthfully state that we Kurds prefer economic cooperation with modern Europe, to fuse our resources, manpower, intelligence and wealth, so creating a stronger role for Europe in the Middle East. Kurdistan’s geologically proven wealth not only features oil and gas, but many other minerals and water resources.

Kurdistan’s large and varied population has long traditions of technical, intellectual and artistic skill.

The political geography of the Middle East today is unstable. It requires urgent changes, including a Road Map for a new and stable, prosperous and progressive Middle East. Greater Kurdistan must exist, or there will never be stability.

These changes must enable the Greater Kurdistan to exist, with the creation from Syria of a 400-kms Free Zone stretching from the Mediterranean Sea to the borders of current Iraq. The New Iraq must be divided from the intersection of the Euphrates River at Baghdad; Iran must give up Kurdish territory from the Straits of Hormuz to the Caspian Sea.

Oil geologists know the extent of oil reserves in this region, and their potential to solve the increasingly short supply of oil in the world. Kurdish Oil and Western partnership will provide that supply security, within secure, just and stable frontiers.

[Sardar Pishdare]

KURDISTAN AND EMERGING WORLD ENERGY CRISIS
ROAD MAP FOR LASTING SOLUTIONS
PROPOSED MODIFICATION - AMK

Sardar Pishdare

Introduction

The world supply of oil and natural gas is not sufficient for current growth of world energy demand.

In combination with strong political tensions, war and instability in the Middle East, this has led to « high oil prices », and increasing natural gas prices. These are described by some economic analysts and commentators as posing a threat to the world economy.

The situation concerning oil is the most difficult. World supply, production capacity, proven reserves and exploration effort for oil pose immediate and serious problems for the world economy, because it will be difficult to much increase supply, but the situation regarding natural gas is broadly similar.

One major problem is that, since 1999, oil prices have in fact increased roughly 400% from about 10 US dollars-per-barrel (10 USD/bbl) to a range of about 45 – 55 USD/bbl without any incidence at all on world demand for oil. Quite the reverse !

World oil demand is now growing at about 2.5% - 3% each year.
In the 1990s, with much cheaper oil, world oil demand growth was only about 1.4% each year.

This proves the central role of strong oil prices in pushing economic growth, therefore reinforcing oil demand growth, not weakening it. This situation will continue unless oil prices go to very high levels, of above 90 USD/bbl, which will cause strong inflation and harm the world economy.

In turn, very high growth rate trends for world oil demand increase the geopolitical and Great Power rivalries in the Middle East, for control over remaining world reserves and supply. As is well known, regional instability in the Middle East is now very high. Bold and long-lasting solutions must be found and applied. First among these is the acceptance of the historic injustice done to the Kurdish people, and the creation of a peaceful, democratic Kurdish homeland in its historical territories.

Creation of Greater Kurdistan will firstly stabilize the geopolitical situation of the Middle East. It will permit the rational and long-term development and production of all regional resources, including energy resources, both renewable and non-renewable. Bringing stability to the Middle East will not be possible without the creation of a Kurdish homeland.

The world oil problem and Kurdistan

An increasing number of books, studies, reports and Internet sites describe the situation regarding world oil reserves, exploration effort, annual discovery trends, production capacity and demand. All the advanced, urbanized, consumer societies (such as USA, Japan, Europe, South Korea, Taiwan) consume about 12 – 25 barrels of oil per head of population, each year. Applying the same consumption rate to China, India, Brazil, Pakistan and Turkey would increase world oil demand by more than 55 Million barrels-per-day (55 Mbd). This is six times the total production of Saudi Arabia, or seven times the production of Russia, the two biggest oil producers and exporters in the world.

While the current oil price of around 50 USD/bbl for the light crudes is described as « very high », this price is in fact too low to encourage serious energy conservation and long-term effort to develop the renewable supplies. Oil prices of about 60 or 70 USD/bbl will most certainly draw serious attention to this problem, and bring financial resources and investment to renewable energy development. This will be a very long-term project, over 30 years or more, and will not harm world oil demand, or the revenues obtained by oil exporter countries. This will be sure because world oil demand will remain very strong due to economic growth and development in China, India, Brazil and other fast-growing economies with very big populations. Even if these countries only obtain a consumption rate for oil equivalent to one-third or one-half the rate in rich countries, world oil demand will still increase by huge amounts in the coming 10 – 15 years.

The problem will be oil supply. This problem will increase very fast and become a crisis unless action is taken in the near-term.

As is well known, the Middle East and Central Asia region holds at least 60% of the world’s remaining oil reserves, and much of the world’s natural gas reserves. Taking the case of Iraq, it is seen that invasion, rather than counting on and supporting local opposition to the regime of Saddam Hussein has produced an unstable, warlike and dangerous situation. This prevents investment and sure development of oil and gas reserves, and increases terror action, to the benefit of nobody.

Kurdistan is, and will always remain a historical fact. It cannot be « swept off the map ». Aiding and assisting the Kurdish people to exercise their natural rights to a homeland in secure and recognized frontiers will be an important first step in bringing stability to the Middle East. Only with this stability can the region’s fossil and renewable energy reserves and resources be developed, to help everybody.

Kurdish energy initiative

Once created, an independent Greater Kurdistan will provide the geographical space in which to create the basis of a Middle East regional electric power grid. This will utilize previously flared gas, and develop hydropower, wind and solar resources to run electric power stations, able to supply countries outside the region. This will first include southern and eastern Europe and the Greater Maghreb.

With regional stability assured, and oil prices maintained at a sufficiently high level, longer-term and more costly investments can be made in the oil sector. These will include effort to improve oil field recovery rates, increase production of heavy-grade crudes, develop gas-to-oil conversion, and other important measures for improving world supply of liquid hydrocarbons. This effort will be vital to help world oil supply to remain at high levels, to prevent catastrophic decreases in the world supply, due to depletion of oil reserves in other regions of the world. Expert estimates place these depletion losses at more than 2 Mbd-per-year.

Greater Kurdistan will assure and ensure that major energy investments are put to good use, on a long-term basis, for the benefit of all. Conversely, rejection of Kurdistan’s natural right to exist in stable and recognized frontiers reflecting its historical existence over 2000 years will make these projects and proposals very difficult to carry out and achieve.

Time is now short with regards to future oil supplies for the world. Action has been delayed, and the wrong methods have been used to attempt bringing stability to the Middle East. Kurdish people and their leaders recognize this, have drawn their conclusions and make the observations, and proposals that are briefly described in this document.

[Sardar Pishdare]

Iran must give up Kurdish territory

As the Holy Bible Revised Standard Version show the map of the great Empires of the sixth century BC which calling MEDIAN EMPIRE the assistance of the Kurdish pupil is approve that the today Iranian territory is belong to the Kurd, not Persian, the history is show that when Median and Persian come down to the Medal East, the Persian stay on the estran of Iran and the Median stay on the western of Iran, this men is all the western Iran is the Kurdish territory from the Straits of Hormuz to the Caspian Sea.

This proposal concerns the rational and efficient, near-term development of up to 10 Million barrels/day of expanded, made over or new oil production capacity within a period not exceeding 6 months from the foundation of an oil development, production and transportation entity in Iranian Kurdistan.

The key elements of this proposal feature the creation, under international guarantee, of a 1000-kms wide Free Zone, extending from the Straits of Hormuz to the Caspian Sea on the Iranian territory.

Further to this proposal, a concessionary and operating company will be founded, the Kurdistan Oil Corporation With US, British and France, incorporating Kurdish and US, British and France interests on a 50/50 basis, together with all those necessary, adequate and sufficient security provisions and structures in the areas concerned by this proposal.

OIL RESERVES AND KURDISTAN

Greater Kurdistan covers a large area of territory currently occupied and/or claimed by Syria, Turkey, Iraq and Iran. Within the effective area of Greater Kurdistan, for example as recognized by the Treaty of Sevres, currently known, proven, inferred and likely oil reserves (and both associated and 'stranded' gas reserves) are very large. Further, and particularly concerning the area made up by the aforesaid Free Zone, in majority lying in Iranian occupied territory, the development of oil production capacities has been deliberately held at a low level to raise the praise of Oil.

Overall, it is fully possible on technical grounds to obtain the stated objective, of 10 M bd of new or expanded production within 6 months following the foundation of the aforesaid Kurdistan Oil Corporation With US, British and France entity, of course with adequate and effective international guarantees, and local security, to be provided with majority Kurdish participation.

FOUNDATION OF KOC

The foundation of an internationally recognised operating entity is the first step towardsrelaising the goals of this proposal. KOC, after discussion, negotiation and appraisal of all interests by all partners, may initially be given the objective of developing and securing reliable oil production capacity, and the transport of oil to the Golf Sea, within Iraq.

This will concern the eastern Iran extremity of the proposed Free Zone.

Several advantages may accrue to a programme featuring this element that is initial oil development, etc, in Iraq and Iraqi Kurdistan.

2. Kurdish influence and political control in Kurdish Iraq is now an established a recognized fact.

4. Current oil field operation, and especially the transport of oil, is unsure and inefficient, whether concerning crude or refined products.

5. Establishment of Kurdish control, with provision of adequate and effective security along the Caspian Sea up to the Straits of Hormuz, through the construction of fortified settlements, will ensure reliable transportation of oil to the Golf.

PROGRAMMING

It is first necessary to found an international oil concern of a concessionary nature, charged with the development, upgrading, and transportation of Kurdish oil. With US, British French partnership, this would be achieved through founding an entity such as KOC. In the case of other partnering interests, for example US, British or Indian interests expressing interest and wishing to participate in the foundation of an operating entity, the name of the entity will be modified, to become KO Corporation. In all cases, capital ownership and management responsibility will be on a 50/50 basis, Kurdish and International interests.

Following creation of the operating entity, programming will feature the simultaneous development or provision of

2. Secure settlements and security facilities from the Straits of Hormuz to the Caspian Sea

3. Oil development, upgrade, renovation and make overall

4. Construction and supply of all installation and ancillary equipment, as required.

Through detailed planning and programming, all the above may be assured within a timeframe not exceeding 6 months, after creation of the KOC, with French or other international partners

FINANCIAL AND ECONOMIC ASPECTS

This proposal concerns the creation of an oil (and associated gas) producing entity with an initial objective of attaining 10 Mbd of oil production capacity within 6 months from the incorporation of a Kurdish-International operating entity, with adequate and full security in the areas concerned by this proposal, notably with regard to transportation facilities and installations.

At current prices, the turnover value represented by new or increased oil production of 10 Mbd is approximately 180 000 Million US dollars/year. Investment and security provisions may be estimated provisionally at approximately 30 – 40 Bn US dollars, with relatively low recurring expenses, costs and charges.

[doctordoom001]

Sardar: You are rightly correct!!! Let me add to your essay just the idea of Mr. Chavez and his crazy idea of USA invasion to Venezuela to raise the price just a bit more.
Source: President's comment on his sunday-always-long-lasted-boring TV program: Aló Presidente (Hello! President)

[Saleh Hoseini]

Dear Sirs/ Madams,

We want the diesel price in Mediterranean market.

[Michael]

Kurd oil is hot and there is a "wildcat" oil company on the scene. Does anyone know the company name? It is a stock exchange listed company I just don't know the name or ticker. Help appreciayed..Mike

[John Robb]

Michael, good luck. Kurdish oil may be hot, but more from the perpetual explosions of pipelines and facilities than from potential financial rewards.

[Michelle Rene]

Oil and Gas Equipment Company that puts out fires and services oil wells is Boots & Coots International Well Control, Inc. under symbol WEL on US Stock Market AMEX exchange. I do not know if that is the information you want, but they do have contracts in Iraq, Algeria, etc. and work witih Halliburtin, symbol HAL. Also found out about a Canadian driller, Heritage Oil Corporation (HOC) on Canadian exchange. I enjoyed this website. What can you tell us about company between France and Kurds? This worries me. Thanks

[Bob Steele]

When will the company start to explore and drill for oil in Iraq?

[Bob Steele]

When will the company start to explore and drill for oil in Iraq?

[Tom]

looking for the wildcat is tough. what I do know is that it's about a $12 stock right now and the it's the only oil company with real ties to the higher ups in the Kurdish north part of Iraq, whom which they signed a contract with on August 26th??

[Patti]

I have heard that the Barzani's have signed an oil deal with a small Canadian Company with family ties to the area by way of Iraq Petroleum Company. Any comments?

[zana kurda]

That is true Patti..the canadian company has begun his work in chamchamal region near the city of Kirkuk ..chamchamal is under administation of KRG (Kurdistan Regional Government).
as far as i know they have reached agreeement with both kurdish leaders Barzani and Talabani.

[wtofd]

"$50/barrel"... the good, old days.

[TM Lutas]

There is a price ceiling effect that the terrorists and the current oil powers jointly wish to avoid. Past a certain price, Fischer Tropsch will kick online in a major way to convert coal to diesel @ $32/bbl (fears of a price crash *before plant equipment is paid for is what's holding this back today), the US will dump its sugar quotas to rev up ethanol production, and a number of other, more drastic measures will be taken.