The Barrel

When US state utility regulators meet in Washington next week for their annual winter conference, one of the themes they will cover--to a larger or smaller extent--will be states versus the Federal Energy Regulatory Commission.

One state regulator is throwing down a big glove, the Constitution, in what reads like a profoundly felt fist-shaking against efforts to plan and pay for power systems more centrally.

For anyone observing from the outside, Saudi Arabia's petrochemical manufacturers would seem little more than a vast, cash generating machine. Given that it has the world's largest hydrocarbon reserves and a huge line-up of investments (estimates hover in a wide range of $20 billion to $100 billion over the next five years) from both prosperous government and foreign investors, it's an image that's hard to argue against.

However, the financial results for the fourth quarter of 2011 of many of these Saudi companies reveal a very different picture indeed. While petrochemical giant like Sabic showed a drop in net income Q4 2011, others, like Saudi Kayan and Petrochem, in fact showed net losses.

Saudi Arabia's petrochemical industries index dropped 1.65%, or 103.12 basis points year-on-year on December 31, 2011 to 6232.93.

By Margaret McQuaile and Kate Dourian

Who will be OPEC's next secretary general after Abdalla el-Badri, who will finish his second three-year term in the job at the end of this year? OPEC kingpin Saudi Arabia has nominated its former OPEC governor Majid Moneef but it's unlikely that he will be the only candidate.

You might think that choosing a secretary general to run the Vienna secretariat would be a fairly simple affair. But it's not. Politics and geopolitics tend to spill over from crude output policy into the process of filling the group's top job.

Not everyone standing on the sidelines is cheering Australia's play to challenge Qatar as the world's largest LNG producer by the middle of this decade.

LNG is a boom industry in Australia, with eight new projects currently under construction, worth a total of more than $175 billion. The new projects will add capacity of nearly 70 million mt/year to Australia's existing LNG industry, which comprises the Woodside Petroleum-led 16.3 million mt/year North West Shelf joint venture and the 3.6 million mt/year Darwin LNG
plant, operated by ConocoPhillips.

(John Roberts was a guest lecturer on energy security at the NATO Partnership for Peace Symposium at Oberammergau earlier this month.)

When NATO looks at Iran it would seem reasonable to expect that it was looking at how the western world's warships are cramming into the Strait of Hormuz amidst charge and counter-charge that the strait faces the prospect of an Iranian blockade.

But when NATO invites its partners in the region -- countries such as Saudi Arabia, the UAE, Iraq, Jordan and Egypt are all members of NATO's Partnership for Peace program -- for an informal symposium on issues of mutual interest, it's not just energy security that's up for discussion, but cyber security, water and the problems posed by declining military budgets.

In his much-hyped State of the Union address this past week, President Barack Obama gave a rhetorical bearhug to US energy development, even stealing a line from Republicans and pronouncing the need for an "all-out, all-of-the-above strategy" on increasing energy production.