At the heart of Korea’s Onsan Refinery lies a street called “A.I. Naimi Road,” an homage to Saudi Arabia’s oil minister. The reason: state-owned Saudi Arabian Oil Co. holds a 65 percent stake in the complex. Taking a controlling interest last year in South Korea’s third-largest refinery highlights the shifting dynamics of the oil business. With crude prices down by more than half in the past two years, the Saudis and other oil-rich countries are fighting to lock in customers. Asia, which now accounts for 70 percent of Saudi oil exports, is the primary battleground. For Saudi Aramco, as the company is widely known, that means purchasing stakes in refineries, with contracts guaranteeing most of the oil will come from the kingdom. Aramco has invested in three processing facilities in Asia. As Iran prepares to boost its own exports, the Saudis are on the cusp of a dramatic increase in its commitment to the region, eyeing billions of dollars of projects in countries from Indonesia to Vietnam. Owning refineries in Asia is “part of a long-term strategy to consolidate” the Saudi market share in a key region, said Mustafa Ansari, an analyst at the Arab Petroleum Investment Corp., a state-controlled development bank in Dammam, the city at the heart of Saudi oil country. The Saudis pursued a similar path in the U.S. three decades ago to lock in sales as crude prices tumbled, buying into three oil-processing facilities in Texas and Louisiana since 1988. The strategy worked: Motiva Enterprises LLC, the U.S. refiner half-owned by Aramco, imported 65 million barrels of Saudi oil in the first eight months of 2015 — more than triple what ExxonMobil Corp. got from the kingdom in that time, U.S. government data show. Key Moment The push into Asia comes at a pivotal moment in Saudi Arabia. With oil revenue falling, the kingdom is tightening its belt just as a new king ventures away from the kingdom’s traditionally conservative diplomacy. The International Monetary Fund predicts a budget deficit exceeding 20 percent of economic output this year. At Aramco, meanwhile, recently appointed Chief Executive Officer Amin Nasser is overseeing a plan to make the world’s biggest oil company a more integrated operation. Long focused on producing crude, Aramco plans to almost double its refining capacity by 2025 to 10 million barrels a day, equivalent to its current output of oil. That would put Aramco ahead of ExxonMobil as the world’s largest refiner. In Vietnam Other oil-producing countries are pursuing a similar strategy. Kuwait is scheduled to open a refinery in Vietnam that is contracted to get more than 90 percent of its crude from the emirate. Oman owns half of a refinery in India and a smaller stake in a petrochemical plant in China. Iran and Qatar have floated the idea of investing in processing facilities in the region. The Saudis, though, have a big lead. In 2004, Aramco bought 15 per cent of a Japanese refinery with a capacity of 395,000 barrels a day, and in 2007 it paid $1.3 billion for a quarter of a refinery in Quanzhou, China, with a capacity of 240,000 barrels. Aramco originally invested in the Korean facility (with a capacity of 670,000 barrels daily) in 1991, and last year paid another $2 billion to increase its stake from 35 percent. The grand prize — and the biggest headache — is China. The Saudis started to ship oil to China in the late 1990s and had little competition there in the following decade. But the market is getting crowded, with Russia this year topping the Saudis as China’s biggest supplier of crude, and Iraq and Angola making inroads. Aramco has appointed Nabil al-Nuaim, a former director of its venture in Japan, to head its Asia office in Beijing. Al-Naimi, the oil minister, last year promoted Mohammed al-Madi, a Mandarin speaker with a PhD from the China University of Petroleum who once ran the Asia business, as his No. 2 at Opec meetings. China Market Since 2011, Aramco has been talking to China National Petroleum Corp. about a facility with a capacity of 260,000 barrels a day in Yunnan province, a mountainous region that borders Vietnam and Laos. Though the two sides agreed in 2011 that the Saudis would control 40 percent of the venture, there’s been little visible progress. “The biggest problem for Saudi Aramco is that fuel markets in several key Asian countries aren’t liberalized,” said Bassam Fattouth, director of the Oxford Institute of Energy Studies. Officials often require refiners to sell gasoline and other fuels at subsidized prices — or even at a loss — he said. Though China has taken steps to reduce fuel subsidies, it’s still tough to make a profit selling gasoline and diesel there. “We would like to multiply our investments in China,” particularly in refining, Aramco Chairman Khalid al-Falih said in Beijing in March. “While recent reforms will help, expanding our presence in China requires more available investment opportunities” — meaning a more open market. Aramco has been more successful in Indonesia. The Saudis have a preliminary agreement to invest in a refinery with a capacity of 370,000 barrels a day in central Java, and they plan to upgrade two other facilities with Pertamina, the Indonesian state-controlled oil company. Aramco will own half of the Java plant, which will primarily use Saudi crude, according to Indonesia Energy Minister Sudirman Said, who met with Deputy Crown Prince Mohammed Bin Salman, chairman of the council that oversees Aramco, during a visit to Riyadh last month. “We’re optimistic,” the minister said, “that we will start our cooperation with our first refinery and expand our cooperation.”

A dinghy overcrowded with Syrian refugees drifts in the Aegean sea between Turkey and Greece after its motor broke down off the Greek island of Kos, August 11, 2015. REUTERS/Yannis Behrakis SEARCH "YEAREND 2015: MIGRANT CRISIS" FOR ALL 55 PICTURES

An Editorial by

The debate over refugees in Germany has grown divisive. Those in favor are unwilling to recognize the difficulties ahead while those opposed too often veer toward prejudice and xenophobia. Neither is helpful. What’s needed is an atmosphere of critical empathy.

In periods of structural change, books and learned professors tell us, those affected tend to align themselves into three groups. The first group, rarely larger than 25 percent, doesn’t shy away from uncertainty and welcomes change with expectant anticipation. The third group, often larger than the first, hates what is happening out of fear for the new. And the second group, in the middle, waits to see how things will develop. They are uneasy, but not aggressive. They also aren’t inflexible, but they are concerned. And it’s true: That which happens in times of change is new and therefore risky, diffuse and difficult to interpret. The consequences are unclear.

In the refugee crisis, those in Germany who find themselves part of the first group are in the best of spirits — some out of a desire to help their fellow humans and others for more calculated reasons, such as their conviction that immigration is vital for the future of the German economy. The third group feels threatened and is afraid of the outsiders pouring into the country. It is this part of the population out of which the German Tea Party is growing, a movement that furiously rejects all that is foreign, spreads rumors, bad-mouths the chancellor and is disdainful of education, the elite and the media. It is, as described by author Volker Zastrow in the Frankfurter Allgemeine Sonntagszeitung, a “new völkisch movement.”

The first and third groups are easy to document because they are vocal about where they stand. Between them, though, is the second group, the center — and members of this group are quietly unnerved. Who can be trusted? Can we really do it? What is the correct, commensurate approach in times like these?

What Would We Do?

An “either-or” approach is not the way to go, the division between those who growl “We Are the People!” and those who paint “Welcome to Germany!” on their signs — the split into cynicism and naiveté, head or heart. Linguistic warfare of the kind currently on display in the US is likewise destructive. The correct approach would be one of critical empathy or, vice versa, empathetic critique. That would be an approach consistent with Western democracy.

No migrant leaves his or her home casually, frivolously or even with any kind of pleasure at all. It is a far-reaching decision and all who pull up roots know it, even those who are still in their formative years. In 2005, the photographer Markus Matzel and I travelled together with refugees from Ghana to Spain via Togo, Benin, Nigeria, Niger, Algeria and Morocco, a trip that became a SPIEGEL cover story and a book. We spoke to hundreds of people on trucks, in camps and in the Sahara Desert, all of whom had heavy hearts at having bid farewell to loved ones and left home — and all dreamed of finding a life worth living. Many were afraid of what was ahead of them because they knew that the journey, particularly the Mediterranean Sea, could be dangerous — and only a few of them knew that they wouldn’t be welcome in Europe. These hopes and fears are not something that should make us Europeans feel superior. Arrogance doesn’t become us. The migrants who come to us merit empathy — and what choice do those people have who come from war-torn Syria? What would we do in their situation?

For SPIEGEL, empathetic critique means months of stories in which we have profiled refugees, described the migrant trafficking mafia and run cover stories such as “Dark Germany, Bright Germany.” What we have shunned this year are headlines such as “Dangerously Foreign,” a questionable title used by SPIEGEL back in 1997. Media and people in the public spotlight should be cautious. That is always the case, but in times of extreme emotion it is particularly important to find precise formulations and to shy away from inflammatory language.

Creating Mistrust

When Chancellor Angela Merkel was chosen as Time magazine’s Person of the Year, the well-known German lawyer Joachim Steinhöfel tweeted, “Isn’t that nice? Our FDJ-lassie person of the year. 2016 then Robert Mugabe.” (FDJ is a reference to the East German socialist youth group.) Such words, such blustering, adds fuel to the fire. And when an otherwise competent journalist like Michael Hanfeld refers to the journalistically responsible public television stations ARD and ZDF as the “Welcome Broadcasters,” he too is playing with fire. Readers remember such disparagements, and they serve to create mistrust.

Nevertheless, we journalists can (indeed, we must) be forthright about what is happening and draw conclusions about possible developments. When Europe errs and the German government makes mistakes because it misjudges its partners in the crisis or reacts too late or too slow, we will tell our readers about it. Many outlets do exactly the same without becoming xenophobic or racist.

It is difficult to achieve objectivity in a crisis as complex as this one. There is proof for everything — for almost every thesis as well as for its antithesis. There are fewer helpers than there were during the summer, but there are still quite a lot. Regions that have integrated many migrants in the past are prosperous today, but integration only works if the state doesn’t lose control, and Germany at present has lost control. Of course there is a basic human right to asylum, but without an upper limit — enforced, if necessary, with border controls — it will be almost impossible to find a way out of the crisis.

For the media, that means: We have to describe all aspects of the story, with a carefully measured tone and as balanced as possible. Empathy and critique can exist alongside one another — because head and heart belong together.


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