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Mohammed bin Salman, Saudi Arabia, Iran and oil December 15, 2017

Posted by hslu in China, 石油, 美國, Energy, Global Affair, Islam, Middle East, Military, Oil, Putin, Trump, U.S. Foreign Policy, 川普, 中國.
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Mohammed bin Salman’s ill-advised ventures have weakened Saudi Arabia’s position in the world


The failed policies of Mohammed bin Salman, the growing influence of Iran and the formation of Shia cresent are the primary reason that WTI is trading above $55 a barrel and Brent crude at $63 a barrel. A 20% war premium has been added to the price of crude oil contracts since November. It has gained more than 30% since the low achieved in late June of this year.

Saudi Arabia has been fighting a proxy war with Iran via Yemen for 2 years with little but many dead Yemenis to show for. Saudi’s oil infrastructure is now under external threat from Yemen which will keep the price of Brent crude at an elevated level. 

US shale oil production is expected to rise because WTI is trading at a few dollars below $60/barrel. However, since US exports very little of its oil, the spread between WTI and Brent crude will widen.

Source: CNBC

Source: CNBC

With WTI comfortably trading above $45 a barrel, roughly the average price of WTI for the past three years, oil company stocks should see a nice rebound in 2018. If the tension between Saudi and Iran flares up further, oil companies should see more upside too. 

With an young and inexperienced prince in Rydah colluding with a dotard and impulsive Trump in the WH, giant mistakes will continue to happen.

It is bad for the world.

It is good for China and it will be great for the US oil companies.

Putin is smiling too.


LOL: Canada, UK and USA December 12, 2017

Posted by hslu in 石油, 美國, Oil.
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Are the UK and Canada bad versions of the USA? 

by Richard Black https://www.quora.com/Are-the-UK-and-Canada-bad-versions-of-the-USA/answer/Richard-Black-31?share=7ee96cc7&srid=eBtU

Canada has a special place in my heart because I was assigned to work for MOCAN, that’s Mobil Canada, for a year and half. My condition to my manager for working up north was to send my family with me to the cold country.

He agreed and my family went with me to live in a city with 6 months of winter and 3 weeks of summer.

The oil field I worked on was called ‘Cold Lake.’ It was 3+ hours away from Edmonton. I sometimes took company’s small (seat 6) twin propeller plane to the field directly but most of the time I had to fly to Edmonton from Calgary and drove 3 hours to the field. To call it “in the middle of no where” or “鳥不生蛋的地方” is actually an understatement. 

Calgary could be very cold in the winter. Temperature dipped to -25 degrees F in the city and the coldest night that I had to out about and work around a drilling rig was -43 degrees F. That was cold indeed. Almost all cars were equipped with electric engine block heaters to keep the engine blocks warm. Without it, the engine block could be too cold and engine oil too viscous to to get car engines started in the morning or after work.  

The Canada I remembered was a slow-paced, easy going, lay back and friendly country. Tax was very high. Almost everything was more expensive than what we could buy in Dallas. Prices for things made out of cotton: socks, underwears, etc., were outrageous. Very few fancy cars on the road and houses for professionals were modest at best.

When I was there, WTI was less than $20 a barrel and oil coming out of ground of Cold Lake could only fetch $8 a barrel. It wss tough back then. MOCAN had to lay off 25% of its staff while I was up there. It was miserable. In the end, the SW SAGD project our team of engineers and geologists was working on was terminated because it cost more to produce each barrel than we could sell the oil for. Now, the SW SAGD process we pioneered has been successfully  applied in the field since late 1990’s all over Alberta. 

Well, we could have made a lot of money for Mobil and converted hundreds of millions barrels of heavy oil resources into reserves. Well, so be it because Mobil management wasn’t like Exxon’s management team. They has a long tern vision for what an oil company should be run. Mobil’s top management only cared for next quarterly results.

Exxon bought Mobil in 2000. 

It was ironic to note that Exxon’s Cold Lake operation was probably 100 times bigger than Mobil’s. They started to develop their Cold Lake field in the 1960’s and kept at it through thin and thick. Mobil shut our successful operation down because oil price was low.

I used to work on South Belridge December 3, 2017

Posted by hslu in 石油, Oil.
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One of the biggest US oil fields turns to an unexpected power source: solar


It is nice to hear these familiar names mentioned in the article seventeen years after I left Mobil.

Before bought by Exxon in 2000, Mobil owned a big chunck of South Belridge heavy oil field and sold part of the lease to Aera. I have traveled to Bakersfield so many times that I lost count long time ago.

The Bakersfield that I remembered was hot, dry, brown, dirty, hilly, sunny, noisy, sweaty, steaming and very boring. Air in the entire area smelled like the warm and smelly fume flying directly into your face from an hot asphalt truck you’ve been following for the last two and half miles. 

South Belridge oil field. Stock image.

Their Chinese restaurants sucked and one half-decent steak house served choice beef only. There was nothing to do after dinner at all. I sometimes drove to northern LA from Bakersfield after work so that I could have something good to eat. 

Massive amount of high pressure steam injection will continue for years to come and it will be hard to replace it with solar energy completely. What Aera plans to do is just the beginning. Other oil companies will look into this project a few years down the road and assess its viability for applications in other field. Without government subsidies, it is questionable whether solar energy can stand on its own feet. Not when natural gas is abundant and at such a low price. 

I’ll pay some attention on how it goes.

A bank of steam generators.

Petro renminbi? November 14, 2017

Posted by hslu in China, 石油, 美國, Economics, Global Affair, Middle East, Oil, Russia, U.S. dollar, 中國.
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Economist Jim O’Neill explains how the dollar will lose its ‘kingpin’ status – https://www.cnbc.com/2017/11/14/economist-jim-oneill-explains-how-the-dollar-will-lose-its-kingpin-status.html

It will happen and it will take less than ten years as speculated by O’neill.

One country at a time. Iran. Russia. Chinese are patient and methodical. They can wait. It is a decadeclong project for China and it started the effort a few years back already.

Saudi Arabia is the big fish but America will fight hard to keep the dollar as the trading currency for crude oil.

It will be futile for the U.S. as China is already the largest oil importer in the world. The culpit is none other than the shale oil American private companies are producing now for their short term gains. Without the growing domestic shale oil production, U.S. will still be the largest oil importer in the world. As such, there is no way that petro-dollar’s kingpin position can be challenged any time soon. 


What’s the benefit to U.S? October 6, 2017

Posted by hslu in Cold War, 美國, Global Affair, Oil, Trump, U.S. Foreign Policy.
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Other than tearing apart yet another work done by Obama, “de-certify” Iran nuclear deal, known as JCPOA, Joint Comprehensive Plan of Action, will not bring any discernible benefit to the U.S. 

It will make Trump the odd man out on the world stage. Again. It will make American economic sanctions less effective this time around without the backing of other five countries which signed the JCPOA. It will not bring Iran any closer to comply with the regulations of the JCPOA either. And it will further isolate America from the rest of the world.

It will, however, fulfill one of Trump’s campaign promises though. 

But, what can Trump or Congress do to prevent Iran from eventually becoming a nation with nuclear weapons?

Not much.

Inspections slowed down the progress of Iran’s nuclearization. American sanctions choked off Iran’s economic development, made Iranians suffer over the years but didn’t stop Iran from gaining necessary hardware and know-how to develop nuclear weapons since Iran’s Islamic revoluion in 1979.

So, what drives Trump do it and push the hot potato to the arms of the Congress? There are several possible reasons:

  1. Trump can wash his hands clean and check it off from the list of things he had promised to do before taking the WH? 
  2. Trump believes Iran will fall in line and negotiate a new deal with the U.S. when threatened by Trump.
  3. America wants to punish Iran because Iran has been accepting Renminbi, instead of U.S. dollar, for millions of barrels of Iranian crudes it has exported to China. This is a “big no-no” because it threatens one of the pillars of American hegemony in the world.
  4. Trump intends to take on China indirectly using Iran as a promixy. By imposing new sanctions on Iran, America can impose restrictions on Chinese banks and Chinese companies if they continue to do business with Iran thus slowing down the transformation from petro-dollar to petro-renminbi.
  5. Trump is the kind of person who “唯恐天下不亂”。He wants all the attentions in the world so that he medses up things in the world as much as he can.

What a “怪胎”!

Can you think of a better term to describe Trump the person?

Tilletson to get fired soon? August 31, 2017

Posted by hslu in 美國, Global Affair, Middle East, Oil, Politics, Russia, Trump, U.S. Foreign Policy.
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The primary reason Tillerson was selected by Trump to be the Secretary of State is Tillerson’s personal tie with Putin. His dealing with oil producing countries in the Middle East is certainly a big plus too.

However, with potential Trump/Putin collusion investigated by multiple parties in the U.S., Tillerson’s usefulness to Trump diminishes by the day.

Tillerson has now openly distanced himself from Trump on Charlottesville tradegy. Is Tillerson looking for a way out? Is Tillerson a few tweets away from being fired by Trump soon?

I think it will be wise for Tillerson to step away from the Trump administration because Trump is a boss who knows very little about how government works and how foreign policy should be conducted. 

Trump wants to cut the State Department by 25% and it is up to its new boss, Tillerson, to do the chopping. It puts Tillerson in such an impossible position to conduct his business. Tillerson should have told Trump that this level of cutting can’t be done in one fell swoop. 

It is Trump who doesn’t get it. It’s not Tillerson.

美國保守派白人的最後掙扎 August 17, 2017

Posted by hslu in Election, Global Affair, Globlization, Middle East, Military, Muslim, Oil, Politics, Russia, Trump.
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I can’t stop blaming you 

By Donald Trump


(I can’t stop blaming you)

I’ve made up my mind

To live in memory of my stupid times

    (I can’t stop pissing you)

    I have more foolish things to say

    So I’ll just tell my lies in dreams of yesterday

    (Dreams of yesterday)

    Those obama days that we once loathed
    Tho’ long ago, they still make me fume

    They say that I broke many laws 

    But laws mean nothing since I took the dump

    (I can’t stop blaming you)

    I’ve more foolish things to say

    To live in memories of my stupid times

    (I can’t stop pissing you)

    I’ve more foolish things to say

    So I’ll just tell my lies in dreams of yesterday






    川普除了放火燒自己的屁股,就沒有做幾件對美國有好處的事。他競選的支票沒有幾張兌現的。他兒子和蘇俄外交官與律師接頭以及川普修改他們會議的原因,遲早會帶給川普一大堆麻煩。還有 Mueller 的 grand jury 更是川普的剋星。川普就像一個火爐上鍋子裏的青蛙。水溫一點一點的增加,川普想跳也跳不出去,只有在裏面等水開了被美國最厲害的律師剝皮。




    BBC News: The end of the Anglo-American order? July 6, 2017

    Posted by hslu in China, Cold War, Economics, Energy, Global Affair, Globlization, Middle East, Oil, Shanghai, U.S. Foreign Policy.
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    I saw this on the BBC and thought you should see it:

    The end of the Anglo-American order? – http://www.bbc.co.uk/news/world-us-canada-40227270

    With China being the largest crude oil importer in the world, with Renminbi being accepted by central banks as a reserve currency and with Saudi Arabia and some OPEC countries don’t like what America is doing in the Middle East, is it likely that we will soon see crude oil being traded at Renminbi instead of the U.S. dollar? 

    Of course I am not talking about all oil trades will be settled on Renminbi but what about bi-lateral oil trades between Saudi and China and Nigeria and China. You know which side Rusdia stands on this. 

    The Renminbi bilateral swap lines between China and 33 (wiki data) other countries will be replaced with a new trading platform next year. In the past, these swaps were cleared by SWIFT which is under America’s influence. The new platform will be under China’s control and will be located in Shanghai away from SWIFT.

    The world order is fast changing in front of our eyes if you care to look.

    What comes next? February 4, 2017

    Posted by hslu in Cold War, Islam, Middle East, Military, Oil, Putin, Trump.
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    Okay. The war between the U.S. and Iran officially starts today. Trump won’t back down. Neither will Iran’s Supteme leader, Ali Khamenei. 

    The big question is this: which side will Putin be on: Iran or the U.S.? What about China?

    Armed confrontation is just a matter of time. Terrorist attacks against American interests, domestic and foreign, will intensity.

    Sooner or later, Iran will abandon U.S. dollar as the currency to buy Iran’s oil.

    Article: Trump to abandon millions of high-wage jobs to China January 8, 2017

    Posted by hslu in China, Economics, Energy, Oil.
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    Trump to abandon millions of high-wage jobs to China


    Well, in a way, China has no other option but to go renewables in a grand scale to clean its air and environment. It is also a good way to reduce China’s dependence on foreign oil. China’s market on renewable is so huge that China doesn’t need anyone else to make it to work. 

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