Commodities | Oil, gold, and silver . . .

Now, what news on the Rialto?
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Doc
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Re: Oil & Gas

Post by Doc »

Typhoon wrote:Image
What does this tell you about the ME and BRICS?
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Endovelico
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Re: Oil & Gas

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China signs currency swap deal with Qatar in the heart of petro-dollar system

The petro-dollar system is the heart and soul of America's domination over the global reserve currency, and their right to make all nations have to purchase U.S. dollars to be able to buy oil in the open market. Bound through an agreement with Saudi Arabia and OPEC in 1973, this de facto standard has lasted for over 41 years and has been the driving force behind America's economic, political, and military power.

But on Nov. 3 a new chink in the petro-dollar system was forged as China signed an agreement with Qatar to begin direct currency swaps between the two nations using the Yuan, and establishing the foundation for new direct trade with the OPEC nation in the very heart of the petro-dollar system.

While this new agreement between China and Qatar is only for the equivalent of $5.7 billion over the next three years, Qatar becomes the 24th nation to open its Forex market to the Chinese currency, and solidifies acceptance of the Yuan as a viable option for the future in the Middle East.

It is perhaps no coincidence that the term for the new agreement is set for three years, and is within the exact time frame being predicted by the director of the Finance Institute under the Development Research Center of the State Council, Zhang Chenghui for the Renminbi to become fully convertible in the global financial system.

The need for new markets and a more stable trade currency in Qatar could be tied to a new report issued yesterday by French bank BNP Paribas which showed that petro-dollar recycling has fallen to its lowest levels in 18 years, signifying that even oil producing nations in the Middle East are finding it difficult to trust the U.S. dollar, and facilitate its use in trade due to its depreciation since the advent of the Federal Reserve's massive QE programs.

Nearly every week now, China, Russia, or one of the BRICS nations are finalizing agreements that supersede the old system of dollar trade and reliance on the petro-dollar system. And as many countries begin to reject the dollar due to the exported inflation that is growing in nations that are relegated to having to hold them for global oil purchases, alternatives such as the Chinese Yuan will become a more viable option, especially now that the Asian power has taken over the top spot as the world's biggest economy.

http://www.examiner.com/article/china-s ... lar-system
Soon the US will be paying the full price for its aggressive posture around the world. And once the dollar's position as the world currency is gone, the US will find out what it means to be a country with a huge trade deficit...
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Doc
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Re: Oil & Gas

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And as many countries begin to reject the dollar due to the exported inflation that is growing in nations that are relegated to having to hold them for global oil purchases, alternatives such as the Chinese Yuan will become a more viable option, especially now that the Asian power has taken over the top spot as the world's biggest economy.
Hmm last time I check oil was heading south of 80 per barrel. If the Chinese actually allowed to let the Yuan float to its natural value I would think that would be a good thing for the US though bad for companies like Walmart until they could shift production back to the US.
"I fancied myself as some kind of god....It is a sort of disease when you consider yourself some kind of god, the creator of everything, but I feel comfortable about it now since I began to live it out.” -- George Soros
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That Oil Price Slump is Really Hitting Russia Hard!

Post by Endovelico »

Third of listed UK oil and gas drillers face bankruptcy
Britain's oil and gas industry is running out of cash as low prices and high levels of debt threaten the sector, warns Company Watch
By Andrew Critchlow, Commodities editor - 11:53AM GMT 29 Dec 2014

A third of Britain’s listed oil and gas companies are in danger of running out of working capital and even going bankrupt amid a slump in the value of crude, according to new research.

Financial risk management group Company Watch believes that 70pc of the UK’s publicly listed oil exploration and production companies are now unprofitable, racking up significant losses in the region of £1.8bn.

Such is the extent of the financial pressure now bearing down on highly leveraged drillers in the UK that Company Watch estimates that a third of the 126 quoted oil and gas companies on AIM and the London Stock Exchange are generating no revenues.

The findings are the latest warning to hit the oil and gas industry since a slump in the price of crude accelerated in November when the Organisation of Petroleum Exporting Countries (Opec) decided to keep its output levels unchanged. The decision has caused carnage in oil markets with a barrel of Brent crude falling 45pc since June to around $60 per barrel.

The low cost of crude has added to the financial pressure on many UK listed drillers which are operating in offshore areas such as the North Sea where oil is more expensive to produce and discover.

Ewan Mitchell, head of analytics at Company Watch, said: “Many of the smaller quoted oil and gas companies were set up specifically to take advantage of historically high and rising commodity prices. The recent large falls in the price of oil and gas could leave the weaker companies in difficulties, especially the ones that need to raise funds to keep exploring.”

Losses are expected to much deeper among privately-owned oil and gas explorers, which traditionally have more debt. Company Watch has warned that almost 90pc in the UK are loss making with accounts that show a £12bn accumulated black hole in their finances.

Mr Mitchell said: “Investors in this sector need to focus primarily on the strength and structure of the balance sheet. A critical question is whether the balance sheet is sufficiently robust to keep the company in business until revenues are expected to flow and, crucially are they likely to be able to rely on existing funding lines while they wait?

"Our fear is sustained low oil and gas prices will put an intolerable financial burden on the weaker companies, jeopardising many livelihoods."

The findings of the Company Watch research are the latest downbeat analysis to hit the industry, which is preparing itself for oil prices to fall below current levels of $60 per barrel. Sir Ian Wood, founder of the oil and gas services giant Wood Group, warned earlier this month that the North Sea oil industry could lose 15,000 jobs in Scotland alone and that production could fall by 10pc as drillers cutback.

According to energy consultancy firm Wood Mackenzie, around £55bn of oil and gas projects in the North Sea and Europe could be shelved should prices fall below their current levels.

Ratings agency Standard & Poor’s recently flagged its concern of some of Europe’s biggest oil and gas groups such as Royal Dutch Shell, BP and BG Group. Its primary worry is debt levels which it says have jumped from a combined $162.9bn (£105bn) for the five largest European companies in the sector at the end of 2008 to an estimated $240bn in 2014.

http://www.telegraph.co.uk/finance/news ... uptcy.html
Who is going to cry uncle first? Russia or the West?...
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Re: Oil & Gas

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Russia.

Unlike Russia, the West has a diverse economy and mechanisms for dealing with bankruptcy.
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Re: Oil & Gas

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as the article says, its the bottom third of smaller players which will struggle to find the resources to see out this period - for the big players its an oppurtunity to buy these out at bargain prices and make back all the short term losses.

who sells the opec oil in the western market ?
who is involved with this downward pressure on oil prices to crush the upstarts ?

silly article, russia is screwed, the big western suppliers like BP and Shell are laughing.
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Endovelico
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Re: Oil & Gas

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noddy wrote:(...) the big western suppliers like BP and Shell are laughing.
Ratings agency Standard & Poor’s recently flagged its concern of some of Europe’s biggest oil and gas groups such as Royal Dutch Shell, BP and BG Group. Its primary worry is debt levels which it says have jumped from a combined $162.9bn (£105bn) for the five largest European companies in the sector at the end of 2008 to an estimated $240bn in 2014.
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Re: Oil & Gas

Post by noddy »

Endovelico wrote:
noddy wrote:(...) the big western suppliers like BP and Shell are laughing.
Ratings agency Standard & Poor’s recently flagged its concern of some of Europe’s biggest oil and gas groups such as Royal Dutch Shell, BP and BG Group. Its primary worry is debt levels which it says have jumped from a combined $162.9bn (£105bn) for the five largest European companies in the sector at the end of 2008 to an estimated $240bn in 2014.
thats the short term endo, dont get distracted by the shiny lights.
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Endovelico
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Re: Oil & Gas

Post by Endovelico »

Russia's most recent policy position on energy deals with the EU:

Image

:lol: :lol: :lol:
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Re: Oil & Gas

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This WSJ article is from April:
Oil Layoffs Hit 100,000 and Counting
Roughnecks feel brunt of cuts as tumble in price of crude ripples through energy industry

Since crude prices began tumbling last year, energy companies have announced plans to lay off more than 100,000 workers around the world. At least 91,000 layoffs have already materialized, with the majority coming in oil-field-services and drilling companies, according to research by Graves & Co., a Houston consulting firm.

Now the cutbacks are slowly showing up in federal employment data. Direct employment in oil and gas extraction, which had grown by more than 50,000 jobs since 2007, has fallen by about 3,000 jobs since it peaked in October at 201,500, according to the Bureau of Labor Statistics; 12,000 jobs have disappeared from the larger category of energy support since it reached 337,600 jobs in September.

And the layoffs are continuing. Last week alone, the Texas Workforce Commission said it received notices of close to 400 layoffs from energy-related companies. Among them, FTS International, a privately owned oil-field-services business, said it was laying off 194 workers, while Lufkin Industries, a subsidiary of General Electric Co. that makes oil-field equipment, said it was cutting 149 workers, adding to the 426 workers it has cut since the year began.
This one from a couple of days ago:
More Layoffs Expected at U.S. Energy Firms

U.S. energy companies had been counting on a rebound in crude oil prices in the second half of this year after last year’s plunge, but that hasn’t happened so far. So they’re planning more layoffs and financial maneuvers to deal with a recent, sudden drop in prices to the lowest level in four months, Lynn Cook reports.

A speedy rehiring of drilling rigs coupled with the possibility of new Iranian oil on the market have pushed down prices more than 20% over the past six weeks. So, for example, oil-field service providers have announced job cuts deeper than initially declared and warned of more layoffs to come. Halliburton Co. and Baker Hughes Inc., two big companies that plan to merge, disclosed last week that they cut 27,000 jobs between them, double the 13,500 announced in February. ConocoPhillips has already cut nearly 1,500 jobs so far this year but is planning more layoffs this fall that could number into the thousands.

“Everybody was hopeful, but it feels like the hangover is dragging on,” said Dennis Cassidy, managing director of oil and gas at global consulting firm Alix Partners.

The impact of low oil prices isn’t limited to U.S. energy companies. Firms world-wide have shelved $200 billion of new-project spending, the Financial Times reports.
Seems like the fracking miracle is taking a break.
“There are a lot of killers. We’ve got a lot of killers. What, do you think our country’s so innocent? Take a look at what we’ve done, too.” - Donald J. Trump, President of the USA
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Heracleum Persicum
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Re: Oil & Gas

Post by Heracleum Persicum »

.

wait till Iran kicks in

Iran the 2nd biggest Gas reserve and 3rd biggest Oil reserve

and

that not counting all those Shia territory oil (Al Saud) :lol:

Pretty much, soon, swimin in oil and gas :lol:


.
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Re: Oil & Gas

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Heracleum Persicum wrote:wait till Iran kicks in
Yep.
“There are a lot of killers. We’ve got a lot of killers. What, do you think our country’s so innocent? Take a look at what we’ve done, too.” - Donald J. Trump, President of the USA
The Kushner sh*t is greasy - Stevie B.
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Re: Oil & Gas

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Eastern European shale gas hopes on ice as boom turns to bust
FT

Whatever happened to the much-heralded eastern European shale-gas boom? The answer is that, for now at least, it has quietly become a bust. Even more than in the rest of Europe, unconventional gas seemed a few years ago to hold out great promise in the centre and east of the continent. With Moscow flexing its geopolitical muscles, shale gas offered the prospect of reducing energy costs and reliance on Russian imports, which in some former Soviet bloc countries is 100 per cent.

Western oil majors, especially from the US, flocked late in the past decade into countries such as Poland, Hungary, Romania and later Ukraine, hoping to replicate the North American shale boom. But alarm bells sounded in 2012 when ExxonMobil pulled out of Poland, seen as one of the continent's best prospects, after disappointing test-well results. The Polish Geological Institute also estimated recoverable reserves of shale gas that year at 346bn-768bn cubic metres, only about one-tenth of previous estimates by a US agency.

Since then, other majors have made for the exits. In the eight months from summer 2014 to early this year Chevron, which had led the charge into eastern European shale exploration, pulled out of Lithuania, Ukraine, Romania and Poland. This summer, ConocoPhillips, the last US major in Poland, withdrew, following on the heels not just of Chevron and ExxonMobil, but Marathon Oil of the US, Canada's Talisman, France's Total and Eni of Italy.

Tim Wallace, Conoco's manager in Poland, after drilling seven wells in three exploration blocks, and investing some $220m since 2009, said "unfortunately, commercial volumes of natural gas were not encountered".

Just a few years ago, Poland's government had hoped commercial shale-gas production would be under way by now. Instead, after more than 70 test wells were drilled on 45 blocks, with investment totalling $2bn, no industrial-scale production has begun.

The reasons for the bust across the region are varied: sometimes unfavourable regulatory and tax regimes, as well as bans or temporary moratoria on hydraulic fracturing in countries such as Bulgaria, Romania and the Czech Republic, often following environmental protests. Some western officials, including Anders Fogh Rasmussen last year when he was Nato secretary-general, have accused Russia of secretly stirring up such protests, which Moscow denies.

Lower oil prices have also changed the financial equation, in a region where drilling costs are high and that lacks the infrastructure whose development has driven costs down in the US. On top of all that, in the words of one executive from a US oil major, "the rocks aren't there". Geological formations that appeared promising in countries such as Poland have turned out to be more difficult to fracture than reserves in North America. Some industry insiders say the geology has been the biggest factor holding back development of central European shale. But while Poland no longer looks like becoming a new North Dakota, its domestic energy companies PGNiG and PKN Orlen have been charged with continuing to try to develop its shale reserves. Polish officials remain optimistic that some commercial shale production will begin - reducing the country's reliance on Russia for about 60 per cent of its gas needs.

Once oil prices rise again, drilling will become more affordable. The experience and data amassed by energy companies so far can then be put to use in attempting to adapt technology to local geological needs.

Ukraine, too, which has seen Royal Dutch Shell and Chevron withdraw from unconventional gas exploration, is hopeful that if it can resolve its eastern conflict and stabilise the economy, shale production will be developed.

It may ultimately be domestic companies and smaller independents, not the international majors, that will harness the unconventional resources of eastern Europe.

With development of unconventional gas stalling, moreover, a pointer to the future may be this month's EU-backed deal to build a 534km gas pipeline from Poland to the Baltic states. All three Baltic republics were until recently entirely dependent on supplies from Russia.

Also this month, outgoing Polish prime minister Ewa Kopacz opened a delayed liquefied natural gas terminal on Poland's Baltic coast at Swinoujscie. The first LNG tanker is expected to dock in late November. For the time being, diversifying eastern Europe's sources of supply is likely to rely on these kind of efforts to develop LNG capacity and establish more "interconnector" pipelines to enable gas to flow more freely. The promise of shale gas will have to wait.
Translation: After lying through their teeth in order to create hype and after creating unnecessary tensions, oil companies (mainly from the USA) found reality to be a harsh mistress, packed their sh*t and left.
“There are a lot of killers. We’ve got a lot of killers. What, do you think our country’s so innocent? Take a look at what we’ve done, too.” - Donald J. Trump, President of the USA
The Kushner sh*t is greasy - Stevie B.
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Re: Oil & Gas

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‘We Need an Energy Miracle’
Bill Gates has committed his fortune to moving the world beyond fossil fuels and mitigating climate change.

[...]

On the surprising wisdom of government R&D:

When I first got into this I thought, How well does the Department of Energy spend its R&D budget? And I was worried: Gosh, if I’m going to be saying it should double its budget, if it turns out it’s not very well spent, how am I going to feel about that? But as I’ve really dug into it, the DARPA money is very well spent, and the basic-science money is very well spent. The government has these “Centers of Excellence.” They should have twice as many of those things, and those things should get about four times as much money as they do.

Yes, the government will be some-what inept—but the private sector is in general inept. How many companies do venture capitalists invest in that go poorly? By far most of them. And it’s just that every once in a while a Google or a Microsoft comes out, and some medium-scale successes too, and so the overall return is there, and so people keep giving them money.

On why he thinks Congress may not be hopeless:

The U.S. Congress does support solar and wind subsidies, which have been quite generous. So Congress isn’t completely absent on this. The House actually passed a climate-change bill [in 2009], when it was a Democratic Congress. There’s a class of voters who care about this, that I think both parties should want to compete for. So I don’t think it’s hopeless, because it’s about American innovation, American jobs, American leadership, and there are examples where this has gone very, very well.

On the centrality of government to progress on energy, historically:

Everyone likes to argue about how much the shale-gas boom was driven by the private sector versus government; there was some of both. Nuclear: huge amount of government. Hydropower: mind-blowingly government—because permitting those things, those big reservoirs and everything, you can’t be a private-sector guy betting that you’re going to get permitted. People think energy is more of a private-sector thing than it is. If you go back to Edison’s time, there wasn’t much government funding. There were rich people funding him. Since World War II, U.S.-government R&D has defined the state of the art in almost every area.
I’m optimistic about climate change because of innovation.

But energy moves really slowly. There’s this thing Vaclav Smil says: If Edison were reborn today, he would find our batteries completely understandable, because it’s just chemistry. He would say, “Oh, cool, you found lithium, that was nice.” Nuclear-power plants, he would go, “What the hell is that?” That, he would be impressed with. And chips, which we can use for managing data and stuff, he’d be impressed with. But he could visit a coal plant and say, “Okay, you scaled it up.” He would visit a natural-gas plant and that would look pretty normal to him; he would look at an internal-combustion engine and he wouldn’t be that surprised.

[...]
“There are a lot of killers. We’ve got a lot of killers. What, do you think our country’s so innocent? Take a look at what we’ve done, too.” - Donald J. Trump, President of the USA
The Kushner sh*t is greasy - Stevie B.
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Re: Oil & Gas

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May the gods preserve and defend me from self-righteous altruists; I can defend myself from my enemies and my friends.
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Re: Oil & Gas

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thats a cute perspective.

its such a pleasant thought that the oil arabs might go back to being irrelevant camel riders in the desert again, so much so that my self defence mechanisms kick in and stop the wishful thinking.
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Re: Oil & Gas

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noddy wrote:
thats a cute perspective.

its such a pleasant thought that the oil arabs might go back to being irrelevant camel riders in the desert again, so much so that my self defence mechanisms kick in and stop the wishful thinking.
To see the evil Saudi regime collapse would almost be as much of a pleasure having seen collapse of the Russian one starting with the Berlin Wall.
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Re: Oil & Gas

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Typhoon wrote:
noddy wrote:
thats a cute perspective.

its such a pleasant thought that the oil arabs might go back to being irrelevant camel riders in the desert again, so much so that my self defence mechanisms kick in and stop the wishful thinking.
To see the evil Saudi regime collapse would almost be as much of a pleasure having seen collapse of the Russian one starting with the Berlin Wall.

Be careful what you wish for because you might get it: if the price of remains low, in a few years the Saudi Royal Family will run out of money to keep its regime intact, and then the power vacuum will be replaced by the proponents of Jihad. And then, even with the low price of oil, all these revenues will be militarized. And as a result, after a few decades, imagine 1.2 billion Muslims manufacturing enriched uranium all over the world, in restaurants, high schools, gutters, kitchens, everywhere. Unstoppable. :D
The name HAL is derived from "Heuristically Programmed ALgorithmic Computer." HAL 10000 is the new generation computer destined to become the successor to HAL 9000, as suggested in Arthur C. Clarke's book.
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Heracleum Persicum
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Re: Oil & Gas

Post by Heracleum Persicum »

HAL 10000 wrote:
Typhoon wrote:
noddy wrote:
thats a cute perspective.

its such a pleasant thought that the oil arabs might go back to being irrelevant camel riders in the desert again, so much so that my self defence mechanisms kick in and stop the wishful thinking.
To see the evil Saudi regime collapse would almost be as much of a pleasure having seen collapse of the Russian one starting with the Berlin Wall.

Be careful what you wish for because you might get it: if the price of remains low, in a few years the Saudi Royal Family will run out of money to keep its regime intact, and then the power vacuum will be replaced by the proponents of Jihad. And then, even with the low price of oil, all these revenues will be militarized. And as a result, after a few decades, imagine 1.2 billion Muslims manufacturing enriched uranium all over the world, in restaurants, high schools, gutters, kitchens, everywhere. Unstoppable. :D

.

Sheikhs, Amir, Kings days numbered, not talking decades, probably yrs .. things unfolding fast .. if things happen as Iranians say, KSA could be gone in less than 5 yr, max

.
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Re: Oil & Gas

Post by noddy »

the prognosis is sunni with a chance of shiite.

boom tish.

more seriously, if things did get worse in the shorterm due to the collapse in saudi influence i could still placate myself with the fantasy that its best for the longer term.
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Re: Oil & Gas

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HAL 10000 wrote:
Typhoon wrote:
noddy wrote:
thats a cute perspective.

its such a pleasant thought that the oil arabs might go back to being irrelevant camel riders in the desert again, so much so that my self defence mechanisms kick in and stop the wishful thinking.
To see the evil Saudi regime collapse would almost be as much of a pleasure having seen collapse of the Russian one starting with the Berlin Wall.

Be careful what you wish for because you might get it: if the price of remains low, in a few years the Saudi Royal Family will run out of money to keep its regime intact, and then the power vacuum will be replaced by the proponents of Jihad.
Maybe. Maybe not.

HAL 10000 wrote:And then, even with the low price of oil, all these revenues will be militarized. And as a result, after a few decades, imagine 1.2 billion Muslims manufacturing enriched uranium all over the world, in restaurants, high schools, gutters, kitchens, everywhere. Unstoppable. :D
As 1.2 billion Muslims die off from radiation poisoning . . .

Flights of fancy aside and humour aside,

Daesh is the latest failed attempt at pan-Arabism.

As a concept, pan-Arabism is such a failure that no one even bothers to remember it, let alone think about it.
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Re: Oil & Gas

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Oklahoma is Now as Much of an Earthquake Risk as California

A new federal map released Monday shows parts of Oklahoma are now as seismic as parts of California and Alaska, long the nation’s leaders in earthquakes, and for the first time includes man-made earthquakes.

The U.S. Geological Survey’s new earthquakes hazard map, which helps states and government officials determine insurance rates and building codes, is in part a reaction to the historic increase in seismic activity in Oklahoma. Last year the state experienced almost 900 3-plus magnitude earthquakes; in 2007, it recorded just one. On earlier USGS maps, Oklahoma was a seismic afterthought.

Read more: See How Oil Drilling Created an Earthquake Crisis in Oklahoma

Scientists say Oklahoma’s surge in quakes is due to the injection of billions of barrels of salty wastewater that have come to the surface during oil and natural gas exploration. The water’s injection back into the earth has put pressure on the state’s fault lines, leading to quakes that have damaged homes, schools and other structures. Oklahoma has thousands of disposal wells, including a heavy concentration in the state’s northwestern and central regions, where most of the earthquakes are occurring. Ten of the state’s 12 most powerful quakes have struck since 2011.

[...]
“There are a lot of killers. We’ve got a lot of killers. What, do you think our country’s so innocent? Take a look at what we’ve done, too.” - Donald J. Trump, President of the USA
The Kushner sh*t is greasy - Stevie B.
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Re: Oil & Gas

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Re: Oil & Gas

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May the gods preserve and defend me from self-righteous altruists; I can defend myself from my enemies and my friends.
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Re: Oil & Gas

Post by noddy »

north western europe, canada and australia have more or less all escaped the curse of being rich in natural resourceswhile the middle east and south america, not so much.

maybe its not a curse, maybe its just a return to normal.
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