mfioretti: saudi arabia*

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  1. India is looking forward to exploring some of Israel’s offshore gas fields soon. Analysts suggested that by including oil in its relationship with Israel, India is giving a strong message to Iran that has held up the allocation of two gas fields discovered by oil companies.

    New Delhi (Sputnik) — The Indian consortium led by ONGC was among the two global entities that took part in the auction of Israel's offshore gas fields held last month after a gap of more than 4 years during which the sea was completely closed for the distribution of new exploration licenses.

    The consortium comprising ONGC Videsh Ltd, Bharat PetroResources Ltd, Indian Oil Corporation Ltd and Oil India Ltd is also set to be registered as a foreign company in Israel's Corporations' Authority in January 2018. This would facilitate its participation in the second round of bidding.

    "This bid round is the first step in a long-range process that would lead to utilization of the gas and oil fields in the Israeli EEZ to the benefit of Israel's citizens. I am pleased to have companies from Greece and India contribute to Israel's energy market. I have ordered preparations for a 2nd licensing round to be launched in 2018, in which lessons from the 1st round will be incorporated," Dr. Yuval Steinitz, Israel's Energy Minister said after the completion of the first round.

    The Israeli blocks are in close proximity to a number of large and proven gas deposits in the eastern Mediterranean. Some are adjacent to the recently discovered Leviathan and Tamar fields. According to an industry estimate, nearly 2,200 billion cubic meters of natural gas and a potential 6.6 billion barrels of oil are to be discovered in these blocks.

    India's decision to enter Israeli waters for energy exploration has a greater strategic significance than securing energy at another location, especially after waiting for several years to win exploration rights for Iran's Farsi and Farzad B gas fields.

    "India wants to send two signals from this decision. First, if Iran continues to dillydally on the proposal of awarding gas fields to India, New Delhi can open new vistas for exploration in the region; secondly, to Israel that New Delhi really wants to deepen its relationship with the Jewish nation," SC Tripathi, former secretary in India's Ministry of Petroleum & Natural Gas told Sputnik.

    Spike missile
    CC BY-SA 4.0 / Rhk111 / Spike NLOS missile
    India Calls off $500 Mln Spike Missile Deal With Israel
    Making oil a subject of bilateral relation will also pacify Israel which received a jolt in four major defense deals with India in the last year. The Indian government scrapped defense contracts for light machine guns, close quarter battle carbines, assault rifles and anti-tank missiles with Israeli firms either due to the single-vendor situation or for giving priority to homemade equipment.

    India's decision to expand the horizons of the bilateral relationship with Israel will have some ramifications on its relationship with the Arab world.

    "Entry into Israeli water for gas exploration could upset some Arabian nations. But, of late, it is being seen that countries like Jordon have started co-operating with Israel while Saudi Arabia is no more fervently opposing Israel. Iran is the only country in the region which could pose strong opposition to the Indian move," SC Tripathi, added.
    https://sputniknews.com/analysis/2017...4122-india-to-explore-israel-oi-field
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  2. A huge economic transformation is planned for the kingdom, and the fees on offer are well worth a few days of strawberry juice in the puritan luxury of a five-star hotel in the Saudi capital.

    Saudi Arabia is lining up a privatisation of state assets that dwarfs the Thatcher “revolution” of the 1980s, and rivals the 1990s dissolution of Soviet assets in scale and significance. It has hung a “for sale” sign on virtually every sector of Saudi economic life: oil, electricity, water, transport, retail, schools and healthcare. Even the kingdom’s football clubs are due to be auctioned off.

    The sell-off programme is the central part of the economic transformation plan envisaged under the Vision 2030 strategy. With oil stuck around the $50 mark, Saudi budgets are creaking and deficits are widening. Around $75 is regarded as the break-even point for the national finances.

    But in 13 years, if all goes to plan, the kingdom will be financially stable, with a more dynamic economy and society, less reliance on oil and government spending, and with a thriving private sector that releases the pent-up entrepreneurial spirit of Saudi men and (whisper it in the kingdom) Saudi women.

    It is, of course, a big “if”, but for an economy stuck in the rentier mentality of the 1930s – when it became a country under the house of Saud and oil was discovered, and which has been ruled by the strict orthodoxy of Wahhabi Islam ever since – this will be nothing less than a revolution.
    https://www.theguardian.com/world/201...ell-off-bankers-lawyers-flocking-gulf
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  3. US-Saudi relationship has shown strains in recent years. Saudi anger over Obama-era rapprochement with Iran and unwillingness to go full-Gaddafi on Assad has been met with US threats about exposing "Saudi" terror, including the 9/11 lawsuits and the 28 pages. The recent American shale oil boom has meant that Saudi has seen selling less oil to the US, and China is only too happy to step in and take America's place as Saudi Arabia's most-favored trading nation. And now China is setting up a yuan-denominated oil exchange that could potentially mean that the Saudis and others may be trading oil for yuan in the future.

    This is why the CIA and other outside forces are extremely interested in what is happening in Saudi Arabia right now, and why, by extension, the rest of the world should be as well. After all, by now we know all too well what happens to countries that try to back away from the petrodollar, don't we? Only this time, it's not some "minor" players on the grand chessboard who can be taken out of the game with a simple NATO lovebomb campaign. This time we're looking at the potential of Russia and China backing this shift away from the petrodollar en masse. And we all know what that spells.
    https://steemit.com/news/@corbettrepo...ou-need-to-know-about-the-saudi-purge
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  4. let’s talk about the most seminal moment in recent Saudi history: the key oil-for-money-and-protection deal struck between the Nixon administration and King Faisal back in the early 1970’s.

    This pivotal agreement allowed KSA to secretly recycle its surplus petrodollars back into US Treasuries while receiving US military protection in exchange. The secret was kept for 41 years, only recently revealed in 2016 due to a Bloomberg FOIA request:

    The basic framework was strikingly simple. The U.S. would buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending.



    It took several discreet follow-up meetings to iron out all the details, Parsky said. But at the end of months of negotiations, there remained one small, yet crucial, catch: King Faisal bin Abdulaziz Al Saud demanded the country’s Treasury purchases stay “strictly secret,” according to a diplomatic cable obtained by Bloomberg from the National Archives database.



    “Buying bonds and all that was a strategy to recycle petrodollars back into the U.S.,” said David Ottaway, a Middle East fellow at the Woodrow Wilson International Center in Washington. But politically, “it’s always been an ambiguous, constrained relationship.”

    (Source)

    The essence of this deal is pretty simple. KSA wanted to be able to sell its oil to its then largest buyer, the USA, while also having a safe place to park the funds, plus receive military protection to boot. But it didn’t want anybody else, especially its Arab neighbors, to know that it was partnering so intimately with the US who, in turn, would be supporting Israel. That would have been politically incendiary in the Middle East region, coming as it did right on the heels of the Yom Kipper War (1973).

    As for the US, it got the oil it wanted and – double bonus time here – got KSA to recycle the very same dollars used to buy that oil back into Treasuries and contracts for US military equipment and training.

    Sweet deal.

    Note that this is yet another secret world-shaping deal successfully kept out of the media for over four decades. Yes Virginia, conspiracies do happen. Secrets can be (and are routinely) kept by hundreds, even thousands, of people over long stretches of time.

    Since that key deal was struck back in the early 1970s, the KSA has remained a steadfast supporter of the US and vice versa. In return, the US has never said anything substantive about KSA’s alleged involvement in 9/11 or its grotesque human and women’s rights violations. Not a peep.

    Until recently.
    Then Things Started To Break Down

    In 2015, King Salman came to power. Things began to change pretty quickly, especially once he elevated his son Mohammed bin Salman (MBS) to a position of greater power.

    Among MBS's first acts was to directly involve KSA into the Yemen civil war, with both troops on the ground and aerial bombings. That war has killed thousands of civilians while creating a humanitarian crisis that includes the largest modern-day outbreak of cholera, which is decimating highly populated areas. The conflct, which is considered a 'proxy war' because Iran is backing the Houthi rebels while KSA is backing the Yemeni government, continues to this day.

    Then in 2016, KSA threatened to dump its $750 billion in (stated) US assets in response to a bill in Congress that would have released sensitive information implicating Saudi Arabia's involvement in 9/11. Then-president Obama had to fly over there to smooth things out. It seems the job he did was insufficient; because KSA-US relations unraveled at an accelerating pace afterwards. Mission NOT accomplished, it would seem.

    In 2017, KSA accused Qatar of nefarious acts and made such extraordinary demands that an outbreak of war nearly broke out over the dispute. The Qatari leadership later accused KSA of fomenting ‘regime change’, souring the situation further. Again, Iran backed the Qatar government, which turned this conflict into another proxy battle between the two main regional Arab superpowers.

    In parallel with all this, KSA was also supporting the mercenaries (aka "rebels" in western press) who were seeking to overthrow Assad in Syria -- yet another proxy war between KSA and Iran. It's been an open secret that, during this conflict, KSA has been providing support to some seriously bad terrorist organizations like Al-Qaeda, ISIS and other supposed enemies of the US/NATO. (Again, the US has never said 'boo' about that, proving that US rhetoric against "terrorists" is a fickle construct of political convenience, not a moral matter.)

    Once Russia entered the war on the side of Syria's legitimate government, the US and KSA (and Israel) lost their momentum. Their dreams of toppling Assad and turning Syria into another failed petro-state like they did with Iraq and Libya are not likely to pan out as hoped.

    But rather than retreat to lick their wounds, KSA's King Salman and his son are proving to be a lot nimbler than their predecessors.

    Rather than continue a losing battle in Syria, they've instead turned their energies and attention to dramatically reshaping KSA's internal power structures:

    Saudi Arabia’s Saturday Night Massacre



    For nearly a century, Saudi Arabia has been ruled by the elders of a royal family that now finds itself effectively controlled by a 32-year-old crown prince, Mohammad bin Salman. He helms the Defense Ministry, he has extravagant plans for economic development, and last week arranged for the arrest of some of the most powerful ministers and princes in the country.



    A day before the arrests were announced, Houthi tribesmen in Yemen but allied with Iran, Saudi Arabia’s regional rival, fired a ballistic missile at Riyadh.



    The Saudis claim the missile came from Iran and that its firing might be considered “an act of war.”



    Saudi Arabia was created between the two world wars under British guidance. In the 1920s, a tribe known as the Sauds defeated the Hashemites, effectively annexing the exterior parts of Saudi Arabia they did not yet control. The United Kingdom recognized the Sauds’ claim shortly thereafter. But since then, the Saudi tribe has been torn by ambition, resentment and intrigue. The Saudi royal family has more in common with the Corleones than with a Norman Rockwell painting.



    The direct attack was undoubtedly met with threats of a coup. Whether one was actually planned didn’t matter. Mohammed Bin Salman had to assume these threats were credible since so many interests were under attack. So he struck first, arresting princes and ex-minsters who constituted the Saudi elite. It was a dangerous gamble. A powerful opposition still exists, but he had no choice but to act. He could either strike as he did last Saturday night, or allow his enemies to choose the time and place of that attack. Nothing is secure yet, but with this strike, there is a chance he might have bought time. Any Saudi who would take on princes and clerics is obviously desperate, but he may well break the hold of the financial and religious elite.
    http://www.zerohedge.com/news/2017-11...-worry-you-youre-not-paying-attention
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  5. The dominance of Wahhabism in Saudi public life made conducting business in the country very difficult. It also created sectarian conflict where none had existed in previous centuries. Wahhabism was a practically non-existent fringe idea with no real followers that had never caught on. Oil wealth allowed it to flourish. If Crown Prince Mohammed’s plan is successful, Saudi Arabia will be able to return, as he put it, “to moderate Islam.” This will allow it to get along with its other Muslim neighbors, including Turkey. While the population of Saudi Arabia has mostly resisted Wahhabism, especially the vast majority non-Saudi residents, the elites tolerated and even protected it. As soon as Wahhabism ceases to be protected by the government, it will wither and die like a fungus exposed to the sun. This is a point that many Western observers have completely missed, predicting it will be difficult to disassemble a system imposed on the people for many decades. I disagree. The people are eager to throw off the shackles of Wahhabism and will do so with pleasure.

    The export of Wahhabism has also been very costly for Saudi Arabia and has caused sectarian divisions among Muslims internationally. The death of Wahhabism will also facilitate a truce with Qatar and a rejuvenated GCC.

    The importance of the words of the crown prince cannot be overstated. For the first time ever, Saudi Arabia now has an economic and political future.
    http://www.timesheadline.com/opinion/...ism-means-mid-east-economy-10435.html
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  6. The reasons for nat gas as the source of discord are numerous and start in 1995 “when the tiny desert peninsula was about to make its first shipment of liquid natural gas from the world’s largest reservoir. The offshore North Field, which provides virtually all of Qatar’s gas, is shared with Iran, Saudi Arabia’s hated rival.”

    The result to Qatar’s finances was similar to the windfall that Saudi Arabia reaped from its vast crude oil wealth.

    The wealth that followed turned Qatar into not just the world’s richest nation, with an annual per-capita income of $130,000, but also the world’s largest LNG exporter. The focus on gas set it apart from its oil producing neighbors in the Gulf Cooperation Council and allowed it to break from domination by Saudi Arabia, which in Monday’s statement of complaint described Qataris as an “extension of their brethren in the Kingdom” as it cut off diplomatic relations and closed the border.

    In short, over the past two decades, Qatar become the single biggest natural gas powerhouse in the region, with only Russia’s Gazprom able to challenge Qatar’s influence in LNG exports.
    http://theantimedia.org/qatar-crisis-natural-gas-terrorism
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  7. For decades, the country’s leadership pursued a consistent political-economic business plan: sell as much oil as possible and use the proceeds to enrich the numerous princes and princesses of the realm; provide lavish social benefits to the rest of the population, thereby averting popular unrest of the “Arab Spring” variety; finance the ultra-conservative Wahhabi clergy so as to ensure its loyalty to the regime; finance like-minded states in the region; and put aside money for those rainy-day periods of low oil prices.

    Saudi leaders have recently come to recognize that this plan is no longer sustainable. In 2016, the Saudi budget has, for the first time in recent memory, moved into deficit territory and the monarchy has had to cut back on both its usual subsidies to and social programs for its people. Unlike the Venezuelans or the Nigerians, the Saudi royals socked away enough money in the country’s sovereign wealth fund to cover deficit spending for at least a couple of years. It is now, however, burning through those funds at a prodigious rate, in part to finance a brutal and futile war in Yemen. At some point, it will have to sharply curtail government spending. Given the youthfulness of the Saudi population -- 70% of its citizens are under 30 -- and its long dependence on government handouts, such moves could, in the view of many analysts, lead to widespread civil unrest.

    Historically, Saudi leaders have been slow to initiate change. But recently, the royal family has defied expectations, taking radical steps to prepare the country for a transition to what’s being termed a post-petroleum economy.
    http://www.tomdispatch.com/post/17614...chael_klare%2C_the_oil_world_in_chaos
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  8. The energy production industry is the second-largest consumer of water in the world after agriculture, according to Xylem Inc., which makes equipment for the water industry. It estimates that some processes in OPEC nations such as secondary oil recovery use about 30 times more of the liquid to extract their crude than producers outside the Organization of Petroleum Exporting Countries.

    The Middle East has some of the world’s lowest levels of water supplies that aren’t replenished by rains. A significant amount of the region’s fresh water is made from the sea pumped through desalination plants, ranging from 27 percent in Oman to 87 percent in Qatar, according to a report on Wednesday by Irena. Removing the salt burns through a third of total power consumed in the United Arab Emirates and Qatar, the report said. Saudi Arabia uses a 10th of its domestic oil to power its desalination plants.
    http://www.bloomberg.com/news/article...s-to-renewables-to-avert-water-crisis
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  9. The US response was to try to use a chemical attack on the Damascus suburb of Ghouta as a pretext to bomb Syria. When that failed because of strong opposition from Russia and US public opinion it stepped up support for the insurgency.

    Weapons, money and fighters poured in, and over the course of 2014 the military balance shifted back to the rebels again.

    The main beneficiary was the organisation that now calls itself the Islamic State. This began as the Iraqi branch of the global jihadi terrorist group Al-Qaeda.

    It took advantage of the vacuum created by the Syrian army's withdrawal from Syria's desert regions to expand into Syria and to establish itself there.

    The Islamic State is said to have a Wahhabist or Salafist ideology, like those in Saudi Arabia and Qatar, and like that of its original parent, Al-Qaeda. Actually it combines Salafism with an apocalyptic vision previously unknown to Islam.

    As it says its leader is the Caliph it claims to be the only legitimate government for Muslims.

    It rules the areas it controls by violence and terror, backed by money it gets from the Gulf and from the illegal oil trade.

    All this explains why following Russia's military intervention in Syria it is doomed.

    The Russian military intervention means there is no danger of the Syrian government collapsing — as looked possible just a few months ago.
    http://sputniknews.com/columnists/201...tent=a3rU&utm_campaign=URL_shortening
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  10. My own pick might be a story that passed largely unnoticed in our American world. Sitting atop some of the planet's great oil reserves and getting 73% of their revenues from oil sales (income that dropped by 23% last year), the Saudi royals just hiked the domestic price of gas at the pump by 40%. Though it still remains dirt cheap by global standards, that act -- which is like charging for salt water in the middle of the ocean -- is an indication that something startling is going on. And note that, in the years to come, that kingdom's rulers are planning to cut back on similar subsidies for “electricity, water, diesel, and kerosene.” In other words, the world’s largest oil producer and a country of striking wealth (and foreign reserves) no longer feels comfortable giving away gas to its own population, even though this is part of a bargain it struck long ago for peace in the kingdom.

    And the reason for this has little to do with Iran or Syria or Yemen or Iraq or the Islamic State. The problem is far more basic, as TomDispatch’s resident energy expert Michael Klare points out today. It’s the price of oil, which in the last 18 months has dropped through the floor. In a sense, the oil business -- with its constellation of giant energy firms, until recently among the most profitable companies in history, and its energy-producing states, until recently riding high -- may prove to be the natural-resource equivalent of a failed state, and, as Klare makes clear, the changing economics of oil will transform the political face of the planet. So keep your eye on Saudi Arabia. Things there could get ugly indeed.

    As of this moment, however, Brent crude is selling at $33 per barrel, one-third of its price 18 months ago and way below the break-even price for most unconventional “tough oil” endeavors. Worse yet, in one scenario recently offered by the International Energy Agency (IEA), prices might not again reach the $50 to $60 range until the 2020s, or make it back to $85 until 2040. Think of this as the energy equivalent of a monster earthquake -- a pricequake -- that will doom not just many “tough oil” projects now underway but some of the over-extended companies (and governments) that own them.

    Brent prices rose to stratospheric levels, reaching a record $143 per barrel in July 2008. With the failure of Lehman Brothers on September 15th of that year and the ensuing global economic meltdown, demand for oil evaporated, driving prices down to $34 that December.

    With factories idle and millions unemployed, most analysts assumed that prices would remain low for some time to come. So imagine the surprise in the oil business when, in October 2009, Brent crude rose to $77 per barrel. Barely more than two years later, in February 2011, it again crossed the $100 threshold, where it generally remained until June 2014.

    Several factors account for this price recovery, none more important than what was happening in China, where the authorities decided to stimulate the economy by investing heavily in infrastructure, especially roads, bridges, and highways. Add in soaring automobile ownership among that country’s urban middle class and the result was a sharp increase in energy demand.

    in early 2014, when the price pendulum suddenly began swinging in the other direction, as production from unconventional fields in the U.S. and Canada began to make its presence felt in a big way. Domestic U.S. crude production, which had dropped from 7.5 million barrels per day in January 1990 to a mere 5.5 million barrels in January 2010, suddenly headed upwards, reaching a stunning 9.6 million barrels in July 2015. Virtually all the added oil came from newly exploited shale formations in North Dakota and Texas.

    In mid-2014, these and other factors came together to produce a perfect storm of price suppression. At that time, many analysts believed that the Saudis and their allies in the Organization of the Petroleum Exporting Countries (OPEC) would, as in the past, respond by reining in production to bolster prices. However, on November 27, 2014 -- Thanksgiving Day -- OPEC confounded those expectations, voting to maintain the output quotas of its member states. The next day, the price of crude plunged by $4 and the rest is history.

    Aside from the continuing economic slowdown in China and the surge of output in North America, the most significant factor in the unpromising oil outlook, which now extends bleakly into 2016 and beyond, is the steadfast Saudi resistance to any proposals to curtail their production or OPEC’s.

    Many reasons have been given for the Saudis’ resistance to production cutbacks, including a desire to punish Iran and Russia for their support of the Assad regime in Syria.

    In the view of many industry analysts, the Saudis see themselves as better positioned than their rivals for weathering a long-term price decline because of their lower costs of production and their large cushion of foreign reserves. The most likely explanation, though, and the one advanced by the Saudis themselves is that they are seeking to maintain a price environment in which U.S. shale producers and other tough-oil operators will be driven out of the market.

    Only three developments could conceivably alter the present low-price environment for oil: a Middle Eastern war that took out one or more of the major energy suppliers; a Saudi decision to constrain production in order to boost prices; or an unexpected global surge in demand.
    http://www.tomdispatch.com/blog/17608...e%2C_the_look_of_a_badly_oiled_planet
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