Henry said 'all barrels are not created equal' meaning many nations' barrels are empty due to domestic use, taxation and political risk. Explains why mkt. crapped on the 50/50 Gulf LNG Project - assumed it's expropriation and not an arms length transaction.
The fact that investment continues in nations with spiralling costs associated with risk ensures Gulf LNG will attract stout $/M bids. Exploration risk is one matter, parking $10 billion in a risky nation for 30 yrs. in an LNG scheme is another. I guess our 6 bidders have figured this out.
**********
09 January 2013 11:39 GMT
Resource-rich Congo-Kinshasa, Libya and Myanmar are among the ten countries most at risk of expropriation and resource nationalism globally, a new analysis has found.
Congo-Kinshasa was ranked fourth on the list of 21 states believed to be at extreme risk of expropriation, with Libya sixth and Myanmar ninth.
Hydro-carbon producers Turkmenistan (11), Equatorial Guinea (14), Venezuela (16), Tajikistan (18) and Bolivia (19) were also all categorised as extreme risk in the new list by Maplecroft.
The UK-based political risk analysis firm said YPF’s re-nationalisation in Argentina - currently subject to a string of legal cases by Spain's Repsol - remained the “most notorious example of resource nationalism” of recent times.
However, Maplecroft said that 2012 had also seen wider use of more indirect measures, including increased royalties and taxation, that were only set to further proliferate this year amid continuing high oil prices.
“As the tactics used by governments to extract value from their natural resources grow increasingly sophisticated, they will be more difficult to avoid, particularly because they are responding to the growing demands of local communities and indigenous groups for a greater share of revenues,” the report said.
The expropriation index is part of a wider annual risk report that has found conflict-torn Syria and Libya saw the most significant rise in political violence in 2012.
The violence in both states is having a spill-over effect, Maplecroft said, with weapons from the Gaddafi region feeding instability in the surrounding region and Syrian violence deepening sectarian divides in Lebanon.
Maplecroft said that the “risk of forced regime change remains high across the Middle East and North African region”, citing in particular Guinea Bissau, Congo-Kinshasa, Zimbabwe, Syria, Madagascar, South Sudan, Yemen, Mali and and Bangladesh.
The analysts listed Turkey as being at extreme risk of terrorism for the first time, citing increasing terrorist attacks by the separatist Kurdistan Workers’ Party (PKK), albeit concentrated on the south and east of the country.
Other hydrocarbon-producing states such as Nigeria, the Philippines, India, Colombia and Russia are also considered at extreme risk of terrorism, with the threat confined to certain regions in some cases.
“While the potential economic gains from operating in these countries is still high, the steps required to mitigate threats to employees, assets and supply chains is increasing the costs,” the Political Risk Atlas report said.
