Who Makes the Rules?

Zadok Hakim – an engineer, entrepreneur, and JAG Energy CEO – keeps a close eye on the global energy sector. In an interview with BRICS Business Magazine, he talks about the differences between doing business in Latin America, Russia, and Asia and shares his insights into the American oil boom.

Mr. Hakim, JAG Energy is doing business with many countries worldwide. Do you have ongoing projects with any companies in the BRICS countries? What business has been particularly valuable to the JAG Group?

At this point in time, our group is dedicated to and focused on the energy market in the Americas, and we are in the early stages of exploring new opportunities with different state oil companies in China, Russia, and Brazil. In the past, JAG initiated an energy transaction project with an oil company in India, but it was difficult to close the deal because of customs barriers upon entry and the way business is conducted in the energy sector in India.

The United States is going from an oil importer to a net oil exporter. How will this change the global energy business? Will this impact, for example, the Chinese energy sector?

I have heard the following statement before: “He who has the gold makes the rules.” If this is the case, then whoever has access and control of the energy sector will control the global economy. Today, China is a powerhouse and is growing at a fast pace. China needs to have access and the capabilities to obtain and use the necessary resources to maintain its growth. The US, as a net oil exporter, will determine what is good and convenient for the US economy, and exercise its control over China when supplying any oil products to maintain its plan going forward. The energy sector is a scarce resource and the US as a net oil exporter will play a major role on the global stage and, in essence, control the destiny and future growth of many countries that need US oil to maintain their plans for development. Only time will tell.

Your company has been working for many years with major Latin American national oil companies. What are the main characteristics of the Latin American energy sector and what makes them different from others?

As we all know, the Latin American energy sector was considered the backyard of the US energy sector until 1990. Even now, most of the Latin energy companies are operated by US companies, and most of the US major oil companies operate, associate, or participate in the energy sector in Latin America. For this reason, we as an American firm don’t see much difference in the Latin energy sector. Of course they are different in culture and customs, but all Latin American energy and state oil companies are aligned with our norms of operation and try to very closely follow the same rules that apply in the US. Now if we compare the Latin energy sector to the Russian or Asian energy industries, then we can see a lot of differences in operation, procedures, and levels of bureaucracy. For example, I can go online and apply to register our firm with any Latin American state oil company, send documentation via the internet, and get an approval of registration from most companies in about three to six months – all on the internet.

Also, I can send and receive a request for products via e-mail to or from an oil company located in Latin America. On the other hand, for us to register or try to register our firm with a company in the oil sector in Russia or Asia, it would take forever. The process is lengthy and convoluted, and if you add the bureaucracy on top of these procedures, it would be costly, time-consuming, and eventually nonproductive. Many Russian and Asian companies require original documentation sent via courier service. They require original letters with a wet seal. These procedures were the norm back in the day, but nowadays, here in the US and in the Latin market, we are moving away from the old customs and procedures and making it easier to trade products using new technologies and innovations to speed the process and, at the same time, make sense of the transaction. Today we don’t have the luxury to wait for weeks to receive an answer to our request. That is why we have the internet and supercomputers. As we can see and observe in the energy market, the US oil companies invest millions of dollars in new technologies, and innovation is on the move. I still remember when we were using courier service to send bid documents to meet certain timetables, but that is in the past and no longer necessary. Today, everything can be done online and in a timely manner without any pressure. This is what I call technology and innovation. The Russian and Asian oil companies are stuck in time, and their policies jeopardize relationships in one way or another and create huge obstacles to doing business with many of them.

Oil trading has always been a tough business. How do you evaluate trading today? How has it been transformed within the last decade?

Oil trading has not changed. The methods and procedures are still the same as ever. The major oil companies still trade their products without any problems. The only difference is the use of new technology and innovations to speed up the transaction. Nowadays, the trading is done at the speed of light, and the major oil companies know how to succeed at that rather easily. It is a small circle of players, the game is limited to a few, and entry is difficult. If you are a small company, it will be difficult to trade or access the market. The trading of oil is reserved primarily for the majors, and it is very hard for a newcomer to enter the trading sector. In this global economy, you need the relationships, the financial support, the knowledge of the moveable market, and the connection with the buyer and supplier. In other words, it is a very difficult and complicated combination. I know of many small companies that have emptied their wallets and wasted countless hours trying to enter the trading sector without any success.

The JAG Group specializes in the distribution and trading of crude oil and finished products with large energy companies in the United States and Latin America. The JAG Group also maintains and runs several terminal facilities in Texas.

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