Seamus Milne on Iraq’s Oil

There is a good reason why Upstream Online is popular amongst workers in the oil and gas industry as opposed to say, Seamus Milne of the Guardian.  Via Tim Worstall, here is the latter:

[F]our of the western world’s largest oil corporations are due to sign contracts for the renewed exploitation of Iraq’s vast reserves. Initially, these are to be two-year deals to boost production in Iraq’s largest oilfields. But not only did the four energy giants – BP, Exxon Mobil, Shell and Total – write their own contracts with the Iraqi government, an unheard-of practice: they have also reportedly secured rights of first refusal on the far more lucrative 30-year production contracts expected once a new US-sponsored oil law is passed, allowing a wholesale western takeover. Big Oil is back with a vengeance.

Milne offers no source for his assertion that BP, Exxon Mobil, Shell and Total wrote their own contracts, which is odd given that stating as fact something previously unheard-of usually requires evidence of such.  But of more interest is what Milne chose to leave out, and what Upstream Online chose to leave in:

Iraq has published a list of 35 companies that it said are qualified to bid for future oil and gas contracts, a government spokesman said.

“Up to now, 35 companies have been qualified out of 120 companies that presented their documentation to the oil ministry,” government spokesman Ali al-Dabbagh said at a press conference, Reuters reported.

35 companies have qualified?  So not just BP, Exxon Mobil, Shell and Total, then.

The 35 companies shortlisted are:

  • Marathon Oil (US)
  • BG International (UK)
  • Mitsubushi Corporation (Japan) 
  • BHP Billiton (Australia/UK)
  • Nexen (Canada)
  • BP (UK)
  • Nippon Oil (Japan) 
  • Chevron (US)
  • Occidental Petroleum (US)
  • China National Offshore Oil Corporation (China)
  • Oil & Natural Gas Corporation (India)
  • China National Petroleum Corporation (China)
  • Petronas (Malaysia)
  • ConocoPhillips (US)
  • Pertamina (Indonesia)
  • Edison International (US)
  • Premier (UK)
  • Eni (Italy)
  • Repsol YPF (Spain) 
  • ExxonMobil (US)
  • Shell (UK/Netherlands)
  • Hess (US)
  • Sinochem (China)
  • Inpex (Japan)
  • Sinopec (China)
  • Japex (Japan)
  • StatoilHydro (Norway)
  • Gazprom Neft (Russia)
  • Total (France)
  • Kogas (South Korea)
  • Wintershall BASF (Germany)
  • Lukoil (Russia)
  • Woodside (Australia)
  • Maersk (Denmark)
  • Anadarko (US)

According to Seamus Milne, the above represents a “full imperial package” on the part of the US.  If so, it’s a pretty cack-handed attempt at imperialism if that is the outcome.



On Thursday 12th June I will be going back to the UK for a 10-day visit, for the first time since June 2006. The last time I saw any of my family was at my wedding in September 2006, and I haven’t been to the UK since I’ve been living in Sakhalin. In those 2 years, I have been to Singapore, Indonesia, Thailand, South Korea, Kazakhstan, Azerbaijan, Spain, Vietnam, and Cambodia, but kept missing the UK.

June 12th will also be 5 years to the day since I first emigrated, when I went to Oman for 5 weeks’ work and never really came home again. For that decision I have no regrets whatsoever. It’s also 5 years since I paid any income tax.

I’m not sure what to expect when I get to the UK. Chaos, filth, and expense, probably. I’m going to be travelling through Heathrow which I’m not looking forward to. But I am looking forward to meeting up with all those people I haven’t seen in years, and being able to visit shops which actually sell stuff and not finding I have to pay a 3% fee to either draw out cash or use my credit card.

On 24th June I will be flying to St. Petersburg where I will meet up with my wife and, if the weather is good, enjoy drinking cold beers under the skies of the White Nights. Now that is living.


A Short Trip to Madrid

I’m now back in Sakhalin, where the weather is absolutely perfect, having returned from Madrid, where the weather was absolutely English. Madrid was a long way to go to give a presentation.

My flight out of Sakhalin was delayed from 16:20 until 22:00, which I suppose isn’t unusual for this part of the world. Equally unusual was the fact that when I checked in at 15:00 thinking the flight would depart on time, the woman at the desk never thought to tell me it was delayed and that I’d be better off coming back in about 5 hours. No, she checked me in without comment and I had to find out for myself.

The boarding process isn’t too hot either. In every other airport in the world, the attendant stands in a logical and convenient place, takes your boarding pass, and hands the stub back to you. In Yuzhno-Sakhalinsk international airport, the attendant stands on the steps leading up to the plane, which itself is sitting in the middle of the tarmac a rough concrete patch. She stands actually on the steps, meaning all passengers have to squeeze past her. A 60-person rugby scrum always develops at the bottom of the steps, each person (this being Russia) having more hand luggage than most ordinary people put in the hold, and everything turns to chaos. All this takes place in a howling wind, in which the attendant is trying to tear boarding passes and handing back the stubs. A hundred yards behind her stands a perfectly adequate building where all of this could easily take place.

One of the advantages of leaving Sakhalin 6 hours late is that you arrive in Sheremetovo Airport after midnight, when the place is empty and you can get outdoors without finding yourself in the middle of a barbarian horde looking for somebody to sacrifice. I had to spend the night in a hotel in order to catch the early flight to Madrid, and with the Novotel and Sheremetovo hotels being typically full up, I had been booked into the Olympiatz Hotel some 6-7km away. I got an inkling of the type of place it would be when my driver found himself having to pay 20 roubles just to enter the compound and drop me off, which is a fine way to attract guests. Sure enough, the place wasn’t exactly set up to attract nor retain guests. It was a typical Soviet monster-hotel, probably – judging by the style and the name – built to house athletes in the 1980s Olympics. It reminded me of the Rossiya in Moscow and the Yalta in, erm, Yalta: huge, sprawling, marble-clad labyrinths with cavernous entrance halls, enormous lobbies and foyers totally devoid of people, and gold-lettered signs sending you in every direction except the one in which you want to go.

Once I’d checked in, which involved a woman grunting at a list and throwing a key at me, she sent me off to the left with a wave before going back to her crossword puzzle. Turning the corner to the left, I was faced with a choice of climbing a huge flight of marble stairs or plunging down a pitch-black corridor the size of a runway. My room was on the 6th floor, and assuming nobody would have been so idiotic to design a hotel where you needed to climb stairs to get to the elevators, I guessed the way to my room lay somewhere down the corridor. I passed by several bars and restaurants decorated with neon lights, all of which were closed and in complete darkness. As with the Yalta and the Rossiya, I am certain it was not the late hour which was the reason for their being closed, but the fact that not more than one of them had been open in years. I continued my trek along the corridor, passing signs to saunas, swimming pools, tennis courts, but none indicating where my room might be. Eventually I came to a room the size of an aircraft hangar, also in complete darkness, containing a few hundred billiard and ping-pong tables and guessed I had probably come the wrong way. Having retraced my steps back to the marble staircase, I lugged my suitcase up it and arrived in another lobby which would serve as a temporary refuge should Valhalla undergo refurbishments, and found the lifts. It appears there was somebody so idiotic to design a hotel where the lifts were accessible only by climbing a staircase.

The room itself wasn’t so bad, albeit stupidly expensive for what you were getting, but this was Moscow and the hotel did stand in a nice bunch of trees and you could stand on the balcony and watch the sun come up, which I did after a few hours sleep. Unfortunately, the bathroom stank of sewerage due to a drain which had been sunk in the middle of the floor containing brown, stagnant water. The shower head expelled water at a pressure suitable for stripping paint aimed directly at the three inch gap where the doors of the shower did not meet properly, which explained the requirement for a large drain in the floor. There was a time when I would have thought all of this was anything other than ordinary.

I liked Madrid. I wasn’t there long, but in the few days that I was I got the impression that it was a clean, smart, wealthy city. Or maybe everywhere looks like this after two years in Sakhalin. I liked the narrow streets with the trees running down them which fanned off in all directions from my hotel, and I liked the cafes which opened first thing in the morning and sold alcohol as early as you could drink it. I liked the laid-back feel of the place, especially during the few hours of sunshine we had when I was there. If I have noted that the people of Istanbul and Baku stand about on the streets doing very little, a good proportion of Madrid appears to sit in cafes doing very little, and I thought it was all rather pleasant. The people were more polite than in Russia or the UK, which I admit is not setting the bar very high, and even though they didn’t speak a lot of English and I knew not a single word of Spanish, they didn’t seem to mind helping you. I particularly enjoyed having a good-natured argument with a young taxi driver who, having decided to wind me up by claiming Christiano Ronaldo would be better off at Real Madrid, I accused of being a Barcelona fan.

I did have some difficulty adapting to civilisation, though. I couldn’t get used to people not barging you out of the way in shops and through doorways. And I couldn’t quite get used to the fact that everybody slowed down to a gentle stop as I gingerly approached a zebra crossing, when I expected them to instead screech to a halt an inch from my leg while a Land Cruiser goes hurtling past my nose. The taxis also had these odd little meter things in them which removed the need to argue with the driver as to the fare, and when they opened the boot for you to put your bags in, it didnt contain a filthy spare tyre, a load of rags, and a gallon drum of oil leaking its contents.

The hotel wasn’t so bad, and better than the Olympiatz, but for the prices they charged it ought to be. The Wellington Hotel is five star and situated in the centre of Madrid, but it is quite old and it was displaying signs of its age. There were two tiny lifts, totally inadequate for the number of guests, one of which chose to entrap me somewhere between the first and second floors. Pressing the alarm button sounded an alarm but summoned no help, so I had to ring the front desk whereupon I was transferred to the maintenance department where nobody spoke English. Ten minutes later I was freed, but slightly unimpressed by the manner in which it was handled. I was equally unimpressed when I went to find some lunch and was told there were no free tables in the restaurant (there were plenty of empty tables, all with reserved signs on them), and they couldn’t accommodate me. When I asked where else I could get lunch, the waiter suggested I go back to my room and order room service. Marvellous. And the TV showed about 8 channels for free, which were mostly news channels, and for everything else you had to pay 15 Euros per day. Given the room charge was in the region of $500 per night, I expected better.

But all in all, I liked Madrid, and I enjoyed meeting up for a few drinks with the author of this blog, whom I knew in Dubai and never expected to see again once he’d staggered home from our leaving party some two years ago having been the first to arrive, last to leave, and full of wine. He also gave me a signed copy of a book he wrote, and if everyone could do him a favour and buy a couple of hundred copies it would be appreciated.

So now I am back in Sakhalin where I wish I was out on my bike rather than sat in an office, but next weekend should correct that problem. And on 12th June I am going back to the UK for the first time since before I got married and moved to Sakhalin, where I will have fun trying to recognise members of my family.


Gazprom Stumbles

This story is telling:

Russian gas monopoly Gazprom has blamed the Sevmash shipyard in the north of the country for delays in commissioning the drilling and production platform for the Prirazlomnoye oilfield in the Barents Sea.

Speaking this week at a Russian Offshore conference in Moscow, head of Gazprom’s offshore department Vladimir Vovk claimed Sevmash simply does not have “enough skilled workers” to complete the assignment.

What was that?  Not enough skilled workers?  For a major Gazprom contract?

What was I saying five weeks ago?

The proportion of ordinary Russian men who fail to make the grade on an oil and gas project either through alcohol consumption, failure to turn up to work, or lack of self-motivation is shockingly high for a country looking to develop rapidly.

[O]ne of the enormous challenges facing Gazprom and Rosneft is how they will staff their projects, especially as they have made it increasingly difficult to bring foreigners to work in Russia.

Having convinced themselves that Russia does not need much by way of an expatriate labour force to realise their oil and gas development plans, Gazprom seems to have stumbled at the first proper hurdle placed in front of them.  If Gazprom’s Russian engineering contractors are struggling to complete a relatively simple topside refurbishment job because of a lack of skilled workers, it doesn’t bode well for their ability to deliver several multi-billion dollar mega-projects simultaneously.