Friday, September 25, 2015

China justifies intervention in Malaysia's internal affairs : Threat of racial riots in Malaysia's Chinatown considered a threat to China's national interest


by Ganesh Sahathevan


The Chinese ambassador to Malaysia Huang Hui Kang has made a very public visit to Kuala Lumpur's Chinatown ,also known as Petaling Street , on the eve of racial riots threatened by Muslim Malay NGOs.

He has warned Malaysia that China will intervene in Malaysia's internal affairs if there is any "infringement on China's national interests."

The Malaysiakini online news site quoted Huang:

"The Chinese government has always pursued peaceful co-existence in international relationship and non-interference in the internal affairs of other countries.
"But with regard to the infringement on China's national interests, violations of legal rights and interests of Chinese citizens and businesses which may damage the friendly relationship between China and the host country, we will not sit by idly,"

(see full report below)

The majority of traders in Chinatown are third if not fourth generation Malaysian citizens of Chinese descent. Huang's statement implies a rather wide interpretation of what might constitute "China's national interests".

END


Chinese ambassador visits Petaling Street on eve of rally

Chinese ambassador Huang Hui Kang paid a visit to Petaling Street today on the eve of an anti-Chinese rally by Malay rightwing groups.

The rally is called in response to the authorities’ purported lack of action against traders who sell counterfeit goods there.

China is against all forms of terrorism, as well as racism and extremism which target specific ethnic groups, the ambassador to Malaysia said in a statement which he read out after his walkabout in the area known as Chinatown.

Huang said Malaysia was a country ruled by law, and therefore, everyone - regardless of ideology or stratum in society - must safeguard it.

"Nobody has the right to undermine the authority of the law or trample on the rule of law.

"The Chinese government has always pursued peaceful co-existence in international relationship and non-interference in the internal affairs of other countries.

"But with regard to the infringement on China's national interests, violations of legal rights and interests of Chinese citizens and businesses which may damage the friendly relationship between China and the host country, we will not sit by idly," said Huang.

The diplomat visited the popular shopping area for about one hour along with the Kuala Lumpur Hawkers and Petty Traders Association.

During the Himpunan Rakyat Bersatu on Sept 16, rally-goers tried to enter Petaling Street and after a standoff, the Federal Reserve Unit used the water cannon to disperse the red shirts.https://m.malaysiakini.com/news/313484

Thursday, September 24, 2015

Marise Payne & Khaleed Sharouf: Evidence of intelligence failure, as well as failure if not refusal to understand the threat of terrorism

by Ganesh Sahathevan

On 12 July 2014 the Weekend Australian reported:

ONE of Australia’s most-wanted terrorists and a suspected war criminal, Khaled Sharrouf continued to receive a taxpayer-funded disability pension months after arriving on the battlefields of Syria.

Sharrouf, who was convicted as part of the 2005 Pendennis terror trial, arrived in Syria in December and has distinguished himself as one of the most brutal ­Australian fighters to emerge on the Syrian battlefield.

Revelations that the former Sydney man was paid his regular fortnightly disability cheque — $766 a fortnight — long after authorities knew he was gone, raise the possibility that the taxpayer may have been inadvertently funding his activities.

Human Services Minister Marise Payne declined yesterday to discuss the Sharrouf case, citing privacy concerns.
Under normal circumstances a disability support pension can be cancelled if the recipient is overseas for six weeks.
Ms Payne said the law as it stood did not allow authorities to cancel the payments of Australians suspected of involvement in criminal or extremist behaviour.
“(But) recent events have highlighted the need for further measures to ensure Australians engaged in terrorist activities are not receiving payments,’’ she told The Weekend Australian.
It is clear from the above that Payne has difficulty comprehending that  someone who had gone to fight in Syria and distinguished himself as one of the most brutal ­Australian fighters to emerge on the Syrian battlefield. might not actually have been entitled to the disability pension.Be that as it may, Payne's response belies her approach to terrorism and related issues, made evident as late as 2006, when she objected to and defeated  then Attorney General Dary William's proposed terrorism laws which would have allowed him to ban entities such as, for example, Hizbut Tahrir who directly and  indirectly provide the networks that encourage ,support and defend the likes of Khaleed Sharouf.
Payne's response,trying to blame departmental policy for her incompetence, is what one expects given her past performance. Early this year in a desperate attempt to sound "progerssive"  and provide herself a defence she  blamed  the Centrelink computer systems for which she was responsible as Minister for Human Services for  her department's mismanagement. One shudders to imagine what she can now do with a far larger budget.
END 

Sunday, September 13, 2015

Najib's US$ 681 million donation -UMNO, Najib may have brought themselves under US jurisdiction

by Ganesh Sahathevan
The continued insistence by Malaysia's PM Najib Razak and the ruling UMNO that a sum of  
US$ 681 million transferred to Najib's accounts in Malaysia via Wells Fargo Bank in New York was a donation to ensure UMNO remains in power may well have brought Najib and UMNO under the jurisdiction of US laws on campaign and political funding.

The problem for Najib and UMNO is the admission by none other than themselves that the funds were for a party political purpose:
Malaysia's Tourism Minister Mohamed Nazri Abdul Aziz on Tuesday (Aug 11) defended Prime Minister Najib Razak, suggesting that "a brotherly nation" which wanted to see "certain parties win in the general elections" was behind the RM2.6 billion deposited into Mr Najib's personal accounts in 2013.
"Whatever donation was given to us was from a friendly nation, not a nation that is much stronger than us like the US," he told reporters on Tuesday. "But this is a brotherly nation who wants to see certain parties win in the general election because we're friendly to them - there's nothing wrong."

The United States' federal and state  laws with regards political contributions  are wide ranging ,and include issues such as tax deductions, limits, and contributions by foreign nationals. Consequently, the definition of what constitutes a political donation or contribution is not always limited,and can be defined broadly to include any payment  anywhere in the world so long as it falls within the definition of a political contribution. 
The problem for UMNO and Najib is the admission , in fact insistence, that the US$ 681 million transferred to Najib's accounts in Malaysia via Wells Fargo Bank in New York was a donation to ensure UMNO remains in power . In doing so they are probably the first foreign political party to have admitted receiving and/or managing their funding in and via the United States, thus bringing themselves under the jurisdiction of US laws, including laws requiring disclosure of donors, amounts, purpose and whole range of other matters they have refused to reveal. The contributor/s of the funds may also have to provide details, of for example, the source of their generous contribution. 
EN D


Wednesday, September 2, 2015

Can the Saudis,OPEC ,survive US oil EXPORTS

Comment
While the the article below from the Oil and Gas Journal  debates the pros and cons of lifting restrictions on the the export of US crude the question that follows is probably more important : Can the US then determine international oil prices using its EXPORTS,and can the Saudi's and OPEC survive the onslaught? To properly understand the issue  readers are also referred to the two articles below on how the shale industry is already enabling the US to become the swing producer ie the  country that changes its crude oil output to meet fluctuations in market demand, taking over that role from Saudi Arabia.
Given  the Saudis and OPEC member countries dependence on oil revenues, they cannot afford to fight another price war. The Saudis are even now suffering  the adverse  consequences of starting the current  round of price cuts.
HOUSTON, Sept. 2
09/02/2015
By OGJ editors

A study released Sept. 1 by the US Energy Information Administration was apparent cause for celebration for several oil and gas industry groups, which took its findings as confirmation that lifting restrictions on US crude oil exports would be a net positive for the industry as well as consumers.

EIA developed several analyses that examine the implications of removing the restrictions for the price of US and global marker crude streams, gasoline prices, crude production, refining activity, and trade in crude and petroleum products.

The study, Effects of Removing Restrictions on US Crude Oil Exports, was conducted in response to requests from US Sen. and current Senate Energy and Natural Resources Committee Chairman Lisa Murkowski (R-Alas.) and former chairman and Sen. Mary L. Landrieu (D-La.), (OGJ Online, Apr. 14, 2014), as well as current members Ronald L. Wyden (D-Ore.) and Maria E. Cantwell (D-Wash.).

Murkowski previously included language ending the 1970s-era ban in her Offshore Production and National Security (OPENS) Act, which was approved by the energy committee at the end of July (OGJ Online, July 24, 2015).

“Multiple studies have shown that lifting the export ban will improve our economic and energy security without harming American consumers,” Murkowski remarked in a statement welcoming the study. “It’s time to leave the old scarcity mindset behind and seize the opportunities provided by America’s energy resurgence.”

Higher output, bigger impact

The report applies EIA’s energy models to directly compare cases over the next decade with and without the removal of current restrictions on crude exports. Four baseline cases using EIA’s National Energy Modeling System are considered to reflect a range of outlooks for resources and technology as well as prices, which are key drivers of crude production.

For this analysis, EIA generally assumes that all streams with 50° gravity oil and above would be eligible for processing and export under recent BIS guidance.

The analysis finds no difference between projections with and without current export restrictions in two analysis cases in which projected production with current export restrictions remains below 10.6 million b/d over the next decade.

However, in two other analysis cases where production in 2025 ranges 11.7-13.6 million b/d, projections without export restrictions show increased production, higher crude exports, reduced product exports, and slightly lower gasoline prices to US consumers compared with parallel cases that maintain current export restrictions.

The variation in projected production across the four baseline cases used in the report reflect differences in the characterization of oil resources and technology as well as future crude prices. EIA notes there is a considerable spread in projected production across these cases. The removal of crude export restrictions does not lead to additional production in the reference and low oil price cases, where production remains at or below 10.6 million b/d through 2025.

However, the removal of crude export restrictions leads to additional production between 400,000-500,000 b/d by 2025 in the high oil and gas resource (HOGR) and HOGR-low price (HOGR-LP) cases that have significantly higher baseline production based on more optimistic resource and technology assumptions.

Gas prices could fall, not rise

Petroleum product prices in the US, including gasoline prices, would be either unchanged or slightly reduced by the removal of current restrictions on crude exports. EIA notes that petroleum product prices throughout the US have a much stronger relationship to North Sea Brent prices than to West Texas Intermediate prices.

In the HOGR and HOGR-LP high-production cases, the elimination of current restrictions on crude exports narrows the Brent-WTI spread by raising the WTI price. As producers respond to the higher WTI price with higher production, the global supply-demand balance becomes looser unless increased production is fully offset by production cuts elsewhere. The looser balance implies lower Brent prices, which in turn result in slightly lower petroleum product prices for US consumers.

Combined net exports of crude and petroleum products from the US are generally higher in cases with higher US crude production regardless of US crude export policies. However, crude export policies materially affect the mix between crude and product exports, particularly in the HOGR and HOGR-LP cases, which have high levels of production.

Crude exports tend to represent a larger share of combined crude and product exports in cases where crude exports are unrestricted. Also, in cases where the level of crude production increases with the removal of crude export restrictions, total combined crude and product exports are higher than in parallel cases with current crude export restrictions in place.

Although unrestricted exports of US crude would either leave global crude prices unchanged or result in a small price reduction compared with parallel cases that maintain current restrictions on crude exports, other factors affecting global supply and demand will largely determine whether global crude prices remain close to their current level, as in EIA’s low oil price case, or rise along a path closer to the reference case trajectory.

As noted by EIA, resource and technology outcomes as well as global price drivers will affect growth in US crude production whether or not current US crude export policies are maintained.

‘Win-win’ for US consumers

“Today’s EIA report is a win-win for American energy consumers and energy producers,” said Barry Russell, president of the Independent Petroleum Association of America, in a statement released subsequent to the report. “By lifting the 4-decades-old ban on US crude oil exports, Americans would see an increase in American energy production, which would, in turn, grow our economy, create good-paying American jobs, and help lower gasoline prices for hardworking American families."

Russell last month urged further administrative action on US crude exports after the Obama administration approved a crude exchange between the US and Mexico (OGJ Online, Aug. 14, 2015). Following news of a secured agreement with Iran that would allow Iranian oil to get traded on the world market, Russell questioned why America wouldn’t allow its companies to do the same with their American-made surplus of crude.

IPAA also voiced its support in May for Murkowski’s and Heidi Heidi Heitkamp’s (D-ND) legislation seeking to lift the ban (OGJ Online, May 13, 2015).

The American Petroleum Institute also noted that “consumers could save on fuel costs if policymakers act now to lift trade restrictions on US crude oil.”

Margo Thorning, senior vice-president and chief economist for the American Council for Capital Formation took it a step further, stating, “It’s not only the increased economic growth and lower gas prices that we stand to lose by keeping this outdated energy policy in place, but our global credibility as well. This begs the question why the government is standing in the way of a policy change that it itself finds will benefit American taxpayers?”


Swing producer: A new role for U.S. shale and how to embrace it

Aug 7, 2015, 11:15am CDT



Laurance L
Courtesy Laurance L. Prescott, Guest contributor
Laurance L. Prescott is an associate director of 
Houston-based Accumyn Consulting.
The crude oil market has been like the Texas floods of late — too much oil since 2013, too much rain this spring, and we are dealing with the consequences. No mortal could stop the floods in Texas, and OPEC could not stop the oil flood. U.S. shale had changed the game.

OPEC declined to act as the swing producer because it could not stop the unprecedented increase in world petroleum stocks (crude plus liquids), leading to May’s market surplus of 3 million bbl/day.

The excess crude oil came from U.S. shale fields. From January 2011 to January 2015, tight oil production from U.S. shale fields increased from 1.0 to 4.5 million bbl/day. In the same period, OPEC’s production fell by 0.3 percent and its market share fell from 43.2 percent to 41.2 percent, a drop representing 1.6 million bbl/day. OPEC may have held the price up until last June, but it couldn’t stop price from plummeting thereafter, as world stocks rose to unprecedented levels.

Had OPEC continued to cut production, keeping price up, U.S. shale producers would have continued dramatic growth. Where would it have stopped? With high prices, OPEC supply cuts would have been replaced quickly by U.S. tight oil production.

Instead, in November, OPEC surprised the market, changing it’s focus to market share. Price plummeted 24 percent in 18 days, bottoming out on March 13 at $43.39/bbl. U.S. oil rigs dropped from 1,575 on Dec. 5 to 635 on June 12, a 60 percent drop.

OPEC realized it could no longer divert price in a flooded market, acting alone. Now, shale producers must transition from price takers into swing producers, making decisions that collectively but independently help correct market imbalances and dampen market price swings. Here’s how they can and what the threats are:

1. Accept the swing-producer role

When price changes trend, shale producers need to adjust production in the same direction within one to three months of a price swing, as OPEC did.

Eagle Ford shale production shows decline rates steep enough to brake production quickly: down 28 percent from first month to third, and 50 percent to sixth. Shale production leveled out in April this year, four months after price and rigs plummeted, and has started to decline. While shale can help, shale isn’t big enough yet to swing production alone.

2. Keep pushing on costs, technology and production efficiency

The shale revolution came about from technology breakthroughs and methodology improvements. Keep pushing the envelope to improve efficiency, reduce costs and increase swing production ability.

3. Be realistic about price

U.S. shale producers can no longer be price takers, comparing current prices to their breakeven prices.

Shale producers must understand how price behaves. They can use a simple idea ­— a “shale threshold price ratio” to inform their price expectations. It is the current price divided by their average breakeven price. If the ratio is high, expect the current price to fall soon and quickly, as shale production ramps up. If the ratio is closer to 1, expect it to come down more slowly.

Use these new price expectations to evaluate new investments and capital decisions. It’s simple, and introduces caution. It’s hindsight, but with better informed expectations, producers may have avoided some of the bigger risks of the last five years.

4. Be cautious about antitrust

Producers need not collaborate about production decisions. What matters is sound price expectations and how producers use them.

5. Understand threats

Market forces beyond producer control affect price, such as geopolitical events and supply disruptions. Producers will form better price expectations if they stay current on expected impact and duration.

The biggest threat is continued excess supply and yet lower prices. With cost reductions up to 30 percent per well, current shale breakeven prices range roughly from $25/bbl to $90/bbl, with most between $45 and $80. A price of $30 would pretty much shut shale down. If price stays above $50, U.S. producers can help by swinging shale production.

Practical and operational issues will challenge the entire U.S. oil industry – storage, downstream, trading and capital market firms will also need to adjust to a new way of doing business.

Finally, since neither OPEC nor the U.S. can swing production alone, OPEC must help.

By the Numbers

47% — How fast U.S. shale fields increased at an annual rate from January 2011 to January 2015 — they went from 1.0 to 4.5 million bbl/day

0.3% — How much OPEC’s production fell in the same time period — and its market share fell from 43.2% to 41.2%

1,575 — Number of U.S. oil rigs on Dec. 5

635 — Number of U.S. oil rigs on June 12 — a 60% drop

Source: Accumyn Consulting
Laurance L. Prescott is an associate director of Houston-based Accumyn Consulting.



Why OPEC's losing its ability to set oil prices


Hailey Lee | @haileylee139Monday, 27 Oct 2014 | 5:22 PM ETCNBC.com





















61COMMENTSJoin the Discussion



OPEC's glory days of steering global oil prices may be at an end.

U.S. shale oil will replace the Organization of the Petroleum Exporting Countries as the first-mover "swing producer," according to a Goldman Sachs report from the weekend—meaning OPEC is losing its power to set global prices for crude.




Saudi Arabia, the world's largest oil exporter, no longer has "the ability to push prices lower than the production costs of U.S. shale" because any cuts from the kingdom would "accommodate the further expansion of U.S. shale, as well as reduce Saudi profits," Goldman said.


The shift in pricing power became apparent to Goldman when U.S. shale's spare capacity, at around 5 million barrels per day, exceededSaudi Arabia's spare capacity of 1.5 million. Spare capacity refers to the amount of crude a country is able to produce in 30 days in case of an emergency.

Read More'Bipolar' markets lose the fear; are they ready to relax?

This trend has been a long time coming, but the tipping point started this year with significant cuts in West African oil exports to the U.S., said John Kilduff, energy analyst and founding partner of commodities investment firm Again Capital. U.S. shale oil has replaced West African imports, which have been redirected to Asia.




The balance was further tipped toward the U.S. when production rebounded in Libya and Iraq despite political instability, adding to an already oversupplied market, Kilduff added.


OPEC pumped 30.6 million barrels of crude oil per day in September, a jump of 400,000 barrels from August that was driven by the Libyan output rebound, found Platts, a global energy information service.

Read MoreDespite washout, hedge funds not bailing on energy


OPEC's loss in pricing power is a consequence of not taking U.S. producers more seriously and cutting prices earlier for clients, said Phil Flynn, senior energy market analyst at Price Futures Group.


"Only a year ago, OPEC was still in denial, but with the slowing global economy, they can't laugh off U.S. production anymore," Flynn said.

By 2019, U.S. shale oil production will jump to 9.6 million barrles per day, from 8 million now, according to forecasts from the Energy Information Administration. In comparison, Saudi Arabia currently produces 9.6 million barrels of crude oil a day.

OPEC’s next move


All that said, market watchers across the board expect OPEC to remainhighly influential when it comes to the price of oil.


The group will likely cut production when the core countries meet in Vienna on Nov. 27, according to Kilduff. "OPEC is in the process of playing chicken with the market," he said. "But their hand will be forced and they will eventually cut, with the Saudis taking on the bulk of it."

OPEC has absorbed lower oil prices up until this point, declining to cut output in a bid to maintain market share.

Read MoreHow the US shale boom will be felt around the world


"The main reason why OPEC is not cutting production is they realize that U.S. shale is a serious threat to their global oil space," Flynn said.

The cyclical nature of the oil industry makes it unlikely that OPEC has lost its price-setting power permanently, Kilduff said: "There's a boom, bust and a new era upon us all the time. So, the jury's still out on the long-term sustainability of U.S. shale production."
Hailey LeeNews Associate