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AZERBAIJAN RUNS OUT OF OIL- THEN WHAT?
http://asbarez.com/117725/azerbaijan-runs-out-of-oil-then-what/
Friday, December 20th, 2013
BY GAREN YEGPARIAN
War. With the Republics of Mountainous Karabakh and Armenia. That's
what!
Here's how and why.
By all accounts, Azerbaijan's oil will run out, practically speaking,
in a little more than a decade (most comprehensively explained in Alec
Rasizadeh's "Azerbaijan's Chances in the Karabakh Conflict." This
doesn't mean there won't be any oil left underground. It means that
given how much oil remains, where it is, the equipment installed to
extract it, the expense of upgrading that equipment to be able to
retrieve more of it, it will not be cost effective get what remains.
Of course new finds might be made, possibly some that are retrievable
through fracking. Newer, better technology might come on line. The
price of oil could go up making it economical to invest more and go
for hard to reach deposits. Regardless, the end of Azerbaijani oil is
near. And the decline in production (which peaked in 2010) has begun.
Take a look at the accompanying graph and table, which is not
comprehensive, but shows various indicators of reduced oil production.
Azerbaijan also has natural gas reserves. Baku is now negotiating
with the big, international, companies to determine which one(s)
will get the contracts. As part of these upcoming deals, the Azeris
will also try to wangle improvements to the oil infrastructure they
now have in place so more of the remaining oil can be extracted. In
all this Aliyev might overplay his hand (explained in an October 12,
2012 Forbes article titled "Is BP On Borrowed Time In Azerbaijan? Yes,
But So Is Baku." This will buy the thieving leaders of the country
a few more years.
Eventually, the fossil fuels will run out. The billions of dollars
pouring into the country will stop. Along with that, so will the
crooked leadership's ability to pacify the populace through money.
Then what will they do? Of course, like all petty tyrants, forceful
repression will ensue. Riots, beatings, civilian deaths will ratchet
up the tension. What do leaders anywhere do in such cases? They will
find or create a distraction. War with an external enemy tends to
mute internal dissent. So Aliyev will attack Armenian positions, or
try to provoke an Armenian assault so he has an excuse to "retaliate"
and start the war he desperately needs.
There's also another reason that Azerbaijan would start a war at such
a point in its oil/gas history. Already, Azerbaijan's budget deficit
is set to increase from $880 million in 2012 to $2140 million in 2013.
With the flood of money drying up, its ability to continue its
weaponry-purchasing binge will end. Arms and munitions get old,
replaced by better technology. So, Azerbaijan would have an incentive
to use what it already has before obsolescence takes its toll.
The trick for Armenians will be to prevent that war from starting
for a decade beyond when Aliyev would want to start it. By then,
Azerbaijan will be in shambles, and Aliyev booted out, or in such
dire straits that he could not afford to use his military resources
against Armenians because they would be tied up protecting the crooks
in Baku by repressing the population at large.
How this can be achieved, through which diplomatic tricks or
military muscle flexing, what carrot-and-stick inducements from the
international community, I know not. But I do know that it behooves the
appropriate government ministries in Yerevan, and Armenian advocacy
groups in the Diaspora, to start figuring out how to achieve this
goal. Otherwise, we'll be paying in blood for our lack of foresighted
preparation and planning.
http://asbarez.com/117725/azerbaijan-runs-out-of-oil-then-what/
Friday, December 20th, 2013
BY GAREN YEGPARIAN
War. With the Republics of Mountainous Karabakh and Armenia. That's
what!
Here's how and why.
By all accounts, Azerbaijan's oil will run out, practically speaking,
in a little more than a decade (most comprehensively explained in Alec
Rasizadeh's "Azerbaijan's Chances in the Karabakh Conflict." This
doesn't mean there won't be any oil left underground. It means that
given how much oil remains, where it is, the equipment installed to
extract it, the expense of upgrading that equipment to be able to
retrieve more of it, it will not be cost effective get what remains.
Of course new finds might be made, possibly some that are retrievable
through fracking. Newer, better technology might come on line. The
price of oil could go up making it economical to invest more and go
for hard to reach deposits. Regardless, the end of Azerbaijani oil is
near. And the decline in production (which peaked in 2010) has begun.
Take a look at the accompanying graph and table, which is not
comprehensive, but shows various indicators of reduced oil production.
Azerbaijan also has natural gas reserves. Baku is now negotiating
with the big, international, companies to determine which one(s)
will get the contracts. As part of these upcoming deals, the Azeris
will also try to wangle improvements to the oil infrastructure they
now have in place so more of the remaining oil can be extracted. In
all this Aliyev might overplay his hand (explained in an October 12,
2012 Forbes article titled "Is BP On Borrowed Time In Azerbaijan? Yes,
But So Is Baku." This will buy the thieving leaders of the country
a few more years.
Eventually, the fossil fuels will run out. The billions of dollars
pouring into the country will stop. Along with that, so will the
crooked leadership's ability to pacify the populace through money.
Then what will they do? Of course, like all petty tyrants, forceful
repression will ensue. Riots, beatings, civilian deaths will ratchet
up the tension. What do leaders anywhere do in such cases? They will
find or create a distraction. War with an external enemy tends to
mute internal dissent. So Aliyev will attack Armenian positions, or
try to provoke an Armenian assault so he has an excuse to "retaliate"
and start the war he desperately needs.
There's also another reason that Azerbaijan would start a war at such
a point in its oil/gas history. Already, Azerbaijan's budget deficit
is set to increase from $880 million in 2012 to $2140 million in 2013.
With the flood of money drying up, its ability to continue its
weaponry-purchasing binge will end. Arms and munitions get old,
replaced by better technology. So, Azerbaijan would have an incentive
to use what it already has before obsolescence takes its toll.
The trick for Armenians will be to prevent that war from starting
for a decade beyond when Aliyev would want to start it. By then,
Azerbaijan will be in shambles, and Aliyev booted out, or in such
dire straits that he could not afford to use his military resources
against Armenians because they would be tied up protecting the crooks
in Baku by repressing the population at large.
How this can be achieved, through which diplomatic tricks or
military muscle flexing, what carrot-and-stick inducements from the
international community, I know not. But I do know that it behooves the
appropriate government ministries in Yerevan, and Armenian advocacy
groups in the Diaspora, to start figuring out how to achieve this
goal. Otherwise, we'll be paying in blood for our lack of foresighted
preparation and planning.