Energy Law in Pakistan :
Law Updates And Consultation Papers

Changing Oil and Gas trends for 2013-2014

The year 2012 saw a lower growth in the energy industry of China, India and Brazil with uncertainty surrounding the handling of the “fiscal cliff” within the U.S. and the Euro crisis. It appears that the impact of austerity measures in the U.S. and in the E.U. will continue to negatively impact economic growth in 2013-2014  and therefore will be a drag on oil price. That being said, oil markets are likely to remain highly sensitive to economic growth indicators through 2013. Furthermore, Oil supplies from Iraq which are hoped to rise 12 mmbd by 2017 look promising but will be largely dependent upon the passage of the draft Hydrocarbon Law; (ii) relations between Baghdad and foreign investors, especially those seeking to also invest in the Kurdistan Region; and (iii) exports from the Kurdistan Region, initially by truck and then pipeline, if agreement is reached with Turkey.

It also seems that 2013 -2014 will witness the advent of the Hydrates technology, where as Japan has been leading studies since 1995 into production of natural gas from hydrate resources. Interestingly, this gas hydrate resource is bigger than all the oil, gas and coal conventional reserves available today. Similar trends are seen coming from the Shale gas in China which could potentially have a much bigger impact in China than in the U.S. (such as that provided by current joint venture partners BP and Shell) to better understand the potential and to exploit the resource. A further issue is that much of the shale gas is located in the desert and water supply for fracking operations is challenging. If international technology is applied successfully, 2013 could see China make significant strides in realizing its shale gas potential.

Next the fact that Liquefied Natural Gas (LNG) has penetrated the transportation market much more deeply and much more quickly than anyone had anticipated. The next push is in developing bunkering to allow for greater use of LNG as a fuel for shipping. Bunkering could double global LNG consumption in 10 years. Interestingly, China’s Yellow River ships have already been converted to LNG, as have Shell’s ships on the Rhine. If this increasing capacity translates into demand for oil then this will lead to significant support for oil prices.

 Finally the way Middle-Eastern, South Asian and Gulf Geopolitics post the signing of Iran Pakistan Gas Pipeline plays out will also be something to watch out for in the coming days, especially after the change of political regimes in both countries.

The Josh and Mak Team
If you are reading this, chances are we will become your favourite virtual law firm at some point. In an economy where businesses have lost their strategic edge and are forced to reconsider their traditional concepts of consulting bricks and mortar law firms, which bill by the minute, we can provide you with affordable quality legal advice, delivered anywhere in the world. Since 2010, our firm has already pioneered and adopted the concept of honest and practical legal advice, delivered straight to your email inbox. In the post Covid19 era, working with the Josh and Mak Team means that, you will get the same commitment, discipline and work ethic, without the heavy Bricks and Mortar and the financial baggage which comes with the latter. Let your choice to work with Josh and Mak International become your unfair strategic advantage over your business competitors of the past, present and the future!