bottleneck analysis

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Monthly Archives: May 2014

Socialism and the crisis in Ukraine

There are sOCIALISTS and Socialists. The former’s take on Ukraine and the Eurasian Union is dangerous to the latter. This needed clarification.

Vostok Cable

Paolo Sorbello explains why the Eurasian Union’s fellow travellers will never see the ultimate triumph of their post-capitalist ideal.

Russian Air Force Star. Image by Mboro. Russian Air Force Star.
Image by Mboro.

Samir Amin, a renowned Marxist author and the director of the Third World Forum in Dakar, Senegal, wrote a short piece for Monthly Review in March, suggesting that the “people” – i.e. the socialist public that reads his leaflet – support “the policy of Russia as developed by the administration of Putin to resist the project of colonization of Ukraine”. His arguments, in the short and bullet-pointed piece, are scattered and typical of a confused leftist who tries to justify some aspects of the past, make parallels with the present, and spite all that is not socialist; although, all the great figures that the contemporary intellectuals cite from the past, did not go back in time themselves to find their raison d’être. Times have…

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Calcio-spettacolo – #JZ4ever edition

Almaty, Kazakhstan

Finalmente sono stati decisi gli ultimi orari delle partite della Serie A, così posso completare il mio umile studio della follia del calcio italiano, che non fa più vedere la luce del sole ai calciatori. Stasera, un’altra nottata per vedere l’ultimo Zanetti.

Trentotto partite. Una squadra che mangia tutto, un’altra che lascia qualche briciola e tante altre mediocrità. Alcune mediocrità hanno speso tanto e hanno fallito i propri obiettivi, alcune altre mediocrità sono salite sul piedistallo e hanno lanciato campioni giovani e maturi e a volte sono state tutt’altro che mediocri, ma solo a volte. Insomma, mentre ancora mi fanno male gli occhi per le partite che ho guardato, ho pensato al motivo per il quale mi sono dovuto fare le nottate qui in Kazakistan. Tutte le cavolo di partite sono giocate la sera!

Spalmare il campionato su più orari, più giorni, più pre-pranzi e pre-cene per vendere meglio i diritti tv. Va bene. Ma bisogna dare un senso a questo “spettacolo”, soprattutto vista la sua qualità. Ho fatto un breve calcolo per le cinque squadre più seguite:

Juventus: 20 partite in notturna (20.45 o 21) e 7 nel tardo pomeriggio (18/18.30/19) – 11 con il sole

Roma: 22 partite in notturna (20.45 o 21) e 3 nel tardo pomeriggio (18/18.30/19) – 13 con il sole

Napoli: 23 partite in notturna (20.45 o 21) e 6 nel tardo pomeriggio (18/18.30/19) – 9 con il sole

Inter: 24 partite in notturna (20.45 o 21) e 3 nel tardo pomeriggio (18/18.30/19) – 11 con il sole

Milan: 26 partite in notturna (20.45 o 21) e 3 nel tardo pomeriggio (18/18.30/19) – 9 con il sole

Soltanto in 3 giornate le partite sono state giocate allo stesso orario (5a, 10a e 30a), tutte alla sera (20.45). Il resto è stata una scelta di palinsesto televisivo. Ora, per chi come me non vive nello stesso fuso-orario dell’Italia ed è costretto a fare le notti per vedersi “la partita”, ecco che le occhiaie cominciano ad allargarsi. Se poi tifi una squadra di Milano, su 76 partite, ben 50 sono state disputate in notturna. Visto il rendimento e il gioco espresso dalle due squadre milanesi, si può solo concludere che queste siano state notti sprecate.

C’è ancora una notturna in programma per l’ultima di campionato, ma quella che brucia di più a un’interista è quella passata domenica scorsa. Stare sveglio fino alle due e non vedere Zanetti sul campo per il derby è stata una ferita simile al 5 maggio. Se oggi, l’ultima a San Siro del capitano di una vita, quello scempio si dovesse ripetere, torno a piedi in Italia e tolgo le zeta dal cognome del mister.

Kazakhstan at the Center of Eurasian Energy (an unconventional article)

Almaty, Kazakhstan

Several things have changed since I wrote this article in October 2013. It was never published and since it’s not topical anymore and it’s not deep enough to pitch it anywhere, I want to embark in an experiment: I’m going to comment it with a seven-month delay to check what has changed in the meantime. Comments are in bold. The original piece was written on October 9, 2013.

October has been a busy month for the energy sector of Kazakhstan. After a very hectic summer, with the launch of Kashagan oil production in September, Almaty and Astana hosted two very important international meetings.

In Almaty, the 21st Kazakhstan International Oil & Gas Exhibition (KIOGE) opened its doors on October 1st and saw the presence of local and international companies involved in the Kazakh energy sector, in particular in oil and gas from the upstream to the downstream. At the KIOGE Conference, on October 2nd, several influential figures took the floor and talked about the main successes and prospective challenges in the Kazakh extractive sector. Of particular interest, due to its recent developments, was the start of production in Kashagan, which had been the object of several years of investments and drillings in severe climatic conditions. At the press conference, the Deputy CEO of Geology and Projects at the national oil and gas company KazMunaiGaz (KMG), Kurmangazy Iskaziyev dismissed the rumors that regarded the stoppage of production soon after its start. “In such difficult conditions” he said, “it is business-as-usual to encounter such halts to production, it was fully accounted for by the consortium”. Now we know that the stoppage was not a short-term hiccup, but a structural problem which will delay production until the end of 2015, at the very least. Also, why do they always choose to start production with the winter season approaching?

When talking about the export options for Kashagan oil, the main option for the consortium is still the Caspian Pipeline Consortium (CPC), which goes through Russia, to the port of Novorossiisk, where oil is shipped to the world markets. The input of new oil into the market goes hand in hand with the expansion of the CPC, which plans to more than double its throughput capacity in the next few years. Without additional input from a source other than TengizChevrOil, a 56/60 mta pipeline will be hard to fill. And if Kashagan is crucial to the “Future Growth Project”, then what does the consortium hope in terms of further oil supply? 

Otherwise, short-length shipping from Atyrau to the hub in Samara, or barge shipping from Aktau to Baku are both viable options, but less palatable economically. According to Reuters’ head of Commodities in the CIS, Aleksander Yershov, the government’s preference for CPC is “logical”. Quietly present was also the Chinese option, because its viability depends on the expansion of the pipeline network that connect Western Kazakhstan to Western China (an option that is not yet being served at the pipelines table). A few key questions for Kazakh energy were brought to the fore: the maturity of the fields that are being exploited in the country, the need for an improvement of the energy transportation infrastructure, and the beginning of the era of hard oil, also called “inaccessible oil”. This last point was echoed at the VIII KazEnergy Eurasian Forum that took place last week in Astana (8-9 October). There, several experts and famous politicians reminded the energy industry that the “end of easy oil” would entail an  increased of the role of the state in the extractive industries. Only by doing so, countries can ensure that the energy mix in domestic consumption and the portfolio for export can remain balanced. Wim Thomas, Chief Energy Advisor at Shell, depicted two scenarios that varied in the state intervention in the energy sector. Only a scenario that gives more power to the market would be successful according to the head of one among the top companies in Kazakhstan. At KazEnergy, the speakers mentioned repeatedly the ‘shale gas revolution’ in the United States as a game changer, because of its indirect effects on several market nodes down the chain of energy trade. These effects have yet to be seen in Europe, as gas is not yet traded without the link to the oil indexes, which is telling of how slow developments in this sectors can be when the resource is either still in the ground or not-so-easy to transport.

The official line of the Kazakh government is that day-to-day pragmatism has to be kept in place, while new development policies are drafted. Ministers and deputies mentioned the Green Economy legislation as the first step and unveiled on October 8th the Project ‘Evraziya’, which can become a platform for transnational companies and littoral governments in the Pri-Caspian region. The main partners will be Russia and Kazakhstan. Their public officials have promised to take the necessary steps to declassify their geological data in order to allow for an informed period of monitoring through the creation of an international consortium, under the auspices of the Ministries of Energy in Moscow and Astana. KazEnergy has been the broker of this project since the meeting last year, and the signature of an agreement by the end of the year would signify the success of the Forum in its mediation efforts. Nobody has talked about it since then, hopefully they’re working on it behind closed doors, but it would be interesting to check back at the next KazEnergy Forum. 

According to François Fillon and José María Aznar, both former Prime Ministers in France and Spain respectively, the role of the government in these matters should be one of balancing domestic needs with regional and global aspirations, but also one of attracting and encouraging foreign investment. This aim can only be achieved by guaranteeing a stable and reliable legislative framework, something that was repeatedly stressed also at KIOGE by several representatives of foreign companies that work in Kazakhstan. In particular, the new tender system, the question of health and safety of the workers, and the general issue of transparency were addressed. (Although some issues created conflicts among workers in the past months.) However, this last point about transparency was addressed by the V National Conference on the Extractive Industries Transparency Initiative in Kazakhstan, held at the end of KazEnergy on October 9th. In this occasion, the working plan for a new study of the penetration of transparency standards in Kazakhstan was laid out, which set in stone the collaboration between Astana and the Oslo-based organization. Competing interests were brought together during these two forums, with the two different understanding of energy security being spelled out by both importers and exporters. The participation of the representatives of the European Union and those of the Persian Gulf countries is telling of the efforts that Kazakhstan puts in place for the solution of one of the most complex equations of the 21st century. The placement of the Central Asian country at the center of the picture, increases the importance of Kazakhstan in bridging the interests of consumers and suppliers from Europe to Asia. No words were spent on India, which had just been sidelined after their offer for a stake in Kashagan was matched by KMG in the summer of 2013, and was later sold to CNPC by the Kazakh state company. Now, the recent developments of the new tenders in Kazakhstan, especially the successful exploration in the Abai offshore bloc, could revive the partnership.

Final note: in the past months, an increasingly depressing picture has been painted on the fate of Kashagan. This is especially true since the problem that it faced at the end of September 2013 is likely to strengthen the Consortium’s headache. Ramping costs, environmental fines, and production delays can only hurt the balance sheet of the operators of the field. Plus, the inability to enjoy the time of high oil prices can also have a negative effect, since the paradigmatic shift in Europe is ensuing and could bring down oil prices. If the “easy oil” era is expiring, the “inaccessible oil” epoch has still to come for Kazakhstan