Exploring for Oil in Nicaragua: Friends in High Places

By: Oil & Energy Insider Analysts of Oilprice.com

On 17 July, Nicaragua announced that US-based Noble Energy would invest $30 million in drilling two offshore wells in the Caribbean—launching Nicaragua’s first-ever oil exploration. The wells will be drilled in the Tyra and Isabel blocks, which have undergone nearly 5,000 kilometers of seismic surveying since 2011. But Nicaragua’s first exploration will not go off without a hitch—namely, the revival of a nasty territorial dispute with Colombia, and another with Costa Rica.

In all Nicaragua is planning to offer up nearly 68,500 square kilometers of offshore Caribbean territory to explorers, dividing the area up into over 150 blocks.

This brings us to Noble Energy, one of our favorites over the past couple of years, but a company whose exploration bravado could land it in hot water—so we keep a close eye on developments. But here it’s all about who you know and who your friends are—and Noble’s got big friends in high places.

Noble Energy has minimal presence in Latin America, although aside from the Nicaraguan Caribbean, they purchased large areas for potential hydrocarbon exploration off the (also disputed) Falkland Islands (or Islas Malvinas, depending on your audience). Noble has built its company, in part, by drilling in unconventional corners of the globe, and the disputed waters between Colombia and Nicaragua are just such a niche.

Although Noble Energy is forging ahead with plans to drill for oil in Nicaraguan water, for most companies the potential downside of raising Colombia’s rankles outweighs the potential upside of a contract in Nicaragua.

Even before the International Court of Justice (ICJ) handed down a decision in late 2012 awarding the maritime territory to Nicaragua, Noble was preparing to get to work there. But Colombia is fighting to reverse the ICJ decision. This is a huge potential problem for outside investors with operations there and contracts with Nicaragua. Even if the bloc stays under Nicaraguan control, Colombia’s energy sector dwarfs Nicaragua’s, and drilling in the disputed area is almost certain to make Noble, and any other company working there, persona non grata in Bogotá.

Still, Noble is counting on projections that an investment of $335 million for at least five productive drills will yield 500 million barrels during the 20 to 30 year contract. They have the backing of one key man who has outlasted many and upset many predictions: Nicaraguan President Daniel Ortega, who will see revenues of up to $700 million a year if Noble’s projections are accurate.

Last week, tensions picked up momentum when Nicaragua’s promise became more than a threat—it became reality—when Noble’s Ocean Saratoga began drilling its first offshore exploration well. The well is being drilled 168 kilometers offshore from the Nicaraguan Caribbean coastal town of Bluefields. The first well will be drilled to a depth of 3,358 meters and exploration will be conducted over the next three months.

This is where Costa Rica comes in. Costa Rica, like Colombia, has its own claims. Specifically, Costa Rica claims maritime territory consisting of 18 blocks in the Pacific and 55 blocks in the Caribbean being offered up to explorers by Nicaragua.

Colombia’s Response

Noble’s endeavor has prompted Colombia to warn that it will under no circumstances allow oil exploration in the disputed territory. The Colombian president has also noted that its discretion on the issue for now should not be interpreted as inaction.

From Colombia’s perspective, this disputed area of the Caribbean sits in a UNESCO-sanctioned biosphere, Seaflower—home to a huge coral reef that should not be an oil-drilling target. A significant number of the blocks being offered up by Nicaragua for drilling are in this area. Also raising Colombia’s ire are the blocks located near the Colombian island of Quitasueno.

It gets even trickier when you consider that Colombia has controlled this territory since it gained independence in 1819—thanks to a number of treaties. However, those treaties—most recently one from 1928—are irrelevant, says Nicaragua, which claims that it was only signed under the pressure of US occupation. The ICJ rocked the boat on this late last year, ruling that Colombia has the right to seven islands in the territory but that Nicaragua should have the right to 70,000 square kilometers more than it was granted under those old treaties. Colombia is now challenging this legal assumption to the best of its ability. But the legal battle will extend further now that Nicaragua is seeking even more than the 70,000 square kilometers the ICJ thinks it should have.


Noble’s got its diplomatic work cut out for it, but its relying on full support from Ortega to deal with these territorial disputes. But there’s additional risk on this one as well. Nicaragua is uncharted territory, and the company itself notes only a 25% chance of success with its first well. This is just the test-run, intended to gather information for Noble’s Caribbean coast drilling ambitions, for which it plans to invest anywhere between $90 million and $335 million over the next six years, depending on how successful this first well is.

But Noble is opening up a Pandora’s Box here—much like it has in the Levant Basin with its wild exploration discovery of natural gas for Israel and a simmering dispute with Lebanon. So far, the company has managed to avoid getting entangled, but Nicaragua could be a legal headache—or worse. Where Noble is concerned, Colombia is the biggest problem, while the battle with Costa Rica is simmering faster on other grievances the country has with Nicaragua (and the US)—namely, ambitions to build a $40 billion Nicaragua Canal to rival the Panama Canal. Right now the most important thing to watch is the ICJ, which could be the kink in this chain.

By: Oil & Energy Insider Analysts of Oilprice.com

This report is part of Oilprice.com’s premium publication Oil & Energy Insider. Oil & Energy Insider gives subscribers an information advantage when investing, trading or doing business in the energy sectors. Successful investors, hedge funds and senior executives, have access to high level intelligence and power in ways that you, as an individual investor, are locked out of (the game is and never has been fair.) Let us help you level the playing field by using our network of traders, intelligence assets and high level partnerships to ensure you are making the right investment decisions.

To find out more on how you can get a legal inside advantage in the energy markets please take a moment to visit: http://oilprice.com/premium


Fifty Years After His Speech: What Would MLK Say?

By: Lloyd Marcus

My brother attended the red carpet premiere of his wife’s first big screen acting role at a Baltimore movie theater. Forced to park blocks away in the hood, after the movie my brother asked a friend to drive him back to his car rather than risk walking.

My brother said Baltimore black youths are out-of-control and extremely aggressive. He said if George Zimmerman was on one street corner and black youths were on the other, he would choose to walk past Zimmerman. “I’m not afraid of Zimmerman. I’m afraid of us!

Our conversation came on the heels of the 50th anniversary of the March on Washington where Dr Martin Luther King, Jr delivered his historic remarkably inspiring, “I Have a Dream” speech.

As expected, the Race Industry is exploiting the 50th anniversary the same way they exploit Black History Month every year to further their false narratives that race relations in America have progressed very little since the 1950s, white America is eternally racist and more entitlement programs, government freebies and lowered standards are needed to give blacks a fair shot at the American dream.

I had a dream. MLK and I met for lunch. Though a bit star struck in the presence of an American icon, I brought the eager to know Dr King up to date on black America’s progress since his tragic departure.

Black out-of-wedlock births are over 70%, three times the level of your day sir. http://bit.ly/soX1oJ

The new normal in the black community is “baby daddy” rather than husband and father.

Murder rates for blacks are up to 8,000 to 9,000 per year in America; 93% perpetrated by other blacks. http://bit.ly/XTGxhx Why are we killing each other? Some say it’s the white man’s fault.

Yes, Dr King, your memory is correct. Black poverty was on the decline. But in 1965 Democrat president Lyndon Johnson launched his so-called War on Poverty which destroyed the black family by government replacing fathers in black households; resulting in black poverty increasing ever since. http://bit.ly/12LBk0K

Did I tell you about the epidemic of black youths dropping out of school? http://fxn.ws/1bO0MIV Considering that high school is free, I do not know why blacks are not completing high school. Black so-called advocates (the Race Industry) say it’s white America’s fault. I agree with you sir, their accusation makes no sense to me either.

Dr King your mastery of the English language is somewhat frowned upon today. Some would accuse you of trying to be white. Using gangsta rapper terms such as “creepy ass cracka” and “nigga” is celebrated as down-for-the-struggle authentic blackness in America. No sir, I said, “gangsta” not “gangster”. Its a cultural thing.

Dr King you won’t believe it, but America elected its first black president. No, not Jesse. The bad news is under president Obama, black unemployment has risen to unprecedented levels. http://bit.ly/12WFbrs

Oh, remember that thing you said in your speech about dreaming of a day when people would be judged by the content of their character rather than the color of their skin? Democrats threw that idea out the window a long time ago.

Democrats and the Race Industry learned that if they can make every political issue about race or skin-color, they win every time because nothing scares whites more than being accused of racism.

Well sir, not much is being done to rectify the issues plaguing black America. Black conservatives such as myself who call for blacks to rely less on government and to accept responsibility for their lives are shouted down and called Uncle Tom sellouts.

Since you’ve been gone, Democrats have owned the black vote (well over 90%). Democrats continue to lower standards and expectations for blacks, offer more entitlements and promise to keep mythical evil racist white conservative Republicans at bay.

Dr King, is there something in your eye? No need to apologize sir. I share your pain.

Lloyd Marcus, Proud Unhyphenated American
Chairman: http://www.conservativecampaign.org/


The Council Has Spoken!! This Weeks’ Watchers Council Results – 08/30/13

The Watcher’s Council

Once again, the Council has spoken, the votes have been cast and we have the results for this week’s Watcher’s Council match-up.

“Look before you leap” – Aesop

“Pride goes before destruction, and a haughty spirit before a fall.” – Proverbs 16:18

This week’s winner, Joshuapundit’s Syria-Ossity, is my look at the current war drums on Syria, why I think the rationale being used to drag us in is highly questionable, why it’s a stunningly bad idea and why it’s certainly not a a place to risk American blood and treasure merely to provide our current president with a ‘wag the dog’ opportunity. Here’s a slice:

The war drums are beating again on Syria. British Prime Minister David Cameron is mouthing off about being ready to commit the downsized, miniscule Royal Navy and what’s left of the RAF to an effort to punish Syria’s Basher Assad, France’s Socialist President Hollande is making aggressive noises and our own John Kerry says that as far as he’s concerned, he’s one hundred per cent cross-my-heart-and-hope-to-die certain that the recent poison gas attacks at Ghouta, a suburb of Damascus that killed a couple of hundred people are the work of Syrian dictator Basher Assad and ‘a moral obscenity’ that of course demands a military response – even though there’s no actual proof who launched the attack.

It was not so long ago that Kerry, who used to be on the Senate Foreign Relations committee was one of Assad’s chief backers and shills. He was always saying how we needed to ‘engage’ with Assad, give him aid, and show him how friendly we were by pressuring Israel to give him back the Golan Heights, the better to kill Jews with.

During the entire time when Senator Kerry was pimping for Basher Assad, Assad was a sponsor of genocidal terrorists like Hezbollah and Hamas. He gave the orders for the assassinations of numerous Lebanese politicians including Prime Minister Rafik Hariri, not to mention a lot of journalists, business people and others who simply got in the way in Lebanon, Syria and occasionally in Europe. Assad’s regime deliberately impeded UN investigative tribunals convened to investigate some of these crimes. Not only that,but after the 2006 Lebanon War, Syria, along with its ally Iran cheerfully violated UN Resolution 1701 to rearm Hezbollah and then turned Lebanon into a colony.

None of these particular ‘moral obscenities’ mattered one whit to Kerry back then. And they certainly never bothered France or the Brits.
That fact ought to raise certain suspicions in your mind when it comes to the current push to ‘punish’ Syria.

Actually, the more I find out about this gas attack, the more something smells.

On Aug. 21, the Syrian opposition announced that there had been a massive chemical attack in Ghouta which allegedly inflicted about 1,300 fatalities including hundreds of children. As in previous chemical attacks blamed on the Assad administration, the attackers claimed the attacks used Sarin nerve gas, and they flooded YouTube with videos, especially ones featuring children.But there was no conclusive evidence about the attack or the perpetrators.

Then, there were those conflicting claims at first from the insurgents about how the gas attack had been delivered. First, the gas was supposedly delivered via missiles. When EU politicians and our own local critters like John McCain started yapping about enforcing a no fly zone, all of a sudden the rebels started claiming the gas come via an aerial bombardment – except there was no evidence of shrapnel wounds that normally come with both artillery or airborne attacks of this kind. It’s also worth remembering that when news of the attacks first went public, the UN delegation and foreign diplomats were denied access to the attack site for a few days by the Syrian opposition because it ‘wasn’t safe’ for them.

We also don’t know who fired shots at the UN delegation when they were finally allowed to enter the attack site by the Assad regime. It could very well have been Assad’s men…but it could also just as easily been the insurgents.

And according to one of my Lil’ Birdies, there’s something else interesting about this attack. Ghouta was the site of a failed attack by the jihadist Syrian Free Army, who along with the other insurgents have steadily been losing ground to Assad’s forces. This was a failed attempt to secure the area south of Damascus for the presumptive no fly zone the Obama Administration has been trying to arrange.

That attack resulted in a number of former opposition leaders publicly switching sides to Assad and even going public on Syrian TV about it. While I haven’t seen the TV clips, it makes sense that after a failed attack, some of the local players would go public in switching sides to the Assad regime as it becomes seen as the strong horse.

If that’s the case, it makes no sense that Assad would gas people who just came out backing him, especially with UN inspectors already in the country.On the other hand, if the rebels had captured some of Assad’s gas weapons and decided to punish defectors in a way that would also give them a propaganda coup….and apparently the rebels do have Sarin gas themselves:

Video on site…

More at the link.

In our non-Council category, the winner was Mark Steyn with Obamacare’s Hierarchy of Privilege submitted by The Noisy Room. It’s Steyn’s masterful dissection of what ObamaCare has become and what it promises for the future. Do read it.

Okay, without further ado, here are this week’s full results:

Council Winners

Non-Council Winners

See you next week! Don’t forget to tune in on Monday AM for this week’s Watcher’s Forum as the Council and their invited special guests take apart one of the provocative issues of the day with short takes and weigh in… don’t you dare miss it. And don’t forget to like us on Facebook and follow us on Twitter… ’cause we’re cool like that!


The last word on Syria

By: James Simpson

In this photo, night falls on a Syrian rebel-controlled area as destroyed buildings are seen on Sa’ar street after airstrikes targeted the area, killing dozens in Aleppo, Syria. (AP Photo/Narciso Contreras)

Well known Middle East expert Ken Timmerman has brought forth damning information about the intelligence being used to justify an attack on Syria. According to Ken’s sources, which include high level former military people from the U.S., Israel, Britain, France and Jordan, intercepted Syrian communications were doctored to present a completely misleading picture. This doctored intelligence is what the Obama administration claimed was the “smoking gun” evidence that Syria used chemical weapons. This doctored intelligence, Timmerman claims, “goes far beyond what critics charged the Bush administration of doing in the run-up to the 2003 Iraq war.”

The intercepted intelligence concerned a conversation between a major in the Brigade of the 4th Armored Division rocket brigades, and an officer on Syria’s general staff. The original, undoctored communication shows that the general staff were very concerned that a chemical weapon had been fired without their authorization. The major denied having done so and invited the staff to visit his base and check the inventory. For any officer to take such a unilateral action would be almost unheard-of in a dictatorship like Syria. In this case he was interrogated for three days and all of his weapons were accounted for.

Timmerman’s report also speculates on the actual source of the gas attack:

An Egyptian intelligence report describes a meeting in Turkey between military intelligence officials from Turkey and Qatar and Syrian rebels. One of the participants states, “there will be a game changing event on August 21st” that will “bring the U.S. into a bombing campaign” against the Syrian regime.

The attack occurred on August 21st. The article concludes:

What appeared from [the UN] investigation was that it was used by the opponents, by the rebels,” said Carla DelPonte, a former Swiss Attorney General and prosecutor with the International Criminal Tribunal for the Former Yugoslavia.

“I was a little bit stupefied by the first indications we got … they were about the use of nerve gas by the opposition,” she added.

“Agents provacateurs are as old as warfare itself. What better than a false flag attack, staged by al Qaeda and its al Nusra front allies in Syria, to drag the United States into a war?”


Al Jazeera Favorite McCain Ignores Constitutional “Niceties” on Syria

By: Cliff Kincaid
Accuracy in Media

Near the end of a long story about whether there is justification for a U.S. military strike on Syria, CNN said, “Finally, there is the U.S. Constitution, which holds that only Congress can declare war and only Congress can appropriate the funds to wage war. The last time such niceties were observed was for America’s entrance into World War II.”

The constitutional provisions have become “niceties.” In fact, however, President Bush went to war against Iraq after Congress passed a resolution of support. It was not a formal declaration of war, but it served the same purpose. At least Bush went to Congress for a vote.

CNN added, “The 1973 War Powers Act requires the president to notify Congress within 48 hours of launching military action and bars U.S. armed forces from fighting for more than 60 days without congressional approval.”

As we pointed put in a column on Obama’s war against Libya, the law says more than that. The War Powers Act says the president can go to war on his own only if there is an imminent threat to the U.S. It authorizes the use of force only in situations “where imminent involvement in hostilities is clearly indicated by the circumstances, and to the continued use of such forces in hostilities or in such situations.”

Where is the imminent threat to the U.S. from Syria?

Though out of session, members of Congress, led by Scott Rigell (R-VA), are moving to assert the primacy of the Constitution in the current Syria crisis. His letter to Obama says, “Engaging our military in Syria when no direct threat to the United States exists and without prior congressional authorization would violate the separation of powers that is clearly delineated in the Constitution.”

In 2007 then-Senator Obama loudly declared that “The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.” This is a correct understanding of the law.

At the time of the Libya operation, we noted that Senator John McCain (R-AZ), who had turned into an advocate for Al Jazeera, became an enthusiastic supporter of the war, conducted with the approval of the Arab League and the United Nations, but not Congress.

Al-Jazeera, committed to the victory of the Muslim Brotherhood in the region, openly backed the “pro-democracy fighters” in Libya, playing down their links to al Qaeda and other terrorist groups. Qatar, the sponsor and funder of Al Jazeera, was the only Arab state to join in NATO operations against Libya.

As Yogi Berra might say, Syria is déjà vu all over again. Once again, McCain, Qatar, and Al Jazeera are leading the cry for U.S. military intervention.

On Tuesday, McCain was on the Neil Cavuto show on Fox News, followed by an appearance on CNN about an hour later. McCain certainly knows how to use the media, and they play right into his hands. He was never asked during these interviews about the legality or constitutionality of intervening in Syria.

In our column, “Obama’s War in Libya is Illegal and Unconstitutional,” we pointed out that the comparison to the war in Iraq was wrong and that the correct parallel was President Bill Clinton’s illegal and unconstitutional military intervention in the civil war in Kosovo, then a province of Serbia. We said. “Serbia, like Libya today, did not present a threat to the U.S., but in both cases Democratic presidents went to war with those nations anyway, in order to strengthen international organizations.”

Obama is doing the same thing regarding Syria.

“As he contemplates the American response to Syria’s gas attack, President Obama has made it clear that he is consulting international law,” notes U.S. News & World Report. The publication claimed that “a consensus is building that it may be lawful to use military force in defense of human rights without violating international law,” a concept known as the “responsibility to protect” (R2P) and popularized by Obama advisors such as Samantha Power.

We noted at the time of Obama’s Libya intervention that the “Responsibility to Protect” doctrine was mostly the work of the World Federalist Movement, a group dedicated to promoting world government by strengthening the United Nations system.

The only “consensus” in favor of the concept comes from one-worlders who want to supersede the U.S. Constitution.

But Al Jazeera is also weighing in. “The Obama team is said to be looking at the 1999 NATO air war on Kosovo as a precedent,” the channel reported. “Back then, the U.S. bypassed the [U.N.] Security Council and sought backing from NATO instead, using the protection of civilians as justification.”

It’s true that Clinton used NATO rather than the U.N. But NATO, which came into being through a treaty as a defensive military force, had been illegally transformed without the benefit of a treaty into an offensive military force.

The result, as we pointed out at the time, was that Clinton intervened on behalf of the Muslim terrorists in the Kosovo Liberation Army against the Christian Serbs. The result was the creation of a Muslim state, Kosovo, in the heart of Europe.

After the Libya intervention, our media tried to put the best possible face on the illegal actions of the Obama Administration. The media wanted to avoid the issue of whether Obama’s unauthorized attack on Libya was an impeachable offense. The chaos and lack of security later resulted in the murders of four Americans in Benghazi.

At the time, Republican Senate leader Mitch McConnell (KY) said he was depending on Senator John McCain, who had recently been praising and appearing on Al Jazeera, for the answer. “Senator McCain has been to Benghazi [Libya] as I think everyone knows. He is keeping us posted on what he thinks ought to be done,” McConnell said.

McCain had been in Benghazi meeting with Ambassador Christopher Stevens, who was killed in the September 11th terrorist attack.

In a May 17, 2011, column, we tried to explain McCain’s appearances on Al Jazeera: “The only explanation that makes any sense is that Al Jazeera constitutes another channel that can give—and has given—McCain favorable publicity. The Arizona Senator has a reputation as a favorite of the press who is always anxious to get in front of a TV camera. In this regard, Al Jazeera simply constitutes another outlet, albeit an unsavory one, that he can use to promote himself. He may, however, find that it will turn on him—and the West—after Gaddafi is overthrown and the Muslim Brotherhood takes power.”

It didn’t turn on him. Rather, the Muslim Brotherhood-backed terrorists turned on Ambassador Stevens and other Americans. McCain would go on to accuse the Obama Administration of covering up what really happened, ignoring his own role in the crisis.

McCain has since called the revolution against the Muslim Brotherhood in Egypt a “coup,” and wants termination of U.S. aid to the interim anti-terrorist regime.

Meantime, Al Jazeera America (AJAM) launched on August 20 with a clip of McCain saying, “What Al Jazeera has done is to achieve what I think all of us want to achieve—and that is to make a contribution.” He was actually talking about AJAM’s predecessor, Al Jazeera English.

McCain apparently still believes in Al Jazeera, despite the fact that the channel funded by Qatar has been booted out of Egypt and denounced for inciting violence and terrorism. That’s only a “contribution” to chaos.

It’s time for the media to count up the number of times that McCain has contributed to the chaos in the Middle East that he now decries.

Cliff Kincaid is the Director of the AIM Center for Investigative Journalism and can be contacted at [email protected].