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ryskey

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Everything posted by ryskey

  1. Do you know a really good, standardized, time-tested way to do that? List on the New York Stock Exchange. Equinor's model is 2/3 owned by the people of Norway. The other 1/3 is the public float. PetroBras is similar.
  2. Noble, but not realistic. Where is the capital to maintain, much less grow PdVSA oil revenues, going to come from? The IMF? Who is going to oversee and efficiently deploy that capital? Rump ex-Chavez/Maduro PdVSA? Not going to happen without new leadership and a massive influx of talent, most of which currently resides in the United States. Not in a million years is that a credit-worthy investment, not even under the most dove-ish IMF/World Bank leadership.
  3. That's fair. Though the world would have the new PdVSA under a microscope. I wouldn't put anything past the Trump admin, but any multinational acting in its own long-term best interests would not risk the political backlash of being the recipient of the first no-bid contract from PdVSA. Those days are still fresh enough in the memory of Latin Americans, and that playbook is a little too Cold War-ish for modern American multinationals. Modern Colombia (EcoPetrol), Brazil (Petrobras), Argentina (YPF) offer good market-friendly templates in the Statoil/Equinor mold that simultaneously attract foreign capital and create a lot of revenue to fund social programs. They're certainly corrupt in their own ways but nothing like how things were in the 70's and 80's. Bolivia (YPFB) and Mexico (PeMex) offer a bit more, umm... Bolivarian alternatives that are probably a bit too close to the current state of things id PdVSA. There's a lot of revenue left on the table every year as that model is very prone to eating its own seed corn and buying popular support to the detriment of the long-term sustainability of the national oil companies. Listing on the New York Stock Exchange has a way of creating transparency and accountability that would otherwise be difficult to enforce.
  4. Has there been any discussion/rumor/whatever on what a Guaido-led government would do with PdVSA? Or is this just the fear? Curious if you've seen anything. The State has control of the minerals. The US is the only major oil-producing nation in which private entities own the minerals. Ownership of minerals implies ownership and control (directly or indirectly) of the revenue. A multinational will need to abide by the rules of the lease or concession. That multinational might have day-to-day operational control, but ultimate control and ownership still resides with the state. See Equinor (Statoil) and the dozens of companies producing oil and gas on the Norwegian continental shelf. See also: US Federal leases. The government can dictate any number of things it deems important. In order to justify the capital outlay, those multinationals can bid on the revenue interest from the oil it expects to produce. If you're afraid of a corrupt puppet government awarding no-bid contracts and leases to well-connected multinationals, then ok. But that's exactly what Maduro did with Russia and China.
  5. This is a good point, and it probably goes beyond gun control to just about everything. The trend towards Trumpism is a dangerous game for the GOP.
  6. Anchorage is about 600 miles from the North Slope. Anchorage is in the Ring of Fire. It's on the boundary between the North American plate and the Pacific plate. Everything on that line is prone to earthquakes. Also frac'ing does not cause earthquakes. Wastewater injection does.
  7. Read the post above the one you quoted.
  8. I love fundamentals. Storage, supply, demand, upstream investments, etc. Hard data that has no agenda, nor does it tweet. I hate trading noise. It distracts and even completely hides fundamentals. It relies on hearsay, political agendas, momentum trading, confirmation bias, lack of critical thinking, ignorance, and sentiment from those who yell loudest. It causes real damage to the worldwide economy. But it can't run from the fundamentals forever. And notwithstanding a worldwide recession, I am very much looking forward to a spectacular short squeeze in 2019. That will be delicious. But then it will probably swing too far in the other direction. The world does not have enough oil to meet demand in late 2019 and 2020. Again notwithstanding worldwide recession.
  9. "Increased" Saudi exports in preparation for Iranian cuts and mid-term elections was never from increased production. It was liquidation of their own storage. Essentially a transfer of storage from SA to the US. Then the last minute waivers caught SA off guard and Trump probably burned a bridge that was already very flammable to begin with (Khashoggi). It's no accident that Saudi prices to the US went up the day after mid-term elections, and they started talking about unilateral, voluntary production cuts a week later when oil was still comfortably in the 60's. They wouldn't have done that if their export levels were sustainable. They and everyone else knows that the most liquid oil benchmarks (WTI and Brent) trade disproportionately on US inventory data. Why? Because we're transparent, have good data, and those markets have the most liquidity. Self-fulfilling prophecy. China was also drawing down their own storage, displacing Saudi imports. China is not transparent, nor do they have good inventory data, nor do they have a global benchmark with a very liquid futures market. Those exports from Saudi have resumed. On top of that you have speculative short sellers piling in with the few logical buyers (outside refiners and pipelines) at the moment sitting on the sidelines waiting for this thing to stabilize. Those Saudi exports that reverted to normal will take months to manifest in the market. It's a cumulative effect that will start 45 days after the last "extra" tanker left Saudi ports headed to the United States. So in about 3 weeks. You won't notice it in that first EIA weekly report. But 2 months later, after Saudi exports have reverted to normal, the market will have priced in the effect. And all those speculative short positions will have to close out in spectacular fashion. Forced buying at ever-increasing prices. Might take several months or even half a year. But it's going to happen***. A tweet from the President can't change physical realities. ***Exception here being demand destruction from global recession. Which may have started a few weeks ago.
  10. https://www.intelligencesquaredus.org/debates/progressive-populism-will-save-democratic-party#vote Excellent debate on which path Dems should go if the goal is to win in 2020. The debate between progressive Bernie-esque Dems and Centrist establishment Dems resulted in a pretty resounding victory for the Centrists.
  11. These used to just be private, cash-flow heavy companies that paid dividends/distributions. They still are, to some extent. The flexibility to increase or decrease the dividend depending on market conditions is what can enable them to survive during a downturn. In that respect, public upstream MLPs were too rigid. I think patient private capital is the answer here. Something cash-flowing so much is severely limited on the upside, but is also very protected on the downside. Lots of cash flow with aggressive hedging, moderate leverage, and some low-risk development is a nice business model. A pension fund or endowment should be all over that asset. Buy the asset, pay out dividends when appropriate, re-invest cash flow when appropriate, pay down debt when appropriate, lever up where appropriate, and finally, exit when appropriate. It's not a tough business model but the lack of patient capital is definitely an issue.
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