Oil Prices Crisis: Saudi Arabia rules out production cuts

Saudi Arabian Oil Minister Ali al-Naimi talks to journalists before a meeting of OPEC oil ministers at OPEC's headquarters in Vienna in this file picture taken December 4, 2013.

REUTERS/HEINZ-PETER BADER/FILES

Saudi Oil Minister Ali Al-Naimi said on Tuesday he was confident more nations would join a pact to freeze output at existing levels in talks expected next month, but effectively ruled out production cuts by major crude producers anytime soon.

Addressing the annual IHS CERA Week conference in Houston, Naimi told global energy executives that growing support for the freeze and stronger demand should over time ease a global glut that has pushed oil prices to their lowest levels in more than a decade. 

"A freeze is the beginning of a process. If we can get all the major producers to agree not to add additional barrels then this high inventory we have now will probably decline in due time," said Naimi, possibly the world's most powerful oil policymaker.

But he was emphatic markets should not view the nascent agreement as a prelude to production cuts.

"That is not going to happen because not many countries are going to deliver," Naimi said during a Q&A session after his speech broadly restated the rationale behind Saudi Arabia's decision to maintain output in the face of tumbling prices.

"Even if they say that they will cut production they will not do it. There is no sense in wasting our time seeking production cuts. They will not happen."

Oil prices fell some 4 percent after Naimi's comments. Traders have been skeptical whether freezing production near record levels could support the market.

After a surprise meeting a week ago, Saudi Arabia, Russia, Venezuela and Qatar agreed to freeze production at January levels and Naimi predicted more support from other countries.

"Hopefully some time in March there will be another meeting and probably gather more agreements on freezing," he said.

Later on Tuesday, Venezuelan Oil Minister Eulogio Del Pino told Reuters he was seeking to convene a meeting of major OPEC and non-OPEC producers in mid-March, with more than 10 expected to sign on to the agreement.

Naimi did not address the issue of Iran, the biggest obstacle to a global deal to limit crude production, as it focuses on ramping up output after years of sanctions.

Mohammed bin Hamad Al-Rumhy, Oman's Minister of Oil and Gas, suggested Iran could be exempted from any Organization of Petroleum Exporting Countries' agreement because it suffered sanctions.

"One solution is that Iran is given time to ramp up production. This is up to OPEC and OPEC countries to decide." Al-Rumhy said.

Oman, the largest non-OPEC producer in the Middle East, would be willing to cut 10 percent of its production if a deal was reached, he said.

"One non-OPEC country is willing to join hands with OPEC, and that is us," Al-Rumhy added.

While Naimi's speech and subsequent discussion marked his most expansive public comments in months, he offered little new insight on the state of oil markets or the evolution of policy making in Saudi Arabia, the world's biggest exporter.

Instead, he sought to make peace with an oil industry that has struggled with the Kingdom's and OPEC's decision in late 2014 to refrain from cutting output to shore up prices, as it had done for decades.

Oil prices have fallen 70 percent since mid-2014 as surplus crude piled up.

"We have not declared war on shale or any given country or company, contrary to all the rumors," Naimi said in the speech. 

It was Naimi's first public appearance in the United States since the OPEC November 2014 meeting.

"We are doing what every other industry representative in this room is doing. We are responding to challenging market conditions and seeking the best possible outcome in a highly competitive environment."

He said the kingdom welcomed "all sources of supply," including shale.

"We are hopeful that the nimbleness and responsiveness demonstrated by shale oil producers will continue. These supplies may be needed quickly once markets balance and tighten."

Naimi also reiterated his longstanding position that Saudi Arabia was ready to meet customer demand, maintaining a cushion of spare production capacity and remaining open to "cooperative action" with other producers to create a stable oil market.

South Korea issues North stern warning after threat to hit presidential residence

South Korea’s President Park Geun-hye addresses the nation at the presidential Blue House in the capital, Seoul, on January 13, 2016. The North Korean military had threatened to blow up the presidential residence. (Photo by AFP)

South Korea has once again warned the North that its “provocations” risk speeding up the “collapse of its dictatorial system” following North Korea's threat to attack the South. 

The South’s Joint Chiefs of Staff issued the warning in a statement on Wednesday, responding to an earlier threat by the North Korean military to blow up the presidential Blue House in Seoul, AFP reported.

“North Korea must keep in mind that it will be responsible for all situations arising from its reckless provocations and we warn it will only speed up the collapse of its dictatorial system,” it said.

North Korea will face “stern punishment” if it ignored Seoul’s warning, the statement added.

The North Korean military had leveled the threat in response to the prospect of the South’s annual joint war games with the United States. Code-named Key Resolve/Foal Eagle, the drills are to be held in their largest-ever proportions in the next month.

Washington will dispatch 15,000 troops to the computer-simulated Key Resolve drill, up from 3,700 last year. The drill, which lasted 10 days in 2015, usually begins simultaneously with the Foal Eagle field exercise.

Pyongyang charges that the exercises are a rehearsal for invasion, while Seoul and Washington describe them as defensive.

North Korea, which is under United Nations sanctions over its nuclear tests and missile launches, accuses the US of plotting with regional allies to topple its government.

A South Korean K-1 tank disembarks from a ship on a beach during a joint landing operation by US and South Korean Marines in South Korea’s southeastern port of Pohang, March 30, 2015. (Photo by AFP

Pyongyang declared itself a nuclear power in 2005 and carried out four nuclear weapons tests in 2006, 2009, 2013 and 2016. It also launched a long-range rocket earlier this month reportedly aimed at placing an earth observation satellite into orbit.

Seoul and Washington have also announced a plan to install a controversial missile system known as the Terminal High Altitude Area Defense (THAAD) on South Korean soil as a means of countering North Korea’s nuclear arms and missile capabilities.

With Press TV

Orientation Course: On-line registration will not be extended - NYSC

The National Youth Service Corps (NYSC) has warned that online registration for the 2016 Batch `A` Orientation Course, for prospective corps members, will not be extended after the Feb. 28 deadline.

Mrs Bose Aderibigbe, the Director of Press Unit of the NYSC, gave the warning in an interview with the News Agency of Nigeria (NAN) on Tuesday in Lagos.

Aderibigbe said that the Stream I of the Batch `A’ orientation course would hold between March 30 and April 18 in various camps across the country.

She added that the Stream II of the same batch would start from April 27 to May 16 in designated states.

 The online registration started on Feb. 8.

The director explained that after registering on the NYSC portal, the corps members would get their call-up numbers.

``Prospective corps members shall wait until they get a Short Message Service (SMS) or an e-mail, informing them to go and print their call-up letters.

``They will get the information before March 30.

``Usually, it takes one week or few days to get this information before the orientation course begins.

Asked if the online registration is for foreign graduates only, Aderibigbe said that the scheme does not segregate its corps members.

``The registration is for both local and foreign trained Nigerian graduates,’’ she said. 

FG Has Scrapped Security Vote To Top Government Officials - Sources

The Buhari administration has ended the controversial practice of routine security vote allocation to top government, military and security officials, according to Sahara Reporters. 

Sources in the Finance and Budget ministries also said that the order extends to the President himself, and the Vice President.  

In recent decades, security votes became popular among politicians, military officers and public officers, especially presidents and state governors, as a vehicle for siphoning public funds.  As the nation became more and more enmeshed in official graft, however, the practice began to generate tremendous public criticism.

Observers say it was a relic from the long years of military rule, but became even more prevalent as from the Second Republic, and assumed a more dramatic and wider form in 1999. Apart from principal federal government officials, state governors and local government chairmen often allocate huge sums of money to their offices as ‘security’ votes, even as the country grew increasingly insecure. 

Government sources now confirm that as soon as the Buhari administration took power last year, a clear indication was given of the new direction when President Muhammadu Buhari asked accounting officers in Aso Rock to keep an eye on his own expenses and that of his deputy, noting that they both intended to run a transparent presidency, with zero-tolerance for corruption. Subsequently, the President directed that there would be no routine allocation of security votes to he or anyone else as had been the practice since 1983, in the report. 

For state governors, security votes often run into billions of Naira annually in many states.  While the actual amount that normally goes to the president was always sketchy, there have been clear indications that it runs into several billions of Naira, sometimes on a monthly basis.

For example, under the Goodluck Jonathan presidency, several security vote accounts have been discovered not just in the office of the National Security Adviser, the State Security Service and the military, but also in accounts of the Nigeria National Petroleum Corporation. 

In one particular instance, Mr. Jonathan approved a controversial payment of N2.4b in one day for the rent of 13 house boats for the use of the military in Niger Delta under the Joint Task Force Operation Pulo Shield.  In the memo for the payment, the former president simply asked the then Petroleum Minister to “release the sum from NNPC security vote.” 

The records show that the memo was approved by Mr. Jonathan on February 16, last year.  It turned out, according to security sources, that the payment for the rent of the house boats was more than sufficient to actually buy several more house boats. The money was cashed from an NNPC account in Zenith Bank, Maitama, number 023-01571-41-13-4 and paid into the Main Account of the Chief of Naval Staff.

Budget officials say while security chiefs and top civil servants argued for retention of security votes in order to take care of security contingencies, the President cancelled routine vote allocations outright, and cut security votes in the budget by 25%.

This means that the National Security Adviser’s office, the Department of State Security and the Department of Military Intelligence have had their budgets slashed by significant sums to reflect the president’s order to cancel routine allocation of security votes.

A source added that in a similar vein, the President and his deputy no longer receive huge sums of money normally released by the NSA’s office whenever they travel, as was the practice in past governments especially the Jonathan administration. 

Sources revealed that in the past when the president or his deputy traveled, not only did they receive routine estacodes, the NSA would bring along loads of hard currency drawn from the security vote, sometimes as much as $50,000 per trip, told Sahara Reporters. 

On learning of the practice, President Buhari is said to have given firm instructions to stop such practices, providing only that he and the Vice President would only receive civil service rated estacodes and daily travel allowance when they travel abroad, or locally.

A consequence of the new standard is that prominent Nigerians who visit Aso Rock and depart with huge bags or envelopes stacked with money no longer receive such treatment. A source in the presidency said when prominent Nigerians visit the president or his deputy these days, they only get a very warm reception, tea, water, sweets and kolanut, but that no money exchanges hands. Sources said such monies given out to prominent visitors were normally drawn from the security vote allocation.

Bolivia's Morales loses his fourth term bids

Morales helped lift millions out of poverty by more equitably distributing natural gas revenues [EPA]

Bolivian President Evo Morales has lost a referendum to allow him to seek a fourth term in office, his first direct election defeat since taking the reign in 2006, according to official results. 

With 99.41 percent of votes counted, the Supreme Electoral Tribunal reported on its website on Tuesday that 51.33 percent of voters cast "no" ballots in the referendum, against 48.67 percent voting "yes".

If Morales' party had won the referendum it would have allowed the president to run for re-election in 2019.

The outcome of Sunday's poll also blocks Vice President Alvaro Garcia from running again.

Morales, Bolivia's first indigenous president, helped lift millions out of poverty by more equitably distributing natural gas revenues, spurring the creation of an indigenous middle class.

But his governing Movement Toward Socialism party has been hit by scandals. The vote closely followed a revelation that Morales may have been personally involved in influence-peddling.

Until Sunday's ballot, Morales had won nationwide elections, including a 2009 rewrite of the constitution, with an average 61.5 percent of the vote.

The referendum's margin of defeat coincided almost exactly with two unofficial "quick count" samples announced on Sunday by polling firms.

The results showed allegations of vote fraud by some members of the opposition to be unfounded, said Jose Luis Exeni, a member of the electoral tribunal.

The vote count had been unusually slow and Vice President Garcia said earlier on Tuesday that the outcome would be a "cliff-hanger".

He claimed a right-wing conspiracy was "trying to make disappear by sleight of hand the rural vote that favours Morales." Garcia provided no evidence to back the claim.

Organization of American States (OAS) observers reported no evidence of fraud, and the OAS delegation's leader, former Dominican Republic President Leonel Fernandez, left Bolivia on Tuesday.

Opposition figures celebrated their projected victory.

"We have recovered democracy and the right to choose," said Samuel Doria Medina, whom Morales twice defeated in presidential elections.

Morales had said he was prepared to give up on a fourth term if voters rejected the bid.

"With my record, I can leave happily and go home content. I would love to be a sports trainer," the Spanish newspaper El Pais quoted him as saying.