Despite the global economic slowdown, China continues to grow, although at a slower pace. To maintain the pace of industrialization requires energy, particularly hydrocarbons. China has acquired E&P interests in in regions as varied as Kazakhstan, Russia, Venezuela, Sudan, West Africa, Iran, Saudi Arabia and Canada. Numbers of downstream and upstream facilities are increasing to keep pace with its rising oil consumption, driven both from industrial demand as well as a burgeoning transportation market (The passenger vehicle market is growing at a 7-10% rate over a base of 15 million cars on the road).
As the energy industry booms in China, so is the number of expatriates working in that industry. The country is undergoing high speed modernization and along with it, many cultural changes.
I lived in Southern China for a year as an expat manager at Schlumberger. It was an eye opening experience for me, both professionally and personally. My wife, who had accompanied me, still feels that it was the best foreign posting location for us. The standard of living was particularly high. We also forged some long term & close knit relationships with other expat families there.
However I would urge any expats to venture out of the “expat ghetto” and get to know the real China. Mandarin is the primary language spoken by a vast majority of people in China. The language can be a bit tricky for someone to pick up initially particularly if you’re not used to East Asian languages. Most taxi drivers do not speak or read English. The best solution is to have the address of your destination written in Chinese. I used to carry cards with common words written on it to help me move around the city. It is not that hard to develop workable Mandarin in a couple of months. However, if you are looking for fluency, I recommend attending a language school.
Finding out about expat life in China is easier these days with various online forums and communities. The new visitor can get some valuable tips through these forums. I recommend Dan Washburn’s blog Shanghaiist . Dan’s a freelance writer but has some interesting stories, and slice of life vignettes, and tips for the recently arrived resident in China.
If you are considering taking up projects in China, my advices is set aside all your preconceptions about the country and discover first hand the exciting, wonderful and the sometimes exasperating experience there.
Thursday, January 15, 2009
Thursday, January 8, 2009
2008: Looking back
The year 2008 will always be remembered for quite a few things, not least of all for the turmoil in the global economy, particularly in the financial sector where giants like Lehman Brothers, Bear Stearns and others tumbled. The same year also saw the extreme gyrations in the spot oil markets which had far reaching impacts across the world. Today, we look at the top energy stories and related developments during the year that went by – events that will affect many aspects of the year ahead.
Unprecedented crude oil price volatility
During the early part of the year, crude oil rose to its highest ever price of almost $150 per barrel. Peak Oil was almost ready to provide an explanation for it when prices slipped into a four year low of around $30 driven by the economic slump. There are many reasons for this – the demand-supply gap , speculation, political risk, etc. As a consequence, there was a fair amount of economic particularly in transportation- the price of gasoline shot up effecting many consumers.
The price rise also contributed to the poor performance of the airline and automobile sectors. contributing to bankruptcy and consolidation of airlines while the automobile industry faced deep financial trouble when people stopped buying low mileage vehicles.. Later, when the oil price tumbled, some non integrated oil companies were affected adversely, particularly those that made large bets on alternative fuels. The retail side was also impacted, companies such as Flying J declared bankruptcy.
Renewable energy took off, but then didn’t
There was renewed interest and impetus in alternative and renewable sources of energy in 2008. This was one of the direct fallouts of the oil price spike in the middle of 2008. Consumers were increasingly looking for sustainable sources of energy. . The US presidential elections put additional spotlight on this issue and the newly elected president Barak Obama has put a major focus on an attempt to shift away from fossil fuel in the long term.
However the opportunistic investments in alternatives haven’t panned out in the short term. Despite production mandates and federal subsidies, ethanol producers are not minting any money. Falling crude and rising corn prices were deleterious to the effort. Renewable energy enthusiasts hit ground reality when second generation ethanol was delayed. Range Fuels, who intended to start producing by 2008 initially delayed to 2009 and now production isn’t forecast to begin until 2010.
Environment,Nature and Politics
Some major oil refineries had to be shut down because of hurricane Gustav followed by hurricane Ike in North America. Though the outages were short termed, many gas stations in the southeast ran out of gas, raising concerns about starting of something more widespread.
Somali pirates proved to be a major threat to oil vessels operating out of the oil rich African continent. Emboldened by recent ransom payments, they hijacked a Saudi supertanker carrying oil worth $100 million. Countries with interest in the continent have stepped up their maritime security in the area which has considerably brought down the number of such incidents.
Political maneuvering in certain hotspots also created short term demand instabilities. Nigeria, Iran and Venezuela continued to have internal upheavals. The end of the year saw some additional volatility in the Middle East and in gas transport issues between Russia and Ukraine.
Record profits by oil companies
Despite the steep fall in oil prices during the later part of the year, integrated oil companies made record profits with the help of high prices during the beginning of the year. Companies like Exxon Mobil posted biggest profit in history during the same year when downstream profits in refining fell along with gasoline consumption.
OPEC went ahead with its big production cut to counter flagging demands, followed by lowered production in other countries like Russia and Mexico. The results are not visible yet, but many hope this together with a recovering economy will stabilize the oil prices in the near future.
Unprecedented crude oil price volatility
During the early part of the year, crude oil rose to its highest ever price of almost $150 per barrel. Peak Oil was almost ready to provide an explanation for it when prices slipped into a four year low of around $30 driven by the economic slump. There are many reasons for this – the demand-supply gap , speculation, political risk, etc. As a consequence, there was a fair amount of economic particularly in transportation- the price of gasoline shot up effecting many consumers.
The price rise also contributed to the poor performance of the airline and automobile sectors. contributing to bankruptcy and consolidation of airlines while the automobile industry faced deep financial trouble when people stopped buying low mileage vehicles.. Later, when the oil price tumbled, some non integrated oil companies were affected adversely, particularly those that made large bets on alternative fuels. The retail side was also impacted, companies such as Flying J declared bankruptcy.
Renewable energy took off, but then didn’t
There was renewed interest and impetus in alternative and renewable sources of energy in 2008. This was one of the direct fallouts of the oil price spike in the middle of 2008. Consumers were increasingly looking for sustainable sources of energy. . The US presidential elections put additional spotlight on this issue and the newly elected president Barak Obama has put a major focus on an attempt to shift away from fossil fuel in the long term.
However the opportunistic investments in alternatives haven’t panned out in the short term. Despite production mandates and federal subsidies, ethanol producers are not minting any money. Falling crude and rising corn prices were deleterious to the effort. Renewable energy enthusiasts hit ground reality when second generation ethanol was delayed. Range Fuels, who intended to start producing by 2008 initially delayed to 2009 and now production isn’t forecast to begin until 2010.
Environment,Nature and Politics
Some major oil refineries had to be shut down because of hurricane Gustav followed by hurricane Ike in North America. Though the outages were short termed, many gas stations in the southeast ran out of gas, raising concerns about starting of something more widespread.
Somali pirates proved to be a major threat to oil vessels operating out of the oil rich African continent. Emboldened by recent ransom payments, they hijacked a Saudi supertanker carrying oil worth $100 million. Countries with interest in the continent have stepped up their maritime security in the area which has considerably brought down the number of such incidents.
Political maneuvering in certain hotspots also created short term demand instabilities. Nigeria, Iran and Venezuela continued to have internal upheavals. The end of the year saw some additional volatility in the Middle East and in gas transport issues between Russia and Ukraine.
Record profits by oil companies
Despite the steep fall in oil prices during the later part of the year, integrated oil companies made record profits with the help of high prices during the beginning of the year. Companies like Exxon Mobil posted biggest profit in history during the same year when downstream profits in refining fell along with gasoline consumption.
OPEC went ahead with its big production cut to counter flagging demands, followed by lowered production in other countries like Russia and Mexico. The results are not visible yet, but many hope this together with a recovering economy will stabilize the oil prices in the near future.
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