Posts Tagged ‘oil’

Vietnam scraps South China Sea oil drilling project under pressure from China — “There is only one real sovereign in the South China Sea.”

March 23, 2018


HANOI (Reuters) – Vietnam’s state oil firm PetroVietnam has ordered Spanish energy firm Repsol to suspend its “Red Emperor” project off the country’s southeastern coast following pressure from China, the BBC reported on Friday.

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It would be the second time in less than a year that Vietnam has had to cancel a major oil development in the South China Sea under pressure from China.

The move comes as Repsol was making final preparations for commercial drilling.

A rig, the Ensco 8504, was scheduled to depart from Singapore for the drill site on Thursday, the report said, citing an unnamed energy industry source.

The cancellation could cost Repsol and its partners $200 million in sunk investment, according to the BBC.

Repsol and PetroVietnam executives could not immediately be reached for comment. The Vietnamese foreign ministry did not immediately respond to an emailed request for comment.

Red Emperor, known in Vietnamese as the Ca Rong Do field, is part of Block 07/03 in the Nam Con Son basin, 440 km (273 miles) off the coast of Vietnam’s southern city of Vung Tau.

The block lies near the U-shaped “nine-dash line” that marks the vast area that China claims in the sea and overlaps what it says are its own oil concessions.

The field can produce 25,000-30,000 barrels of oil and 60 million cubic meters of gas a day, Vietnamese news provider reported last month.

Repsol spent around 33 million euros ($41 million) on exploration in Vietnam last year, according to the company’s 2017 profit and loss statement.

The Red Emperor site is considered by Repsol’s top management as one of the company’s future growth projects.

Repsol, which has a 51.75 percent stake in the project signed a 384 million euro rental contract for a rig to start work on a Vietnamese site in 2019, according to the statement.

Reporting by Khanh Vu in HANOI; Additional reporting by Jose Elias Rodriguez in MADRID; Editing by James Pearson and Richard Pullin


Boko Haram in Nigeria: “They are achieving the mission they have set out to do.” — “We must unite against them.”

March 17, 2018


The leader of the Northern Elders Forum, NEF, Professor Ango Abdullahi has voiced his concern about the lingering killings in some parts of Nigeria.

Abdullahi in a statement on Friday said blaming Fulani herdsmen for the killings was political.

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He noted that killings can only be stopped when there was a right communication.

The statement read: “Killings are activities that the government did not envisage but the killings are a challenge to everybody. So, everybody should be blamed for the killings. Communication resolves everything. How much communication is there? And if there are no instruments of communicating, we must establish them rather than buying the weapons of war.

“But let me tell you and I am saying it with all sense of responsibility. Many people are playing politics with the killings. They are initiating a particular pattern of belief, which would undermine the credibility of their group in future. We had the Biafran war in 1967 -1970 and the South East held Nigeria to a standstill before it ended. So, nobody could undermine the Nigerian/Biafran war.

“Now, the issue of militancy confronted this country and reduced our oil production to less than one million barrels per day. Nobody can undermine the works the militants did in the Niger Delta. The National Democratic Coalition (NADECO) confronted Nigeria peacefully after the annulment of the 1993 election and in spite of what you may think, there was no coup in Nigeria that was resisted that ever succeeded. The 1993 annulment of the election of MKO Abiola was resisted through the activities of NADECO and so on and so forth, and that was how the compromises of 1999 brought in former President Olusegun Obasanjo from the South West zone of the country.

“From what I said now, you cannot undermine the Niger Delta, you cannot undermine the Igbo and you cannot undermine the Yoruba. And when the problem of the Fulani caliphate was there, they discovered that they could not undermine the Kanuri and the Tivs.

“But do you know what we are doing now because of politics? Anything that happens now, we say it is the Fulani herdsmen whereas it is since the collapse of the Libyan army and the problem in Mali that caused the free flow of weapons into Nigeria especially the activities of Boko Haram. And instead of looking at the challenges confronting Nigeria, we are saying that it is the herdsmen that are doing it. Cattle rustlers also seize the cattle and kill the herdsmen which is another issue confronting Nigeria but we in Nigeria because of politics always say killings are by the Fulani herdsmen.

“Do you know that what Othman Dan Fodio could not achieve when he was quoted as having said that he would dip the Quoran in the sea is being achieved through stupid politicking by saying that everything that happens in Nigeria is by the Fulani herdsmen? Anywhere you go to, people would say we cannot go to farm because of the Fulani herdsmen. This is when as a matter of fact, the Fulani herdsmen are in more danger than any other Nigerian. Do we talk of Igbo armed robbers? Do we talk of Yoruba 419ers and so on? We talk of all these as crimes and we should be talking of the killings as also a crime. But because of politics, we are going into areas to make our children believe that the fear of Fulani herdsmen is the beginning of wisdom. So, what Othman Dan Fodio could not achieve when he was alive in Nigeria, we are achieving it through communication and making our own children afraid of the Fulani.

“Remember that the Fulani are in the minority in this country. Can you see the way we are moving in the way of deforestation and who would pay for it; our children. We must have the right communication. So, I want to say that criminals do the killings and we must all come together to fight it.

“I am worried over the situation but do not think that it is because the election is coming next year. The Boko Haram sect is fighting a war and they are not fighting a war because there is an election. They are fighting the war because they believe in what they are doing. They are ‘haram’. In other words, they are discouraging people from going to school. So, if Boko Haram abducts people like they did recently in Dapchi, they could not go to school. It is an area that people do not want to go to school and with what happened, you further discourage them from going to school.

“They are achieving the mission they have set out to do. So, they are not looking for election but do not forget that since they have been degraded, they would look for soft targets and where the military is weak to carry out their activities. If they go to the market, they are not there to kidnap anybody but to kill people. They have their members who are suicide bombers. The perception they have is what no Igbo man or Yoruba man would have. They say if you kill yourself, you are going to paradise. Tell me any Southerner whether Yoruba, Igbo, Edo, Urhobo and so on that would kill himself in order to go to paradise. Nobody would do that. But over there, you are told that if you kill someone for a good cause, you are going to paradise. And that is not even in the Quoran. When I was in a Quoranic school in Auchi, I was told that if you kill a Christian, you have not committed an offence. I grew up to discover that it was a lie. It is not there anywhere in the Quoran.

“But then, the Prophet Muhammed said that there would be 73 sects in Islam and only one would be correct. Only one that abides by the provision of the Quoran is correct. The Quoran has dos and donts which says that you do this, you go to paradise and you do that, you go to hell. I am not aware of any book that says it so clearly where you go to when you sin. So people now take the road they want to take and when a scholar moves in the direction of using religion as a weapon, then you get what we have in Nigeria today.

“So, we have to really communicate in the direction of peace and not war. Someone wins an election, takes over and governs and someone loses election and gets prepared to contest again. That is what happens in Britain, America and others. Election should not be a do-or-die thing.

“Do you know that the whole of Nigeria is porous? How many areas do we have? The borders are thousands of kilometers porous. Do you know that around 1980 or so, people of Chad came and invaded Maiduguri and I think that President Muhammadu Buhari was the GOC that time.

“So, these people have been coming but do not forget that Nigeria is at war with Boko Haram. Therefore the whole world of insurgents –ISIS, Tuaregs, al-Qaeda and so on are there fighting. Perhaps, if we look deep enough, we may discover that all these people we call Fulani herdsmen are insurgents who have infiltrated Nigeria. So, the nation is fighting more than the Boko Haram sect. We are currently fighting the whole world of insurgents and that is what Nigerians should be thinking about.

“It is a war that Nigeria must fight and whatever government that we have, the insurgents are there to undermine security. Nigeria is 60 per cent rural and in the rural areas, how many security officials do we have there? So, we have a lot of problems on our hands and we must unite to address these problems.”



Iran’s Oil Boom Hasn’t Showed Up

March 8, 2018

Many international companies are hesitant to invest as the Trump administration threatens to reimpose sanctions

TEHRAN, Iran—Iran’s oil-and-gas industry was supposed to take off after the nuclear deal. Instead, one of the world’s largest energy sectors is languishing.

International oil companies are staying on the sidelines as the Trump administration threatens to rip up the 2016 deal and reimpose oil sanctions lifted in exchange for limits on its atomic-power program.

Iranian officials predicted the deal would result by now in $10 billion a year in fresh foreign spending in the oil and gas sector. But only about $1.3 billion has been injected over two years, mostly from China, said Homayoun Falakshahi, an Iran-focused analyst at the oil consultancy Wood Mackenzie.

After an initial uptick, oil-production capacity has plateaued at 3.85 million barrels a day, according to the International Energy Agency, far below the varying estimates that Iranian officials have predicted over the years. France’s Total SA signed a $1 billion deal on President Donald Trump’s election day that was touted as heralding a rush of Western investment, but it remains the only one to forge ahead.

French auto-maker Peugeot and aircraft producer Boeing Co. have found ways to make deals in Iran, but the energy sector has lagged because these investments would be multi-billion-dollar, potentially decadeslong affairs with high visibility to the U.S. government. In Iran, hardliners opposed to foreign investment have pushed back against President Hassan Rouhani’s plans to sweeten the pot for oil companies.

A weekend conference in Tehran was supposed to be a showcase of the country’s energy potential. British oil giant BP PLC, French energy company EDF Group and Germany’s Wintershall AG sent representatives, people familiar with the matter said.

But these companies are hesitant because they or their parent companies have U.S. operations that could be affected if sanctions were reimposed, the people said.

“It’s depressing,” said an Italian executive whose company has been trying for years to sign an oil deal in Iran.

BP declined to comment. EDF didn’t respond to requests for comment. Wintershall said it is “closely following the developments” in Iran and follows all laws.

The oil industry was expected to be the easiest piece of Iran’s economy to fix after almost a decade of sanctions curbed its crude exports. Iran has the world’s fourth-largest reserves of oil and the largest natural-gas assets—much of it still untapped. Big oil companies like BP had long experience in Iran, the expertise to unlock oil from its sometimes difficult geology and the willingness to go back in under the right terms.


  • Oil Prices Fall as U.S. Production Climbs

Iranian officials acknowledged that foreign investment was coming in more slowly than expected, blaming the U.S. for sowing fear and uncertainty.

“I am not satisfied,” said Iranian Oil Minister Bijan Zanganeh in an interview. “But we are trying and I am optimistic.”

Mr. Trump has set a May 12 deadline for amending the nuclear deal or setting a course that could revive sanctions on Iranian oil sales. A U.S. State Department official said the U.S. was upholding its side of the deal “while holding Iran strictly accountable to its commitments.”

U.S. officials are concerned about Iran’s support for groups like Hezbollah and its ballistic missile technology, among other things.

Iran did get economic relief after sanctions were lifted, with exports rising by almost a million barrels a day and investments pouring in from China. Those barrels helped stave off a financial collapse, got Iran’s economy growing again and eased rampant inflation.

But its anemic comeback since has helped foster broad disappointment among average Iranians. Economic concerns were the initial focus of widespread demonstrations this year that transformed into a broader condemnation of Iran’s ruling system.

Iran’s economic growth is forecast to fall to 4.2% during this fiscal year from 6.6% the year before, according to the International Monetary Fund, citing flat oil production and uncertainty over the deal. The Iranian rial has fluctuated wildly.

Mr. Zanganeh said he expected to make deals with foreign oil companies in the coming weeks, and Russian state media reported that Russian oil companies were planning to invest in Iran. Some Western companies are looking at deals in Iran, including Baker Hughes GE, which is trying to find a way to use non-American staff to supply equipment and services for Total’s Iranian gas project, people familiar with the matter said.

A Baker Hughes GE spokeswoman said its “commercial engagement in Iran is limited to those activities that are consistent and compliant with U.S. government rules, licenses and policies.”

The U.S. still bars all dollar transactions with Iran, complicating matters because oil is traded in greenbacks. Big banks are reluctant to provide financing for Iranian deals.

According to people familiar with the matter, Total has had to assemble a group of little-known small banks from China, France and Italy to transfer money for its project to increase production at Iran’s largest offshore gas field.

Total said its gas project “is progressing as per plan” and its use of small banks was in compliance with all laws.

Iranian hardliners have been working to limit foreign investments like Total to natural gas, which is less politically charged in Iran because it isn’t exported in large quantities like crude oil.

But last month, Iran canceled a preliminary deal with a Norwegian company to build the country’s first liquefied-natural-gas offshore export facility after criticism from hardliners.

Local oil contractor Mohammed Hadi Rahaeari drew loud applause this weekend from a mostly Iranian audience at the conference by calling for local companies’ needs to take precedence over outside firms.

“You should build your house first before letting foreigners in,” he said.

Write to Benoit Faucon at

Philippines Struggles To Cope With China’s “Duplicitous Ways” in South China Sea, Benham Rise

March 7, 2018

GOTCHA – Jarius Bondoc (The Philippine Star) – March 7, 2018 – 12:00am

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China has militarized the South China Sea — even though they have no legal claim. This is Mischief Reef, now an extensive Chinese military base — one of seven Chinese military bases near the Philippines

The issues of the West and East Philippine Seas are joined, as far as China is concerned. As polls show, Filipinos distrust China because of its duplicitous ways. In Benham Rise east of Luzon, China conducted natural resource and military explorations without Manila’s consent. It rejected Manila’s reasonable condition of including Filipino scientists in its researches. After sneakily giving Chinese names to five undersea peaks it now wants to name 50 or so other features. It claims to a right to conduct marine scientific research (MSR) under international law.

In the West Philippine Sea, China has done worse. It grabbed the traditional Filipino fishing ground Scarborough Shoal 123 miles off Zambales, within the Philippines’ 200-mile exclusive economic zone but 700 miles from China’s nearest coast and beyond its own EEZ. It has concreted seven reefs and shoals in the Philippine EEZ into artificial island fortresses. It also claims reefs and rocks closer to the Philippines by imagining to be the first to name them.

Supreme Court Senior Justice Antonio Carpio leads patriotic Filipinos in disputing Beijing’s illegal claims and activities. He helped in Manila’s victorious arbitration in The Hague against China’s maritime expansionism. He also debunked through ancient maps and documents Beijing’s farcical “historical rights” to the South China (West Philippine) Sea.

Here Carpio shares his thoughts on the joined east-west issues:

“(1) No Philippine law specifically regulates MSR in our extended continental shelf (beyond the 200-mile EEZ) like Benham Rise.

“(2) However, the Philippines having ratified UNCLOS, this international convention is part of the Philippine legal system. Under Article 246 of UNCLOS, the Philippines has an obligation to allow foreign states to conduct MSR in its continental shelf like Benham Rise ‘to increase scientific knowledge of the marine environment for the benefit of all mankind.’ Thus, the results of the MSR must be made known to the whole world.

“(3) MSR by foreign states in Benham Rise is purely for scientific research, and cannot be to explore the mineral resources for exploitation. Under UNCLOS, the Philippines has exclusive sovereign right to explore and exploit the mineral resources in its extended continental shelf like Benham Rise. Neither the President nor the Foreign Secretary can waive this exclusive sovereign right to a foreign state. To ensure that the foreign state conducting MSR in our extended continental shelf is not exploring for purposes of exploitation, Filipino marine scientists must be on board the foreign research vessels.

“(4) UNCLOS is a ‘package deal.’ A state that ratifies UNCLOS must accept its rights and obligations as one entire package. A ratifying state cannot cherry pick – accepting only certain provisions and rejecting others.

“(5) By refusing to accept the award of the UNCLOS arbitral tribunal pursuant to the dispute settlement provisions of UNCLOS, China is not accepting its obligation under UNCLOS. China should not be allowed to enjoy its rights under UNCLOS, like conducting MSR in Benham Rise, while it refuses to accept its obligation under the arbitral award. Otherwise, China is cherry picking and not taking UNCLOS as one package deal.

“(6) Article 246 of UNCLOS states, ‘Coastal States shall, in normal circumstances, grant their consent for marine scientific research projects by other States.’ The refusal of China to comply with the arbitral award of the UNCLOS tribunal is not a ‘normal circumstance,’ and thus the Philippines should refuse China’s request for MSR in Benham Rise.

“(7) If a bully has squatted on your front yard, and requests to look at your backyard, would you grant the request of the bully? China has squatted on the West Philippine Sea and refuses to leave despite the ruling of the UNCLOS tribunal. Now, China requests to be allowed to survey the Philippine Sea on the east side of the Philippines. The Philippines would be dumb (bugok) to grant China’s request.”

*      *      *

For 14 years Harry Roque headed the Center for International Law and taught at the University of the Philippines College of Law. That was before he became party-list congressman in 2016 and presidential spokesman in 2017. Here are some of his recent statements:

On China’s naming of undersea features in Benham Rise: “Don’t let’s magnify the issue … China gave so many names – siopao, siomai, ampao, pechay, hototay – but all those don’t mean it is laying claim.”

On President Rodrigo Duterte’s proposed “joint exploration” with China of West Philippine Sea resources: “It’s a practical solution for Filipinos to utilize natural resources without having to deal with the contentious conflicting claims to territories… The existing jurisprudence is we can enter into joint exploration and joint exploitation with foreign entities provided that it complies with the Constitution among others, it be pursuant to a written agreement signed by the President and submitted to Congress.”

On China’s “co-ownership” of those Philippine resources: “What the President meant was that’s exactly the kind of relationship we will have in a joint exploration and exploitation.”

*      *      *

Ten years ago when the Joint Marine Seismic Understanding was exposed, Roque called it “treasonous.” Malacañang had ordered the Philippine National Oil Co. to sign with China National Overseas Oil Corp. the secret joint exploration of the Palawan continental shelf and Recto (Reed) Bank within the Philippine EEZ and way beyond China’s.

Roque said:

“Clearly, an agreement to jointly survey for the existence of petroleum resources in the Spratlys would be a derogation of the country’s sovereign rights (because) the exploration here would cease to be exclusive.

“A Filipino GOCC could not redefine what is provided for by law.

“My position is that anyone who will give away Philippine territory is guilty of treason. Since the national territory is governed by the Constitution and by law, a President (Gloria Macapagal Arroyo) who will surrender the exercise of sovereign rights is guilty of treason, an impeachable offense.”

*      *      *

Catch Sapol radio show, Saturdays, 8-10 a.m., DWIZ, (882-AM).

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Chinese bases near the Philippines


We’ve heard 白痴國家 (Means “Idiot Nation”)




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China has long had its eye on James Shoal and may move toward the island unless Malaysia or Indonesia protest…


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China says it has sovereignty over all the South China Sea north of its “nine dash line.” On July 12, 2016, the Permanent Court of Arbitration  in The Hague said this claim by China was not valid. But China and the Philippine government then chose to ignore international law.

Philippine judge rules out South China Sea gas deal unless China recognises Manila’s sovereignty

March 5, 2018

Joint venture exploration project is in the Reed Bank area of disputed waterway, which The Hague ruled was part of the Philippines’ exclusive economic zone

PUBLISHED : Monday, 05 March, 2018, 2:03pm
UPDATED : Monday, 05 March, 2018, 8:10pm

Any deal between the Philippines and a Chinese firm to jointly explore for gas on Reed Bank in the South China Sea would be illegal unless Beijing recognised Manila’s sovereign rights there, a Philippine judge said on Monday.

The Philippines has identified two areas in the crowded waterway suitable for joint exploration and the two countries are seeking ways to tackle the diplomatic and legal headaches of jointly exploring in the waters, but without addressing the issue of sovereignty.

Reed Bank is claimed by both sides, but international law says it falls within the exclusive economic zone (EEZ) of the Philippines. China says it falls within the so-called nine-dash line on maps recording its historic rights in the area.

Antonio Carpio, the acting top judge of the Supreme Court, said it was legal for the Philippines’ energy ministry to talk to state-owned China National Offshore Oil Corp (CNOOC) as a possible subcontractor.

“There’s no problem as long as CNOOC recognises that that is our exclusive economic zone,” he told news channel ANC. “But that is the problem, because CNOOC will not recognise [Philippine jurisdiction].”

Carpio was speaking as an expert on international law and staunch advocate for the Philippines to assert its maritime sovereignty claims.

He was among the lawyers involved in the Philippines’ legal challenge against China, which Manila took to the Permanent Court of Arbitration in The Hague in 2013.

The tribunal invalidated China’s nine-dash line in its 2016 ruling, making clear that Reed Bank fell within the Philippines’ EEZ, and that Manila had sovereign rights to resources there.

China is a signatory to the United Nations Convention on the Law of the Sea but it does not recognise The Hague ruling.

“The stumbling block has always been the insistence of China that we recognise their sovereign rights,” Carpio said.

“We cannot do that any more because there’s already a ruling. And the [Philippine] constitution says the state shall protect its marine wealth in its exclusive economic zone. It’s very specific.”

Reed Bank was the site of exploration by the Philippines’ PXP Energy Corp to evaluate the block’s gas reserves, until the energy ministry suspended activities there in late 2014 because of the arbitration case.

PXP has had talks with CNOOC for possible joint exploration and development, but the arbitration halted negotiations. Carpio said another issue between the two companies was who should collect taxes.

Last week, Philippine presidential spokesman Harry Roque said any potential deals between Manila and Beijing should be agreed with a company and not the Chinese government.

On Monday, he said the Philippines and China would have to sign a treaty to enter into joint exploration and development in Reed Bank.

“That’s on the assumption that [Reed Bank] is contested territory,” he said. “We have no treaty on joint exploration as of yet.”


Why China is coming to Brunei’s aid as its oil slowly runs out

March 5, 2018

Beijing sees the state on the coast of Borneo as a potentially key ally as it stakes its claim to waters in the South China Sea, according to analysts

South China Mornoing Posy

PUBLISHED : Monday, 05 March, 2018, 3:25pm
UPDATED : Monday, 05 March, 2018, 4:58pm

The Sultan of Brunei, Hassanal Bolkiah, inspects an honour guard during National Day celebrations last month. Photo: Reuters


On a tiny island off Brunei’s northern tip on the South China Sea, thousands of Chinese workers are building a refinery and petrochemical complex, along with a bridge connecting it to the capital, Bandar Seri Begawan.

When completed, the first phase of the US$3.4 billion complex on Muara Besar island, run by China’s Hengyi Group, will be Brunei’s largest-ever foreign investment project and comes at a time when the oil-dependent country needs it the most.

Brunei’s oil and gas reserves are expected to run out within two decades. As production falls, oil firms will not be investing much in existing facilities, further hampering output, oil analysts say. As a result, the country’s oil revenues, which provide virtually all of Brunei’s government spending, are in steady decline.

With youth unemployment rising, Brunei’s ruler, Sultan Hassanal Bolkiah, is trying to quickly reform the economy and diversify its sources of income, while fighting graft and cracking down on dissent.

Brunei’s changing fortunes have been reflected in its financial industry. HSBC pulled out of Brunei last year, while Citibank exited in 2014 after 41 years. Bank of China, meanwhile, opened its first branch in the sultanate in December 2016.

The Muara Besar project is promising more than 10,000 jobs, at least half of which would go to fresh graduates, media reports in Brunei said. But claims that thousands of Chinese workers have been shipped in to build the complex has angered some residents.

“There are no jobs for us, so why create some for the Chinese?” asked one shopkeeper in the capital city.

Hengyi Industries, the local company building the refinery, did not respond to requests for comment. The company, founded in 2011 and based in Bandar Seri Begawan, expects to complete the first phase of the refinery and petrochemical complex on Muara Besar by the end of the year, according to its website.

 Students attend the National Day celebrations last month. Photo: Reuters

A US$12 billion second phase would expand the refinery capacity to 281,150 barrels per day and build units to produce 1.5 million tonnes per year of ethylene and 2 million tonnes per year of paraxylene, the company said last month.

Total Chinese investment in Brunei is estimated at US$4.1 billion, according to the American Enterprise Institute’s China Global investment tracker.

That will almost certainly rise as China ramps up its “Belt and Road Initiative”. Sometimes called the “21st Century Maritime Silk Road, it envisages linking China with Southeast Asia, Africa and Eurasia through a complex network of ports, roads, railways and industrial estates.

“Brunei is an important country along the 21st century Maritime Silk Road,” Chinese ambassador to Brunei Yang Jian said at the opening ceremony in February 2017 for a joint venture, running Brunei’s largest container terminal.

Accumulated US foreign investment in Brunei, by contrast, was just US$116 million in 2012, the latest figures available, according to the US State Department.

China has invested about US$205 billion in East Asia between 2010 and 2017, according to the China Global investment tracker.

It has been increasing those investments while tussling with four other Southeast Asian nations, including Brunei, over competing claims to islets and atolls in the South China Sea.

“Building good relations and offering big investments are part of China’s strategy to split Southeast Asian nations to ensure there is no consensus on South China Sea matters,” said Jatswan Singh, associate professor at the University of Malaya in Kuala Lumpur, who has written four books on Brunei.

“The sultanate is hard-pressed for investments to diversify its economy and in this sense the Chinese investments are important to [Brunei],” he said. Brunei has not commented publicly about its territorial claims in the South China Sea.

There was a time not so long ago, with oil prices over US$100 a barrel, when Brunei citizens could care less about jobs at a refinery.

 Squeezed between two Malaysian states on the island of Borneo, Brunei provided cradle-to-grave benefits for its 420,000 citizens. Photo: Reuters

Squeezed between two Malaysian states on the island of Borneo, Brunei provided cradle-to-grave benefits for its 420,000 citizens, including zero taxes, subsidised housing and free education and health care.

But the sultan has had to whittle back some of those benefits – Brunei has been in recession for three straight years – and tighten up the ship of state.

The 71-year-old Bolkiah, the world’s second-longest reigning monarch, reshuffled his cabinet again last month, replacing six top ministers – just over a couple of years after they were appointed. No explanation was given.

Sources close to the government and foreign diplomats say Bolkiah wanted to weed out corruption and address grumbling among the Malay-Muslim majority who are unhappy with the pullback in welfare programmes, budget cuts and unemployment.

In the last available official report in 2014, the unemployment rate was put at 6.9 per cent. Unofficial figures suggest youth unemployment could be as high as 15 per cent.

“A majority in Brunei expect a job in the government, state-linked firms or in the oil and gas sector, but all three have been hit pretty hard,” one Western diplomat said.

Bolkiah, who is also the prime minister, controls the key portfolios of defence, finance and foreign affairs.

The sultan’s office did not respond to a request for comment and newly appointed ministers refused to comment during National Day celebrations last week.

 Brunei’s Sultan Hassanal Bolkiah salutes during National Day celebrations in Bandar Seri Begawan. Photo: Reuters

But the sultan is still popular. He marked 50 years in power in October, with a glittering procession through the capital on a gilded chariot, cheered by well-wishers.

But in the long run, an economy based on dwindling single source of income could erode the relationship between the ruler and his subjects, said Muang Zarni, democracy advocate and a former research fellow at the London School of Economics.

“That doesn’t mean that will translate into street protests, but Bruneians know things are not as rosy as they appear in the sultan’s newspapers and TV channels,” said Zarni, who quit the University Brunei Darussalam in 2013 over what he said was a lack of academic freedom.

China’s president orders arrest of CEFC’s founder Ye Jianming, ending entrepreneur’s stellar rise as one of China’s oil tsars — Funded by China’s state banks

March 1, 2018


© AFP/File | CEFC’s rapid expansion in China’s state-dominated oil universe and emergence as a major player in world oil markets has raised questions about its backing inside China

BEIJING (AFP) – Shares of two firms linked to Chinese conglomerate CEFC China Energy tumbled Thursday after a report that its high-flying chairman was under investigation.Ye Jianming — dubbed China’s “newest oil baron” by Forbes magazine in 2016 — quickly built CEFC China Energy into a global energy powerhouse, expanding into Eastern Europe, Africa and the Gulf States, and agreeing to buy 14 percent of Russian oil giant Rosneft last year.

Image result for Ye Jianming, photos

Ye Jianming

But Chinese financial news magazine Caixin, citing anonymous sources, reported that Ye has been put under investigation over links to a former Communist Party chief accused of graft.

The CEFC China Energy conglomerate itself is not publicly listed. But following the report, shares in Shenzhen-listed subsidiary CEFC Anhui International Holding fell by as much as 9.85 percent before closing down 4.45 percent, while affiliate CEFC Hong Kong Financial Investment Company dropped by almost 23 percent on Hong Kong’s Hang Seng.

Both companies distanced themselves from Ye in separate stock filings.

“Ye Jianming does not hold any position at (CEFC Anhui), there is no direct relationship with our company, and he is not the company’s actual controller,” the Shenzhen-listed unit of CEFC China Energy said in a stock filing prompted by the Caixin report.

The Hong Kong company said its directors “noted there are press reports today about Mr. Ye Jianming” but stressed that he did not hold any directorship and is not involved in the management of the its operations.

The Caixin report did not specify the nature of the investigation into the oil tycoon though it noted “Chinese authorities have requested Ye’s assistance in a graft investigation” of a former provincial Communist Party chief who had been detained on corruption charges.

The party chief had helped CEFC raise money, Caixin reported.

Beijing has sought to rein in conglomerates whose splashy overseas investments have taken billions out of the country. Last week, authorities took control of Anbang Insurance Group and said its chairman faced prosecution for “economic crimes”.

CEFC’s rapid expansion in China’s state-dominated oil universe and emergence as a major player in world oil markets has raised questions about its backing inside China.

The company has played up its role in Chinese President Xi Jinping’s ambitious One Belt One Road initiative.

CEFC China Energy did not respond to an AFP request for comment.

Last year, US authorities took the company to task over its business dealings in Africa.

US authorities arrested Hong Kong’s former home affairs secretary and the ex-foreign minister of Senegal for leading a multimillion dollar bribery scheme in Africa on behalf of a top Chinese energy company.

CEFC was not identified in the announcement or the complaint filed in New York federal district court, but details in the complaint pointed to CEFC China Energy.


China’s president orders arrest of CEFC’s founder Ye Jianming, ending entrepreneur’s stellar rise

From obscurity, Ye Jianming built a business empire with 263 billion yuan in revenue by 2015, before he turned 40, and began on a shopping spree for energy assets around the world, mostly funded by China’s state banks.

South China Morning Post

PUBLISHED : Thursday, 01 March, 2018, 2:31pm
UPDATED : Thursday, 01 March, 2018, 3:23pm

The Fujian entrepreneur who took less than five years to rise from obscurity to become head of China’s fourth-largest oil conglomerate, has been detained for questioning on the mainland at the direct order of the Chinese president Xi Jinping, according to four sources familiar with the matter.

Ye, ranked two spots ahead of French president Emmanuel Macron in Fortune magazine’s ‘40 Under 40’ list of the world’s most influential young people in 2016, was detained just before the start of the Lunar New Year celebrations on February 16, a source told the South China Morning Post, declining to provide his name for disclosing a matter under investigation. Caixin magazine earlier reported that Ye had been taken away for questioning, but the story appeared to have been removed from its website.

 CEFC’s founder Ye Jianming. Photo: SCMP/Handout

Shares of three companies linked to Ye’s flagship company CEFC China Energy plunged on stock exchanges in Hong Kong, Shenzhen and Singapore, wiping out a combined 4 billion yuan (US$630 million) in market value within an hour of trading.

A CEFC spokesman in Shanghai responded by text that the company “has nothing to announce for the time being,” declining to elaborate.

The detention of the low-profile entrepreneur follows the November 21 arrest in New York of Hong Kong’s former Home Secretary Patrick Ho, on charges of routing bribes for African government officials through US financial institutions.

Ho, 68, was leading a life of what he called “civil diplomacy” since his retirement from Hong Kong’s public service, heading a think tank called the China Energy Fund Committee, fully funded by CEFC. The think tank has special consultative status with the United Nation’s Economic and Social Council, with access to influential decision makers in UN bodies.

Ho and Senegal’s former foreign minister Cheikh Gadio operated “an international corruption scheme that spanned the globe” since 2014, according to a November 20, 2017 statement by the US Department of Justice. The two men allegedly offered a US$2 million bribe to Chad’s president Idriss Deby in exchange for “valuable oil rights,” and another US$500,000 to Uganda’s Foreign Affairs Minister Sam Kutesa.

 Sam Kutesa (left), President of the 69th session of the United Nations General Assembly, met with Ye Jianming (right), Chairman of CEFC China Energy, after appointing the Chinese entrepreneur as Special Honorary Advisor to UN General Assembly. Photo: CRIENGLISH

Ye’s detention in China marks a remarkably speedy downfall for an entrepreneur who was still making waves three months earlier. CEFC made its third media and communications asset in the Czech Republic in November, leading a consortium that would pay 500 million (US$609 million) to buy the majority of Czech broadcaster CME from Time Warner.

Two months earlier in September 2017, CEFC paid US$9.1 billion for 14.2 per cent of Russia’s state-backed oil company Rosneft, becoming one of the largest shareholders in the world’s largest listed oil firm by production.

Shanghai-based CEFC, established by Ye in 2002 when he was in his mid twenties, had spent at least US$1.7 billion since 2015 buying energy-related businesses in Romania, the United Arab Emirates, Russia and even Chad, not including another US$1.2 billion buying financial services in the US and in the Czech Republic.

 Czech Republic’s President Milos Zeman, center right, and Chinese President Xi Jinping review a guard of honour during a welcome ceremony outside the Great Hall of the People in Beijing, on October 27, 2014. The Czech president would make his second trip to China a year later, becoming the sole European Union head of state to attend China’s military parade to commemorate the end of the Second World War. Photo: AP Photo/Andy Wong

Due partly to Ye’s investments in the country, the Czech Republic’s president Milos Zeman was the sole European Union leader to join a 2015 military parade in Beijing to commemorate the end of the Second World War.

Ye, whose aggressive shopping spree had been attributed to the mistaken association of him with the family of the late Ye Jianying – China’s head of state from 1978 to 1983 – is actually the son of an ordinary worker’s family in Fujian province, according to people who know both families.

After working briefly as an enforcement officer with the forestry department, he earned his first pot of gold helping to extricate a Hong Kong businessman from financial strife and complete a real estate transaction, according to Depth-paper, a Chinese news portal.

From there, he bought at auction the oil businesses that the government had confiscated from Xiamen’s smuggling kingpin Lai Changxing, using loans from state banks, as well as investors in Hong Kong and Fujian to finance his purchase, he told Fortune in an interview.

By 2015, Ye had built up a business empire with 263 billion yuan in revenue, 60 per cent of which was from the trading of oil and gas. CEFC then embarked on an overseas shopping spree, starting with a US$680 million purchase of a majority stake in the overseas unit of Kazakhstan’s state oil company. Subsequent acquisitions extended across eastern Europe, the Middle East and Africa, mostly in oil and gas. He made waves in Hong Kong when CEFC paid HK$1.4 billion (US$177 million) for three floors of office space at the Wan Chai Convention Plaza, with views of Victoria Harbour.

His biggest acquisition had been his investment in Rosneft, chaired by Igor Sechin, a close ally of Russian President Vladimir Putin. The deal was financed primarily by state banks in Russia and China.

China Development Bank, a state lender established with the charter to provide funding for projects aligned with Chinese state policies, has been CEFC’s biggest financier since the company’s establishment.

The Beijing-based lender extended 32.3 billion yuan of loans, or 87.5 per cent of total bank borrowings, according to the September 2016 bond prospectus of its principal subsidiary CEFC Shanghai International Group.

Asian Markets Sell Off To Start March — Tokyo sank three percent; China Lower

March 1, 2018
© GETTY IMAGES NORTH AMERICA/AFP | Federal Reserve boss Jerome Powell is due to appear before lawmakers again Thursday, days after his comments spooked global markets

HONG KONG (AFP) – Asian markets saw in March with sharp losses on Thursday, extending a global sell-off on US interest rate hike fears, with energy firms taking another hit from plunging oil prices.After a couple of weeks of calm, the volatility that kicked off February has returned on worries that the strong US economy and Donald Trump’s tax cuts will lead the Federal Reserve to tighten borrowing costs more than previously thought.

The latest bout of selling came after new Fed boss Jerome Powell gave an upbeat assessment for the economic outlook as he appeared before lawmakers Tuesday. Similarly, markets went into spasms at the start of last month in reaction to a strong report on US jobs and wages growth.

Powell is due to speak on Capitol Hill again Thursday.

Adding to the unease are the relatively high valuations of stocks after a stellar 2017 and January, which saw some indexes hit record or multi-year highs.

“February finally cracked the volatility genie out of the bottle, and now the big question is: will he stay out for good?” Ryan Detrick, senior market strategist at LPL Financial, asked in a note.

“The good news is that March kicks off two of the strongest months historically for equities, before we hit a period of seasonal weakness from May through October.”

On Wall Street, the Dow, S&P 500 and Nasdaq all ended sharply lower for a second successive day, and Asia again followed suit.

Tokyo finished the morning session 1.6 percent lower, with a stronger yen hitting exporters, while Hong Kong fell 0.4 percent, Sydney shed 0.8 percent and Singapore slipped 0.6 percent.

Wellington, Taipei, Manila and Kuala Lumpur were also well down. Shanghai was flat.

– Oil prices sink –

Among the biggest losers were petroleum-linked firms, tracking their counterparts in New York, which were hit by data showing a bigger-than-expected rise in US stockpiles. Hong Kong-listed CNOOC, PetroChina and Sinopec were all down around two percent, while Inpex in Tokyo sank three percent.

Both main contracts have been taking a hit recently as a ramp-up in US shale production offsets the effects of a key OPEC-Russia cap, while gains in the dollar against higher-yielding currencies make the commodity more expensive. Brent lost more than one percent and WTI more than two percent Wednesday.

Stephen Innes, head of Asia-Pacific trading at OANDA, said: “Traders are hypersensitive to crucial inventories data, especially top-side builds, given the market’s refocusing on shale production output as the US remains on course to be the world’s largest oil producer.”

On currency markets the pound continues to struggle against the dollar after falling Wednesday on worries about faltering Brexit talks.

British Prime Minister Theresa May rejected a draft EU proposal over the tricky Northern Ireland issue, while the bloc’s chief negotiator said the pace of trade talks needs to pick up to reach a deal this year.

“Brexit is going to get really ugly or it’s not going to happen,” said Greg McKenna, chief market strategist at AxiTrader.

“First, the UK government is making a mess of the negotiations… (and) second is that the EU clearly does not want the UK to leave, is making it as difficult as possible for it to do so and has just delivered a poison pill to … May it knows she cannot swallow.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 1.6 percent at 21,714.97 (break)

Hong Kong – Hang Seng: DOWN 0.4 percent at 30,716.08

Shanghai – Composite: FLAT at 3,260.65

Euro/dollar: DOWN at $1.2189 from $1.2201 at 2200 GMT

Pound/dollar: DOWN at $1.3749 from $1.3769

Dollar/yen: DOWN at 106.63 yen from 106.71 yen

Oil – West Texas Intermediate: DOWN four cents at $61.60 per barrel

Oil – Brent North Sea: DOWN 11 cents at $64.62 (new contract)

New York – DOW: DOWN 1.5 percent at 25,029.20 (close)

London – FTSE 100: DOWN 0.7 percent at 7,231.91 (close)

The Blockchain Won’t Save Venezuela — Maduro’s cryptocurrency the “Petro” is “backed by oil.” — But Venezuela’s oil industry is in a state of collapse

February 25, 2018
The petro is just a way to hide new international debt behind crypto mumbo-jumbo.
There’s not even a promise of oil. Photographer: Wil Riera/Bloomberg

This post originally appeared in Money Stuff.

I don’t know why Venezuela’s “petro” cryptocurrency annoys me so much. It is partly that the promise of cryptocurrency was supposed to be trustless decentralization: You trust the thing because of objective certainties embedded in its open-source code, not because some authority tells you to. Meanwhile the petro is just the opposite. For one thing, you can’t trust the code; in fact Venezuela’s government can’t even get its story straight on what sort of code it is:

Investors will have to overlook confusion about how the currency will operate. The white paper says the Petro is built on the Ethereum network, while the user guide the government published says it’s on the Nem network.

Also irritating is that this cryptocurrency is supposed to “promote well-being, bringing power closer to the people” but you can’t buy it with Venezuelan bolivars. The reasons for this are obvious: The petro is not a currency, crypto or otherwise, but a way to raise hard currency externally now that Venezuela is cut off by sanctions from accessing the international debt markets. So the petro is just a way to hide new international debt behind a thin screen of blockchain. (The U.S. sanctions administrators, I should note, are not fooled.)

Also, I keep reading that the petro is a cryptocurrency that is “backed by oil.” What does that mean? First of all: It means that you need to trust Venezuela’s government to exchange oil for petros. (There are efforts to build decentralized pegged coins, but for the most part a peg requires someone to maintain it.) Obviously the petro does not give you a security interest in any oil. So the petro is unsecured oil-indexed debt of a government that is sliding into default and that has been barred from the international debt markets.

But it’s worse than that! Venezuela doesn’t even promise to give you any oil. The oil peg is just this:

The Bolivarian Republic of Venezuela guarantees that it will accept Petro’s as a form of payment of national taxes, fees, contributions and public services, taking as a reference the price of the barrel of the Venezuelan basket of the previous day with a percentage discount of Dv.

Imagine that someone told you, without using words like “crypto” or “blockchain,” that Venezuela was planning to issue perpetual zero-coupon unsecured debt that could be used to pay taxes in Venezuela at a valuation pegged to the price of oil, but that Venezuelans wouldn’t be able to buy that debt. I think it would be fairly clear that there is no use case for that debt. The Venezuelans who could use the debt to pay taxes can’t buy it with their bolivars. The foreigners who can buy it will get nothing from it: It doesn’t pay interest and can’t be redeemed for cash. It is simply a joke, a product for nobody. But if you add “on the blockchain!” then that somehow obscures all of the actual economics of the product.

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Cyprus urges Turkey to end gas standoff, resume peace talks

February 21, 2018


Cyprus’ energy minister Yiorgos Lakkotrypis, right, and Cyprus’ President Nicos Anastasiades attend a meeting with the leadership council of the island, at the Presidential palace in divided capital Nicosia, Cyprus, on Wednesday, Feb. 21, 2018. Cyprus’ president Anastasiades says an offshore hydrocarbons search will carry on as planned despite strong opposition by Turkey and the ethnically split island nation’s breakaway Turkish Cypriots. (AP Photo/Petros Karadjias)
NICOSIA: Cyprus President Nicos Anastasiades on Wednesday urged Turkey to lift its blockade of offshore gas exploration that would benefit both the Greek and Turkish Cypriots once the island is reunited.
“The rhetoric by Turkey and the Turkish Cypriots is unjustified and unfounded, and it does not serve the best interests of the Cypriot people… The planning of the Republic of Cyprus in the field of energy will proceed,” Anastasiades said in a statement.
“I publicly call on Turkey and the Turkish Cypriot community to immediately respond to my call to return to the negotiating table, provided this is preceded by the termination of the violation of the sovereign rights” of Cyprus in its exclusive economic zone (EEZ), he said.
Anastasiades, the Greek Cypriot leader, said the island’s untapped energy riches belonged to the state and would be shared with the Turkish Cypriots once the island was reunified.
“Our goal is to fully explore Cyprus’s hydrocarbon potential, in the best terms possible, so as to maximise the benefits for all the people of Cyprus,” he said.
Cyprus is embroiled in a standoff with Turkish warships blocking an Italian drillship from exploring for gas in the divided island’s politically sensitive waters.
 Turkish warships stop Italy’s ENI rig in waters off Famagusta: Greek Cypriot reportsTurkish warships on manoeuvers in the Mediterranean Sea blocked the oil exploration vessel Saipem 12000
Turkish President Recep Tayyip Erdogan has warned foreign energy companies not to “overstep the mark” in the Mediterranean after Turkey’s warships blocked the Italian vessel.
The standoff over exploiting energy resources in the eastern Mediterranean risks further complicates stalled efforts to reunify Cyprus following the collapse of UN-brokered peace talks last year.
Italy’s energy giant ENI said its ship had been ordered to stop by Turkish ships earlier this month over “military activities in the destination area” as it was on course to start exploring in block 3 of Cyprus’s EEZ.
Cyprus has been divided since 1974 when Turkish troops invaded and occupied the northern third of the island in response to a Greek military junta-sponsored coup.
While the Greek-majority Republic of Cyprus is internationally recognised, the breakaway Turkish Republic of Northern Cyprus is recognised only by Ankara.
Turkey and Cyprus have long argued over the eastern Mediterranean, and Ankara has been stringent in defending the claims of Turkish Cypriots for a share of energy resources.
Cyprus expects more exploratory drills, with US giant ExxonMobil also planning two drills in the second half of 2018.
Turkey ups the ante over Cyprus drilling (Update 4)

TCG Gokceada — Turkish warship