Global Investing

Still there

BP's Macondo Gulf spill would be nothing compared to the effect of a drilling accident in the Arctic, Jessica Bachman reports from "the foulest place in all of Russia."  Scientists and Russian officials are just starting to wake up to the fact that "if something happens on the Arctic Barents Sea in November it would be, 'OK, we'll come back for you in March,'" Jessica says.

But quite what Russia would do about that is not at all clear. The Russian government gets more than 50 percent of its revenues from oil and gas and Prime Minister Putin's stated aim is to keep producing more than 10 billion barrels a day through 2020. Environmentalists aren't the only ones who are worried.

Bank of America-Merrill Lynch’s monthly poll of around 200 fund managers had a few nuggets in the June version, aside from the usual mood-taking.

Gold is too expensive.  A net 27 percent of respondent thought it overvalued, up from 13 percent in May. Then again, the respondents to this poll have reckoned gold is too pricey since September 2009.

The fall in the euro should be tailing off. A net 14 percent reckon the single currency is still overvalued, but that is way down from the net 45 percent who thought so in the May poll.

Industry analysts and executives are sceptical a planned opening of the war-torn country’s oil industry to foreign investment will bring big profits for the Western Oil Majors, or boost output as much as hoped.

While many have lined up to register to bid for Iraqi oil deals, actual bidders may be thinner on the ground and deals may take longer to conclude than the government plans.

John Mitchell, an energy specialist at the Royal Institute of International Affairs said recent rises in Iraqi production to around 2.3 million barrels per day were largely due to the improving security situation. If Iraq wants to make big jumps from here on, it will need to invest a lot of money in, and apply a lot of technology to, its oilfields.