Foreign Reports
Foreign Reports Inc. is a Washington, D.C.-based consulting firm for the oil industry, founded in 1956. Foreign Reports advises energy companies, governments, and financial institutions on world energy issues, with a specialization on the Middle East. The president of the firm is Nathaniel Kern.
Overview
Foreign Reports has been in this business for more than 50 years and counts among its subscribers many of the world's largest oil companies—both international and national—as well as many other financial institutions. It reports on political developments that are highly relevant to oil markets, crude
Methods
In providing political intelligence and analysis of world oil markets, Foreign Reports uses three tools:
- Focus: Its Reports focus on political questions that impact oil markets. They are brief (rarely more than two pages), single-topic reports and are transmitted three to five times a week to its clients. They filter out the mass of extraneous intelligence which accumulates every day in today's world.
- Facts: The Reports do more than focus on what is truly relevant; they are also the product of intensive efforts to go to difficult-to-access sources to find out what political decisions are being made and why they are being made. Sources are more comfortable and more open in talking with Foreign Reports because they know that their identities will be protected and that the information they provide will receive highly limited circulation.
- Analysis: Frequently the focus and the facts are not enough to predict uncertain outcomes. Foreign Reports uses its expertise and experience in world oil markets to create a focused product that is relevant to these markets.
History
Foreign Reports was founded in 1956 by Harry Kern, who had previously been foreign editor of Newsweek, in which capacity he traveled extensively throughout the world, but especially in the Far and Middle East.
Newsweek and Time during that period were practically the sole elements of the U.S. news media reporting on world activities in a timely fashion. As foreign editor, Harry Kern also was editor-in-chief of the magazine's International Edition and thus had the privilege of picking who or what would adorn the cover of those editions. Since various foreign leaders, or aspiring ones, angled to get their pictures on the front of Newsweek, Kern was a popular visitor in many foreign capitals. In the process, he managed to befriend both current and future leaders and to gain insights into how their policies were developed.
Foreign Reports grew out of these unique circumstances, as Kern saw a need among growing multinational companies with sizable stakes around the world for a level of international political reporting that surpassed what was then being carried in the daily newspapers of the period. From Newsweek, he brought with him to Foreign Reports two bureau chiefs, one in Beirut and one in Tokyo. From these "bureaus" of Foreign Reports came a steady stream of insightful reporting on the regions they covered. Among its initial major subscribers were the world's major oil companies, but also other industrial and banking concerns.
Oil crises
In the year of its founding, Foreign Reports benefited from one of the first oil crises that have afflicted the Middle East over the years—the 1956 Suez Crisis, with its concomitant closure of the Suez Canal, which was a great boon to notable tanker owners of the time, who were avid clients of Foreign Reports.
Since that time, Foreign Reports has closely covered for its subscribers all the major and minor crises that have bedeviled world oil markets ever since, as well as the broad geopolitical trends that have affected markets and business conditions. The methods it uses to anticipate the unanticipated are relatively straightforward and avoid being unduly alarmist. They are methods that have been refined over time.
Most every crisis begins with a series of rumbles, and the rumbles have to be distinguished from mere bluster and bombast. Knowing who the players are, how they think, what they confide in others, their history of risk-taking and their own domestic political requirements is essential. As any potential crisis builds, often over a period of months, Foreign Reports writes up a contemporaneous narrative, covering the story as it develops, often focusing on key details, which, only later, historians pick up on and piece together.
Foreign Reports and the Middle East
The Middle East, with its vast reserves of
Within two years of Nat's joining the firm, the world of oil and the Middle East had changed dramatically, with prices skyrocketing and the volumes of crude oil being produced in Saudi Arabia growing steadily. The firm's business branched out from providing political reporting on oil in the Middle East into also providing business development assistance to firms wishing to break into new markets in the Middle East, primarily, though not exclusively, in Saudi Arabia. The main areas the firm concentrated in were competitive bidding opportunities in the power and desalination markets. This required an understanding of the technologies, engineering and procurement issues inherent in complex projects, and Foreign Reports brought on board the necessary skilled individuals in these areas.
Changing realities of the oil market
By the early 1980s, the nature of the world oil business began to change in a number of different ways, all of which affected how Foreign Reports would be able to continue to provide services to its client base. The major international oil companies were gradually losing their equity ownership of Middle East oil production and many needed to forge different kinds of relationships with producing governments. In addition, a new class of players in the oil market was gradually emerging as interest and liquidity grew in the futures market. World oil prices had been practically a secret in the early days of Foreign Reports and had been remarkably stable in general during the firm's first 16 years, but it would be another ten years before price volatility would become a major reason for the firm to develop another service for its clients.
As the pace and sophistication of
Current work
Foreign Reports continues to report on political developments that are highly relevant to oil markets, crude oil price formation, and related
- Iraq: Many of the world's major international oil companiesto have much of a physical presence there, and because Western news agencies have a limited number of journalists stationed throughout the country, many energy companies, governments, and financial institutions rely extensively on the political reporting and analysis done by Foreign Reports.
- Iran: The political and economic events in Iran are often discussed, yet rarely understood. Foreign Reports has shown an ability to look beyond the bluster and bombast coming out of Iran, in an attempt to understand what is really making things work in its domestic and international affairs. Recent reports have analyzed President Ahmadinejad's unique economic policies; Iranian involvement in Iraq; the effects of sanctions and the trajectory of the nuclear file; the Iranian risk premium; Iran's winter gas crisis; and Iran's inability to sell the heavy sour crude from its Nowruz and Soroushfields.
- Saudi Arabia: With extensive experience and contacts in Saudi Arabia, Foreign Reports is able to report with confidence on the country with the largest Khuraisfield expected to be brought online in June 2009.