Australia to import LNG? When the illogical makes sense: Russell

Mon Nov 21, 2016 | 12:10am EST By Clyde Russell | LAUNCESTON, Australia Sometimes the seemingly illogical actually makes sense. Take the case of Australia, which will become the world's largest exporter of liquefied natural gas (LNG), but also may start importing the super-chilled fuel at the same time. Australia is in the final stages of completing more than $180 billion of LNG projects that will see it overtake Qatar as the world's largest supplier by the end of next year. When the last of eight new facilities is finished, Australia will have 10 operating projects capable of producing about 85 million tonnes of LNG a year. Given the huge surge in LNG production in Australia, it would seem extraordinary that it would have to import the fuel to meet domestic requirements, but that is exactly what major domestic utility AGL Energy is considering. The company said on Nov. 14 it would spend A$17 million ($12.8 million) on a feasibility study for an import terminal in the southeast of the country, home to most of the nation's gas-consuming industries and the largest retail market.What AGL has identified is Australia is facing a set of circumstances where economic realities are colliding with geography and politics. Firstly, the economic realities. The building of three new LNG plants in Queensland state, on the country's northeast coast, has dramatically altered the supply-demand balance along the populous eastern seaboard. The three LNG plants use coal-seam gas as feedstock, but they are also capable of tapping into the existing pipeline network that draws natural gas from fields in central Australia, Queensland and from the offshore Bass Strait between Victoria and the island state of Tasmania. These three facilities will account for about 70 percent of east coast natural gas demand by 2018, according to AGL. This means a massive exploration and production effort is required to boost output by enough to meet the demand of the LNG plants. It also means that pricing in the domestic market will become more tied to international LNG prices on a netback basis, which is the cost of the LNG to customers in Asia minus freight, liquefaction and other costs. In reality, this makes it likely that the three LNG plants will suck up natural gas that would otherwise have been available to the domestic markets, creating a potential shortage sometime around 2019. Secondly, the geography part. Although Australia is the world's smallest continent, it's still a huge country and the currently producing natural gas fields in its center are thousands of kilometers (miles) from where the fuel is consumed in coastal cities. This means pipelines are needed to transport natural gas, and these dramatically add to the final cost to customers. It's also far from certain that pipeline investors would be prepared to commit the massive amounts of capital needed to expand the network unless they are guaranteed high rates of return, meaning domestic prices would have to be well above current Asian LNG prices. POLITICS KEY FOR LNG IMPORTS Lastly, the influence of politics. The best solution for easing southeastern Australia's looming shortage of natural gas would be to boost onshore production in Victoria and New South Wales, the two most populous states. However, politicians in both have effectively banned or placed moratoriums on much of the exploration and production sector. This mainly has been done to appease public opinion, which has increasingly swung behind a coalition of rural interests and environmentalists that oppose both producing natural gas from hydraulic fracturing and from coal-seams. Also In Commodities Oil prices climb on expectation of OPEC-led output cut China investors up bets on copper as fundamental picture brightens For farmers, much of their opposition is because of interruptions to their operations from the presence of drilling rigs and associated infrastructure on their land, as well as to fears of pollution of water tables. While a series of independent scientific reports have stated there is little reason to fear contamination or other adverse effects from natural gas wells, these have been largely drowned out by activists opposed to fossil fuels. Politicians from both the centre-right Liberal Party, which rules in New South Wales, and the centre-left Labor Party, which controls Victoria, have found it easier to appease these groups than to make the case as to why exploration should go ahead, and the consequences of higher prices if it doesn't. Enter AGL with a possible solution of building an LNG import terminal in the world's biggest LNG exporter. It would solve the problem of a potential shortage of natural gas in southeastern Australia, introduce competition with existing players, keep prices to at least the level of what Asian buyers are prepared to pay and allow the politicians to keep appeasing noisy pressure groups. Overall, the seemingly illogical actually makes perfect sense. (The opinions expressed here are those of the author, a columnist for Reuters.) (Editing by Joseph Radford)

$22bn deal for supply of LNG to Pakistan

$22bn deal for supply of LNG to Pakistan The Newspaper's Staff Reporter — Published about 7 hours ISLAMABAD: Global Energy Infrastructure Ltd (GEIL) of Turkey and Qatargas on Friday announced signing of about $22 billion agreement for import of Liquefied Natural Gas (LNG) to Pakistan for 20 years. A statement issued by the GEIL, a company of Global Energy Group of Turkey, said it “concluded a 20-year long-term LNG Sale and Purchase Agreement (SPA) with Qatargas, a company owned by State of Qatar, for supply of LNG/RLNG to Pakistan’s market, on private-to-private basis.” GEI Pakistan (GEIP), the local company of the Group, is setting up an LNG regasification terminal at Port Qasim LNG Zone, on a site procured from the Port Qasim Authority (PQA). The terminal will be completed in the first half of 2018. Following the terminal completion, LNG procured from Qatargas will be imported into Pakistan and re-gasified to meet demands of the local market for the next 20 years. “This agreement represents the single largest private international contract to be signed for Pakistan,” said the statement, adding it was an exemplary foreign private investment initiative to supplement the initiatives of Government of Pakistan in addressing the energy shortages in the country. It also reflects the confidence of international business community in the government’s successful policies in the energy sector, the company said and hoped the deal will help the economy of Pakistan, create jobs and enhance production capacity of private sector. Separately, Qatargas also announced a long-term Sale and Purchase Agreement (SPA) with Global Energy Infrastructure Limited (GEIL). Under the agreement, Qatargas will supply 1.3 million tonnes per annum of Liquefied Natural Gas (LNG) to Pakistan for 20 years, with provisions allowing the volume to increase to 2.3m tonnes per annum. The LNG will be supplied form Qatargas-2, the world’s first fully integrated LNG value chain venture, with the first cargo expected to be delivered to Pakistan in 2018 by Qatargas-charted Q-Flex vessels. Saad Sherida Al-Kaabi, Chairman of Qatargas Board of Directors, reaffirmed the commitment of Qatargas to provide clean and reliable energy to customers. He said: “We are proud to support countries in their desire to enhance their energy security. This new agreement reinforces our confidence in Pakistan as an energy market and in its potential.” Qatar, as the World’s largest exporter of LNG, has been able to achieve its strategic objective to diversify its export base to include major gas markets, and to be a leader in the supply of a clean energy source that will help reduce greenhouse gas emissions and protect the environment, he said. Commenting on the newly-signed deal, Khalid bin Khalifa Al-Thani, Chief Executive Officer of Qatargas, said: “Qatargas is delighted to announce a 20-year deal with GEIL for the supply of LNG into Pakistan. Published in Dawn, July 2nd, 2016

Is It Safe To Get Back Into These Oil Stocks: Ophir Energy Plc, Genel Energy PLC & Gulf Keystone Petroleum Limited?

Wed, 3rd February 2016 - 13:12 Without the cushion of steady cash flows from a downstream business, mid-cap oil and gas producers are going through a tough patch. The price of Brent crude oil has slumped to barely above $30 a barrel and worse may be ahead. With excess supply in the oil market likely to persist until at least 2017, investor sentiment towards the sector is very low. Shares in Africa-focused E&P company Ophir Energy (LSE:OPHR) have fallen 14% this year. But there's cause for optimism: its sizeable portfolio of gas assets in Thailand, Indonesia and Africa positions it to benefit from rising Asian gas demand. There's substantial upside potential because Ophir's largely untapped resource base is high quality clean gas, which makes it easy to convert to LNG, and therefore is cost competitive too. The company also benefits from a strong balance sheet, with $650m of cash at the end of 2015. This should cover all capex needs and exploration costs until at least the end of 2017. Recently, Ophir Energy announced a deal to farm-out a 40% equity stake in its Fortuna floating LNG project to Schlumberger in exchange for reimbursing 50% of Ophir Energy's past development costs, estimated to be around $250m to $300m. Achieving this deal at that price while oil prices are so low demonstrates the quality of the asset and reduces the cash flow needs of the company. On the downside, Ophir Energy's high capex needs mean its bottom line is expected to linger heavily in the red for at least another two years. Despite efforts to cut costs, Ophir is still forecast to remain free cash flow negative for at least another three years, leading to speculation that further farm-out deals or a capital raise may be needed before first gas is produced from its major developments. Meanwhile, shares in Gulf Keystone Petroleum (LSE:GKP) have performed better. Its shares are up 9% this year, thanks to news that oil producers in the Kurdistan Regional Government may soon resume regular payments to producers for crude exports. Repayment of Gulf Keystone's nearly $300m in arrears would allow it to organically fund capex. This would massively improve its cash flow outlook and balance sheet. Tough times Kurdistan-focused producer Genel Energy (LSE:GENL) has remained profitable throughout the recent turbulence in the oil sector, but its shares have fared even worse. After a 77% decline in 2015, Genel has lost another 43% of its value since the start of the year, leaving the former £3bn company with a market cap of just £275m. Falling oil production only made matters worse. Genel decided to cut back on new drilling in 2015 because of payment issues with the Kurdistan government. It expects to produce only between 60,000 and 70,000 barrels of oil a day this year, compared with 85,000 in 2015. Genel should be able to cover its capex needs over the next two years without additional funding, as it's owed some $400m in arrears by the Kurdistan government and has over $400m in cash on its balance sheet. What's more, analysts expect Genel to have earned underlying earnings of 10p per share in 2015, giving it an estimated P/E of 10. All three mid-cap oil stocks seem to be attractive plays on higher long-term oil prices, but timing is also an important issue to consider. I feel that the oil price could fall further, so I would stay out of these stocks. Unless the oil price bottoms out, these oil stocks could have much further to fall. Jack Tang has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

The non-transparent LNG deal?

The non-transparent LNG deal? April 17, 2015 Documents available with Business Recorder reveal that the Cabinet Committee on Energy (CCoE) has approved a mechanism of direct payment for LNG imported from Qatar to Pakistan State Oil (PSO) by the Ministry of Finance from the subsidy payable to power sector. Three major conclusions can be drawn from this. First that the letter of credit was opened by the PSO, an entity that comes under the administrative control of the Ministry of Petroleum and Natural Resources, and not by any private sector entity including the CNG sector and the fertilizer sector. Secondly, PSO and its parent ministry would therefore naturally be engaged in negotiating a price for LNG import with Qatar. And finally, subsequent to the arrival of one LNG shipment to Pakistan to maintain that the price of LNG has not yet been agreed between the governments of Qatar and Pakistan defies belief. Brotherly relations aside, no government is going to send one consignment to another country valued at millions of dollars, without first reaching an agreement on price. Be that as it may, the following is the pricing formula approved by CCoE for the LNG import: (i) LNG price DES; (ii) PSO margin; (iii) terminal charges; (iv) SSGCL administrative margin for LSA; (v) SSGC cost of service and or transportation charges; and (vi) transmission and distribution losses. However, the exact amount to be charged under each head is not available and as such neither the per unit import price of the commodity nor any other prices under items (ii) to (vi) above have been released to the public. The allocation of the imported gas has also come under severe criticism. Shahid Khaqan Abbasi publicly stated that the CNG and fertilizer sectors would benefit from the first consignment but later the CNG sector was ignored (much to the chagrin of the sector claiming that each station had set aside major finances to procure LNG from the first consignment). The fertilizer sector was considered to be the main beneficiary of the first consignment but that policy too was revised and eventually the entire LNG cargo was dispatched to one company namely: Pak-Arab Fertilizer. One would have assumed that given the massive continuing energy shortfall the government would have preferred allocating LNG to those sectors that use it as a fuel notably the power sector whereas the fertilizer sector uses LNG as raw material. That too has inexplicably not happened and no clarification has been forthcoming with confusion fuelling accusations of massive kickbacks. What is extremely unfortunate is that the incumbent government has been taking several economic decisions with millions of dollars of the taxpayers' money involved that are simply not transparent. Shahid Khaqan Abbasi has stated on the electronic media that the government is considering amending the public procurement rules that would facilitate the agreement on LNG imports. This no doubt must have further raised the hackles of analysts and civil society alike given the fact that already the government has been agreeing to commercial deals that are violative of the PPRA rules by citing national interest. Disturbingly, the Prime Minister has stood by the flawed non-transparent decisions taken by his cabinet members - (for example, the Nandipur project and import of substandard wheat from Ukraine and Russia with large wheat stocks held in our godowns) and non-transparent alike - because of the rather strange logic that firing any cabinet member for lack of performance would weaken his government. This approach belies his earlier stance that he would constantly review the performance of each minister and minister of state and those found wanting would be fired. One can only hope that the Prime Minister takes cognizance of the performance of his cabinet colleagues and takes appropriate measures when found wanting. ================== Energy deal: Moscow to lend $2b for LNG pipeline By Zafar Bhutta Published: April 18, 2015 Petroleum minister says Russia will start its first LNG exports in 2016 and has also offered to sell gas to Pakistan. PHOTO: FILE ISLAMABAD: Pakistan and Russia have finalised an agreement under which Moscow will lend Islamabad $2 billion to lay a pipeline that will transport liquefied natural gas (LNG) from Karachi to Lahore, Petroleum Minister Shahid Khaqan Abbasi says, adding that in return Russian companies will be awarded the contract to build the pipeline. The formal agreement between the two sides is expected to be signed next month, following which Pakistan will also sign a commercial agreement with a Russian firm that Moscow will identify as its preferred contractor to build the 1,100-kilometre pipeline. According to the agreement, the contract will be awarded without any formal bidding process. The financing for the LNG pipeline comes as a prelude to Russia’s offer to sell LNG to Pakistan. Russia is the second-largest producer of natural gas in the world, and is seeking to diversify its export markets after a spat last year with the European Union, its main buyer, over Ukraine. “Pakistan and Russia have finalised an LNG pipeline deal in a recent meeting in Moscow and the two countries will sign a government-to-government basis deal next month,” Petroleum Minister Abbasi told The Express Tribune. “Russia will start its first LNG exports in 2016 and has also offered to sell gas to Pakistan.” This is not Islamabad’s first major cooperation agreement with Moscow over infrastructure. The former Soviet Union had financed the construction of the state-owned Pakistan Steel Mills under a similar arrangement. The Soviets had also helped supply some of the oil drilling equipment for the state-owned Oil and Gas Development Company. Some of that equipment is in use till date. Currently, Pakistan is working on two pipelines to transport re-gassified LNG from Karachi to the northern parts of the country. The first is a pipeline that will connect the Gwadar Port to the main natural gas pipeline hub in Nawabshah. The second will lay a direct pipeline from Karachi to Lahore. The government has signed an initial deal with China to award a $3 billion LNG terminal and pipeline project to a Chinese contractor in a similar financing-for-guaranteed-contract arrangement. Islamabad had initially offered Moscow and Beijing a similar arrangement for the Iran-Pakistan pipeline, but American and European sanctions against Tehran scuttled that project – at least for now. An LNG import terminal, owned and operated by the Engro Corporation, an industrial conglomerate, is already up and running, though there is, as yet, no agreement to import natural gas from Qatar, the third-largest natural gas producer in the world and closest to Pakistan. There is also no infrastructure yet that would allow that natural gas to be transported upcountry. “We are negotiating an LNG supply deal with Qatar which will be finalised soon,” Abbasi said. Pakistan’s existing pipeline network has the capacity to transport 320 million cubic feet of gas per day (mmcfd) in re-gassified LNG. Consumption in Punjab and Khyber-Pakhtunkhwa, as well as upper Sindh, however, exceeds 3,000 mmcfd, which is why the new pipelines are badly needed. In order to finance the payback of the loans needed to construct the pipelines, the Oil and Gas Regulatory Authority (Ogra) has allowed the state-owned gas utilities, Sui Northern Gas Pipelines (SNGP) and Sui Southern Gas Company (SSGC), to start charging consumers more for their gas bills every month. SNGP and SSGC are expected to invest $750 million and $300 million respectively to finance the LNG pipeline. Published in The Express Tribune, April 18th, 2015. ========================== California gas pipeline explosion, fire injure up to 15 people Sat, Apr 18 14:26 PM EDT image By Sharon Bernstein SACRAMENTO, Calif. (Reuters) - A construction crew on Friday accidentally ruptured a natural gas transmission line in Fresno, California, sparking an explosion and fire that injured up to 15 people, four of them critically, officials said. The 12-inch (30-cm) pipeline, belonging to Pacific Gas & Electric Corp (PCG.N), was struck by a backhoe near state Highway 99, unleashing a fireball that injured members of the construction team and a jail inmate crew nearby, Fresno Fire Department spokesman Peter Martinez said. The accident forced closure of the highway in both directions, along with an adjacent railroad line, Martinez said. Rail traffic was halted to check for possible damage to a railway bridge over a river, he said. One worker in critical condition was flown to hospital by helicopter, and 13 or 14 others were taken to hospitals for evaluation and treatment of injuries after the pipeline was ruptured at about 2:30 p.m., Martinez added. Four of the injured were taken to Community Regional Medical Center in Fresno, and two more were taken to the burn unit there, said hospital spokeswoman Mary Lisa Russell, adding that four were in critical condition and two serious. The utility had shut off the gas flow by 3:20 p.m., with the residual amount in the pipeline burning off just before 4 p.m., said PG&E spokesman Donald Cutler. A county public works equipment operator struck the natural gas line, said The Fresno Bee, citing Fresno County Administrative Officer John Navarrette. The employee, who was badly burned, was the patient airlifted to Community Regional Medical Center, the paper said, citing Navarrette. Inmates on a work detail were among the injured, it added, citing Sheriff Margaret Mims. The accident occurred at a shooting range used by law enforcement, the Fresno County Sheriff's Department told the newspaper. Fresno is about 190 miles (300 km) southeast of San Francisco. The California Public Utilities Commission sent a team to Fresno to investigate the explosion, spokeswoman Terrie Prosper said. "The CPUC will conduct a full investigation of the explosion and has already coordinated with the federal Pipeline and Hazardous Materials Safety Administration," Prosper said. A PG&E representative said the utility was also investigating. (Additional reporting by Steve Gorman in Los Angeles and Rory Carroll in San Francisco; Editing by Eric Beech, Sandra Maler and Clarence Fernandez) ======================= SPE Webinar Jan 2014 While remote parts of the world are awash with hundreds of trillions of cubic feet (Tcf) of natural gas, the industrialized West and emerging economies of the East cannot get enough of the clean-burning, environmentally friendly fuel. The problem is transporting this compressible fluid long distances, across major bodies of water. For markets greater than 1,500 miles, liquefied natural gas (LNG) has proved to be the most economic option. By refrigerating natural gas (primarily methane) to -260ºF (-162ºC), thereby shrinking its volume by 600:1, LNG can be transported in large insulated cryogenic tankers at reasonable cost. Natural gas liquefaction is a series of refrigeration systems similar to the air conditioning system in our homes consisting of a compressor, condenser and evaporator to chill and condense the gas. The difference is in the scale and magnitude of the refrigeration. A typical single-train LNG plant may cost $5 billion and consume 6-8% of the inlet gas as fuel. Since many of the impurities (water vapor, carbon dioxide, hydrogen sulfide, etc.) and heavier hydrocarbon compounds in natural gas would freeze at LNG temperatures, they must first be removed, and disposed or marketed as separate products. This paper will provide an overview of LNG liquefaction facilities, from inlet gas receiving to LNG storage and loading. However, the focus is on the liquefaction process and equipment. Differences among the commercially available liquefaction processes (cascade, single mixed refrigerant, propane-pre-cooled mixed refrigerant, double mixed refrigerant, nitrogen, etc.) will be discussed. The aim is to provide SPE members with a clear understanding of the technologies, equipment and process choices required for a successful LNG project. ================ For further info: Contact: SAQLAIN92110@YAHOO>COM

Oil prices drop on possible Iran deal, dollar

Oil prices drop on possible Iran deal, dollar Mon, Mar 30 06:13 AM EDT image By Christopher Johnson LONDON (Reuters) - Oil prices fell on Monday as officials from Iran and six world powers discussed a possible deal over Tehran's nuclear programme that could bring an end to sanctions and allow an increase in Iranian oil exports. The two sides have until the end of Tuesday to come up with an agreement at talks in Lausanne, Switzerland. Officials close to the talks have said progress has been made and many investors believe a deal is in the making. Few expect the talks to end without some sort of agreement. "Regarding Iran, there are two possible outcomes: a framework deal or an extended deadline," Bjarne Schieldrop, chief commodities analyst at SEB Markets in Oslo, told the Reuters Global Oil Forum. Brent crude was down 40 cents at $56.01 a barrel by 0938 GMT as the market began to price in a deal with Iran. U.S. crude was down 80 cents at $48.07. Oil markets are well supplied and recent figures show global production outstripping demand by around 1.5 million barrels per day (bpd), filling oil inventories. "Further downward pressure may come at any time from a nuclear agreement with Iran," said Michael Wittner, analyst at Societe Generale. "If a framework agreement is reached, we would expect an immediate bearish knee-jerk reaction in the markets, with oil prices quickly losing on the order of $5." Barclays said a build in U.S. stocks would make its way into an oversupplied global market in the second quarter and that demand would unlikely be strong enough to support oil prices once that happened. "Continued dollar strength is (also) a headwind to the oil price recovery," Barclays said, forecasting the dollar would rise above parity with the euro by the fourth quarter of 2015. Few investors expect the Organization of the Petroleum Exporting Countries, which pumps around a third of the world's oil, to restrain production to help push up prices. Oil producers are much more focused on maintaining market share, analysts say. Lower oil prices have encouraged some oil and gas companies to stop drilling, particularly in the United States, but this is unlikely to affect oil production until later this year. "The current rig count is pointing to U.S. production declining slightly sequentially in 2Q15 and 3Q15," Goldman Sachs said, adding that activity could bounce back in 2016 as drillers benefit from falling production costs. (Additional reporting by Henning Gloystein in Singapore; Editing by Jason Neely and Dale Hudson) ----------------------------- Air strike kills at least 40 at Yemen camp for displaced Mon, Mar 30 17:41 PM EDT image 1 of 11 By Mohammad Mukhashaf and Sami Aboudi ADEN (Reuters) - An air strike killed at least 40 people at a camp for displaced people in north Yemen on Monday, humanitarian workers said, in an attack which apparently targeted nearby Houthi fighters who are battling President Abd-Rabbu Mansour Hadi. Yemen's state news agency Saba, which is under the control of the Houthis, said the camp at Haradh was hit by Saudi planes. It said the dead included women and children, and showed the bodies of five children laid out on a blood-streaked floor. A Saudi military spokesman said the kingdom was seeking clarification on the incident. "It could have been that the fighter jets replied to fire, and we cannot confirm that it was a refugee camp," Brigadier General Ahmed Asseri said. "We will ask the Yemeni official agencies to confirm that," he told reporters. Hadi's Foreign Minister Riyadh Yassin earlier blamed Houthi artillery for the explosion. The International Organisation for Migration, which initially reported 45 deaths, said 40 people were killed and 200 wounded - dozens of them severely. A humanitarian worker said earlier that the strike hit a truck of Houthi militiamen at the gate to the Mazraq camp, near Haradh, killing residents, guards and fighters. The medical aid organization Medecins Sans Frontieres said at least 34 wounded people were brought to a hospital in Haradh which it supports. Another 29 were dead on arrival. "People in Al Mazraq camp have been living in very harsh conditions ... and now they have suffered the consequences of an air strike on the camp," said Pablo Marco, MSF operational manager for Yemen. Mazraq, in the province of Hajja next to the Saudi border, is a cluster of camps that are home to thousands of Yemenis displaced by over a decade of wars between the Houthis and the Yemeni state, as well as East African migrants. Saudi Arabia, supported by regional Sunni Muslim allies, launched an air campaign to support Hadi after he withdrew last month from the capital to Aden. He left Yemen on Thursday to attend an Arab summit and has not returned. The fighting has brought civil war to the Arabian Peninsula's poorest country. Sunni Muslim tribesmen allied with Hadi are battling northern Zaydi Shi'ites backed by soldiers loyal to former President Ali Abdullah Saleh, who stepped down after 2011 mass protests against his 33 years in office. Yemen was already sliding into chaos with a growing southern secessionist movement and a covert U.S. drone campaign -- now stalled -- against al Qaeda in the east. The growing power of the Houthis, part of a Shi'ite minority that makes up about 20 percent of the country's 25 million people, also means Yemen has become the latest stage for Saudi Arabia's power struggle with Iran. The two regional rivals support opposing sides in Syria's civil war and in neighboring Lebanon. Tehran also supports and arms Shi'ite militias in Iraq, although it denies Riyadh's accusations that it supports Yemen's Houthis militarily. WARSHIPS FIRE ON HOUTHIS In the capital Sanaa, controlled by the Houthis, jets struck around the presidential palace overnight and made more raids throughout the day. Most of the air strikes, launched on Thursday, have taken place so far only at night. In the south, Houthi fighters closed in on the port city of Aden, the last major stronghold of Hadi supporters, and residents said warships believed to be Egyptian shelled a column of Houthis advancing along the coastal road. It was the first known report of naval forces taking part in the conflict. A Reuters reporter heard heavy explosions and saw a thick column of black smoke rising from the area about 15 km northeast of Aden, apparently after air strikes. Saudi-led war planes also shook buildings in Aden's Khor Maksar district when they fired at least one missile at the airport, where Houthi-allied fighters are based, residents said. A stray shell killed at least three people on a mini-bus in the same area, local fighters said. A Hadi aide told the Dubai-based al-Arabiya TV that Houthi fighters also shelled the president's private residence in Khor Maksar killing a number of guards. While Hadi's fighters ceded ground around Aden, Pakistan announced it would send troops to support the Saudi-led coalition. "We have already pledged full support to Saudi Arabia in its operation against rebels and will join the coalition," a Pakistani official said. In a cabinet statement, Saudi King Salman said Riyadh was open to a meeting of all Yemeni factions willing to preserve Yemen's security, under the auspices of the six-member Gulf Cooperation Council. The Arab leaders agreed at their meeting in Egypt to form a unified military force to counter growing regional security threats such as the Yemen conflict. But working out the logistics of the force will be a protracted process and Yemen's rugged geography, internal power struggles and recent history all present challenges to any military campaign. Just four years after the 1990 unification of North and South Yemen, civil war erupted when southerners tried to break away, but were defeated by Saleh's northern forces. In the 1960s, intervention by Saudi Arabia and Egypt on opposing sides of a civil war in North Yemen led to a long and damaging military stalemate. Saudi Arabia says it is focusing for now on air strikes against the Houthis, rather than a ground campaign, promising to increase pressure on them over coming days. On Sunday, sources said Yemeni exports of liquefied natural gas (LNG) were running as normal despite the shutdown of major seaports. But French oil firm Total said on Monday operations at its Block 10 had been reduced, with gas production maintained only for local power generation and to supply nearby areas. Several countries have evacuated citizens from Yemen in recent days. About 500 Pakistani nationals were flown out of the Red Sea port of Hodeida on Sunday, and India said on Monday it was preparing to fly out 500 people from Sanaa. (Additional reporting by William Maclean, Noah Browning and Rania El Gamal in Dubai, Angus McDowall in Riyadh, Stephanie Nebehay in Lausanne; Writing by Dominic Evans; Editing by Angus MacSwan and Catherine Evans) ----------------------------------

Shortage of petrol hits alarming levels Ahmad Fraz Khan Published about 7 hours ago

LAHORE: Prime Minister Muhammad Nawaz Sharif Saturday took strict notice of the fuel shortage in various parts of the country and suspended four officials concerned. After arriving from Saudi Arabia, the Prime Minister called a meeting at the airport and took decisions to improve the situation on immediate basis. The four immediately suspended officers responsible for the crisis included Secretary Petroleum Abid Saeed, Additional Secretary Petroleum Naeem Malik, DG Oil C.M. Azam and Managing Director Pakistan State Oil (PSO) Amjid Janjua, said a press release. The provincial governments were directed to check sale of petrol in black and expedite its supply and delivery. ============================ Petrol crisis: Oil companies, govt trade accusations of culpability KARACHI / ISLAMABAD: Oil companies and government officials continued to trade accusations on Friday, with neither side willing to accept culpability for the sudden crunch in petrol supplies in the northern half of the country. Both sides agree on one fact: there was an unprecedented surge in demand for petrol after the government decided to reduce prices. At a press conference on Friday night, Petroleum Minister Shahid Khaqan Abbasi said that demand had surged by 25% after the 27% drop in oil prices from their peak in June 2014. Both sides also agree that the oil companies did not have the legally required 20 days’ worth of inventory to help deal with supply disruptions. But that is where the agreement ends. Government officials claimed that the lack of inventory was the sole reason for the petrol shortage. Oil and Gas Regulatory Authority (Ogra) Chairman Saeed Ahmad Khan announced at a press conference on Friday that Ogra would be serving notices to oil companies for failing to meet the legally required levels of inventory. But industry officials point out that if inventory was the only issue, then there would also be a shortage of diesel and the shortages would be uniform across the country. “The industry cannot be blamed for this situation. There is no shortage of diesel anywhere and petrol is available at all the pumps in Sindh and Balochistan,” said Aftab Husain, CEO of Pakistan Refinery and head of the Oil Companies Advisory Council (OCAC), an industry group. Husain explained that one ship carrying 50,000 tons of oil products was delayed by a few days. “This, along with heavy fog in Punjab, hampered transportation and disrupted the supply chain,” he said. Diesel is transported through a cross-country pipeline originating at Port Qasim, whereas petrol is transported mostly through trucks going north from Karachi. Husain admitted that the oil industry often does not carry the full 20 days of required inventories, especially when prices are declining, but blamed government pricing policy for the situation. “Petroleum prices are revised once a month and whenever the price drops, we book a loss due to the reduced value of our petroleum stock,” he said. “Complete deregulation of prices is the answer. But whenever we talk about it everyone starts writing against us.” Ogra acknowledges the commercial difficulties faced by oil companies when prices are declining, but appears in no mood to accept this as an excuse for not complying with regulatory requirements, said the regulatory body’s chairman. However, even though he blamed the oil companies for the current crisis, Khan agreed with their stance that oil and liquefied petroleum gas (LPG) prices should be deregulated. “In the beginning it will not be pleasant, but it will be good in the long run due to market competition,” said the Ogra chairman. Yet even though everyone agrees that the oil price drop resulted in an unprecedented surge in demand, the government is planning on decreasing prices even further. The petroleum minister announced at his press conference that prices could be reduced by more than Rs5 per litre in February. Abbasi also appeared to insist that the privately owned oil marketing companies were more responsible for the supply crunch than the state-owned PSO, even though PSO has a 65% share in the petrol market. Sales of petrol tend to rise particularly sharply on the first day of a government-mandated price cut. “Petrol sales hit 40,000 tons on January 1,” admitted the petroleum minister. The current crisis appears to have been worsened by the fact that alternatives to petrol – specifically compressed natural gas (CNG) – have largely been absent from the market due to a shutdown of gas supply to CNG stations in Punjab. Abbasi said that if the weather did not turn too cold, the government might consider reopening some of the supply of natural gas to CNG stations. Natural gas is the primary heating fuel in most of the affluent parts of urban Pakistan. Meanwhile, at a hearing at the Senate finance committee on Friday, Federal Finance Secretary Waqar Masood suggested that the current shortage is just the tip of the iceberg and that the country could be facing a rough six weeks before the crisis is fully resolved. Masood’s timeline is far longer than the 10 to 12 days promised by cabinet members during their speeches in the National Assembly on the same day. The finance secretary pointed out that there is a 45 day lag between when an oil company opens a letter of credit (LC) with a bank for oil imports and when the petrol is actually delivered to petrol pumps across the country. The finance ministry has released Rs17 billion to the state-owned PSO to handle its LC requirements, but admits the company needs Rs27 billion for this month alone. Masood admitted that the inter-corporate circular debt in the energy industry, caused in large part by government entities refusing to make the full payments they owe power companies, was at least partially the cause of the crisis. PSO has defaulted on at least Rs110 billion in LCs owed to its foreign suppliers. The finance secretary claimed that the government had been making timely payments of the subsidies it owes to power companies, which in turn owe PSO money for the fuel they use to generate electricity. However, he admitted that the finance ministry refused to pay amount related to the cost of theft, meaning that the power companies still do not have enough money to pay PSO. When the power companies fail to pay PSO on time, PSO defaults on its payments due to foreign suppliers, who then refuse to supply more fuel without payments made upfront in cash. The finance ministry has paid out Rs222 billion power subsidies so far this fiscal year, said Masood. The finance ministry has been urging the water and power ministry to crack down on electricity theft so that the circular debt problem can end once and for all. Sources told The Express Tribune that another reason for the supply crunch was Finance Minister Ishaq Dar’s refusal to allow state-owned PSO to buy US dollars to make oil payments to its international supplies in December, because doing so would have reduced the country’s foreign exchange reserves below the $15 billion mark the minister was targeting. Despite hearing that the drop in oil prices was at least partially responsible for the sudden supply shortage, the Senate finance committee passed a resolution demanding that the government reduce domestic oil prices even further, to fully match the global price drop. Published in The Express Tribune, January 17th, 2015. ============== By Zafar Bhutta / Saad Hasan / Shahbaz Rana / Photo: Shahbaz Malik Published: January 17, 2015 Customers throng a filling station in Lahore amid severe dearth of petrol. PHOTO: SHAHBAZ MALIK/EXPRESS KARACHI / ISLAMABAD: Oil companies and government officials continued to trade accusations on Friday, with neither side willing to accept culpability for the sudden crunch in petrol supplies in the northern half of the country. Both sides agree on one fact: there was an unprecedented surge in demand for petrol after the government decided to reduce prices. At a press conference on Friday night, Petroleum Minister Shahid Khaqan Abbasi said that demand had surged by 25% after the 27% drop in oil prices from their peak in June 2014. Both sides also agree that the oil companies did not have the legally required 20 days’ worth of inventory to help deal with supply disruptions. But that is where the agreement ends. Government officials claimed that the lack of inventory was the sole reason for the petrol shortage. Oil and Gas Regulatory Authority (Ogra) Chairman Saeed Ahmad Khan announced at a press conference on Friday that Ogra would be serving notices to oil companies for failing to meet the legally required levels of inventory. But industry officials point out that if inventory was the only issue, then there would also be a shortage of diesel and the shortages would be uniform across the country. “The industry cannot be blamed for this situation. There is no shortage of diesel anywhere and petrol is available at all the pumps in Sindh and Balochistan,” said Aftab Husain, CEO of Pakistan Refinery and head of the Oil Companies Advisory Council (OCAC), an industry group. Husain explained that one ship carrying 50,000 tons of oil products was delayed by a few days. “This, along with heavy fog in Punjab, hampered transportation and disrupted the supply chain,” he said. Diesel is transported through a cross-country pipeline originating at Port Qasim, whereas petrol is transported mostly through trucks going north from Karachi. Husain admitted that the oil industry often does not carry the full 20 days of required inventories, especially when prices are declining, but blamed government pricing policy for the situation. “Petroleum prices are revised once a month and whenever the price drops, we book a loss due to the reduced value of our petroleum stock,” he said. “Complete deregulation of prices is the answer. But whenever we talk about it everyone starts writing against us.” Ogra acknowledges the commercial difficulties faced by oil companies when prices are declining, but appears in no mood to accept this as an excuse for not complying with regulatory requirements, said the regulatory body’s chairman. However, even though he blamed the oil companies for the current crisis, Khan agreed with their stance that oil and liquefied petroleum gas (LPG) prices should be deregulated. “In the beginning it will not be pleasant, but it will be good in the long run due to market competition,” said the Ogra chairman. Yet even though everyone agrees that the oil price drop resulted in an unprecedented surge in demand, the government is planning on decreasing prices even further. The petroleum minister announced at his press conference that prices could be reduced by more than Rs5 per litre in February. Abbasi also appeared to insist that the privately owned oil marketing companies were more responsible for the supply crunch than the state-owned PSO, even though PSO has a 65% share in the petrol market. Sales of petrol tend to rise particularly sharply on the first day of a government-mandated price cut. “Petrol sales hit 40,000 tons on January 1,” admitted the petroleum minister. The current crisis appears to have been worsened by the fact that alternatives to petrol – specifically compressed natural gas (CNG) – have largely been absent from the market due to a shutdown of gas supply to CNG stations in Punjab. Abbasi said that if the weather did not turn too cold, the government might consider reopening some of the supply of natural gas to CNG stations. Natural gas is the primary heating fuel in most of the affluent parts of urban Pakistan. Meanwhile, at a hearing at the Senate finance committee on Friday, Federal Finance Secretary Waqar Masood suggested that the current shortage is just the tip of the iceberg and that the country could be facing a rough six weeks before the crisis is fully resolved. Masood’s timeline is far longer than the 10 to 12 days promised by cabinet members during their speeches in the National Assembly on the same day. The finance secretary pointed out that there is a 45 day lag between when an oil company opens a letter of credit (LC) with a bank for oil imports and when the petrol is actually delivered to petrol pumps across the country. The finance ministry has released Rs17 billion to the state-owned PSO to handle its LC requirements, but admits the company needs Rs27 billion for this month alone. Masood admitted that the inter-corporate circular debt in the energy industry, caused in large part by government entities refusing to make the full payments they owe power companies, was at least partially the cause of the crisis. PSO has defaulted on at least Rs110 billion in LCs owed to its foreign suppliers. The finance secretary claimed that the government had been making timely payments of the subsidies it owes to power companies, which in turn owe PSO money for the fuel they use to generate electricity. However, he admitted that the finance ministry refused to pay amount related to the cost of theft, meaning that the power companies still do not have enough money to pay PSO. When the power companies fail to pay PSO on time, PSO defaults on its payments due to foreign suppliers, who then refuse to supply more fuel without payments made upfront in cash. The finance ministry has paid out Rs222 billion power subsidies so far this fiscal year, said Masood. The finance ministry has been urging the water and power ministry to crack down on electricity theft so that the circular debt problem can end once and for all. Sources told The Express Tribune that another reason for the supply crunch was Finance Minister Ishaq Dar’s refusal to allow state-owned PSO to buy US dollars to make oil payments to its international supplies in December, because doing so would have reduced the country’s foreign exchange reserves below the $15 billion mark the minister was targeting. Despite hearing that the drop in oil prices was at least partially responsible for the sudden supply shortage, the Senate finance committee passed a resolution demanding that the government reduce domestic oil prices even further, to fully match the global price drop. Published in The Express Tribune, January 17th, 2015. ================== Schlumberger To Lay Off 9,000 Workers January 16, 2015 Oilfield services giant Schlumberger plans to cut 9,000 jobs as the global collapse in crude oil prices crimps production in 2015 and perhaps even longer. The cuts — nearly 8% of Schlumberger's 120,000 workers, were announced Thursday "to better align with anticipated activity levels for 2015,'' the company said. With production surging and waning growth, the world is awash with oil. That's led to a collapse in prices that's taken benchmark crude price down more than 50% since last June. Thursday, West Texas Intermediate fell 4.6% to $46.22 a barrel, while Brent crude slipped 2% to $47.67. Yet many forecasters say crude isn't close to bottoming. "In this uncertain environment, we continue to focus on what we can control,'' said CEO Paal Kibsgaard. "We have already taken a number of actions to restructure and resize our organization that have led us to record a number of charges in the fourth quarter. We are convinced that performance must now be driven by an accelerated change in the way we work through our transformation program." The layoffs come despite a relatively solid fourth-quarter earnings report in which the Houston-based Schlumberger increased revenue 6% to $12.6 billion and boosted earnings 11% to $1.94 billion. Schlumberger is also boosting its stock dividend 25%. Houston-based energy explorer Apache Corp. began laying off about 5% of its workers earlier this week. .. Read more: http://www.drillingahead.com/page/schlumberger-to-lay-off-9-000-workers?xgs=1&xg_source=msg_share_page#ixzz3P4ZZEWC6 =========================== Ahmad Fraz Khan Published about 7 hours ago A petrol pump seen deserted due to the shortage petrol.— Online/File A petrol pump seen deserted due to the shortage petrol.— Online/File LAHORE: The country is left with oil stock of less than three days and its import has totally dried up as the Pakistan State Oil defaults on its payments and says it will need at least Rs100 billion and eight weeks’ time to retrieve the situation. According to PSO officials, no oil consignment has arrived at any port in the country for the past two weeks, whereas usually six to eight ships, each carrying 65,000 tons of oil, come to the country in a fortnight. “The company has exhausted all its overdraft (OD) facilities over the past few weeks. All its LCs (letters of credit) lines have been choked as its total receivables now run over Rs215bn,” a PSO official said, adding that the power sector owed Rs190bn and PIA Rs12.5bn. PSO defaults on its payments, needs Rs100 billion to retrieve situation The company’s default on its payments to a few local banks has made all others cautious; no bank is now ready to underwrite PSO’s LCs. Exporters are also not ready to trust the PSO with their commodity without hard cash or bank guarantees. “The piecemeal payments being made by the government cannot provide any relief to PSO given the size of default. On Thursday, the government released Rs17bn, but like all such previous payments, it went into retiring overdue drafts, making no impact on fresh imports. Also read: Petrol shortage continues for third consecutive day “The company needs at least Rs100bn immediately to set things right. Even if it gets the required money, it will need another two months to line up imports and re­store the supply line,” the official said. “Apart from the financial crisis, it is ad hocism at the top that has landed the PSO into this ditch,” said another official. “With the acting managing director sitting at the top of the company and being more interested in import of liquefied natural gas (LNG) — a new pastime of the PML-N — PSO has been sliding deep into crisis,” he said. “No one really knows how a bankrupt PSO will import LNG. Why has it not stopped supplies to the defaulting companies, be it IPPs (independent power producers) or the PIA? “Why did the PSO remain content on small payments of a few billion rupees over the past year or so, which made no difference to the import? “Why did other oil marketing companies (Shell, Total, Caltex), which are duty bound to keep stocks of at least two weeks, fail in their essential business obligation?” the official wondered. All these questions, he added, needed to be answered and should be made part of an investigation into how the company had stumbled into the current crisis. “The government is pressing local refineries to supply oil to the PSO on credit. If this happens, there may be some temporary relief in supplies in the days to come. But the situation will not improve in the long run unless the government arranges Rs100bn, and makes sure that the company gets regular payments from all its buyers,” the official said. Published in Dawn, January 17th, 2015 On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play

Ties triumph: Pakistan, Russia ink $1.7b energy deal

Ties triumph: Pakistan, Russia ink $1.7b energy deal By Zafar Bhutta Published: December 23, 2014 The energy agreement was signed during the visit of the Russian defence minister. PHOTO: PID ISLAMABAD: Pakistan and Russia signed a most sought-after energy deal of $1.7 billion for laying a liquefied natural gas (LNG) pipeline from Karachi to Lahore. The supply of LNG is expected before March next year. It is for the first time Islamabad and Moscow have signed an energy pact decades after their defence deal. The energy agreement was signed during the visit of the Russian defence minister. Moreover, Islamabad and Moscow also signed a defence and military cooperation deal, a move seen by economic experts as ushering in a gradual improvement in ties between the two countries. Before Gen Ziaul Haq’s military regime, Russia had helped Pakistan set up the Karachi Steel Mills and also supported the Oil and Gas Development Company Limited, which is still using old Russian machinery in exploring oil and gas. Pakistan is currently working on two LNG pipelines as an alternative to the apparently doomed Iran-Pakistan (IP) gas pipeline project, which included LNG Gwadar pipeline and south pipeline from Karachi to Lahore. The government has signed a deal with China to award $3 billion Gwader LNG pipeline and terminal project. Earlier, Pakistan had offered China and Russia to lay IP gas pipeline but both the countries had backed out due to sanctions imposed against Iran. “However, the government has offered Moscow to sign a deal on government to government basis of $1.7 billion for laying LNG pipeline from Karachi to Lahore during the recent meeting of Pak-Russia Joint Ministerial Commission following a defence deal between the two countries,” sources said. There was a good development between Islamabad and Moscow in the JC meeting to enhance bilateral energy cooperation, the sources maintained. Officials pointed out that the pipeline would be used to transport imported LNG from Karachi to Punjab, adding that LNG terminal was in progress and first supply of LNG was expected before March next year. At present, existing pipeline network has capacity of transporting 320 million cubic feet of gas per day (mmcfd) LNG and therefore the government was going to set up additional LNG pipeline. The regulator Oil and Gas Regulatory Authority (Ogra) has already allowed gas utilities Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company (SSGC) to generate funds from gas consumers to set up LNG pipeline. SNGPL has planned to invest $750 million and SSGC $300 million to set up LNG pipeline. This pipeline was also likely to link with Gwadar LNG pipeline in future to pump gas from Iran and also LNG supply through a terminal to be set up at Gwadar. Officials said that Pakistan had almost done a deal with China to lay Gwadar LNG pipeline which would be connected to Iran and south LNG pipeline from Karachi to Lahore had been offered to Russia. The government of Pakistan was keen to award contract of south LNG pipeline to Russia on government to government basis which would create competition with China. “The presence of two countries [Russia and China] in energy sector would open new avenues for attracting more investment,” sources maintained. Published in The Express Tribune, December 23rd, 2014.

The inside story : The world is "Drowning In Oil."

العربية ESP РУС DE FreevideoИНОТВRTДRUPTLY ApplicationsRSS LIVERT logo 08:29 GMT, Dec 13, 2014 News USA UK Russian politics Business Op-Edge In vision In motion Shows Bulletin board More Home / Business / Canada’s currency at 54mo low as oil prices collapse below $60 Published time: December 12, 2014 11:51 Get short URL An oil pump jack pumps oil in a field near Calgary, Alberta (Reuters/Todd Korol)An oil pump jack pumps oil in a field near Calgary, Alberta (Reuters/Todd Korol) 1.6K127 Tags Currencies, Economy, Oil The Canadian dollar is taking spill with falling oil prices, and traded at a new low of 86.58 cents against the US dollar Friday. Canada has the world’s third largest proven oil reserves, and relies on oil and gas exports for 30 percent of GDP. The ‘Loonie’, as the currency is called in Canada, hit a 5-year low in October, and continues to sink along with oil prices, which have lost more than 43 percent from their June peak. Brent crude, the global benchmark, was trading at $62.95 per barrel at 13:15 MSK. West Texas Intermediate (WTI) crude futures slipped to $59. The Canadian currency hit a high of $1.05 against the dollar in summer 2011, but has been stuck in a 5-year lull as investors sell off crude oil in the market. "Roughly speaking, if we start to think about oil prices below $50 a barrel for any significant period of time, you're talking in all likelihood of a US dollar getting up to the CAN$1.20 to CAN$1.25 range," Shaun Osborne, chief currency strategist at TD Securities is quoted by Reuters as saying. As oil prices collapse, so are the currencies in high-cost oil producing nations, such as Canada, Norway, and Russia. Both Norway and Russia have complex oil drilling projects in frigid northern waters, which often necessitate ice breakers. READ MORE: OPEC decision will keep oil prices low & hit Russia, Iran, US – experts Canadian heavy crude has fallen to near $40 a barrel. The blend trades lower than WTI because production and shipping costs in Canada are more expensive. Canada specializes in oil sands, which needs to be extracted from the ground and refined and processed into lighter crude. About one-third of Canada’s proven reserves are oil sands. Like the US shale boom, Canada’s oil sands have been a big boost to the economy since the 2008-2009 recession. Canada is the largest source of energy imports into the United States, the world’s second biggest oil consumer. Canadian energy stocks have taken a beating as crude has plunged into a bear market, as many investors are losing confidence in the expensive oil extraction methods. This week, Canada’s benchmark share index, TSX, experienced the biggest single day drop in 18 months. The volatile downswings in oil prices began in June, after Libya restarted oil production and the US started upping oil exports. Oil prices plunged after OPEC, heavily influenced of Saudi Arabia, decided not keep the market over supplied in an attempt to drive out more high-cost producing nations, such as Russia, Venezuela, Iran, Iraq, US shale, and Canadian tar sands. READ MORE: OPEC ‘effectively dissolved’; oil will slide to $50 - Bank of America Producers could cut US Shale output if the price drops below $65-70, according to various analyses. Wells that are already open will remain profitable, but new projects may be derailed as companies lose profit and spending capacity. 1.6K127 Sponsored LinksMore From The Web How Australian People Can Buy An iPad For $29 ? Swoggi The Company Trying To Kill Microsoft PowerPoint Just Raised $57 Million Prezi Jimmy Kimmel Is the Most Dangerous Cyber Celebrity of 2014 Intel iQ by Taboola More from rt.com ​West behind falling ruble, oil prices - Russian spy chief China unveils anti-drone laser weapon able to shoot down 'small aircraft' within 5 seconds Russia develops hybrid fusion-fission reactor, offers China role by Taboola 113 comments Login LILLAN EVAT 0 Canadians must be as stupid and ignorant as Americans since they elected and re-elected their idiotic buffoon Zionist jew prime minister who thinks he is an Israeli godfather. 26 minutes agoReply LILLAN EVAT 0 And all they talk about is the Russian rubble. All their sanctions and economic shenanigans will turn around and bite the west in their collective arrse when their citizens revolt against poverty and unemployment and overthrow their oppressive police state governments. 32 minutes agoReply E 0 Poverty and unemployment? are we still talking about Russia? 3 minutes agoReply william SMITH 0 Maple syrup and jack boot exports to Kiev. That's the answer... 37 minutes agoReply Guzel +1 I live in Canada. Its funny as I was just driving from work 30 mins ago I listened local news station joyfully proclaiming weakening of Russion economy because of low oil price. Now I read this article. What an irony! Truly, don't rejoice on other people's troubles! Especially if those "troubles" are greatly exaggerated by western media. an hour agoReply william SMITH 0 And those troubles can easily become your own if you alienation potential trading partners like Russia and China by hiring a dipstick to run your country... 35 minutes agoReply E +1 Oil and gas actually accounts for about 8% of Canadian GDP. Manufacturing autos is the single largest contributor to Canadian GDP. Lower gas prices will increase demand for cars. This energy price crash have mixed effects in Canada, some good some bad. about 7 hours agoReply E 0 Recall, Dragan, that this article discusses specifically economic effects of falling oil prices, not environmental. BeachBum, lower royalties increases inflow of foreign capital, lower taxes is good for investment. Sovereign wealth funds are provincial, the only thing foreign about a Canadian built auto is the country it ends up in, and the Queen is a traditional figurehead so what? 6 minutes agoReply Dragan Radulovic +1 How this all will affect the environment? Recall you can't breathe dollars. 45 minutes agoReply ElNidoBeachBum +2 yeah .... digging/drilling for oil by offshore companies for 12% royalties (Norway gets 75%), no sovereign wealth fund, "manufacturing" foreign cars, a "Queen" as the head of state ... Canada, the sold out land, you are not very impressive, but at least you are a legend in your own mind. about 6 hours agoReply Next comments Where to watch Schedule Recommended ​West behind falling ruble, oil prices - Russian spy chief China unveils anti-drone laser weapon able to shoot down 'small aircraft' within 5 seconds Russia develops hybrid fusion-fission reactor, offers China role by Taboola NewsIn visionUSAIn motionUKShowsRussian politicsBulletin boardBusinessMoreOp-Edge Live Where to watch Schedule Legal disclaimer Privacy policy Feedback About us Contact info RT NEWS ENGLISH APPS Android iOS Windows phone Windows 8 العربية Español Русский Deutsch Freevideo ИНОТВ RTД RUPTLY ApplicationsRSS RT.com © Autonomous Nonprofit Organization “TV-Novosti”, 2005–2014. All rights reserved. Oil plunges 3 percent to new five-year lows after bearish IEA outlook Fri, Dec 12 18:04 PM EST image By Barani Krishnan NEW YORK (Reuters) - Crude oil markets fell 3 percent or more to plumb new five-year lows on Friday after the world's energy watchdog forecast even lower prices on weaker demand and larger supplies next year. Benchmark Brent oil settled at below $62 a barrel and U.S. crude slumped to under $58 to extend Thursday's landmark fall below $60. Surging crude inventories in the United States and top oil exporter Saudi Arabia's reiteration that it will not cut production had roiled prices over the last two days despite data pointing to strong U.S. economic recovery. On Friday, the Paris-based International Energy Agency which coordinates the energy policies of industrialised countries, cut its outlook for demand growth in 2015, triggering another collapse. The IEA slashed its outlook for global oil demand growth for 2015 by 230,000 barrels per day to 900,000 bpd on expectations of lower fuel consumption in Russia and other oil-exporting countries. It predicted that oil-producing nations outside of the Organization of the Petroleum Exporting Countries will add to global supplies. It also expected prices to fall further. "That's just more bad news for the oil markets," said Andrew Lipow, president of Houston-based Lipow Oil Associates. Brent settled down $1.83, or nearly 3 percent, at $61.85 per barrel. It fell to $61.35 during the session, the lowest since July 2009. U.S. crude finished down $2.14, or 3.6 percent, at $57.81. It fell earlier to $57.34, its lowest since May 2009. On the week, Brent lost more than $7, or about 11 percent. U.S. crude tumbled over $8, or 12 percent. Both markets have lost about 46 percent of their value since their June highs, when Brent stood at above $115 and U.S. crude at around $107. The IEA outlook had a greater impact on Friday's market than data from U.S. oil services firm Baker Hughes showing the number of rigs drilling for oil in the United States were down by 29 this week, the biggest weekly drop in two years. Voluminous crude from U.S. shale projects has been blamed for much of the global oil glut now, and energy traders have been watching rig data to see if prices that have almost halved since June will prompt a cutback in drilling. Regulators in North Dakota, one of the largest shale oil producing states in the United States, also said on Friday the state's crude production held steady in October despite strict new rules that aim to prevent wasteful burning of natural gas produced alongside oil. (Additional reporting by Simon Falush in London and Adam Rose in Beijing; Editing by Marguerita Choy and Gunna Dickson) ================ US Shale Oil Revolution A Platts.com News Feature Shale against prices December 10, 2014 -- By John Kingston in New York This time, it's different. It's an old phrase, one that can be dragged out in all sorts of situations. It's also wrong a lot. So the question as 2014 comes to a close is whether the recent precipitous decline in the price of oil and oil products is just a short-term decline, soon to be reversed as the world bounces back to a more solid $100/b future, or whether this is the end of a commodity super cycle that - with a few up and down aberrations - lifted the price of oil from an inflation-adjusted all-time low in early 1999 to that $100-plus level in the first half of this year, with an even bigger spike a few years ago. It was at a meeting of the US chapter of the International Association for Energy Economics in 1999, a few months after oil had started to climb, that I first heard the declarations: we are at the start of a "super cycle" in oil markets, and maybe broader commodity markets, and it may run for 15 years. Do the math: the 15 years is up. Break points So let's assume that cycle is over. If so, it's been a wild ride. In early 1999, the price of oil hit its lowest inflation-adjusted level ever and The Economist published a cover story in March that proclaimed the world was "Drowning In Oil." Little did the magazine know the bottom had already been reached a month earlier. It climbed steadily to its all-time high in July 2008, and plummeted on the back of the Great Recession. But by February 2009 the rise had resumed, peaking out earlier this year. Precisely when the cycle ended - if it did - is not necessarily easy to determine. In a speech given at Platts' Benposium conference in June, Peter Tertzakian of Arc Financial walked through his view of the way these cycles work. What are key are "break points," which he said come about only once every few generations. Tertzakian saw a break point in that July 2008 peak, because it accelerated a trend toward lower demand. That's not enough to reverse all the trends contributing to the busting of a 15-year cycle. There are other break points needed - or more specifically, what Tertzakian called "magic bullets" - and the biggest one is obvious: the boom in unconventional drilling. But it isn't enough to simply declare that it's all related to soaring US and Canadian production, and that's that. The type of trends that Tertzakian talks about - "the industry does not roll over, it innovates," Tertzakian said at Benposium - can be seen in the Baker Hughes rig count. According to Baker Hughes' worldwide rig count, rigs operating in the US in October 2011 stood at a little over 2,000. Three years later, it was a bit more than 1,900, and production of natural gas and all petroleum liquids - crude, LPG and condensate - had surged. The "break point" was not just the unconventional drilling methods, but the endless innovation that the industry kept bringing to the sector, getting more production out of a smaller number of rigs. It wasn't easy. As Tertzakian noted, "it took a five-fold increase in the price of oil to make this change." Actually, when we look back on the 1999-2014 oil super cycle, we see a lot bigger rise than that. Platts' Dated Brent assessment bottomed out at $9.62-$9.66 on February 9, 1999. When it hit its 2008 peak on July 3, 2008, it stood at $144.21-$144.23, and had risen by a factor of almost 15. Even if you throw out the craziness leading up to the July 2008 peak and its subsequent breathtaking fall, and instead look at a more sustained rise, Brent peaked out in May of this year at about $115, an increase of about 12 times the 1999 low. Next article: New commodity super cycle ================ More XOM #oil density: 100 pounds of gasoline can take a 5,000 pound car at 70 mph for 350 miles...in Texas Profit of OPEC and oil-producing countries Sugiya, in redistribution of wealth, it also affects the crude oil sale of the gap between the rich and the poor little contribution ISIS sources of funds to correction of between international Begin "dumping" curtain, impatient China bias of the LNG boom "LNG is too increased production volume. China, so to speak, something like impending suffocation in LNG" China's economy is stalling. Demand declined, from the fact that China's domestic gas prices also decline is expected, profitability of imports worsening World of LNG market to the "multi-year bear market" containing In addition to Australia of the project begins early next year, from the fact that exports from the United States of the plant begin by the end of next year, I showed the outlook of the supply of LNG is increased. According to the Berkeley Research, potential LNG production is more than 10% of demand in 2020 And the United States of crude oil inventories, which was announced earlier is contrary to expectations of decreased 3 million barrels, inventory increase of 1.5 million barrels, of crude oil according to still overproduction in effect that does not extend the influence and demand of increased production of shale oil Dabutsuki is prominent and crude oil prices further or Maji also $ 50 cars rush in decline $ 61.23. ================= Isis: the inside story One of the Islamic State’s senior commanders reveals exclusive details of the terror group’s origins inside an Iraqi prison – right under the noses of their American jailers. Report by Martin Chulov Camp Bucca Detainees in Camp Bucca, in southern Irag. Photograph: David Furst/AFP/Getty Images Martin Chulov Thursday 11 December 2014 17.00 AEST Share on Facebook Share on Twitter Share via Email Share on LinkedIn Share on Google+ Shares 5,424 Comments 304 In the summer of 2004, a young jihadist in shackles and chains was walked by his captors slowly into the Camp Bucca prison in southern Iraq. He was nervous as two American soldiers led him through three brightly-lit buildings and then a maze of wire corridors, into an open yard, where men with middle-distance stares, wearing brightly-coloured prison uniforms, stood back warily, watching him. “I knew some of them straight away,” he told me last month. “I had feared Bucca all the way down on the plane. But when I got there, it was much better than I thought. In every way.” The jihadist, who uses the nom de guerre Abu Ahmed, entered Camp Bucca as a young man a decade ago, and is now a senior official within Islamic State (Isis) – having risen through its ranks with many of the men who served time alongside him in prison. Like him, the other detainees had been snatched by US soldiers from Iraq’s towns and cities and flown to a place that had already become infamous: a foreboding desert fortress that would shape the legacy of the US presence in Iraq. The other prisoners did not take long to warm to him, Abu Ahmed recalled. They had also been terrified of Bucca, but quickly realised that far from their worst fears, the US-run prison provided an extraordinary opportunity. “We could never have all got together like this in Baghdad, or anywhere else,” he told me. “It would have been impossibly dangerous. Here, we were not only safe, but we were only a few hundred metres away from the entire al-Qaida leadership.” It was at Camp Bucca that Abu Ahmed first met Abu Bakr al-Baghdadi, the emir of Isis who is now frequently described as the world’s most dangerous terrorist leader. From the beginning, Abu Ahmed said, others in the camp seemed to defer to him. “Even then, he was Abu Bakr. But none of us knew he would ever end up as leader.” Abu Ahmed was an essential member of the earliest incarnation of the group. He had been galvanised into militancy as a young man by an American occupation that he and many like him believed was trying to impose a power shift in Iraq, favouring the country’s larger Shia population at the expense of the dominant Sunnis. His early role in what would become Isis led naturally to the senior position he now occupies within a revitalised insurgency that has spilled across the border into Syria. Most of his colleagues regard the crumbling order in the region as a fulfilment of their ambitions in Iraq – which had remained unfinished business, until the war in Syria gave them a new arena. Advertisement He agreed to speak publicly after more than two years of discussions, over the course of which he revealed his own past as one of Iraq’s most formidable and connected militants – and shared his deepening worry about Isis and its vision for the region. With Iraq and Syria ablaze, and the Middle East apparently condemned to another generation of upheaval and bloodshed at the hands of his fellow ideologues, Abu Ahmed is having second thoughts. The brutality of Isis is increasingly at odds with his own views, which have mellowed with age as he has come to believe that the teachings of the Koran can be interpreted and not read literally. His misgivings about what the Islamic State has become led him to speak to the Guardian in a series of expansive conversations, which offer unique insight into its enigmatic leader and the nascent days of the terror group – stretching from 2004, when he met Abu Bakr al-Baghdadi in Camp Bucca, to 2011, when the Iraqi insurgency crossed the border into Syria. At the beginning, back in Bucca, the prisoner who would become the most wanted man in the world had already set himself apart from the other inmates, who saw him as aloof and opaque. But, Abu Ahmed recalled, the jailers had a very different impression of Baghdadi – they saw him as a conciliatory and calming influence in an environment short on certainty, and turned to him to help resolve conflicts among the inmates. “That was part of his act,” Abu Ahmed told me. “I got a feeling from him that he was hiding something inside, a darkness that he did not want to show other people. He was the opposite of other princes who were far easier to deal with. He was remote, far from us all.” * * * Baghdadi was born Ibrahim ibn Awwad al-Badri al-Samarrai in 1971, in the Iraqi city of Samarra. He was detained by US forces in Falluja, west of Baghdad, in February 2004, months after he had helped found a militant group, Jeish Ahl al-Sunnah al-Jamaah, which had taken root in the restive Sunni communities around his home city. “He was caught at his friend’s house,” said Dr Hisham al-Hashimi, an analyst who advises the Iraqi government on Isis. “His friend’s name was Nasif Jasim Nasif. Then he was moved to Bucca. The Americans never knew who they had.” Most of Baghdadi’s fellow prisoners – some 24,000 men, divided into 24 camps – seem to have been equally unaware. The prison was run along strictly hierarchical lines, down to a Teletubbies-like uniform colour scheme which allowed jailers and captives alike to recognise each detainee’s place in the pecking order. “The colour of the clothes we wore reflected our status,” said Abu Ahmed. “If I remember things correctly, red was for people who had done things wrong while in prison, white was a prison chief, green was for a long sentence and yellow and orange were normal.” When Baghdadi, aged 33, arrived at Bucca, the Sunni-led anti-US insurgency was gathering steam across central and western Iraq. An invasion that had been sold as a war of liberation had become a grinding occupation. Iraq’s Sunnis, disenfranchised by the overthrow of their patron, Saddam Hussein, were taking the fight to US forces – and starting to turn their guns towards the beneficiaries of Hussein’s overthrow, the country’s majority Shia population. Abu Bakr al-Baghdadi, the leader of Isis. Facebook Twitter Pinterest expand Abu Bakr al-Baghdadi, the leader of Isis. Photograph: AFP/Getty Images The small militant group that Baghdadi headed was one of dozens that sprouted from a broad Sunni revolt – many of which would soon come together under the flag of al-Qaida in Iraq, and then the Islamic State of Iraq. These were the precursors to the juggernaut now known simply as the Islamic State, which has, under Bagdhadi’s command, overrun much of the west and centre of the country and eastern Syria, and drawn the US military back to a deeply destabilised region less than three years after it left vowing never to return. But at the time of his stay at Bucca, Baghdadi’s group was little-known, and he was a far less significant figure than the insurgency’s notional leader, the merciless Abu Musab al-Zarqawi, who came to represent the sum of all fears for many in Iraq, Europe and the US. Baghdadi, however, had a unique way to distinguish himself from the other aspiring leaders inside Bucca and outside on Iraq’s savage streets: a pedigree that allowed him to claim direct lineage to the Prophet Muhammed. He had also obtained a PhD in Islamic studies from the Islamic University of Baghdad, and would draw on both to legitimise his unprecedented claim to anoint himself caliph of the Islamic world in July 2014, which realised a sense of destiny evident in the prison yard a decade earlier. “Baghdadi was a quiet person,” said Abu Ahmed. “He has a charisma. You could feel that he was someone important. But there were others who were more important. I honestly did not think he would get this far.” Baghdadi also seemed to have a way with his captors. According to Abu Ahmed, and two other men who were jailed at Bucca in 2004, the Americans saw him as a fixer who could solve fractious disputes between competing factions and keep the camp quiet. “But as time went on, every time there was a problem in the camp, he was at the centre of it,” Abu Ahmed recalled. “He wanted to be the head of the prison – and when I look back now, he was using a policy of conquer and divide to get what he wanted, which was status. And it worked.” By December 2004, Baghdadi was deemed by his jailers to pose no further risk and his release was authorised. “He was respected very much by the US army,” Abu Ahmed said. “If he wanted to visit people in another camp he could, but we couldn’t. And all the while, a new strategy, which he was leading, was rising under their noses, and that was to build the Islamic State. If there was no American prison in Iraq, there would be no IS now. Bucca was a factory. It made us all. It built our ideology.” As Isis has rampaged through the region, it has been led by men who spent time in US detention centres during the American occupation of Iraq – in addition to Bucca, the US also ran Camp Cropper, near Baghdad airport, and, for an ill-fated 18 months early in the war, Abu Ghraib prison on the capital’s western outskirts. Many of those released from these prisons – and indeed, several senior American officers who ran detention operations – have admitted that the prisons had an incendiary effect on the insurgency. “I went to plenty of meetings where guys would come through and tell us how well it was all going,” said Ali Khedery, a special aide to all US ambassadors who served in Iraq from 2003-11, and to three US military commanders. But eventually even top American officers came to believe they had “actually become radicalising elements. They were counterproductive in many ways. They were being used to plan and organise, to appoint leaders and launch operations.” We wrote each other’s details on the elastic of our boxer shorts. When we got out, we called each other Abu Ahmed agreed. “In prison, all of the princes were meeting regularly. We became very close to those we were jailed with. We knew their capabilities. We knew what they could and couldn’t do, how to use them for whatever reason. The most important people in Bucca were those who had been close to Zarqawi. He was recognised in 2004 as being the leader of the jihad. “We had so much time to sit and plan,” he continued. “It was the perfect environment. We all agreed to get together when we got out. The way to reconnect was easy. We wrote each other’s details on the elastic of our boxer shorts. When we got out, we called. Everyone who was important to me was written on white elastic. I had their phone numbers, their villages. By 2009, many of us were back doing what we did before we were caught. But this time we were doing it better.” According to Hisham al-Hashimi, the Baghdad-based analyst, the Iraqi government estimates that 17 of the 25 most important Islamic State leaders running the war in Iraq and Syria spent time in US prisons between 2004 and 2011. Some were transferred from American custody to Iraqi prisons, where a series of jailbreaks in the last several years allowed many senior leaders to escape and rejoin the insurgent ranks. Abu Ghraib was the scene of the biggest – and most damaging – breakout in 2013, with up to 500 inmates, many of them senior jihadists handed over by the departing US military, fleeing in July of that year after the prison was stormed by Islamic State forces, who launched a simultaneous, and equally successful, raid on nearby Taji prison. Iraq’s government closed Abu Ghraib in April 2014 and it now stands empty, 15 miles from Baghdad’s western outskirts, near the frontline between Isis and Iraq’s security forces, who seem perennially under-prepared as they stare into the heat haze shimmering over the highway that leads towards the badlands of Falluja and Ramadi. Parts of both cities have become a no-go zone for Iraq’s beleaguered troops, who have been battered and humiliated by Isis, a group of marauders unparalleled in Mesopotamia since the time of the Mongols. When I visited the abandoned prison late this summer, a group of disinterested Iraqi forces sat at a checkpoint on the main road to Baghdad, eating watermelon as the distant rumble of shellfire sounded in the distance. The imposing walls of Abu Ghraib were behind them, and their jihadist enemies were staked out further down the road. The revelation of abuses at Abu Ghraib had a radicalising effect on many Iraqis, who saw the purported civility of American occupation as little improvement on the tyranny of Saddam. While Bucca had few abuse complaints prior to its closure in 2009, it was seen by Iraqis as a potent symbol of an unjust policy, which swept up husbands, fathers, and sons – some of them non-combatants – in regular neighbourhood raids, and sent them away to prison for months or years. At the time, the US military countered that its detention operations were valid, and that similar practices had been deployed by other forces against insurgencies – such as the British in Northern Ireland, the Israelis in Gaza and the West Bank, and the Syrian and Egyptian regimes. An Islamic State fighter in Raqqa, Iraq. Facebook Twitter Pinterest expand An Islamic State militant in Raqqa, Iraq. Photograph: Reuters Even now, five years after the US closed down Bucca, the Pentagon defends the camp as an example of lawful policy for a turbulent time. “During operations in Iraq from 2003 to 2011, US Forces held thousands of Law of War detainees,” said Lt Col Myles B Caggins III, a US Department of Defense spokesman for detainee policy. “These type of detentions are common practice during armed conflict. Detaining potentially dangerous people is the legal and humane method of providing security and stability for civilian populations.” * * * Some time after Baghdadi was released from Bucca, Abu Ahmed was also freed. After being flown to Baghdad airport, he was picked up by men he had met in Bucca. They took him to a home in the west of the capital, where he immediately rejoined the jihad, which had transformed from a fight against an occupying army into a vicious and unrestrained war against Iraqi Shia. Death squads were by then roaming Baghdad and much of central Iraq, killing members of opposite sects with routine savagery and exiling residents from neighbourhoods they dominated. The capital had quickly become a very different place to the city Abu Ahmed had left a year earlier. But with the help of new arrivals at Bucca, those inside the prison had been able to monitor every new development in the unfolding sectarian war. Abu Ahmed knew the environment he was returning to. And his camp commanders had plans for him. The first thing he did when he was safe in west Baghdad was to undress, then carefully take a pair of scissors to his underwear. “I cut the fabric from my boxers and all the numbers were there. We reconnected. And we got to work.” Across Iraq, other ex-inmates were doing the same. “It really was that simple,” Abu Ahmed said, smiling for the first time in our conversation as he recalled how his captors had been outwitted. “Boxers helped us win the war.” Zarqawi wanted a 9/11 moment to escalate the conflict – something that would take the fight to the heart of the enemy, Abu Ahmed recalled. In Iraq, that meant one of two targets – a seat of Shia power or, even better, a defining religious symbol. In February 2006, and again two months later, Zarqawi’s bombers destroyed the Imam al-Askari shrine in Samarra, north of Baghdad. The sectarian war was fully ignited and Zarqawi’s ambitions realised. Asked about the merits of this violent provocation, Abu Ahmed paused for the first time in our many conversations. “There was a reason for opening this war,” he said. “It was not because they are Shia, but because the Shia were pushing for it. The American army was facilitating the takeover of Iraq and giving the country to them. They were in cooperation with each other.” He then reflected on the man who gave the orders. “Zarqawi was very smart. He was the best strategist that the Islamic State has had. Abu Omar [al-Baghdadi] was ruthless,” Abu Ahmed said, referring to Zarqawi’s successor, who was killed in a US-led raid in April 2010. “And Abu Bakr is the most bloodthirsty of all. “After Zarqawi was killed, the people who liked killing even more than him became very important in the organisation. Their understanding of sharia and of humanity was very cheap. They don’t understand the Tawheed (the Koranic concept of God’s oneness) the way it was meant to be understood. The Tawheed should not have been forced by war.” Despite reservations that were already starting to stir, by 2006, Abu Ahmed had become part of a killing machine that would operate at full speed for much of the following two years. Millions of citizens were displaced, neighbourhoods were cleansed along sectarian lines, and an entire population numbed by unchecked brutality. That summer, the US finally caught up with Zarqawi, with the help of Jordanian intelligence, killing him in an airstrike north of Baghdad. From late 2006, the organisation was on the back foot – hampered by a tribal revolt that uprooted its leadership from Anbar and shrank its presence elsewhere in Iraq. But according to Abu Ahmed, the group used the opportunity to evolve, revealing a pragmatism in addition to its hardline ideology. For Isis, the relatively quiet years between 2008 and 2011 represented a lull, not a defeat. By this time, Abu Bakr al-Baghdadi had risen steadily through the group to become a trusted aide to its leader, Abu Omar al-Baghdadi, and his deputy, the Egyptian jihadist Abu Ayub al-Masri. It was at this point, Abu Ahmed said, that Isis made an approach to the Ba’athist remnants of the old regime – ideological opponents who shared a common enemy in the US and the Shia-led government it backed. Earlier incarnations of Isis had dabbled with the Ba’athists, who lost everything when Saddam was ousted, under the same premise that “my enemy’s enemy is my friend”. But by early 2008, Abu Ahmed and other sources said, these meetings had become far more frequent – and many of them were taking place in Syria. Syria’s links to the Sunni insurgency in Iraq had been regularly raised by US officials in Baghdad and by the Iraqi government. Both were convinced that the Syrian president, Bashar al-Assad, allowed jihadists to fly into Damascus airport, where military officials would escort them to the border with Iraq. “All the foreigners I knew got into Iraq that way,” Abu Ahmed told me. “It was no secret.” * * * From 2008, when the US began to negotiate the transition of its powers to Iraq’s feeble security institutions – and therefore pave the way to its own exit – the Americans increasingly turned to only a few trusted figures in the Iraqi government. One of them was Major General Hussein Ali Kamal, the director of intelligence in the country’s Interior Ministry. A secular Kurd who had the trust of the Shia establishment, one of Kamal’s many duties was to secure Baghdad against terror attacks. Like the Americans, General Kamal was convinced that Syria was destabilising Iraq, an assessment based on the interrogations of jihadists who had been captured by his troops. Throughout 2009, in a series of interviews, Kamal laid out his evidence, using maps that plotted the routes used by jihadists to cross the border into western Iraq, and confessions that linked their journeys to specific mid-ranking officers in Syrian military intelligence. Seventeen of the 25 most important Islamic State leaders now running the war in Iraq and Syria spent time in US prisons As Isis activity ebbed in Iraq, he had become increasingly obsessed with two meetings that had taken place in Syria early in 2009, which brought together Iraqi jihadists, Syrian officials and Ba’athists from both countries. (Kamal, who was diagnosed with a rare cancer in 2012, died earlier this year, and authorised me to publish details of our conversations. “Just tell the truth,” he said during our last interview in June 2014.) When I first met him in 2009, he was poring over transcripts of recordings that had been made at two secret meetings in Zabadani, near Damascus, in the spring of that year. The attendees included senior Iraqi Ba’athists who had taken refuge in Damascus since their patron Saddam was ousted, Syrian military intelligence officers, and senior figures in what was then known as al-Qaida in Iraq. The Syrians had developed links to the jihadists since the earliest days of the anti-US insurgency and had used them to unsettle the Americans and their plans for Iraq. “By early in 2004/05, Islamic elements, jihadists and disenfranchised Ba’athists were starting to get together,” said Ali Khedery, the former adviser to American ambassadors and senior commanders in Bagdhad. “They were naturally disciplined, well organised people who knew the lay of the land. And over time, some folks who were Ba’athists became more and more Islamist and the insurgency raged. By 2007, General [David] Petraeus was saying there was crystal clear intelligence of cooperation between Syrian military intelligence and the jihadists. Though the motivations never really aligned 100%.” In our conversations, Abu Ahmed emphasised the Syrian connection to Iraq’s insurgency. “The mujahideen all came through Syria,” he said. “I worked with many of them. Those in Bucca had flown to Damascus. A very small number had made it from Turkey, or Iran. But most came to Iraq with the help of the Syrians.” The supply line was viewed by Iraqi officials as an existential threat to Iraq’s government and was the main source of the poisonous relationship between Nouri al-Maliki, then Iraq’s prime minister, and Bashar al-Assad. Maliki had become convinced early in the civil war that Assad was trying to undermine his regime as a way to embarrass the Americans, and the evidence he saw in 2009 from the meeting in Damascus took his loathing of the Syrian leader to a whole new level. “We had a source in the room wearing a wire,” at the meeting in Zabadani, General Kamal told me at the time. “He is the most sensitive source we have ever had. As far as we know, this is the first time there has been a strategic level meeting between all of these groups. It marks a new point in history.” The Ba’athists present led the meeting. Their aim, according to General Kamal’s source, was to launch a series of spectacular attacks in Baghdad and thereby undermine Maliki’s Shia-majority government, which had for the first time begun to assert some order in post-civil war Iraq. Until then, al-Qaida in Iraq and the Ba’athists had been fierce ideological enemies, but the rising power of the Shias – and their backers in Iran – brought them together to plan a major strike on the capital. By July 2009, the Interior Ministry had increased security at all checkpoints across the Tigris river into Baghdad, making a commute at any time of day even more insufferable than normal. And then General Kamal received a message from his source in Syria. The extra security at the bridges had been spotted by the attack plotters, he said. New targets were being chosen, but he didn’t know what they were, or when they would be hit. For the next two weeks, Kamal worked well into the evening in his fortified office in the southern suburb of Arasat, before being sped by armoured convoy across the July 14 Bridge – which had been a target only days earlier – to his home inside the Green Zone. For the rest of the month, General Kamal spent several hours each scorching night sweating it out on a treadmill, hoping that the exercise would clear his head and get him ahead of the attackers. “I may be losing weight, but I’m not finding the terrorists,” he told me during our last conversation before the attackers finally struck. “I know they’re planning something big.” Abu Musab al-Zarqawi Facebook Twitter Pinterest expand Abu Musab al-Zarqawi in 2006 when he was the leader of al-Qaida in Iraq. Photograph: AP On the morning of 19 August, the first of three flat-bed trucks carrying three large 1000-litre water tanks, each filled with explosives, detonated on an overpass outside the Finance Ministry in south-eastern Baghdad. The blast sent a rumble across the Emerald City, raising desert soil that caked homes brown, and sending thousands of pigeons scattering through the sky. Three minutes later, a second enormous bomb blew up outside the Foreign Ministry on the northern edge of the Green Zone. Shortly after that, a third blast hit a police convoy near the Finance Ministry. More than 101 people were killed and nearly 600 wounded; it was one of the deadliest attacks in the six-year-old Iraqi insurgency. “I failed,” Kamal told me that day. “We all failed.” Within hours, he was summoned to meet Maliki and his security chiefs. The prime minister was livid. “He told me to present what I had to the Syrians,” Kamal later said. “We arranged with Turkey to act as a mediator and I flew to Ankara to meet with them. I took this file” – he tapped a thick white folder on his desk – “and they could not argue with what we showed them. The case was completely solid and the Syrians knew it. Ali Mamlouk [the head of Syrian general security] was there. All he did was look at me smiling and say ‘I will not recognise any official from a country that is under US occupation’. It was a waste of time.” Iraq recalled its ambassador to Damascus, and Syria ordered its envoy to Baghdad home in retaliation. Throughout the rest of the year, and into early 2010, relations between Maliki and Assad remained toxic. In March 2010, Iraqi forces, acting on a US tip, arrested an Islamic State leader named Munaf Abdul Rahim al-Rawi, who was revealed to be one of the group’s main commanders in Baghdad, and one of the very few people who had access to the group’s then leader, Abu Omar al-Baghdadi. Al-Rawi talked. And in a rare moment of collaboration, Iraq’s three main intelligence bodies, including General Kamal’s Intelligence Division, conspired to get a listening device and GPS location tracker in a flower box delivered to Abu Omar’s hideout. After it was confirmed that Abu Omar and his deputy, Abu Ayub al-Masri, were present at a house six miles south-west of Tikrit, it was attacked in a US-led raid. Both men detonated suicide vests to avoid being captured. Messages to Osama bin Laden and Ayman al-Zawahiri were found on a computer inside the house. Much like Bin Laden’s safe house in Pakistan, where he would be killed a little more than a year later, Abu Omar’s hideout had no internet connections or telephone lines – all important messages were carried in and out by only three men. One of them was Abu Bakr al-Baghdadi. “Abu Bakr was a messenger for Abu Omar,” Abu Ahmed told me. “He became the closest aide to him. The messages that got to Osama bin Laden were sometimes drafted by him and their journey always started with him. When Abu Omar was killed, Abu Bakr was made leader. That time we all had in Bucca became very important again.” The deaths of Abu Omar al-Baghdadi and Abu Ayub al-Masri were a serious blow to Isis, but the roles they had vacated were quickly filled by the alumni of Camp Bucca – whose upper echelons had begun preparing for this moment since their time behind the wire of their jail in southern Iraq. “For us it was an academy,” Abu Ahmed said, “but for them” – the senior leaders – “it was a management school. There wasn’t a void at all, because so many people had been mentored in prison. “When [the civil war in] Syria became serious,” he continued, “it wasn’t difficult to transfer all that expertise to a different battle zone. The Iraqis are the most important people on the military and Shura councils in Isis now, and that is because of all of those years preparing for such an event. I underestimated Baghdadi. And America underestimated the role it played in making him what he is.” * * * Abu Ahmed remains a member of Isis; he is active in the group’s operations in both Iraq and Syria. Throughout our discussions, he portrayed himself as a man reluctant to stay with the group, and yet unwilling to risk any attempt to leave. Life with Isis means power, money, wives and status – all attractive lures for young firebrands with a cause - but it also means killing and dominating for a worldview in which he no longer believes so fervently. He said hundreds of young men like him, who were drawn to a Sunni jihad after the US invasion, do not believe that the latest manifestation of the decade-long war remains true to its origins. Iraqi detainees sleeping outside their tents in Camp Bucca, Iraq Facebook Twitter Pinterest expand Iraqi detainees sleeping outside their tents in Camp Bucca, Iraq. Photograph: David Furst/AFP/Getty Images “The biggest mistake I made is to join them,” Abu Ahmed said, but added that leaving the group would mean that he and his family would certainly be killed. Staying and enforcing the group’s brutal vision, despite partially disavowing it, does not trouble Abu Ahmed, who sees himself as having few other options. “It’s not that I don’t believe in Jihad,” he said. “I do,” he continued, his voice trailing away. “But what options do I have? If I leave, I am dead.” The arc of his involvement with what is now the world’s most menacing terrorist group mirrors many others who now hold senior positions in the group: first a battle against an invading army, then a score to be settled with an ancient sectarian foe, and now, a war that could be acting out an end of days prophecy. In the world of the Bucca alumni, there is little room for revisionism, or reflection. Abu Ahmed seems to feel himself swept along by events that are now far bigger than him, or anyone else. “There are others who are not ideologues,” he said, referring to senior Isis members close to Baghdadi. “People who started out in Bucca, like me. And then it got bigger than any of us. This can’t be stopped now. This is out of the control of any man. Not Baghdadi, or anyone else in his circle.” Martin Chulov covers the Middle East for the Guardian. He has reported from the region since 2005. Additional reporting by Salaam Riazk Follow the Long Read on Twitter: @gdnlongread