Canadian subsidiary invests in genocidal Sudan

Despite Sudanese state sponsorship of terrorism and its campaign of massacres by Arab Muslims against black Muslims and Christians, a Vancouver-based firm, Statesman Resources, has an African subsidiary that maintains an oil exploration concession in the Sudan.

This information comes from Jonathan Schanzer of the Foundation for Defense of Democracies.  Schanzer points out that although he believes such investment is legal, it is totally out-of-step with Western expectations about refraining doing business with the Sudanese:

Why is the West Doing Business with Sudan?

Jonathan Schanzer
5th April 2013 – National Post

What does Canada have in common with the regime in Sudan, which perpetrated genocide in Darfur, while allying with Iran and providing weapons to the Palestinian terror group Hamas?

In practical terms, they share very little. Ottawa withholds commercial support services and government-to-government development co-operation from Sudan. Canada’s parliament also has enforced sanctions mandated by the United Nations Security Council, including an arms embargo, as well as an asset freeze and travel ban on certain individuals.

Yet, somehow, it is legal for Canadian firms to invest in Sudan’s oil sector.

Just consider Vancouver-based Statesman Resources. The company owns 50.1% of an African subsidiary, Statesman Africa. In July 2012, Statesman Africa was awarded 75% of an oil exploration area known as “Block 14” in northwest Sudan, along Egypt’s southern border.

Preliminary estimates by Statesman Africa indicated that the block might have a “mean potential resource of 600 million barrels.” By November 2012, Block 14’s prospects looked even brighter. One estimate suggested that it held “1.5 billion barrels of gross un-risked prospective resources.”

According to the Associated Press, as of December 2012, Statesman Africa was “in the process of being formally registered in Sudan and opening an operational office in Khartoum.” According to the company’s CEO, Sudan’s state oil company, Sudapet, is “essentially … a joint venture partner.” Statesman must also work with Sudan’s Ministry of Petroleum, which is the regulatory authority.

To be clear, there is nothing illegal about Statesman’s investment in Sudan. Canadian companies are apparently free to do business with Khartoum. But in doing so, they are out of step with Canada’s otherwise sensible foreign policies in the Middle East.

Sudan, as noted above, is a patron of Hamas. It allows the group’s leaders to fundraise and train on Sudanese soil. It also was the origin point for Iranian-made Fajr 5 long-range rockets that were smuggled into Gaza and subsequently fired into Israel during the conflict in November 2012. This was not the first time Sudan helped Iran smuggle weapons into Gaza, either.

Canada has properly listed Hamas under its criminal code. There are severe penalties for “persons and organizations that deal in the property or finances of a listed entity. In addition, it is a crime to knowingly participate in, or contribute to, any activity of a listed entity for the purpose of enhancing the ability of the entity to facilitate or carry out a terrorist activity.”

Yet, somehow, it is legal to engage in business with Hamas’ patron, Sudan.

Sudan serves as an important hub for Iran’s terrorist training, financial investments, and the distribution of Iranian weapons to jihadi groups across the African continent. Canada has placed strong sanctions on Iran for its global terrorist activity and its pursuit of an illicit nuclear program. Yet, somehow, it is legal to engage in business with Iran’s close ally, Sudan.

This dissonance appears to be rooted in Canada’s focus on Sudan’s civil conflict, rather than its foreign policies. As one official government website notes, “Improved bilateral relations between Canada and Sudan are contingent on the Government of Sudan’s willingness to take steps toward maintaining a peaceful relationship with the Republic of South Sudan and its other neighbors, ending the current violence in Darfur and the transitional areas, and improving the overall human rights situation across the country.”

The United States, by contrast, lists Sudan as a State Sponsor of Terror. Khartoum earned this distinction in 1993 by allowing al-Qaeda to create its headquarters in the country during the 1990s. However, it remains on the list now for its close and continuing ties to both Iran and Hamas…

Read it all here.

By the way, Ken Rijock also advises entities doing business with Sudanese companies to obtain written assurances from them that their goods and services aren’t benefiting end users in Iran.  Statesman Resources wouldn’t want to run afoul of Canada’s sanctions on Iran by engaging in slipshod business practices in Sudan, would they?

Freedom from Arab oil boosted by record production in North Dakota

770,000 barrels per day closer to independence

Texas, federal waters, and North Dakota constitute the holy trinity of the U.S. energy production, and North Dakota contributes an increasingly larger portion of the total.

Bakken output puts us the U.S. closer toward energy self-sufficiency, which, over time, will mean less power for OPEC, fewer petrodollars going to state sponsors of terrorism, a decreased risk of supply interruptions, and less pressure for America to become involved in the squabbles of the Middle East.

This encouraging data comes to us from PennEnergy on Mar. 18 (hat tip to Steve Maley):

North Dakota oil production reaches new high in 2012

North Dakota crude oil production (including lease condensate) averaged an all-time high of 770,000 barrels per day in December 2012. Total annual production more than doubled between 2010 and 2012 through the use of horizontal drilling and hydraulic fracturing of deposits in the Bakken Formation in the Williston Basin. North Dakota production in 2012 trailed only Texas and the U.S. Federal Offshore region, and the state accounted for 10% of total U.S. crude oil production.

Much of crude oil production in North Dakota is gathered and transported by truck to railcars leaving the state. In the four counties where production is concentrated, about 75% of production is transported by truck, and this can cause supply chain problems at times. Severe weather can impede truck travel, which may lower oil production in the state. Once on-site storage tanks at production sites are full, production stops until the trucks can move again. For example, in November 2012 North Dakota crude oil production fell slightly from the October level to 735,000 bbl/d because of weather-induced transportation problems caused by an unusually heavy snowstorm. Pipeline networks, which can be more efficient and less subject to storm disruptions than trucking, are currently being expanded.

Weather slowing or halting truck transportation can also affect the completion of wells that are not yet producing. According to the North Dakota Department of Mineral Resources (DMR), almost all (95%) wells drilled in North Dakota use hydraulic fracturing to produce the crude oil embedded in shale rock and tight (low permeability) formations. To start production, each well needs hundreds of truckloads of material (900-2,000, including 800 truckloads of water, according to the DMR) on-site that are delivered by tank trucks to storage tanks, unless a sufficient quantity of water is available at the wellsite. The total amount of water needed for hydraulic fracturing must be at the wellsite before hydraulic fracturing can begin.

Because over 80% of North Dakota’s wells are located in only four counties—Dunn, McKenzie, Montrail, and William—in the northwest area of the state, harsh weather in these areas can reduce the state’s total crude oil production, as happened in November 2012 and again in January 2013.

It’s also worth noting that pipeline expansion would help even further—a point lost on extreme environmentalists and Democrats.

Oil discovered in Arabia 75 years ago this month

Standard Oil of California, which would later become Chevron, obtained a concession in the early 1930s to explore for oil in Saudi Arabia by paying $175,000 in gold up front.  After five difficult years of dry holes, Socal struck oil at Well Number 7 in the Arab Zone in March 1938.

Several years ago, Time magazine explained the significance of this discovery in a short article called “Finding the King’s Fortune“:

March 3, 1938

The king of Saudi Arabia, Abd-al-Aziz ibn Saud, had authorized a team of American engineers to explore the trackless desert bordering the Persian Gulf, an arid landscape marked only by the occasional palm-fringed oasis. He hoped they would find water. A tribal leader with precarious finances, Ibn Saud believed the Americans might discover places where he could refresh his warriors’ horses and camels. But the team, from Standard Oil of California, had something else on its mind.

Oil had been discovered in other countries in the region, and the engineers thought they would find more in Saudi Arabia. Over several years, they drilled more than half a dozen holes without result. In desperation, they decided to dig deeper at well No. 7. They plumbed to a depth of 4,727 ft. and finally hit what would turn out to be the largest supply of crude oil in the world.

The King did not appear to appreciate the news fully at first. It was an entire year after the discovery when he and his retinue arrived in a caravan of 400 automobiles at the pumping station of Ras Tanura to witness the first tanker hauling away its cargo of Saudi crude. Henceforth the King would no longer rely for income on the pilgrims arriving in Mecca, Islam’s holiest city. And his kingdom’s petroleum wealth would emerge as a crucial factor in Middle East politics and the bargaining over global energy supplies.

Princeton University professor Bernard Lewis has memorably described what this discovery of oil in Wahhabi-backed Saudi Arabia meant for Islam and the world today:

…Imagine that some such group as the the Ku Klux Klan or Aryan Nation were suddenly to come into the possession of unlimited wealth and use that money to set up schools and colleges all over the world promoting their particular version of Christianity and you get an idea of what has happened to Islam as a result of the enormous wealth that oil has brought to some people in Saudi Arabia.

It has enabled them to set up schools and colleges all over the Muslim world teaching their brand of Islam—this kind of fanatical, extremist version of Islam—which has thus acquired a scope and expansion which it could never otherwise would have had.  Without oil money, this kind of Islam would have remained a fringe group in a marginal country…

In addition to funding schools and Wahhabi causes around the world, Saudi Arabia has funded terrorism through two main methods:  1) governmental “charitable” foundations such as the Muslim World League, World Assembly of Muslim Youth, and the International Islamic Relief Organization, and 2) private zakat and sadaqa donations from rich Arabs—who themselves had become wealthy from oil and oil-related Saudi boom sectors in banking and construction—such as those listed in the Golden Chain document.

American security enhanced as OPEC weakens

Thanks to increasing U.S. and Canadian energy production, OPEC no longer induces the wild reaction among traders that it once did.  This according to investor Travis Hoium writing for The Motley Fool (with stock quotes omitted) last month:

Is OPEC Still Relevant in Oil Market?

The energy market used to hang on every word from OPEC. A reduction or increase in production could send prices rising or falling in an instant. But, earlier this week, the oil-producing group announced that it would maintain production where it is, and almost no one cared. There weren’t headlines on the evening news or endless analysis on cable television. It was a story that was over almost before it happened.

This begs the question: Is OPEC still relevant in the oil market?

It’s not what it used to be
To say that OPEC doesn’t matter would be silly. In fact, OPEC’s production has grown faster than world production over the past 20 years.

You could make the argument that OPEC’s influence globally has grown and, considering the rise in prices over the past 20 years, the economic influence of OPEC has arguably grown.

The difference in the past few years is who is buying OPEC’s oil and where these trends are headed. The chart below shows that while OPEC oil production has grown slightly over the past five years, the amount of oil produced in the U.S. and Canada has exploded.

This chart may explain why traders don’t react wildly to OPEC’s statements anymore. It isn’t the U.S., Canada, or even Europe who is heavily dependent on OPEC for oil these days. China is a growing customer of OPEC’s oil; roiling the one customer that is growing isn’t something OPEC is likely to do any time soon.

Impact on stocks
The impact of OPEC’s waning importance in North America can be felt on the stock market as well, particularly by shipping stocks like Frontline, Teekay, and Nordic American Tankers. These oil shippers are being affected by a dramatically reduced need for foreign oil in the U.S. and Europe, and they are all bouncing near 52-week lows.

Right now there’s no end in sight to the pressure on these stocks. With oil production up in non-OPEC countries the need for long-haul shippers is in a steep decline.

The trend will continue
The general trend of increased oil production in North America, and waning influence of OPEC here, is likely to continue. Companies like Continental Resources, Whiting Petroleum, and Kodiak Oil & Gas are still expanding production in the Bakken Shale play in North Dakota and Montana, the Saudi Arabia of North America.

As long as oil prices don’t drop dramatically, the expansion of oil drilling and oil sands production will continue. OPEC will have less influence on oil traded in the U.S. and oil prices felt here at home.

Not forgotten, but in a pickle
With OPEC’s place in context, I would say that OPEC isn’t the power it once was… but it could be. If OPEC decided to drastically increase or decrease supply it could again have a major impact on global oil prices. But that’s becoming less and less likely because of economic reasons within OPEC itself.

OPEC countries are reliant on the revenue that oil exports generate — disrupting supply right now could be problematic. Increasing supply could lower prices and put pressure on shale producers, but budget pressures on many of these member countries requires that they maintain a steady profit from oil. It’s not easy to double supply, but the price of oil easily could be cut in half if another 10 million barrels per day hit the market, for example…

Strong analysis.  On the other hand, OPEC will continue finding buyers in Asia and retain its position as a global power.  And rapid growth in Iraqi oil production could shift the dynamics in OPEC’s favor too.

But the best things about the possibly diminishing power of OPEC are a lesser likelihood of price shocks, less dependence on a volatile part of the world, and less money to fund terrorism.

Money laundering expert accuses Venezuela of massive uranium exports to Iran

One of Money Jihad‘s favorites, the Financial Crimes Blog by Kenneth Rijock, is making a disturbing allegation:  that Venezuela is illegally exporting massive amounts of uranium for Iran’s nuclear program, and that U.S. officials have rejected the evidence.  The “reliable sources” aren’t named and the “irrefutable, documentary evidence” isn’t specified, so take it with a grain of salt, but Mr. Rijock has proved to be very insightful and prescient before.

From Jan. 10:

US POINTEDLY IGNORES VENEZUELAN URANIUM EXPORTS

The United States, for reasons not known to this writer, appears to be deliberately ignoring the mounting indications of massive exports of Uranium, from Venezuela, to its end user, the Government of Iran. Reliable sources have confirmed that irrefutable, documentary evidence of same, from unimpeachable sources, has been politely declined when offered. America opposes Iran’s WMD programme, somebody has chosen to ignore the truth, when  it comes from Venezuela.

Given that close monitoring of Iran’s developing illegal Weapons of Mass Destruction programme has become an American obsession, I am baffled as to why actionable intelligence, regarding these outbound shipments is of no interest to America’s intelligence community. Vessels laden with Uranium  are leaving Venezuela’s Caribbean ports, steaming direct to Iran with their illicit cargo…

There’s a little more to the full post including Rijock’s speculation on the reason for the U.S.’s hear-no-evil, see-no-evil attitude here.

Energy security: the chokepoint risk factor

5 of 7 critical oil transit corridors are in Islamic world

Looking for another reason to support domestic energy production rather than heavily relying on the fragile political and security situation in the Middle East?  Energy independence from Arab oil isn’t just about reducing the flow of petrodollars to jihad—it’s about ensuring our energy needs are met regardless of the latest turmoil, attack, or unrest in the Islamic world.

This map and background from the U.S. Energy Information Administration should be enough to persuade most citizens that depending on stability in these regions of the world is an untenable proposition:

World oil chokepoints for maritime transit of oil are a critical part of global energy security. About half of the world’s oil production moves on maritime routes.

Chokepoints are narrow channels along widely used global sea routes, some so narrow that restrictions are placed on the size of the vessel that can navigate through them. They are a critical part of global energy security due to the high volume of oil traded through their narrow straits.

In 2011, total world oil production amounted to approximately 87 million barrels per day (bbl/d), and over one-half was moved by tankers on fixed maritime routes. By volume of oil transit, the Strait of Hormuz, leading out of the Persian Gulf, and the Strait of Malacca, linking the Indian and Pacific Oceans, are two of the world’s most strategic chokepoints.

The international energy market is dependent upon reliable transport. The blockage of a chokepoint, even temporarily, can lead to substantial increases in total energy costs. In addition, chokepoints leave oil tankers vulnerable to theft from pirates, terrorist attacks, and political unrest in the form of wars or hostilities as well as shipping accidents that can lead to disastrous oil spills. The seven straits highlighted in this brief serve as major trade routes for global oil transportation, and disruptions to shipments would affect oil prices and add thousands of miles of transit in an alternative direction, if even available…

Video: oil dependence

Do you want OPEC to keep calling the shots in the 21st Century?  Do you enjoy seeing American presidents literally holding hands with or bowing down to the Saudi king?

Regular readers know that this blog supports expanded domestic oil drilling to help North America decrease its dependence on Middle East oil.  Although Eyal Aronoff of the Fuel Freedom Foundation (@fuelfreedomnow on Twitter) offers a different course of action to deal with the problem of oil financing terrorism, this video as a must-watch:

Aronoff lays out compelling ideas for reduced oil dependence, and Money Jihad has as well.  Wouldn’t it be nice if national political leaders embraced just some of these ideas as part of a genuine “all of the above” approach to energy to reduce our reliance on Saudi sharia oil?

Flashback: Romney’s No Apology

Mitt Romney touched on several issues involving jihad and the necessity for energy independence from the Middle East in his book, No Apology.  Some of the governor’s comments—which suggest that he has a far clearer understanding of global threats, foreign affairs, and national security than his opponent—are worth revisiting today.  Romney wrote:

• Radical Sunni & Shia “endeavor to cause the collapse of all competing economies and systems of government.”
• “In all forms of energy, Russia already is the largest exporter in the world, actually outpacing Saudi Arabia.”
• “Our dependence on foreign oil rose from 42% of our total consumption in 1990 to 58% today.”
• “Massive Saudi investment in Islamic study centers in Western universities is designed” to lull the West into inaction.
• “The [Ottoman] empire’s wealth was amassed from pillage and taxes.”

A presidential candidate who actually defends America and who is critical of aggressive rivals?  Very refreshing.

Energy output falling on federal lands

One of the best developments of the last couple years has been increased energy production in the U.S.  No thanks to government policy, crude oil and natural gas production have grown on private land.  Meanwhile, oil and natural gas production on federally owned land have fallen during the Obama administration.

From Energy Tomorrow blog on Oct. 19:

…First, graphing U.S. crude oil production from federal and non-federal areas:

As you can see, U.S. crude production has increased steadily since 2008 (blue top line). Remember, the oil production timeline is a long one. Offshore and onshore projects can take up to a decade to develop, from leasing to actual production. Broken out by area, crude production on non-federal lands (69.7 percent of total production) has risen dramatically since 2010 (red line). Since 2010 crude production from areas controlled by the federal government has fallen (green line).

Here’s a look a natural gas production, federal and non-federal:

Overall domestic natural gas production (blue line) has climbed sharply – owing to advances in shale development through hydraulic fracturing and horizontal drilling. Look at the red line. Production from non-federal areas parallels the top line, indicating overall growth is being driven by production from areas not controlled by Washington. Indeed, natural gas from federally controlled areas started declining in 2009.

These charts suggest something important: Imagine what could happen with U.S. oil and natural gas production with increased access to public resources, with increased drilling. With the right policies in place the production line for federal areas could mirror that of the non-federal.

Actually, we don’t have to imagine too much. According to Wood Mackenzie’s analysis, we could see more domestic energy produced, more jobs and more revenues to government. In less than 15 years we could see 100 percent of our liquid fuel needs met through domestic oil and gas production, increases in biofuels and crude from friend and neighbor Canada. And we could see all of the plot lines on both these charts heading up, reflecting a more secure U.S. energy future.

As good as the increased growth overall has been to help wean America off Saudi sharia oil, think of how much farther we could be with energy independence if we had leaders willing to use the oil and natural gas sitting underneath land owned by the taxpayers.  We as taxpayers own the land, but we’re not getting a good return on our investment.

Offshore oil production fell 14% under Obama

U.S. energy independence has improved in recent years due to boosted output through hydraulic fracturing and higher production on privately owned land.

The U.S. would be even less reliant on Saudi oil, and could have moved faster on adopting sanctions against Iranian oil, if it weren’t for the Obama administration’s obstructionism on drilling offshore.

Check out this Romney campaign graphic which lays out Pres. Obama’s lousy record on energy:

Golden Chain document named Sheikh Yamani

Sheikh Ahmad Turki Zaki Yamani served as Oil Minister of Saudi Arabia (1962-86), OPEC Secretary General (1968-69), and as a former director of Saudi Aramco.  Sheikh Yamani played a central role in the 1973 Arab oil shock.

But the Arab oil embargo wasn’t Sheikh Yamani’s only act of economic aggression against the West.  If you accept the credibility of the Golden Chain document which named the financial sponsors of Osama bin Laden prior to 9/11, then Yamani is also culpable for funding Al Qaeda.

Additional background on both Yamani’s role in the embargo and the eventual discovery of the Golden Chain document comes to us from the website calibratedconfidence.com:

…The 1970s oil embargo is evidence enough that the U.S. economy is vulnerable to attack by politically motivated financial operators. BCCI [Bank of Credit and Commerce International] co-founder Sheikh al-Nahyan of Abu Dhabi initiated the embargo as a way to retaliate against the United States for providing military aid to Israel, which had just fought a coalition of Arab states in a war that broke out in October 1973. As Sheikh al-Nahyan has said, the idea for retaliating against the United States with an embargo came to him in consultations with his BCCI co-founder, Abedi.

The details of the plan were worked out with Sheikh Ahmad Turki Yamani, then the Saudi minister of petroleum; and Sheikh Abdel Hadir Taher, the governor of the Saudi state oil company Petromin. Both of those Sheikhs were also shareholders in BCCI. And the mammoth oil profits that these Sheikhs earned from the embargo were, to a large extent, delivered to BCCI, which opened for business just before the embargo went into effect. It was, in fact, this new oil money that made BCCI a powerhouse in the world of finance and a giant criminal enterprise capable of plundering the U.S. economy throughout the latter half of the 1970s and the 1980s.

Henry Kissinger once said that the oil embargo was “one of the pivotal events in the history of the [twentieth] century.” Kissinger was not referring to BCCI, but the emergence of BCCI as destructive criminal element was certainly an important outcome. And it is not out of the question that some of the acts that BCCI subsequently perpetrated against the United States were, like the oil embargo, motivated to some extent by ideology and the by the resentment that the sheikhs felt as a result of the 1973 Arab war with Israel. After all, a principal tenet of both Salafi Islam (the brand of Islam subscribed to by the sheikhs behind both BCCI and the oil embargo) and radical Shiite Islam (subscribed to by a number of BCCI’s key executives) is that Muslims should fight their enemies by “plundering their money.”

Regardless of what the motives of BCCI’s founders were in the past, it is clear that most of them are, to this day, major players in the global financial system. They have more than enough firepower to inflict damage on the U.S. markets. And, as the French intelligence report noted, “directors and cadres of the bank [BCCI] and its affiliates, arms merchants, oil merchants, Saudi investors” have been among the most important financial supporters of America’s Enemy Number One – Al Qaeda.

By way of introducing just a few of the billionaire BCCI figures who support Al Qaeda, I need to relate a story about Benevolence International, the Al Qaeda front that was accused by the U.S. government of having contacts with people trying to obtain nuclear weapons for Osama bin Laden.

* * * * * * * *

In 2002, U.S. soldiers stationed in Sarajevo raided the local offices of Benevolence International and found a document that referred to the “Golden Chain” – an elite club of twenty Saudi billionaires whom Osama bin Laden had identified as his most important financiers. These financiers not only delivered large sums of money to the prospective nuclear weapons proliferators at Benevolence International, but can correctly be understood to have been among Al Qaeda’s founding fathers.

Some highly regarded authors, such as Steve Coll, who is otherwise quite reliable (though arguably a bit over-reliant on his Saudi sources), have suggested that the Golden Chain members funded Al Qaeda only in its early years. This is false. Most of them continued to support Al Qaeda after bin Laden declared war against the United States and after Al Qaeda carried out the 9-11 attacks.

The Golden Chain document has, meanwhile, received virtually no attention from the media, perhaps because it would seem a bit “crazy” to suggest that Al Qaeda is a movement whose most important operatives are not rag-tag fringe fanatics living in caves, but rather the crème de la crème of Saudi society – the people who control much of the world’s oil wealth, the people who own the most powerful manufacturing conglomerates, and the biggest Saudi banks, and the biggest hedge funds, and the biggest stock brokerages, and the Saudi stock exchange itself.

One of the names on the Golden Chain list?  Sheikh Yamani himself.  Yamani struck at us once through the Arab oil embargo.  Is it so hard to believe that he would have attempted an encore performance by funding Osama bin Laden?