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December 22, 2014 / 30 Kislev, 5775
 
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Posts Tagged ‘gas’

Fixing Egypt’s Economy: No More Military Macaroni

Wednesday, July 31st, 2013

Originally published at Daniel Pipes.

Since July 3, Gen. Abdul-Fattah al-Sisi has made it clear who runs Egypt: he does. He faces two great challenges. One is the Islamist element, spoiling for a fight to take back the power it so recently lost. The other, my focus here, is the economy.

The country once famous as the “breadbasket of the Nile” now imports something like 70 percent of its food. To make matters worse, decreasing income could mean that the money will just not be there – other than gifts from Saudi Arabia and other governments – to fend off starvation. Plus, the prospect looms of severe cuts in the country’s Nile water allotment. What to do?

There is only one choice if Egypt is to break the bonds of poverty: pull the military out of the economy. As detailed by Shana Marshall and Joshua Stacher for MERIP and Nimrod Raphaeli for MEMRI, what’s sometimes known as “Military, Inc.” controls somewhere between 25 and 40 percent of the economy. Its products

range from consumer goods such as laptops, flat-screen televisions, sewing machines, refrigerators, pots and pans, plastic table covers, butane gas bottles, olive oil, and bottled water to medical equipment, tourism, real estate, and gas and energy. The military owns and operates no fewer than nine factories for macaroni.

The military has grown so large because of preferential tax treatment, subsidized labor, an extra-legal status, old-boy networks, and many other privileges. As can be imagined, its enterprises run along socialistic lines and are steeped in nepotism and baroque forms of corruption.

Egypt’s economy can only take off if Sisi has the courage to tell his colleagues that the gig is up, that the armed forces are leaving the macaroni and other businesses so that Egyptians can build a proper economy. I can’t imagine he will do this of his own accord, for officers have become accustomed to the good life, with plenty of money and an abundance of free servants.

Hammering at this message is one of the more important actions that foreign governments can take when meeting with Sisi and the military leadership.

Moses Took the Right Turn after all, Says Netanyahu

Thursday, June 20th, 2013

“It turns out that Moses wasn’t such a bad navigator after all, Prime Minister Binyamin Netanyahu told the Israeli Presidential Conference birthday party for President Shimon Peres Thursday evening.

Negating the old joke that Moses could have turned towards Saudi Arabia and lead the People of Israel from Egypt to a land of oil instead of one of “milk and honey” and sand, the Prime Minister said, “We’re lucky enough not to have discovered gas in our first 65 years, or 60 years, because we could rely on our wits, on our ingenuity.

“And yesterday we decided to open up our gas fields for developing an export. We’re not going to make the mistake of those countries who said we shall not export, and the gas remained in the ground and in the sea. We’re going to develop the gas for our internal market and we’re going to fill up the coffers of the state with what we bring from exports for the benefit of all Israelis.”

(Not) Only Netanyahu Can Go to China

Sunday, May 5th, 2013

Prime Minister Netanyahu is on his way to China on Sunday evening, but he won’t be the only one. PA President Mahmoud Abbas is also on his way. The two are not expected to meet – it is a big country after all.

Netanyahu will be in China for 5 days to discuss economic agreements between China and Israel. He will be meeting with the Chinese president and prime minister, as well as other senior officials.

It’s almost certain that Netanyahu will talk to Beijing about Iran. Less than two weeks ago, head of Military Intelligence, Maj. Gen. Aviv Kochavi, secretly met in China with his counterpart to reportedly discuss Syria and Iran.

As China has stood with Russia opposing Western intervention in the Syrian civil war, this trip could be very interesting considering the reports of multiple Israeli air strikes against Syrian chemical weapons.

Warren Buffet Buys Out Israeli Firm for $2 Billion

Wednesday, May 1st, 2013

Warren Buffett’s Berkshire Hathaway is paying $2.05 billion for the remaining 20 percent of IMC International Metalworking Co, otherwise known as Isracar, completing the buyout that began with the giant $4 billion purchase of 80 percent of the company in 2006.

“We are delighted to acquire the portion of the company that was retained by the Wertheimer family when IMC first became a member of the Berkshire group of companies,” Buffett said Wednesday in a statement.

“As you can surmise from the price we’re paying for the remaining interest, IMC has enjoyed very significant growth over the last seven years,” Buffett, 82, said.

Isracar employs more than 2,000 people in Israel and 7,500 others around the world.

Buffett has literally fallen in love with Israel. The 2006 purchase of most of Isracar was Buffett’s largest-ever investment outside of the United States.

When he visited Israel prior to the spectacular purchase of the precision carbide cutting tools company, he said, “If you’re going to the Middle East to look for oil, you can skip Israel. If you’re looking for brains, look no further. Israel has shown that it has a disproportionate amount of brains and energy.”

Since then, an American-Israeli consortium drilling off the Haifa coast has made the world’s largest discovery of natural gas in the past 20 years, with a strong possibility of commercial quantities of oil.

Buffet’s purchase of the rest of Isracar on Wednesday helped strengthen the shekel against the dollar, with the going rate for a greenback now less than 3.58 shekels.

Israel: The Natural Gas and Start Up Nation

Tuesday, April 16th, 2013

1.  “The flow of natural gas from Israel’s Tamar reservoir in the Mediterranean to the Ashdod reception facility was inaugurated on March 30, 2013, ushering in a new era in Israel’s energy sector [led by the Houston-based Noble Energy]. Israel will not only become independent in being able to supply its own energy needs, but it is likely to become an energy exporter as its maritime gas fields are further developed…. The amount of gas discovered offshore now dwarfs any feasible, projected Israeli demand for at least half a century….Israel will become a net exporter of gas….Europe would seem to be the natural export market for Israeli gas….Yet Asia may emerge as Israel’s preferred export destination. The Australian firm, Woodside, which acquired about a third of the rights to the Leviathan field, is oriented toward marketing gas in Asia, and envisions building a liquefaction plant to service that trade….Israel will view with apprehension any scheme to anchor its critical infrastructure in countries beyond its own borders, such as Jordan, Cyprus, or Turkey….” (Dr. David Wurmser, April 4, 2013).

2. Hewlett-Packard (HP) is the second largest investor – trailing Intel – in Israel’s information technology sector, with 6,000 employees.  HP’s Israel-developed products carry the Indigo and Scitetx Vision brands (Southeast-Israel Business News, March, 2013).

3.  The Chicago-based AllScripts acquired Israel’s dbMotion for $235MN (Globes Business Daily, March 6, 2013).

4.   The globe’s largest biotech company, Roche of Basel, Switzerland, concluded a joint venture with Israel’s Chiasma, developing and commercializing Chiasma’s Octreolin for acromegaly and neuroendocrine tumors. Roche received a worldwide exclusive license in return for an upfront payment of $65MN and additional $530MN in milestones and royalties (Globes, February 19).

5.  Singapore Telecommunications (SingTel) and Israel’s Amdocs are establishing a joint development center in Israel.  Amdocs operates a similar center with AT&T.  SingTel intends to invest in a few Israeli start-ups, following its acquisition – in March 2012 – of Israel’s Amobee for $321MN (Globes, March 4).  Germany’s global optical giant, Zeiss, is establishing a research and development center in Israel.  Five years ago, it acquired Israel’s Pixer (Yedioth Achronot daily, April 4).  Michael Dell’s MSD Capital invested $22MN in Israel’s food chain, Rami Levy, increasing its holding to 6.1%.  The Boston-based Fidelity acquired 5% of Rami Levy for $27MN (Globes, March 29 and April 8).

6.  Hong Kong’s investment mogul, Li Ka Shing’s Horizon Ventures, led an$ 8MN round of private placement by Israel’s Nipendo (Globes, March 12).  The Waltham, MA-based Battery Ventures – joined by the Menlo Park, CA-based Opus Capital - led a $10MN second round by Israel’s SiSense (Globes, April 4). The Menlo Park-based Sequoia Capital – joined by T-Mobile – led an $11MN round by Israel’s Innovid (Globes, March 8).  Israel’s StarCom raised $4MN at the London  Stock Exchange for smaller companies, AIM (March 6).

Visit The Ettinger Report.

Moses’ Gift: Natural Gas in the Mediterranean

Sunday, April 14th, 2013

Golda Meir once quipped that Moses could have done the Jewish people a better service. “He took us 40 years through the desert,” she said, “to bring us to the one spot in the Middle East that has no oil.”

Today, Golda Meir’s quip has lost its punch. Last week, natural gas began flowing out of the Tamar gas field, discovered off the coast of Israel in January 2009. Tamar and Leviathan, its neighboring gas field, discovered in June 2010, are among the world’s largest recent offshore natural gas discoveries. The Israeli companies controlling the fields are even considering exporting gas to neighboring countries.

Geologists assume that commercial oil reserves may lie beneath the gas find. Some analysts say that the Tamar and Leviathan fields might change Israel’s position in the geopolitical and energy world. But not just Israel’s.

The Israeli fields are adjacent to the Aphrodite gas field, discovered in December 2011, which lies in Cypriot territorial waters, less than 25 miles west of Leviathan. The government in Nicosia expects that the result of offshore drillings will confirm later this year that the island is sitting on vast amounts of natural gas worth billions of dollars. The recent banking crisis in Cyprus –the latest episode in the saga of the collapsing euro – came too early for the country to benefit from its future natural gas wealth. It is, however, indicative that Cyprus turned down the European Union’s demands that the gas reserves be used as collateral for the loans which the E.U. has just extended to Cyprus.

Brussels had demanded that a fund be created in which it was given a direct say over the revenues from Cypriot gas reserves, but Nicosia refused to do so. The Cypriots feel betrayed by the E.U. Hence, they are not inclined to let Europe share in the future wealth which they hope to derive from gas. Nicos Anastasiades, the president of Cyprus, said that Cyprus had no other choice than give in to the harsh demand of Brussels that it dismantle its banking sector. He, however, promised that savers who lost money in the Cypriotic banks would be compensated by being given shares in banks guaranteed by the future natural gas revenues.

Today, Cyprus is paying a very heavy price for its membership of the E.U.’s common currency, the euro. When by 2019 the gas proceeds are expected to start flowing, the tables will be turned. Then Cyprus will be in a position to leave the euro without facing the prospect of national bankruptcy.

To begin extracting the gas from the Aphrodite field by 2019, however, the virtually bankrupt Cypriot government will in the coming years need to make enormous investments. The Russian state-owned gas company Gazprom, the largest extractor of natural gas in the world, seems keen to get involved. So far, however, the Cypriots have kept the Russians at bay.

Europe is already to a large extent dependent on Russian gas, supplied by Gazprom, a company controlled by the Russian oligarchy around President Putin. A quarter of Europe’s of Europe’s entire gas consumption comes from Gazprom. As a new player in the market of gas exporters, Cyprus could reduce the European dependency on Russian gas.

What applies to Cyprus, obviously, applies to Israel as well. It, too, could use its gas exports to a political end. Bat Ye’or has argued that the pro-Palestinian positions of the European governments since the 1970s were to a large extent the result of Europe’s dependency on Arab oil. Israel has a unique chance of also using the Cypriot gas to its own geostrategic benefit. The Cypriot gas fields are located halfway between the Cypriot and Israeli coast. Israel, Cyprus and Greece are already collaborating in the EuroAsia Interconnector project, which is an undersea power cable linking Israel with Cyprus and Cyprus with Greece. A gas pipeline following the same route would balance the current pipeline on the Baltic seabed linking Russia with Germany.

Another opportunity for Israel might be the fact that some international gas companies are reluctant to get involved in the exploitation of Cypriot gas fields because they also operate in Turkey and do not want to upset the Turkish authorities who oppose the Cypriot gas extraction. Though the Aphrodite gas field lies in waters across Southern Cyprus, Turkey is demanding that all gas revenues be shared with Turkish occupied Northern Cyprus.

Fischer Launches New War on Shekel-Dollar Rate

Monday, April 8th, 2013

Bank of Israel Governor Stanley Fischer launched a new war on the falling shekel-dollar rate Monday and ordered the purchase of $100 million of greenbacks, soon after the rate dropped close to 3.59 shekels to the dollar for the first time in nearly two years.

The massive purchase catapulted the rate from the 18-month low of 3.592 to 3.62 in only a few minutes.

The shekel has strengthened this year, receiving recent support from expectations of positive fallout from the beginning of the flow of Israeli natural off-shore gas.

A strong shekel is great news for consumers buying items imported from the United States, but it sends shivers through Israeli companies with revenues in dollars. After converting income to shekels, the firms are left with less money, and their executives are constantly pressuring the Finance Ministry and the Bank of Israel to take measures to raise the currency rate.

Printed from: http://www.jewishpress.com/news/breaking-news/fischer-launches-new-war-on-shekel-dollar-rate/2013/04/08/

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