Free Energy Exam 2010 Essay Sample

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A. Iran a state in the Middle East is an OPEC member. The oil reserves as claimed to be discovered are not new. These field or if you may reserves have been know they have not been commercially exploited. The news therefore simply state that Iran intends to exploit these field; it announces this in order to receive bids from oil companies who are interested in helping Iran exploit the oil fields so as to increase the country's total oil output, therefore no Iran has not discovered new fields. According to Mehr News Agency, Iran has discovered new gas fields with over 700 billion cubic meters of gas in the Persian Gulf to mean that the state of Iran did not know of these fields plus many others discovered in the north of the country. First of all this discovery may be a reaction to the fact that Iraq has returned or is intending to return to the OPEC after years of conflict and ravage. Iran has for quite some time considered Iraq as a rival as history proves therefore the news that Iran has discovered new fields in the North. These discovered field fields are being described as in-place reserve which I presume means the fields are verified and economically viable and that is why they have invited bidders to exploit the fields. But to describe them as newly discovered is not entirely true considering that Iran is one of the largest Oil producers in the world.  This statement I believe is meant to bring forth new allegiances as Iran faces an uncertain future considering its efforts to go nuclear.

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B. Yes I agree with Sen. Discovering Oil is different from the actual oil production. Production involves a lot of factors such as financial and economic factors, social factors to mention but a few. To begin with, for oil to be mined it has to pass a few test. By this I mean that the oil has to economically viable because the process of mining oil is very expensive. Secondly the country must have the suitable man power so as to facilitate the actual mining. According to Weismann the environment has to be considered and it is this evaluation that will determine the process of extraction.

C. Oil prices are affected by a number of issues for example physical issues such as conflicts lets say in Iraq did affect the price of crude. Such an announcement will therefore have little to no influence in the time being till the actual production begins. Iran currently faces the risk of being sanctioned because of its nuclear ambitions. Behind these sanctions is the west who regards Iran as unstable and therefore a threat to their peace. On the back ground are countries like Venezuela under Chavez who has defied the USA in the International arena despite being in the Americas. On the other hand is the Iraq issue; the USA has reasons to believe that Iran is financing a number of issues including belligerents in Iraq. All this consequently shows us the bigger picture where Iran is looking for means to survive and what better way than to quote oil. USA and China are the largest consumers of oil in the world today and Iran is on the way to almost surpass the largest producer of the commodity. This is therefore oil diplomacy where one country seeks to repair the damage already caused albeit by dangling the issue of oil knowing that the forces behind its fall will take the bait, all this considering the Iraq issue where Iraq seeks to return to oil production. If Iraq exploits its oil it means Iran will be left with no leverage and therefore vulnerable considering that some of the fields are shared between the Iran and Iraq.

D. Yes I would advice him to join in the bidding. The bidding process involves the actual oil fields that are soon to be exploited. This is therefore a chance for Saudi Arabia to exercise its influence that may prove beneficial in the future. Saudi Arabia is considered the largest oil producer in the world with it largest market being the USA. This explains why The Kingdom has managed to survive the times despite all the differences. Saudi also supports many of USA programmes for example USA has a military base in Saudi Arabia; the base serves as a post watching the greater Middle East. It is also there in service to the greater US interest it being Oil. The Kingdom of Saudi Arabia therefore has all the reasons for joining in the bid for the Iranian oil fields. As discussed above this is a means a stretching its influence in the Middle East. But foremost in doing so, the will be an extension of the USA in Iran. This will therefore ensure the USA influence in the oil sector through their puppet Saudi Arabia. Above all this will be away of countering the influence of the Chinese in the Middle East. Recently China has over taken the USA in terms of oil consumption. Secondly China is out doing the USA in other emerging Markets such as Africa with its significant oil reserves. Therefore even though Saudi may opt to stay out of the Iran and Iraq issues they have no option because external influences are much greater.