The recent oil reserve announcement made by the outgoing oil Minister of Iraq Hussein al-Shahristani catapulted the country’s position to the third largest reserve holder in the world only after Saudi Arabia and Venezuela. Major concerns have been raised
by many experts on the revised oil reserve estimate which claims that the country has about 143 billion barrels of oil against the previously believed 115 billion barrels. While a huge oil reserves can indicate the potential of a country to boost its production capacity and also to invite significant investments, the global oil industry is sceptical due to the fact that Iraq neither had any substantial exploration activities nor did any proof from completed seismic surveys to claim the reserve increase. However, many experts are of the view that the apparent availability of new data on energy reserves which is the basis of the statement is derived from estimates made by IOCs are not be completely believed. Experts criticize the government for drawing the data based on seismic surveys which are yet to be completed. The questionable claims about the increase in reserves made by Iraq unveil the information politics by energy companies as well as the countries.
In general, the term ‘information politics’ is often used to refer to ‘how one uses information as a means to attain a specific goal. With regard to ‘politics of energy information’, it is one of the most important factors that shapes and controls the global energy geo-politics. Information regarding energy reserves, production, availability, accessibility, transportation and costs, etc is some of the key factors contributing to policy formulation and development of energy strategy in countries across the world. Energy policy of a country, the future plans and strategies for resource development, and energy investments are largely dependent on the information available in the energy domain. Many observe that information regarding global energy sector is largely manipulated by countries or international oil companies or other parties with vested interests. Often the energy reserve estimates are over projected by countries or owner companies in order to get a better price for the resources in the international market. There are many such examples in the global oil industry. Many reports about petroleum reserves in the Central Asian region, prior to the disintegration of Soviet Union argued that many of the Central Asian economies have huge reserves which were substantially higher than the actual petroleum reserves available in the whole Persian Gulf region. While in-depth seismic surveys in post-Soviet era assessed the reserve to be much less than what was perceived earlier, it points to the fact that the perceptions of huge reserves have substantially catalysed the demand for autonomy from these states. The State Chief Minister’s claims of huge natural gas reserves in India’s KG basin by the Gujarat State Petroleum Corporation (GSPC) earlier this decade have also invited wide criticism from companies and even the central government, pointing to the fact that such twisted information could be sending wrong signals to the global energy industry.
Information politics is an undeniable fact in the global petroleum industry and for petroleum producers it is has been a necessary content for a successful business recipe. There two major factors that drive the information politics in energy sector. First, such information available in the public domain could be aimed at various target groups. Investment decisions, stake purchase decisions, bilateral relations between countries, mergers and acquisitions and many more industry plans and strategies can be influenced by such blown up reserve information. And if anything can contribute to the rise the value of the reserves it is always preferred by the producers. Second, the global oil price which touched closer to $150 bbls in the mid 2008 has already raised concerns in import dependent countries about the continuing dependence on this finite source. The peak oil concerns already influences the policy decisions of importing countries to favour an energy mix with higher share of alternative fuels. Losing the import dependent countries, especially Asian countries which are expected to be the major demand centres of petroleum fuels in the coming decades, as customers could be a bigger challenge to the growth of petroleum industry. Moreover the increasing demand to cut down energy related emissions are also making way for huge investments in renewable energy development which is seen as an additional hurdle to the oil and gas industry. Third, petroleum revenue plays a pivotal role in national economy of most of the producing countries. Long term export markets, uninterrupted demand for their supplies and a reliable consumer network are important for their economies. Hence for Iraq, probably there is no better way but to (over)project the reserve estimates through the statements of an outgoing Energy Minister in order to secure the country’s economic future.
While uninterrupted supply of fuels to meet the economic targets gives ‘energy security’ for import dependent countries, for producers it is nothing but uninterrupted demand for their supplies and value for their products in the global energy market. Nonetheless, this would give way to another debate: whether or not energy information politics is a necessary evil to ensure the energy security of producing countries.
by many experts on the revised oil reserve estimate which claims that the country has about 143 billion barrels of oil against the previously believed 115 billion barrels. While a huge oil reserves can indicate the potential of a country to boost its production capacity and also to invite significant investments, the global oil industry is sceptical due to the fact that Iraq neither had any substantial exploration activities nor did any proof from completed seismic surveys to claim the reserve increase. However, many experts are of the view that the apparent availability of new data on energy reserves which is the basis of the statement is derived from estimates made by IOCs are not be completely believed. Experts criticize the government for drawing the data based on seismic surveys which are yet to be completed. The questionable claims about the increase in reserves made by Iraq unveil the information politics by energy companies as well as the countries.
In general, the term ‘information politics’ is often used to refer to ‘how one uses information as a means to attain a specific goal. With regard to ‘politics of energy information’, it is one of the most important factors that shapes and controls the global energy geo-politics. Information regarding energy reserves, production, availability, accessibility, transportation and costs, etc is some of the key factors contributing to policy formulation and development of energy strategy in countries across the world. Energy policy of a country, the future plans and strategies for resource development, and energy investments are largely dependent on the information available in the energy domain. Many observe that information regarding global energy sector is largely manipulated by countries or international oil companies or other parties with vested interests. Often the energy reserve estimates are over projected by countries or owner companies in order to get a better price for the resources in the international market. There are many such examples in the global oil industry. Many reports about petroleum reserves in the Central Asian region, prior to the disintegration of Soviet Union argued that many of the Central Asian economies have huge reserves which were substantially higher than the actual petroleum reserves available in the whole Persian Gulf region. While in-depth seismic surveys in post-Soviet era assessed the reserve to be much less than what was perceived earlier, it points to the fact that the perceptions of huge reserves have substantially catalysed the demand for autonomy from these states. The State Chief Minister’s claims of huge natural gas reserves in India’s KG basin by the Gujarat State Petroleum Corporation (GSPC) earlier this decade have also invited wide criticism from companies and even the central government, pointing to the fact that such twisted information could be sending wrong signals to the global energy industry.
Information politics is an undeniable fact in the global petroleum industry and for petroleum producers it is has been a necessary content for a successful business recipe. There two major factors that drive the information politics in energy sector. First, such information available in the public domain could be aimed at various target groups. Investment decisions, stake purchase decisions, bilateral relations between countries, mergers and acquisitions and many more industry plans and strategies can be influenced by such blown up reserve information. And if anything can contribute to the rise the value of the reserves it is always preferred by the producers. Second, the global oil price which touched closer to $150 bbls in the mid 2008 has already raised concerns in import dependent countries about the continuing dependence on this finite source. The peak oil concerns already influences the policy decisions of importing countries to favour an energy mix with higher share of alternative fuels. Losing the import dependent countries, especially Asian countries which are expected to be the major demand centres of petroleum fuels in the coming decades, as customers could be a bigger challenge to the growth of petroleum industry. Moreover the increasing demand to cut down energy related emissions are also making way for huge investments in renewable energy development which is seen as an additional hurdle to the oil and gas industry. Third, petroleum revenue plays a pivotal role in national economy of most of the producing countries. Long term export markets, uninterrupted demand for their supplies and a reliable consumer network are important for their economies. Hence for Iraq, probably there is no better way but to (over)project the reserve estimates through the statements of an outgoing Energy Minister in order to secure the country’s economic future.
While uninterrupted supply of fuels to meet the economic targets gives ‘energy security’ for import dependent countries, for producers it is nothing but uninterrupted demand for their supplies and value for their products in the global energy market. Nonetheless, this would give way to another debate: whether or not energy information politics is a necessary evil to ensure the energy security of producing countries.
