Russian energy model challenges OPEC

In the lead-up to the G8 summit in St Petersburg, Russia presented a revolutionary agenda that leaders of the developing states in Africa and Asia should have every reason to support. This is a new Russian scheme for supplying, consuming and pricing energy - principally oil and gas, but also coal and uranium - to the world.

The OPEC model has been limited to crude oil; the Russian model aims at covering supply of both crude oil and natural gas. The Russian model aims to supplant the Saudis, emphasizing Russia's global lead in gas reserves and in barrel of oil equivalent (boe). Already, Russia exceeds Saudi Arabia as the largest producer in boe terms (13.3 million boe per day, compared with 10 million boe/d for Saudi Arabia); the largest exporter in boe terms (18.7% of global hydrocarbon exports); and the largest reserve base (16.3% of world hydrocarbon reserves boe).

In the OPEC model, suppliers hold much of their cash and government securities in US-controlled institutions. In the Russian model, cash is held in the form of a currency basket; conversion from cash is sought into non-US assets, particularly in the European market.

The Russian model also extends to energy-convertible coal, uranium, and other mineral resources. The US, Australia, Canada and other resource-exporting states have sought to gain unlimited access to search and development of Russian minable resources. The Russian model rejects this, and instead assigns priority and equity control of domestic resources to national resource companies.

- This is big. With the export of more energy output in boe terms than Saudi Arabia, Russia is starting to assert its leadership. And, unlike the Saudi's, the Russians have nukes, which means nobody is going to mess with them any time soon.

This time, I think, the Russians have all the cards. Perhaps I will go long on Russia.

Post a Comment:

Comments are closed for this entry.

« Indonesia crude oil... | Main | RIP Singapore Serf »

Most popular blog postings on lowem.log :

1. Singapore MRT rail network length to double by 2020
2. 2010 Nissan Leaf electric car specifications : 107hp, 24KWh lithium-ion batteries, 100-mile range
3. Live spot gold price quotes chart on COMEX
4. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
5. AVG Anti-Virus Free Edition 2011 direct download link
6. Real-time live gold and silver price quotes chart on COMEX
7. Singapore electric vehicles : Government agencies EMA and LTA to study EV introduction
8. Book review : Shut Down by William Flynn

Featured articles on lowem.log :

1. Book review : Shut Down by William Flynn
2. Singapore electric cars testing starts with 9 electric vehicles
3. Honda, GS Yuasa JV to make lithium-ion batteries for 2010/2011 Honda Civic Hybrid
4. 2010 Honda Civic Hybrid preliminary specifications released
5. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
6. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
7. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
8. Singapore : Nuclear power not ruled out