The sanctions practice

Leonard Le Blanc

The principle function of sanctions levied against other nations is to force changes in objectionable actions or heads of governments by creating domestic dissatisfaction or economic unrest.

Sanctions rarely work, and they often damage outside companies trying to conduct business there. The target governments with objectionable actions often are too firmly entrenched in power, or global commerce renders the action worthless over time.

However, the sanction process is one of the few peaceful weapons in practice today. The alternatives are to do nothing, use invisible means of influence, or resort to armed conflict. With these poor choices, sanctions will remain a preferred option. Since the practice is unlikely to go away, the process should be accompanied by two other elements to ensure they serve a purpose:

• Timed exit: Sanctioning nations should set a time period (confidential, for obvious reasons) to produce results. After that, sanctioning governments should find some other method of influence. Long-running sanctions are rarely effective.
• Win the propaganda battle: In order to gain the economic unrest sought by imposing sanctions, the affected populations must know the sanctions are not being imposed against them. This requires a continuing rhetoric focusing clearly on the sanctioned government officials.

Sanctioned government officials typically wage a constant propaganda campaign, in an effort to create public animosity toward the sanctioning governments, and expand a modest reservoir of anti-interference and nationalistic feelings.

If a sanctioning organization isn't planning to win the propaganda battle, and to obtain solid results within a prescribed span of time, then sanctions are best not levied at all.

Buy low - sell high?

Troubled by oil and gas producers bowing out of contracts or showing complete disinterest in new acreage offered, countries around the world are lowering dramatically the government take on offshore license contract terms. Couple this with the push by more maritime nations to providing acreage for oil and gas licensing, and you have a bonanza for those operators able to fund a position on these licenses.

But most producers have focused instead on buying financially troubled reserves or companies, where they are actually interested in unexplored reserves. Sooner or later, oil prices will rise, low-priced reserves will disappear, and new license contract terms will become much tougher. Suddenly, companies in a cash rich position will find nothing but high priced acreage available - all over the globe.

Producers need to think of licenses as investments, and build license portfolios when prices are low. True, there will have to be budgetary sacrifices elsewhere when cash flow is low. However, when oil and gas prices rise, the competition and costs for licenses escalate, and surplus shareholdings can be cashed out profitably. Of course, who wants to think that far ahead.

Salt formations

Subsurface salt layers were deposited eons ago during low sea states. As sedimentary overburden covered the salt beds, the low density layers began flowing upward through fissures and faults, taking various forms.

Salt's ability to flow under low pressure and heat allows natural fractures and boreholes drilled through them to close up within a matter of weeks or months. While a problem for drillers and producers, this characteristic is valuable to geologists engaged in the disposal of radioactive waste.

Seismically passive geological formations elsewhere have been found to leak dissolving fluids - mostly water - over time. Unless the formations have the ability to self-seal - like salt - they could present problems for radioactive containment. Radioactive breakdown requires a seal that will last for 10,000 years.

The questions about salt for disposal geologists are numerous: Will the salt body rise over the period of containment, even when the density of surrounding sedimentary formations is equivalent to the salt? What are the chances of a lateral excursion of the salt body, which could uncover the disposed radioactive materials or expose them to seepage from surrounding sediments? Are there ways to evaluate this risk? In the future, if salt body motion threatens exposure of radioactive materials, how difficult would recovery be?

This turn of events is proving interesting for a material so common to the petroleum industry.;

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