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At issue now: the elections, which Maduro wants to replace with some kind of referendum on the constitution. Venezuela coming under sharp criticism from Nikki Haley, US representative at the UN. Does this lead to sanctions? That's a tough cookie.
http://www.reuters.com/article/us-usa-venezuela-rights-idUSKBN18X1TG
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Rio's net debt now below 2010 levels, and at that point they went on a capex surge. This time we need to see some shareholder friendliness please.
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Small note for political cognoscenti: Boris Johnson was allowed out of the box yesterday, and the response of the Tory faithful was instantaneous. Theresa May is once again outpacing Jeremy Corbyn in Google Trends. Something to do with with 'Tricephalous'.
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Messy.
Crucial point: so far the Gas pipeline to the UAE is still working.
Meanwhile:US intelligence officials believe Russian hackers planted a false news story that prompted Saudi Arabia and several allies to sever relations with Qatar, according to CNN.
FBI experts visited Qatar in late May to analyse an alleged cyber breach that saw the hackers place the fake story with Qatar’s state news agency, the US broadcaster said.
Saudi Arabia then cited the false report as part of its reason for instituting a diplomatic and economic blockade of Qatar, the report said. The blockade was joined by several other Gulf states and has spiralled into the worst diplomatic crisis for the region in decades.
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This is more important than it looks, Saudi prices it's crude streams off Dubai/Oman blends that until yesterday, included some Qatari Oil.
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Peace breaks out between the teapots and regulators? At one point Beijing had threatened to rescind all import quotas.
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80% working interest on 307000 acres adjacent to an existing Oil field. These deals just don't get better than that!
Over the last year we have seen a gradual improvement in Oil deals from sovereigns. We had the improvement in UK N Sea terms, we had the Mexican privatisation on terms that attracted capital, and now Equatorial Guinea gives 80% net. We're starting on the next phase of our great decade long journey at the $50 mark. Phase one was the shales doing their funky stuff. Phase two will be the offshore redesigning itself from the ground up. It's going to be all FPSO's, subsea completions, and only in countries that give spanking great deals.
We're watching Venezuela now. A Maduro collapse would inevitably alter the game, 'new' Venezuela would be looking for Oil deals. The trouble is, Venezuela has stung the Americans, Europeans, Russians and Chinese in the last two decades, and nobody has emerged with either Oil or cash. So the deal would have to be really good.
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Notable that the Saudi crude discount has sharply narrowed in the past two weeks. Saudi-Russian rapprochement has meaning.
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It is always interesting when the minority partner in a consortium discloses the dirt. In this case BP probably is unmoved by 2 tcf of gas in low return Trinidad and Tobago.
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Gazprom clearly cannot stand the idea that Israeli (or Egyptian gas) should reach Italy, and is repitching south stream here. Clearly the opaque Turks, who have sat on the fence on this one for nearly a decade, don't like the fact that the Israeli-Italy pipeline does not pass through Turkey.
The Dam is breaking in the Eastern Med.
Which brings us to Qatar and the Saudis. Now we've all noticed that the Saudi's made nice with the Russians, and vice versa. One of the big issues on the table was Syria, where Qatar has spent a small fortune supporting anyone willing to help it's gas pipeline ambitions to the EU. In recent months Iran has been navel gazing, and discovered it has much Gas, and is thinking a S Pars field development, which would mesh nicely with the Qatari's on the N Pars field. Then out of the blue, the Iranian's blew the dust off this pipeline suggestion:
So to summarise:
~Israel wants to build a pipe to Italy from Leviathan. Eni wants 'in' because of all the Egyptian gas they have found.
~Gazprom is suddenly talking southstream, with the Turks, which is basically a 'blocking' move to prevent any other pipeline moving towards the EU.
~Iran is talking S Pars, and offering development contracts left, right, and centre.
~The Saudi's and Russians have smoked the peace pipe on Syria.
and poor little Qatar, with 30% of the world's LNG market, and a history of being a nuisance suddenly finds itself bouncing around like a cork in a bucket. This by the way, some weeks after they announce a low cost expansion in LNG capacity.
Meanwhile the EU/UK/US are becoming seriously annoyed about all the bombs being thrown around by immigrants from this part of the world.
The funniest bit of all: I haven't said 'Oil' once.
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Mind your eye here, Colombia seems to have having one its periodic convulsions, and its spread to Oil. At issue: distribution of royalty income between centre and municipalities.
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Big shrug.
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It is worth emphasising that on these EIA numbers global production is still cracking on at 1.6mbpd pa, and above demand.
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The market has moved on to the production number. EOG said last night fracking/completion shortages could curtail US shale growth to 700kbpd this year. That's 30% lower than current adds.
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After the fact surely?
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The Niobrara.
Let's start from the top:
Here's the map of North America during the Cretaceous. There's an enormous shallow sea running from the Yucatan to Alaska. From south to north we have Mexico's fecund Oil rocks, the Permian, the Niobrara, the Bakken, the Duvernay, the Oil Sands and Alaska's north slope. Every single one of these locations is intimately connected with Oil.
We know the Wattenburg in Colorado is extremely profitable, and Oily.
Of the top 12 shale wells in the Niobrara only 4 are in the D.J Basin. So the present dominance of the DJ Basin (Anadarko/Noble etc) is simply an economic reaction to the Oil crash.
In May Chesapeake drilled a 'monster' well with 'enhanced completions' and claimed 2.7bn boee of resource in the immediate area. This is the Powder River basin in Wyoming.
Notable: in recent weeks Baker Hughes is reporting some 6-12 rigs have moved into the Niobrara.
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US LNG export completions accelerate from here.
By the end of 2020 the US will be closing in on Australia as #2 worldwide.
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Now construction is not due to start until year end here at Woodfibre, so unfortunately the green/liberal coalition will be in power. This is a small project in an isolated location, so it might squeeze past the greens as a test of concept. It all depends how religious everyone is feeling.
MGL CommentBack to TopFRANKFURT, June 7 (Reuters) - German utilities scored a major victory on Wednesday when the country's top court declared a nuclear fuel tax as illegal, enabling E.ON, RWE and EnBW to claim back about 6 billion euros ($6.76 billion).
In a long-awaited verdict closely watched by investors and analysts, Germany's Constitutional Court said the tax, which was imposed between 2011 and 2016, was "formally illegal and void".
Verdict in.
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Sugar.
World price: $0.14c
US price: $0.27c
US producers and consumers: largely private sector.
Mexico: Gov't sector, about 1m employees!
Background: the US has maintained Sugar import controls since 1789, (there maybe a clause in the constitution on this one!) NAFTA agreement went pear shaped about ten years ago when the gradual ratchet on NAFTA provisions allowed unlimited volumes of Mexican sugar into the USA.
Complicating factors: US exports of high corn fructose syrup to Mexico are large, and sugar buyers have leverage in congress too.
Fact: there has never been free trade in Sugar.
Wilbur Ross comments are quite illuminating:Mr. Ross said “the Mexican side has agreed to nearly every request made by the U.S. industry,” but he added that the U.S. sugar industry overall isn’t ready to support the pact. Washington protects U.S. sugar growers and refiners from some foreign competition, but policy makers also have to take into account confectioners who want easy access to sugar at the lowest possible price.
“We now need to make a definitive agreement, and we’re hoping in that process the industry will come on board,” Mr. Ross said.
Everyone unhappy, aside from the Mexican's who just seem relieved.
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The assumption of rising demand for Potash in China and India has to be questioned. We know nitrate intensity in theses two countries is way too high, we know both have water pollution issues in scale. We know that OECD farm practises have markedly reduced potash intensity per acre. We might be able to infer that China/India farm practises follow the same route.
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No disruption here.
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Gold has now been between $1100 and $1400 for 4 years.
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China turns back to Gold.
Last year the Chinese preferred bitcoin:
But volumes have crashed in China as regulators stepped in to tap shoulders.
It now looks like they are coming back to Gold.
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600/- mt of Aluminium capacity disrupted.
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It is worth mentioning that the new stream of Carajas fines is extremely high grade, at least according to Vale. China's anti-pollution drive is definitely making buyers more circumspect on price vs quality.
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So Beijing has killed the privates sector, and sent out armies of inspectors, yet the AQI's of even the Beijing-Tianjin corridor which has been inspected so many times now, remain stubbornly high. The SOE's are going to have to comply too. President Xi's ambition to have tea on the lawn in Tiananmen square under a blue sky is just not happening, and thats embarrassing.
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Where now at the point where new capacity ideas likely die, which is good, and low quality Chinese domestic capacity cannot make a dime, that's good too. Unfortunately, I am still looking at silver linings.
ALL the markets attention is one what the miners do NEXT. They are making the right sort of noise, but we need ACTION. Capex bad. Dividends and share buybacks good.
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Whats the betting this ends up being permanent?