The game of oil

[yahi]

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here is article 1: A new era begins:
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"Colonel" Edwin L. Drake had no idea, this August 27, 1859, that the precious oil spouted from his well in Titusville (Pennsylvania) was going to upset the world economy and geopolitics. That it would become "black gold" for all who profit from it and "dung of the devil" for all the damned of the earth deprived of this rent by corrupt governments. After a hundred and fifty years of uninterrupted extraction and greedy consumption, the world has entered an uncertain period: at 70 dollars per barrel, the price has tripled since 2001, more and more observers assure that the world has entered the world. after oil.

2005 was a year of changeover. What happened during this crazy summer when the Nymex and the IPE, the New York and London oil "exchanges" ignited? Are we experiencing a remake of previous shocks, with a scenario and actors different from those of the 1970s? Who benefits from soaring courses? Can the price of black gold reach 100 dollars per barrel or return to 30 dollars, after having doubled since January 2004?

According to the definition inherited from the 1970s, an oil shock is the conjunction of a tension in the markets and a political crisis in the Middle East which leads to a supply disruption. The chain is then fatal: soaring oil prices and inflation, raising interest rates, recession. The tension in the markets is there, but the American intervention in Iraq did not have the recessive effect of the embargo of OPEC on the friendly countries of Israel (1973), of the Iranian Revolution of 1979 and the first Gulf War in 1991. For the moment, inflation remains under control and growth is vigorous.

Unlike previous crises, "the main reason for current oil prices is certainly in the strength of demand, recently analyzed the director general of the International Monetary Fund (IMF), Rodrigo Rato. And there is no prospect of a decrease in this demand. " Prices per barrel are high and close to those of 1980 (where they exceeded 80 dollars in 2004 value), but they are due to the strength of American demand and the spectacular economic take-off of China for five years.

"China! We always accuse him, gets annoyed Pierre Terzian, director of the journal Pétrostratégies. But it is the Americans who consume the most, by far!" More than 20 million barrels a day - a quarter of world production - when the Chinese still "burn" only 7 million. The United States and China, these are the two "oiloholics" that the British weekly The Economist crunched in its edition of August 27: an uncle Sam and a ventripotent and sated dragon sipping crude with straw.

The dynamics of Chinese demand are no less dizzying. Since 2000, the Middle Kingdom has absorbed a large third of the increase in world production. It is only to see the offensive of the oil companies (PetroChina, Cnooc) for the reserves of firms and countries of Africa, Central Asia or South America - and their overbidding on asset prices bought abroad - to convince ourselves that a sharp slowdown in demand is not for tomorrow.

We know the winners of this great boom. Producing countries, which collect more than $ 2 billion a day today. Oil companies, whose dividends have never been so fat. Oil companies like Halliburton, Schlumberger, Technip, which have seen their order books swell excessively. The large industrialized countries, which have a heavy hand on VAT and oil taxes, where they can represent more than 80% of the price of a liter at the pump (as in France). Without forgetting investment funds, which speculate at all costs: almost a quarter of the price of a barrel (or 18 dollars on 70 dollars) would be attributable to speculators, says the German Minister for the Economy, Wolfgang Clement.

The losers are infinitely more numerous. We can find consumers there, who have seen pump prices rise by almost 20% since the start of the year. The French pay up to 1,45 euros for the Super 98, cutting back on purchasing power which is already progressing little. If inflation is not yet affected, it is because many other products manufactured in the "workshop of the world" that China has become (clothing, computers, toys, household appliances ...) sold at low prices prices compensate for these additional petroleum costs. Even the Americans, accustomed to cheap gasoline, discover with amazement today a gallon (3,78 liters) at more than 3 dollars - a price which is likely to increase after the decommissioning of many petroleum infrastructures by the cyclone Katrina.

Few people, on the other hand, have taken the measure of the drama of poor and heavily indebted countries. To the point that the G8 had to make a gesture, at its July summit in Scotland, by deciding to create a special fund to cushion this oil shock. The energy bill is all the heavier as their obsolete production apparatus consumes on average twice as much oil as the rich countries for the same production. Poor efficiency that characterizes large oil consumers like China and India.

Will prices fall quickly? "Oil prices are unlikely to fall much further this year or next year," said the Center for Global Energy Studies (CGES) in London in its August monthly report. Unless, qualify its experts, a drop in pressure on currently saturated production and refining capacities, a significant slowdown in economic growth or the removal of political uncertainties in certain countries, Saudi Arabia, Iraq, Iran and Venezuela in particular. They therefore expect a crude "above 50 dollars a barrel in 2006", also driven by the obsession to build stocks in the event of a hard blow and "massive purchases of speculators".
With 85 million barrels a day, the world has never pumped so much black gold.
Atef Hassan / Reuters
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Steve Forbes, editor of the eponymous magazine, is more optimistic. The thirst for black gold of the Chinese and the Indians only accounts for a small part of the rise in prices. "The rest is just a speculative bubble," he said recently, before making the "bold forecast" of a barrel "fell in twelve months to 35-40 dollars". Who to believe? Especially since two financial institutions very invested in the petroleum sector also made, in spring 2005, radically divergent forecasts: when Goldmann Sachs predicted a barrel at 105 dollars in the coming months, Merill Lynch expected a collapse in prices.

Who can predict the evolution of the price of black gold in five or ten years? A quick glance at their evolution over the last 30 years (see graph) shows that they have been ridiculously low for a century. A shame for a fossil fuel that took millions of years to build up and of which we have already used between 50% and 3%! By this geological yardstick, refined products are just as inexpensive. Even at over $ 4 a gallon, gasoline is "cheap" in the United States (due to low taxes). But what politician would be foolish enough to tax the American Way of Life? 4 x XNUMXs and other sport utility vehicles (SUVs) have a bright future ahead of them.

The production horizon for a few years is no more clear. Whose fault is it ? Western majors (ExxonMobil, BP, Total, Eni ...) and national companies (Saudi Aramco ...) closed to foreign investors. They have not invested enough in exploration-production. Russia now shows stagnant production and risks extracting less oil in 2007, recently warned the CEO of Loukoil, the leading Russian oil company. Indonesia has become a net importer while it has comfortable reserves off its coast.

The future is fraught with two unknowns: the rate of growth in consumption and the level of reserves. How will demand from emerging countries in Asia or Latin America grow? At a sustained pace, the IMF responds. The Washington institution predicts that they will account for 75% of the increase in demand in the next five years. In the past two years, demand has grown twice as fast as in the previous decade.

What could be more natural, recently analyzed Chip Goodyear, the president of the Anglo-Australian mining giant BHP Billiton, since "there are billions of people in the world who aspire to something we are used to, the car".

The prospect of hundreds of millions more Chinese and Indian motorists changed the game, referring to the second unknown in the oil equation: reserves. And its corollary, the famous "peak oil", beyond which the extraction of black gold will decline. "For twenty years, the volumes discovered have been lower than those consumed," notes the French Petroleum Institute. Companies may find 12 to 15 billion barrels each year, according to calculations by CERA, a benchmark American study center on energy, the planet consumes 30 billion. And there is probably no new El Dorado, this mythical "other Saudi Arabia" glimpsed a few years ago after promising discoveries in Kazakhstan.

In 1956, Marion King Hubbert, geologist at the Shell, had defied the ban on his company to announce that the peak of American production would be reached in 1970. History has not denied it. And now the spirits of this troublemaker begin to haunt the world of oil, where the war of estimates is raging between independent geologists, producer states and company experts. Because at the rate of current consumption, the peak will be reached faster than expected by the most optimistic, who set it for 2030. The president of a large oil company willingly confides, far from the microphones, that without major discoveries, the beginning of the decline in extraction can occur well before the date of 2025, which its experts had originally set.

Do Central Asian steppes, Middle Eastern deserts, equatorial zones and deep oceans contain 1 billion barrels, as is commonly accepted, 000, even 3 billion, as the most optimistic claim? Transparency is not the cardinal virtue of the oil universe, all these figures are questionable. But the euphoria of the 000s has subsided. And the scandal of the overestimation of reserves by Shell in 4 or the doubts of the American financier Matthew Simmons on the 000 billion barrels held by the Saudis have shaken confidence in the bright future of oil.

"We have entered the post-oil era," assured Dominique de Villepin, Thursday, September 1, revealing his plan to revive growth. The oil giants have anticipated the decline, trying to erase their image of polluters and investing more and more in other fossil fuels (gas) or renewable energies (biofuels, wind, solar). Do we know that, without the opposition of its shareholders, BP would no longer be the acronym for British Petroleum but for Beyond Petroleum ("beyond petroleum"). The world of Mad Max, where bands kill each other for the last drops of black gold, is not for tomorrow, but that of "colonel" Drake is already in ancient history.

and article 2: China's insatiable appetite:
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The scene takes place in the heart of the flat vastness of Manchuria, covered with a taiga already flowering Siberia. Above the town esplanade, a huge statue has frozen a group of very proletarian "heroes" in stone. The torsos are exhausted by effort, the faces exalted by the ideal. By the dark lacquer which coats the bodies, we guess them emerged from an oil well, this oil which made Daqing, a lost locality of the province of Heilongjiang (North-East), one of the industrial beacons of socialist China.


This spring day 2002, at the foot of epic figures, workers demonstrate. They are plump, them, although crumpled by age. They protest against the terms of their forced retirement. Before its introduction to Wall Street, their company, PetroChina, a subsidiary of China National Petroleum Corporation (CNPC), cleans up, polishes its window, and sends these old models of Maoist mythology to the junkyard of History.

August 2005, Canton, at the other (southern) end of the empire. Stretching in front of petrol stations, the line of cars and two-wheelers is endless. A typhoon was all it took to disrupt the supply of petroleum passing through southern Chinese ports. Clashes broke out and pumps had to close. Daqing, Canton: two scenes, three years apart, which sum up the Chinese oil dilemma.

The ancient conglomerates may have a facelift, the shortage threatens the country like never before. Between the extraction sites and the centers of consumption, the gap is widening. Because the spectacular economic take-off of the country stirs up a greedy appetite for energy and, in the case of oil, connects it every day more to external supplies. China now consumes nearly 7 million barrels a day, twice as much as a decade ago. It has just taken the rank of second world consumer in Japan, behind the United States.

The historic site of Daqing is running out, and the potential deposits of Xinjiang - the Far West bordering Central Asia - encountering great technical difficulties of exploitation, Beijing has no other recourse than to solicit the market international.

Since 1993, the Chinese - who still consume 40 times less than the Americans per capita - have been net importers of crude oil. It is a strategic revolution for a nation with an outgoing patriotism, formed, under Mao, in the school of self-sufficiency. Purchases abroad climb to 40% of its needs, a proportion doomed to increase to 80% around 2030, according to the International Energy Agency (IEA). Such voracity obviously contributes to the rise in prices on the international market since one third of the additional world demand comes from China.

This new situation requires Beijing to radically rethink its energy policy or risk taking off. In the short term, soaring prices tend to destabilize domestic distribution channels. The shortages of the summer in Canton illustrated to the absurd the dysfunctions of a baroque system where plan and market coexist. While the big oil companies - PetroChina, Sinopec, Cnooc - are exposed to fluctuations in the international market, they see their profitability eroded by gasoline prices at the pump, frozen by the state for reasons of "social stability" .

In China, urban inflation is fraught with political danger - the Beijing spring in 1989 had been fed up with a rise in prices - and the central government is trying to avoid passing on the rise in prices to consumers raw materials. The problem is that PetroChina, Sinopec and Cnooc are listed on foreign financial markets and are accountable to their shareholders. Believing themselves injured, the companies are reluctant to supply gas stations. Hurry up. Overheating forces Beijing to decide quickly: the social risk of inflation or the industrial risk of shortage.

In the longer term, the danger for China is strategic. Two-thirds of its crude imports come from the Middle East, a proportion that too is set to increase over time. Unfortunate constraint: the region is unstable and this black gold follows maritime routes - the 12 km separating the Strait of Hormuz from Shanghai - controlled by the US Navy or infested with pirates on the Strait of Malacca side. China is struggling with this new vulnerability. His anxiety stems from the scenario of a military conflict around Taiwan precipitating a war with the United States. In this scenario, the US Navy would be able to block the shipping routes bringing oil from the Middle East to China and therefore undermine its growth. The hypothesis obsesses the strategists of the People's Republic.

How to thwart the danger? The first track consists in endowing the country with strategic reserves which are almost nonexistent today. The government has just completed in August in Ningbo, not far from Shanghai, the construction of the first of three storage sites dedicated to ensuring the country an autonomy of 90 days of consumption by 2015. Efforts are undertaken in parallel to improve energy efficiency. Waste remains the rule in a country which, to produce a dollar of added value, consumes three times more energy than the world average. As the fleet explodes, Chinese vehicles burn between 20% and 30% more gasoline than foreign models.

Third area to explore: the diversification of energy sources. According to Kang Wu, a researcher at the East-West University of Honolulu (Hawaii), the Chinese energy equation should undergo readjustments by 2020: the share of coal will regress slightly while remaining dominant (57,5% against 68,4% today), that of oil will remain stable (25,4% against 25,7%), but that of natural gas will increase (10% against 3%), just like that of hydroelectricity (3,9, 2,3% against 3,2%) and that of nuclear (0,7% against XNUMX%). With "clean coal", natural gas is presented as a strategic alternative: it has the advantage of being available in Asia and therefore of escaping the tormented geopolitics of the Middle East.
Fourth parade, finally: the diversification of supplier countries in order to break up dependence. Since the late 1990s, Chinese oil companies have been aggressively prospecting the planet and buying ruby ​​on the nail of very expensive assets, to the point of disrupting the geopolitics of petroleum. Embedded in Africa or Latin America, Beijing displays an unmistakable petro-diplomacy to the point that the routes abroad of Chinese hierarchs seamlessly follow the map of hydrocarbons. A priori, Russia and Central Asia have all their favors because they offer them a less random continental supply, that is to say less controlled by the Americans. The region is now the scene of a "big game" of a new type.

Chinese activism in the establishment of the Shanghai Cooperation Organization (CSO), a forum regional grouping of six Central Asian states (China, Russia, Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan) is not innocent. It is partly explained by this concern to secure the corridors connecting the Caspian Sea to western China, a game of influence sold to countries crossed under the romantic colors of a revisited "Silk Road".

BEIJING plays another card: to open breaches in the countries which are in the crosshairs of Washington. It thus spawns with Iran or Sudan, whose oil reserves excite its lust. Thousands of Chinese soldiers - disguised as petroleum workers - are said to be deployed along a Sudanese oil pipeline leading to the Red Sea. In recent times, however, the game has become more subtle. Taking advantage of the cold snap between Riyadh and Washington after the September 11 attacks, the Chinese made a breakthrough in Saudi Arabia. In 2004, they obtained the right to explore certain gas fields, where American companies had failed. For their part, the Saudis entered the capital of a Chinese refinery to the tune of 25%, an unprecedented acquisition of equity for foreign investors in this sector. Shared interests: Beijing controls the resource while Riyadh wants to ease its dependence on the American market.

Even more worrying for Washington: the Chinese are now creeping into its backyard. Decidedly able to take advantage of the political tensions of the moment, they display an insolent friendship with Venezuela - the fourth supplier of the United States -, whose president, Hugo Chavez, poses at the herald of a new anti-Americanism in the southern hemisphere. Peru and Ecuador are also being wooed, as is Canada, where they have just signed an oil and gas pipeline agreement between Alberta and the Pacific coast, where 200 barrels per day will be loaded.

How far will this offensive go? What new frontier will shake up this insatiable appetite for black gold whose economic growth in China, the new source of legitimacy for the Communist Party - once the ideals of socialism have collapsed - is in dire need? The geopolitical implications are very heavy and will not fail to reconfigure the balance of power in Asia, or even beyond. Already, friction is emerging between China and Japan. The two countries covet the same gas reserves in the East China Sea. And they - diplomatically - clashed to take advantage of a Russian oil pipeline transporting oil from the Siberian site of Angarsk.

Despite the rapprochement between Beijing and Moscow, Tokyo won this round since the coveted pipeline will lead not to Daqing the Chinese, but to the Pacific (Nakhodka) opening onto Japan.

But it is in Washington that the suspicion is exasperated to feed a veritable paranoia in certain circles of Congress or the Pentagon. One of their arguments is that Chinese petro-diplomacy pollutes international relations by favoring the proliferation of weapons - conventional or of mass destruction -, promoted to the rank of means of payment for oil purchases. And that every barrel snatched by Beijing comes at the expense of the American supply.

It is in this context of concern that the House of Representatives put a halt this summer to the takeover offer by the Chinese company Cnooc of the American Unocal on the grounds that such an acquisition would represent "a threat for the security of the United States. " The affair made a big splash and bodes ill for a long-term telescoping of the oil strategies of Washington and Beijing. One of the most listened to oil experts on China in the United States, Amy Myers Jaffe, of Rice University, mentioned in the Washington Post of July 27 a historic precedent: "In the 1930s (...), mutual tension - between the United States and Japan - around the oil supply fueled an escalation of paranoia which contributed to the outbreak of the Second World War. "

Will History Stutter? The ability of the international community to deal with the Chinese appetite will undoubtedly weigh on the geopolitics of the century.

Article 3: In texas, the new black gold rush
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Texan companies do not shout it from the rooftops, but it is a fact: the disaster perpetrated by Hurricane Katrina is a very good deal for them. In New Orleans, the victims are counted. On Wall Street, financial analysts are already making clever calculations as to who will benefit the most. The companies that install and repair pipelines, and platforms have long-term jobs and their order books will thicken. The producers of crude, large and small, who have seen the price of a barrel soar and the shortage settle without suffering any damage, do not complain either. "They pocket the whole hike without breaking their heads with repair problems," says Dan Pickering, the head of Pickering Energy Partners in Houston.
Houston, the fourth city of the United States, with two million inhabitants (4,6 million with the suburbs), is the world capital of energy. Over 50 kilometers, along a stretch of sea stretching from the rich Texan city to Galveston Bay in the Gulf of Mexico, is the largest concentration of refineries and petrochemical plants in the world. Thick forest of pipes, pipelines, chimneys, flares, storage tanks of all sizes and all shapes. The place is called the "ship channel". On the sea side, tankers and LNG carriers follow one another continuously along the terminals, spilling their floods of oil and gas before setting off again for offshore platforms. On the land side, the installations are spread over kilometers crossed by multiple railways cluttered with tank cars. Highway 225 which winds between Houston, Pasadena and La Porte is bathed day and night in the stubborn odors of burnt gas. In short, it is no coincidence that the air quality in Houston is the worst in all of the United States.
At night, "the aisle of ships" offers an astonishing spectacle: the factories are lit up like Christmas trees as far as the eye can see. The whole world oil industry is in Houston and it shows. More than 5 companies coexist in production, exploration, drilling, development, services, platforms, pipelines, gas pipelines, distribution, refining, marketing, financing, etc. Houston offers a critical mass without equal to the world of skills and know-how ranging from the most expensive and complex technologies, such as deep water drilling, to tank cleaning. The city's prosperity has fluctuated for one hundred and sixty-nine years according to the price of crude oil.
"Energy is the bread and butter of the city, explains David Ivanovitch, energy specialist of the city's main daily newspaper, the Houston Chronicle. But as much oil wealth spread outrageously until the 1980s, as much Today it wants to be discreet. The industry is overflowing with profits, but above all it does not want to anger the Americans by showing its prosperity when prices at the pump soar. "
Fadel Gheit, analyst at Oppenheimer & Co, confirms: "She is the mother of all booms. Profits reached unimaginable levels just a few months ago. Firms, big and small, no longer know what to do with their money They are so embarrassed that even in Texas, where you are not really ashamed of your overall success, they are embarrassed. You have to see it to believe it! "
The fields of the vintage are in balance with a barrel at 15 or 20 dollars, often less. At 65 or 70 dollars, the margins explode. In 2004, Exxon Mobil made the largest profit in history for a company: $ 25,3 billion. The record will be widely beaten in 2005. It no longer has the slightest debt, has cash over 25 billion dollars and its market value approaches 400 billion dollars, which makes it the most expensive company in the world. Not bad for a dinosaur, heir to two descendants of Standard Oil, the empire built by John Rockefeller and dismantled in 1911 by the American antitrust authorities! At the other end of the scale, Marathon Oil, a small producer in Texas, has seen its profits increase by 90% since the start of the year. Halliburton, the group that has become famous for winning dubious contracts from the Pentagon in Iraq, no longer really needs the help of the United States government to make money. Oil services now represent 88% of its profits.
Overwhelmed by their profits, companies are buying back their shares to raise prices and distribute record dividends. Wages are also soaring. What is most lacking today in Houston is not projects, investments or money, but men. There is a shortage of engineers, geophysicists, technicians and simple operators to go to offshore platforms. "Oil prices are soaring because of demand which is increasing very quickly, but also because production cannot fails to keep up, says consultant William Herbert, "Industry has under-invested in equipment and people for twenty-thirty years. What do you want, students prefer law, finance or IT rather than geology . " The need for qualified personnel is all the greater since, with a barrel at 70 dollars, economically interesting projects are innumerable.
Euphoria reigns in Houston. Professionals are sure that the world is not on the verge of going without oil. They believe that technological advances and the flow of investments will make it possible to find and still exploit considerable quantities of them, at the bottom of the seas, in the Arctic, even in the tar sands of Alberta in Canada. In theory, there would be more barrels there than in any Saudi well.
Jeff Johnson, owner of Cano Petroleum, is betting on the revival of old wells. According to him, they are still stuffed with "oil". Jeff belongs to the tradition of Texas poker players, the "wildcatters", the "wild drillers" ready to do anything, Winchester in hand, to make a fortune. He owns four old fields in Oklahoma and Texas which painfully produce 400 to 450 barrels / day. But he hopes to get 10 in three years. "Advances in technology, the ability to know the basement precisely and to drill where you want, even horizontally, change everything," he explains. Money is not a problem. now has more dollars ready to invest in energy than in my wildest dreams. Just bend down to pick up. "
Another Houston group, Anadarko, even intends to reactivate a century-old field in Wyoming! Others have found a simpler way, "they dig on Wall Street" as they say in Texas. By spending $ 16,4 billion for producer Unocal, Chevron bought huge reserves at an average price of $ 9 a barrel! Happiness never comes alone, the Bush administration no longer knows what to do to please its oil friends. Texans, in particular. Never in the history of the United States has a government been so close to this sector. For a long time, he endorsed the theses of Lee Raymond, CEO of Exxon Mobil, who affirms without blinking that "renewable energies are a total waste of investment", and global warming "an unscientific notion propagated by researchers in bad budgets ". According to him, "the stone age did not end for lack of stones and the oil age will end well before there is no more oil".
Presidents Bush, father and son, worked in petroleum. Just like the vice-president, Dick Cheney, who directed Halliburton from 1995 to 2000. And even Condoleezza Rice, the secretary of state who is a former administrator of Chevron. Since 1998, the oil industry has spent more than $ 440 million in campaign contributions. Three-quarters for the Republicans. The current White House tenant alone has raised more than $ 1,7 million. And it is not ungrateful. "The watchword in Washington is 'Produce, produce, we take care of the rest,'" says Matt Simmons, a Houston banker. Dick Cheney himself explained two years ago that "saving [energy] can be an individual virtue, but not a basis for building a solid energy policy".
The result: while companies are crumbling under the profits, out of the 11,5 billion credits in the new energy law adopted in August, they will receive 1,6 billion in the form of subsidies and other tax advantages. The idea is to encourage drilling in the Texan hinterland, central and western Gulf of Mexico, which already supply 25% of American oil and 30% of gas. It's only a beginning.
The republican elected officials intend to take advantage of the consequences of Katrina to incessantly authorize prospecting off the Gulf of Mexico, even beyond the continental shelf which is owned by the federal government. The new rush for black gold is not about to end. If the vitality of the American oil industry is impressive, it does nothing but delay the inevitable. "It has been thirty years that the country has before it ten years of production reserves," said a French banker living in Houston for twenty years. "The reserves are melting," predicts Stevan Farris, president of Apache, an exploration firm in Houston. "If we don't spend the money to find more oil, we lose substance every day. Most companies, sitting around gloating over their heap of gold, will collapse. But that will not be probably no longer the problem of current leaders. "
Another, more political, threat hangs over the American oil industry. The national dependence vis-à-vis abroad for 65% of the oil and 15% of the gas consumed is considered increasingly unbearable. An astonishing alliance is gradually being formed between environmentalists and influential groups attached to national security, notably conservatives.
Both want a radical change in energy policy. In a recent open letter to George Bush, some XNUMX political figures, grouped within the Energy Future Coalition, affirm: "Our dependence on imported oil is a risk to national security and our economic health. We must develop domestic oil substitutes. "
Boyden Gray served in the White House as an advisor to George Bush Sr. He fears that "the corrupting influence of oil will end up in terrorist hands". Robert McFarlane, former national security adviser to Ronald Reagan, also signed the letter. He is worried about the "devastating effect of attacks targeting oil infrastructures". He joined forces with environmentalists "because we share a common interest: to get rid of this dependence". James Woolsey, a former CIA director, believes that a coalition of "conservationists, politicians of good will and hawks of national security" can end "the omnipotence of oil". Case to follow ...

Article 4: Russia: politics and petrodollars

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Vladimir Poutine estimated, a few years ago, that the oil industry of his country was a real "goose that lays the golden eggs". The world's second-largest exporter of crude after Saudi Arabia, Russia is indeed now benefiting greatly from the rise in world prices. Concentrated in Western Siberia, national production has increased by more than 50% since 1999. With the revival of household consumption, the influx of petrodollars is at the heart of Russian economic growth. Thanks to this windfall, Moscow is now garnering billions of dollars in a stabilization fund supposed to protect the national economy from a possible turnaround in prices. And the country was able to repay $ 15 billion in debts to the Paris Club this year, ahead of schedule.

And then the Yukos affair broke out, which threw an icy cold over the entire black gold sector. The deceased group employed 100 people. Its contribution to national oil production was 000%. Today, Yukos is emptied of its substance. Last May, his former boss, Mikhail Khodorkovsky, was sentenced to nine years in prison. The company had to settle the record amount of $ 11 billion in tax arrears! Finally, after a dismantling in good standing, the assets of the old group were transferred at the beginning of the year to a public structure called Rosneft. Because Yukos still produced around 28% of world crude oil and the disorganization caused by the dismantling caused major delivery problems, the crisis helped, for a moment, to push up world prices.

Now everything seems to be back to normal. But Russia has not finished paying the consequences of the scandal. The niches which were occupied by the old group on the foreign markets suffered. Most are now occupied by Loukoil and Rosneft, two groups whose leaders are on excellent terms with political power. Coincidence? Many believe not. For them, the whole Yukos saga was basically just a redistribution of cards for the benefit of the friends of the Kremlin. Rosneft is run by relatives of Mr. Poutine. Foreign investors have interpreted the message: Moscow is not willing to give them the slightest control over this lucrative sector. Lucrative, but not necessarily sustainable.

In the opinion of the main specialists, the effect of the oil windfall on the national economy has reached its limits. For at least three reasons. By seriously undermining the confidence of capital holders, the Yukos affair first led to a drop in the investments necessary for the sector. Then, the congestion of the pipelines slows down the possible revival of exports. Finally, after the peak observed in September 2004, with 9,42 million barrels / day, and despite a small recovery in the last three months, the increase in national production of black gold has continued to slow.

According to the International Energy Agency, it will increase by 3,8% this year. But the increase was 9% in 2004 and 11% in 2003! There is more dramatic. The Kremlin's "reluctance" to open the energy sector to foreign investment has triggered a crisis of confidence which hampers development projects even beyond the oil sector. Capital flight resumed, up to $ 33 billion "flown away" in 2004 alone according to the agency Fitch Ratings. However, "to continue growing, the economy needs more and more capital inflows," said Yevgeny Gavrilenkov, chief economist of the Troika Dialog bank in Moscow. The Minister of Economy and Trade, Guerman Gref, himself recognized in the spring, "the inflow of petrodollars is no longer able to push national growth up."

Whether to China, to the port of Nakhotka in the Russian Far East, or to Murmansk, in the Far North, major pipeline construction projects are marking time. For the time being, deliveries of petroleum products to China are by rail. "In the absence of major investments, notes the economist Evguéni Gavrilenkov, the capacity to use the infrastructure now exceeds 90%."

Busy with raking in the profits, national oil companies have simply not spent enough resources exploring new deposits. They have contented themselves with improving the yield of old wells already drilled in Soviet times. In short, the dividends of the oil "boom" are no longer really felt in certain very specific places in the country.

In the depths of the taiga, the small town of Khanty-Mansiysk, three hours by plane from Moscow, is the most obvious illustration. Khanty-Mansiysk, 55 inhabitants, spreads out its impeccably paved streets, its new buildings with futuristic architecture, its chic shops and its state-of-the-art hospital at the foot of wooded hills, at the confluence of the Ob and Irtich rivers, in western Siberia. Here emerges a new Russia, conquering and patriotic, as the Kremlin dreams, that is to say, bathed in the richness of its underground, hardworking, steeped in Orthodox religious values, and devoid of political protesters.

This place is called "Russian Kuwait". Khanty-Mansiysk is the capital of a region which produces 58% of the national oil. It has the highest standard of living in the country, after the agglomeration of Moscow. The average salary there is 20 rubles (000 euros), almost three times the Russian average. In 570, the region provided 2004% of revenue from the Russian federal budget.

The Governor of Khanty-Mansiysk, a former Soviet dignitary in office since the 1970s, loves the arts and wants to focus on education. He has already inaugurated a university, and "asked" the oil firms to kindly finance the acquisition of 400 paintings by Russian masters of the XNUMXth and XNUMXth centuries, and icons dating back to the XNUMXth. A freshly constructed building, erecting its neoclassical colonnades in the middle of this marsh landscape, houses the collection. A young woman, Natalia Golitsina, who arrived from her native region of Ekaterinburg in the Urals, has been appointed deputy director of this museum, unique in Siberia, and entirely funded by petroleum patronage. The collection has become the culmination of a real revival of nationalist fervor. "We emphasize patriotic art, to convey a certain pride in being Russian to the new generation," said the young manager.
The Yukos affair had chilled the entire black gold sector in Russia.

The region, where a certain pioneering spirit reigns, has set up a "school for gifted children". A thousand students from distant villages are accommodated there free board. They study dance, painting, music. "Our goal is excellence," said the director, Alexandre Berezine, a 33-year-old Russian from Ukraine. "Russia has gone through difficult times. We want to show that there are things to be proud of, and that it is possible, even in a remote region, to offer a high level education", says- he. Alexandre Berezine makes the locals admire, a riot of marbles and exotic plants.

In Khanty-Mansiysk, the streets are crisscrossed by shiny Japanese 4 ¥ 4. Storefronts of travel agencies offer stays in Egypt or Europe. A large orthodox cathedral with golden bulbs is under construction on the hill. "It will be our Montmartre," says a resident, with white stone stairs going down to the city center. " Further on, an advertising sign extols the merits of military service "under contract" in Chechnya. "The choice of real men," says the slogan.

The well-being brought here by the high oil prices has restored confidence to the people. While Russia has experienced a sharp demographic decline for years, the Khanty-Mansiysk region has a record birth rate. The region pays families 3 rubles (000 euros) per month for each child under the age of 86. "At the birth of each child, specifies a young father, the regional authorities pay a sum of money into a special account. When the child reaches 3, he will receive 18 to 70 rubles (000 to 100 euros ), for his education or his accommodation. It's like in the Arab Emirates! "

Only one political party has a storefront: United Russia, the pro-Putin party. Its luxurious building borders "the alley of sports glories of Khanty-Mansiysk", where portraits of biathlon champions are displayed. A bit like the panels of deserving workers from the Soviet era.

The regional secretary of the party, Alexandre Sidorov, speaks of "national recovery, focused on a necessary partnership between the big oil companies and the public authorities". For him, of course, "since the coming to power of Vladimir Putin, we feel that the Russian state has started to exist again". According to the polls, however, United Russia is closely followed here by an ultranationalist party.

In Khanty-Mansiysk, there is only one source of audiovisual information: federal television, controlled by the Kremlin. The regional written media are loyal to the governor, also a member of United Russia. No opposition newspaper is distributed. The task is therefore tough for Iouri Chagout, the representative of the small democratic party Iabloko, who laments: "The economy is growing, so our message, few people want to hear it."

In these Siberian vastnesses where oil springs, we want to look to the future with optimism. Valentin Nazarov, a strong muzhik, manages the Generations Foundation which finances, thanks to oil taxes, all of the local educational and sports programs. He claims that the basement is full of enough oil for decades. Its foundation has so far collected $ 500 million, partly reinvested in the stock market. Specialist in the oil sector, he assures that the fallout from the Yukos affair was minimal. "The bottom line for local people is that wages continue to be paid," he said.

What matters, continues our interlocutor - incidentally adviser to the governor, is the mission that Russia must fulfill at the start of the XNUMXst century. A fervent Orthodox and Russian patriot, the muzhik believes that his country is "the vanguard of Europe. It is we who supply it with gas and oil. We Russians have preserved sacred values, meaning community, true Christianity. It is we here who are doing everything to stem the advance of the Chinese in Siberia. Europe should show us more sympathy. "

Can the economic miracle that Khanty-Mansiysk is living spread across the vast country? This is one of the challenges facing the Kremlin. This region of 1,5 million inhabitants the size of France - and where until the 1th Cossack colonization of ethnic groups of Finno-Ugric origin, the Khanty and the Mansis lived - represents only 25% of the total population of Russia. A pocket of opulence in a Russia where disparities are constantly increasing and which has XNUMX% of the poor.

You just have to go to the other side of the wooded hills, far from the paths reserved for the foreign visitor, to see the behind the scenes. Hundreds of underprivileged families, Uzbek workers, Moldovans, Tartars, workers on construction sites, as well as Russians descendants of deportees from the Soviet era, crammed there in small wooden izbas, or in metal containers transformed into dwellings of Fortune.

Without running water, heated in a wood stove when the temperature drops to - 40 in winter, their world is that of a slum in the Third World.

yahi