Mark Latham Commodity Equity Intelligence Service

Switzerland votes in a referendum on Sunday on whether to make a speedy withdrawal from atomic energy production, a move that would reduce nuclear risks but raise reliance on fossil fuels from Germany or imported nuclear power from France.

The opposition Swiss Greens and Social Democrats have pushed for a vote since the 2011 Fukushima disaster in Japan, but the government and industry oppose a quick exit, saying Switzerland would be unable to replace power supplies with renewable energy.

Recent surveys from the gfs.bern polling institute show the "Yes" and "No" camps in the referendum are neck and neck.

Switzerland prides itself on the fact that two thirds of its power is hydroelectric, from reservoirs in the Alps, but it also counts on nuclear energy for a third of its power output.

Anti-nuclear groups are pushing for it to follow neighboring Germany, which shut 40 percent of its nuclear reactors after Fukushima and will close the rest by 2022.

Swiss reactors Muehleberg and Beznau I and II would be closed next year, followed by Goesgen in 2024 and Leibstadt in 2029.

That would leave insufficient time to develop solar and wind alternatives, the government says. Nor would Switzerland be nuclear free, due to a long-term nuclear energy supply relationship with France which relies on atomic power stations for three quarters of its electricity.

"The Swiss would relinquish some of their autonomy in power and they would have to get used to the idea of getting more coal- and gas-fired power from cheaper Germany," said Philipp Goetz, a senior consultant at Berlin-based Energy Brainpool.

Reliance on nuclear energy is being debated across Europe: while Germany is getting out, France is shoring up its industry and Britain recently signed a deal to build its first nuclear plant in decades.

Advertising by the "No" campaign in the referendum asks the Swiss if they really want "dirty power" from Germany. Supporters of the "Yes" vote for a quick exit say Switzerland's nuclear fleet is aging -- Beznau I, launched in 1969, is the world's oldest operating nuclear plant -- and is too close to urban areas. "Safety of the people is a matter of highest importance," said Regula Rytz, a co-president of the "Alliance for an orderly Atomic Exit" and a Green Party lawmaker. The government wants to phase out nuclear power eventually, but energy minister Doris Leuthard has raised the prospect of blackouts if a referendum vote accelerates the process.

"In our view, it would be a disorderly exit," Leuthard said last month. "Suddenly, we will have endangered the energy supply for 1.6 million households."

Swiss power network operator Swissgrid has also said it is unlikely to be ready by 2017 to accommodate the shutdown.

"Our grid infrastructure cannot be quickly modified to handle the changes," the private company said in a statement.

Poyry Management Consulting Switzerland has calculated that the impact on prices for consumers would be small as imports would be relatively inexpensive because of a German capacity surplus.

ECONOMIC COSTS

Germany's move to shut down its nuclear reactors has public backing, but Berlin faces billions of euros' worth of lawsuits as dispossessed operators try to reclaim losses.

Should the Swiss initiative succeed, the nation's utilities have likewise suggested they would pursue more than 7 billion Swiss francs ($6.89 billion) in "economic damages" from having to shut their plants before the end of their lifespan.

Swiss utilities argue the best option, at least for now, is to keep nuclear stations running as long as possible, to recoup their investments and stock up on decommissioning and storage reserves amid a transition to different sources of power.

Alpiq, which owns slices of Goesgen and Leibstadt, has branded a voluntary early shutdown "economically unacceptable." "Regardless of how the vote goes, exiting nuclear power will cost billions of dollars," an Alpiq spokesman said in an email. "For Alpiq, under the present conditions, continuing to operate the plants is the one option that will cause least damage."

http://www.reuters.com/article/us-swiss-nuclearpower-idUSKBN13J1PA

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Copper cable companies in trouble!

Copper prices rose birth grimace, cable companies are hurt?

Waste Headlines 2016-11-24 17

Whether the recent surge in copper prices suddenly make copper terminal companies by surprise? SMM It is understood that the cost of cable companies uplift caused some corporate earnings compressed, and some intermediate processors of copper rod business has therefore been liquidated, even more shocking is that cable companies will then sell the finished product back to the copper plant. But overall, as companies adopted various countermeasures, cable companies have been hit much.

Copper prices rose birth grimace

1, the cable and then sell the finished stripping copper Enterprises:

It SMM understood that, because copper prices pulled up sharply, causing some cable companies produce finished goods inventory increase, leading cable companies will be part of the industry appears finished and then sold to scrap copper wire stripping corporate profits thus obtained more than direct sales of finished .

2, copper rod business is breach of contract rate rise

Due to the recent rally in copper cable companies make terminal under more cost pressure, especially the part of the cable manufacturer's product prices are mostly locked in advance.There are copper rods companies said that cable companies have recently when its breach of contract, an adverse effect on the part of the copper rod business. But it is understood, because the maintenance of long-term credit transactions, default minority enterprises.

3, refined copper scrap spreads widening use ratio rises

In addition, due to the recent copper prices pulled, refined copper spreads widening sharply, according to SMM statistics, November 15 the average price of refined copper spreads up to 3371 yuan / ton, for the January 2011 highs.

Section copper rod manufacturers use raw materials, used in a proportion of copper has increased, partly refined copper rod production companies, said copper rod-making enterprises increased their market share in the near future have a certain impact.

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Science and Academia are shifting on Climate Change

http://www.nature.com/news/carbon-is-not-the-enemy-1.20976?WT.mc_id=TWT_NatureNews

Carbon has a bad name.

But carbon — the element — is not the enemy. Climate change is the result of breakdowns in the carbon cycle caused by us: it is a design failure. Anthropogenic greenhouse gases in the atmosphere make airborne carbon a material in the wrong place, at the wrong dose and for the wrong duration.

Rather than declare war on carbon emissions, we can work with carbon in all its forms. To enable a new relationship with carbon, I propose a new language — living, durable and fugitive — to define ways in which carbon can be used safely, productively and profitably. Aspirational and clear, it signals positive intentions, enjoining us to do more good rather than simply be less bad.

It is easy to lose one’s way in the climate conversation. Few of the terms are clearly defined or understood. Take ‘carbon neutral’. The European Union considers electricity generated by burning wood as carbon neutral — as if it releases no CO2 at all. Their carbon neutrality relies problematically on the growth and replacement of forests that will demand decades to centuries of committed management.

Such terms highlight a confusion about the qualities and value of CO2. In the United States, the gas is classified as a commodity by the Bureau of Land Management, a pollutant by the Environmental Protection Agency and as a financial instrument by the Chicago Climate Exchange.

A new language of carbon recognizes the material and quality of carbon so that we can imagine and implement new ways forward. It identifies three categories of carbon — living, durable and fugitive — and a characteristic of a subset of the three, called working carbon. It also identifies three strategies related to carbon management and climate change — carbon positive, carbon neutral and carbon negative.

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Odebrecht to sign $2 billion leniency deal in Brazil graft probe: source

Brazilian engineering conglomerate Odebrecht SA has agreed to plea bargains and a massive leniency deal under which it would pay around 7 billion reais ($2.1 billion) in fines for its role in Brazil's biggest corruption scandal, a person familiar with the matter said.

The deals sent shockwaves through Brazil's political establishment as they could incriminate as many as 200 lawmakers for taking graft money from Odebrecht , which prosecutors said had a department dedicated to bribery.

If approved by the judge leading the "Operation Car Wash" probe into corruption at state-controlled oil firm Petrobras, the Odebrecht deal would be the world's largest plea and leniency agreement.

The Salvador, Brazil-based company told Reuters it has no comment on "an eventual deal with the courts." A spokesperson for the prosecutor general's office declined to confirm any deal had been signed.

A source close to the negotiations, however, told Reuters that more than 70 executives at Odebrecht, Latin America's largest engineering company, would sign plea bargain deals on Wednesday or Thursday.

Under the deals, the executives would become states witnesses and provide prosecutors with details of bribes paid to executives of Petrobras and other state companies, plus kickbacks to dozens of politicians.

A separate leniency deal for Odebrecht is almost ready and will be signed within a few days, said the source, who spoke on condition of anonymity due to the sensitivity of the matter.

A settlement figure of 7 billion reais reported by local media was broadly accurate, the source said, without confirming the amount.

Such a deal involving admission of guilt by the company, return of embezzled funds and payment of fines, would allow Odebrecht to bid for government contracts again by lifting a suspension imposed after the Petrobras scandal broke in 2014.

Reuters reported this month that the deal would exceed the record 2008 agreement in which German engineering company Siemens AG paid $1.6 billion to U.S. and European authorities for paying bribes to win government contracts.

Prosecutors are expected to take months to take plea statements and verify their details, prolonging political instability caused by a corruption scandal that contributed to the removal of leftist president Dilma Rousseff this year.

Political turmoil in Congress could delay passage of fiscal reforms by new President Michel Temer and delay Brazil's recovery from its deepest recession since the 1930s.

The price on Odebrecht's 7.5 percent perpetual bond jumped more than 1 cent on the dollar to 54 cents in midafternoon trading. At that price, yields slid to 14.05 percent from about 14.25 percent.

Odebrecht has been accused by prosecutors of overcharging state-controlled oil company Petróleo Brasileiro SA and other state companies for contracts and paying bribes to politicians.

The agreement is key to the restructuring of the company's 110 billion reais in debt.

Since August, law firm E. Munhoz Advogados has been advising the talks with banks and investors.

Marcelo Bahia Odebrecht, Odebrecht's former chief executive officer and the scion of the family that owns the conglomerate, has been in jail since June 2015 and was sentenced to 19 years.

The patriarch of the family-owned business, Emilio Odebrecht, is also making a plea statement to prosecutors.

http://www.reuters.com/article/brazil-odebrecht-corruption-idUSL1N1DO0DY

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US Manufacturing PMI Rebounds To 13 Month Highs On Post-Election Optimism

Following the bump in Eurozone PMIs this morning, Markit reports November US manufacturing at 53.9 (better than 53.5 expected) and its highest since Oct 2015, showing "further signs of factories and their customers moving away from destocking to inventory-building amid a more optimistic outlook."

However, hope in the PMI survey seems to be decoupling from reality in actual production.

Under the covers, everything looks awesome with new orders rising (highest since Oct 2015), employment spiked to one of the largest of the year, and output jumped to its highest since March 2015.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“US manufacturers enjoyed a strong post-election bounce in November, further tilting the scales toward the Fed hiking rates in December. Many factories reported that demand from customers had picked up as uncertainty about the election result cleared. Domestic demand rose especially sharply, helping to make up for subdued export growth, linked in turn to the strong dollar.

“The survey also found further signs of factories and their customers moving away from destocking to inventory-building amid a more optimistic outlook, accompanied by an upturn in hiring. The increase in employment was one of the largest seen so far this year.

“Inflationary pressures remained muted, with average prices charged barely rising, despite some further upward movement in many commodity prices.

“The buoyant post-election picture of the manufacturing economy and signs of increased optimism about the futurewill further fuel the conviction that the Fed will raise interest rates at its December 14th meeting, and may also raise the possibility that policymakers might be inclined to tighten somewhat more aggressively in 2017 than previously thought, although much of course also depends on the new government’s policy framework.”

http://www.zerohedge.com/news/2016-11-23/us-manufacturing-pmi-rebounds-13-month-highs-post-election-optimism-decouples-produc

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Anglo productivity up 40%

Mining company Anglo American, which has reduced the number of assets in its portfolio from 68 in 2012 to 42 now, is producing more product from those 42 assets than it was with the 68.

As a consequence, the product produced per person is currently 40% higher than it was four years ago.

With that, the company has seen a 33% reduction in operating costs and is on track to deliver a $1.6-billion cost improvement and a $1-billion cash flow improvement when it reports in February.

While continuing to adhere to its announced strategy of reducing the asset number still further to 37, Anglo currently finds itself in a position to be considerably more price assertive when dealing with offers for its mining businesses outside of diamonds, platinum and copper – the chosen three.

It is becoming increasingly comfortable to continue operating and investing in its iron-ore, thermal coal, coking coal and other assets earmarked for disposal, until offers arise that match or better the price tags set for them – and also benefit the countries concerned.

Anglo CEO Mark Cutifani makes the point that Anglo’s sale of Rustenburg platinum mine to South Africa’s Sibanye Goldwas right for South Africa because Sibanye is committed to investing in the asset for the long term, whereas Anglo American Platinum has other investment priorities.

Meanwhile, it is continuing to go all out to meet all the commitments to shareholders, which could mean that it will have only 37 assets when it reports in February, as it is not deviating from its disposal strategy despite the improved commodity price climate.

It laid the foundation for change in 2015, began experiencing the benefits of that this year buoyed by better commodity prices, and expects to be set up for the future as it goes into next year.

http://www.miningweekly.com/article/anglo-productivity-up-40-2016-11-23

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What Exactly is Trump saying on Climate Change?

Trump to scrap Nasa climate research in crackdown on ‘politicized science’

Nasa’s Earth science division is set to be stripped of funding as the president-elect seeks to shift focus away from home in favor of deep space exploration.

…

Bob Walker, a senior Trump campaign adviser, said there was no need for Nasa to do what he has previously described as “politically correct environmental monitoring”.

“We see Nasa in an exploration role, in deep space research,” Walker told the Guardian. “Earth-centric science is better placed at other agencies where it is their prime mission.

“My guess is that it would be difficult to stop all ongoing Nasa programs but future programs should definitely be placed with other agencies. I believe that climate research is necessary but it has been heavily politicized, which has undermined a lot of the work that researchers have been doing. Mr Trump’s decisions will be based upon solid science, not politicized science.”

TRUMP: HIS OWN WORDS VERBATIM:

TRUMP: You know the hottest day ever was in 1890-something, 98. You know, you can make lots of cases for different views. I have a totally open mind.
My uncle was for 35 years a professor at M.I.T. He was a great engineer, scientist. He was a great guy. And he was … a long time ago, he had feelings — this was a long time ago — he had feelings on this subject. It’s a very complex subject. I’m not sure anybody is ever going to really know. I know we have, they say they have science on one side but then they also have those horrible emails that were sent between the scientists. Where was that, in Geneva or wherever five years ago? Terrible. Where they got caught, you know, so you see that and you say, what’s this all about. I absolutely have an open mind. I will tell you this: Clean air is vitally important. Clean water, crystal clean water is vitally important. Safety is vitally important.
And you know, you mentioned a lot of the courses. I have some great, great, very successful golf courses. I’ve received so many environmental awards for the way I’ve done, you know. I’ve done a tremendous amount of work where I’ve received tremendous numbers. Sometimes I’ll say I’m actually an environmentalist and people will smile in some cases and other people that know me understand that’s true. Open mind.
JAMES BENNET, editorial page editor: When you say an open mind, you mean you’re just not sure whether human activity causes climate change? Do you think human activity is or isn’t connected?
TRUMP: I think right now … well, I think there is some connectivity. There is some, something. It depends on how much. It also depends on how much it’s going to cost our companies. You have to understand, our companies are noncompetitive right now.
They’re really largely noncompetitive. About four weeks ago, I started adding a certain little sentence into a lot of my speeches, that we’ve lost 70,000 factories since W. Bush. 70,000. When I first looked at the number, I said: ‘That must be a typo. It can’t be 70, you can’t have 70,000, you wouldn’t think you have 70,000 factories here.’ And it wasn’t a typo, it’s right. We’ve lost 70,000 factories.
We’re not a competitive nation with other nations anymore. We have to make ourselves competitive. We’re not competitive for a lot of reasons.
That’s becoming more and more of the reason. Because a lot of these countries that we do business with, they make deals with our president, or whoever, and then they don’t adhere to the deals, you know that. And it’s much less expensive for their companies to produce products. So I’m going to be studying that very hard, and I think I have a very big voice in it. And I think my voice is listened to, especially by people that don’t believe in it. And we’ll let you know.

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Shanxi coal firm to invest in UK power plant

A Shanxi-based company principally engaged in the coal business will invest 3 billion yuan ($440 million) in the Hinkley Point power plant in the United Kingdom.

Wintime Energy Co Ltd, a company principally engaged in the exploitation, operation, washing, selection and processing of coal, recently made the investment, together with China General Nuclear Power Corporation.

The two companies are to jointly carry out several clean energy projects, including Guangdong Lufeng Power Station, Hinkley Point C power plant and some non-nuclear power plants, according to a project cooperation agreement signed between the two companies on Nov 21.

CGN signed a final agreement on the 18 billion pound ($23.4 billion) Hinkley Point C power plant two months ago with the French utility EDF and the British government. The project has been hailed as a gateway to promote Chinese nuclear technology.

He Yu, chairman of CGN, said China's nuclear technology being used abroad will lead to more countries having confidence in Chinese reactors and pushing forward its global market development.

Wintime Energy, which mainly operates in the domestic market, will become a major partner of the Chinese investment consortium for the project by laying out 10 percent of the total investment in Hinkley Point, which is around 3 billion yuan.

Chinese power firms are currently pacing up mergers and acquisitions at home and abroad, motivated by their financial strength, poor domestic markets and policy support.

"The developers' balance sheets are now the strongest in at least five years, enhancing their financial strength for mergers and acquisitions," said Joseph Jacobelli, senior analyst with Asia Utilities and Infrastructure Research of Bloomberg Intelligence.

"China's power supply has grown at a pace faster than demand, leading to sinking plant utilization rates, especially for coal-fired power. Government policy also strongly supports local power companies' expansion abroad."

Profit reporting shows that the performance of domestic coal companies turned weaker than earlier expectations in 2015, due to overcapacity, poor demand and lower prices, with 39 listed coal companies reporting a net loss of 5.1 billion yuan in 2015, plummeting 1,120 percent year-on-year.

Wintime Energy Co Ltd, together with other 18 companies however, still reported net profit last year.

The company mainly operates in Shanxi province. In addition, it is also involved in hotel business, as well as the production and sale of building materials.

According to the company, participation in the overseas project, while in accordance with the government's going global strategy and in line with the Belt and Road Initiative, still presents certain risks in investment decision-making and management.

In addition, the challenge for Chinese enterprises related to the electric power industry in operating overseas may also lie with the understanding of the local market, especially in developed economies such as the UK, said Jacobelli.

http://www.chinamining.org/Investment/2016-11-23/1479880609d78043.html

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FX Markets Signal Brexit-Like Disruption As Italy Referendum Looms

FX traders are pricing in as big a potential disruption event for Italy's referendum as they did (correctly) for the Brexit vote. So-called 'currency-vigilantes' are buying EURUSD protection across the Dec 4th date of the vote in size as Italian bond spreads (over Bunds) push to 30-month highs.

Anticipated euro-dollar price swings for the period of the Italian vote surged. Two-week implied volatility climbed to 12.5 percent, approaching the highest since the aftermath of the Brexit vote in June... and the premium for that protection across the referendum date is now at its highest since Brexit...

As Bloomberg reports, selling the euro before Italy’s vote “makes a lot of sense given the potential for more expansionary fiscal and tighter monetary policy in the U.S., coupled with the increased focus on political risk and the increased likelihood of more policy from the ECB,” said James Athey, a money manager in London at Aberdeen Asset Management Plc, which oversees more than $400 billion.

“For FX, politics is the new economics,” HSBC Holdings Plc analysts including David Bloom wrote in a note last week. “QE has constrained the bond market, distorted equity prices and narrowed yield differentials. This means FX is uniquely placed to reflect political developments.”

Trump’s election has boosted speculation that Italians will reject the reforms on which Renzi has staked his political future. Deutsche Bank AG economists say there’s a 60 percent chance the vote will fail, while political risk-advisory firm Eurasia Group changed its call this month, and now assigns a 55 percent probability to a “no” vote.

“Markets are anticipating two risks at the moment: reflation and populism in Europe,” said Marc Chandler, head of currency strategy at Brown Brothers Harriman & Co. in New York. “If one thinks that the Italian referendum is going to be lost, and it’s not priced in, selling the euro -- which is also being weighed down by other factors -- seems the path of least resistance compared with a rate position.”

http://www.zerohedge.com/news/2016-11-21/fx-markets-signal-brexit-disruption-italy-referendum-looms

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Japan's Fukushima hit by 7.3 magnitude earthquake

A 7.3 magnitude earthquake hit offshore Fukushima early Tuesday, leading to a coal-fired power plant being shut and the suspension of oil product shipments from northeastern Japan.

The earthquake hit at a depth of 10 km offshore Fukushima in northeastern Japan at 5:59 am local time Tuesday (2059 GMT Monday), the Japan Meteorological Agency said.

Tsunami warnings were issued for Fukushima and Miyagi prefectures in the northeast, and advisories for the Pacific Coast in Aomori, Iwate, Ibaraki and Chiba prefectures, the JMA added.

The impact of the 7.3 magnitude earthquake is given below, based on company reports as well as information from the Ministry of Economy, Trade and Industry. METI information is current as of 9:30 am local time.

COAL:

The 600 MW No. 9 coal-fired Nakoso unit operated by Joban Joint Power Company had an automatic shutdown as a result of the earthquake, and it was not immediately clear when it will be restarted, according to METI.

OIL:

Japan's largest refiner JX Nippon Oil & Energy on Tuesday suspended truck and waterborne oil product shipments from its 145,000 b/d Sendai refinery in the northeast and the 252,500 b/d Kashima refinery on the east coast as a result of the earthquake, a company official said.

JX had restarted its truck oil product shipments at its Sendai refinery at 12:40 pm local time but its waterborne shipments at its Sendai and Kashima refineries remain suspended, the official said.

Refining operations were not affected, the official added.

JX and Cosmo Oil have also restarted oil product shipments from the Hachinohe terminal at Aomori in northern Japan and Onahama terminal in Fukushima in the northeast after suspensions earlier in the day, according to company officials.

Cosmo Oil's Shiogama truck oil products shipments have also been restarted after suspension, according to a company official.

Waterborne and truck oil product shipments from Idemitsu Kosan's Hachinohe and Shiogama terminals have also been restarted after suspension earlier in the day, a company official said.

Refining operations and oil product shipments at the Chiba facilities of Idemitsu Kosan and Cosmo Oil were unaffected by the earthquake, company officials said.

NUCLEAR:

A cooling system for nuclear fuel pool had an automatic shutdown of the No. 3 reactor at the Fukushima-2 nuclear power plant in the northeast at around 6:10 am but the system was restarted at 7:47 am local time, Tokyo Electric Power Company Holdings said.

METI reported that there were no other abnormalities at nuclear power plants, including Fukushima-1 and Tohoku Electric's Onagawa plant, all of which were currently not operating.

GAS:

METI said that no incidents were reported at gas facilities following the earthquake.

METALS:

Operations were suspended at the 260,000 mt/year Onahama copper smelter in Fukushima prefecture early Tuesday following the earthquake and tsunami warning, a spokesman for Mitsubishi Materials said.

The melting furnace was shut for safety inspections, he added.

http://www.platts.com/latest-news/oil/tokyo/cross-commodity-factbox-japans-fukushima-hit-27713768

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Quarterly: All Change!

In which we move our focus from Gold/Oil to 'Activity'.

Politics matters. Image title

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Trump outlines plans for first day in office, meets with Cabinet hopefuls

U.S. President-elect Donald Trump outlined plans on Monday for his first day in office, including withdrawing from a major trade accord and investigating abuses of work visa programs, and met with Cabinet hopefuls at his Manhattan office tower.

Trump met with Oklahoma Governor Mary Fallin, Democratic U.S. Representative Tulsi Gabbard and former Texas Governor Rick Perry. But he announced no further appointments, keeping candidates and the public guessing about the shape of the administration that will take office on Jan. 20.

Fallin, Gabbard and Perry were the latest of dozens of officials who have made their way across the opulent lobby of Trump Tower for talks with the Republican president-elect in a relatively open - and unconventional - transition process since his election victory on Nov. 8.

Trump, who has not held a news conference since his election, issued a video on Monday evening outlining some of his plans for his first day in office, including formally declaring his intent to withdraw from the Trans-Pacific Partnership, or TPP, trade deal, which he called "a potential disaster for our country."

The 12-nation TPP is Democratic President Barack Obama's signature trade initiative and was signed by the United States earlier this year but has not been ratified by the U.S. Senate.

The president-elect said he would replace the accord with bilaterally negotiated trade deals that would "bring jobs and industry back onto American shores."

"My agenda will be based on a simple core principle: putting America first. Whether it’s producing steel, building cars or curing disease, I want the next generation of production and innovation to happen right here on our great homeland, America, creating wealth and jobs for American workers," he said.

Japanese Prime Minister Shinzo Abe said on Monday the TPP "would be meaningless without the United States."

Trump said he would cancel some restrictions on producing energy in the United States on his first day in office, particularly shale oil and "clean coal," which he said would create "many millions of high-paying jobs."

He promised to direct the Labor Department to investigate abuses of visa programs for immigrant workers. The main U.S. visa program for technology workers could face tough scrutiny under Trump and his proposed attorney general, U.S. Senator Jeff Sessions, a longtime critic of the program.

Trump had made eliminating regulations and withdrawing from the TPP central to his campaign, but he sent mixed signals during the campaign about his views on visa programs including the main H-1B visa for high-tech industry workers.

'WE'VE GOT TO GET IT RIGHT'

Trump has so far picked two Cabinet members and three top White House advisers, but aides said he was not expected to make further announcements on Monday.

"They could come this week, they could come today, but we're not in a rush to publish names," Kellyanne Conway, a senior adviser, told reporters. "We've got to get it right."

Trump spoke often with reporters camped out at his New Jersey golf course over the weekend, but has not held a traditional news conference to talk about his priorities. He held an off-the-record meeting with a group of television anchors and executives on Monday afternoon and was scheduled to meet with print media representatives on Tuesday.

The Washington Post reported that four participants at Monday's meeting described it as a contentious but generally respectful session.

They told the Post that Trump singled out reporting of his campaign by CNN and NBC that he considered to be unfair.

Trump also returned to Twitter on Monday night, saying "many people" would like to see Brexit campaigner Nigel Farage as British ambassador to the United States. "He would do a great job!"

Farage, who helped lead the successful referendum fight for Britain to leave the European Union, spoke at a Trump rally during the U.S. campaign and visited the president-elect after his victory.

Trump's first meeting on Monday was with Iraq war veteran Gabbard, a representative from Hawaii who backed U.S. Senator Bernie Sanders in his unsuccessful 2016 Democratic presidential nominating contest against Hillary Clinton.

The "frank and positive" discussion focused on the war in Syria, counterterrorism and other foreign policy issues, Gabbard said in a statement. She did not say whether a Cabinet role was part of the discussion.

Gabbard has veered from Democratic Party positions at times, backing policies cracking down on immigration to the United States by Muslims.

Fallin told reporters she was not offered a position but discussed "a wide range of topics" with Trump. The Republican governor's spokesman said that included a focus on the Interior Department, an agency whose responsibilities include oversight of oil and gas leases on public lands.

Former Republican U.S Senator Scott Brown of Massachusetts told reporters he had a "great" meeting about veterans' issues with Trump.

Trump also met with former House of Representatives Speaker Newt Gingrich and Elaine Chao, the U.S. labor secretary under former President George W. Bush, advisers said.

Trump's transition team said Perry, the former Texas governor, was being considered for Cabinet posts including defense, energy and veterans affairs.

http://www.reuters.com/article/us-usa-trump-idUSKBN13G1KH

"The United States, the most powerful economy in the world, the second-largest emitter of greenhouse gases, must respect the commitments that were made," he said. "It's not simply their duty, it's in their interest."

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Queensland’s new groundwater law a ‘risk’ to resource projects – miners

Despite objections from the resources sector and dire warnings about the impact it would have on the development of coal projects, the Queensland Parliament has backed the Environmental Protection (Underground WaterManagement) and Other Legislation Amendment (EPOLA) Bill.

In essence, the Bill is aimed at strengthening the effectiveness of the environmental assessment of underground waterextraction by resource projects, while allowing for the ongoing scrutiny of the environmental impacts of underground water extraction during the operational phase of a resource project.

The Bill is also aimed at improving the ‘make good’ framework in the current Water Act, ensuring that the administering authority for the Environmental Protection Actis a decision- maker for specific applications relating to environmental authorities.

Further, the Bill will ensure that mining projects that are advanced in their environmental and mining tenure approvals are appropriately assessed for their impact on the environment and underground water users, and that opportunities for public submissions and third-party appeals are provided before underground water is taken in a regulated area for mine dewatering purposes.

It is this last objective that is causing havoc among the resource companies in Queensland, which are arguing that additional approval requirements for projects already in the development pipeline could impact on project scheduling and financial investment decisions.

In its submissions to the Parliamentary committee inquiry into the Bill, the Queensland Resources Council (QRC) pointed out that, to date, the coordinator-general had made decisions and imposed and recommended conditions relating to groundwater on coordinated resource projects, while the Land Court had made recommendations about specific groundwater conditions.

In particular, detailed groundwater models had been prepared by several miners as part of the environmental-impact statement (EIS) process and the QRC noted that the proponents had proactively entered into ‘make good’ agreements with potentially affected landholders.

The QRC added that mining projects in Queensland were also subjected to strict environmental requirements through the environmental-impact assessment process and extensive review through the Independent Environmental Scientific Committee and the Commonwealth government’s Environmental Protection and Biodiversity Conservation Act approval process.

“These Commonwealth processes extensively scrutinise any impact on or [extraction] of groundwater and explicit conditions [are] imposed to deliver environmentaloutcomes,” the QRC said.

The industry body said the changes imposed by the EPOLA Bill would further increase the duplication with the “increasingly redundant” Commonwealth groundwater laws, unless there was a way of recognising earlier public consultation.

The QRC told the committee that there should be no requirement for an associated water licence for advanced mining projects that had already completed an EIS process and developed a detailed groundwater model that identified potentially affected third-party landholders and entered into ‘make good’ agreements with the majority of the landholders.

However, the Queensland Parliament seemed to disagree, ratifying the EPOLA Bill in early November.

http://www.miningweekly.com/article/queenslands-new-groundwater-law-a-risk-to-resource-projects-miners-2016-11-18

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Radical Thoughts.

With the blockchain, Wal-Mart will be able to obtain crucial data from a single receipt, including suppliers, details on how and where food was grown and who inspected it. The database extends information from the pallet to the individual package.

“It gives them an ability to have an accounting from origin to completion,” said Marshal Cohen, an analyst at researcher NPD Group Inc. “If there’s an issue with an outbreak of E. coli, this gives them an ability to immediately find where it came from. That’s the difference between days and minutes.”

Work to be done

Global trade may have peaked. Future supply chains will be less dependent on distant, low-cost labour and natural resources. The race to return home is on, and the world is watching.

It's no longer necessary for retailers to stock goods themselves

In the early days of e-commerce, retailers would carry inventory for each product listed on their website. However, in today's model many retailers never physically touch the products they sell online. Instead, online orders for these products are routed to a third party for fulfilment. Both third-party logistics providers and niche e-commerce fulfilment houses offer services in which they will pack and ship items on behalf of retailers.

The world of 3D printing has officially booked a new high fashion runway show, now that luxury fashion house Alexander McQueen has developed an edgy, one-of-a-kind 3D printed umbrella as part of its autumn/winter 2016-17 collection. I am not ashamed to admit that I used to watch a lot of “America’s Next Top Model” and “Project Runway,” and so I was especially excited to write this story…those qualify as high fashion, right?

The limited edition piece is patterned in a black skull motif – too bad it wasn’t out in time for Halloween! It features an ergonomic, 3D printed handle, which perfectly fits the grasp of an actual human fist. Spooky…

But something interesting, and a little unexpected, is happening. FFF machines print using reels of plastic filament (usually PLA or ABS). The choice of materials has been limited because the filaments are typically produced by small-scale companies, serving a low-end market. But we’re now seeing large materials firms entering the filament market, and this can’t be explained by a sudden, unexpected growth in the number of people who want to print novelty plastic Eiffel Tower models at home.

One of the stars of the show of K 2013 was Arburg’s Freeformer. The Germany-based injection moulding machine maker surprised many with a machine that made rapid prototypes using fused droplets of extruded polymer to build up a 3D shape, in a process akin to FFF but without the need for filament.

A selling point of the Freeformer was the freedom to use materials that weren’t available in filament form because it created a melt stream from ordinary granules.

Material choice has limited FFF in the past. According to Covestro, one of the large material firms which entered the 3D printing filament market, whilst ‘‘over 3,000 materials are available for conventional component manufacturing, only about 30 are available for 3D printing’’.

And the process has suffered by association with the ‘homebrew’ hobbyists. Proper, professional, 3D printers used proper, professional 3D printing processes such as stereolithography (SLA) and selective laser sintering (SLS), with high resolution results. FFF has a tendency to create visible stripes, indicating the individual layers of print that have built up on top of one another, leading to a perception of it being a lower-quality technique.

Three years on, FFF is now being treated as a proper, professional process by proper, professional companies and the problem of limited material choice is being blown away. Covestro demonstrated new materials for 3D printing at K 2016. This portfolio of new materials included TPU powders for SLS and liquid PU-based resins for SLA, but also filaments for FFF from flexible TPUs to high strength PC.

Love them or hate them, industrial robots are here to stay. While there are plenty of critics who are against the modern advancement and widespread adoption of robotic technology, these devices can be of great benefit to employees, business owners, and even mainstream consumers. In fact, robotics has already found its way into the day-to-day operations of several different industries.

Here is a look at four of them:

Manufacturing

Generally speaking, manufacturing operations provide the perfect environment for the large-scale implementation of robots and automation technology. In fact, the International Federation of Robotics has forecasted the introduction of no less than 1.3 million industrial robots to global manufacturers by 2018. This is in addition to the robotics already in use around the world.

Tesco Towers: supermarket enters the fray with a radical new solution to the housing crisis

Typically, flats are built on top of existing buildings. Recent developments have involved flats being constructed off-site, then crane-lifted into place on a building.

It won’t be long before the cities of the world begin to look very differently than we know them now. 3D printed houses and other buildings have gone from a distant fantasy to a reality seemingly overnight, and 3D printed construction technology is advancing at an almost dizzying pace. New companies – and new technologies – are springing up everywhere, each with the goal of taking 3D printed architecture and construction further than anyone ever has before.

Cazza Construction Technologies may be a young company, but they’re already making significant progress towards an ambitious goal – the construction of 3D printed smart cities across the world. It may sound like a far-fetched goal, but Cazza has the the technology and expertise to back it up. CEO Chris Kelsey is only 19 years old, but has already built and sold a major tech company. He created the app development company Appsitude, which brought in over $10 million in revenue per year, when he was only 17.

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Rosneft approves $17 billion rouble bond programme

Russia's largest oil producer Rosneft is to return to the county's domestic bond market after a two-year absence with a programme worth 1.071 trillion roubles ($16.6 billion), the company said on Thursday.

Rosneft said the money raised might be used for foreign projects, new upstream business as well for planned refinancing of outstanding debt. The bonds issued under the programme would have a maturity of up to 10 years.

Rosneft, which is under Western sanctions due Moscow's role in the Ukraine crisis, faces limits on raising funds outside Russia.

A large Rosneft bond issue at the end of 2014 coincided with a steep slump in the rouble.

Russia's central bank declined to comment on Thursday on the possible effects of a new Rosneft bond programme on the country's money and forex markets when contacted by Reuters.

In December 2014, Rosneft had issued 625 billion roubles of bonds in the domestic bond market. This caused volatility in domestic money markets, which had expected the company to use the money to buy foreign currency. The company said at the time that proceeds were not used to buy foreign currency.

In January 2015, Rosneft placed another 400 billion roubles in domestic bonds. It has not been active in the domestic bond market since then.

Rosneft said in a statement the latest bond programme would be conducted in separate issues taking into the account the timing of investments and planned refinancing.

A Rosneft spokesman declined immediate comment on when first bond issue might take place and the amount.

The company also said its subsidiaries would be able to buy its bonds as part of the programme.

Rosneft also said its board has also approved Gazprombank as the arranger for the bond issue and it also might buy up to 173.2 billion roubles in Rosneft bonds. A Gazprombank spokesman was not available for immediate comment.

Under a state privatisation plan, Rosneft is to buy a 19.5 percent stake from parent company Rosneftegaz in a deal worth around 700 billion roubles. Russia's budget should receive funds from this privatisation by end-2016.

http://www.reuters.com/article/russia-rosneft-bonds-idUSL8N1DP24B

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Woodside moving forward with Browse, Scarborough projects at similar pace

Woodside Petroleum is moving forward with its Scarborough area gas fields and its delayed Browse liquefied natural gas (LNG) project at a similar rate, and can't say at this stage which will be developed first, its CEO told Reuters.

Woodside agreed in September to buy half of BHP Billiton's stake in the Scarborough area fields off Western Australia for $400 million, in a move that could help speed a decision to develop a project that has been stuck on the drawing board since its discovery in 1979.

With LNG prices depressed, the Australian oil and gas company earlier shelved its Browse project.

"I honestly don't know," Chief Executive Peter Coleman said, when asked which project would be developed first during an LNG conference in Tokyo on Thursday.

"We are going to be moving both at the same pace ... Both are very active at this point in time and I wouldn't want to say which one will go first because I will probably get it wrong," Coleman said.

At a time of plentiful supply, LNG buyers are not committing to long term contracts.

"On the buyers side, they are looking for flexibility in contracts. In our view, they are not ready to sign up to a lot of long green field project contracts," Coleman said.

LNG suppliers have been put in a tough spot as demand from the world's top importers of the past few decades, Japan and South Korea, has declined due to slowing economies, more efficient use of power, and switches to coal and renewables. That has led to a number of projects like Browse being delayed.

It is too early to say whether Scarborough would be able to supply gas to the North West Shelf LNG plant, Australia's oldest and biggest, when its existing fields start to run out of gas in the next decade, Coleman said.

http://www.reuters.com/article/lng-japan-woodside-idUSL4N1DP3JX

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Oil Companies Shoulder Pain Of Downturn With Lower Output

The world's listed oil companies have slashed oil output by 2.4 percent so far this year during one of the industry's worst downturns as OPEC battles to agree on its first production cut since 2008.

The aggregated production of 109 listed companies that produce more than a third of the world's oil fell in the third quarter of 2016 by 838,000 barrels per day from a year earlier to 33.88 million bpd, data provided by Morgan Stanley showed.

By comparison, the Organization of the Petroleum Exporting Countries produced 33.64 million bpd in October. OPEC has struggled to agree on a joint production freeze or cut to support oil prices before its Nov. 30 meeting in Vienna.

In the second quarter of 2016, the companies reduced production by nearly 930,000 bpd, according to Morgan Stanley.

The firms include national oil champions of China, Russia and Brazil, international producers such as Exxon Mobil and Royal Dutch Shell, as well as U.S. shale oil producers like EOG Resources and Occidental Petroleum .

The drop in oil companies' output is particularly compelling given the increase in 2015, when third-quarter production rose by some 1.9 million bpd.

"Clearly, we have seen a large swing in the year-on-year trend in production, from strong growth as recent as a year ago, now to steep decline. This is the outcome of the strong cutbacks in investment," Morgan Stanley equity analyst Martijn Rats said.

Capital expenditure for the companies combined more than halved from $136 billion in the third quarter of 2014 to $58 billion in the same period this year, according to Rats.

Oil executives and the International Energy Agency have warned that a sharp drop in global investment in oil and gas would result in a supply shortage by the end of the decade.

Large oilfields, such as deepwater developments off the coasts of the United States, Brazil, Africa and Southeast Asia, typically take three to five years and billions in investment to develop.

Cost reductions and increased efficiencies have only partly offset the drop in production as a result of the lower investment. Technological advancements have also helped boost onshore U.S shale production.

"These declines should temporarily soften in 2017 as new fields are coming on-stream in Canada, Brazil, the former Soviet Union and U.S. tight oil probably stabilises," Rats said.

"Still, unless investment rebounds relatively soon, this steep downward trend is likely to resume in 2018 and beyond."

http://www.rigzone.com/news/article.asp?hpf=1&a_id=147538&utm_source=GLOBAL_ENG&utm_medium=SM_TW&utm_campaign=FANS

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Oil India soars 4% ahead of board meet to consider bonus issue

State-run oil exploration company Oil India shares gained 4 percent intraday to hit fresh 52-week high of Rs 444.20 Thursday ahead of board meeting for bonus issue.

"The board of directors would consider issue of bonus shares in the board meeting scheduled to be held on November 28, 2016," the company said in its filing. On the same date, the board members will also approve unaudited financial results for the quarter and half year ended September 30, 2016 (Q2) on standalone basis.

Therefore, the trading window for insider trading will be closed between November 18-30 (both days inclusive), Oil India said.

The last bonus issue, which was in the ratio of 3 shares for every 2 shares held, was announced by the company in 2012. The Government of India holds 67.64 percent stake in the company that has 39 oil exploration blocks in India and 15 blocks globally.

Read more at: http://www.moneycontrol.com/news/buzzing-stocks/oil-india-soars-4-aheadboard-meet-to-consider-bonus-issue_8012301.html?utm_source=ref_article

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Russia Tries to Dress Up Oil Freeze as Cut Amid OPEC Pressure

Facing pressure from OPEC to make a significant output reduction, Russia reiterated its readiness to freeze oil production at current levels, arguing that the offer amounted to a cut compared with next year’s plans.

A production cap would mean Russia pumping 200,000 to 300,000 barrels a day less than planned in 2017, Energy Minister Alexander Novak told reporters in Moscow on Thursday. That means a freeze would be “quite a difficult and harsh situation for us as our plans envisioned an output growth next year,” he said.

OPEC, which is seeking to finalize its own supply cuts of as much as 1.1 million barrels a day next week, has asked non-members to cooperate by cutting daily production by 880,000 barrels for six months starting January, Azerbaijan’s Energy Minister Natig Aliyev said in a newspaper article.

The Organization of Petroleum Exporting Countries reached a preliminary agreement in September to reduce collective output to 32.5 million to 33 million barrels a day, compared with the group’s estimate of 33.6 million in October. Talks on individual production quotas continued this week with the aim of securing a final pact by the ministerial meeting in Vienna on Nov. 30. It will meet with non-OPEC producers to discuss cooperation on Nov. 28.

While Russia, the largest crude supplier outside OPEC, has reiterated its preference for a freeze over a cut for several months, members of the group including Saudi Arabia had been expecting the nation would eventually join a cut, according to people briefed on the matter. If Russia and other non-OPEC producers balk at the idea of cutting output, the exporters’ group could reconsider pushing ahead, the people said.

Russia’s position “has remained unchanged and consistent,” Novak said Thursday. “As our president said earlier, we are ready to freeze production at the current levels.” Russian President Vladimir Putin on Monday reaffirmed Russia is willing to freeze, adding he sees no obstacles to an OPEC agreement this month after the group made major progress in overcoming differences.

Russia drafts its 2017 budget using an oil-production estimate at about 11 million barrels a day compared to an average 10.9 million expected this year. Output increased to a record 11.205 million barrels a day in November, near a post-Soviet record. The country has raised its production forecasts several times a year since 2015.

A delegation from Moscow is scheduled to meet OPEC experts in Vienna on Monday. Azerbaijan and Mexico are also set to participate, according to people familiar with the arrangements. Azerbaijan’s Aliyev co-chaired similar talks last month.

"While there’s actually nothing new from Russia today, Moscow is changing its rhetoric to show its commitment to a deal,” said Alexander Kornilov, an analyst at Aton LLC in Moscow. “The new wording shows Russia is trying to convince OPEC partners.”

https://www.bloomberg.com/news/articles/2016-11-24/russia-tries-to-dress-up-oil-freeze-as-cut-amid-opec-pressure

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India Cavern for crude is now full

Vizag unit helps India join the US, Japan, China that have strategic reserves.
India’s first massive underground strategic storage facility at a rock cavern built at Vizag to store crude oil for emergency requirements of the country is all tanked up.

Visakhapatnam: India’s first massive underground strategic storage facility at a rock cavern built at Vizag to store crude oil for emergency requirements of the country is all tanked up. The facility, developed by India Strategic Petroleum Reserves Ltd (ISPRL), has been commissioned. It was to have been commissioned by Prime Minister Narendra Modi last year. The filling of another cavern built at Mangalore has also begun in October.

The ISPRL planned caverns at Vizag, Mangalore and Pudur. The Vizag’s cavern storage capacity is 1.3 million metric tonnes and the facility is a 7.5-km long tunnel with several caverns to store various grades of crude oil. The roof of these caverns is 162 metres below sea level. Its initial capa-city of 1 MMT was later increased by 0.3 MMT, and cost Rs 1,129 crore. The total capacity of the thr-ee facilities will be 5.3 MMT and can meet 90 days of energy needs in case of oil supply disruption due to any emergency.

Consignments of the crude oil were brought in Very Large Crude Carrie-rs and unloaded at HPCL’s single point moo-ring berth at Vizag port. “Under Strategic Petro-leum Reserve project Ph-ase-I, underground rock caverns for total storage of 5.33 MMT of crude oil at three locations, Visak-hapatnam (1.33 MMT), Mangalore (1.50 MMT) and Padur (2.5 MMT) ha-ve been created. The Vis-akhapatnam and Mangalore storage facilities have already been commissioned. The facility at Vizag has already been filled up and nearly one-fo-urth of Mangalore storage facility has also been filled. The storage facility at Padur has also been completed. The total app-roved expenditure is Rs 4,098.35 crore of which Rs 3,552.59 crore has alrea-dy been disbursed,” said Union petroleum minister Dharmendra Pradhan in reply to Congress Lok Sabha member Veer-appa Moily. India joined countries like the US, Japan, and China that have strategic reserves with the Vizag facility coming into operation.

http://www.deccanchronicle.com/nation/current-affairs/241116/visakhapatnam-cavern-for-crude-is-now-full.html

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Bruised Oil Nations Seek Solace in Fastest Growing Guzzler

As the oil market anxiously awaits OPEC’s decision next week, some of the countries hardest hit by the biggest price crash in a generation may have found a lifeline outside of the group.

India, the world’s fastest growing crude consumer whose appetite for fossil fuels is forecast to surge in the next two decades, will likely decide next month on whether to advance $15 billion to Nigeria for future supplies. Essar Oil Ltd., operator of India’s second-biggest refinery, has struck a $13 billion deal which may lead to the plant processing more oil from Venezuela.

With prices languishing at under $50 a barrel, about 55 percent below its 2014 peak, smaller sellers have been the most vulnerable to falling revenues. Nigeria has been pushed to the brink of its first full-year economic contraction in 25 years, while Venezuela struggles to ward off a debt default at its national oil company. Now the two crude producers are finding their own means of survival as OPEC seeks to resolve an impasse over output cuts aimed at stabilizing the market.

“Countries like Venezuela and Nigeria, reeling under financial crisis, will challenge any OPEC decision that works against their economic interests,” said Kunal Agrawal, an analyst with Bloomberg Intelligence. “These countries want to secure long-term supply contracts with the likes of India and China.”

India, which imports more than two-thirds of its oil from the Middle East and whose demand is forecast to double through 2040 to 10.3 million barrels a day, is seeking to diversify its purchases to guard against the geopolitical risks tied to the world’s biggest suppliers like Saudi Arabia and Iraq. Over 80 percent of India’s crude is imported, and with a burgeoning population and an economy projected to grow 7.4 percent next year, companies such as the U.K.’s BP Plc and Russia’s Rosneft PJSC are eyeing a piece of an oil retail market already worth $117 billion.

Rosneft has indicated it intends to process crude from its share of oil fields in Venezuela at Essar’s refinery after the Russian company’s acquisition of the facility at Vadinar in western India. Nigerian oil minister Emmanuel Ibe Kachikwu said last month that the West African nation is looking to sign a pact with the Indian government for $15 billion in advance payments for its oil in December.

Welcome Respite

“You can’t depend on one country, but you have a basket of countries from where you take,” said Mukesh Kumar Surana, chairman of India’s state-run refiner, Hindustan Petroleum Corp. “So there will be opportunities for smaller producers.”

Those deals are a welcome respite for Nigeria and Venezuela. Nigeria, which counts oil as its biggest foreign-exchange earner, could see its gross domestic product shrink 1.7 percent this year, according to the International Monetary Fund, its first full-year contraction since 1991. Venezuela has faced widespread shortages of food and essential products as the price of oil, which accounts for 95 percent of its foreign currency earnings, collapsed.

The Latin American nation’s state-owned oil company, Petroleos de Venezuela SA, has struggled with its finances this year after the price it receives for its exports has plummeted 63 percent from over $100 a barrel in 2014. PDVSA, as the company is known, said last month that creditors holding $2.8 billion of bonds that come due over the next year agreed to extend maturities in a highly anticipated swap that will buy the company some time.

http://www.bloomberg.com/news/articles/2016-11-23/bruised-oil-nations-seek-solace-in-fastest-growing-crude-guzzler

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IEA expects oil investment to fall for third year in 2017

Investment in new oil production is likely to fall for a third year in 2017 as a global supply glut persists, stoking volatility in crude markets, the head of the International Energy Agency (IEA) said on Thursday.

"Our analysis shows we are entering a period of greater oil price volatility (partly) as a result of three years in a row of global oil investments in decline: in 2015, 2016 and most likely 2017," IEA director general Fatih Birol said at an energy conference in Tokyo.

"This is the first time in the history of oil that investments are declining three years in a row," he said, adding that this would cause "difficulties" in global oil markets in a few years.

Oil prices have risen to their highest in nearly a month, as expectations grow among traders and investors that OPEC will agree to cut production, but market watchers reckon a deal may pack less punch than Saudi Arabia and its partners want.

The Organization of the Petroleum Exporting Countries meets next week to try to finalise to output curbs.

U.S. shale oil producers will increase their output if oil prices hit $60 a barrel, meaning OPEC will have to walk a fine line if it curtails production to prop up prices, Birol said last week. Brent crude stood around $49 a barrel on Thursday.

He said that level would be enough for many U.S. shale companies to restart stalled production, although it would take around nine months for the new supply to reach the market.

http://www.reuters.com/article/iea-oil-investment-idUSL4N1DP16F

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End of downturn at hand? Operators' behavior suggests so: Fuel for Thought

The way US E&P operators are adding rigs, planning activity ramp-ups, preparing to raise capex and looking forward to renewed production growth in 2017, you'd be tempted to write finis to a harrowing two-year industry downturn.

During third-quarter 2016 earnings calls in the last few weeks, oil operator after operator unveiled what became surprisingly repetitive near-term plans: stirring the production pot by slipping a rig or two into the field during the final months of this year, kicking up the capital budget modestly and then returning to production growth in 2017.

'Third quarter results tell the story of good, old fashioned American ingenuity,' Robert W. Baird analyst Ethan Bellamy told S&P Global Platts. 'Costs are down, productivity is up, and capital is flowing into the most productive regions.'

CEOs certainly displayed sunnier dispositions on conference calls than a couple of quarters ago when the specter of what then was a recent period of $30/b oil was fresh in their minds.

But now, with a new year looming, oil executives seemed energized by their victory over a low-priced oil world after two years of squeezing costs and efficiencies from oil fields and developing precise completion designs to extract still more oil and gas per well. So they appeared willing to open the purse strings a bit next year-and if oil prices cooperated, rev up the drilling machine and production spigot in the months to come.

But beneath their show of confidence, oil executives appeared mindful of the sobering and ongoing volatility of oil prices. Most clearly conveyed that any stepped-up activity would be done prudently until price signals indicated otherwise. Larger operators in particular said higher prices of mid-$50s/b to $60/b were needed for next-stage growth.

Paul Horsnell, head of commodities research for Standard Chartered Bank, noted industry still is not investing according to the oil price curve. Front-month WTI closed Friday at $45.69/b, while forward prices in June and December 2017 settled at $49.49/b, and $50.60/b, respectively.

'On average, they are maybe planning on the basis of the curve minus at least $5' per barrel, Horsnell said. 'So, not overly aggressive.'

But even as the outlook for 2017 turns up, independent E&Ps as a group showed financial losses from July to September for the eighth straight quarter, he said.

Despite losses, rig count growing

While the losses were half that of three months before and only 15% of the loss in the same 2015 period, 'it was another loss on top of a lot of other losses,' he said.

Q3 results 'show an industry that is behaving like survivors from a storm: very happy to be alive, but still facing the task of clearing up a lot of wreckage,' Horsnell added.

While 153 oil rigs have been added in US fields during the last six months, and 19 in the last week alone, not all operators are necessarily planning production growth. Some are preparing for flat output next year. ConocoPhillips is eyeing flat to 2% growth in 2017 output while others, like Whiting Petroleum and Murphy, could hold next year's output flat with Q4 2016.

On the other hand, several operators have forecasted double-digit output growth, notably from the Permian Basin in West Texas and New Mexico: Pioneer Natural Resources expects 13% to 17% production increase next year that includes 23% to 27% oil output growth. Concho Resources sees 20% per year total production growth for 2017-2019 and Diamondback Energy eyes more than 30% output growth.

To meet those estimates in the Permian Basin, operators added 50 rigs in Q3 and so far in Q4 have added another 26 to a total of 229 rigs, nearly 100 more than all other major US shale plays combined.

Although the EIA has forecasted US oil production down 110,000 b/d or 1.2% for 2017 year over year, the agency 'may be underestimating the capital efficiency being realized by US E&Ps, UBS analyst Bill Featherston said in a recent investor note. And that could potentially 'prolong the oil price recovery or lower the medium-term normalized oil price.'

UBS' own oil production model, based on EIA data, currently calls for 2017 volumes to be down roughly 340,000 b/d year over year or 4%, and 2018 output up around 85,000 b/d or 1% year on year.

While oilfield service and equipment providers recently cautioned they would likely soon take back some of the 15% to 30% or more in price concessions granted to oil companies early in 2015, this may not happen until late next year or possibly even 2018, Robert W. Baird analyst Dan Katzenberg said.

http://www.oilvoice.com/n/End-of-downturn-at-hand-Operators-behavior-suggests-so-Fuel-for-Thought/90663a04aff3.aspx

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Canacol Energy announces new gas sales contracts, private pipeline, and 2017 and 2018 gas forecast

Canacol Energy Ltd. is pleased to provide the following update concerning the execution of 100 million standard cubic feet of new gas sales contracts to existing and new customers located on the Caribbean coast of Colombia, and the initiation of a private pipeline venture that will deliver 40 MMscfpd of new gas production to new and existing customers located on the Caribbean coast in 2017.

New Gas Sales Contracts

Further to its November 10, 2016 announcement of a new transportation agreement with Promigas S.A. to ship 100 MMscfpd of new gas production, the Corporation has negotiated 4 new take or pay gas sales contracts totalling 100 MMscfpd with existing and new thermoelectric, refining, industrial, and commercial customers located in Cartagena and Baranquilla. The contracts all commence in December 2018, have a term of between 5 and 10 years, and are with large, established offtakers. The pricing of these new contracts, combined with the Corporation's current multi-year take or pay gas contracts, and the private pipeline sales as described below, results in an average contract price of approximately US$ 5.00/mcf for the anticipated 230 MMscfpd of production in December 2018.

Private Pipeline

A Special Purpose Vehicle ('SPV') has been formed to build a new private gas pipeline connecting the Corporation's gas facility located at Jobo to the Promigas operated pipeline at Sincelejo. The private pipeline will consist of approximately 80 kilometers of flowlines and two compression stations, and is designed to transport 40 MMscfpd of Canacol's gas to new and existing customers located in Cartagena under take or pay contracts at existing prices. Surveying and permitting for the new pipeline is underway, with first gas transportation anticipated in December 2017. The SPV is anticipated to raise approximately US$ 50 million in a combination of equity and debt, outside of Canacol, to construct and operate the pipeline.

Corporate Gas Production Forecast 2017 and 2018

Based upon the above mentioned new private gas pipeline, the new gas sales contracts, and the recently announced agreement whereby Promigas will add 100 MMscfpd of new transportation capacity to the existing pipeline to Cartagena and Baranquilla by December 2018, the Corporation is planning to increase current gas sales from 90 MMscpf to 130 MMscfpd in December 2017, and to 230 MMscfpd in December 2018.

The Corporation expects to have approximately 190 MMscfpd of productive capacity from the 11 existing wells drilled in its Nelson, Palmer, Nispero, Trombon, Clarinete and Oboe gas fields combined with two remaining 2016 development wells (Clarinete 3 and Nelson 8) being drilled prior to year end 2016. In addition, the Corporation's facility located at Jobo has 190 MMscfpd of gas processing capacity.

http://www.oilvoice.com/n/Canacol-Energy-announces-new-gas-sales-contracts-private-pipeline-and-2017-and-2018-gas-production-forecast/9a53f1f9c8c0.aspx

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Iran oil exports into EU increase

The ramp up we have seen in Saudi, Iraqi - and particularly - Iranian oil exports. The chart below highlights how Iranian oil exports have flowed back into the EU after the lifting of sanctions at the beginning of the year.

Iranian flows have also increased into Europe as Nigerian flows have dropped off, with West African exports rising to the U.S. East Coast as Bakken production has drifted lower and as crude by rail economics have become increasingly unfavorable. The chart below also highlights the recent increase in Libyan exports as production returns. The vast majority of Libyan oil exports head to Europe:

Colombia, FARC rebels to sign new peace deal on Thursday

Colombia, FARC rebels to sign new peace deal on Thursday

A new peace accord between Colombia's government and Marxist FARC rebels will be signed on Thursday and sent to Congress for approval, President Juan Manuel Santos said on Tuesday, bringing a formal end to the 52-year civil war ever closer.

The revised document will be signed in Bogota between FARC leader Rodrigo Londono and Santos, who won the Nobel Peace Prize last month for his efforts to end the conflict with the insurgent group.

"We have the unique opportunity to close this painful chapter in our history that has bereaved and afflicted millions of Colombians for half a century," the president said in a televised address.

The government and the Revolutionary Armed Forces of Colombia (FARC) have been in talks in Havana, Cuba for the last four years, hammering out a deal to end a conflict that has killed more than 220,000 and displaced millions in the Andean country.

The government published the revised peace deal last week in a bid to build support after the original draft was rejected in an Oct. 2 referendum amid objections it was too favorable to the rebels.

Santos and Londono signed the original deal two months ago in an emotional ceremony before world leaders and United Nations Secretary General Ban Ki-moon.

The decision to ratify the revised accord in Congress instead of holding another referendum will anger members of the opposition, particularly former President Alvaro Uribe who spearheaded the push to reject the original accord and wants deeper changes to the new version.

"This new accord possibly won't satisfy everybody, but that's what happens in peace accords. There are always critical voices; it is understandable and respectable," said Santos, 65, warning another plebiscite could divide the nation and put in danger the bilaterial cease-fire.

The expanded and highly technical 310-page document appears to make only small modifications to the original text, such as clarifying private property rights and detailing more fully how the rebels would be confined in rural areas for crimes committed during the war.

Uribe has criticized it as just a slightly altered version of the original and wants rebel leaders to be banned from holding public office and for them to be jailed for crimes.

The FARC, which began as a rebellion fighting rural poverty, has battled a dozen governments as well as right-wing paramilitary groups.

An end to the war with the FARC is unlikely to end violence in Colombia as the lucrative cocaine business has given rise to dangerous criminal gangs and traffickers.

http://www.reuters.com/article/us-colombia-peace-idUSKBN13H1U5

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Ecopetrol announces 2017 investment plan

-During 2017 Ecopetrol will invest approximately USD 3,500 million.

-Nearly USD 2,850 million will be allocated to exploration and production. The planned investment in this segment doubles the amount budgeted for 2016, in line with the 2020 Business Plan.

-Investment in exploration will be increased from USD 282 million in 2016 to USD 650 million in 2017.

-The Ecopetrol Group will continue to produce an average of about 715 thousand barrels of oil equivalent per day during 2017. This production level lays the foundation for Ecopetrol's expected increase in production by 2020 of between 760 and 830 thousand barrels of oil equivalent per day, depending on international crude oil prices.

Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) reports that its Board of Directors has approved an investment plan for approximately USD 3,500 million for 2017.

This plan addresses the goals set forth in the 2020 Business Plan, allocating more than 80% of investments to profitable exploration and production projects.

Exploration and production projects will largely focus on developing key production assets and identifying Colombian onshore and offshore resources, maintaining our position in foreign assets.

More than 95% of investments will be made in Colombia, with the remainder made abroad.

The investments of the Ecopetrol Group are broken down by segment below:

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The midstream and downstream segments will complete ongoing projects and required maintenance, ensuring reliable, efficient and safe operations.

The funds required to finance the Ecopetrol S.A. investment plan will come from internal cash generation, with no need to incorporate additional net financing.

Under this plan, the Ecopetrol Group will continue to demonstrate its commitment to ethics, clean and safe operations and stronger ties to communities. Our operations will continue to give priority to excellence in HSE, our ongoing promotion of employee satisfaction and our commitment to development by all of our employees and stakeholders. Innovation and knowledge generation will be levers for growth.

http://www.oilvoice.com/n/Ecopetrol-announces-2017-investment-plan/818d639c8572.aspx

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New infrastructure aims to increase takeaway capacity of natural gas from Utica region

How diverse can so-called Diversified Independents* remain? More capital is being allocated to tight oil, increasing their weighting to this resource hotspot. We use our benchmarking by investment, financials, value, production and reserves to understand the importance of tight oil in the next phase of portfolio development for this peer group.

Get our exclusive benchmarking analysis — companies included: Anadarko, Apache, ConocoPhillips, Hess, Marathon, Murphy Oil, Noble Energy, Occidental Petroleum and Repsol.

Outlook for
Diversified Independents: http://www.woodmac.com/lp/highest-returns/diversified-independents/?utm_source=twitter&utm_medium=social&utm_campaign=sm-buyside-diversified-org&utm_content=o

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Singapore's SGX, Japan's TOCOM to jointly develop Asian LNG market

Singapore Exchange (SGX) and Japan's Tokyo Commodity Exchange (TOCOM) said on Tuesday they have signed a memorandum of understanding to jointly develop Asia's liquefied natural gas (LNG) market, as well as electricity futures.

As part of the accord, the exchanges plan to explore opportunities like co-listing LNG derivatives, as well as synergies between the pair's market distribution networks.

SGX, which listed Asia's first electricity futures in 2015, will also share its experience with its Japanese counterpart, Loh Boon Chye, SGX's Chief Executive Officer, said in a statement.

"We also look forward to drawing on SGX's experience in electricity futures, as a liquid electricity market is closely linked to the development of the LNG market," said Takamichi Hamada, President and Chief Executive Officer of TOCOM.

SGX began pricing LNG in October 2015 when it launched its Singapore Sling index, assessing cargoes on a free-on-board Singapore basis. In September this year it launched a second index, the North Asia Sling.

The latter index, which will price the super-cooled fuel for the Japanese, South Korean, Taiwanese and Chinese markets, was seen by market participants as a signal that the market continues to take pricing signals from traditional buyers in North Asia.

Singapore, already Asia's main trading location for oil and refined fuel products, and Japan, the world's biggest consumer of LNG, had previously been in competition to establish Asia's main LNG hub.

The city-state of Singapore has so far been seen to lack a big enough consumer base to warrant a real trading hub, although investors and market participants appreciate Singapore's well established trading regulations, as well as the fact that English is its operating language.

On the other hand, Japan's status as the world's biggest consumer was seen by LNG producers as creating a market that was too importer-biased.

With the two now cooperating, these concerns may be addressed, making it harder for other aspirant trading hubs - including Seoul and Shanghai - to succeed.

http://www.reuters.com/article/us-sgx-tocom-lng-idUSKBN13H0LU

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Uganda names Sinopec among firms interested in refinery

Oil firms including China's Sinopec have expressed an interest in developing Uganda's planned oil refinery and an investor for the project will be selected by February 2017, a top government official said on Tuesday.

The East African country, which discovered oil fields in 2006 but has yet to start production, began trying to secure a private investor for the project nearly two years ago, but a previous tendering process collapsed earlier this year.

Energy and Mineral Development Minister Irene Muloni told an oil conference in Kampala that some new firms had expressed interest in the project and that fresh talks were underway.

"There are a number of companies that have expressed interest in joining us in the development of this refinery," Muloni said, adding interested parties included China's China Petroleum & Chemical Corp (Sinopec).

"We hope by February next year we should have identified a lead investor," she said.

Ugandan oil fields were found in the Albertine Rift Basin along its border with the Democratic Republic of Congo, but wrangling over taxes and the viability of the refinery have been blamed for delaying production, which is now projected for 2020.

Uganda said it was negotiating with Russia's RT Global Resources on a final agreement in 2015, but the talks broke down this year. Subsequent negotiations with a consortium led by South Korea's SK Engineering also collapsed.

Kampala estimates crude resources at 6.5 billion barrels, of which 1.4 to 1.7 billion barrels is considered recoverable.

This year, Uganda agreed with Tanzania to develop a pipeline to help export its crude, snubbing Kenya which wanted to host the export route via its newly-discovered oil fields.

Muloni said France's Total, one of the three explorers operating in the country alongside China's Cnooc and Britain's Tullow Oil, had indicated it would take up a 10 percent stake in the refinery project.

Kenya and Tanzania have also committed to taking up stakes of 2.5 percent and 8 percent respectively, Muloni said.

http://www.reuters.com/article/uganda-oil-idUSL8N1DN266

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Record ME oil loadings

Middle East OPEC members (Iran, Iraq, Kuwait, Qatar, Saudi, UAE) had record crude oil export loadings last week

@ClipperData

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USGC distillate exports to Europe at 1 mil mt in Nov to date

A total of about 1 million mt of US Gulf Coast distillates could land in Europe and North Africa in November, according to an estimate based on Platts trade flow software cFlow.

S&P Global Platts calculates cargo volumes based on the size of each ship and standard diesel export sizes from the US to Europe.

In total, 25 vessels were spotted on the US Gulf Coast-Europe route, including eight heading towards the Mediterranean. Of the 17 ships sailing towards Northwest Europe, nine are heading towards the Amsterdam-Rotterdam-Antwerp hub.

Some cargoes originally expected to discharge in Europe diverted over the course of last week, resulting in a lower arbitrage volumes week on week. This notably included the Medium Range tanker Turquoise, originally headed for Milford Haven in the UK and now en route for Brazil.

Trading sources said that on the back of healthy demand, Latin America was competing with Europe to attract US barrels, even though arbitrage economics to ship distillate across the Atlantic remain poor.

In October, about 1.16 million mt of distillates were exported from the US Gulf Coast to Europe.

http://www.platts.com/latest-news/oil/london/usgc-distillate-exports-to-europe-at-1-mil-mt-21131379

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Oil Speculation Rule Gets Final CFTC Push Before Trump Takeover

Timothy Massad, the top U.S. derivatives regulator, is trying to push ahead before President-elect Donald Trump takes office with controversial rules that clamp down on traders’ ability to speculate in oil and other commodities, according to people familiar with the matter.

Massad recently gave his latest plan that caps the number of contracts a trader can have to the Commodity Futures Trading Commission’s other two members, the people said. That move raises the prospect that the chairman is trying to schedule a vote before the end of President Barack Obama’s term. Consumer advocates and Democrats have pushed for years for the so-called position limits as a way to reduce excessive speculation that they blame for driving up commodity prices.

The new draft takes into account some industry demands, giving certain traders more leeway to speculate than originally proposed, said one person, who asked not to be named since the plan hasn’t been made public. The version by Massad, who has said repeatedly even prior to the election that he wanted to get the regulation done, may still draw a fight though from exchanges, banks and Republicans who have railed against previous iterations of the rule.

Commissioner J. Christopher Giancarlo, the panel’s only Republican who’s likely to become acting chairman in January, has been a consistent critic of the limits. Industry opponents are already lobbying lawmakers and CFTC officials to try to thwart the effort, according to people familiar with the meetings.

A spokesman for the CFTC declined to comment.

“Deeply Controversial”

“The position limits rulemaking remains a deeply controversial proposal,” Representative Mike Conaway, a Texas Republican who chairs the House’s Agriculture Committee which oversees the CFTC, said in a letter on Friday to Massad urging him not to move ahead with his efforts. “The final supplement the commission proposed remains far short of a workable rule.”

The surprise election of Trump now makes it more likely that Massad, an Obama nominee who said before the election that he planned to stay on the job until his term ended in April, will step down sooner. While Massad hasn’t yet scheduled a vote on the rule, circulating it through commissioners’ offices is a step toward finalization. The measure would require majority approval by the three-person panel.

The effort could also all be for naught if the next Congress decides to review the regulation and override it, which they could do before it could be implemented next year.

“He took too long,” said Tyson Slocum, energy program director at advocacy group Public Citizen, which has urged for the limits to be put in place. “Having a hard, federally-enforced limit takes a lot of autonomy away from the exchanges.”

Rule Rejected

The rule that the CFTC proposed in 2013 set limits in 28 commodities for derivatives traded on exchanges such as those owned by CME Group Inc. and Intercontinental Exchange Inc., and in the swaps market. That version came after a federal judge in 2012 rejected the agency’s previous final rule in a case filed by the International Swaps and Derivatives Association and Securities Industry and Financial Markets Association.

While the surging gas prices that prompted Congress to include position limits in the 2010 Dodd-Frank Act have subsided, some lawmakers still want to see the rule finished. Senator Debbie Stabenow, the ranking Democrat on the Senate Agriculture Committee, said in an e-mailed statement on Friday that she supports Massad’s plan to complete the rule.

“Position limits are an important tool to ensure Wall Street speculation does not lead to high energy costs for families at home or at the pump,” she said.

http://www.bloomberg.com/news/articles/2016-11-21/oil-speculation-rule-gets-final-cftc-push-before-trump-takeover

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Venezuela's PDVSA says made bond payments despite delay talk

Venezuela's state oil company PDVSA said on Monday it had made bond coupon payments due this month on its 2021, 2024 and 2035 bonds despite a JPMorgan report of delays.

"The information about a PDVSA default spread by the enemies of the fatherland is totally false," PDVSA president and Oil Minister Eulogio Del Pino said on Twitter.

Earlier, JPMorgan analysts said PDVSA had delayed $404 million in payments though they expected the company to make the missing disbursements within a 30-day grace period.

"This highlights the cash difficulties and mismanagement of PDVSA with regards to its liabilities," the analysts wrote.

But PDVSA, in a statement, said it had paid "punctually" its obligations due this month for 2021, 2024 and 2026 papers, and was also "in the process of executing" interest payments for the 2035 bond.

"In this way, PDVSA honors its commitment ... ratifying the financial solidity of Venezuelans' main industry," it said.

The JPMorgan report had noted that PDVSA did make a $135 million coupon payment on its 2026 bond, citing information provided by paying agent Citi and settlement group Clearstream.

Citi did not immediately respond to request for comment.

Prior to PDVSA's response, Torino Capital had said the reported delay appeared to be "a technical mistake" rather than an indication of default.

It noted that payments were being made "through accounts not conventionally used for these purposes" and that some PDVSA management changes had occurred, both of which could have contributed to a delay.

"Our tentative conclusion is thus that the delay in payments likely reflects administrative and technical issues of the type that the 30-day grace period is designed to handle," wrote its chief economist Francisco Rodriguez in a note to clients.

"We do not believe it reflects a change in authorities' willingness to service its international obligations."

Venezuela bonds trade at distressed levels as a result of investor concern that a steep recession and spiraling inflation will leave it without resources to meet heavy commitments.

The country's sovereign bonds on average pay 26 percentage points more than comparable U.S. Treasury Notes, according to JPMorgan's Global Diversified Emerging Markets Bond Index.

Socialist President Nicolas Maduro says the country will meet all its debt commitments and calls default talk a right-wing conspiracy against him.

He has also accused global banks of leading a "financial blockade" that has left Venezuela with few financing options amid the oil market downturn.

http://www.reuters.com/article/pdvsa-debt-idUSL1N1DM1OK

ConocoPhillips selling Kenai LNG export plant

Houston-based energy giant and LNG player ConocoPhillips said it is in the initial stages of marketing the liquefied natural gas export facility on the Kenai Peninsula in Alaska.

According to the company’s statement, the efforts to market the plant are consistent with the company’s efforts to regularly review its assets to ensure it is optimizing its portfolio.

“Our current focus is on our North Slope operations,” the company said in a statement.

ConocoPhillips believes the facility is a strategic asset offering “good opportunities for the right buyer.”

The export plant operated for six months during 2015, liquefying 20 Bcf of natural gas and delivering six LNG cargoes.

“Due to market conditions, ConocoPhillips did not conduct an export program in 2016,” the company’s statement reads, adding that the plant is operational and ready to resume exports.

The facility was the world’s largest plant when it started operations in 1969, and for 47 years has been the only export plant in North America.

Since February, the Sabine Pass LNG plant in Louisana, operated by Cheniere, began exporting liquefied natural gas produced from U.S. shale gas from its Train 1.

The Kenai LNG plant complex includes docking and loading facilities to transport LNG, and has shipped over 1,300 cargoes primarily to Japan.

http://www.lngworldnews.com/conocophillips-selling-kenai-lng-export-plant/

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Why Saudi Arabia’s Oil Giant Aims to Be Big in Chemicals, Too

Saudi Arabian Oil Co. has been the world’s single largest crude producer for decades. It wants to be a lot more than that now, as a new petrochemical complex shows.

Aramco, as it is commonly known, until recently focused on pumping great quantities of oil and, like the Standard Oil companies of John D. Rockefeller, processing it through its refineries. Aramco now aims to vastly expand its petrochemical operations, turning itself into a modern integrated energy company along the lines of Exxon MobilCorp.

Thousands of miles away, near the Saudi Arabian city of Al Jubail on the Persian Gulf, an army of workers is finishing the $20 billion Sadara petrochemical complex, an Aramco joint venture with Dow Chemical Co. Sadara will use ethane refined by Aramco nearby to make a petrochemical called butadiene to ship world-wide to facilities, likely including its Dutch plant.

Aramco's Shifting Flow

Saudi Arabian Oil Co., the world's largest crude producer for decades, is expanding into petrochemicals to become an integrated energy company.

“Aramco’s capabilities will be fully unleashed,” Saudi oil minister and Aramco Chairman Khalid al-Falih said in a briefing with several reporters this year. “The company will be able to go global in multiple ways.”

Aramco declined to answer detailed questions, referring instead to speeches such as one by Aramco Chief Executive Amin Nasser in September. He signaled why the company was interested in a growing petrochemical industry. He said the Gulf region was home to only 2.5% of global petrochemical revenue and less than 1% of the industry’s jobs.

“Considering the Gulf’s endowment of oil and gas, as well as our geographic proximity to major markets in Europe and Asia,” he said, “both those figures should be much, much higher.”

New jobs, revenue

Aramco’s moves position it for a future when crude demand may peak and when owning reserves won’t be as attractive. Even if electric-vehicle adoption and alternative-fuel use soar, cutting global thirst for fuel, demand for petrochemicals is likely to remain strong. By developing more chemical manufacturing of its own, Aramco could attract jobs and revenue to the kingdom, which recently issued $17.5 billion in bonds to shore up its finances.

Aramco’s reinvention as a public company invested in producing gasoline, diesel and specialty chemicals could mean abdicating Saudi Arabia’s traditional role as de facto head of the Organization of the Petroleum Exporting Countries. Historically, the kingdom, through Aramco, has opened the spigot when prices rise too high and restricted supply when they fall too far. To do this, Aramco has kept unused spare production capacity, which shareholders would frown on, say some oil-industry consultants.

It isn’t clear how much of the change will come to pass at Aramco or in the Saudi economy. The government relies on oil for the vast majority of its revenue and has for decades talked about needing to diversify, without much change.

Richard Mallinson at Energy Aspects, a London global-energy-market consultant, says he thinks the diversification plan “will fall a long way short of the lofty ambitions” and “is just too much of a jump from where they are today.”

The strategy of directly owning more petrochemical plants to create outlets for crude and refined products has long been pursued by large firms such as Exxon Mobil and Royal Dutch Shell PLC. “Aramco is the powerhouse in the area of oil. They want to get bigger in chemistry,” says Matthias Zachert, chairman of Aramco’s German joint-venture partner Lanxess AG. “But you don’t create a leading chemical company overnight.”

Several advisers involved in the IPO planning say the transformation will be so complex it could go beyond 2018. The 5% stake targeted for the IPO is so large—Aramco has been valued at $2 trillion to $3 trillion—that finding a deep enough pool of investors may require Aramco to float the stock on several stock exchanges and to face multiple sets financial-disclosure rules, they say. It is a special challenge for bankers, they say, because the company and the kingdom are so deeply intertwined in ways that aren’t public.

A prince’s role

The company has said it will begin disclosing financial statements in 2017. Its operations are shrouded in secrecy and wouldn't meet governance requirements of most exchanges, such as board diversity. Its board includes no women and few outsiders.

King Salman bin Abdulaziz has already shaken up the kingdom’s ruling elite by empowering his son, Deputy Crown Prince Mohammed Bin Salman. Prince Mohammed is moving ahead with a plan drawn up by McKinsey & Co. consultants to wean the country off its oil dependence. In May, he proposed the IPO and the transfer of proceeds to a sovereign-wealth fund that will invest in other sectors.

Deputy Crown Prince Mohammed Bin Salman is moving ahead with a plan to wean Saudi Arabia off its oil dependence. PHOTO: CHARLES PLATIAU/REUTERS

By taking on the transformation, the 31-year-old Prince Mohammed is challenging the established order in ways that could prove difficult to implement, say people close to the current establishment. Even giving shareholders partial control over Saudi Arabia’s oil reserves would be tough because taking control of those assets was a defining moment for the kingdom.

The prince is working with Mr. Falih, Aramco’s chairman, and a tight circle of advisers to map out the future of Aramco and the Saudi economy, say people familiar with the discussions. They are making many decisions surrounding Aramco with little input from the company’s bureaucracy, these people say.

Members of the company’s board learned of the IPO plans from media reports, rather than from Mr. Falih or Mr. Nasser, Aramco’s CEO, one Aramco official says. “In some occasions even the chief executive is not fully aware of the latest update,” the official says of Mr. Nasser. Aramco didn't make Mr. Nasser, Mr. Falih or other executives available for interviews. A spokesman for the prince declined to comment.

Aramco owns directly or through joint ventures plants capable of processing 5.4 million barrels a day in markets that are its biggest crude customers: the U.S., South Korea, Japan, China and Saudi Arabia.

Making Aramco’s integrated model more lucrative, its operating costs for extracting oil remain among the world’s lowest—perhaps $6 a barrel, compared with an average of $10 in Texas’ Permian Basin, according to oil consultant Wood Mackenzie.

“The idea of control of the end market is very important to them,” says Anas Alhajji, an independent energy economist in Dallas. “This is their outlet to the market.”

Aramco presented an exhibit at a September conference in Bahrain for the refining and petrochemical industries, fields in which the Saudi company is expanding. PHOTO:HAMAD I MOHAMMED/REUTERS

That philosophy led Aramco earlier this year to break up a strategic partnership: Motiva, its two-decade-old joint venture with Shell. A key asset was a Port Arthur, Texas, refinery, North America’s largest.

Motiva had begun buying American crude oil, which was competing with Saudi oil, say people familiar with the Motiva relationship.

Shell spokesman Ray Fisher says ending such a long venture with numerous assets and liabilities is “a very complex process, involving various adjustments and changes along the way before final agreements can be reached.”

The breakup will let Aramco cement its U.S. foothold. From Port Arthur, it could ship gasoline, jet fuel and diesel to military bases in Virginia, airports in the Washington, D.C., area and service stations in New York.

The split will free Aramco from certain limits imposed by the Motiva deal, allowing it to expand, for instance, on the West Coast. The Saudi company has looked at buying a large refinery along the Gulf Coast or a stake in a refinery, say people familiar with the company.

Aramco is negotiating with the Malaysian national oil company, Petronas, to work together on a $21 billion refining-and-petrochemicals project near Singapore, The Wall Street Journal reported in October. The project would operate as a joint venture and serve as another major Asian beachhead for Saudi oil.

Aramco owns a stake in the giant Fujian Refining & Petrochemical complex, supplying oil that is turned into gasoline and plastics for China.

Aramco’s roots

Aramco has its roots in Texaco and Standard Oil of California, which formed a partnership that found enormous oil deposits on the Arabian Peninsula. In the early 1970s, the kingdom bought a stake in Aramco and by the 1980s had acquired it all.

In 1991, Aramco began looking overseas when it bought a stake in a South Korean refiner. In terms that Aramco would repeat, it agreed to supply the refinery with crude for two decades. Over the years, it bought and built more refineries.

Still, Aramco remained a company almost entirely focused on producing crude. The first inklings of a new strategy emerged in 2011 when Aramco and Dow Chemical agreed to create Sadara, among the world’s largest petrochemical complexes.

After signing the deal, Mr. Falih, then Aramco’s CEO, explained his vision. Aramco, he said, will “become the world’s leading integrated energy company by the year 2020.”

http://www.wsj.com/articles/why-saudi-arabias-oil-giant-aims-to-be-big-in-chemicals-too-1479675420

The number of oil and gas rigs in U.S. fields boomed this week, rising by 20 — the largest jump since the peak of the shale oil boom two years ago.

U.S. oil drillers collectively sent 19 more rigs into the patch, the Houston oilfield services company Baker Hughes reported Friday. Gas drillers added one rig.

The rise was driven largely by drillers in West Texas’ Permian Basin, which added 11 rigs.

The total rig count rose to 588, up from a low of 404 in May. U.S. oil companies haven’t added this many rigs since May of 2014, when oil was still bringing $100 a barrel.

The count, however, still lags the same period last year, when 757 drilling rigs were operating in U.S. oil and gas fields.

The number of active oil rigs jumped to 471 this week. Gas rigs ticked up to 116. Even the number of offshore rigs rose, by 3 to 23, down 7 year over year.

Total rig counts lifted by eight in Texas, four in Louisiana, four in Oklahoma, three in Ohio and two in Colorado. They fell by one in North Dakota, Pennsylvania and Wyoming.

Drilling activity has followed the modest rebound in prices, from February’s low of about $26 a barrel to more than $50 in recent weeks.

Prices stabilized this week at about $45 a barrel.

http://fuelfix.com/blog/2016/11/18/rig-count-jumps-by-20-largest-increase-in-two-years/

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Iran, Iraq Signal Deal Hope Before Vienna Meeting

Oil extended gains as Iran signaled optimism OPEC will agree to a supply-cut deal and Iraq said it will offer new proposals to help bolster the group’s unity before members meet next week in Vienna.

Iranian Oil Minister Bijan Namdar Zanganeh said it’s “highly probable” members will reach a consensus, according to comments published by the country’s Shana news service. Iraq will offer three new proposals for the output cut deal this week that are consistent with the group’s policies, The Wall Street Journal reported, citing Iraq Oil Minister Jabbar al-Luaibi.

Oil has rebounded since hitting the lowest in almost two months last week as members of the Organization of Petroleum Exporting Countries began making renewed diplomatic efforts before their meeting Nov. 30 to finalize the output deal informally agreed to in September. The group is seeking to trim output for the first time in eight years, a plan that has been complicated by Iran’s commitment to boost production and Iraq’s request for an exemption to help fund its war with Islamic militants.

“It’s pretty clear that some people are convinced in the market that this could lead to production cuts,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said by phone. “The potential for breaches of any announced agreement is very high, but it is a solid move and it is coming on pretty reasonable volumes.”

OPEC Optimism

It’s likely that OPEC producers will honor the output cut agreement and will try to put it into action, Iran’s Zanganeh said after meeting with OPEC’s secretary-general, Mohammed Barkindo, in Tehran on Saturday. Iraq’s new proposals “are based on other variables and will make it easier for OPEC members to make a decision,” Oil Minister al-Luaibi was cited as saying in an interview with The Wall Street Journal.

http://www.bloomberg.com/news/articles/2016-11-21/oil-climbs-as-iran-iraq-signal-deal-hope-before-vienna-meeting

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Russia's Putin sees no difficulties for Moscow to freeze oil output

Russia is ready to freeze its oil output - among the world's highest - at current level as there would be no problems for Moscow to do so, Russian President Vladimir Putin said on Sunday.

OPEC nations are due to agree a world oil freeze pact with non-OPEC countries on Nov. 30.

"We will do everything that our partners from OPEC are expecting. To freeze crude production is not an issue for us," Putin told a news conference in Lima after the APEC summit.

He added that Russia's oil firms are ready to do so.

Putin also said he has seen a "high probability" that the deal aiming to prop up the markets and boost prices would be reached in an OPEC meeting next week.

http://www.reuters.com/article/apec-summmit-putin-oil-idUSL1N1DL0RG

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Iraq's exports from Kirkuk fields drop on power outages - official

Iraq's exports from the Kirkuk oil field through an export pipeline to Turkey have dropped because of power outages, an official at state-run North Oil Co. said on Saturday.

Export are currently running at 100,000 barrels per day (bpd), compared with 133,000 bpd in October, the official said.

The pipeline delivers crude to Turkish terminal of Ceyhan, on the Mediterranean. It also carries crude produced in fields developed by the Kurdistan Regional Government (KRG), an autonomous region in north Iraq.

OPEC's second-largest producer after Saudi Arabia, Iraq exports most of its oil through the southern ports, on the Gulf.

Total exports for September, including the KRG, were 3.871 million bpd, of which 3.276 million bpd were shipped from the southern ports, according to the last figures published by the nation's state-oil marketer SOMO, in October.

North Oil resumed exports through the Kurdish-controlled pipeline in August, after a five-month halt caused by a dispute on oil revenue sharing between Baghdad and the KRG.

http://www.reuters.com/article/iraq-oil-kirkuk-idUSL8N1DK04N

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Carl Ichan Sells Rest of his Chesapeake Stock, Good Riddance

Now that the damage has been done, evil corporate raider Carl Ichan has sold off the rest of his Chesapeake Energy stock–completely exiting the company.

The one solace we have is that Ichan didn’t make any money from his dalliance with the company. He lost something like over $1 billion, according to our best guess.

We’ve chronicled the rise and fall of Ichan, and of Chesapeake, over the past four years. The purpose of investing, for people like Ichan, is to seize control of the company, fire a bunch of people, sell off a bunch of assets, which leads to a rise in the stock price. Said corporate raider then sells his shares and makes boatloads of money.

Except that didn’t happen with Ichan’s investment in Chesapeake…

http://marcellusdrilling.com/2016/11/carl-ichan-sells-rest-of-his-chesapeake-stock-good-riddance/

EDF in talks on offshore wind partnership in China

EDF in talks on offshore wind partnership in China

The renewable energy unit of French state-owned utility EDF (EDF.PA) is in talks with Chinese companies about a possible partnership to build offshore wind parks in China, the company said.

EDF CEO Jean-Bernard Levy said last year the firm wants to nearly double its renewable energy capacity worldwide to more than 50 gigawatts by 2030 from about 28 GW.

EDF Energies Nouvelles (EDF EN) CEO Antoine Cahuzac told reporters on Tuesday that EDF will target areas with growing power needs like Latin America, China, India and sub-Saharan Africa.

It will also focus on offshore wind, a new and growing industry in which EDF is still a minor player for now.

"We've started discussions with some Chinese partners to see whether we will go into offshore wind in China," Cahuzac said.

He said that given high power demand and urban density in southern China, offshore wind would make sense there.

Cahuzac said EDF is the only European utility with a dedicated renewables unit in China following its July 2016 acquisition of UPC Asia Wind Management, which has over 1.3 GW under development, construction or operation in China.

Including that deal, EDF EN now operates more than 10 GW in installed wind capacity globally.

Compared to Dong Energy (DENERG.CO) of Denmark and Germany's E.ON (EONGn.DE), EDF is a newcomer in offshore. It operates the small 62 MW Teesside park in Britain, has a 9 percent stake in Belgium's 325 MW C-Power park and this summer launched construction of the 100 MW Blyth park in Britain.

In 2012 it won a tender to build 1,500 MW on France's Atlantic coast, but due to red tape and legal recourse the turbines will not come online before 2021.

"We have the capacity to operate in the offshore wind industry," Cahuzac said. EDF will start close to home but wants to develop internationally and China is one of its targets.

Cahuzac said EDF EN is one of the world's top 10 wind developers and in the top five when excluding Chinese firms, who operate mainly domestically. He said EDF EN the top wind developer in North America in 2015.

EDF typically develops its own wind parks, then sells stakes to investors, keeping about 50-60 percent ownership.

He said its developments are mostly funded with project finance, unlike Italy's Enel (ENEI.MI), which uses more corporate funds to finance its developments.

In recent years, EDF has spent 1.5-2 billion euros per year to develop renewables. Cahuzac said that EDF has a pipeline of about 12 gigawatt of projects in France, the United States, Latin America and other areas.

http://www.reuters.com/article/us-edf-renewables-windpower-idUSKBN13H29S

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Argentina biodiesel producers fear losing access to U.S. market

Argentina's biodiesel producers fear losing access to the United States, the destination of nearly all their exports, after Donald Trump's surprise victory in presidential elections earlier this month, representatives of the sector said.

The Republican candidate, who is skeptical of climate change and has advocated scrapping or renegotiating trade deals, has raised alarms in a sector already reeling from a series of setbacks in international trade in recent years.

Argentina is one of the world's largest biodiesel exporters, and is home to processing plants belonging to multinational producers like Cargill Inc and Bunge Ltd.

"The level of uncertainty is very high," said Claudio Molina, executive director of the Argentine Biofuel Association in a recent emailed statement. He said the sector was worried Trump might scrap policies meant to reduce the United States' contribution to climate change, affecting demand for biofuels.

In 2005, the U.S. Environmental Protection Agency (EPA) implemented a policy requiring a minimum level of renewable fuels to be blended into transportation fuel.

Trump has said he supports the program, known as the Renewable Fuel Standard (RFS).

Argentine exports to the United States grew substantially after 2015, when the EPA made it easier for Argentine biofuel to qualify for the RFS.

That filled a vacuum that had been left when the European Union (EU), then the South American country's largest export market, slapped anti-dumping tariffs on Argentine biodiesel in 2013.

But Trump's promises to slap tariffs on imports and renegotiate trade deals have worried the Argentine sector, which would send more than 90 percent of its 1.5 million tonnes of biodiesel exports to the United States, according to Molina.

"The outlook, keeping in mind what he said during the campaign, is not good," Gustavo Idigoras, director and specialist in international biofuels trade at consultancy Business Issue Management said on Friday. "These strong protectionist policies could have an unfavorable impact on biodiesel imports."

Earlier this year, the World Trade Organization ruled in favor of and annulled the tariffs, but that may not mitigate any potential disruption to U.S. exports.

"The process of revising the (EU) measure will take some time," Idigoras said. "Losing the U.S. market would thus be a nearly fatal blow."

http://www.reuters.com/article/argentina-biodiesel-idUSL1N1DN1CL

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Chile regulator says purchase of SQM stake may require public share offer

Chile's SVS securities regulator said on Tuesday that the eventual buyer of Oro Blanco's stake in Pampa Calichera must make a public offer to shareholders in fertilizer company SQM if the acquisition allows the purchaser to control SQM's board.

An indirect stake in Chile's SQM , one of the world's biggest lithium and iodine suppliers, has been for sale since December when holding company Oro Blanco invited buyers to make an offer for its entire 88 percent interest in Pampa Calichera.

Pampa Calichera in turn owns about 23 percent of SQM, also a major producer of potash and fertilizer chemicals.

The SVS note came in response to a regulatory inquiry by Hong Kong's HK Scott Minerals Company, one of the firms interested in buying the stake.

"Any person or entity that acquires a controlling stake in Pampa Calichera ... must launch a public share offer to SQM shareholders if the operation allows the buyer to elect enough SQM board members to control decision making," the securities regulator said.

http://www.reuters.com/article/sqm-ma-idUSL1N1DN1JS

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Tesla solar roof cheaper than regular roof, says Musk – electricity “just a bonus”

Tesla founder and CEO Elon Musk has again set tongues wagging, this time with his declaration that his newly launched integrated solar roof tiles could actually cost less to install than a regular roof – making the renewable electricity they produce “just a bonus”.

The claims, which are already being carefully dissected by various media pundits, were made by Musk last Thursday, after Tesla and SolarCity shareholders voted in favour of a $2 billion deal to merge the two companies.

“It’s looking quite promising that a solar roof will actually cost less than a normal roof before you even take the value of electricity into account,” he said.

“So the basic proposition would be, ‘Would you like a roof that looks better than a normal roof, last twice as long, cost less and by the way generates electricity?’ Why would you get anything else?”

As we reported last month, Musk unveiled four different types of surprisingly stylish looking solar shingle options at a much-hyped LA launch event in October.

At the time, the cost of the shingles was unknown – and their release was somewhat overshadowed by the the unveiling of Tesla’s second generation Powerwall home battery storage units, at twice the capacity and half the cost per kilowatt-hour.

But the shareholder approval of the Tesla-Solar City merger put Musk’s solar roof right back in the picture and gave him the impetus to make his next big announcement.

According to Bloomberg, it was just minutes after the deal was approved that Musk told the crowd that he had just been advised by his engineering team that the company’s solar roof would actually cost less to manufacture and install than a traditional roof – even before savings from the power bill. “Electricity,” he said, “is just a bonus.”

Of course, as Bloomberg and many others have noted, the high-end terracotta and slate tiles that Tesla’s solar shingles have been designed to look like are among the most expensive roofing materials on the market, so this must be taken into consideration against Musk’s rather sensational claim.

And as Gizmodo noted, how this cost compares to the average cheap Australian corrugated iron roof remains to be seen.

But then Musk has noted that his tempered-glass roof tiles, engineered in Tesla’s new automotive and solar glass division, will weigh as little as a fifth of current products and are considerably easier to ship – being more robust.

Thus, as Bloomberg reports, much of the cost savings Musk is anticipating will come from shipping the materials.

As for the “bonus” electricity generation component of the tiles, Tesla will produce the solar cells for the roof with Panasonic at its manufacturing facility in Buffalo, New York. And at a November conference call, SolarCity CEO Lyndon Rive said the companies were aiming for 40 cents a Watt, which puts it in line with the competition.

https://onestepoffthegrid.com.au/tesla-solar-roof-cheaper-regular-roof-says-musk-electricity-just-bonus/

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China on-grid wind capacity further up, but utilization rate waning, NEA

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Potash Corp cuts production, lays off 140 from Cory mine

Canada’s Potash Corp. of Saskatchewan, the world’s largest producer of the fertilizer by capacity, said Wednesday it would cut jobs and production at its Cory potash mine west of Saskatoon.

The Saskatoon, Saskatchewan-based company said approximately 100 full-time workers and 40 temporary positions are being laid off. Most of the cuts will take place in February with the remainder during the company’s 2017 third quarter.

Production will also be halted for six weeks at Lanigan mine starting in January and for 12 weeks at Allan, beginning in February.

Potash Corp said it plans to drop production of one type of potash at Cory, lowering the mine’s operational capability by 43% to about 800,000 metric tons of the key fertilizer ingredient. It also said the mine will continue to employ about 350 people.

“We are making this decision to optimize production to our lowest cost operations, including Rocanville and other Saskatchewan sites,” Mark Fracchia, president of the company’s PCS Potash operations said in the statement.

Rocanville mine, also in Saskatchewan, has a production capacity of 3 million tons.

Potash will also curtail output for six weeks at two other operations in the province in early 2017 to help match supply with market demand. Production will be halted for six weeks at its Lanigan mine starting in January and for 12 weeks at Allan, beginning in February.

Potash Corp, which agreed in September to merge with peer Agrium, said additional temporary layoffs will result from the curtailments, adding that specific numbers haven’t yet been determined.

Sector struggles

A global oversupply of the fertilizer has caused prices to tumble in the past year, leading to layoffs and mine closures across the sector.

Prices for the fertilizer ingredient began their decline four years ago, as weak crop prices and currencies weakness pinched demand. Potash has also suffered from increased competition following the breakup in 2013 of a Russian-Belarusian marketing cartel that previously helped limit supply.

Potash's collapse picked up speed in the past year, putting additional pressure on producers, whose profits have been hit by falling prices, largely due to weak currencies in countries such as Brazil and low grain prices.

Crop prices have also been hurt, with corn and wheat at seven-year and 10-year lows respectively, which have reduced farmers’ willingness to maximize production with fertilizers.

Earlier this year, BHP Billiton, revealed it might place its Canadian Jansen potash project in the back burner if prices for the fertilizer ingredient don’t pick up by the end of the decade.

http://www.mining.com/potash-corp-cuts-production-lays-off-140-from-cory-mine/

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Morocco's OCP and Ethiopia sign large fertiliser plant deal

Morocco's Office Cherifien des Phosphates (OCP), the world's largest phosphate exporter, signed a deal with Ethiopia on Saturday to build a $3.7 billion plant to produce fertilisers.

The North African country's firms, including banks and insurers, have invested heavily in Sub-Saharan Africa in the past few years. Last month, OCP signed an agreement with Rwanda to build a blending unit.

The agreement signed with state-run Ethiopian firm Chemical Industries Corporation (CIC) will enable the construction of a new plant in the town of Dire Dawa in eastern Ethiopia.

The project is expected to produce 2.5 million tonnes of fertiliser in its first phase by 2022, and a second phase would see a further $1.3 billion invested to increase production to 3.8 million tonnes three years later.

"Its funding will first be from equity and the second part through debt," the firm's representative in Ethiopia Faycal Benamer told Reuters.

Faycal did not give a date when the plant construction will start, and said they were about to complete its designs.

Ethiopia at present imports around 900,000 tonnes of fertiliser each year. OCP will ship its own phosphoric acid to the plant, while potash will be transported from large reserves in the Horn of Africa country's northeast, he said.

OCP, a major earner of foreign currency for Morocco, reported a 23.2 percent fall in first-half net profit to 3.07 billion dirhams ($317 million) due to low prices in the international markets.

It has invested heavily and made a series of acquisitions to improve its infrastructure and boost its output. It aims to raise output to 47 million tonnes of crude phosphate rock in 2017, from around 34 million tonnes in 2013.

It is also targeting an increase in fertiliser production to 12 million tonnes by 2017 from 7 million in 2014, which would make it the world's leading producer.

Saturday's agreement was signed during a visit by Morocco's King Mohammed VI. The two countries inked deals to develop several projects.

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Precious Metals

$6 Billion Puke Sends Gold Plunging Below $1200 As Dollar Index, Bond Yields Spike

As Chinese Yuan collapses to fresh lows (USD Index spikes), and bond yields surge, this morning's durable goods data sparked an extended collapse in gold, crashing them below $1200 as over $6 billion of pressure flowed through futures.

EUR down, Stocks down, Bonds down, Gold down...Yuan just keeps crashing...Bonds are dumped as USD soars...

Dollar index makes new high...Sending gold reeling... as 50,000 contracts are dumped. The gold liquidity moment started it (around 0825ET) but the US macro data sparked the break below $1200...Pushing Gold to its lowest since Feb...

http://www.zerohedge.com/news/2016-11-23/6-billion-puke-sends-gold-plunging-below-1200-dollar-index-bond-yields-spike

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Randgold and Newcrest team up in the Ivory Coast

Randgold announced on Friday it has committed to a joint venture with ASX-listed Newcrest Mining for the exploration and development of an “area of interest” in southeastern Cote d’Ivoire.

According to the announcement: “Randgold will manage the exploration programme as well as any mines that it produces. A technical committee of senior geologists from both companies will work closely with the Randgold exploration team and a joint venture board will oversee the exploration programme and any consequent development projects.”

CEO Mark Bristow has spoken glowingly of the Ivory Coast over the last year or so citing the country’s sound infrastructure and mining regime as making it one of the most attractive countries in Africa to do business. This, together with the country’s relatively unexplored geology, means Randgold is devoting more resources to exploration there than any other country in which it operates.

The announcement noted the area of interest “covers the extension of some of the more prolific Ghanaian gold belts and associated structures.”

The creation of the joint venture seems to indicate Randgold anticipates the discovery of another world-class gold deposit in this area. Bristow has defined “world-class” as being a three million ounce deposit that yields a 20% return on based on a gold price of $1 000 an ounce.

“The bigger the footprint, the greater the opportunity, and both Newcrest and Randgold believe in Côte d’Ivoire and the potential for the discovery of truly world-class gold deposits,” he said.

http://www.mineweb.com/news/companies/randgold-and-newcrest-team-up-in-the-ivory-coast/

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Platinum market deficit set to shrink in 2017 - WPIC

Platinum market deficit set to shrink in 2017 - WPIC

The platinum market deficit will shrink to its narrowest since 2011 next year, the World Platinum Investment Council said on Tuesday, as a drop in investment and
diesel's waning share of the European car market pressure demand.

The WPIC also cut its expected platinum market shortfall for this year to 170,000 ounces from the 520,000 ounces predicted in September, citing a larger than expected drop in Chinese platinum jewellery demand, and higher recycling.

That deficit will likely shrink to 100,000 ounces in 2017, it said, cutting above-ground stocks of the metal to 2.045 million ounces by the end of next year, the WPIC said.

"It's all good and well to say that metal is available from above-ground stocks, but as soon as the vaulted holdings aren't for sale, any deficit makes for concern, especially from industrial users," the WPIC's director of research Trevor Raymond said.

Autocatalyst demand is expected to decline 1 percent next year, the WPIC said, as diesel's overall share of the autocatalyst market shrinks.

Demand for platinum for use in catalytic converters was flat this year, it said, in the face of concerns that last year's Volkswagen emissions scandal would dent demand for diesel cars, which use a higher loading of platinum in their autocatalysts.

At the moment, the 2016 percentage of diesels on European roads is 50 percent. Our forecast for next year includes a 48.5 percent diesel share, so that's a fairly aggressive fall,"Raymond said. There has also been a move to other forms of
emissions control technology, he said.

Investment in platinum, which is expected to have risen 15 percent this year on the back of strong coin and bar demand, particularly in Japan, is forecast to fall by more than a quarter next year, the WPIC said.

It expects bar and coin investment to lighten, and demand for platinum-backed exchange-traded funds, which tailed off recently after a strong start to the year, to be little changed.

Overall platinum demand is tipped to fall 3 percent this year to 8.04 million ounces, the WPIC said. Jewellery demand is expected to slip by 10 percent, or 300,000 ounces, as buying in number one consumer China drops for a second year.

On the supply side of the market, refined production by mining companies is predicted to have fallen 3 percent this year. The WPIC revised up its forecast for recycled platinum supply this year to 1.86 million ounces from 1.745 million in
September, due chiefly to rising jewellery recycling in China.

http://www.reuters.com/article/platinum-wpic-idUSL8N1DM2EL

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Asia Gold-India premiums surge to 2-yr highs on fears of import curb

Gold premiums in India jumped to two-year highs this week as jewellers ramped up purchases on fears that the government might put curbs on imports after withdrawing higher-denomination notes from circulation in its fight against black money.

Retail demand was subdued due to a cash crunch following the government's move on high-value banknotes, but dealers in the world's No.2 consumer of the metal were charging a premium of up to $12 an ounce this week over official domestic prices that include a 10 percent import tax.

The premium was the highest since mid-November 2014, and compared with a premium of up to $6 an ounce last week.

"There was a rumour that after scrapping 500 and 1,000 rupee notes, the government will ban gold imports. It prompted many jewellers to increase buying," said a Mumbai-based dealer with a private bank.

"Jewellers were running businesses with limited stocks after good sales during the Diwali festival. Now they are keen to replenish inventory as prices have fallen."

The government last week withdrew 500 and 1,000 rupee banknotes from circulation, in a surprise move designed to bring billions of dollars worth of cash in unaccounted wealth into the mainstream economy.

"We are seeing some jewellery demand due to the ongoing wedding season and crash in prices. But the cash constraint is going to be really tough for the gold industry in the near future, especially from rural areas," said Chirag Thakkar, a director with Amrapali Group.

Two-thirds of gold demand comes from rural areas where jewellery is a traditional store of wealth.

"Our business has nearly stalled due to the cash crunch," said Mangesh Devi, a jeweller based in Satara, Maharashtra, who caters mainly to farmers.

Gold was on track to post a second straight weekly fall on rising expectations of a rate hike by the U.S. Federal Reserve. Spot gold has declined 1.5 percent so far this week.

Meanwhile, premiums in China rose up to $10 an ounce against the international benchmark from $5 last week.

"It (the buying) could be driven by the panic in reaction to the recent depreciation of the yuan," said Zhirui Ji, an analyst with Thomson Reuters-owned metals consultancy GFMS.

The yuan fell to an 8-year low on Friday on resurgent dollar.

In Hong Kong, sellers were offering a premium of up to $1 an ounce compared with 50 to 70 cents last week, while in Singapore premiums were unchanged at 80 cents.

Demand in Japanese markets continued to remain tepid with premiums flat to a discount of 10 cents.

http://www.reuters.com/article/asia-gold-demand-idUSL4N1DJ26X

European base metals business Nyrstar has entered into further short-term strategic hedging arrangements utilising put and call collar structures to mitigate potential down side risks to the zinc price.

The global multi-metals business, with a market leading position in zinc and lead, said Thursday that for the first quarter 2017, protective hedges were already in place for 70% of the free metal produced by the metals processing business segment, or 8 000 t/m of zinc metal.

It has also hedged 3 000 t/m of the payable zinc metalproduced in concentrate by the mining segment, resulting in full exposure for the hedged volume in the first quarter to a floating zinc price between $2 127/t and $2 496/t. In the current and first quarter, Nyrstar retains full exposure at a price above $2 800/t.

Belgium-incorporated Nyrstar, which has mining, smelting and other operations located in Europe, the Americas and Australia, advised that protective zinc price hedges have also been completed for the second quarter and fourth quarter of 2017, for 70% of the free metal produced by the metals processing segment (8 000 t/m of zinc metal), plus 5 350 t/m of the payable zinc metal produced in concentrate by the mining segment, resulting in full exposure to a floating zinc price between $2 172/t and $2 543/t.

In the second quarter of 2017 to the fourth, Nyrstar again retains full exposure at a price above $3 117/t.

Nyrstar's said it will continue to review and potentially apply strategic hedges to limit downside risks for key commodity price and foreign exchange sensitivities during the implementation of the company's transformation and turnaround plan.

Zinc spot prices have risen about 15% to $1.14/lb in the last 12 months, as an emerging supply gap and a run-down of stock supported the trend.

http://www.miningweekly.com/article/nyrstar-hedges-more-zinc-as-price-downside-protection-2016-11-17

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Steel, Iron Ore and Coal

China Oct thermal coal imports up 31.4pct on year

China imported 7.32 million tonnes of thermal coal (including bituminous and sub-bituminous coal) in October, rising 31.42% on year but down 10.07% on month, showed the latest data released by the General Administration of Customs.

The value of the imports totaled $426.45 million, translating to an average import price of $58.26/t, rising $7.46/t from a year ago and up $0.94/t from the month prior.

In the first ten months, China imported 75.94 million tonnes of thermal coal, up 9.55% from the year-ago level. Total value stood at $3.78 billion, down 8.44% year on year.

Meanwhile, China imported 6.95 million tonnes of lignite in October, surging 92.52% year on year but down 19.65% on month, with the value increased 103.63% year on year to $271.7 million.

Total lignite imports in the first ten months reached 55.65 million tonnes, up 35.9% year on year, with value at $1.91 billion, up 10.73% year on year.

Separately, the country exported 620,000 tonnes of thermal coal in October, with value at $40.12 million. Thermal coal exports from January to October stood at 3.1 million tonnes, with value at $218.08 million.

China's export of lignite gained 7.3% on year to 32.38 million tonnes over January-October, with values at $231,000; lignite export in October was 181 tonnes, with value at $2,000.

http://www.sxcoal.com/news/4549600/info/en

Traders on edge as volatility surges in China's iron ore futures

Surging volatility in China's iron ore futures is sending global prices on a roller-coaster ride, spelling risks for traders and steel mills, some of whom are losing faith in a market swayed by speculative Chinese money.

Amid wild swings in futures, spot iron ore prices surged by a record 23 percent in the second week of November, only to fall nearly 10 percent the following week.

At the same time, steel producers say a near 80 percent rise in spot iron ore prices this year despite plentiful supplies does not reflect physical demand, raising concerns that buyers could be left with costly iron ore in the event of a sharp pullback. Some are sitting out the volatility and holding back purchases.

"I cannot imagine the price hit $70, it's crazy. Supply of iron ore is bigger than before," said an iron ore buyer for a mill in China's Fujian province.

Unlike oil, gold and copper, whose benchmark pricing is set in London and New York, iron ore is one of the few commodities whose global pricing takes its cue from China.

Because of the massive volumes of iron ore futures traded on the Dalian Commodity Exchange, the direction of prices set there virtually dictates the path for the physical market. In March, the futures volume reached a record 7.6 billion tonnes, or more than five times the annual global iron ore trade.

On Wednesday, the most-active iron ore contract on Dalian posted its most volatile trading day since July 2015 when futures prices hit their lowest since the contract began in 2013, based on Thomson Reuters data.

The contract has moved in a 10 percent trading range on some days this month, a huge move in the once-staid iron ore market.

SPECULATIVE CRACKDOWN

Price moves have been partly driven by an attempt by Chinese commodity exchanges to crack down on speculative trading, which led to a steep selloff last week after a series of sharp rallies. Futures surged back this week, pushing prices to near three-year highs, before coming off again.

"Prices are changing too fast. It's difficult to strike a deal," said an iron ore trader in Shanghai.

A sudden price drop could prompt a buyer who bought a cargo at a higher price to walk away from the deal while a trader would try to renegotiate a cargo he sold at a low price when the market abruptly shoots up, he said.

"This kind of market is not good for anybody," he said.

Iron ore's surge has surprised many in the market, because unlike supply-deprived coal, there remains plenty of iron ore, with stocks at China's ports the biggest in more than two years.

While spot prices have tracked futures higher, traded volume in the physical market is "very low," said a trader at a global trading firm in Singapore.

"Market participants are losing faith in the market. There's too much speculative money in China that is affecting physical prices," he said.

With the seasonally weak winter period approaching, some Chinese steel producers are holding back from purchasing iron ore and waiting for prices to stabilize, he added.

http://www.reuters.com/article/us-china-ironore-futures-idUSKBN13K0AU

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Coal exports to China from Australia's DBCT slumps 38% on month in Oct: DBCT Management

Coal exports to China from the Dalrymple Bay Coal Terminal in Queensland, Australia, slumped in October by 38% month on month and 44% year on year, at 741,006 mt, according to data released Thursday by the terminal operator.

The China-bound October shipments were 34% lower than the 12-month rolling average of 1.13 million mt/month, and follows a similar slump in August when a 12-month low of 700,425 mt was sent, data collected from DBCT Management showed.

Exports to China from Australia had surged in recent months following Beijing placing restrictions on domestic production. Exports peaked in March, when 1.60 million mt was sent to China from DBCT.

DBCT exports to India, which surged in September, making it the largest export destination for the month, eased back in October.

The Queensland state government-owned common user facility shipped 909,707 mt to India in October, down 42% month on month but up 241% year on year, the figures showed. The monthly total is 7% above the 12-month rolling average for exports to India of 850,619 mt.

In September, India was sent the lion's share of DBCT coal with 23%, but its share sank to 17% in October, dropping below both Japan and South Korea.

Exports to Japan from DBCT were at a seven-month low of 1.12 million mt in October -- down 13% month on month and 17% year on year -- and were 7% lower than the 12-month rolling average of 1.20 million mt.

Shipments to South Korea fell 11% from September's 1.17 million mt to 1.04 million mt in October, but were up 35% year on year and 19% higher than the 12-month rolling average of 944,203 mt, data showed.

South America was sent its largest volume in 11 months with 335,467 mt in October, which is up 285% month on month and 200% year on year, and 50% higher than the 12-month rolling average of 223,320 mt, according to the figures.

Anglo American, BHP Billiton, Glencore, Peabody Energy and Rio Tinto are among the coal producers that ship via DBCT.

Europe, Taiwan and parts of Asia were among the other destinations for coal sent from the DBCT terminal in October.

Shipped volumes from DBCT totaled 5.51 million mt in October, according to DBCT Management, which is down 17% from September, up 5% year on year and only slightly below the 12-month rolling average of 5.57 million mt.

The breakdown of how much coal shipped from DBCT is thermal and metallurgical is not immediately available, however, a source close to the facility said earlier this year that generally it is 18% thermal coal and about 82% metallurgical coal.

The terminal has an 85 million mt/year shipment capacity, and from January to October, it has shipped 56.90 million mt, which translates to an annualized rate of 68.10 million mt/year, the DBCT Management figures showed.

On Thursday, there was one coal vessel loading at DBCT and nine at anchor, which is fairly well in line with the average of around two loading and nine queuing seen in October, DBCT Management data showed.

http://www.platts.com/latest-news/coal/sydney/coal-exports-to-china-from-australias-dbct-slumps-26604711

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Grande Cache coal mine looking to restart operations

Equatorial Resources aims to invest $1.2 billion in Congo iron project

Africa-focused Australian mining company Equatorial Resources Ltd will aim to invest around $1.2 billion to develop its Badondo iron ore project in Republic of Congo, the company said.

John Welborn, a non-executive director of Equatorial Resources and chief executive of its Congolese unit Congo Mining Exploration Ltd, met Prime Minister Clement Mouamba on Tuesday and submitted an application for a mining license.

"The recent improvement in the price of iron ore makes Equatorial confident that it will find the necessary financing to develop the mine," the company said in a statement distributed late on Tuesday after the meeting.

African mining, particularly large iron ore projects, has been hit hard by the global commodities crash.

However, the S&P 1500 composite steel index .SPCOMSTEEL has surged since the U.S. election, bolstered by U.S. president-elect Donald Trump's perceived support for the steel industry.

Chinese iron ore futures are also rising amid news that production at steel mills in northern Hebei province will be curbed or even shut for as long as four months in an effort to combat pollution.

Equatorial Resources estimates annual iron ore production of 40 million tonnes at the Badondo mine and its feasibility study foresees construction beginning next year, the statement said.

Plans for the building of new infrastructure, including construction of a rail line and port to facilitate exports, must be finalised before the project can be developed, it said.

http://www.reuters.com/article/us-congo-iron-equatorial-idUSKBN13I0XY

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Samarco licensing moving forward despite fines, regulator says

Samarco’s quest to obtain permits for resuming its Brazilian iron-ore operations is progressing despite environmental fines and a court order, with a mid-2017 restart still possible, the state licensing agency said.

The venture owned by BHP Billiton and Vale, which halted work a year ago after a tailings dam collapse, is seeking a new operating license as well as additional permits to deposit waste into an unused pit called Alegria Sul rather than building a new dam. Minas Gerais state environmental regulator Semad sees merit in the Alegria Sul option, which the company says would allow it to resume at partial capacity for about two years.

“The benefit and the environmental balance is very positive,” Anderson Silva de Aguilar, who is overseeing the licensing requests, said in an emailed response to questions. "Environmentally, it is a lot better than depositing in an area that was not prepared or would have to be prepared for this purpose."

For now, Semad has received all the documentation requested from Samarco and is analyzing the plan to use the vacant pit while it formulates a set of guidelines for the mining complex license.

The regulator’s decision to look at re-licensing the mine’s main complex under a single “corrective” permit rather than requiring dozens of individual licenses, will simplify the process, according to Semad’s press office.

LEGAL CHALLENGES

Samarco Mineracao, as the operating company is known formally, was the world’s second-largest producer of iron-orepellets before the dam collapse sent billions of gallons of sludge into the Rio Doce river valley. The incident killed as many as 19 people, contaminated waterways in two states, put thousands out of work and is threatening repayments on more than $3-billion in debt.

As it seeks new licenses, the mine is facing other regulatory and legal challenges that threaten to increase costs. Earlier this month, Brazil’s federal environmental agency Ibama said Samarco had yet to fully contain leakage from the dam that ruptured more than a year ago, imposing a fine of 500 000 reais ($149 000) a day until it proves otherwise.

Separately, a federal judge in Minas Gerais ruled Samarco had failed to prove it has definitively contained leaking. The judge gave the company 90 days to provide proof that the situation has been rectified, and 30 days to come up with a 1.2-billion-real guarantee.

While Samarco will need to also prove to Semad it has contained the leaking of mining waste before it can secure licenses, the issue is not slowing the agency’s work, according to Semad’s press office.

http://www.miningweekly.com/article/samarco-licensing-moving-forward-despite-fines-regulator-says-2016-11-23

India aims to boost low-grade coal sales while global prices high

India is trying to boost sales of its low-quality coal and lower freight costs in a bid to cut imports, while global prices are high, Reuters reported.

State-controlled Coal India, the world's largest miner of the fuel, has sharply boosted output in the past two years but has struggled to sell all of that due to softer domestic demand and the availability of superior-grade foreign coal at competitive rates, until recently.

Benchmark Australian coal prices have more than doubled this year, helped by reduced Chinese mining and strong demand across Asia and Europe just when exporters cut output. But prices have begun to recoil this month as China eased restrictions on domestic mining.

"Our prices are already very competitive," India's Coal Secretary Anil Swarup said. "If transportation costs can be brought down, more and more private companies will bid to buy from Coal India."

Swarup met Railways Minister Suresh Prabhu late last month to discuss lowering the charges to move coal in some routes to lure private firms away from foreign coal.

Daily dispatches of coal had already jumped by a fifth this month to around 1.6 million tonnes, said a senior Coal India official, adding the company is set to make a record amount of coal available to be sold through auctions. The company typically sells only 10% of total output through auctions to private companies but the government has relaxed that limit.

Higher international prices and the rise in local output are expected to cut India's imports by around 20 million tonnes this fiscal year from the 181 million tonnes brought in for the year ended March 31, 2016, said the Coal India official.

Coal imports fell 16% to around 10 million tonnes in September, the lowest level since April 2013, according to brokerage Motilal Oswal.

http://www.sxcoal.com/news/4549452/info/en

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Mongolia Jan-Oct coal exports soar 64pct on yr

Coal-rich Mongolia exported 18.70 million tonnes of coal over January-October this year, soaring 64.07% from 11.40 million tonnes the same period last year, showed data from the Mineral Resources Authority of Mongolia.

In October, coal exports of the country dropped 15.9% from September to 2.14 million tonnes, the data showed.

Exports of washed coking coal increased 25.9% on month to 0.16 million tonnes in October, while that of raw coking coal dropped 34.8% from September to 0.70 million tonnes.

The country exported 0.57 million tonnes of thermal coal in the month, rising 21.1% on month.

In the first ten months, Mongolia produced 24.42 million tonnes of coal, with output in October gaining 20.3% on month to 3.70 million tonnes.

Its coal output stood at 24 million tonnes last year, down 1.64% year on year.

Over January-October, Mongolia sold 24.36 million tonnes of coal, with domestic sales at 5.52 million tonnes.

In October, coal sales slid 4.3% on month to 3.03 million tonnes, with domestic sales rising 43.6% on month to 0.89 million tonnes.

http://www.sxcoal.com/news/4549450/info/en

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Will coal price retreat be a Dunkirk or Stalingrad?

It may be a tad early to call a peak in the price of thermal coal in top-consuming region Asia, but at the very least the momentum seems to have been lost from a commodity that has surged some 130 percent in the past 10 months.

If coal prices have already peaked, the question is which of the World War II battles of Dunkirk or Stalingrad will the retreat most resemble.

A Dunkirk-style retreat would see coal prices hold on to much of their gains this year, just as the British Army managed to keep much of its fighting strength by evacuating from France in the face of a German victory in 1941.

A Stalingrad-style defeat would see coal prices surrender most of their gains in a rout similar to what happened when the German Sixth Army was surrounded and annihilated by Soviet forces in the winter of 1942-43 at Stalingrad.

So far, the pullback in thermal coal prices has been very modest, with the Australian benchmark, the weekly Newcastle port index dropping to $100.52 a tonne in the week ended Nov. 18.

This was down from the 44-month high of $109.69 a tonne the previous week, and the first downward move since last August.

The index rose 131 percent between its 10-year low of $47.37 a tonne on Jan. 22 to its peak on Nov. 11.

While this is an exceptionally strong rally, history suggests that the retracement may be quite robust as well.

Between November 2006 and July 2008, the index surged 372 percent, with coal reaching its all-time high of $194.79 a tonne on July 4, 2008.

It then slumped by 69 percent, taking coal back to $60.30 a tonne by March 2009. However, this price was still almost $20 more than the starting point of the prior rally.

From the trough in March 2009, Newcastle coal rallied 126 percent to $136.30 a tonne by Jan. 14, 2011.

That peak marked the start of a five-year downward trend during which coal dropped 65 percent to the low in January this year.

Given that the two previous rallies in the Newcastle index were both followed by pullbacks of more than 60 percent, is it likely that history will repeat itself this time around?

THIS TIME IS DIFFERENT?

It's still possible that prices may not have peaked yet, given we are just at the start of peak northern hemisphere winter demand period.

But, if the $109.69 a tonne from Nov. 11 does represent the peak of this cycle, then a retreat in the order of 60 percent would take prices back to around $43 a tonne.

This seems extremely unlikely as an entirely different set of circumstances are prevailing this time around compared with the price plunges of 2008-09 and 2011-15.

In the rally up to July 2008 coal prices had been pulled along with other commodities as investors believed China's appetite for natural resources was insatiable.

The 2008 financial crisis and global recession crushed those hopes, and coal fell dramatically in tandem with other commodities as world economic growth stumbled.

In the rally from 2009-11, stimulus spending by China provided a platform for rising prices, especially since the supply response was slow in coming.

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But when new mines came on stream and existing ones pumped up output, the rally fizzled and coal was set up for an extended slump as the excess capacity was worked through.

In stark contrast, the rally so far in 2016 has been mainly driven by Chinese domestic considerations, with the most important factor being the decision by the authorities in Beijing to limit the number of days coal mines could operate.

This led to a sharp drop in production, with China's output falling 11 percent in the first 10 months of 2016 from the same period a year earlier.

Imports couldn't make up for this shortfall, hence the sharp rise in the main Asian benchmark prices.

It's likely that this rally will be ended by Chinese political decisions, with Beijing reversing course and allowing mines to operate for 330 days a year, up from 276 before, ensuring supply will be adequate but not enough to collapse prices.

To suggest coal prices are heading for a rout also ignores the fact that there is far less spare capacity around currently, with those mines that survived the five-year slump operating as efficiently as they can.

And the pullbacks after the previous rallies had different dynamics, the first being a global recession and the second being an extended period of oversupply.

Neither of these are currently the case, suggesting that the pullback in coal prices will be more modest.

Given China's primacy in Asian coal markets, it's likely coal will drop to a level at which the majority of Chinese domestic mines can operate profitably and meet their debt obligations, while still selling at a price that won't stoke inflation or damage power utilities.

Where that magic number lies is open to debate, but it's unlikely to be above $100 a tonne or below $60.

http://www.reuters.com/article/column-russell-coal-idUSL4N1DN1EM

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Huanghua port has become China's top one coal handling port, said local marine bureau at a press conference on November 10.

The port realized coal handlings of 168 million tonnes as of November 6, surging 57.01% from the year-ago level, according to the Cangzhou Marine Bureau.

This was mainly attributed to increased coal supply from newly-commissioned Zhunchi railway.

In addition, Huanghua port has been opened to all coal producers since 2015, instead of being exclusive to Shenhua Group.

http://www.sxcoal.com/news/4549363/info/en

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