Tuesday, April 24, 2012

HM arrives in Croatia for well earned vacation, locals star-struck

Just a quick one: HM Sultan Qaboos has arrived in one piece in Croatia, and is safe and sound on his magnificent yacht Al Said. Happy holidays your Majesty. Here's the story breathlessly reported by The Croatian Times.
Royalty arrives in Dubrovnik Croatian Times
The Sultan of Oman, said to be worth more than the Queen, arrived in the Dalmatian tourist city of Dubrovnik yesterday (Sun), reported Croatian daily newspaper Jutarnji list. After landing at Cilipi airport in his private plane, Qaboos bin Said Al Said, 71, was transported by helicopter to his awaiting 156 metre super luxury yacht "Al Said", which has been anchored in the Dubrovnik port of Gruz for the last 3 weeks, together with its accompanying boat for logistics "Fulk Al Salamah".

The Sultan was met on his arrival in Dubrovnik by Mayor Andro Vlahusic, who wished the Sultan a pleasant stay before he boarded his super yacht, which is currently one of the top five biggest yachts in the world.
It is unknown when the Sultan will depart, however, his two yachts are due to leave Dubrovnik on 5 May. There has been talk that the Sultan of Oman is in Croatia to look at possible investment possibilities.
Croatia is struggling a bit financially. You can see why they'd love some business from the State Investment Fund. I'm sure His Majesty will be well looked after.

I wonder where his flotilla will set sail for next?

Saturday, April 21, 2012

Omani terrorist arrests in UK. Plus, Government Gas contracts: When you've gott'em by the balls... Twist.

Breaking News: 3 terrorists were nabbed in the UK coming from Oman.

3 Arrested at Heathrow on Suspicions of Terrorism
By RAVI SOMAIYA
Published: April 20, 2012
LONDON — Three men have been arrested at Heathrow Airport and held on suspicion of “possessing articles and documents with intent to use them for terrorist purposes overseas,” the police said on Friday.

The suspects, residents of Britain’s second-largest city, Birmingham, were arrested Thursday night as they arrived from Oman. The police did not release their names.

The three, aged 33 to 39, were detained by officers from the West Midlands Counter Terrorism Unit as part of a “preplanned and intelligence-led” operation, the police said, that was not mounted “in response to any immediate threat to public safety.”

They were held under Section 57 of the British Terrorism Act. That law makes it a criminal offense to possess materials that create a “reasonable suspicion” that they are “for a purpose connected with the commission, preparation or instigation of an act of terrorism.”

A police spokeswoman said British officers had traveled to Oman to meet with the authorities there before making the arrests, but she declined to provide further details about the operation or to describe the articles and documents the men possessed.

Oman, a small Arab nation that borders Yemen and Saudi Arabia, has not previously figured significantly in Britain’s long struggle against homegrown groups of Islamic extremists who have roots overseas. Earlier this week the British government rearrested Abu Qatada, a Jordanian-Palestinian militant preacher accused of being one of Al Qaeda’s leaders in Europe, and said it would resume efforts to deport him.




A couple of other interesting news items over the past few days.

Potential for Shale Gas in Oman?The Ministry of Oil and Gas was touting Oman's potential for the new 'unconventional' shale gas (& oil) plays that are all the rage in the global oil market [a big 'thank you' to the good ol' USA for figuring that out for us, BTW].

It follows the recent expro on Oil and Gas held in Oman last week. Read all about it in the Oman Observer in a press release by His Excellency, Nasser bin Khamis al Jashmi, Under-Secretary, Ministry of Oil & Gas. The Government is desperate for gas, having over built LNG capacity and given away large amounts in gas contracts to stimulate associated industry in Sohar and Salalah. Oxy got the Mukhaisna oil field project mainly because it could bring gas for steam from Qatar, via its Dolphin project.

The Observer also had this cracker of a headline:

Oil and gas expo showcases OER tech[sic]

It seems the ace young Hacks reporters at the Government's news agency can't even spell the 3-letter acronym "EOR" correctly [that's Enhanced Oil Recovery chaps, EOR].


Shale Gas. Not cheap, but there could be an awful lot of it in Oman. At a price.

PDO was quoted as having a $20bln spend over the next 5 years, all of which will need to be paid from production sales. Not included in that cost is the vast amount of natural gas PDO consumes to get that oil. Steam EOR requires gas fired boilers, even if some are from secondary heat recovery units on power stations. On top of the steam, PDO consumes about 700 mega-watts of power, all of it generated by gas.

EOR and fraccing all this unconventional gas and oil is very expensive. Hell, they can't get that to pay in the USA at $3/MMBTU, and that's a country that can drill and frac holes fast and cheap.

The price of oil may well be high enough for PDO's steam and stuff to more than repay, but a market price for gas in Oman (or the region) doesn't exist!

British Gas walked on Oman's Abu Butabul gas find because the gas price was too low. BP are struggling along with the Khazzan gas field, which may pay at $2.50 in places. But in all this the price of gas is a huge issue.

If only the MONE Ministry of National Economy [now defunct] hadn't gaven away loads of gas Oman's gas to Industrialists at dirt cheap rates! $0.77 per MMBTU to the Indians (and yourselves with a carried 50%) for fertiliser; same $0.80 deal for the Wizard of Oz to make Methanol. Even more generous - non-inflating fixed price contracts too! [see the laments of MC passem]

Thus Oman, with no extra conventional gas and rising internal demand to meet power and water requirements, has 20% shut-in capacity in it's 3 LNG export trains as a result. And Japan is gagging for LNG right now. Oman needs more gas* to liquify and send to the Japanese. But looking for the stuff is expensive. And gas supplies are tight. You can't shut the lights off in Muscat. What to do?

The Minister and his undersecretary suggest Foreign Oil companies come in to Oman and invest risk capital to explore for these shale gas and oil deposits, outside the patch of the dominant player (& majority Omani Government owned) PDO and their infamous and productive 'Block 6' concession (The gas is owned 100% by the Government, by the way). After all, there may be opportunities for these companies to strike it rich if the gas price is high enough, and Oman keeps its promises on tax and other fiscal terms. And Oman would get the gas it craves.

Sounds good! Where do I sign?

* Technical Factoid. Selling Natural Gas is different to oil. Most gas is effectively sold 'in the ground' over a long time period. If Oman could be sure of getting more gas from somewhere else in the future, they could 'swap' this new gas for already developed and sold existing gas. Thus the new gas could be immediately sold using existing capacity for the LNG projects and from PDO, plus that would increase oil [condensate] production as an added bonus!

In Other News
It was reported yeaterday that The Ministry of Oil and Gas has decided to break its gas supply contract with their Indian partners in the Oman Fertiliser Plant, Oman India Fertiliser Company (OMIFCO), a joint venture firm between Oman's state-owned Oman Oil Co (OCC) and Indian co-operative firms KRIBHCO and IFFCO. This is a business originally designed as a way to convert cheap, really cheap, gas into Urea for export to India, and to stimulate nearby business and infrastructure. [for reference, $0.80 per MMBTU is about $5/bbl oil equiv.]

The Urea plant & port has already been built and is working, but any extra gas supplies implied as an option in the Gas Supply contract were quickly cancelled after comissioning.

Since then, Oman has now threatened to turn off the taps altogether unless the Indains agree to pay a lot more for the gas - from $0.77 (constant, no inflation) to $3.00 with inflation added every year. Not withstanding the contract signed by the Government to supply long term gas. Surprise!


Photo: The Minister of Oil and Gas renegotiates a Sovereign Omani Non-renegotiable long-term Gas Supply contract. Go ahead, make his day.


As reported in the The Indian Express


Oman cuts gas price to $1.5 per mmBtu, but with riders
New Delhi, Tue Apr 17 2012, 16:33 hrs

Oman has halved the price at which it will sell natural gas to an Indian fertiliser plant in the Gulf nation to USD 1.5 per mmBtu but has added an annual escalation clause.

Oman, which had previously proposed to raise rates of gas sold to OMIFCO's urea manufacturing facility at Sur to USD 3 per million British thermal unit instead of present price of USD 0.77 per mmBtu, has revised its offer to charge USD 1.5 per mmBtu, sources in know of the development said.

The Gulf nation has also set a rider that gas price would be hiked by USD 0.5 every year till it reaches USD 3 per mmBtu.

Oman India Fertiliser Company (OMIFCO), a joint venture firm between Oman's state-owned Oman Oil Co (OCC) and Indian co-operative firms KRIBHCO and IFFCO, produces about 2 million tonnes of urea a year at Sur for exports to India

Oman had contracted to selling gas to the plant at USD 0.77 per million British thermal unit for 15 years beginning 2005 but mid-way decided to hike rates to USD 3 per mmBtu from January 1, 2012 citing firming up of prices in global market.

"Oman has agreed to cut the price to USD 1.5 per mmBtu from January 1, 2012 and under the new mechanism the rate would be USD 1.5 per mmBtu from January 1, 2012, and then the price would be increased by USD 0.5 per year till it reaches USD 3 per mmBtu," sources said.

Fertiliser Ministry has also proposed to the Cabinet to accept the price increase by Oman as it is much lower than the global rates of natural gas.

"We have sent a proposal to the Cabinet that the hike in gas price be accepted," a senior Fertiliser Ministry official had said.

The Ministry argues that even at USD 3 per mmBtu, the gas supplied by Oman is cheaper than alternative fuel sources. Long term gas supplies in the international market are no less than USD 18 per mmBtu.

The official said Cabinet, which may consider the proposal as early as this week, would decide if India should drag Oman to arbitration for breach of signed gas supply contract.

The ministry believes that Oman may snap gas supplies to the plant once arbitration is initiated the OMIFCO would have to buy fuel from international market during pendency of the suit. IFFCO and KRIBHCO holds a stake of 25 per cent each in OMIFCO, while the rest is with Oman Oil Company.

"We are against the proposal of taking the matter to the International Arbitration Tribunal in London, as this could lead to disruption of supply from Oman," the official said.

OMIFCO ships around two million tonnes of urea, which is its entire production, to India under an agreement the country has with the Oman government.



The Indians initially choked, so the Omanis gave them a special discount for a couple of years, while still immediately doubling the price.

Ouch!

I wonder why the Indians didn't get the contract entered as a Royal Decree, which would make it more difficult to renege upon.

It's also a bit sad the way the Indian press headlines the article as a victory for India (Gas Price halves!). They are getting screwed.


Meh. Yanni. Whallah. What to do? We have no gas! Sorry.


If I were some of the other big industrial gas users: Vail [steel plant - needs lotsa gas], or The Wizard of Oz [2 Methanol plants - needs lotsa clean gas], or Alcoa [Aluminium plant - lotsa gas!], I'd be pretty damn nervous right now. Maybe time to do some lobbying and hire some lawyers.


Is this the start of a resource nationalism trend by stealth? Is the Government's policy to negotiate long term contracts in bad faith?





It does not encourage Foreign investors to bring the capital and expertise into Oman, when the agreed and signed legal, fiscal and contractual terms are held at the whim of the Government.

The business environment is bad enough. Oman's courts are already a minefield for outsiders. Employment law is a micro-managing mess biased toward the Oligarchs. Education is poor. And wasta is a huge tax on SMEs. Infrastructure isn't everything.

Is this what happen's when HM goes on vacation?

Saturday, April 14, 2012

HM Looks to Europe for some travelling, and Oman Cavalry set to dazzle at Queen Liz's big bash

It was nice to hear from one of my sources that HM will be visiting Europe - the Royal yacht Al Said is currently awaiting instruction in the beautiful port of Dubrovnic, stocked 24/7 with fresh chocolates and flowers no doubt. Al SAID, at 155m long, is so big it travels with a dedicated support vessel FULK AL SALAMAH, just 137m long.

The arrival of the 3rd largest private yacht in the world was enjoyed by the enthusiastic 'Boat Spotters'. Here's a nice video, in case you haven't seen Al Said.




(See youtube)

It's nice to see HM give the boats some use. He last visited Croatia in 2003 and brough along a whole retenue. He was expected to arrive by plane a couple of weeks ago, as reported on 30th March when the boat arrived in port.

Not only is the cruise season and tourist season well and truly open in Dubrovnik but it also seems today that the luxury yacht season is opening. This morning in Gru┼ż harbour the private yacht of one of the richest men in the world arrived. “Al Said” is the third largest yacht in the world and owned by the Sultan of Oman, Qaboos bin Said al Said. The 71 year-old sultan owns five yachts in total and Al Said is the largest measuring 155 metres and holding a crew of 140 and up to 65 guests. It is believed that the sultan will arrive tomorrow by private jet but the purpose of his visit is still unknown.



And what is cooler than to visit Europe with your own floating 7 star hotel. He deserves a good bit of R&R too. Having seen off the challenges of the Arab Spring and the Sohar & Salalah protests, new Majlis underway, new set of Government Ministers, and with Iran in talks, it's a great time for a vacation.

Also, I wonder if HM sees parallels between Croatia and Oman? The scenery is very 'Omani' around Dubrovnik. And there are similar issues of tribalism, tourism, competitiveness, unemployment, currency, & powerful neighbours. How to get Omani's more involved working in the services sector would be some good research. Croatia would love to get some of that State Investment Fund, so there will probably be deals afoot.

Of course one big reason for the trip to Europe will be for His Majesty to attend Queen Elizabeth's massive Diamond Jubilee celebration party.

It's at Windsor Castle from 10th - 13th May, in case you didn't get your invite yet. Everybody who's anybody will be there, Daaaarling!

"The World Comes To Windsor" will celebrate 60 years of the Queen's rule.


Oman will be helping the celebrations with it's own contribution to the pagent: A Passion for Tradition.

A Passion for Tradition by The Royal Cavalry of Oman.The Royal Cavalry and The Mounted Band will be performing along with The Royal Guard of Oman with 100 pure bred Arabian Horses, two drum horses and a Hanoverian ridden by the Conductor.


Awesome. Oman gets to represent the Middle East. Take that Dubai.

Photo: His Majesty Sultan Qaboos will be contributing a special Oman Cavalry & hoursemanship turn for Queen Elizabeth's Diamond Jubilee extravaganza next month.


MeanwhileIt will be interesting to see the fate of the unnamed unlicensed driver who killed 2 women in Marbella. Anyone have the details?

Muscat: A young man, driving without a licence, killed two people as death toll from road accidents last week reached 14.

The speeding driver ran over three women after losing control of control his vehicle in the residential neighbourhood of Mabella in Seeb district on Wednesday.

Two women died on the spot while the third is battling for her life at a hospital in Muscat. The driver escaped with minor injuries, Royal Oman Police (ROP) said on Saturday

"Five people were killed in Muscat last in road accidents as the countrywide count rose to 14," a spokesperson for the ROP's Public Relations Department said.



And yes, I know some of you are still waiting for Part 3. It's coming along. I'm a very busy Dragon right now!