Oil Markets and Prices

Evaluation of the impact on the Western Hemisphere heavy sour crude oil market of upgrading facilities at source

This research focuses on the implications of the increasing supply of heavy sour crude oil as well as upgraded/partially upgraded or synthetic crude oil in the western hemisphere. Given the resistance to construction of new deep conversion capacity in the traditional markets for heavy sour crude, the potential netback losses for heavy crude producers in accessing new markets, the overall tight capacity in global refining, the current dominance of heavy grades of crude in Middle East spare capacity, a preferred strategy might be to upgrade at source an retain a greater share of the value. The objective then is to analyze the factors that will influence decisions to invest in source upgraders versus the merits of developing new markets for heavy sour crude. The cases of Venezuela and of Canada will be empirically compared.

Research contact Adrian Lara

Russia and OPEC

The aim of the project is to examine the key factors that could make Russia more susceptible to co-operation with the Organisation of Petroleum Exporting Countries in supply management. It in this assessment the research project focuses on three areas:

Russia’s technical ability to manage its oil output;
Russia’s political and economic dependency on oil exports;
Geopolitical considerations.

Research contact: Shamil Yenikeyeff

The Battle for Russian Oil: Corporations, Regions, and the State

(to be published by Oxford University Press in 2008)

At the time of the Soviet Union's disintegration, oil was contested by Moscow and Russian regions as the main commodity generating considerable rents under volatile economic conditions. The initial arrangements of the early 1990s between the federal executive and regional administrations with regard to the oil sector played a major role in establishing an institutional framework for the business activities of federal oil companies throughout the Russian Federation. The result of these arrangements was the increased authority of regional elites over the oil industry's infrastructure, natural resources, petroleum sales, oil exports and taxation. This book examines the main problems that federal oil companies faced in their formative years and their subsequent strategies aimed at undermining the regional control over the key aspects of national oil production. The book argues that, in 1998-2004, federal corporate groups have successfully undermined the hold of regional authorities on the national oil sector. As a result, the federal centre with the help of large petroleum corporations managed to reintegrate the semi-confederal Russian Federation economically and politically. This set the stage for the present situation of further centralisation of state control over the Russian national oil sector and the emergence of Russia as a hydrocarbon power.

Research contact: Shamil Yenikeyeff

Where does Russia stand?

Russia appears to be at a crossroads in its emerging stance towards major forces in the world energy markets. A major shift in the behaviour of this key non-OPEC producer could have considerable implications on how global markets develop. In the current times of high energy prices Russia is quickly developing features usually present in traditional oil/gas exporting economies. Shamil Yenikeyeff’s project will attempt to establish whether these features show that the Russian government has failed to diversify the national economy making it even more sensitive to export revenues. In this respect the project will examine the changing role of the state in the Russian oil/gas industry and Russia’s growing fiscal dependency on exports of mineral resources.

Research contact: Shamil Yenikeyeff

Dr Keun-Wook Paik: Sino-Russian Oil and Gas Cooperation

The project on Sino-Russian oil and gas cooperation will review China and Russia's oil and gas cooperation since 1993; examining the status of the oil and gas industry in China and Russia. Factors affecting oil and gas cooperation between the two energy giants will be analysed and the crucial question of how far that cooperation can go will be addressed.

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