Dr. Bakhtiari: Barbara's Interview

EnviroEngr

From our very own Barbara, this English translation interview with Ali Samsam Bakhtiari:

AN INTERVIEW WITH ALI SAMSAM BAKHTIARI
(from www.reporterassociati.org on 9.13.2004 - now available by subscription only)

Barbara:
- Mr. Bakhtiari, what's happening to oil?

Dr. Bakhtiari:
Many, many things at the same time, most of all influenced by the imminence of 'peak oil' which my WOCAP model predicts for 2006-2007 (bear in mind 2006 is only 15 months away). Oil price is climbing regularly, as is crude oil's place on the global agenda. Come 'peak oil', the price will be much higher (people remembering the "good old days" at $50 when it was still very cheap) and oil will be at the top of the agenda and remain there for quite some time.

Barbara:
- You're a senior chemical engineer in the oil field. Nobody better than you can tell the last word about those new "huge fields" they keep on talking about. Are those "huge fields" in Canada, in Mexico, in the ocean deep, going to save us from the consequences of peak Oil?

Dr. Bakhtiari:
There are no more 'huge oil fields' (which I call 'supergiants'). The last two have been discovered in 1999 (the Azadegan field in south Iran) and in 2000 (the Kashagan field in offshore Kazakhstan). Both are not faring well at all. Azadegan is in contract to Japanese 'INPEX' and seems to be standing still. As for Kashagan (operator Italy's ENI) it should begin producing in 2008 (if everything goes right). Real problem is that existing 'supergiants' (some 40 in the whole world, producung around one third of total oil output) are getting old, some have more than 50 years of service --- like the largest of all: Saudi Arabia's GHAWAR (still producing some 4 million b/d). Experts believe that the chances of finding another 'huge oil field' are almost nil.

Barbara:
- You say "oil will be at the top of agenda". It seems already is! Don't you think, from what you see, that international leaders are aware (and influenced) of peak oil coming? Do you think they have an hidden agenda about it?

Dr. Bakhtiari:
Oil is certainly not "top of the agenda" when it will be the media will be obliged to turn to it, maybe three-digit prices could achieve that. Not many people are aware of 'peak oil', some politicians know but don't want to talk about it (all negative). I don't think there is secret agenda: what could it be ? There is no plan B. When 'peak oil' eventually arrives it will create enormous problems, especially for those totally unprepared. One of the only country that is doing something now is Australia: they are really thinking and switching investments and getting ready.

Barbara:
- Recent news report that international banks, like Morgan Stanley, are buying oil supplies directly and stocking them. Is this a sign of Peak Oil coming, are they expecting prices to grow forever?

Dr. Bakhtiari:
I hadn't heard about 'reserves-building' by Morgan Stanley and others. Very wise investment indeed, as the price can only go up, with some volatility along the way (of course).

Barbara:
- OPEC conventions are no more top news. It looks like OPEC is going to lose its power. They are no more able to decide oil price, leaving the price flowing with the market for the first time in history. What's the future of OPEC with Peak Oil coming? Will they simply dissolve as a cartel or they'll try to make a stronger agreement in order to keep oil production in their hands?

Dr. Bakhtiari:
OPEC has lost both its raison d'etre and its power. It could try to change its spots, but that requires vision, imagination and lateral thinking --- which I can see within the present OPEC Secretariat. So that I am not optimistic about the Organization's future, especially that it is now almost useless to the international oil industry. OPEC needs a miracle to survive 'peak oil'.

Barbara:
- Franco Bernabe, former executive director of ENI (and now director of PetroChina), in 1998 said peak oil was expected in the very first years of new millennium. But most of your colleagues in the oil field never mention Peak Oil, and act like we're soaking in it. Can you guess why?

Dr. Bakhtiari:
Mr. Bernabe was right in 1998, but in general the int'l oil industry doesn't want to hear about 'peak oil'. None of the big oil companies are ready to acknowledge it, although they must all know that it is bound to come sooner or later. But until they can get away with remaining silent, they will carry on. For the time, they are far too busy counting their mirobolant profits (which are breaking all world and national records in 2004).

Barbara:
-Let's speak a bit more about Italy. Maybe you know Enrico Mattei and his "unrespectful attitude" to the western companies he called "the seven sisters". He was the first to make an agreement to buy Iranian oil. In the path of his tradition, ENI today is working at Darquain field without worries about the embargo. How are the relations between Italy and Iran regarding oil?

Dr. Bakhtiari:
About ENI's Iranian ventures, I think there is an abyss between what the great visionary Dr. Mattei achieved and today's projects. Enrico Mattei was an extraordinary individual who single-handedly create ENI (the largest Italian company in 2003: 42th worldwide with a market value of $ 77bn; Italy's no.2 comes way below ranked 91st :'Telecom Italia') and imbued ENI with "a sense of mission". He brought to Iran in 1957 the most revolutionary type of contract (the "75-25") that became the industry's new norm (and maybe cost him his life). Today in Iran, ENI has come with the worst possible type of contract --- the so-called 'buy-back' or 'revised buy-back' (even worse, if that is possible) --- in its two projects of 'South Pars Phases 4 + 5' and 'Darquoin'. I rest absolutely certain that the late Dr. Mattei would NEVER have signed a 'buy-back'.

Barbara:
- "No nation that sits on so much oil and gas has a legitimate, peaceful need to generate nuclear electricity." This is what Ari Fleischer, one of the hawks of USA administration, had to say about the Iranian nuclear program. Some say that the nuclear electricity program is a "defensive screen" to discourage future invasions. Since you need a lot of oil at a cheap price to build nuclear plants, is it possible Iran is preparing for Peak Oil?

Dr. Bakhtiari:
I really doubt that people are preparing for 'peak oil' by going to renewable energies. They don't know anything about 'crude oil', how could they know about 'peak oil' ?

Barbara:
- A last word about your people. Iranians are a strong and unite people, they're well educated and love their ancient country. What do you expect for your future?

Dr. Bakhtiari:
I seriously hope that the great Iranian people will be better off tomorrow than they are today: they really deserve much, much better...

{Many thanks to both Dr. Bakhtiari and Barbara for sharing this with us; EE}