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Sunday, November 25, 2012


in order the european zone to become  competative again.


USA to leave Saudi Arabia behind in terms of crude production

The U.S. Department of Energy recently released a message stating that in 2012 oil production in the country will increase by seven percent. America is opening up its resources and reviewing its energy policy, experts say. If the production of crude oil and other liquid hydrocarbons continues to grow at the same pace, in a couple of years the United States will catch up to the indicators of Saudi Arabia. According to analysts of the International Energy Agency, the level of oil production in Saudi Arabia will remain unchanged until 2017. At the same time, the United States intends to accelerate the development of major oil and gas fields, particularly in Alaska.
In addition, American mining companies will increase the production of non-ferrous and rare earth metals to reduce the dependence of the U.S. industry on imports. In 2010, large deposits of rare earth metals were discovered on the American continent. Two deposits located in the states of Idaho and Montana can meet the needs of the country. As the new deposits are being developed in the U.S., China will lose the monopoly on the production and sale of rare earth elements. But the real sensation was a significant increase in production of "black gold" in the United States. The success of oil drillers is due to the implementation of horizontal drilling technology that greatly accelerates oil production.
The U.S. has the richest oil fields, 35,000 of them are located in the country. Among them are 300 giant fields (over 13 million tons) and 5 mega-gigantic ones (300 million tons). The U.S. holds 12th place in the world in terms of the volume of usable known oil reserves.
However, the U.S. is also the world's largest consumer of oil and needs 23 million barrels a day. Since 1972, the volume of production of "black gold" began to decline. By 1995, the U.S. production was 368 million tons, and in 2000 - 350 million. Then flows of cheap oil from abroad poured into the country.
In 2002, after the September 11 attacks, the United States became the world's largest oil producer. This was in response to a sharp reduction in production of "black gold" in Saudi Arabia due to lower prices. Later the American oil indicators somewhat lowered. After the disaster at the BP platform in the Gulf of Mexico on April 20, 2010, Barack Obama criticized the U.S. energy policy. The President called this policy unsustainable, emphasizing that the U.S. dependence on foreign oil was too strong. In February of 2012, the President once again mentioned this in his speech in Miami. Obama said that the U.S. needs for energy depend on the global events, for example, the unrest in the Middle East that gave impetus to speculative operations on Wall Street. He also said that American scientists and engineers needed to work out other options - for example, solar and nuclear energy as well as biofuels, "The Voice of America" reported.
However, the abandonment of hydrocarbons is not being discussed. In contrast, in the last three to four years, the situation has changed and the United States saw the oil and gas boom. This year, America has returned to the 14-year high level for the extraction of "black gold" (the maximum was recorded in 1998). In the near future, America may unseal the oil reserves created in 1997.
There are at least two reasons for the change in Washington's policy in the oil sector. First, the U.S. is interested in reducing its dependence on energy imports from the unstable countries in the Middle East. Second, the increase in production of oil, gas and rare earth metals in the country is closely linked to the changes in the global prices of minerals. Now Washington and Riyadh do not hide their interest in a long-term decline in oil prices. For Russia, this scenario is highly undesirable.
In addition, Washington is trying to weaken the positions of Iran, a major oil and gas exporter. In September, Oil Minister Ali al-Naimi said that Saudi Arabia was seriously concerned with the rise in prices for oil. At the same time, the White House welcomed the initiatives of Riyadh aimed at their subsequent decline.
However, the increase in the production of "black gold" in the United States is unlikely to lead to the exports of petroleum products from the United States to the world market, analysts say. The U.S. needs cheap oil to meet the vast needs of the domestic market. One way or the other, the concerted actions of Saudi Arabia and the United States to regulate the price of oil are likely to lead to a turmoil in global markets in the near future.
Yuri Sosinsky-Semikhat

USSR to rise from ashes through joint Eurasian currency

The creation of the supranational currency within the scope of the Customs Union is inevitable, Prime Minister of Armenia, Tigran Sargsyan, believes. According to him, this should be the next stage of integration within the organization, which makes sense from the point of view of simplification of currency circulation in transfers. The new currency may see the light on January 1, 2015.
As the prime minister of Armenia said during the meeting with members of the Club of Editors of the CIS, Baltic countries and Georgia, it would be advantageous for three member states of the Customs Union to have a supranational currency. "This is beneficial both to economic entities and citizens. What's the point in having a national currency and losing money during transfers?" said Sargsyan.
The Armenian Prime Minister also said that Russia, Belarus and Kazakhstan are now at about the same level of development, "and no country is going to live at the expense of another." According to Sargsyan, five years of coordinated monetary and fiscal policy will be enough for everyone to realize the need for a single currency. However, for representatives of the Russian side this question is important already today.  The active discussion of the issue began in the summer of 2012.
"In the summer of this year, Russian Prime Minister Medvedev called for the creation of a single currency for Russia, Belarus and Kazakhstan. He repeated a similar idea at the recent CIS forum in Yalta - Alexander Razuvayev, Ph.D. and Director Analytical Department of Alpari said in an interview with Pravda.Ru. - In principle, it may seem that the idea looks a little strange against the background of the crisis in the euro zone and the probability that not only Greece, but perhaps Spain may leave the euro zone, but there is a grain of common sense here, because money decides a lot in today's world. Only a single currency may actually unite the single economic space."
Originally, the main challenge to the single currency of the Customs Union was the fact that the idea was presented by the Russian government from the dominant position. That is, Russia offered the CIS countries to join the ruble zone, while Moscow would retain the right to control the money-printing process, and other countries would automatically fall into dependence on the Russian Central Bank and the Finance Ministry. Needless to say that this approach left Belarus and Kazakhstan dissatisfied. As a result, everyone started to pull the blanket over in this matter.
"Some would say that Belarus has planned economy, some would say that there are problems in Kazakhstan. However, we must realize that Russia's economy is much larger than that of Kazakhstan, and especially of Belarus. One shouldn't forget that Russia has world's third largest international reserves, more than 500 billion dollars, and Russia's GDP this year is about 2 trillion. Accordingly, given the positive macroeconomic situation in Russia, this includes the growth of more than 4 percent, and the budget surplus, so to form a currency area like that would be easy enough, taking into consideration the fact that there is political will for that on the part of Russia, Belarus and Kazakhstan. As for Belarus, the idea was very popular 10 years ago, but during that time Mr. Lukashenko wanted to have the emission center.  Well, of course, neither the Russian Finance Ministry nor the Russian Central Bank could accept that," says Alexander Razuvayev.
Another major problem of the Customs Union was Ukraine's reluctance to join it. Experts say that the full integration within the Customs Union and the Eurasian Economic Community is impossible without the participation of Ukraine. However, it was reported at the end of last week that Ukraine's Ministry of Foreign Affairs reiterated the impossibility of joining the Customs Union, as the country sets the course for European integration. The reasonable arguments saying that the Russian market was much more advantageous for Ukraine than the Ukrainian was for Russia, have not brought any results.
Surprisingly, though, the free trade idea between the CIS countries and Russia inspired the Crimean Republic, the first president of which, Yuri Meshkov, unexpectedly expressed his intention to join the Customs Union regardless of the Ukraine. Moscow does not hope much for the influence of the Crimea, although it may ring another "bell" for Ukraine's Yanukovych. Experts tend to see the "hand of the Kremlin" here, rather than an independent decision made by the head of the autonomous territory. However, it is no secret that Russia can make Ukraine join the union through the use of more abrupt, manipulative measures.
"In today's world, only 200-250-million-strong markets can be self-sufficient. Kazakhstan and Russia, plus Belarus is somewhat less. And, accordingly, the system can work only if Ukraine is integrated. One shouldn't forget that Russia can put pressure on Ukraine through energy carriers," says Alexander Razuvayev.
To date, Russia has taken a detached attitude to Ukraine. Ukrainian officials say that there could be a possibility for the country to join the Customs Union in the event the economic situation in the euro zone worsens. For the time being, Ukraine is standing at a crossroads, wondering which union to join.
"Either way, it is believed that the new currency will appear on 1 January 2015, although possibly earlier. Political sovereignty can hardly be questioned. It is unlikely that it will be the Russian ruble. Most likely, it will be a new Eurasian currency, and, consequently, we will have a new Eurasian Central Bank. Of course, it will be a local currency, because the size of combined economies is still a lot smaller than the economy of the United States, China, or the European Union. However, it will really mark the actual denunciation of Belovezha Accords and restoration of the Soviet Union, albeit in a new version 2.0 and on absolutely new market and capitalist principles," the expert concluded.
Maria Snytkova


Outcome of the EDA's steering board meeting

Ministers of Defence met on 19 November 2012 in the composition of the European Defence Agency (EDA) steering board, under the chairmanship of Catherine Ashton as the Head of the Agency.
Ministers took note of the significant progress of pooling and sharing initiatives such as air-to-air refuelling, maritime surveillance, the European SATCOM procurement cell and medical support. Additionally, Ministers endorsed the EDA's proposal of additional pooling and sharing opportunities in the areas of cyber defence, route clearance CIED, NH90, air transport, and maritime landscaping. They also adopted the Agency's voluntary code of conduct on pooling and sharing aiming at supporting cooperative efforts of EU Member States to develop defence capabilities.
Additionally, ministers welcomed the Agency's work in support of national defence ministries vis-à-vis the development of EU policies in industry and market, research and innovation, European space policy, cyber security and defence, SESAR, radio spectrum and maritime security.



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