Oil Surplus Research Articles

The Effectiveness of Financial Sustainability in Targeting Inflation, Nigeria as a Model for the Period 2004-2040

Creating a sovereign fund financed by Nigeria's oil surpluses is a significant objective. Rentier countries tend to see their current operating expenditures increase in tandem with oil revenue growth, surpassing the growth of the gross domestic product. This points to a structural deficit resulting from excessive spending. The government controls the money supply by managing the monetary base, which, in turn, is influenced by foreign reserves. Therefore, the study focused on assessing the effectiveness of fiscal policy tools and financial sustainability in addressing inflation. The goal is to predict these financial variables accurately until 2040 to safeguard monetary stability against fluctuations in oil prices. Utilizing the autoregressive model and moving averages (ARIMA), the study aims to address government spending growth, primarily driven by the monetization of oil revenues. This has led to a structural deficit within the Nigerian economy, which needs to be curbed by the effectiveness of the sovereign fund. This effectiveness is reflected in the concept of financial sustainability, with a focus on targeting inflation through what is known as nominal financial wealth. This translation of economic sustainability into tangible financial wealth does not adequately clarify the increase in non-oil output achieved through investment spending. The latter, in turn, results in actual growth in non-oil revenues, which is essential for addressing inflation through fiscal policy tools. In a rentier economy reliant on oil, achieving economic stability isn't assured solely by a balanced budget. It's crucial that public spending is managed with a level of independence from fluctuations in oil prices. The study's findings demonstrate the relative effectiveness of the financial sustainability forecasting model in influencing inflation targeting in the Nigerian economy.

Analysis of the effectiveness of some macroeconomic variables on the industrial sector in Iraq for the period (2004-2020)

The research aims to clarify the nature of the relationship between some macroeconomic variables represented (public spending, interest rate, exchange rate) and the industrial sector in Iraq for the period (2004-2020), which expresses the content of the Iraqi economy, and the use of standard analysis tools to know the impact of some macro variables (expenditure year, interest rate, exchange rate) on the industrial sector in Iraq for the duration of the study. The research reached to prove the validity of the hypothesis that some macroeconomic variables did not play a positive role in the Iraqi industrial sector for the period 2004-2020. where it was concluded through the results to a clear decline in its contribution to the output, as it did not exceed (3%) and with an average period of (2.3%) during the study, due to the weakness of production lines and the high level of costs as a result of obsolescence and loss of equipment in addition to the looting that this sector was subjected to. Accordingly the oil surpluses achieved each year and directing the development of economic growth and covering local manufacturing from imported raw materials or through the modernization of manufacturing methods and the use of technology capable of increasing production and reducing costs.

US-China Cooperation on Climate Change at COP26: Policy Implications for Environment and Energy

Despite fierce strategic competition, the United States and China reached to a breakthrough agreement at COP26. This article addresses how and why the two superpowers chose to cooperate on environment and energy. Scientific evidence of global warming pressured the largest and second-largest carbon emitters to bear the responsibility and burden of climate change.
 In addition, there has been a growing interdependence between them since the Obama administration. As the US became an oil and gas exporting country in the late 2010, the Trump administration pushed ahead with selling oil and gas surpluses to China that rapidly increased energy imports. In pursuit of a Global Green New Deal, the Biden administration made efforts to help China achieve carbon neutrality as early as possible. For China, natural gas can be a second-best option during energy transition because it emits less carbon than coal. US gas also contributes to diversifying energy imports. These mutual interests played a crucial role in insulating climate change cooperation from strategic competition.

INVESTMENT AND SUSTAINABLE ECONOMIC GROWTH: EMPIRICAL PERSPECTIVE ON KUWAIT’S DUAL CHALLENGE DURING THE COVID-19 PANDEMIC AND BEYOND

Endogenous economic growth theories have pointed to private investment as one of the determinants of long run, sustainable economic growth; a well-studied relationship in the development economics literature, both theoretically and empirically. One of the main reasons the Kuwaiti economy has not achieved its aspired degree of economic diversification over decades, is the relatively low level of private investment, which has eventuated in a relatively small private sector, partly due to an unimproved investment ecosystem. Like other economies, investment in Kuwait is a robust growth driver especially as a policy tool to achieve a digital, knowledge-based economy that leapfrogs on innovative technological investments, as ambitiously strategized by the Kuwait Vision 2035. The eruption of the coronavirus pandemic and the deep recession it triggered is likely to become a major hurdle in the way of spurring sufficient quality investments. With contracted GDP and collapsed oil prices, export and fiscal revenues shrink substantially, reducing investment activity and hence negatively affecting investment. This paper focuses on the role of private investment as a function of sustainable economic growth. Specifically, this paper aims to delineate the relationship between investment and economic growth in Kuwait by outlining; the determinants and impediments of investment, investment trends and behavior, innovative models of investment in Kuwait and applying a set of seven simulation-based scenarios of investment modelled as autoregressive distributed lags. By so doing, the paper elucidates the impact of critical variables including; non-oil GDP growth, interest rates management, attracting and fostering FDI inflows, as well as the recession plagued fiscal and trade balances, in order to estimate the magnitude and time-path of key policy variables on investment. The findings illustrate the rigidity of investment when recession drags GDP, FDI, exports and trade balances as well as fiscal revenues.Keywords: Oil Surplus Economy, Kuwait Vision 2035, Diversification, Coronavirus, Simulation, Autoregressive Lag ModeJEL Classifications: C1, C15, F, F01DOI: https://doi.org/10.32479/ijefi.11513

California oil: Bridging the gaps between local decision-making and state-level climate action

California has set ambitious climate policies, including economy-wide carbon neutrality by 2045. Yet levels of oil production and consumption remain high in the state. This gap between California's oil politics and its climate ambitions is deepened by decentralized decision-making processes. County officials are tasked with extractive planning decisions that have wide-ranging implications. In this Viewpoint article, we analyze proposals for enhanced extraction at the Cat Canyon oilfield in Santa Barbara County. After two of three proposals were withdrawn in recent months, we highlight how it has been oil industry volatility and public opposition – rather than state regulations – that have brought county development plans into closer alignment with state climate goals. As California pursues a goal of ‘managing the decline’ of domestic oil production, we identify strategies for bridging such gaps between local decision-making and state-level climate action, including: a comprehensive state-wide ban on new enhanced oil extraction projects; a 2,500 ft buffer zone around extraction sites; and revenue generation schemes that support a just transition. As Covid-19 forces an oil surplus and lowered production, there are opportunities to enact such changes – particularly by redirecting oil industry labor toward the growing problem of well decommissioning.

A new dawn for biobased chemicals?

Companies trying to make and market biobased chemicals tend to struggle when oil prices fall. But now, in the midst of an historic oil surplus and the start up of mega factories making cheap petroc...

Aspects of economic activity in Phoenicia during Roman and Byzantine times. The case of olive oil and amphora production in Chhim, in the chora of Sidon

Using archaeological data from two closely located sites within the Sidon chora, Chhim and Jiyeh, the author considers possible oil distribution routes in Phoenicia in the Roman–Byzantine period, taking into account the impact, on this, of the administrative fragmentation of the region between the 1st and 7th centuries AD. A typology of, and data on, local and imported amphora from Chhim are presented. Various models are proposed in order to explain what appears, based on calculations relating to the output of the presses, a surplus of oil for which no corresponding evidence for exports — in the form of Chhim amphorae — can be identified. These include: alternative packaging for the oil (skins; Jiyeh amphorae-Beirut imitations); non-continuous, ad-hoc seasonal production; possible alternative markets, including Chhim’s role and context in the road networks connecting the coast, Chhim and the Beqaa Valley.

Esterification of unsaturated fatty acids by the fusel oil alcohols

The aim of the research was to determine the regularities for esterification process of an unsaturated fatty acids by the fusel oil alcohols, including by individual 2-methylpropan-1-ol and 3-methylbutan-1-ol. As catalysts for esterification process the cation exchange resin KU-2-8 and the p-toluenesulfonic acid were used. It was established that during the esterification process of an unsaturated fatty acids by 3-methylbutan-1-ol in the presence of p-toluenesulfonic acid the acids conversion in 40 minutes of the reaction reaches 95.1 %, while in the presence of cation exchange resin it reaches 92.6 % for 300 minutes. Under these same conditions an unsaturated fatty acids conversion for esterification reaction with 2-methylpropan-1-ol in the presence of cation exchange resin KU-2-8 reaches only 78.9 % in 300 min. The use of benzene which forms a triple benzene-alcohol-water azeotropic mixture has a different effect on the achieved equilibrium conversion of acids when they interact with 2-methylpropane-1-ol and fusel oil. The maximum effect of the use of benzene is achieved in the esterification process of an unsaturated fatty acids by fusel oil in the presence of cation exchange resin KU-2-8: maximum conversion of unsaturated fatty acids is 83.2 %. In the absence of benzene it reaches only 22.6 %. Extreme dependence of an unsaturated fatty acids conversion on the reagents ratio was found. It is explained by the fact that in the presence of a high fusel oil excess the quotient of water-soluble alcohols increases. It worsens the drainage of water from the reactor and results in a low an unsaturated fatty acids conversion. The low value of the acids conversion by a small surplus of fusel oil is due to a decrease in the proportion of C2–C3 alcohols, which are also involved in the esterification process of an unsaturated fatty acids and are more reactive than higher alcohols. The accomplished studies show the expedience of using as a raw material for the production of esters of higher fatty acids of such substances as an unsaturated fatty acids (sunflover oil waste products) and fusel oil (waste of ethyl alcohol production) or of individual C4–C5 alcohols.

Comments: What Will the New Year Hold?

Editor's column In this issue, SPE’s technical directors evaluate the current state of the upstream oil and gas industry and offer their outlook for what will drive the sector in 2018. After several years of low oil prices and heavy restructuring, it is no surprise that cost containment and adding value are at the top of the agenda, from drilling to completions. Parts of the industry are still adjusting to change. Shifting demographics, increased automation and digitization, and the ever-increasing flow of data will continue to have an impact on the industry for the foreseeable future. In general, analysts who study the industry predict that 2018 will be a year of stability and continued gradual recovery: oil prices should hold steady or slightly rise, and OPEC and non-OPEC producers will chart their course forward as the supply overhang gradually subsides, leading to a market in better balance than it has been in 3-4 years. The big picture will focus on OPEC and other large producers’ adherence to production cuts, the continued rise in shale output in the US, and whether global demand can whittle away at the oil surplus. Deloitte sums up the past year and how it will impact the new one in its 2018 Outlook On Oil and Gas. Among its observations is the surprise of the US coming into its own as an energy exporter. When the US oil export ban was lifted in January 2016, it was thought that it would have little effect on the global market. But the US has become a regular exporter of crude oil, especially unconventional, to as far away as Asia, as well as a force in liquefied natural gas and refined products. If the trend continues, the US will have gone from a heavy net oil importer to a truly global player in the market, especially as unconventional production continues to climb, in just a few years. That also has implications for national security and global geopolitics. Deloitte points out that the question coming into 2017 was whether cost reductions in unconventional production would be sustainable. “The evidence seems to tell us they are, with break-even costs across the major US shale plays still 30-50% below the levels of early 2015,” its report says. The downside is that, although many producers are not only surviving but doing well, the oilfield services industry is still reeling “and further consolidation may be in the cards.” OPEC’s extensions of cuts along with major producers such as Russia has been key to stabilizing prices. But with non-OPEC production climbing, the market still needs a significant demand boost to solidify prices. OPEC and the other producers first announced their cuts in late 2016, and the adherence to them has been stellar. The cuts were extended another 6 months and, in late November, another 9 months to the end of 2018. How long these producers, especially Russia, are willing to curtail output will have a major influence on oil prices in the coming year.

Political Economy of Resource Curse and Dialectics of Crude Oil Dependency in Nigeria

This paper explores the political economy of resource curse with the view of appreciating the development challenges caused by crude oil dependency in Nigeria. Relying on the systematic analysis of secondary data, it posits that Nigeria, Africa’s largest economy, a major oil producer and one of the leading member of OPEC, since the discovery of crude oil, have been awash with petrodollar but without sustainable development and industrialization. The problem attributed to the challenges is the crude oil dependent and rentier economic structure of Nigeria, where crude oil surpluses were misappropriated by the successive governments. To unravel the dialectics of crude oil dependency from a resource curse perspective, the paper argues that crude oil discovery and the oil boom of the 1970s and 1990s rather than bringing about meaningful development, under ‘right-talk’ led to a series of agitations and violence in the Niger Delta region. To mitigate the challenges of resource curse arising from crude oil dependency in Nigeria, the paper pragmatically recommends the diversification of the economy, transparency and accountability in government, the establishment of sovereign welfare fund and the restructuring of federalism.

Pré-sal e Petrobras além dos discursos e mitos: disputas, riscos e desafios

This study examines the challenges and possibilities of the pre-salt oil reserves and the role of Petrobras to reconcile the expectations of their potential for social transformation in Brazil. Toward this end, it examines the role of the processes of social appropriation of energy in the social revolutions of humanity. It then examines the conditions and processes that led to the hegemony of oil vis-a-vis other energy alternatives and analyzes the consequences of this development. In the geopolitical and economic field, it reviews the contradictions and antagonistic interests in the dispute for control over access to oil resources and for the appropriation of oil income. Within this geopolitical and strategic context, the essay focuses on the challenges and opportunities associated with the discovery of the Brazilian pre-salt reserves, and on the role of Petrobras, arguing for the need of critical examination of the current national strategy with regard to the identification, characterization and quantification of the oil reserves, and to establishment of the pace of production and exportation in coordination with OPEC and other exporting countries. This implies the revision of the current regulatory regime to ensure the generation of resources to be invested according to a national plan for economic and social development. Neither the concession nor the production-sharing regimes are suitable to ensure the hegemony of public interest in setting production and export control. However, the direct contracting of Petrobras, which is already authorized by applicable law, seems to be the most suitable system to allow flexibility similar to that of service contracts, where government control over production and export of oil prevails. This work also summarizes the analysis of the expected financial results from the production of oil from the pre-salt reserves in Brazil. First, the oil production for each field is simulated. Then the expected revenue for the various stakeholders (business and government) is calculated under different scenarios of oil barrel price, investment and regulatory regimes. Results are presented for today's regulatory regimes concessions, production sharing, onerous assignment and onerous assignment with production sharing for surplus volumes), as well as for alternative regulatory frameworks, such as the service contracts system. One of the main results is an analysis of break-even prices for each oil field under each regulatory regime, indicating the minimum price per barrel that would make the production feasible from the perspective of the entrepreneur. The expected government revenues are also presented, as well as an estimate of the royalties intake that would go to health and education. Overall, the production-sharing regime is not the one that provides higher revenues to the government, at least not with the assumptions of the simulation, i.e., based on the rules and dynamics of State participation in the oil revenue defined according to the outcome of the auction of the Libra field. This seems contradictory, since the production-sharing regime was introduced in Brazil in 2010 after a national debate about the possibilities of increasing the government's share of the production in the pre-salt areas. The regime that would bring more revenue to the government was shown to be the services contract system, in which the State is the investor and owner of the reserves and of the production results. Therefore, measures that bring the current production-sharing regime now in place closer to the service contract system, as made possible by current legislation, would tend to increase government revenues. After the service contract regime system, the one that would offer the greatest government share is the concession regime, as the sum of special participations and of royalties normally exceeds the sum of the State's percentage of the surplus in oil and of royalties on a production-sharing basis, considering the assumptions adopted in the simulation (Libra field auction). Only in fields with large reserves and when the price of a barrel of oil is higher would government revenues be greater in the sharing scheme than in the concession contract scheme. We thus conclude that for the production-sharing regime to bring in more revenue for the government, there must exist mechanisms that ensure that the State's percentage of the oil surplus is higher than that of the auction of the Libra field, for example. Last but not least, this essay analyses the two assets that comprise the public property in dispute, namely, oil reserves (substantially those of the pre-salt) and Petrobras, with its technological capacity. Other alternatives for production development and for the role of Petrobras are feasible: what differs is the potential to generate public resources to be invested in the amelioration of social liabilities. The primary contribution of this paper aims to elucidate conflicts of interest, alternative paths and potential outcomes, winners and losers.

Assessing dietary quality of older Chinese people using the Chinese Diet Balance Index (DBI).

Background/ObjectivesFew studies have applied the Chinese Diet Balance Index (DBI) in evaluating dietary quality for Chinese people. The present cross-sectional study assessed dietary quality based on DBI for older people, and the associated factors, in four socioeconomically distinct regions in China.MethodsThe China Health and Nutrition Survey (CHNS) involves 2745 older Chinese people, aged 60 or over, from four regions (Northeast, East Coast, Central and West) in 2009. Dietary data were obtained by interviews using 24 hour-recall over three consecutive days. Four indicators: Total Score (TS), Lower Bound Score (LBS), Higher Bound Score (HBS) and Diet Quality Distance (DQD) from DBI were calculated for assessing dietary quality in different aspects.Results68.9% of older people had different levels of excessive cereals intake. More than 50% of older people had moderate or severe surplus of oil (64.9%) and salt (58.6%). Intake of vegetables and fruit, milk and soybeans, water, and dietary variety were insufficient, especially for milk and soybeans. 80.8% of people had moderate or severe unbalanced diet consumption. The largest differences of DQD scores have been found for people with different education levels and urbanicity levels. People with higher education levels have lower DQD scores (p<0.001), and people living in medium and low urbanicity areas had 2.8 and 8.9 higher DQD scores than their high urbanicity counterparts (p<0.001). Also, significant differences of DQD scores have been found according to gender, marital status, work status and regions (p<0.001).ConclusionDBI can reveal problems of dietary quality for older Chinese people. Rectifying unbalanced diet intake may lead to prevention of non-communicable diseases (NCDs). Dieticians and health care professionals need to increase dissemination and uptake of nutrition education, with interventions targeted at regions of lower socioeconomic status.

Consideraciones sobre la Reforma de la Industria Petrolera en México

The energy reform constitutes a paradigmatic change. It means nearly unrestricted legal access to private investments and turns back both the exclusivity of the State in energy activities and the scope of Nation’s sovereignty over hydrocarbons. The reform proponents believe as a matter of fact that private investors will react on the way they want to. A naive similar assumption was adopted regarding the convergence of both investors and Nation interests. Without demonstration, based on doctrinarian perception of the market laws, it is assumed that maximization of hydrocarbons exploitation, increased income for the government and the reversal of the present declining trend of the country’s oil surplus will be in order. As a consequence of the protracted stagnation of the country’s oil processing capacity (refining and petrochemicals) the reform will accentuate the crude oil exporting bias of the past three decades. The new paradigm represents a century long retrogression: a new exporting colonial enclave justified by the assumption that the presence of foreign investment will automatically translate into a widened hydrocarbons horizon for the country.

A system dynamic model for production and consumption policy in Iran oil and gas sector

A system dynamic model is presented, which considers the feedback between supply and demand and oil revenue of the existing system in Iran considering different sectors of the economy. Also the export of the oil surplus and the injection of the gas surplus into the oil reservoirs are seen in the model by establishing a balance between supply and demand. In this model the counter-effects and existing system feedbacks between supply and demand and oil revenue can be seen considering different sectors of the economy. As a result, the effects of oil and gas policies in different scenarios for different sectors of Iran’s economy together with the counter-effects of energy consumption and oil revenue are examined. Three scenarios, which show the worst, base and ideal cases, are considered to find future trends of major variables such as seasonal gas consumption in power plants, seasonal injected gas in oil reservoirs, economic growth in the industrial sector, oil consumption in the transportation sector, industrial gas consumption and exported gas. For example, it is shown that the exported gas will reach between 500 and 620 million cubic-meter per day in different scenarios and export revenues can reach up to $500 billion by 2025.

The Shocks of a World of Cheap Oil

Oil prices have been flirting recently with $25-130 per barrel, levels almost reminiscent of the oil shocks of the 1970s. Rising energy prices have been accompanied by the usual hysteria about dwindling supplies and potentially dangerous transfers of wealth, tempting policymakers to consider ways of dealing with a coming oil crisis. But contrary to much received wisdom, the energy problem looming in the early 21st century is neither skyrocketing prices nor shortages that herald the beginning of the end of the oil age. Instead, the danger is precisely the opposite; long-term trends point to a prolonged oil surplus and low oil prices over the next two decades. Paradoxically, this scenario of plenty could destabilize oil-producing states, especially those in the ellipse stretching from the Persian Gulf to Russia. And although the economies of the United States and oil importing developing nations would by and large benefit, the backfire of low oil prices could undermine U.S. policy assumptions and imperil U.S. interests.

L'industrie pétrolière mondiale : raréfaction, coûts de production et surplus pétrolier

This paper exposes the concept of scarcity of oil and its links with the long-run change of production cost trend. It's aim is to show that the long term evolution of production costs, the market structure and the appropriation of oil surplus, vary whether or not petroleum is a renewable energy source. So, in the latter case, costs tend to increase, competitive pressure decreases and the market favors the producers. Nevertheless, if petroleum is a renewable resource, costs of productions fall trendly offering incentives to new entries and the market becomes favourable to consumers. However, firms and governments who control the market impose entry barriers in order to limit competition and the market becomes cartelistic.

97/02685 The international petroleum industry—competition, structural change and allocation of oil surplus

97/02685 The international petroleum industry—competition, structural change and allocation of oil surplus

The international petroleum industry: Competition, structural change and allocation of oil surplus

The aim of this paper is to show that in the last thirty years the world oil industry has gone through three successive stages in the evolution of marginal production costs, corresponding to three different organizations of the market: the majors order (1929–1973), the OPEC order (1974–1986) and the consumer-countries order (1986 to the present). These orders all differ as far as organization of competition or the conditions of oil surplus distribution are concerned. By provoking a break with industrial structure and the established balance of power between actors, it seems that each successive reversal in the evolution of the production costs' trend results in an oil crisis, and subsequent backlash, and that these change the organizational dynamics of the industry. The oil crisis of 1973, which announced the end of the majors order and its replacement by OPEC, thus occurred at the moment when the production costs' trend went through a transition from a decreasing stage to a growth stage. A new change in this trend in the mid-1980s, from a growth stage to a decreasing one, was the cause of the 1986 backlash which led to the replacement of the OPEC order by that of the consumer-countries order.

Assessment and prospects for energy resources in kuwait

Kuwait's only resources of primary energy are oil and natural gas. The country produces 1 million barrels of oil per day of which 15% are used locally. The surplus of oil is exported. Due to rapid development, the per capita consumption of electricity increased from 1473 kWh in 1960 to 9255 kWh in 1985. If this situation continues, Kuwait will be forced either to increase oil production or reduce exports. Reduction of exports will affect the standard of living in Kuwait. We assess the energy in Kuwait and discuss other alternative resources that are available, e.g., nuclear, wind, and solar energy. We also introduce the concept of coupling a large solar pond to a 150 MWe power plant as a measure to reduce dependence on oil. A detailed economic analysis is carried out comparing hybrid, conventional, and ORC engine power plants.

The Olive Boom. Oil Surpluses, Wealth and Power in Roman Tripolitania

AbstractThis paper is a sequel to an earlier study of the archaeological evidence for olive oil production in Roman Tripolitania, and combines archaeological information on olive presses with the evidence for trade in Tripolitanian oil, as manifested by the identification of Tripolitanian containers (amphorae). Attention is drawn, in particular, to the apparent correspondence between conclusions made in respect of the settlement data and of the socio-economic significance of stamps on Tripolitanian amphorae. Both sets of data support the view that the urban elite of the region, and in particular that of Lepcis Magna, had control of a very considerable quantity of surplus oil production and that this constituted a major source of individual prosperity, in part manifested by the extravagant donations of public buildings. The notable wealth of the Lepcitanian aristocracy enabled increasing numbers from amongst it to participate at a high level in the central government of the Roman Empire as senators or equestrians. The culmination of this process was the elevation of Septimius Severus as the first African Emperor in AD 193. His reign brought clear short term advantages to his home town, but after his death and the assassination of both his sons by AD 217, the fortunes of the town changed for the worst. Under Severus the town had offered the Roman State a voluntary ‘tax’ in olive oil and this together with the absorption of much land into Imperial estates must have taken a significant amount of agricultural surplus out of local control. In an Appendix, some comments are made on the problems of attempting to quantify the scale of oil production, and some broad estimates are suggested.