A new global energy map is taking shape as Canada, Russia and Qatar come to play new, more decisive supply-side roles and the U.S. and China continue to lead global oil demand growth. Sustained high oil prices are allowing Canada to develop its massive reserves of unconventional oil, of which at least 175 billion barrels are deemed recoverable. China is in the midst of striking large oil deals with the Chavez government in Venezuela and is also becoming one of Brazil's primary trade partners. Russia's combined oil and gas production of nearly 20 million barrels per day of oil equivalent will give Moscow great geopolitical influence in the European and Asian energy markets. Qatar has the world's third-largest gas reserves, and enjoys low development and production costs because its gas is concentrated in the massive North Field. Qatar's Middle Eastern location makes it equally favorable to sell liquefied natural gas (LNG) to both the Atlantic and Pacific markets. As the LNG market grows, these factors will make Qatar the global LNG kingpin. Canada, Qatar and Russia will gain heightened strategic and economic importance. Interaction between these suppliers, newly powerful national energy companies, and large consumers like China and the U.S. will shape the global energy and security architecture. China's growing energy ties to "rogue states" like Venezuela, Iran and Sudan, as well as to others like Saudi Arabia, Nigeria and Angola, will strongly impact global energy politics. Certain existing geopolitical relationships will grow, for example U.S.-Qatari ties, while other relationships will emerge. China will strengthen energy ties with Australia, Canada and Russia. Qatar and Russia may become global gas price setters because they can sell to both the Atlantic and Pacific markets. The interplay between Russian and Qatari LNG supply, and U.S. and Chinese demand, will likely help determine global LNG prices in coming years. For more on this, see the December issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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