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Natural Gas Europe 08-Sep-16
Turkey has awarded Russian gas exporter Gazprom the first permits it requires for the development of the 31.5bn m³/yr Turkish Stream gas pipeline via Turkey, Gazprom announced late September 7.
According to the statement Gazprom has received the permits “through appropriate diplomatic channels” following a meeting last week between Gazprom CEO Alexei Miller and Turkish energy minister Berat Albayrak.
Gazprom referred to the meeting as having seen the two sides reach an agreement to finalise quickly all the necessary procedures for initiating the project and quoted Miller as stating:
“The issuance of first permits is good news for Gazprom. This move of the Turkish side reflects the interest of Turkey’s government in the Turkish Stream project and marks the transition to its practical implementation,” Gazprom said.
Following last week’s meeting Gazprom announced that the two sides had reached an agreement on the “earliest possible completion of the procedure for issuing authorizations” to enable the work on Turkish Stream to start.
Both Gazprom’s Turkish representative and Turkish energy ministry officials were unavailable September 8 to confirm exactly what sort of permits had been issued.
However they are likely to relate to the conducting of feasibility studies for the final section of pipeline running through Turkey’s European Black Sea Exclusive Economic Zone (EEZ) and territorial waters and the section running overland through Turkey’s European province of Thrace.
The main part of the offshore section of the line running through Turkey’s Black Sea EEZ was previously approved under Gazprom’s now abandoned project for a 63bn m³/yr South Stream pipeline across the Black Sea and through Bulgaria.
Gazprom last year completed an environmental impact assessment (EIA) report for the offshore and landfall sections of the new Turkish Stream project which was submitted to Turkey’s environment ministry for vetting.
Turkish Stream route (Credit: Gazprom)
Although the ministry web site indicates that the public consultation process for the project has been completed, as yet the EIA report has not received official approval.
No EIA report has yet been submitted for the overland section of the line owing to a succession of bureaucratic and political delays, stemming from the need for the two countries to conclude an intergovernmental agreement for the line before they finalise the overland route. Turkish media reported recently that Gazprom has started surveying land in Thrace.
UKB:160919:(25-SEP-16):Nicola Sturgeon ‘has abandoned 2014 referendum lies to argue for independence at any cost’
Daily Telegraph 19-Sep-16
Nicola Sturgeon has argued that Scottish independence transcends national wealth
Ruth Davidson has accused Nicola Sturgeon of abandoning the economic “tissue of lies” she tried to sell Scots in the 2014 referendum after the First Minister argued that national wealth is less important than being independent.
Speaking on the second anniversary of the historic vote to save the Union, the Scottish Conservative leader said “fantasy figures” on a separate Scotland’s wealth, oil revenues and deficit had formed an integral part of the SNP’s independence white paper.
But Ms Sturgeon used an article marking the anniversary to downplay their importance, instead arguing that the case for independence “transcends” all these factors and Brexit.
Ms Davidson said the SNP’s 2014 prospectus had been replaced with a “new mantra” that the economy does not matter and “people should just shut up about them and wrap themselves in a flag instead.”
David Mundell, the Scottish Secretary, said it was now clear that the SNP’s stance was “independence at any cost.” Recent Scottish Government figures showed Scotland has a £15 billion annual deficit, higher as a proportion of GDP than even Greece’s, following a collapse in oil revenues.
Both senior Tories also highlighted a new opinion poll showing two-thirds of Scots oppose a second independence referendum being staged before Britain leaves the EU.
John Swinney, the Deputy First Minister, ruled out a snap referendum by stating its timing would depend on how the Brexit negotiations proceed. However, he insisted that a rerun remained “highly likely” if Scotland’s links to the EU are not protected.
Both nationalists and Unionists marked the second anniversary of the 2014 vote, with Alex Salmond among the speakers at a rally in Glasgow and the Tories setting up stalls on high streets across the country to call on the SNP to rule out another referendum.
Ms Sturgeon promised Scots an oil boom if they voted Yes in the last referendum but, writing in the SNP-supporting Sunday Herald, she said: “Two years on from the historic vote of 2014, the fundamental case for Scotland’s independence remains as it was.
“The case for full self-government ultimately transcends the issues of Brexit, of oil, of national wealth and balance sheets and of passing political fads and trends.”
She argued that Scotland being pulled out of the EU against the will of 62 per cent of Scots was “probably the most striking and significant instance ever” of the UK’s democratic deficit and “should be of concern to everyone.”
But Ms Davidson said: “The economic case for independence two years ago was a tissue of lies. Fantasy figures on oil and our national wealth concocted to fool people and which fell apart under scrutiny. Now everyone can see Nicola Sturgeon’s sums don’t add up, she’s decided to abandon them altogether.
“Instead of trying to explain what would happen to our economy and how we fund our public services under independence, the new mantra is that none of these things matter anymore and people should just shut up about them and wrap themselves in a flag instead.”
Speaking on the BBC’s Sunday Politics programme in Scotland, Mr Mundell said: “I think it’s quite clear now that the SNP position is independence at any cost. The pretence that we had two years ago that somehow independence would be economically beneficial, that it would lead to prosperity in Scotland has been abandoned.”
Ian Murray, Scottish Labour’s Westminster spokesman, said Ms Sturgeon appears to have “learned all the wrong lessons” from the Leave campaign during the EU referendum by dismissing the need for economic details. He added: “What we’re talking about are people’s lives, livelihoods and the money they have in their pocket.”
Alex Salmond predicted on Friday that a second independence referendum would be staged in autumn 2018 but a Panelbase poll for the Sunday Times found only 33 per cent of Scots want a rerun before the Brexit negotiations have concluded.
It put support for independence at 48 per cent, three points higher than in the 2014 referendum but four points down on a similar poll conducted in the immediate aftermath of June’s Brexit vote.
This is also far below the level of support where Ms Sturgeon could be assured of victory, her previous litmus test for demanding a rerun, but Mr Salmond intensified his pressure on her to drop her cautious stance and press ahead anyway.
The former First Minister told Scotland on Sunday: “If I was willing to call an independence referendum in 2012 for 2014 on 27 per cent support, I’m not certain that Nicola will be too concerned about starting off with an average of 48 per cent.”
UKB-EU:160923:(25-SEP-16):‘Not worth it anymore!’ HAMMER BLOW for Juncker as nations dump EU trade deals post-Brexit
The Express 23-Sep-16
DEVELOPING countries are set to dump controversial trade agreements with the European Union en masse following the Brexit vote, leading economists have said.
The EU’s trade policy is in chaos
Up and coming nations in Africa and the Caribbean will no longer see any worth in being tied to dictatorial Brussels policies now that the UK is no longer part of the bloc.
And they could be about to torpedo the EU’s roll-out of Economic Partnership Agreements (EPA), which are designed to create a free-trade zone between Europe, Africa, the Caribbean and the Pacific.
That is the view of top academics Christopher Stevens and Jane Kennan, from the Overseas Development Institute, who say Brexit has given many governments an excuse to pull out of the deeply unpopular scheme.
Tanzania has already ditched a proposed deal between Brussels and the East Africa Community (ECA) countries, citing the “turmoil” engulfing the EU following the Brexit vote and the skewed terms of the agreement.
MEPs have warned the bloc is in danger of becoming irrelevant
The country’s Foreign Affairs permanent secretary Aziz Mlima blasted: “Our experts have established that the way it has been crafted, the EPA will not benefit local industries in East Africa. Instead it will lead to their destruction as developed countries are likely to dominate the market.”
And now the two trade experts have predicted that a number of other African and Caribbean countries will follow suit, because for most Commonwealth countries Britain is by far the biggest market for their exports.
In an essay on the future of Britain’s trade policy post-Brexit, the pair wrote: “Although some Africa, Caribbean and Pacific signatories have embraced the required policy changes, for many the whole EPA process remains deeply contentious.
“The post-Brexit announcement by Tanzania that it will not proceed with the East African EPA is merely the most recent example of delay and backtracking on implementation.”
A number of countries have been stalling on implementing the trade agreements, agreed as far back as 2008, over concerns about the power they will hand to Brussels to meddle in national affairs.
And the economists predicted that the Caribbean – held up as the ‘EPA poster boy’ by Brussels bureaucrats – could be the “first to split” and sink another key area of EU trade policy.
Even though Britain is no longer considered a “dominant EU importer” from Africa, Caribbean and Pacific countries it does still “absorb a significant share” of the goods those countries sell, they added.
The news comes as Europe’s much-vaunted trade clout withers away, with Brussels staggering from crisis to crisis as it tries to close out a number of flagship deals.
Trade deals with both the US and Canada are on the verge of collapse following a groundswell of public opposition, whilst EU leaders have been visibly unnerved by the enthusiastic response of the international community to Britain’s pledge that it is open for business.
Member states including Germany are trying to slow down and block the Government from negotiating new free trade deals with global superpowers like the US and China before Britain formally leaves the bloc amid fears the UK may prove to be vastly more successful outside the Brussels club.
They fear that if Britain prospers as a free nation already rebellious populations could be tipped over the edge, with eurosceptic parties taking control across the continent and dismantling the federalist project.
UKB-EU:160923:(25-SEP-16):Bratislava Summit: the future of the European project without the UK looks bleak
American Enterprise Institute 23-Sep-16
The meeting was meant to show a united front in the face of common challenges. The effect was far from convincing given the refusal of Italy’s Prime Minister Matteo Renzi to appear at the initially scheduled joint press conference with German Chancellor Angela Merkel and French President François Hollande. “I’m not one of those who [will] tell people after a summit that everything will be all right and that the roses are going to flourish,” Renzi said.
He is right to be disappointed. The summit’s conclusions are heavy with aspirational declarations but lighton specifics. This might come as a disappointment to those who argued that Brexit could provide an impetus for the EU’s much-needed reforms, which were supposedly held back by the UK’s uncomfortable position of never having been fully committed to the European project. More likely, the absence of the UK’s pragmatic, down-to-earth voice is already making compromises within the EU more difficult.
Obviously, the refugee crisis was high on the summit’s agenda. Yet besides affirming their willingness to assist Bulgaria with the protection of its border with Turkey, the 27 leaders did little besides stressing their commitment to the EU’s agreement with Turkey reached earlier this year. That deal, however, might already be crumbling, as refugee flows through the Eastern Mediterranean have intensified dramatically in recent weeks.
The Bratislava Roadmap expresses the intention to “broaden consensus on long-term migration policy,” which is necessary to preserve Schengen into the future. But the sad reality is that there is no consensus – in fact, member states are way apart, as the upcoming referendum in Hungary illustrates. Even if the idea of mandatory resettlement quotas, a major point of contention between the ‘old’ and ‘new’ Europe, is dropped, the bloc will not be anywhere closer to a common asylum policy.
A lot of attention in the document is spent, and rightly so, on issues of internal and external security and defence. Yet according to Walter Russell Mead at The American Interest, this mostly reflects the fact that, following the Brexit referendum, France has become the preeminent military power within the EU. An emphasis on military capacity plays to France’s strengths relative to Germany’s, and might herald a period of more assertive French leadership in the bloc on a whole range of issues. That is hardly good news for the EU’s reformist, lean government-friendly North.
More importantly, without the UK’s military, the EU’s common defence will always be something of a paper tiger. Should the EU take on a more assertive role, it will be necessary to work with the British anyway. But that has been made more complicated by the fact that the UK is on its way out of the bloc.
Nowhere was the absence of the UK’s pragmatic, pro-market voice more evident than in the discussion of economic questions in the Roadmap. I have argued elsewhere that sluggish economic performance gives fuel to populism on both left and right. It is, therefore, a matter of urgency that the EU become a vehicle for economic dynamism, not a drag on it. Unfortunately, the document gives little indication that the EU will go above and beyond business as usual.
Europe needs to do better. It needs an aggressive strategy to dismantle the existing regulatory barriers that are still dividing markets between the member states. It needs to review existing EU regulations, especially where they are hampering the innovation and growth of new industries. To survive, the Eurozone needs a sustainable model for fiscal governance, involving either some degree of federalization or binding fiscal rules. On all of these issues, the Bratislava Roadmap remains silent.
This is not a coincidence. In the past, it was the UK that was behind many of the EU’s liberalizing reforms, including the Single European Act. Without its presence at the table, the Nordic and Baltic states are already fighting an increasingly uphill battle against the forces of the status quo. The lack of any mention of TTIP is telling too, especially in light of the flak which the negotiations have taken in recent months. Instead, Europeans are only offered a largely meaningless promise of a “robust trade policy that reaps the benefits of open markets while taking into account concerns of citizens”.
If the meeting in Bratislava gives us any indication of the future of the European project without the UK, it is not an encouraging one. The bloc faces an assortment of urgent crises, solutions to which will require leadership, imagination, and strategic thinking. Last Friday, we saw evidence of neither.
Int. Chr. Emb. Jerusalem 23-Sep-16
In another blow to the effort to Boycott, Divest and Sanction (BDS) Israel, the London Stock Exchange Group’s ELITE international program signed a Memorandum of Understanding this week with Israel’s largest financial institution, Bank Hapoalim. “Israel is the start-up nation of the world, a powerful hub for entrepreneurial ambition, innovative investment activity and wealth creation,” said Nikhil Rathi, CEO of the LSE and its director of international development.
CV-CO:160923:(25-SEP-16):Pope Francis’ Canon Law Change Strengthens Evangelism With Eastern Churches
The Holy Father altered the Latin Code of Canon Law, citing the need for the Western and Eastern Churches to work together for the good of all the faithful.
Pope Francis has strengthened the Latin and Eastern Churches’ cooperative efforts in spreading the Gospel with a new decree that brings the Latin Church’s Code of Canon Law into harmony with the canon law of the Eastern Catholic Churches.
The new document from Pope Francis, issued motu proprio (on his own initiative), changes the Latin Church’s Code of Canon Law to harmonize with the existing canons on baptism and marriage in the Eastern Code of Canon Law governing the 23 other Eastern Catholic Churches spread throughout the world. It also strengthens the pastoral support for Eastern Christians in the West, reminding the faithful that they “are obliged to observe their own rite wherever they are,” and sends another powerful message in Francis’ papacy that the Catholic Church is a communion of co-equal sister Churches with their own rich rites and traditions deserving of mutual respect.
The Holy Father explained that since many Eastern Catholics have migrated to Latin-majority territories, he wanted the Latin Church’s law to promote “effective cooperation” between all Catholic communities of the Eastern and Latin Churches in any given territory. Bringing the Latin Code into harmony with the Eastern Code, he explained, would help protect and develop “these venerable Eastern rites” in the West, while respecting the traditions of the majority Latin Church.
Bishop Nicholas Samra of the Melkite Greek Catholic eparchy of Newton, Massachusetts, told the Register that the Pope’s changes would help the Eastern Church’s evangelical mission in the West.
“It strengthens the Eastern tradition, so it is very, very good,” he said.
The canons establish definitively in the Latin Church that only a priest or bishop — never a deacon — can be the minister for a valid marriage involving an Eastern Catholic or Orthodox person.
Bishop Nicholas explained that the Eastern Churches’ theology holds that the priest confers the sacrament of matrimony upon the husband and wife, meaning that deacons cannot validly confer the sacrament. The Latin Church has a different theology, where the priest or deacon is the Church’s witness, and the man and woman minister the sacrament of matrimony to each other.
The new canons also make clear that while a child to be baptized belongs to the sui iuris (rightful) Church of the father, the parents by mutual consent can have the child baptized in the mother’s sui iuris Church. For example, if the father belongs to the Latin Church but the mother belongs to the Melkite Church, and both parents want their children to belong to the Melkite Church and follow its traditions, they can elect to have their children baptized in the Melkite Church. But if there is no mutual consent to do this, then the child belongs to the sui iuris Church of the father — in the case of this example, the Latin Church.
The law also provides that spouses can transfer to the sui iuris Church of the other spouse — for example, from the Latin Church to the Maronite Church — at any time during their marriage. The spouse can freely return to the Latin Church upon the end of the marriage.
Bishop Nicholas pointed out that the Latin code no longer has a presumption that an unbaptized person should be baptized in the Latin tradition if they live in a Western country. Now, anyone over 14 years old seeking baptism can freely choose to be baptized and enrolled in the Latin Church or another sui iuris Church.
Doing Pastoral Paperwork
Dioceses and other ecclesiastic jurisdictions throughout the Latin Church have three months to put the new canons into operation.
“We’ll have to disseminate this to the clergy and inform them of the changes,” said Father Alexander Laschuk, a Byzantine Catholic priest and canonist who serves on the Archdiocese of Toronto’s tribunal.
He said the bishops’ conferences may want to decide first how they are going to implement and standardize the changes.
“These are now requirements that already existed in the Eastern code,” he said.
Father Laschuk said the biggest impact on Eastern Catholic faithful would occur in places like Western Europe, where large numbers of Catholics from Eastern Europe and the Middle East have either migrated or come as refugees, but do not have their own hierarchy or clergy to care for them. Such Catholics must rely on the pastoral care of the local Latin-rite bishop and clergy.
But the Pope’s directive also mandates the Latin Church track in its baptismal records to which sui iuris Church the baptized person actually belongs.
Father Peter Mottola, a canon lawyer in the Diocese of Rochester, New York, told the Register this provision will require Latin Church parishes to enter in the baptismal register whether the child baptized was “Latin” (belonging to their own church) or was “Chaldean,” if that was the particular Church of the father or parents.
This form of record-keeping was not previously required in the Latin Church. He said that dioceses will likely take up the question of exactly how the child’s ascription will be written in the baptismal register, such as putting it in a “general notes” field.
Father Mottola, a parochial vicar at St. Louis Church in Pittsford, New York, said his parish serves many Eastern Catholics already. The enhanced record-keeping makes sure that, in the case of an Eastern Catholic man who is married and seeks ordination to the priesthood in his tradition, the baptismal certificate will show his ability to do so.
“If you want to take up the heritage that is rightfully yours, you have the right to do that,” said Father Mottola.
Bishop Nicholas said the new rules for the Latin Church should reduce mistakes regarding sacraments for Eastern Catholics that come from Latin parishes not looking too closely at their paperwork.
“We’ve had to send notices that they did not check out the legal paperwork and this person was already confirmed,” he said. “That happens a lot.”
Orthodox Marriages and Baptisms
The new canons also allow priests to bless the marriages and baptize the infants of Christians from non-Catholic Eastern Churches (Eastern Orthodox, Oriental Orthodox or Assyrian Church of the East).
The law states that the local ordinary can give to any Catholic priest the faculty to bless the marriages of non-Catholic Eastern Christians if the faithful voluntarily ask for it and the priest prudently informs the appropriate hierarch.
The law also allows priests to baptize infants of non-Catholic Christians if one or both of the parents requests it and it is “physically and morally impossible for them to approach their own minister.”
However, Father Mottola indicated the canon raises the interesting question of whether requests for baptism will ever come from people in Protestant ecclesial communities.
Overall, Msgr. William King, a pastor in the Diocese of Harrisburg, Pennsylvania, and adjunct lecturer on canon law at The Catholic University of America in Washington, told the Register that the changes in canon law have “codified hospitality” between the Latin and Eastern Churches. He added that it is clear that the changes are part of Pope Francis’ sensitivity that the Latin Church needs to provide pastoral care and support to Eastern Catholics who have migrated to the West or come as refugees sustained only by the treasure of the faith as nurtured by the Eastern Churches.
The law is also a teacher, Msgr. King explained, and will help Latin-rite Catholics to broaden their understanding of the Church beyond their parish experience to realize the Catholic Church is actually a communion of Churches, united with the bishop of Rome, and that each have their own different “liturgical expressions, devotional and pietistic, and inculturation of the [Catholic] faith.”
“This motu proprio of Francis reminds us clearly and rather potently that the Latin Church is not the only Church within the communion of Catholic Churches,” he said. “It asks us to be mindful and attentive to the various cultures that may exist within our midst or within our neighborhoods.”
Peter Jesserer Smith is a Register staff reporter.
John L. Allen Jr.
As a non-Arab and a perceived friend of both Israel and Judaism, Italian Archbishop Pierbattista Pizzaballa may seem a counter-intuitive choice by Pope Francis as the new Apostolic Administrator of the Latin Patriarchate of Jerusalem. That, however, may just be the genius of it.
While the old saying “personnel is policy” applies in a variety of settings, perhaps nowhere does it hold as thoroughly as in the Catholic Church, where officials enjoy a wide degree of latitude in setting priorities and deciding how official teaching will be applied in their particular circumstances.
Nothing any pope ever does, therefore, is as consequential as the people he chooses to put in charge. On Wednesday, one of the more striking picks so far by Pope Francis officially took up his new duties, when Archbishop Pierbattista Pizzaballa formally entered Jerusalem through the Jaffa Gate to become the Apostolic Administrator of the Latin Patriarchate, which includes Israel, Palestine and Jordan.
Often when an apostolic administrator is named, it’s seen as an interim move. That’s formally true with Pizzaballa as well, although the perception both in Rome and in the Middle East is that he’s very much Francis’s man, and his “interim” role could go on a while.
The choice of the 51-year-old Italian Franciscan and former Custodian of the Holy Land in June was a head-turning move by Francis, for a couple of reasons.
First, while there’s a long tradition of Italians being named the Patriarch of Jerusalem, for the last thirty years the office was held by Arabs – Michele Sabbah, who served from 1987 to 2008, is a Palestinian born in Nazareth, and Fouad Twal, who led from 2008 until this past June, is a Jordanian.
Beginning under Pope Paul VI in the 1960s, the strong Vatican preference has been for local churches to be led by prelates indigenous to that culture, and it was more or less assumed that the era of “foreign” leadership in the Holy Land was closed.
Pizzaballa said Wednesday that policy remains in force, and, in a characteristically humble touch, added that he’ll serve only until a “proper and better candidate” is selected.
Second, while Pizzaballa is just too nice a guy not to like on a personal level (he’s a vintage Franciscan in that regard), it’s well-known that a segment of the clergy in the Patriarchate of Jerusalem has long looked on him with suspicion because of his closeness to Israel and Jewish culture.
Born in Bergamo, Pizzaballa went on to become a scripture scholar, doing his doctoral work at the Franciscan-run Biblical institute in Jerusalem. His specialty was Biblical Hebrew and Judaism, and for a time his command of Arabic was fairly rudimentary.
When he was working for the Franciscan Custody of the Holy Land, beginning in 1990, he was known for his fondness for the small community of Hebrew-speaking Catholics in Israel, and served for a time as the pastor of the Hebrew-speaking parish in Jerusalem. (There are now seven Hebrew-speaking Catholic communities in Israel, composed of a handful of Jewish converts as well as foreign students, migrants and asylum seekers and religious from around the world.)
From 2001 to 2004 Pizzaballa was the superior of a friary that occupies itself with the pastoral care of Hebrew-speakers, and in which the friars themselves speak Hebrew.
In the zero/sum political game of the Middle East, in which a friend of Israel often is automatically seen as an enemy of Palestine and the Arab cause, all that has made Pizzaballa suspect in the eyes of some Arab clergy, and something of an arresting choice to lead a patriarchate whose membership is overwhelmingly Arab.
(Pizzaballa also has a reputation for personal integrity and Franciscan-style simplicity, and in a neighborhood where management of church funds is a chronic headache, those qualities don’t hurt either.)
The counter-intuitive factors to the appointment, however, could just be the genius of it, depending on how things play out.
The Patriarch of Jerusalem is, de facto, a primary spokesman and point of reference for Christians all across the Middle East, and therefore a key interlocutor with both the international community and also the important regional players, which obviously includes Israel.
For the past thirty years, when many Israelis looked at Sabbah or Twal, no matter what they said or did, it was hard not to regard them at some gut level as the enemy – figures who represent peoples and points of view hostile to Israeli interests.
In general, because most senior churchmen in the region are Arabs, they naturally see the world through Arab eyes, and can at times come off as a bit partisan in their pronouncements on Palestine, on Syria and Iraq, and any number of other matters.
Pizzaballa not only doesn’t carry the same baggage, but he’s seen as a friend of both Judaism and Israel – someone who knows Jewish tradition almost as well as the most learned rabbis, and whose long experience of living in Israeli society has given him an insider’s grasp of its dynamics.
That’s not to say the new Apostolic Administrator is any kind of apologist for Israel.
When a wave of attacks on Christian churches by militant Israeli settlers rolled through the country in 2012, Pizzaballa was pointedly critical of what he saw as a failed security and police response. He’s been outspokenly against the construction of Israel’s security barrier between the West Bank and Jerusalem, denounced by Palestinians as the “apartheid wall,” taking part in protests in 2015.
On the other hand, Pizzaballa has been equally critical of what he regards as a tendency by Palestinian leaders on the West Bank and the Gaza Strip to scapegoat Israel for all their problems.
“If the weather isn’t good, the cause is the occupation,” he once quipped.
The fact that Pizzaballa is respected on both sides of the world’s most intractable divide was clear from the fact that Francis entrusted him with organizing his peace prayer in the Vatican gardens in June 2014, which brought together then-Israeli President Shimon Peres and Palestinian leader Mahmoud Abbas.
In a word, what Pizzaballa brings is balance – a quality sorely lacking in the Middle East generally, and, at times, even in the region’s ecclesiastical leadership. What Francis has done is to give the church in the Holy Land a chance to make a clean start under the leadership of someone who can speak credibly, and sympathetically, to everyone.
In a news conference following his official entrance on Wednesday, Pizzaballa said he sees Christian unity, inter-religious dialogue and the broader situation in the Middle East as among his immediate priorities.
Of course, given the long history of failed efforts to break the logjam in the Middle East, it would be highly unrealistic to suggest that Pizzaballa, by himself, will wave a magic wand and somehow get it done.
Still, if Pizzaballa is able to open channels of communication where they didn’t previously exist, that alone could make the appointment, however long it lasts, not only one of Francis’s most unusual but also one of his masterstrokes.
The Trumpet 20-Sep-16
For the “Quiet German,” who is the most powerful woman in the world, politics has long been a game of matching public opinion. “I’m going to be all things to all people,” Angela Merkel said after winning the German chancellorship in 2005. When Green leader Katrin Göring-Eckardt was asked by George Packer whether Merkel had any principles, she hesitated before saying, “She has a strong value of freedom, and everything else is negotiable.”
For 11 years, Merkel’s methods have worked. Even now many of her critics won’t deny that the economic picture is the best Germany has seen.
But a fault has recently appeared in the Merkel machine: She has gone against public opinion.
The Mecklenburg-Vorpommern state elections on September 4 proved that. The state makes up only 2 percent of the German population. Yet Spiegel called the elections a “vote about the chancellor,” the “Merkel-vote.” Her Christian Democratic Union (cdu) placed third, with a mere 19 percent of the vote. Ahead of it were the Social Democrats (spd) with 30.6 percent and Alternative for Germany (AfD) with 20.8 percent.
The AfD certainly addressed the concerns of the conservative citizens in Mecklenburg-Vorpommern, and, as Edmond Stoiber suggests, the cdu seems to have lost sight of the democratic right. However, as the Trumpet wrote in April, “People don’t really trust the AfD, but they don’t see an alternative—the [Christian Social Union] is only present in Bavaria.”
Two weeks after the Mecklenburg-Vorpommern state elections, on September 18, the scenario nearly repeated itself in Berlin. Merkel’s cdu recorded its worst result ever, picking up only 17.6 percent of the vote. The AfD rocketed, entering parliament for the first time with 14 percent of the vote.
Going Against Public Opinion
Russia’s annexation of Crimea in March 2014 was a turning point for Merkel’s approach to public opinion. Russian President Vladimir Putin had quickly and effectively gained territory, and the West was horrified. Although Merkel did not want to use military force, she promised that Russia would “not get away” with the annexation. She wanted a serious response.
Public opinion was against her. Spiegel reported that 54 percent of Germans believed the European Union and United States should accept Russia’s actions. A Pew poll revealed only 19 percent of Germans supported nato sending arms to Ukraine—the lowest percentage of the nato nations surveyed. Since then, the chancellor’s popularity has taken a beating. The Syrian civil war, which began in 2011, finally wreaked its consequences in Germany in 2014. Spiegel identified Syria as Merkel’s “biggest problem.” Merkel’s only guiding principle, as Katrin Göring-Eckardt said, has been “a strong value of freedom.” For the chancellor, that means allowing millions of migrants into Germany.
Two million migrants entered Germany in 2015. Around 860,000 of them departed at the same time, leaving Germany with 1.1 million more residents. In comparison, net immigration in the United States—where immigration has dominated political debates—was 1.7 million. America’s population is four times the size of Germany’s, with 27 times the land area. To match the magnitude of Germany’s issue, the U.S. would have to have immigration rates 2½ times greater than it has now.
To cap off the year of immigration, an estimated 2,000 “Arab” or “North African” men working in groups sexually assaulted around 1,200 women on New Year’s Eve in Cologne. The assaults were one of Germany’s biggest scandals in recent years, made worse by the “failure of national newspapers and public broadcasters to report on them until days after the event.”
Those who had reservations about the impact of Muslim immigration were swept over the edge with floods of outrage. That small minority of genuinely racist Germans now had a reason to scream. Arsons and crimes against refugee shelters increased 15-fold and fivefold respectively from 2014 to 2015. And yet, Chancellor Merkel stood by her migrant policy. Before the immigrants arrived, her popularity was at 75 percent. Halfway into 2016, it had dropped below 50.
Then came the Böhmermann scandal. It was underreported by international media—hardly anyone outside of Europe would know of the tv moderator and satirist, Jan Böhmermann, who works for German public broadcaster zdf. But his poem insulting Turkish President Recep Tayyip Erdoğan sparked a huge debate in Germany.
The German chancellor had been working overtime to broker a deal with Turkey to seal off migrants flowing in from the Middle East. The deal itself was controversial, and arranging it meant pandering to the Turks who have been trying to gain entry into the EU for years. In short, Merkel wanted to please Erdoğan. President Erdoğan saw the poem as an offensive attack on a foreign head of state and demanded Germany prosecute Böhmermann. Merkel jumped to Erdoğan’s aid, prohibited the publication of the poem, and allowed Böhmermann’s prosecution.
“We just experienced the beginning of the end of chancellorship #Merkel,” Oliver Kalkofe wrote on Twitter concerning the Böhmermann affair. “I am ashamed by the lack of spine.” As the scandal’s effects kicked in, we wrote, “At the beginning of April, 56 percent of the population was satisfied with Merkel’s policy …. But after Böhmermann’s poem, her popularity dropped by 11 percent—a big shift in German politics.” Notwithstanding the loud criticism of her migrant policies from supposed party allies such as Horst Seehofer, Edmund Stoiber and Karl-Theodor zu Guttenberg, prior to July, Merkel could point to the fact that no serious terrorist attacks had yet occurred on German soil.
July changed that when Germany suffered four high-profile killings in the space of only a week by men of Middle Eastern origins. The attacks were not on the scale that occurred in Paris and Nice, France. Nevertheless, after Merkel’s popularity experienced a brief bounce-back after Brexit, it declined drastically again. The popularity of Horst Seehofer, state premier of Bavaria and csu leader, experienced the inverse of Merkel’s decline. In all this, no single politician stands out as the successor to Merkel’s long reign. To the public, Horst Seehofer is not up to the job. He has done well when he criticizes Merkel, but you can’t base policy on accusations. Frauke Petry, of the rising AfD, is barely even trusted by supporters of her own party—most see the popularity of the AfD as protest votes. Veteran politician Edmund Stoiber has rejected a comeback—he says he’s too old—and is comfortable to continue “Merkel-bashing” in the beer halls instead. Angela Merkel won’t go down easily because she’s a brilliant politician—possibly one of the greatest of our time. cdu politician Rainer Eppelmann, who became close to Merkel after the fall of the Berlin Wall, said, “I have the impression that she thinks things over more carefully and is always a few moves ahead of her competitor.”
The chancellor isn’t oblivious to Germany’s problems. One senior official in her government described her as the “best analyst of any given situation that I could imagine.” But this time, she has decided to act contrary to public opinion. We are witnessing the decline of Merkel’s popularity. Next we will see someone who can give the public what it wants; a man for emergencies. Germany wants a man who will speak “plain-text” to the public. For years, the Trumpet has been watching for such a man. Read “A Strong German Leader Is Imminent” for more details. Chancellor Angela Merkel’s decline is inevitable. But what comes next will be more dramatic and is equally inevitable.
The Trumpet 23-Sep-16
“The charred lump of a 2,000-year-old scroll sat in an Israeli archaeologist’s storeroom for decades, too brittle to open,” wrote Daniel Estrin for the Associated Press on Thursday. Now, new imaging technology has revealed what was written inside: the earliest evidence of a biblical text in its standardized form. The passages from the book of Leviticus, scholars say, offer the first physical evidence of what has long been believed: that the version of the Hebrew Bible used today goes back 2,000 years. …
Researchers say it is the first time they have been able to read the text of an ancient scroll without having to physically open it. “You can’t imagine the joy in the lab,” said Pnina Shor of the Israel Antiquities Authority, who participated in the study. …
The biblical scroll examined in the study was first discovered by archaeologists in 1970 at Ein Gedi, the site of an ancient Jewish community near the Dead Sea. Inside the ancient synagogue’s ark, archaeologists found lumps of scroll fragments. The synagogue was destroyed in an ancient fire, charring the scrolls. The dry climate of the area kept them preserved, but when archaeologists touched them, the scrolls would begin to disintegrate. So the charred logs were shelved for nearly half a century, with no one knowing what was written inside.
Last year, Yosef Porath, the archaeologist who excavated at Ein Gedi in 1970, walked into the Israel Antiquities Authority’s Dead Sea Scrolls preservation lab in Jerusalem with boxes of the charcoal chunks. The lab has been creating hi-resolution images of the Dead Sea Scrolls, the earliest copies of biblical texts ever discovered, and he asked researchers to scan the burned scrolls. “I looked at him and said, ‘You must be joking,’” said Shor, who heads the lab. She agreed, and a number of burned scrolls were scanned using X-ray-based micro-computed tomography, a 3D version of the CT scans hospitals use to create images of internal body parts. The images were then sent to William Brent Seales, a researcher in the computer science department of the University of Kentucky. Only one of the scrolls could be deciphered.
Using the “virtual unwrapping” technology, he and his team painstakingly captured the three dimensional shape of the scroll’s layers, using a digital triangulated surface mesh to make a virtual rendering of the parts they suspected contained text. They then searched for pixels that could signify ink made with a dense material like iron or lead. The researchers then used computer modeling to virtually flatten the scroll, to be able to read a few columns of text inside. “Not only were you seeing writing, but it was readable,” said Seales. “At that point we were absolutely jubilant.”
Scholars have believed the Hebrew Bible in its standard form first came about some 2,000 years ago, but never had physical proof, until now, according to the study. Previously the oldest known fragments of the modern biblical text dated back to the eighth century. The text discovered in the charred Ein Gedi scroll is “100 percent identical” to the version of the book of Leviticus that has been in use for centuries, said Dead Sea Scroll scholar Emmanuel Tov from the Hebrew University of Jerusalem, who participated in the study. “This is quite amazing for us,” he said. “In 2,000 years, this text has not changed.”
FC:160923:(25-SEP-16):UN fears third leg of the global financial crisis – with prospect of epic debt defaults
Daily Telegraph 23-Sep-16
The third leg of the world’s intractable depression is yet to come. If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history.
It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity.
“Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out,” said the annual report of the UN Conference on Trade and Development (UNCTAD).
We know already that the poisonous side-effect of zero rates and quantitative easing in the US, Europe, and Japan was to flood developing nations with cheap credit, upsetting their internal chemistry and drawing them into a snare. What is less understood is just how destructive this has been.
Much of the money was wasted, skewed towards “highly cyclical and rent-based sectors of limited strategic importance for catching up,” it said.
Worse yet, these countries have imported the deformities of western finance before they are ready to cope with the consequences. This has undermined what UNCTAD calls the “profit-investment nexus” that ultimately drives growth and prosperity.
The extraordinary result is that some countries are slipping backwards, victims of “premature deindustrialisation”. Many of them have fallen further behind the rich world than they were in 1980 despite opening up their economies and following the global policy script diligently.
The middle income trap closed in on Latin America and the non-oil states of the Middle East a long time ago, but now it is beginning to close in such countries as Malaysia and Thailand, and in some respects China. “The benefits of a rushed integration into international financial markets post-2008 are fast evaporating,” it said.
Yet the suffocating liabilities built up over the QE years remain. UNCTAD says corporate debt in emerging markets has risen from 57pc to 104pc of GDP since the end of 2008, and much of this may have to written off unless there is a world policy revolution.
“If the global economy were to slow down more sharply, a significant share of developing-country debt incurred since 2008 could become unpayable and exert considerable pressure on the financial system,” it said.
“There remains a risk of deflationary spirals in which capital flight, currency devaluations and collapsing asset prices would stymie growth and shrink government revenues. As capital begins to flow out, there is now a real danger of entering a third phase of the financial crisis which began in the US housing market in late 2007 before spreading to the European bond market,” it said.
These are deeply-disturbing assertions. The combined US subprime and ‘Alt-A’ property exposure before the Lehman crisis was just $2 trillion, and Greece’s debts were trivial. What UNCTAD is talking about is an order of magnitude larger.
Views differ on whether the emerging market bloc is really out of the woods. UNCTAD says capital outflows reached $656bn last year after the US Federal Reserve turned off the liquidity spigot, and a further $185bn left in the first quarter of this year.
While there has been a respite over recent months thanks to the Fed’s retreat, UNCTAD fears that the underlying rot is pervasive.
We are left with a world in a state of leaderless policy inertia, unable to escape slow suffocation. Trade is stagnant. Deflation is still knocking at the door a full seven-and-a-half years into the economic cycle, even with the monetary pedal pushed to the floor. The next downturn will test this regime to destruction.
The UN’s diagnosis is that “shareholder primacy” and the entire edifice of liberal market finance are among the key culprits, all made worse by stringent fiscal austerity that has starved the global economy of sufficient demand.
Its prescription is radical. The world must jettison neo-liberal ideology, and launch a “global new deal” with a blitz of investment on strategic sectors. It wants a return of the “developmental state”, commanding a potent industrial policy, and backed by severe controls on capital flows.
“If policymakers fail to mitigate the negative impacts of unchecked global market forces, then a turn to protectionism could trigger a vicious downward spiral for everyone,” it said.
The UNCTAD critique – controversial to be sure – is that activist funds have acquired a stranglehold over the corporate management, leading to a culture of share-buybacks and the relentless extraction of profit. “Corporations are not reinvesting their profits into production capacity, jobs, or self-sustaining growth,” it says.
While the profit share of GDP has risen to an historic high of 36pc of GDP from 30pc in 1980, private investment has slumped to 17pc from 21pc. This accumulation of unused savings is itself a major cause of the deflationary malaise.
It also explains the conundrum of collapsing productivity. There is no need for the grim pessimism of Professor Robert Gordon, who thinks the great the spurt of human progress over the last 250 years is largely exhausted, supposedly because we have already made most of the great advances. Falling investment explains it well enough.
The UN’s advice to the emerging nations is to retake control of their destiny and turn the tables on the financial elites. They should impose capital controls, preferential tax treatment for retained earnings, and force fund managers to hold assets for longer. They should allocate credit without apology, and learn a trick or two from the Korea’s methods of “financial repression”.
It is not to everybody’s taste. UNCTAD’s manifesto of Left-wing proposals clashes with almost every nostrum taught in universities and business schools for the last two generations. Yet its arguments cannot be dismissed lightly, and its dissenting voice deserves to be heard.
The report puts the advocates of globalisation (as practiced) in a quandary. They – or we, perhaps I should say – typically argue that it has vastly raised the living standards of hundreds of millions of people across Asia.
It allegedly “works” for emerging nations, and this is cited as the paramount moral justification even if free flows of capital have regrettably allowed multinationals to fatten on ‘labour arbitrage’ and play off western wages at against low-pay hubs abroad.
But what UNCTAD shows is that globalisation has not in fact worked for these countries, bar a few exceptions. One starts to suspect that it works for nobody except the owners of capital and their close allies.
Besides, I have a hunch that UNCTAD’s moment may be coming. It was Britain’s Margaret Thatcher who kicked off the neo-liberal age of tax cuts, privatisation, and unfettered supremacy of the markets.
With uncanny timing – fit from a Conservative Party that has outlived every other major party in the world from sheer instinct and fingerspitzengefühl – Theresa May may now start to close that era with her embrace of industrial strategy.
What is clear is that world will soon need a massive and coordinated spending push by governments to create demand and bring the broken global system back into equilibrium. UNCTAD is entirely right about that.
If this does not happen, it is sauve qui peut.
UK-EU:160918:(25-SEP-16):Britain to block EU army. Nato rival will not happen, vows defence secretary
The Times 18-Sep-16
EU leaders discussed proposals for a “common military force” at a summit in Bratislava yesterday
Britain will veto measures to build an EU army for as long as it remains a member of the union, the defence secretary has warned.
Sir Michael Fallon’s comments came as it emerged that France and Germany had drawn up a timetable to create a “common military force” that would rival Nato in army capability.
According to a document discussed by EU leaders at a summit in Bratislava yesterday, the European Commission will put forward proposals in December for the common military force, with the aim of agreement by June next year.
Britain was not invited to the summit. Sir Michael said, however, that he was concerned about any move to create a force that would duplicate the military and defence role played by Nato.
“That is not going to happen,” he told The Times. “We are full members of the EU and we will go on resisting any attempt to set up a rival to Nato.”
Berlin and Paris are the main backers of the military proposals that aim to present the EU as a beacon of security and defence in a vulnerable world. The issue of an EU army will be at the forefront of a meeting of Europe’s defence ministers a week on Tuesday.
“We have always been concerned about unnecessarily duplicating what we already have in Nato,” Sir Michael said. The veto threat will further poison British relations with Brussels after the Brexit vote and harden attitudes in Germany and France against giving Theresa May concessions on access to Europe’s single market.
One EU diplomat said: “Threatening to block what we want to do is not going to make an already difficult negotiation easier when Britain comes cap in hand on Brexit next year.”
Donald Tusk, president of the European Council, said that there had been no substantial discussion on Brexit and emphasised that the EU “would protect its interests not those of the leaving country”.
“We are well-prepared,” he said. “We will be able to effectively protect our interests.”
Mr Tusk said that during recent talks in London with Mrs May, the prime minister had told him that Britain was not yet prepared to trigger the EU’s Article 50 exit clause. “She told me it was quite likely she would be ready maybe in January or February next year.”
The EU army timetable, drafted by Jean-Claude Juncker, president of the European Commission, commits Brussels to agreeing a three-point plan. All three measures have been vetoed by Britain over the past five years.
Mr Juncker’s proposals call on the EU to “establish permanent, structured co-operation in defence, including the creation of common battle groups to carry out military intervention in crises”.
The document, seen by The Times, also calls for the establishment of a “single operational headquarters for all EU civilian and military missions to be more efficient and quicker to act” and a “defence fund to boost investment in shared military capabilities”.
Angela Merkel, the German chancellor, said that talks would be held on the issue between Mr Tusk and Mrs May over the coming weeks. “We need more co-operation, particularly in the area of defence, and a lot more needs to be done on the Franco-German plan,” she said. “The UK remains a member of the EU and all of these issues have to be discussed.”
At a press conference with Mrs Merkel, President Hollande of France said: “The UK still has responsibilities.”
The new defence fund means that the EU will compete with Nato for cash for an embryonic European air force and navy through the Brussels budget for drones, cyberdefence, air transport and naval vessels.
Despite failing to meet Nato defence spending targets, European countries will be expected to pool billions of euros for dual-use assets owned by the EU that can be deployed for border and coastguard operations as well as military missions.
Jyrki Katainen, a vice-president of the European Commission, said this week that the plan would begin with assets “on the borderline of civilian and military use”. He told the Financial Times: “It would be EU-wide defence capabilities. We are talking about drones or ships, space capacities or cyberdefence technologies.”
Britain vetoed similar plans in 2011 and 2013 and after June’s referendum EU leaders had expected the way to be clear for realising defence ambitions championed by France and Germany.
The Baltic countries and Romania and Poland are uneasy about the EU military plan at a time when they are seeking more European support for the expansion of Nato’s defences on eastern Europe’s borders with Russia.
Sir Michael said that Brexit would not reduce Britain’s commitment to helping to defend the continent. He pledged extra troops for Nato battalions in Latvia, Lithuania, Estonia and eastern Poland.
“We will go on being committed to the security of the European continent,” he said. “We are not going to back out of our commitment to keeping Europe secure but we don’t want to see unnecessary bureaucracy at the EU level when we have got it in Nato.”
Martin Schulz, the German president of the European Parliament, said that Brexit would lead to Britain’s departure from the G7 group of the largest economies. “Why is the United Kingdom a G7 country; why is it the second economy in Europe?” he said. “With the unlimited access to the single market. And they cut it now? This is a lose-lose situation.”
The president’s party easily won parliamentary elections, despite lower voter turnout compared to the 2011 contest.
NEWS BRIEF Russian President Vladimir Putin’s United Russia party won a huge victory in the country’s parliamentary election Sunday, but voter turnout was low compared to the last election four years ago.
More than 90 percent of votes were counted by Monday morning, and Putin’s party had won 54 percent of the vote in elections for the Duma, the lower house of parliament. Both the Communist Party and the nationalist LDPR secured about 13 percent, while the social democratic party, A Just Russia, won 6 percent.
It was widely expected that Putin’s party would win. The results mean United Russia will take 343 of the 450 seats in the Duma. In the 2011 elections, the party won 238 seats. Sunday’s outcome means Putin’s party holds the largest-ever majority of seats. That, Reuters points out, is enough to allow the party to unilaterally change the country’s constitution.
The weekend election was also the first time the people of Crimea, which Russia annexed from Ukraine two years ago, voted in a Russian election as Russian citizens. As the BBC reported, voters in Crimea overwhelmingly supported Putin:
United Russia won all the region’s constituency seats, in a vote that prompted protests in the Ukrainian capital, Kiev.
Chechnya’s leader Ramzan Kadyrov – a firm ally of Mr Putin who runs his troubled North Caucasus republic with an iron fist – swept to victory with 98% support, with 78% of votes counted.
Voter turnout was the lowest in Russia’s modern history, with less than 48 percent of the eligible voters casting a ballot. In 2011, turnout was 60 percent. Widespread reports of vote-rigging led to protests in the country during that election, and this year the Kremlin sought to avoid allegations of tampering. Still, some stations did report vote-rigging. One video showed an election worker cramming ballots into a box, and in one part of Siberia, there were reports of “carousel voting,” in which a group of people are bussed to different voting stations to cast ballots more than once.
Putin is eligible to seek another term in 2018, when the presidential election is held, but he has not yet said whether he will run. The president’s approval rating is at 83 percent.
Egypt has attracted large and small producers, thanks to higher well-head prices and favourable geology. Its ultimate goal is not only self-sufficiency but a surplus for exports.
Egypt’s gas demand is 52bn m³/yr and is expected to continue rising and may reach 65-70bn m³/yr over the next ten years. A combination of a switch to renewables, lower subsidies, higher gas prices and an awareness campaign by the Egyptian government about more efficient energy use may help stem the rampant increase in demand. But even with these, without new gas coming online the gas deficit of 7bn m³/yr in 2015 will carry on growing.
The challenge is that gas production declined this year to less than 40bn m³/yr, owing to the policies of past governments, requiring expensive LNG imports as from last year. And if this decline continues unchecked, gas production may go down to 15bn m³/yr in 10 years, as most of Egypt’s existing oil and gas wells are either at maturity or beginning to decline. The oil minister said recently that Egypt is expected spend an estimated $8bn on energy imports this fiscal year – a drain on the country. It is currently importing about 1.1bn ft³/day (11.4bn m³/yr). Without new oil and gas production this will worsen.
However, Zohr and a number of new gas-field developments, spurred on by the new gas prices negotiated recently by the Egyptian government and the gas companies, are coming to the rescue, with BP and Eni leading the way.
Egypt’s hydrocarbons are produced in: the Western Desert, Eastern Desert, the Mediterranean Sea, Upper Egypt, Nile Delta, Gulf of Suez, and the Sinai Peninsula. Gas reserves are expected to grow mostly due to new discoveries in the Mediterranean and the Western Desert. While a lot of attention has gone to Zohr, most of Egypt’s oil and gas is produced from relatively small fields that are tied into regional gathering systems.
Egypt has revamped its energy sector strategy and is on a drive to increase oil and gas production. It is dealing with the crippling problem of energy subsidies and increased energy prices in August. Also in August, Tareq El Hadidi, the chairman of EGPC, told Reuters that state spending on petroleum subsidies dropped 23% year-on-year in the financial year 2015-2016 and further reductions are expected during 2016-2017. Egypt is also signing new exploration contracts, and has renegotiated new and higher gas prices, between $4/mn Btu and $5.88/mn Btu, that have prompted gas companies to speed up project development.
BP, Eni and other producers operating in Egypt stand to gain from this new pricing regime, which has become a massive incentive to develop new projects. And with a gas-hungry domestic market, they do not have to look far or hard to find end-consumers. Through its unused LNG plants, Egypt also has the capability to export excess production. Provided also the security and fiscal situation improves, so that Egypt can catch up and keep up payments to the upstream companies, there is a huge growth potential ahead for upstream companies operating in Egypt. However, there is still some way to go. By the end of June Egypt’s debt to international oil companies reached $3.4bn, up from $3.2bn last year.
New gas projects
Last year, Eni announced the discovery of the giant 100 km² gas field Zohr, in the Shorouk block about 190 km offshore and close to Egypt’s exclusive economic zone’s border with Cyprus. Zohr was drilled to a total depth of 4,130 m, in 1450 m of water. It is estimated to hold about 850bn m³ gas. This was confirmed by the first five appraisal wells just completed, which showed there is an upside in comparison to original estimates, increasing these to 907bn m³. Zohr was discovered in a Miocene carbonate formation with excellent reservoir characteristics with a 630 m hydrocarbon column and 400 m net play.
Eni plans to drill six appraisal wells by the end of the year, including a dedicated well to test out a deeper Cretaceous prospect this year. Based on evaluation of seismic data, Eni indicated that this may hold another 280bn m³ gas.
On September 1 it said its fifth well, drilled to a final depth of 4,350 metres, 12 km southwest of the discovery well Zohr 1x and in water depth of 1,538 m, confirmed the potential at 30 trillion ft³ (850bn m³). It proved the presence of a carbonatic reservoir and gas accumulation also in the south-west of the mega-structure, with a 180-m continuous hydrocarbon column.
The well was also successfully tested opening 90 m of the reservoir section to production and confirms the great deliverability of the Zohr reservoir, in line with the Zohr-2 well test, producing more than 50mn ft³/d, limited only by the constraints of the drilling ship production facilities.
In the production configuration, Zohr 5x is estimated by Eni as capable of delivering up to 250mn ft³/d.
Spurred on by an attractive gas price of up to $5.88/mn Btu, Eni and the Egyptian government agreed a fast-track development plan that will bring Zohr online by the end of 2017 with an agreed initial production of 10bn m³/yr, to reach a plateau of about 27bn m³/yr when full production is achieved by 2019, with a total investment of about $12bn. Eni’s CEO Claudio Descalzi confirmed that development has already started. In fact Eni is already investing $3.5-4bn in building a natural gas processing plant in Port Said with a capacity of 2.7bn ft³/day (28bn m³/yr) to process gas from the Zohr field and has awarded contracts for the construction of the first phase. Descalzi said Zohr gas will be “mainly sold on the Egyptian market.” But he noted that Egypt’s two LNG export terminals have enough spare capacity to enable some Zohr gas to be liquefied for export, especially if Eni discovers more gas beneath Zohr.
Descalzi told the Financial Times July 8 that the company hopes to sell a part-stake in the 30 tn ft³ (850bn m³ ) field in the Mediterranean by the end of 2017 and it has received several expressions of interest from majors and national oil companies. According to Reuters these include Lukoil, ExxonMobil, Total and BP. Descalzi did not say how large a stake it will sell, but said it would contribute to Eni’s target for disposals, and spread the risk of its Egyptian investment. An analyst told the FT that a 20% stake might fetch $1.6bn.
Eni, as the operator, and BP are also expanding development of Abu Madi West block in the Nile Delta through Nidoco North 1X in the Nooros prospect, having been successful with Nidoco NW3 late 2015. Last June BP and Eni announced their latest gas discovery in the area through the drilling of Baltim South West Well. Eni has also identified significant additional potential in this area, which will be tested through the drilling of two exploration wells. They have already increased output in the Nooros area this year, achieving 65,000 boe/day, about 3.7bn m³/yr, in May and plan to increase it to 140,000 boe/day, close to 8bn m³/yr, by end of 2016 through the drilling of additional
In August Eni announced that it aims to increase the Western Desert Noras field gas production to 1bn ft³/day (10.3bn m³ /day) at the beginning of 2017, up from 700 mn ft³/day in the current year and 300 mn ft³/day at the end of 2015.
The $12bn West Nile Delta (WND) Project involves the development of gas and condensate fields about 65 km-85 km off the coast of Alexandria. BP, as the operator, and DEA have started work on phase I, which involves the development of five fields – Taurus, Libra, Giza, Fayoum and Raven – to produce over 140bn m³ of gas and 55mn barrels of condensate. First production is expected to start in 2017, with peak production expected to reach 12.5bn m³/yr of gas.
WND also includes other discoveries – the Maadi, Viper, Ruby, Polaris and Hodoa fields – which will be further explored and developed in later phases. These are expected to produce another 140bn m³ to 200bn m³ gas, potentially adding another 12bn m³/yr to 16bn m³/yr to the Egyptian gas grid.
BP is also accelerating development of the 42bn m³ Atoll gasfield in the North Damietta Offshore Concession in the Nile Delta, with production expected to start in 2017. This is expected to add another 3bn m³/yr to Egypt’s gas grid.
With a market for its gas assured, and at attractive prices, BP plans to also step up investment in its existing operations through its joint ventures with GUPCO in the Gulf of Suez and the Pharaonic Petroleum Co (PhPC) in East Nile Delta with an estimated potential exceeding 140bn m³, as well as continuing to progress its exploration program in the Nile Delta. BP with its partners currently produces 30% of Egypt’s gas and expects to more than double this amount over the next four years.
BP’s North Africa regional president Hesham Mekawi said in an interview with Reuters that future discoveries will revive the Damietta LNG plant, and allow restart of Egyptian LNG exports. He added “There is still a lot of gas to be found in Egypt in the Mediterranean.”
Another successful operator in Egypt is Apache with major presence in the upstream rich area of the Western Desert. It operates there through its JV with EGAS, Khalda Petroleum, and increased gas production in 2015 close to 9bn m³/yr. Apache has allocated close to $1bn investments during the fiscal year 2015-2016 budget for the drilling of 94 development and exploratory wells. Apache is currently producing 9bn m³/yr gas and announced in August that it is planning new investments, including expansion of its activities in Egypt.
Apache, through Khalda Petroleum, has also embarked on an unconventional/shale gas exploration programme in the Western Desert through a JV with Shell as the operator with 52%, having agreed a price of $5.45/mn Btu. Three wells were to be drilled at the field by June, when Shell and Apache would be discussing the full-scale development of the project with the Egyptian government, but there are no news yet. Initial indications are good. The EIA estimates Egypt’s recoverable shale gas reserves at 2.83 tn m³, most of which are in the Western Desert.
Dana Gas Egypt and its partner BP successfully drilled Balsam-2 and Balsam-3 wells onshore Nile Delta in 2015, discovering new gas reservoirs, which could add close to 1bn m³/yr to the grid. In addition to Blocks 1 and 3, Dana Gas also has another three concessions onshore Nile Delta, the El Manzala, West El Manzala and West El Qantara. The concessions now consist of 14 development leases with gas and condensate production from 12 fields, and with a further two fields in development. Today, gas production is about 2bn m³/yr and 4800 b/day condensate. Dana plans to increase it to 2.5bn m³/yr and condensate production to 7000 b/day during 2016. As a result, Dana plans to spend $400mn in Egypt over the next three years on an ambitious E&P programme that includes drilling at least 20 development wells and up to 6 exploration wells. In August it announced that its gas production in Egypt increased by 11% year-on-year.
In the meanwhile it was reported in the Egyptian press that BG Egypt, now fully owned by Shell, and EGPC have patched up their differences on the gas price associated with the development of the West Delta Deep Marine Phase 9B project. The compromise appears to be that BG will receive an initial payment of £400mn towards its debt and will be allowed to export gas through Idku, but it has not been confirmed. Development of the project should then resume with the drilling of 15 wells, with production scheduled in 2017 and estimated to be over 4bn m³/yr. But so far the government has failed to fulfill this promise due to foreign exchange shortages. The total debt to BG has now increased to $1.1bn.
In the meanwhile, Shell announced in June its new plans in Egypt for the coming fiscal year 2016/2017. It plans to invest $342m in drilling 33 wells in its concession areas. This is down £100m on 2015/2016, reflecting the state of the industry but perhaps also Shell’s debt uncertainties in Egypt. It should also be remembered that Shell announced early this year that that it plans to end its oil and gas operations in 10 countries in order to reduce the company’s costs and streamline operations, but there are no details yet, except perhaps for Gabon.
Finally, EGPC has just signed a cooperation agreement with Edison International to develop the second phase of the offshore Abu Qir gas field. This is expected to add another 1.5bn m³/yr to the Egyptian gas grid, possibly in 2017, in addition to the 2.8bn m³/yr it produces now.
Potential for new discoveries
Zohr is encouraging oil and gas companies to look more carefully at carbonate formations in the eastern Mediterranean. The region has produced some significant discoveries in recent years and it is believed that the Med still has massive hydrocarbon deposits to be discovered.
Among the blocks close to Zohr, and east of Shorouk, are North Thekah and North Port Fouad operated by Italy’s Edison. 3D seismic surveys have been completed and Edison is in the process of planning its drilling campaign in North Thekah. It has been reported that initial indications are good. The plan is to tender for a similar survey for North Port Fouad by the end of the year and decide if and where to drill by 2018 or 2019. Eni has two other exploration blocks, North Leil and Karawan, west of Shorouk.
BG, now owned by Shell, has three offshore concessions, El Manzala, North Gamasa and El Burg, where two discoveries were made Harmattan Deep-1 and Notus with an estimated 170bn m³ gas. It remains to be seen how Shell progresses these.
Onshore prospects are also good, particularly in the Western Desert where Shell and Apache are drilling for shale gas.
Having awarded four offshore licenses last year, and 56 concessions in total between 2014-2015, Egypt plans to announce a new international tender in 2016 for 9 new exploration blocks in the Mediterranean sea. In August the government approved five oil and gas drilling and exploration agreements with foreign companies, that include BP, Eni, Total and Edison.
Based on the new discoveries and gasfield development described in this article, Egypt expects to more than double its current gas production by 2020, by bringing onstream another 50-60bn m³/yr gas. This was confirmed at the Offshore Technology Conference in Houston. In fact, two of the presenters said that gas production in Egypt is expected to increase by more than 90bn m³/yr by 2022, with increasing future prospects. Not only this is enough to achieve self-sufficiency, and do away with the need for LNG imports, but there should also be excess gas available for exports. The process has already started with two LNG cargos exported from Idku so far this year. It is expected that significant reductions in LNG imports should materialize from 2018 onwards.
From Egypt’s perspective, the good news is that it is not just Zohr coming to the rescue, but also development of many other smaller gas fields, spurred on by new government policies, higher gas prices and a guaranteed domestic market.
With BP planning to develop the other WND discoveries soon after phase I, Eni progressing with new finds, Shell and Apache progressing with unconventional/shale gas, and exploration and development of new offshore blocks, Egypt is experiencing a remarkable transformation and is well placed to continue expansion of is gas production well into the next decade.
The outcome of all these developments is a dramatic reversal of fortunes for Egypt from gas shortages to self-sufficiency and exports. The Egyptian gas sector is turning the corner as a result of better management and regulation, but also through the new and potential gas discoveries. Reversal of the decline in gas production started during Q1 2016 and by August production reached 4.2bn ft³/day (43.4bn m³/day). The Petroleum Minister stated in August that currently there are 13 projects being executed to develop Egypt’s natural gas fields with investments estimated at $33bn. These are expected to increase gas production to about 5.5-6bn ft³/day (57-62bn m³/yr).
These developments impact the hopes of its neighbours Israel and Cyprus to export their gas to Egypt. Not only this is commercially challenging, but the markets for it may no longer be available.
Times of Israel 24-Sep-16
Theresa May highlights Balfour Declaration centennial, vows to fight BDS and says ‘Britain would not be Britain without its Jews’
In her first address to the British Jewish community as prime minister, to mark the upcoming Jewish New Year festival, Theresa May praised the relationship between the UK and Israel and reaffirmed the British Government’s long-held position of support for Israel’s right to self-defense.
Writing in the latest edition of the magazine for the Conservative Friends of Israel, a pro-Israel group in her ruling Conservative party, May said that the UK’s relationship with Israel was “as strong as ever.” She heralded the close ties between the two countries, in particular in bilateral trade, scientific research, security cooperation and shared values.
May highlighted the fact that the UK and Israel will soon mark the 100-year anniversary of affirmation by then Conservative foreign secretary Arthur James Balfour of the “UK’s support for the establishment of a national home for the Jewish people” — in a document now known as the Balfour Declaration.
In a reflection on her first visit to Israel during her stint as home secretary in 2014, May wrote that she was “reminded of the deadly threats the people of Israel face every day, with the terrible news that the bodies of three missing Israeli teenagers had been found.”
Singling out the Hamas and Hezbollah terror groups, May said the “dangers that confront Israel remain considerable,” and pledged that the UK “must do everything we can to ensure [Israel’s] citizens feel safe and secure in their own country.”
Addressing Britain’s Jewish community, May said she was determined to “stamp out injustices,” including anti-Semitism in the UK and boycotts of Israeli goods and events. She also expressed her pride in working with British Chief Rabbi Ephraim Mirvis and the cross-party UK Holocaust Memorial Foundation to “deliver our commitment” to a new National Holocaust Memorial and an associated learning center.
“Britain would not be Britain without its Jews,” May wrote, wishing the community “Shanah Tovah” (Happy New Year) and a “happy, healthy and peaceful year ahead.”
Daily Telegraph 25-Sep-16
Liam Fox, the International Trade Secretary, will put Britain firmly on the path to withdrawing from the European Union’s single market in a dramatic speech this week.
He will make a major speech to the World Trade Organisation (WTO) on Tuesday, signalling the UK’s determination to take its place as an independent member of the international body, able to negotiate its own trade deals outside the EU.
At present, the UK is unable to strike free trade agreements with other countries because it is part of the EU’s “customs union”, which imposes common tariffs across the bloc.
“Britain is going to be open for business like never before, and we will use our new found position outside the EU to become the world’s brightest beacon and champion of open trade”Dr Liam Fox
Britain is represented by the EU in trade negotiations at the WTO, which deals with global trade rules between nations.
Dr Fox is expected to signal his strong intent that once outside the EU, Britain will take up a fully independent place at the WTO and will be free to strike competitive deals with countries across the world.
In order to achieve this, Britain would have to leave the EU single market’s customs union.
Officially, the Government is not saying whether it wants to remain part of the single market, the customs union, or to be completely free of all the EU’s trade structures.
However, Dr Fox’s comments are likely to be seen as a clear signal that the Government is preparing the ground for a “hard Brexit”, which would involve leaving the single market entirely.
He is expected to argue that Britain would be in a powerful position to influence international policy after Brexit and usher in more liberal rules of commerce because the UK is the fifth biggest economy in the world.
In remarks to investors last week, Dr Fox said: “One hundred and fifty years ago the UK was the world’s biggest trading nation, and now we will lead the charge again for freer and fairer global trade.”
The Cabinet minister’s intervention represents a significant moment in Theresa May’s effort to carve out a prosperous future for Britain outside the EU.
Mrs May and other ministers are focused on ensuring the UK gets a good trade deal with Brussels and leaves the EU on the best terms.
Many leading banks and businesses want the UK to keep its membership of the single market, or to retain as close ties as possible, in order to make it easier for them to continue trading across the EU.
There are signs, however, that senior ministers are ready to accept that retaining full access to the single market will not be possible.
As International Trade Secretary, Dr Fox’s role is to prepare the ground for new deals with countries outside Europe.
He has already begun informal discussions with Australia over a potential new trade deal after the UK leaves the EU. Downing Street is aiming to have a number of deals lined up and ready to sign on the day Britain exits the European bloc. New Zealand and Singapore are among the other countries to have expressed interest in striking a quick deal with the UK. Dr Fox has visited the United States, India, and the Gulf since being appointed to the Cabinet in July and next week he will stake Britain’s claim to a full, independent role at the WTO for the first time.
In previously unreported comments to a meeting of investors in Dubai last week, Dr Fox set out his view of Britain’s future trade policy outside Europe.
“Britain is going to be open for business like never before, and we will use our newfound position outside the EU to become the world’s brightest beacon and champion of open trade,” he said.
Leaving the EU gives Britain “the glorious opportunity” to “position ourselves at the centre of an increasingly interconnected world”, he said.
The UK has a legal system that is trusted by businesses around the world, a skilled workforce, low levels of industrial action, light taxes and regulations, and benefits from a favourable time zone for trade in Asia and America and the English language, he said.
“These fundamentals have meant that the British economy has proven resilient both before and after the referendum, despite the doomsday predictions that we were hearing,” Dr Fox argued.
“We are essentially at the heart of the new campaign for global trade liberalisation.”
Exports of goods, excluding diamonds, totaled $24 billion in January-June, compared with $25.3 billion in the first half of 2015.
The Israel Export and International Cooperation Institute today published figures showing a 5.7% drop in exports of goods, excluding diamonds, in the first half of 2016. Exports of goods hit their lowest point in the past six years, compared with the corresponding period in previous years. Exports of goods, excluding diamonds, totaled $24 billion in January-June, compared with $25.3 billion in the first half of 2015.
The Export Institute attributed the decline in exports of goods to highly concentrated sectors: pharmaceuticals, electronic components, and chemicals. In addition, there was a decline in Israel exports to key markets around the world accounting for a third of total exports, such as the US, UK, and China. Israeli exports of goods to countries like Turkey and India also fell.
The figures showed that Israeli exports of goods to the US dropped 3% to $5.4 billion in the first half of 2016, with exports of chemicals, electronic components, and pharmaceuticals leading the decline.
Exports of goods to the UK, Israel’s second largest export market, fell by a steep 17% to $2 billion in the first half of the year. The Export Institute attributed the fall in exports of goods to this market to export of pharmaceuticals, which account for two thirds of all Israeli exports of goods to the UK. At the same time, excluding pharmaceutical exports, Israeli exports of goods to the UK were unchanged. The Export Institute also explained that some of the decline in exports of goods to the UK resulted from the devaluation of the pound against the dollar in dollar-denominated export deals, even before the full effects of the UK’s exit from the European Union on the exchange rates are included.
Israeli exports of goods to China, Israel’s largest export market in Asia, were also hard hit in the first half of the year, falling 8%. The decline was led by exports of minerals, which plunged 77%, compared with the corresponding period last year, and electronic components, in which exports fell 28%, compared with the first six months of 2015. At the same time, excluding the decline in these two sectors, exports of goods to China were up 9%, compared with the corresponding period last year.
Exports of goods to India and Turkey were also down: exports of goods to India totaled $580 million, down 9%, compared with the corresponding period in 2015, when exports of goods to India jumped 21% as a result of defense industries’ deals with Indian defense agencies. These deals expired in the first half of this year, causing a fall in exports of goods to India.
Exports of goods to Turkey sank 35% to $625 million, on the heels of a 40% decline in exports of goods in 2015. On the other hand, exports of goods to some countries rose: to Spain (up 13%), Italy (4%), and Germany (3%).
The figures for exports of services, however, showed the opposite trend, with a 13% increase, putting total Israeli exports of goods and services in the first half of 2016 at $47 billion. The Export Institute attributed the rise in exports of services to higher exports of high-tech services.
Washington Post 25-Sep-16
A senior Israeli military official on Sunday said a massive underground barrier being built along the Gaza border to defend against Hamas tunnels should be finished in a matter of months, dealing what he said would be a serious blow to the Islamic militant group.
The Southern Command official said the structure was at the forefront of a new effort meant to rob Hamas of one of its most potent weapons.
During a 2014 war, Hamas militants on several occasions made their way into Israel through a tunnel network, though they did not manage to reach civilian areas. Israel destroyed 32 tunnels during that conflict, and since then has made neutralizing the tunnel threat a top priority.
The official, speaking on condition of anonymity under military briefing guidelines, said Hamas is now trying to restore its military capabilities, with its primary focus on building a subterranean warren of tunnels to hide from Israeli strikes and sneak into Israel to carry out attacks in a future round of fighting.
In recent weeks, Israel is believed to have begun work on a 60-kilometer (40 mile) underground barrier expected to stretch dozens of meters (yards) deep. Work crews have been spotted digging trenches and installing infrastructure in the ground.
In a briefing with reporters Sunday, the Israeli official showed video footage of heavy machinery raking the sandy border area, a series of holes drilled deep into the ground, a stretch of land the army has flooded, and some controlled explosions. The army also showed a photo of simulated tunnels where soldiers train for subterranean combat.
He declined to discuss specific features of the barrier being built, calling it a key strategic project. But he said the new wall will defend Israel’s border with Gaza both above and below the ground. The army’s goal, he said, is to turn the underground battlefield into a “death trap” for Hamas.
“It will take time to build it. It’s a big project. But it is a main goal,” he said.
Since the war, Israel has announced the discovery of several more tunnels. Israel has already surrounded Gaza with a sophisticated above-ground fence fortified with sensors, cameras, barbed wire and watch towers.
Hamas, an Islamic militant group sworn to Israel’s destruction, seized power of Gaza in 2007. Since then, the sides have fought three wars.
During the 2014 fighting, the group fired several thousand rockets and missiles into Israel. More than 2,200 Palestinians, over half of them civilians, were killed in the fighting, along with 73 people on the Israeli side.
The official said Hamas has been steadily rebuilding its capabilities since the fighting, though Israeli officials do not believe the group is looking for another round of hostilities for the time being.
Mushir al-Masri, a Hamas official in Gaza, said the Israeli efforts would fail.
“They must realize that they will not enjoy security as long as the Palestinian people don’t enjoy it,” he said. “The language of threats no longer terrifies our people.”
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