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Archive for September, 2014

Russia has discovered a massive oil field which may be bigger than the Gulf of mexico…

In a dramatic stroke of luck for the Kremlin, this morning there is hardly a person in the world who is happier than Russian president Vladimir Putin because overnight state-run run OAO Rosneft announced it has discovered what may be a treasure trove of black oil, one which could boost Russia’s coffers by hundreds of billions if not more, when a vast pool of crude was discovered in the Kara Sea region of the Arctic Ocean, showing the region has the potential to become one of the world’s most important crude-producing areas, arguably bigger than the Gulf Of Mexico. The announcement was made by Igor Sechin, Rosneft’s chief executive officer, who spent two days sailing on a Russian research ship to the drilling rig where the find was unveiled today.

The oil production platform at the Sakhalin-I field in Russia,
partly owned by ONGC Videsh Ltd., Rosneft Oil Co., Exxon Mobil
Corp. and Japan’s Sakhalin Oil and Gas Development Co. on June 9, 2009.

Well, one person who may have been as happy as Putin is the CEO of Exxon Mobil, since the well was discovered with the help of America’s biggest energy company (and second largest by market cap after AAPL). Then again, maybe not: as Bloomberg explains “the well was drilled before the Oct. 10 deadline Exxon was granted by the U.S. government under sanctions barring American companies from working in Russia’s Arctic offshore. Rosneft and Exxon won’t be able to do more drilling, putting the exploration and development of the area on hold despite the find announced today.”

Which means instead of generating billions in E&P revenue, XOM could end up with, well, nothing. And that would be quite a shock to the US company because the unveiled Arctic field may hold about 1 billion barrels of oil and similar geology nearby means the surrounding area may hold more than the U.S. part of the Gulf or Mexico, he said.

For a sense of how big the spoils are we go to another piece by Bloomberg, which tells us that “Universitetskaya, the geological structure being drilled, is the size of the city of Moscow and large enough to contain more than 9 billion barrels, a trove worth more than $900 billion at today’s prices.”

The only way to reach the prospect is a four-day voyage from Murmansk, the largest city north of the Arctic circle. Everything will have to shipped in — workers, supplies, equipment — for a few months of drilling, then evacuated before winter renders the sea icebound. Even in the short Arctic summer, a flotilla is needed to keep drifting ice from the rig.

Sadly, said bonanza may be non-recourse to Exxon after Obama made it quite clear that all western companies will have to wind down operations in Russia or else feel the wrath of the DOJ against sanctions breakers. Which leaves XOM two options: ignore Obama’s orders (something which many have been doing of late), or throw in the towel on what may be the largest oil discovery in years.

And while the Exxon C-suite contemplates its choices, here is some more on today’s finding from Bloomberg:

“It exceeded our expectations,” Sechin said in an interview. This discovery is of “exceptional significance in showing the presence of hydrocarbons in the Arctic.”

The development of Arctic oil reserves, an undertaking that will cost hundreds of billions of dollars and take decades, is one of Putin’s grandest ambitions. As Russia’s existing fields in Siberia run dry, the country needs to develop new reserves as it vies with the U.S. to be the world’s largest oil and gas producer.

Output from the Kara Sea field could begin within five to seven years, Sechin said, adding the field discovered today would be named “Victory.”

The Kara Sea well — the most expensive in Russian history — targeted a subsea structure named Universitetskaya and its success has been seen as pivotal to that strategy. The start of drilling, which reached a depth of more than 2,000 meters (6,500 feet), was marked with a ceremony involving Putin and Sechin.

The importance of Arctic drilling was one reason that offshore oil exploration was included in the most recent round of U.S. sanctions. Exxon and Rosneft have a venture to explore millions of acres of the Arctic Ocean.
But what’s worse for Exxon is that now that the hard work is done, Rosneft may not need its Western partner much longer:

“Once the well is plugged, there will be a lot of work to do in interpreting the results and this is probably something that Rosneft can do,” Julian Lee, an oil strategist at Bloomberg First Word in London, said before today’s announcement. “Both parties are probably hoping that by the time they are ready to start the next well the sanctions will have been lifted.”
And here is why there is nothing Exxon would like more than to put all the western sanctions against Moscow in the rearview mirror: “The stakes are high for Exxon, whose $408 billion market valuation makes it the world’s largest energy producer. Russia represents the second-biggest exploration prospect worldwide. The Irving, Texas-based company holds drilling rights across 11.4 million acres in Russia, only eclipsed by its 15.1 million U.S. acres.”

Proving just how major this finding is, and how it may have tipped the balance of power that much more in Russia’s favor is the emergence of paid experts, desperate to talk down the relevance of the Russian discovery:

More drilling and geological analysis will be needed before a reliable estimate can be tallied for the size of the oil resources in the Universitetskaya area and the Russian Arctic as a whole, said Frances Hudson, a global thematic strategist who helps manage $305 billion at Standard Life Investments Ltd. in Edinburgh. Sanctions forbidding U.S. and European cooperation with Russian entities mean that country’s nascent Arctic exploration will be stillborn because Rosneft and its state-controlled sister companies don’t know how to drill in cold offshore conditions alone, she said.

“Extrapolating from a small data sample is perhaps not going to give you the best information,” Hudson said in a telephone interview. “And because of sanctions, it looks like there’s going to be less exploration rather than more.” In addition, the expense and difficulty of operating in such a remote part of the world, where hazards include icebergs and sub-zero temperatures, mean that the developing discoveries may not be economic at today’s oil prices.
Maybe. Then again perhaps the experts’ time is better suited to estimating just how much longer the US shale miracle has left before the US is once again at the mercy of offshore sellers of crude.

In any event one country is sure to have a big smile on its face: China, since today’s finding simply means that as Russia has to ultimately sell the final product to someone, that someone will almost certainly be the Middle Kingdom, which if the “Holy Gas Grail” deal is any indication, will be done at whatever terms Beijing chooses.

NZ democracy half- asleep already…

Former All Black’s son in Sevens Development squad

All Blacks Sevens captain DJ Forbes – Source: Getty Images
There are five fresh faces in the All Black Sevens development squad which includes the son of a former All Black.

Jordan Bunce, the son of Frank Bunce who played 55 Tests in the Black jersey, has been named in a 16 strong squad for next weekend’s Oceania tournament in Queensland.

Coach Sir Gordon Tietjens is looking forward to working with 20-year-old Bunce saying: “Jordan was great at National Sevens in Rotorua this year and he showed a great sevens skillset at trials”.

The tournament will be an opportunity for Tietjens to blood in new players and for players needing game time to contest for a spot in the All Blacks Sevens team to play the first leg of the 2014/2015 World Series tournaments on the Gold Coast.

“I’m quite excited about this group – we’ve got some real talent in there and the question will be whether they take their chance and step up to the challenge,” Tietjens said.

The squad is (*denotes new players): Jordan Bunce*,Tomasi Cama, Matt Clutterbuck*, Scott Curry, Sam Dickson, Tony Ensor*, DJ Forbes, Gillies Kaka, Tim Mikkelson, Lote Raikabula

Trinity Spooner-Neera, Sherwin Stowers, George Tilsley, Junior Tofa Vaa*, Sam Vaka* , Gareth William-Spiers

Would you like a portfolio Brown Nose?

Do you have a money personality disorder?

Al Murray's Multiple Personality Disorder

Al Murray’s Multiple Personality Disorder (Photo credit: Wikipedia)


Do you shop incessantly? Leave your bills in the bottom drawer, unopened? Panic when it comes to making financial decisions? Or make impulsive ones? You may have a money personality disorder that’s holding you back from becoming wealthy.Lately I’ve been reading a bit about attention deficit disorder (ADD) after chancing upon a blog dedicated to money and ADD.

It reminded me that not everyone can simply sort out their finances as easily as others.

I can’t even begin to claim to be an expert on deep psychological issues. I’m not. But I am aware that people with personality disorders and mental mental-health problems are all around us. Many of whom may have trouble with money, which they can’t don’t have an understanding of.

When I found the blog about ADD and your money, I started thinking about how personality disorders can wreck your personal finances. For example, there are plenty of people who don’t pay their bills thanks to problems with their mental health and who end up losing lose their homes or cars.

Personality disorders and mental mental-health issues come in many different varieties, such as obsessive-compulsive personality disorder, schizoid personality disorder and narcissism. Anxiety is another huge problem when it comes to functioning financially. Not long backago, I read the book Can’t Buy Me Love , by Sally Coleman, which talked about people who are obsessive shoppers — often being driven to spend money as a way of attempting to make themselves happy. Their shopping was a way of masking a disorder. Many people who suffer this addiction, which is seriously bad for your wealth, have obsessive-/compulsive tendencies. Money obsessions aren’t just about spending it. Coleman’s book had a chapter about poverty addiction — although the root cause was much the same as the obsessive shopper.

When one partner of a couple has a personality disorder that affects the way they function with money, it can be very draining on the relationship. If one or both parties don’t recognise that there is a disorder, their finances and or relationship can be left in tatters.

When it comes to serious mental mental-health issues, such as depression and schizophrenia, people’s personal finances can go completely haywire. It’s not uncommon, for example:

  • If forced to give up work or take time off, your income may reduce suddenly and dramatically.
  • Your capacity to make financial decisions can be affected by mental mental-health issues, leading you to act recklessly or unwisely.
  • You can lose the motivation or the ability to keep control of your personal finances.
  • You become vulnerable to financial exploitation or abuse.

Having any of these disorders doesn’t mean that you’llyou will never be able to function properly with money. People with ADD, for example, often become entrepreneurs although not all see their ADD as an advantage.

Becoming aware of how your brain is different is a huge step. Some disorders need professional treatment. But by understanding yourself, it’s possible to find ways to cope and perhaps treat the problem.

Whilest having a money personality disorder can affect the way you run your finances in a negative manner, it is possible to overcome the problem by seeking help.

That may be from a psychologist, psychotherapist, or, if not too serious, a counsellor or financial coach. It”s also important to beware of self-diagnosis — there are many different disorders than that can affect your spending or saving and they can largely be overcome or at least lived with.

If you don’t know where to start, it can be worth visiting your GP or the local Citizen’s Advice Bureau, — which can put you in touch with more specialisedt groups.

Have your say: Does your state of mind affect your personal finances?

More information


Sound familiar?

Unions fearful of what National is planning in a third term…

A former National Party logo

A former National Party logo (Photo credit: Wikipedia)

Unions say they are fearful of what a third term of a National-led Government will bring for the country’s schooling system and for the industry sector.

John Key declares victory for the National Party. John Key declares victory for the National Party.


Listen to Helen Kelly on Morning Report ( 3 min 44 sec )

The Public Service Association and the Educational Institute said they were uneasy about some of the party’s policy pledges.

But business lobbyists are calling for the next Government to start tackling the more complex issues.

The Educational Institute is sceptical about whether or not this government is really that serious about building a quality education system.

National secretary Paul Goulter said poverty and inequality are the two core issues that continue to be sidelined.

“We have been unable to get the Government to even consider them in the context of education.

“Secondly, they just have to recognise that if they’re talking about improving things teaching quality, it is absolutely ridiculous to have things like charter schools that have unregistered teachers in them.”

The biggest concern for the Public Service Association is National’s push to change the employment law.

The association’s national secretary Richard Wagstaff said it was particularly worried about the move to enable employers to walk away from negotiations.

“There are issues such as pay equity which has been getting worse in the state sector, and funding for health and the public services has been a real stretch.

“We know our members raised that issue about trying to cope with that demand and trying to cover the work that’s been expected.”

Mr Wagstaff said the Government’s push to keep funding down and bring in tax cuts would not help, nor would they boost morale for workers.

Council of Trade Unions president Helen Kelly also said workers could expect to have to fight for their rights after Saturday’s election.

Helen Kelly.Helen Kelly.

Photo: Supplied

Ms Kelly said National had a strong mandate to govern but they had no policies to deal with the inequality workers experience.

She expected the Government to push through its industrial relations policy which will have severe implications for wages and paid breaks.

She said Prime Minister John Key had already said the bill is a priority.

She said there will be an immediate impact on working people and unions will have to organise within a hostile environment.

But Business New Zealand‘s chief executive Phil O’Reilly was happy with the election outcome, but said there were several challenges ahead.

Phil O'Reilly.Phil O’Reilly.


“It seems to me there’s a fair few things emerging around issues like sustainability, around the role of women and about how we’re going on Pacific people in our society and in our economy.

“So there’s always new things to be talking about and I think a third-term government is a good time to start thinking about some of those things that are a bit more complex and might have emerged over the last few years.”

Mr O’Reilly said there also needed to be a significant push for changes to the Resource Management Act and labour law reform.

The Employers and Manufacturers Association agrees.

Its chief executive, Kim Campbell, said the National Party certainly had some unfinished business to take care of.

“We also think that the Callaghan innovation initiative for research and development is only just starting to hit its straps so we’d like to see that continue.

“So there are a number of initiatives where a continuity of government will make quite a lot of difference.”

Kim Campbell said they also want the tax system simplified for small and medium sized businesses.


Next story in Election 2014: Support for National still high in Chch

The worst election result for Labour since 1922…

From Peters Place comes this post-election comment:

Labour’s 2014 Closing Address – Two ticks Labour

Vote two ticks Labour…