Tag Archives: Oil

Our Investment criteria and Interests for 2016 and beyond

Dear Friends:

 

Following my joining the board of Elate Partners, www.elateinvest.com – a Chinese investment group backed by large institutional, strategic and wealthy individual investors from China – a lot of you have been asking me about the kind of deals Elate would be interested to invest in in partnership with Blackhawk.

 

Without further delays, here is the short list as per below

Guidelines

  •  Western Investment:
    • Hard asset-based deals that have “intrinsic values” of their own, for example mines, oil field, certain real estate;
    • Businesses with potential synergy with China;
    • Generally shy away from businesses that rely on services for revenue due to a lack of expertise
  • China Expansion:
  •  Technology-based and other businesses that could be transferred to China sometime in the future (regardless whether the US operation is kept intact or not);

For More: http://ziadabdelnourblackhawk.com/our-investment-criteria-and-interests-for-2016-and-beyond/

Thank you,

Wake up folks…. It’s all about Big Oil’s

Wake up folks…. It is high time to realize that the whole Syrian shenanigan was nothing but Assad getting in the crosshairs between his ally Putin and his Arab foes’ interests (Qatar and Saudi Arabia).

 

All the rest is for the birds… no matter what the US media leads you to believe.

 

No one gives a rat’s ass about 120,000 people dying or Assad playing with his toys…. It’s all about money, oil and power….. Very unfortunate state of affairs but true.

 

The fact of the matter is that Assad refused to sign a proposed agreement with Qatar that would run a pipeline from the latter’s North field, contiguous with Iran’s South Pars field, through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets – albeit crucially bypassing Russia.

 

Assad’s rationale was “to protect the interests of his Russian ally, which is Europe’s top supplier of natural gas.

 

For More: http://ziadabdelnour.net/its-all-about-big-oils-interests-stupid

Thank You,

Oil Geopolitics and Iran

There has been much fuss lately as to the huge impact a deal with Iran will have on oil prices globally.

I personally see the near-term impact on oil markets likely to be far less significant than most oil analysts predict, despite Iran’s large natural gas and oil reserves.

The bottom line is that a deal with Iran would likely add only about 500,000 barrels/day to the 90-million-barrel daily oil market over the next 12 months. This would be a non-trivial amount, but clearly not a “game changer”.

The baseline is for prices to return to about $70 for a barrel of Brent Crude in 2016. Additional supply from Iran would knock roughly $5/barrel off expectations – or less than one quarter of a standard deviation. Said another way, additional Iranian output could move prices lower, but many other factors, such as changes in global GDP or the return of Libyan oil, could prove more meaningful over the next year. What’s more, recent trading suggests the market has already priced in much of this risk.

Over the longer term, I believe an increase in Iranian output could be for sure significant. With investment and time, Iran could meet a greater share of global demand for oil and liquefied natural gas (LNG). It also could ship natural gas to Europe via pipeline, challenging Russia’s dominance.

The details of the contracts Iran signs with international oil companies will be telling. Depending on the terms offered to Western companies, other oil producing nations – Iraq, in particular – could feel the pressure. Increased competition for investment would be a material signal that lower prices will endure longer.

I still though believe that the key factor in the global geopolitical game of oil will be China not Iran.

China is today the second largest importer of oil in the world and its appetite for oil is all but insatiable, growing at 8 percent a year. They decided to go with cars instead of sticking with mass transit. Plus, factories that produce cars can easily be converted to military needs. I believe within twenty years they’ll have more cars than the U.S. and that same year they’ll be importing just as much oil as we do. So here’s the deal. They don’t have it. Want to guess where they get it from? Iran. They signed a deal saying if Iran would give them lots of oil, China in return would block any American effort to get the United Nations Security Council to do anything significant about its nuclear program. They’ve been doing a lot of deals with each other ever since. Oh yeah, these two countries are very cozy indeed. Anyway, China gets most of its oil from Iran. And they don’t just need oil—they need “cheap oil” because they sell the least expensive gasoline in the world. I think that’s to keep everybody happy driving all those new cars.

Bottom Line: Iran’s agreement with major world powers to curtail its nuclear program in exchange for the lifting of economic sanctions opens up the world’s fourth-largest oil reserves, second-largest natural gas reserves and an 80 million population to multinationals. But the strict, decades-old U.S. restrictions on doing business with Tehran, which predate the nuclear crisis and relate to other concerns such as terrorism support and human rights abuses, will remain in place.

What will be particularly difficult for American companies is if they are the only ones that are prohibited whereas the rest of the world will be trading. Problematic because every time you’re at a disadvantage relative to your foreign counterparts, you lose market share.

Is Water The New Gold?

It is a fact that water use is today rising at double the rate of global population growth owing to urbanization, more water-intensive agricultural products, growing industrialization of emerging markets and the impact of climate change. The supply of fresh water is relatively static; hence, the rapid rate of demand growth is, not surprisingly, causing some stress.

 
An estimated 1/3 of the world’s population currently lives in water-stressed or water-scarce countries. On the current trajectory, it is estimated based on most recent population projections (according to the Food and Agriculture Organization of the United Nations and the Geneva Conference) that by 2025 countries will have water demand in excess of supply and 64% of the world’s population will be under significant pressure.

 
The Middle East (and North Africa) has the greatest absolute and relative water supply problem, in fact classified as ‘high’ stress compared to the rest of the world which is classified as moderate (Asia) and low (all other regions).

 

For More: Is Water The New Gold?

Thank You,

The US Global Geopolitical Future

Well this encapsulates the American psyche to the letter for people who are still trying to figure out what American Power really means.

 
While I don’t approve of the American Global Empire, I respect the intelligence and drive of those tasked with maintaining and expanding it–and they number in the millions.

 
Bottom Line: There is only one nation-state which can project hard power today and it is the U.S.  A missile is not power-projection, because it exerts control over nothing; it is deterrence or threat, but not power that can be projected. Only aircraft carrier groups and the ability to transport an army by sea and air to any locale in the world is power projection.

 
It is a fact to everyone today that the U.S. is the only great power with true power projection because it alone has hegemony over the world’s reserve currency. The U.S. skims a stupendous arbitrage profit from creating dollars and exporting them in exchange for real goods.

 

For More: The US Global Geopolitical Future

Thank You,

Oil and Technology What Makes the World Go Round

Being both an oil trader and financier and tech investor, I am frequently asked about my general views on the oil and tech sectors at large given the ever changing financial and political disturbances out there.
Well for a start, you might think that tech is today in a bubble as a company whose sole product is a photo sharing app in which the pictures get deleted after they are shared just turned down $3 billion.

Maybe…. But the reality is that even if there is a bubble in the making there are really no consequences. Unlike the late 90s, technology is now established. If one company blows up, other entrepreneurs will start a new one or join someone else. So If you really think about it, the cost of failure has never been so low, ever.

By the same token, and for the sake of argument, I don’t think that the tech and software sector is even close to eating the world.
Take a look at the Fortune 500 2013 – Fortune on CNNMoney.com.  There are hardly any software companies on there. Google is #55 with a $52.2B in annual revenue. Facebook is barely hanging on at #482 with $5.1B in revenue.  The largest electronics company is Apple at #6 with $156.5B in revenue. The second largest is Hewlett-Packard at #15 with $120.4B.

Read More: Oil and Technology What Makes the World Go Round

Thank you

Ziad K Abdelnour

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