Replies to This Discussion

Permalink Reply by Joseph-Ohio on January 21, 2016 at 6:03am

Philip,

We're already selling to China as I've read.

Unless we negate the deals the point is moot.

Should we ?

Are they 'vetted allies' ?

Personally I wouldn't think so.

How would we go about negating the deals ?

Nationalize the cargo ?

Nationalize the Domestic Natural Gas and Oil Fields they own (like the 1/3 of the Permian Basin they're supposed to own as I've read here earlier) ?

Why not ?

I'm up for it.

How about you ?

• ▶ Reply

Permalink Reply by Joseph-Ohio on January 21, 2016 at 7:23am

These days, an 'Executive Order' I would welcome / embrace would include entries along the lines of the following :

1) In order to purchase / own land / raw undeveloped / harvested natural resources (including Fossil Fuels / Coal / Natural Gas / and Oil / Refined Fuels / Developmental Rights to property / properties in the U.S.A. the purchaser would need to be, at the least, a 'vetted ally' of the U.S.A.  And the 'vetted ally / purchaser' would agree to not do similar / typical business with any entity deemed by the U.S.A. to be in opposition to the interests of the U.S.A. (foreign and / or domestic to themselves and / or the U.S.A.) under penalty of immediate forfeiture of such assets / seizure of such assets by the U.S.A.; and dissolution of the binding covenants of the agreement including all rights of ownership.

If property can be seized by the government from actual citizens (such as by invoking 'Eminent Domain') it would seem to me to be piss simple to do the same in situations involving mere trading partners / vetted allies.

JMHOs

• ▶ Reply

Permalink Reply by Joseph-Ohio on January 21, 2016 at 8:51am

It comes to mind that maybe all that's in the Trade Agreements with China already or maybe it's all a given between partners.

But, somehow, I doubt that to be the case.

• ▶ Reply

Permalink Reply by Joseph-Ohio on January 21, 2016 at 9:19am

Anybody actually know how things like that shake out ? ?

Permalink Reply by searcherone on January 19, 2016 at 4:10pm

Here is a Seeking Alpha article with Saudi history, Saudi oil info, current politics with a young prince who spoke of an IPO and what that IPO might look like.   Lots to comprehend.

http://seekingalpha.com/article/3819896-3-key-facts-news-outlets-mi...

• ▶ Reply

Permalink Reply by Joseph-Ohio on January 22, 2016 at 12:27am

Just to be most clear :

I'm 'Jake' with lifting the ban on exports - always have been - but, that doesn't mean (to me anyway) that we should do business with any old foreign state that may then use our own resources against our own sovereign interests (including our population's security / well being / economy / very existence).

Catch my drift ?

Still need common sense regulation / penalty applied to abusive / offending foreign flags.

I have always and will continue to call the favored customers 'vetted allies'.

That designation would (and ought to be) very easy to lose should even a hint of offensive behavior / hostility / aggression / malevolence / etc. on behalf of any customer manifest itself.

Just 'Common Sense'.

JMHOs

• ▶ Reply

Permalink Reply by Joseph-Ohio on January 23, 2016 at 10:05am

http://news.yahoo.com/china-president-starts-iran-visit-185016388.h...

China and Iran cut a $600B deal (to be executed within the next 10 years as I read).

Take the above link and check it out.

Are they picking friends / partners / allies ?

What are we doing / how are we faring I wonder ?

Read another article that said SA thinks they can flood the market with oil and keep the price per barrel down low for a long time.

Wondering how all this will shake out / impact us (here in the USA) ?

• ▶ Reply

Permalink Reply by searcherone on January 28, 2016 at 11:10am

Interesting Seeking Alpha article discussing if Saudi Arabia has established a floor for the price of a barrel of oil.

http://seekingalpha.com/article/3842436-opec-put-sets-floor-oil-prices

• ▶ Reply

Permalink Reply by Thomas Malcolm Pendergast on April 5, 2016 at 10:14am

Saudi Arabia’s Deputy Crown Prince, Muhammad bin Salman, gave a fascinating interview to the Economist on January 4. Among the many subjects he covered, one in particular appealed to energy wonks—the privatization of Saudi Aramco.

This topic has been discussed within the kingdom for years, but never got anywhere, probably because a privatized Saudi Aramco would have to publish audited statements. Saudi Aramco, a modern and brilliantly managed company, would likely have no problem in being as transparent as, say, ExxonMobil. However, a transparent Saudi Aramco would allow the public to find out how much money gets diverted to the royal family before income from oil sales enters the accounts of the Ministry of Finance. This could be most embarrassing for the royal family, which would have to explain to Saudis why it is entitled to many billions of dollars at a time when subsidies are being removed and all residents have to pay more for gasoline, water, electricity, etc. 

Saudi citizens would not begrudge proper salaries for the princes and princesses who work in the various ministries and the numerous princes in the security services and armed forces.  On the other hand, the public may object strongly to stipends paid to the many princes and princesses not directly employed by the state or stipends paid in addition to their normal salaries as civil servants.

Certainly, Saudi Aramco today has no say on the payments sent to the Royal Diwan, the King’s primary executive office, and how much the Diwan pays to each member of the royal family. The payments to the Diwan are probably transferred before the money enters Saudi Aramco’s accounts. The handful of banks in the United States that negotiate letters of credit opened in favor of Saudi Aramco for oil purchases probably have standing instructions to transfer funds to the Royal Diwan before the money is paid to Saudi Aramco’s accounts. The Royal Diwan thus funded can divvy up the money it receives among the numerous princes and princesses that are part of the Al Saud dynasty. Only a few Saudi princes and trusted advisers of the King get to decide who gets what. 

The issue of payments from the Diwan to members of the royal family is sensitive.  Perhaps one of the reasons why the privatization of Saudi Aramco has been delayed so long is that transparency could lead to questions about who is entitled to receive a payment.  At a time of very much lower oil prices, less money is available for distribution to the royal family and to the Ministry of Finance to run the government and invest in the numerous projects required to develop the kingdom.

As hinted by the Deputy Crown Prince, the privatization of Saudi Aramco may start with the company’s affiliates. Many of these, like Sadara, SATORP, Petro Rabigh, or foreign refineries like Motiva, are extremely large and are already structured more transparently than their parent company. If these ventures get privatized, most likely with Saudi Aramco keeping a controlling interest, various ownership formats could be designed to have these affiliates pay some dividends to the family in a transparent way.  A model for this would be the way the British royal family handles its very large holdings in the United Kingdom.

Salman has been tasked with modernizing the economy, and as he mentions in his interview with the Economist, he wants to see if there is any corruption in the oil payments, which is how the payments to the royal family would be characterized today. In other words, Salman wants to put an end to the de facto taxes imposed by the state and the royal family on Saudi Aramco’s income. This implies that the state would have to be funded through a substantial and disclosed income tax, in a country where there is no income tax. Entrenched interests in the private sector, as well as many major and minor royals, will undoubtedly fight the idea of an income tax.

However, Salman is not shying away from political and financial battles. He stands a good chance of winning them in part because he has the support of his father, King Salman, but also, and above all, because he has the support of the under-thirty age group that represents seventy percent of Saudi Arabia’s population. The Crown Prince’s present popularity in the kingdom is rooted in this very large constituency and gives him the power base to push for the reforms needed to take the kingdom forward.

The privatization of Saudi Aramco and its subsidiaries will, if implemented, help the kingdom join the group of modern countries that have proper governance. Increased transparency in the ownership of the largest company in the kingdom, as well as new forms of funding the state, will push the country away from its dependence on oil revenues towards a modern economy more comparable to the G20 countries to which the kingdom belongs.

Jean-François Seznec is a Nonresident Senior Fellow in the Atlantic Council’s Global Energy Center.

• ▶ Reply

• ‹ Previous
• 1
• 2
• 3
• Next ›
• Page