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China Railway Minister Dismissed
BEIJING, Feb. 25 (Xinhua) -- The Standing Committee of the National People's Congress, the top legislature of China, on Friday agreed to dismiss Liu Zhijun from his post as Railways Minister.
The discipline watchdog of the Communist Party of China (CPC) said on Feb. 12 that Liu was under investigation for alleged " severe violation of discipline," while the CPC Central Committee's Organization Department said he had been removed from the post of the ministry's Party chief.
The committee appointed Sheng Guangzu, 62, the former head of the General Administration of Customs (GAC), as the new Railways Minister.
Sheng had already been appointed to replace Liu, 58, as the ministry's Party chief.
Liu became the Railways Minister and the ministry's Party chief in March 2003. Sheng was vice minister of railways before he was transferred to the post of the GAC's deputy commissioner in 2000.
INTERVIEW-Malaysia needs to step up palm oil replanting -Unilever
* Malaysian palm oil replanting rate inadequate
* Malaysian plantations need to " step it up" or " die"
* Unilever sees its 2011 palm demand little changed
By Michael Taylor JAKARTA, Feb 25 (Reuters) - Malaysian palm oil producers should replant ageing and low yielding estates or risk declines in production in coming years, the world's top palm oil buyer Unilever said on Friday. Malaysia, the world's no. 2 producer, was expected in 2011 to produce above last year's 17.5 million tonnes of palm oil, but heavy rains and flooding have hurt output in recent months. Consumer giant Unilever says uncertain weather is shifting attention away from the lack of re-planting and growers were instead relying on higher prices
to boost margins. " Average yields in Malaysia are simply going down," Jan Kees Vis, global director sustainable sourcing development at Unilever
, told Reuters in an interview.
" The sector should really look at its re-planting policy and investment in planting, and step it up," he added. " If you don't re-plant, then your plantation will die." Commodity prices have surged in recent months on supply worries and robust demand, with Malaysian benchmark palm oil prices hitting a near three-year high this month. Unilever, which uses palm oil for products like Dove soap and Stork margarine, bought 1.3 million tonnes of palm oil last year, and expects little change in 2011. " There could be a couple of percent increase, in line with business growth," said Vis, who is based near Rotterdam. " Other than that, it is flat." More than 90 percent of the Anglo-Dutch firm's palm oil comes from Indonesia and Malaysia, Vis said. Last year, the Malaysian Palm Oil Board (MPOB) said the government's new replanting scheme would target 365,000 hectares of oil palms older than 25 years as the world's No.2 palm oil producer tries to lift flagging output.
The scheme, which will take two to three years to complete, is the latest initiative to boost yields in Malaysia, which has fallen behind top producer Indonesia in terms of output. " The technical life-time of an oil palm is 25 years, and you have need to re-plant 4 percent of your area annually, Vis said. " The re-planting rate in Malaysia is well below that. " It is never a good time to re-plant," he added. " If prices are low you don't have the cash flow (but) if prices are high, you don't want to replace still productive palms with seedlings that won't produce for four or five years." Indonesia, which is seen producing 21-23 million tonnes of palm oil this year, outpaced Malaysia to become the top palm oil producer in 2007.
SUSTAINABLE DEMAND Efforts to reduce forest clearance to avoid greenhouse gas emissions from deforestation are seen as potentially limiting industry expansion in Indonesia. Unilever is targeting 50 percent sustainable palm oil supplies by the end of 2011, moving up to 100 percent by 2015. " We will reach it," added Vis, who was elected to lead the Roundtable on Sustainable Palm Oil (RSPO) at its conception in 2004. " We are by far the largest buyer of green palm certificates, and we do not want this market to be totally dependant on Unilever purchases. It would be unhealthy." The RSPO is an industry body of consumers, green groups and plantation companies, and aims to promote growth and use of sustainable oil palm products. Certification of for green palm oil started two years ago, aimed at preserving forests and protecting local communities. But there is growing dissatisfaction at the progress of sustainable standards in Indonesian palm oil, with the government set to roll out a mandatory scheme in 2012.
" The reality is there will be some competition (with the RSPO)," said Vis. " But I see it as a move forward for the Indonesian government, to bring some sustainability to the palm oil sector." " I look at it as a first step toward RSPO-certification."
(Editing by Neil Chatterjee) ((michael.taylor@thomsonreuters.com)) Keywords: UNILEVER/PALMOIL
If You Thought February Was A Crazy Month, Get Ready For A March That's Going To Be Insane
February is a short month, and it's not quite over, but already it's been a wild ride.
We saw chaos erupt in virtually every Mideast country, the return of stock market volatility, an oil spike, and several other things to get the pulse racing.
But February was just the trailer. The big show is in March.
A note from Brown Brothers Harriman's Head Of Global Strategy Marc Chandler, titled " March Madness," lays out the craziness ahead.
In the emerging world we start with a big Brazilian Central Bank meeting on March 2. There's the possibility for some major tightening that day. That's followed a week later by the South Korean bank, which skipped a hike in February. They probably won't do that this month.
Then in Europe, all of the big structural issues will come to a fore. There's a ton of debt issuance starting next week. There's an ECB meeting March 3, and a BoE meeting March 10th. And then of course, there's the huge heads-of-state summit on the 24th and 25th. And then before that there are these three meetings
March 11 Euro area summit on competitiveness
March 14 Finance Ministers meeting
March 21 (Possible) Finance Ministers meeting
The nature of the European Financial Stability Fund is at stake.
And of course in the US, we have the jobs report on March 4 (which has been a major disappointment for several months running now). That's also the day the government is due to shut down if there's no budget agreement met. On 15 there's the Fed meeting, and then finally as the budget issue gets resolved, there will be the epic fight over the debt ceiling, that's going to make the budget stuff look like child's play.
Add in the likelihood that the Mideast stuff will continue to spiral, and you've got the makings of what's going to be an epic. We'll, of course, be covering LIVE.
A boy waves a Kingdom of Libya flag atop an army tank in Benghazi February 26, 2011. Libya's rebel-held city of Benghazi has filled a political void with a coalition which is cleaning up, providing food, building defences, reassuring foreign oil firms and telling Tripoli it believes in one nation.
TRIPOLI -- Poor neighbourhoods of the Libyan capital Tripoli openly defied Moammar Gadhafi on Saturday as his grip on power after 41 years of rule looked increasingly tenuous in the face of nationwide revolt.
Security forces had abandoned the working-class Tajoura district after five days of anti-government demonstrations, residents told foreign correspondents who visited the area.
The residents said troops opened fire on demonstrators who tried to march from Tajoura to central Green Square overnight, killing at least five people. The number could not be independently confirmed.
A funeral on Saturday morning for one of the victims turned into another show of defiance against Gadhafi.
" Everyone in Tajoura came out against the government. We saw them killing our people here and everywhere in Libya," a man who identified himself as Ali, aged 25, told Reuters.
" We will demonstrate again and again, today, tomorrow, the day after tomorrow until they change."
The scene in Tajoura contradicted statements by Gadhafi's son Saif al-Islam Gadhafi, who told reporters on Friday night that peace was returning to Libya.
Much of the east of the oil-producing country, including the second city Benghazi, is in opposition forces' hands.
Gadhafi's strongest European ally, Italian Prime Minister Silvio Berlusconi, said in Rome on Saturday that he no longer appeared to be in control of Libya.
Foreign powers met to discuss punitive actions against Gadhafi and expressed outrage at the tactics used to try to crush the revolt, the bloodiest of a wave of pro-democracy uprisings in the Arab world which has already swept away the longtime rulers of Tunisia and Egypt.
In Washington, U.S. President Barack Obama signed an order prohibiting transactions related to Libya.
" By any measure, Muammar Gadhafi's government has violated international norms and common decency and must be held accountable," Obama said in a statement on Friday.
Diplomats at the United Nations said a vote on a draft resolution calling for an arms embargo on Libya as well as travel bans and asset freezes on its leaders might come on Saturday after U.N. chief Ban Ki-moon said it could not wait.
PALM TREE BARRICADES
In Tajoura, protesters had erected barricades of rocks and palm trees across rubbish-strewn streets, and graffiti covered many walls.
Pro-Gadhafi security forces were nowhere to be seen on Saturday morning but bullet holes in the walls of the tightly packed houses bore testimony to the violence of recent days.
Several thousand people attended the funeral of one of the dead from Friday night's shooting, which quickly turned into another demonstration.
" Gadhafi is the enemy of God," the crowd chanted.
One man named Ismail, who said he was unemployed, told Reuters: " Gadhafi forces came here, they shot everywhere during a demonstration that was peaceful."
Another man said he had seen 20 dead bodies in past two days.
Gadhafi's camp took an optimistic view of the situation confronting the man who took over Libya as a young colonel in a 1969 military coup.
" Peace is coming back to our country," Saif al-Islam Gadhafi told reporters flown into Libya under close government supervision.
" If you hear fireworks don't mistake it for shooting," said the 38-year-old London-educated younger Gadhafi, smiling.
He acknowledged pro-Gadhafi forces had " a problem" with Misrata, Libya's third city, and Zawiyah, also in the west, where protesters had beaten back counter-attacks by the military, but he said the army was prepared to negotiate.
" Hopefully there will be no more bloodshed. By tomorrow we will solve this," he said.
A government-escorted trip to Zawiyah for the foreign media planned for Saturday morning was called off.
Gadhafi himself vowed to " crush any enemy" on Friday before a crowd of supporters in Green Square and threatened to open military arsenals to his supporters and tribesmen.
State television said the government was raising wages and food subsidies and ordering special allowances for all families, a late bid to enrol the support of Libya's 6 million citizens.
In recent days, the flamboyant Gadhafi has made several appearances railing against his enemies as rats and cockroaches and blaming the unrest on a range of foes from the United States and Israel to al Qaeda militants and youths high on drugs.
The revolt came as a surprise to the West, which once reviled Gadhafi as pariah due to his support for revolutionary movements and incidents such as the 1988 Lockerbie airliner bombing but later sought a rapprochement driven by oil deals and other commercial opportunities.
CORPSES EVERYWHERE
Diplomats say some 2,000 or more people have been killed across the country.
Protesters in Zawiyah, an oil refining town on the main coastal highway 50 km (30 miles) west of Tripoli, fought off government forces on several nights, according to witnesses who fled across the Tunisian border at Ras Jdir.
" There are corpses everywhere. It's a war in the true sense of the word," said Akila Jmaa, who crossed into Tunisia on Friday after travelling from the town.
In the east, ad hoc committees of lawyers, doctors, tribal elders and soldiers appeared to be filling the vacuum left by Gadhafi's government with some success.
At Tripoli's international airport, thousands of desperate foreign workers besieged the main gate trying to leave the country as police used batons and whips to keep them out.
Washington, having evacuated Americans from Libya after days of difficulties, said it was closing down its embassy.
Prosecutor-general Abdul-Rahman al-Abbar became the latest senior Libyan official to resign, telling al Arabiya television he was joining the opposition. Libya's delegations to the Arab League and the United Nations in Geneva also switched sides.
Libya supplies 2 percent of the world's oil, the bulk of it from wells and supply terminals in the east. The opposition says it controls nearly all oilfields east of Ras Lanuf.
Industry sources told Reuters that crude oil shipments from Libya, the world's 12th-largest exporter, had all but stopped because of reduced production, a lack of staff at ports and security concerns.
U.N. Security Council to Discuss Libya Today
The United Nations Security Council is meeting in New York today to discuss imposing international sanctions, including an arms embargo and an asset freeze and travel ban, against Muammar Qaddafi, his relatives and key members of his government. The meeting comes one day after the U.S. closed its embassy in Tripoli and
imposed unilateral sanctions against Libya, freezing the American-held assets of Qaddafi, his children and family, and senior members of the Libyan government. Diplomats from the U.S., France, Germany and Britain circulated a draft resolution that also calls for the
the violent crackdown against protesters in Libya to be referred to the International Criminal Court to investigate crimes against humanity. “It’s clear that Colonel Qaddafi has lost the confidence of his people,” noted White House press secretary Jay Carney. “His legitimacy has been reduced to zero.” [
NYT,
CNN]
Mizuho to buy out units in $4 bln deal-source
* Minority stakes in three units worth roughly $3.7 bln
* Buyout expected in Oct after shareholder approval-source
* Mizuho to issue new shares, swap them for buyout-Nikkei
(Adds details)
By Taiga Uranaka
TOKYO, Feb 26 (Reuters) - Mizuho Financial Group is planning to buy out its brokerage and trust bank units, a source familiar with the matter said on Saturday, in a roughly $4 billion deal aimed at helping the lender grow beyond sluggish commercial banking business in Japan.
Japan's second-largest bank by assets is planning to buy out minority shareholders in Mizuho Securities , Mizuho Trust & Banking and Mizuho Investors Securities , said the source, confirming an earlier report in the Nikkei newspaper.
The buyout will likely be carried out around October after approval at an annual shareholders meeting in June, according to the source, who was not authorised to speak publicly about the planned transaction.
Mizuho and rival banks Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group are trying to strengthen investment banking and other operations as they face weak prospects in their core lending business in Japan.
The deal would allow Mizuho, created in 2000 through a merger of three banks, to reduce operational overlap while keeping more profits within the group as it prepares for tougher capital requirements due to be introduced in the coming years.
Mizuho has 75 percent in Mizuho Trust in terms of voting rights, 60 percent in Mizuho Securities and 67 percent in Mizuho Investors Securities. The stakes Mizuho does not own in those firms are worth roughly 300 billion yen ($3.7 billion) at current market prices.
Mizuho, which has a market value of about $43 billion, plans to issue new shares and exchange them for minority holdings in the units, the Nikkei newspaper said.
Mizuho will look into merging Mizuho Securities, an investment bank, with retail broker Mizuho Investors Securities next year, hoping to accelerate a push into Asia and other overseas markets, the Nikkei said.
It also plans to forge closer ties between Mizuho Trust and its retail banking arm. Among likely steps, Mizuho Bank will effectively take over the management of the trust bank's ordinary savings accounts and ATMs, the Nikkei said.
(Reporting by Taiga Uranaka, additional reporting by Santosh Nadgir in Bangalore Editing by Yoko Nishikawa)
Game fans snap up Nintendo's 3DS at Japan launch
* Nintendo sticks to tried and trusted format
* 3DS sales may not match up to original DS -analysts
* 3DS launches 10 months ahead of Sony's rival handheld
By Isabel Reynolds and Kaori Kaneko
TOKYO, Feb 26 (Reuters) - Game fans hit Japanese stores early on Saturday to be among the first to get their hands on Nintendo's new 3D-capable game player, but the gadget's sales may be squeezed in the longer term by competition from smartphones and tablets.
The 3DS, set to launch in the United States and Europe in a month, has sparked excitement as the first games device to offer glasses-free 3D gaming, and it has the advantage of launching 10 months ahead of Sony's rival Next Generation Portable.
Nintendo, based in Japan's ancient former capital of Kyoto, is sticking to a tried and trusted formula -- a dedicated portable games device with software available on cartridges that cost $30 or more.
That worked for the original DS, launched in 2004, which appealed across the board from school children to the elderly. But casual gamers now have the option of free or inexpensive games available on mobile devices from Apple iPhone or based on Google's Android operating system.
Rival Sony Corp , whose PlayStation Portable (PSP) never caught up with the DS, has gone head-to-head with these upstarts, announcing last month it would make some games available on other companies' Android-based devices and offer a new development system for casual games, a strategy with its own risks.
" Sony's offering of PlayStation games on other platforms means they will sell less hardware longer term," said David Gibson, head of equity research at Macquarie Securities in Tokyo.
" Nintendo's competitive advantage is that they develop both hardware and software. I don't think you will see a change to Nintendo strategy longer term, but because of smartphones they will not see the same growth they once had," he added.
Nintendo expects no less than 4 million units of the 3DS to fly off the shelves in the five weeks to March 31. The original DS sold 145 million units worldwide to December last year.
" Of course it will be difficult to sell more than the DS in Japan or other developed countries," said analyst Shun Tanaka of SMBC Friend Research Center.
" But if they market it in regions like South America and Asia, it may eventually sell even more than the DS," he said.
On Saturday, gamers lined up at the Bic Camera electronics store in Yurakucho, central Tokyo, despite the fact that initial stocks of the new gadget sold out in a single day of pre-orders on Jan. 20 and the 25,000 yen ($305) price tag.
" I have been away from playing games for a while, but 3DS brought me back to it," said Hitoshi Yanagi, a 39-year-old from Kawasaki in the suburbs of Tokyo. " What smartphones can do is different from what the 3DS can do -- it's not that either one is superior."
The launch is expected to hike Nintendo's sagging sales and anticipation has helped push the company's shares up more than 20 percent since they hit a 10-month closing low on Oct. 15, two weeks after Nintendo revised down its annual profit and sales forecasts.
Speculation that Nintendo's President Satoru Iwata will make an announcement about the next-generation Wii home games console at the Game Developers' Conference in San Francisco on March 2, or at the E3 game show later in the year, has also helped power the stock's rise, though many analysts see the new home console making its debut in 2012.
Nintendo's share price hit dizzying heights over 70,000 yen in 2007, amid excitement over the then unbeatable Wii and DS. Operating profit peaked at more than 555 billion yen ($6.78 billion) in the year to March 2009.
The company is targeting an operating profit for the full year to March 31 of 210 billion yen, the lowest since the year ending in March 2006 and, despite new products, analysts' consensus has growth remaining sluggish for the following two years. ($1=81.89 Yen)
Oil, copper and cocoa up on political unrest
* Oil prices resume their rise on Mideast tensions
* Copper has biggest one-day gain in three months
* Gold steady, cocoa at 32-yr high on Ivory Coast unrest
By Joshua Schneyer
NEW YORK, Feb 25 (Reuters) - Crude gained with Brent oil holding above $112 a barrel on Friday as unrest in the Middle East, including a bloody political standoff in OPEC producer Libya, overshadowed news that Saudi Arabia has boosted oil output in recent days.
Oil rose slightly as a revolt in Libya continued to disrupt the OPEC nation's supplies.
Top exporter Saudi Arabia said it has already boosted production by more than 700,000 barrels per day, to a level exceeding 9 million bpd, helped keep prices in check.
Commodities mostly rose on Friday as traders were reluctant to enter the weekend short of raw goods with unrest in the Middle East and Africa spreading. The 19-commodity Reuters-Jefferies CRB index rose 1.6 percent.
Oil advanced slightly, copper surged to its biggest one-day advance in three months, and cocoa futures shot to a 32-year high Friday as rebels seized a town in top grower Ivory Coast.
" I don't think many traders are comfortable being short over the weekend," said Tom Bentz, an energy broker at BNP Paribas Commodity Futures in New York.
In London, Brent crude futures settled up 78 cents at $112.14 on Friday, capping a 9 percent gain on the week, but off a 2 1/2 year high near $120 reached earlier in the week.
U.S. oil rose 60 cents to settle at $97.88, off a $99.20 high touched earlier in the day.
Following falls earlier in the week, base metals rallied on Friday. Copper posted its biggest daily advance in three months, as buyers for the industrial metal emerged after oil prices traded in a more stable range following this week's sharp rally, calming mounting concerns over inflation and the impact of potential oil shortages on the global economy.
London Metal Exchange (LME) copper for three-month delivery shot up $245 or 2.6 percent to close at $9,750 a tonne, its biggest one-day gain since early December. The active May COMEX copper contract surged 11.15 cents to finish at $4.4550 per lb.
Gold ended nearly unchanged on Friday, but bullion posted its fourth consecutive weekly gain, with investors seeking a store of value amid unrest in Africa and the Middle East.
UNREST EYED
The unfolding situation will remain in focus next week. Civil unrest first broke out in Tunisia in December, from where it spread quickly to Egypt, and then to Bahrain, Libya, Yemen and others.
Anti-government protests intensified in both Iraq and Yemen on Friday, while Libyan strongman Gaddafi sent loyalists and mercenaries to battle rebels that have already seized control of most of the country and seek to take Tripoli soon, forcing him from power.
Cocoa futures on ICE rose to close at a 32-year high Friday as rebels seized a town in top grower Ivory Coast, while raw sugar rebounded ahead of the March contract's expiry Monday. Coffee prices rose after a two-day setback.
The United Nations Secretary General said Ivory Coast was closer to the brink of a new civil war after rebels controlling the north seized a town in government territory and were heading south.
China FX chief says hard to invest in commodities
* SAFE head says hard to invest in oil, gold, iron ore
* Says low rates in developed markets hurting its returns
* Says China must work to cut its current account surplus
BEIJING, Feb 26 (Reuters) - China cannot invest much of its foreign currency riches in the global commodities market, because doing so would only push up the prices of the raw materials that the economy depends on, the country's top money manager said on Saturday.
Yi Gang, head of the State Administration of Foreign Exchange (SAFE), also said that monetary easing in wealthy countries was driving down China's returns on its $2.85 trillion in official currency reserves, the world's biggest such stockpile.
He said it was not a simple matter for China to buy into oil or gold, which have soared in recent days with investors worried that political unrest in Libya could spread through the Middle East.
" Some have argued that we should buy oil, buy gold, buy iron ore, or even buy into companies and land. But it is much easier said than done," Yi said in a speech at Peking University.
" If we go into the spot market to buy commodities, we will immediately push up prices. These markets, compared to the size of our foreign exchange reserves, are too small.
" If China gets into these markets and pushes up prices to extremely high levels, the Chinese people will bear the cost at the end of the day as China is often the key buyer in these markets," said Yi, who is also a vice governor with the People's Bank of China.
As an example, Yi said that China had purchased more than 300 tonnes of gold last year through normal trade, and that it would have been harder to buy any more with foreign reserve funds.
" The gold price shot up last year, and surging gold prices have forced Chinese people to pay more as there is strong demand for gold for those getting married and other events."
Yi also said that it was not easy for China to use its reserves to conduct acquisitions. Global oil, iron ore and gold markets have their own rules and mechanisms, and it would be hard for China to shop around, he said.
HERBAL MEDICINE
Loose monetary policies implemented by wealthy countries in an attempt to power their economies towards recovery from the global financial crisis were another complication.
" Due to quantitative easing and near-zero interest policies, investment returns of (our foreign exchange reserves) are increasingly moving towards lower and lower levels. Although we have achieved fairly good returns through management, it should be said that the environment is not optimistic," he said.
" For me, that's a big challenge," Yi added.
To staunch the growth of its bulging reserves, Yi said that it was imperative for China to cut its current account surplus.
However, he said that China had to take " herbal medicine" in a mixture of gradual policies, rather than a radical approach.
" We will work hard this year to expand domestic demand a little bit to reduce reliance on external demand a little bit to increase wages and social insurance a little bit, enhance environment checks a little bit, reform resource pricing mechanisms a little bit, relax outbound investments a little bit, and make the yuan a little bit more flexible," he said.
STABLE YUAN
Keeping the yuan's exchange rate " basically stable" was still a policy aim for Beijing, he added.
Yi acknowledged that there were more calls for yuan appreciation from other developing countries such as India and Brazil, but he said that China has already gone a long way to reforming the yuan and allowing it to strengthen over the past five years.
Narrowing the current account surplus was also critical to dampening inflationary pressure, Yi said. Cash inflows via China's trade surplus have helped to push inflation to an annual rate of 4.9 percent, just shy of a two-year high.
Beijing has managed the excess cash by raising big banks' required reserves to 19.5 percent, a record, and some question how much more room it has to push reserves up further.
Asked whether he saw a ceiling on reserve requirements, Yi said that he had no research findings on that, but added that it was was worth studying the impact on commercial bank operations.
He said that the the central bank would continue to soak up excessive liquidity and that China would aim to keep inflation to an average of " about 4 percent" this year. (Reporting by Zhou Xin and Simon Rabinovitch Editing by Jacqueline Wong)
2011-02-26 12:01:53
Thanks for the updates.
Angry Irish voters turn out for historic election
By ROBERT BARR
Associated Press
(AP:DUBLIN) Ireland's government prepared for a whopping defeat and the country for more uncertainty as angry voters turned out for a historic election triggered by the humiliating collapse of the " Celtic Tiger" economy.
The opposition Fine Gael party has enjoyed a wide lead during a campaign dominated by debate over how to rebuild an economy brought down by a property boom collapse, which in turn led to a bailout of Ireland's failing banks.
The governing Fianna Fail party is bracing for a rout. It led the government through Ireland's boom years in 1994-2007 and into the economic meltdown that end up with a humiliating bailout from the European Central Bank and the International Monetary Fund.
But whoever wins will find their ability to maneuver limited by the IMF and the bankers of Europe. Meanwhile, with unemployment at more than 13 percent, Ireland's young and jobless are heading for ports and airports, and the nation is reeling from tax increases and public service cuts.
The opposition has used Ireland's dire economic situation as a rallying call for change _ Fine Gael leader Enda Kenny, 60, campaigned in northwestern Ireland on Thursday urging voters to " turn your anger into action."
Ireland's plight has inspired a lively contest with a record 566 candidates including 179 independents for the 166 seats in Ireland's lower house in parliament, the Dail. Nearly 49,000 people have rushed to register to vote in recent weeks.
Turnout in most of the country was brisk Friday, running ahead of the 2007 election, national broadcaster RTE reported.
Opinion polls suggest that Ireland's 3.1 million voters will usher in a new government led by the Fine Gael party, which until now has been the perennial runner-up to Fianna Fail.
The key question was whether Fine Gael could win the 84 seats needed for a majority in the Dail. Labour has bumped along near 20 percent, ahead of Fianna Fail. Sinn Fein, the Northern Ireland-based party that supported the Irish Republican Army, is expected to gain seats.
The Labour Party hoped to pile up enough votes to deny Fine Gael an outright majority in the Dail and secure Labour a place in a coalition government.
That appealed to Mark Fortune, a civil servant who fear Fine Gael's plans to cut 20,000 public service jobs.
" I think Labour would hold them back a bit," Fortune said.
Voters have expressed a yearning for change, but Jack Fitzpatrick, 56, was cautious about getting it. " I would be not too optimistic that there will be too much change," he said after voting in Dublin.
Fine Gael's big advantage may be simply that it isn't Fianna Fail, the party in power when the good times stopped.
" I don't think there's a great deal of difference," said Michael Marsh, professor of comparative political behavior at Trinity College Dublin.
The most significant distinction among the three leading parties, Marsh said Friday, is that " Labour is speaking a bit more about pump priming ... and that dreaded word, tax."
John Webb, who said he voted for Fine Gael as " most likely to clean up the mess," feared that old loyalties would reassert themselves and that Fianna Fail would do better than opinion polls indicated.
" It all goes back to the civil war, though none of them fought in it," Webb said.
Fine Gael traces its ancestry to the revolutionaries led by Michael Collins who accepted a treaty with Britain in 1921, then fought a war with Fianna Fail's founders, who rejected the treaty and refused to take seats in the Dail until 1932.
Fianna Fail has been in turmoil: Brian Cowen, the prime minister, had fallen to record low popularity and resigned as party leader before the campaign. New leader Micheal Martin appears to have steadied the party without markedly improving its standing.
The votes will not be counted until Saturday and RTE will broadcast its exit poll results an hour before the count begins. Final results aren't expected before Sunday.
Wall St Week Ahead-Possible pullback, high oil raise risks
By Ryan Vlastelica
NEW YORK, Feb 25 (Reuters) - On Wall Street they wonder: Was that it? Is the pullback over?
Following the S& P 500's worst week in 15, investors are trying to determine whether the predictions of a correction have been fulfilled or if there's still downside ahead as oil prices remain at elevated levels.
Along with the direction of oil, potential market movers for traders will be the February payrolls report, which will be released on Friday, and Federal Reserve Chairman Ben Bernanke's speech on Tuesday.
The benchmark S& P index fell 1.7 percent in the week, a relatively mild pullback for an index that has gained more than 25 percent since the start of September.
" We were looking for a pullback of at least 5 percent and we didn't get it, so I don't think we can expect a lot of new entrants at these levels," said Leo Grohowski, who oversees about $166 billion in assets as chief investment officer at BNY Mellon Wealth Management in New York.
" With the gains we've had, and since tensions remain high in the Middle East, I don't expect to see aggressive buying on the dip this time around," Grohowski said.
A lack of new entrants could mean lighter volume, which could leave the market more susceptible to increased volatility. Lately, volume has been stronger on down days in the market.
" RISKIER" ENVIRONMENT
An unexpected surge in crude prices, sparked by Libya's popular uprising, pressured equities for much of the holiday-shortened week on concern that higher energy costs could stifle economic activity.
U.S. crude futures spiked as much as 20 percent during the week to a high of $103.41 per barrel, though they later fell below $100. The CBOE Volatility Index VIX rose 17 percent this week and at one point was up 30 percent.
Though many say the market remains overstretched, its resilience in the face of geopolitical uncertainty and some disappointing data has some encouraged.
Judy Moses, portfolio manager at Evercore Wealth Management in San Francisco, said that the week's drop had quieted some of the calls for consolidation.
" Had we not seen this pullback, our enthusiasm would be a little tapered because valuations would be fuller," she said. " But it does seem that in general the investment environment is a bit riskier now."
S& P MEETS KEY LEVEL
The S& P faces few technical hurdles before it reaches 1,360, and this week it seemed to find support at 1,300. Grohowski said it was " very important, psychologically, that we closed above that level on Wednesday and Thursday."
Others were more bearish on a market that, even with the week's drop, has seen gains of 4.8 percent since the start of the year.
" We're at the end of the push in equities, and I see a lot of downside from here," said Steven Hochberg, chief market analyst at Elliott Wave International in Gainesville, Georgia. " Those who are adept at handling risk should look to short the market in one form or another."
Hochberg added that financial stocks " look particularly weak here, and that could be an interesting area on the downside."
With earnings season largely over -- Costco Wholesale, H.J. Heinz Co and Novell Inc are among the few S& P components reporting next week -- equities will track other factors.
Recent monthly payroll reports have been a mixed bag, with fewer jobs being added than anticipated, but the unemployment rate declined. The upcoming unemployment report will be watched for confirmation that a job market recovery remains on track.
Meanwhile, comments from Bernanke will be parsed for clues about when the Federal Reserve's quantitative easing program will end and whether a third round is likely.
On Monday, new restrictions on short selling with go into effect. Under the new rules, the circuit breaker will kick in with a 10 percent price decline from the previous day's close and will last for the duration of the trading day, as well as the following day. (Reporting by Ryan Vlastelica Editing by Kenneth Barry)
Attack shuts Iraq's largest oil refinery, kills 1
By SINAN SALAHEDDIN
Associated Press
(AP:BAGHDAD) Gunmen attacked Iraq's largest oil refinery Saturday, killing a guard and detonating bombs that sparked a fire and forced the facility to shut down, officials said.
The assailants, carrying pistols fitted with silencers, broke into the Beiji refinery around 3:30 a.m., attacked the guards and planted bombs near some production units for benzene and kerosene, said the spokesman for Salahuddin province, Mohammed al-Asi.
One guard was killed and another wounded, al-Asi said.
By midmorning, firefighters were still trying to extinguish the blaze, said Iraqi Oil Ministry spokesman Assem Jihad, adding that an investigation will be launched. " We hope that work will be resumed in a short period of time," Jihad told The Associated Press, but did not give a date.
The Beiji refinery has two sections. The attackers targeted the installation's North Refinery that handles 150,000 barrels a day. The second section, the Salahuddin Refinery, is under renovation. It used to process 70,000 barrels per day.
Iraq's overall refining capacity is currently slightly over 500,000 barrels per day. Its three main oil refineries _ Dora, Shuaiba and Beiji _ process slightly over half of the 700,000 barrels-per-day capacity they had before the 2003 U.S. invasion.
Iraq sits on the world's third-largest known oil reserves with an estimated 115 billion barrels, but its production is far below its potential due to decades of war, U.N. sanctions, lack of foreign investment and insurgent attacks.
At the height of an insurgency from 2004 to late 2007, the Beiji refinery was under control of Sunni militants who used to siphon off crude and petroleum products to finance their operations.
Beiji is about 155 miles (250 kilometers) north of Baghdad.
Also Saturday, health officials and police said two teens, ages 12 and 18, died of injuries sustained in anti-government protests a day earlier, bringing the death toll for the day to 14. The officials spoke on condition of anonymity because they were not authorized to release information.
On Friday, thousands marched on government buildings and clashed with security forces in cities across Iraq in an outpouring of anger, the largest and most violent anti-government protests in the country since political unrest began spreading in the Arab world weeks ago.
The protests, billed as a " Day of Rage, were fueled by anger over corruption, chronic unemployment and shoddy public services from the Shiite-dominated government.
CURRENCIES
The March Dollar closed higher due to short covering on Friday as it consolidates some of the decline off last week's high. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If March extends the decline off last week's high, November's low crossing at 76.18 is the next downside target. Closes above Tuesday's high crossing at 78.39 would temper the near-term bearish outlook. First resistance is the 10-day moving average crossing at 77.88. Second resistance is Tuesday's high crossing at 78.39. First support is today's low crossing at 76.98. Second support is November's low crossing at 76.18.
The March Euro closed lower due to profit taking on Friday as it consolidates some of the rally off last week's low. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. If March renews the rally off January's low, the 75% retracement level of the November-January decline crossing at 139.06 is the next upside target. Closes below Tuesday's low crossing at 135.23 would temper the near-term friendly outlook. First resistance is this month's high crossing at 138.56. Second resistance is the 75% retracement level of the November-January decline crossing at 139.06. First support is Tuesday's low crossing at 135.23. Second support is last Monday's low crossing at 134.24.
The March British Pound closed lower due to profit taking on Friday as it consolidated recent gains. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are turning bearish hinting that a double top with the early-February high might have been posted with Thursday's high. Closes below the reaction low crossing at 1.5959 are needed to confirm that a short-term top has been posted. If March extends the rally off December's low, weekly resistance crossing at 1.7043 is the next upside target. First resistance is Wednesday's high crossing at 1.6296. Second resistance is weekly resistance crossing at 1.7043. First support is the reaction low crossing at 1.5959. Second support is the reaction low crossing at 1.5818.
The March Swiss Franc posted an inside day with a lower close on Friday as it consolidates some of this winter's rally. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near-term. If March extends the aforementioned rally, upside targets will now be hard to project now that it has rallied into uncharted territory. Closes below the 20-day moving average crossing at .10531 would confirm that a short-term top has been posted. First resistance is Thursday's high crossing at .10833. First support is the 10-day moving average crossing at .10543. Second support is the 20-day moving average crossing at .10531.
The March Canadian Dollar posted a new contract high on Friday and the high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off August's low, weekly resistance crossing at 106.19 is the next upside target. Closes below the reaction low crossing at 100.06 would confirm that a short-term top has been posted. First resistance is today's high crossing at 102.19. Second resistance is weekly resistance crossing at 106.19. First support is Wednesday's low crossing at 100.36. Second support is the reaction low crossing at 100.06.
The March Japanese Yen closed higher on Friday as it extends the rally off last week's low. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If March extends the rally off last week's low, this month's high crossing at .12,341 is the next upside target. Closes below the 10-day moving average crossing at .12060 would confirm that a short-term top has been posted. First resistance is Thursday's high crossing at .12253. Second resistance is this month's high crossing at .12,341. First support is the 20-day moving average crossing at 12,118. Second support is the 10-day moving average crossing at .12060.
GRAINS
May Corn closed up 25 1/2-cents at 7.22.
May corn closed sharply higher on Friday following the release of this week's export sales report. The USDA export sales report showed that corn export sales posted a marketing year high of 59 million bushels removing any doubt that current high prices were curtailing demand. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning neutral signaling that sideways to higher prices are possible near-term. If May renews this winter's rally, the 2008 high on the weekly continuation chart crossing at 7.79 is the next upside target. Closes below Wednesday's low crossing at 6.67 1/2 would confirm that a short-term top has been posted while opening the door for a larger-degree into early-March. First resistance is Tuesday's high crossing at 7.44 1/4. Second resistance is the 2008 high on the weekly continuation chart crossing at 7.79. First support is Wednesday's low crossing at 6.67 1/2. Second support is the November-January uptrend line crossing near 6.30.
SOYBEAN COMPLEX
May soybeans closed up 45 3/4-cents at 13.75.
May soybeans closed sharply higher on Friday as it consolidated some of this month's decline. This morning's exports sales report showed net export sales of 4.9 million bushels. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold and are turning neutral to bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing at 14.08 would confirm that a short-term top has been posted. Closes below the July-October uptrend line crossing near 12.95 1/4 would confirm that a significant top has been posted and that a major trend change has taken place. First resistance is the 20-day moving average crossing at 14.08. Second resistance is the reaction high crossing at 14.21 1/4. First support is Wednesday's low crossing near 12.96 1/4. Second support is the 38% retracement level of the July-February rally crossing at 12.54 3/4.
May soybean meal closed up $9.80 at $364.70.
May soybean meal closed higher due to short covering on Friday as it consolidates some of this month's decline. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold and are turning bullish signaling that a low might be in or is near. Closes above the 20-day moving average crossing at 377.00 would confirm that a short-term low has been posted. If May extends this month's decline, the 38% retracement level of the May-February rally crossing at 340.60 is the next downside target. First resistance is today's high crossing at 370.10. Second resistance is the 20-day moving average crossing at 377.00. First support is Wednesday's low crossing at 348.30. Second support is the 38% retracement level of the May-February rally crossing at 340.60.
May soybean oil closed up 234-pts. at 56.95.
May soybean oil closed sharply higher on Friday as it rebounds off the 25% retracement level of the September-February decline crossing at 54.34. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that a low might be in or is near. Closes above the 20-day moving average crossing at 57.57 would confirm that a short-term low has been posted. If May extends this month's decline, the 38% retracement level of the July-February rally crossing at 51.34 is the next downside target. First resistance is the 20-day moving average crossing at 57.57. Second resistance is this month's high crossing at 59.96. First support is Wednesday's low crossing near 53.31. Second support is the 38% retracement level of the July-February rally crossing at 51.34.
Oil's next danger zones
BRIAN MILNER and BARRIE McKENNA
From Saturday's Globe and Mail
Whether you produce the stuff, refine it, consume it or speculate in it, it's impossible to separate oil from political risk.
Today the focus is on Egypt and Libya. Tomorrow, it could be Algeria, Saudi Arabia or Nigeria that triggers a price shock.
The supercharged price of crude is part of a new normal, where political risk trumps the old law of supply and demand.
“Oil increasingly comes from unstable parts of the world,” pointed out geopolitical risk expert Ian Bremmer, president of Eurasia Group. “It’s the Persian Gulf, it’s West Africa. It’s the Caspian. Those are not places we vacation. Those are places over time that are more and more unstable.”
And in this uncertain environment, politics matters more than market outcomes, Mr. Bremmer said.
In the grand scheme of things, Libya is a relatively small oil player. It’s the 18th-largest producer in the world and ranks ninth in proven reserves. The world can easily cope without its oil.
The concern, however, is that Libya is a harbinger of what may lie ahead in the Arab world, where democracy is stunted and small elites control the vast oil wealth.
As instability moves up the ranks of oil-producing countries, the price spikes are likely to be longer and more intense.
“It’s been so hard to predict where the next domino might be. If you look at a map, you’ve got Egypt, Tunisia, Libya,” remarked James Hamilton, an economics professor at the University of California-San Diego. “Algeria would be another possibility. And they’re a bigger oil producer than Libya.”
The damage so far seems to be contained. But the risk of further disruptions remains “pretty considerable,” Prof. Hamilton said. Just imagine, then, what the impact would be if the turmoil hit production in Saudi Arabia or Iran, the world’s No. 2 and No. 4 producers.
“If it were to end up in some place like Saudi Arabia, of course that would be a whole new ball game, in terms of the potential disruption to world supplies – bigger than anything we’ve ever tried to get through,” Prof. Hamilton said.
Here we take a look at the world’s crude hot spots, and rate the potential for unrest.
See The Globe's scorecard in a map
SAUDI ARABIA
Risk: moderate
Oil production: 9.8 million barrels a day. Reserves: 265 billion barrels.
In many ways, Saudi Arabia is OPEC. It’s the world’s second-largest producer after Russia. And it sits on one-fifth of the world’s known reserves. Any hint of unrest here would make the recent oil shock look like a blip. Dissidents, presumably including its restive Palestinian population, are anonymously calling for a “day of rage” on March 11. But this isn’t Egypt or Libya. Yes, the country has a large and underemployed generation of young people . But 80-year-old King Abdullah II keeps his people pampered and wealthy, recently announcing as much as $37-billion in perks. It’s also unlikely that the U.S. would stand idly by if the security of all that crude was threatened by rebellion – particularly if it involved militant fundamentalists who have attacked oil installations in the past.
IRAN
Risk: extreme
Oil production: 4.2 million barrels a day. Reserves: 138 billion barrels.
Any number of things could go wrong here – from protests at home to conflict with Israel. And that could affect its capacity to produce and export oil to customers in Europe and Asia. Experts say the hard-line Islamist government isn’t likely to topple, which makes it more of a threat to the region. “The fact that Iranians are going to become more assertive and provocative is something that can scare oil markets,” political risk analyst Ian Bremmer says. But the country with the world’s third-largest oil reserves shares much of the Arab world’s economic woes, including double-digit unemployment, with rates worse for under-25s. The regime has ruthlessly crushed opposition protests. Unlike other oil-rich states in the Middle East, regime change might actually improve oil market conditions. Years of sanctions and low investments have hampered the country’s ability to fully exploit new reserves, which make up 10 per cent of world supply.
LIBYA
Risk: extreme
Oil production: Normally 1.8 million barrels a day. Reserves: 47 billion barrels
The shutdown of Libya’s oil fields in the wake of the nationwide uprising has triggered a global price shock. Estimates of how much oil has been removed from the market so far vary, but it could be as much as 1.2 million barrels a day. The prospect of further bloodshed and perhaps civil war is likely to keep the taps shut off for a long time, now that all the foreign technicians have departed. Libya lacks the expertise to keep the oil flowing without them. This is a critical problem for big Europe consumers, because Libya is a major supplier of the light, sweet crude that is used by European refineries for diesel fuel, which is already in short supply. The Saudis have vowed to make up the shortfall. But while Libyan oil produces close to 80 litres of diesel per barrel, Saudi replacement crude would produce at most about 30 litres. Whatever the political outcome in Libya, it could be years before production returns to anything approaching normal.
NIGERIA
Risk: moderate
Oil production: 2.2 million barrels a day. Reserves: 37.5 billion barrels.
While the world focuses on North Africa, this top 10 world producer and major U.S. supplier remains a serious trouble spot. Upcoming elections in the spring are likely to trigger outbreaks of violence, which may well affect output. Oil means everything, accounting for 95 per cent of the country’s foreign exchange earnings and 80 per cent of government revenue. Oil wealth is used as a lubricant to keep fractious ethnic groups in line. Money, in the form of transfer payments, flows to the poor, mainly Muslim, northern provinces. In the south, a large, service-based economy has been built around the industry. And in the Delta region, where the oil is produced, armed militants have waged a lengthy campaign against government forces, foreign operations and local infrastructure projects to keep more of the profits in their area. The result has been sporadic cuts in production, which is now about 30 per cent below peak levels. The country itself remains hobbled by political instability, corruption and bad economic stewardship.
ALGERIA
Risk: extreme
Oil production: 2.1 million barrels a day. Reserves: 13.4 billion barrels.
Many analysts see this as the next likely domino. It shares a lot of features with the likes of Egypt and Tunisia, including an unpopular, military-backed government and deep economic woes. President Abdelaziz Bouteflika took office in a 1999 election that was widely seen as fraudulent. He has since removed term limits to remain in power. The country suffers from high unemployment, housing shortages, poor basic infrastructure and chronic corruption. The environment has made it ripe for Islamic militants, including an al-Qaeda splinter group that has led a series of attacks and kidnappings against the government and Western interests.
RUSSIA
Risk: low
Oil production: 10.1 million barrels a day. Reserves: 74.2 billion barrels
The world’s largest oil producer. Wearing his statesman’s hat, Prime Minister Vladimir Putin has warned that high and rising prices are a threat to the global economy, which is not in Russia’s interests. But in the past, Mr. Putin has readily used his country’s energy clout for blatant political purposes, twice cutting off natural gas shipments to a heavily dependent Ukraine ... in the middle of winter. So far, Russia has promised to increase natural gas exports to the European Union to cover any shortfall from lost production in Libya and elsewhere. But Western European countries have expressed worries about becoming too dependent on a fickle Russia to meet future energy needs. On the plus side, the government is pouring capital into the sector to improve technology and boost production.
IRAQ
Risk: moderate
Oil production: 2.4 million barrels a day. Reserves: 115 billion barrels.
Oil export earnings are finally back to where they were before the U.S.-led invasion. But the country’s economy and political situation remain shaky. Instability has so far limited the flow of foreign capital needed to develop vast untapped reserves. But the potential for greatly increased production remains. Perhaps the biggest threat stems from its volatile and ambitious neighbour, Iran.
KUWAIT
Risk: moderate
Oil production: 2.5 million barrels a day. Reserves: 104 billion barrels.
The Persian Gulf state has already faced demonstrations, and, like the UAE, has moved to buy peace with government handouts. Last weekend, hundreds of protesters demanding greater rights for expatriate workers and other non-citizens clashed with security forces. Kuwait has struggled for years about what to do with the non-citizens that do much of the labour in the country. There has also been political paralysis between the elected National Assembly and the ruling al-Sabah family over allegations of corruption.
UNITED ARAB EMIRATES
Risk: moderate
Oil production: 2.8 million barrels a day. Reserves: 98 billion barrels
As in many of the small Gulf states, citizens are outnumbered by expatriate workers. Its moderate foreign policy has made it a friend of the West. But there’s no democracy and the regime keeps a lid on dissent with generous subsidies, including free education, health care and various financial subsidies. Dwindling oil reserves threaten the regime’s longer-term ability to maintain its generous nanny state.
ANGOLA
Risk: low
Oil production: 1.9 million barrels a day. Reserves: 13.5 billion barrels.
Angola has enjoyed relative stability since its bloody 27-year civil war ended in 2002. But the country still suffers from an overreliance on oil, poor infrastructure and uneven wealth distribution. President Jose Eduardo Dos Santos promised elections in 2009, but reneged and now plans to hold them in 2012.
QATAR
Risk: low
Oil production: 1.2 million barrels a day. Reserves: 25.4 billion barrels.
The country is probably far too oil-rich to experience any serious upheavals. It ranks second, behind only Liechtenstein globally, in per capita income, and unemployment is low. In addition to large oil reserves, Qatar also boasts large untapped natural gas reserves. Its main focus these days is on attracting more foreign investment and private capital as it builds the stadiums, hotels and other facilities needed for the 2022 World Cup of soccer. The government has opened the question to the public for debate of whether the tournament should be held in scorching summer or more moderate winter.
OMAN
Risk: moderate
Oil production: 816,000 barrels a day. Reserves: 5.5 billion barrels
The world almost never hears from tiny Oman. And from a risk assessment perspective, that’s a good thing. And yet the country, , which counts Saudi Arabia and deeply troubled Yemen as neighbours, recently saw small and peaceful demonstrations of its own. Protesters called for political reform, including the resignation of several government ministers. But they pledged loyalty to the hereditary monarch, Sultan Qaboos bin-Said. The country is another of the regal welfare states, where citizens pay virtually no taxes and are cared for by the government. If there is a danger here, it is that Oman tilts toward Iran in any realignment of Middle East power.
EGYPT
Risk: moderate
Oil production: 680,000 barrels a day. Reserves: 4.3 billion barrels
For now, the army is firmly in control. But Egypt is likely to remain unstable until it becomes clear who will fill the political power vacuum left in the wake of President Hosni Mubarak’s ouster. Egypt consumes most of the oil it produces. So it isn’t a player in world markets. But its control of the Suez Canal, a key oil trade route, and its large Arab population put it at the centre of oil geopolitics. Any hint of a hard-line Islamist government coming to power would roil world markets.
INDONESIA
Risk: low
Oil production: One million barrels a day. Reserves: 4 billion barrels
This nascent democracy is a minor world player in oil. And while it has been a target of terrorist attacks in the past, a 2006 peace agreement with armed separatists in Aceh province has greatly reduced the threat of instability. The country still struggles with poverty, unemployment, inadequate infrastructure and corruption. But its economy is among the fastest-growing in the emerging world.
VENEZUELA
Risk: moderate
Oil production: 2.4 million barrels a day. Reserves: 99.4 billion barrels
President Hugo Chavez has never hidden his antipathy toward Washington. Nor, despite frequent threats, has he ever moved to cut off the flow of oil, by far the biggest source of capital for his deficit-ridden government. Oil money supplied 35 per cent of government revenue in 2009, down from just under 50 per cent the previous year, when prices were higher. The risk is that Mr. Chavez’s actions to strip foreign control and siphon off more revenues from the oil sector will further crimp production and exports. In 2002, Mr. Chavez fired about 18,000 workers at the national oil company, after a strike in response to his efforts to gain more control over operations. The resulting loss of homegrown technical expertise remains a problem.
KAZAKHSTAN
Risk: moderate
Oil production: 1.5 million barrels a day. Reserves: 30 billion barrels
This is an oil-dependent economy. The government has sought to diversify its export markets to reduce reliance on Russia, its former master. It has also provoked clashes with Western oil companies over the terms of production agreements.
MEXICO
Risk: low
Oil production: 2.6 million barrels a day, Reserves: 12.4 billion barrels
A never-ending war on drug cartels – accompanied by escalating violence and brutal attacks on government officials – has not yet posed a risk to the country’s oil sector. But reforms, including reducing the monopoly hold of the national oil company, Pemex, on exploration and drilling, are needed to boost production, which declined by nearly 25 per cent from 2004 to 2009 and has only recently stabilized.
BRAZIL
Risk: low
Oil production: 2.6 million barrels a day. Reserves: 13.2 billion barrels
This is one of the dazzling growth stories in the emerging world, and it doesn’t hurt that the country is sitting on vast energy reserves. The state oil company, Petrobras, runs the biggest exploration and production budget this side of the Persian Gulf. And unlike smaller state companies in many other oil countries, it has the expertise to go toe to toe with the private sector heavyweights of global oil. Its biggest problem: building enough refining capacity to avoid becoming dependent on imports to meet burgeoning domestic demand. A less likely risk would be the kind of heavy-handed political interference that has done severe damage to Venezuela’s industry and left Iran’s in such poor shape that production is steadily declining.
ECUADOR
Risk: low
Oil production: 486,000 barrels a day. Reserves: 6.5 billion barrels
Along with the likes of Russia, Venezuela and the Caspian states, an activist government has raised its nationalist flag over its oil resources. In 2006, the government seized the operations of Occidental Petroleum after accusing the U.S. company of despoiling the environment and engaging in espionage. And earlier this month, an Ecuadorean judge ordered Chevron to fork over $8.6-billion in environmental damages over drilling in the 1980s by a company Chevron later acquired. The risks of asset seizures and outsized damage awards are nothing new to the oil business. But they can definitely throw a spanner into new developments. The country faces some 15 lawsuits from foreign companies over asset seizures and other alleged violations of contracts and treaties.
AZERBAIJAN
Risk: moderate
Oil production: 1.01 million barrels a day. Reserves: 7 billion barrels
Not many former oil executives end up running the entire country. But that’s how closely oil and politics are intertwined in this former Soviet republic. President Ilham Aliyev, who succeeded his father to the country’s helm, was briefly a vice-president of the state oil company and has written papers on the geopolitics of his country’s oil strategy. This has helped him in his dealings with competing companies. But it hasn’t translated into competent stewardship of a stumbling economy that is riddled with inefficiencies and infected by chronic corruption. As a result, the risk of social unrest runs high.
Brazil Petrobras CFO: Oil Prices Could Return To $80-90 Range
By Jeff Fick
Published February 25, 2011
Dow Jones Newswires
RIO DE JANEIRO -(Dow Jones)- Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, expects international oil prices to return to levels seen before the wave of pro-democracy protests hit key countries in the Middle East and North Africa, Chief Financial Officer Almir Barbassa said late Friday.
International oil prices should return to trading between $80 and $90 a barrel over the next two months as conflicts are resolved in the key oil producing region, Barbassa said.
" There's no reason to justify higher oil prices," Barbassa said during a press conference to discuss the company's fourth-quarter earnings. " The trend is for oil prices to return" to the levels seen before the Middle East and North Africa unrest.
The only thing that could maintain international oil prices at current levels above $100 a barrel would be a permanent loss of supply, Barbassa said.
148 Brazilians leave Libya for Greece
10:50, February 26, 2011
A ship carrying 148 Brazilian employees of engineering company Queiroz Galvao departed Friday from Libya's eastern port of Benghazi and headed for Greece, officials said.
The vessel was scheduled to dock at the Greek capital of Athens on Saturday 17 hours after the departure, where the group will be assisted by the Brazilian Embassy to return to homeland, Foreign Ministry officials said in a statement.
The Brazilian government had planned to airlft some of its nationals out of the Libyan port, but the attempt had failed because the airport there was destroyed, it added.
On Thursday, a plane carrying 446 employees of Brzilian engineering company Odebrecht, including 114 Brazilians, flew from the Libyan capital of Tripoli to Malta.
The ministry said there had been about 500 Brazilians living in Libya before the unrest, most of whom working for engineering companies Queiroz Galvao, Andrade Gutierrez and Odebrecht, as well as oil company Petrobras.
Source:Xinhua
Petrobras tests new pre-salt well
Brazil's state-run oil company Petrobras has begun productions tests on well 6-MLL-70 in the Campos basin’s Tracajá reservoir.
Upstream staff 25 February 2011 20:45 GMT
The tests started at a flow rate of 23,300 barrels per day, Petrobras said in a statement.
The pre-salt well, located in the Marlin Leste field about 124 kilometres off the coast of Rio de Janeiro, has been tied back to floating production, storage and offloading vessel P-53.
Petrobras found the oil reservoir in September last year with the well drilled to a depth of 4442 metres.
Petrobras wants to learn more about the characteristics of the reservoir to determine whether to set up a long-term production project.
Offshore drillers eye Brazil boost
Leading offshore drilling contractors expect deepwater demand to improve this year as an impending contracting move by Petrobras is likely to prompt other oil executives to secure rigs while they can.
News wires 25 February 2011 02:28 GMT
Reuters reports Transocean expects a marked improvement in rig demand in the next few months on the belief that Brazil's state oil company will hire between four and eight of them.
On a call with analysts, Transocean vice president for rig marketing Terry Bonno said she did not think Petrobras was likely to change their strategy of contracting rigs.
But she later added: " With the expectation that Petrobras will take off some of this supply, I think there has been an improvement in urgency with our other customers."
Petrobras, which will report its earnings today, is expected to unveil a revised five-year investment plan in the coming months that will probably increase the $224 billion in spending slated for 2010 to 2014.
Reuters was unable to reach Petrobras for comment.
Shares of Transocean, which reported lower-than-expected fourth-quarter earnings late Wednesday, fell 1.7% yesterday on a disappointing outlook from the company, including an expected rise in shipyard costs in 2011.
Rival Seadrill enjoyed a better share performance as the company declared a special dividend in anticipation of a good year ahead.
Seadrill, which has just one deepwater rig in the moribund Gulf of Mexico market while Transocean has a dozen there, posted a 25% rise in fourth-quarter operating profit.
Ensco, with three deepwater rigs in the Gulf of Mexico, reported a 36% decline in quarterly profit, but said deepwater revenue would rise in 2011 to between $575 million and $625 million from $475 million in 2010.
That does not include contributions from Pride International Inc , which Ensco is buying in a deal that will create the world's second-largest offshore fleet once complete.
Ensco shares rose 1% to close at $53.63.
The situation remains uncertain in the Gulf of Mexico, where regulators are still working out how to proceed after last year's drilling disaster, and Transocean said it was in talks to move a deepwater rig out of the region.
But Noble offered a reason for US Gulf optimism after announcing a deal with Shell on Wednesday to keep the Jim Day rig there at an ultimate day rate of $485,000, plus 15% bonus potential.
US regulators will need to start issuing permits first, and a federal judge in New Orleans ruled last week that the regulators must decide on five pending applications by Ensco.
Ensco chief executive Dan Rabun said on a conference call yesterday that he hoped this may help to restart permits being issued in the Gulf.
Goldman Sachs analyst Daniel Boyd said he expected between 15 and 20 deepwater rigs to be working in the Gulf of Mexico by the fourth quarter, compared with seven now and 34 before the BP well blowout last April.
