VIDEO: Ulstein, NOV Present Next Generation Offshore Vessel

In the following video, National Oilwell Varco (NOV) and ULSTEIN present what they describe as the “next generation of modern offshore vessels.”

According to the caption of the video published on Ulstein’s YouTube channel “this is the standard for future offshore construction.”

The vessel platform used is the ULSTEIN designed Deepwater Enabler.

The 160.0 m long Deepwater enabler is a Multi-purpose Offshore construction vessel of a highly flexible design that can, according to Ulstein, be customized to meet client’s specifications and requirements.

The construction vessel is designed for various offshore operations. With a simplistic customization process it can be used to install and maintain offshore wind turbines, as well as for flex-lay, well intervention and slim hole drilling operations for the offshore oil and gas industry.

If February this year, Toisa placed an order for a construction vessel of the Deepwater Enabler design. The vessel will be built by South Korea’s Hyundai Heavy Industries.

See the video below:

Rowan Secures Contract for “Rowan Resolute” Drillship. Sells “Rowan Paris” Rig

The U.S. based drilling contractor Rowan Companies has entered into a three-year contract with Anadarko Petroleum Corporation.

The drillship is expected to be delivered at the end of the second quarter 2014 and operate in the U.S. Gulf of Mexico starting in the late third quarter 2014.  The Rowan Resolute is one of four ultra-deepwater drillships being constructed for Rowan by Hyundai Heavy Industries Co. Ltd. (“HHI”) shipyard in Ulsan, South Korea.

With the award of this contract for the Rowan Resolute, two of the Company’s four ultra-deepwater drillships under construction at HHI are now under contract.  The remaining two uncontracted drillships are scheduled to be delivered from the shipyard at the end of October 2014 and March 2015.

Rowan, in its fleet status report, said that the day rate for the contract is in the high $600.000s.

Rig contract in Indonesia

Also, the company has informed it has secured a 170 day contract with Pertamina Hulu Energi for Gorilla II rig in Indonesia at a day rate in the high $160s (above previous day rate in the mid $130s) expected to commence operation in September 2013.

Further in the report for June 2013, Rowan said it has sold the Rowan Paris rig for $40 million in June 2013.

Offshore Energy Today Staff, June 20, 2013

Corporations Push to Overrule National Laws

First Congress Member Allowed to Read Secret Treaty Says:

“There Is No National Security Purpose In Keeping This Text Secret … This Agreement Hands The Sovereignty of Our Country Over to Corporate Interests”

We reported last year:

Democratic Senator Wyden – the head of the committee which is supposed to oversee it – is so furious about the lack of access that he has introduced legislation to force disclosure.

Republican House Oversight Committee Chairman Darrell Issa is so upset by it that he has leaked a document on his website to show what’s going on.

What is everyone so furious about?

An international treaty being negotiated in secret which would not only crack down on Internet privacy much more than SOPA or ACTA, but would actually destroy the sovereignty of the U.S. and all other signatories.

It is called the Trans-Pacific Partnership (TPP).

Wyden is the chairman of the trade committee in the Senate … the committee which is supposed to have jurisdiction over the TPP. Wyden is also on the Senate Intelligence Committee, and so he and his staff have high security clearances and are normally able to look at classified documents.

And yet Wyden and his staff have been denied access to the TPP’s text.

Indeed, the decision to keep the text of TPP secret was itself classified as secret: Video

(I have also received a tip from a credible inside source that TPP contains provisions which would severely harm America’s national security. Specifically, like some previous, ill-conceived treaties, TPP would allow foreign companies to buy sensitive American assets which could subject us to terror attacks or economic blackmail.)

Yesterday, Congressman Alan Grayson (who knows how to read legislation … he was a successful lawyer before he was elected to Congress, and has written and co-sponsored numerous bills himself including the bill to audit the Federal Reserve and – most recently – the “Mind Your Own Business Act” to stop NSA spying) announced that he had been allowed to read the text of TPP – and that it is  an anti-American power grab by big corporations:

Last month, 10,000 of us submitted comments to the United States Trade Representative (USTR), in which we objected to new so-called free trade agreements. We asked that the government not sell out our democracy to corporate interests.

Because of this pressure, the USTR  finally let a member of Congress – little ole me, Alan Grayson [anyone who’s seen Grayson in action knows that he is formidable] – actually see the text of the Trans-Pacific Partnership (TPP). The TPP is a large, secret trade agreement that is being negotiated with many countries in East Asia and South America.

The TPP is nicknamed “NAFTA on steroids.”  Now that I’ve read it, I can see why. I can’t tell you what’s in the agreement, because the U.S. Trade Representative calls it classified. But I can tell you two things about it.

1)    There is no national security purpose in keeping this text secret.

2)    This agreement hands the sovereignty of our country over to corporate interests.

3)    What they can’t afford to tell the American public is that [the rest of this sentence is classified].

***

I will be fighting this agreement with everything I’ve got. And I know you’ll be there every step of the way.

***

Courage,

Congressman Alan Grayson

Grayson also noted:

It is ironic in a way that the government thinks it’s alright to have a record of every single call that an American makes, but not alright for an American citizen to know what sovereign powers the government is negotiating away.

***

Having seen what I’ve seen, I would characterize this as a gross abrogation of American sovereignty. And I would further characterize it as a punch in the face to the middle class of America. I think that’s fair to say from what I’ve seen so far. But I’m not allowed to tell you why!

Remember that one of the best definitions of fascism – the one used by Mussolini – is the “merger of state and corporate power”. Our nation has been moving in that direction for a number of years, where government and giant corporations are becoming more and more intertwined in a malignant, symbiotic relationship.   TPP would be the nail in the coffin for free market economics and democracy.

Note to progressives who support public banking: This is a key battle.

Note to those who oppose to what they call “one world government” or a “new world order”: This is the big fight.

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Indefinite Surveillance: Say Hello to the National Defense Authorization Act of 2014

 

June 18, 2013

by Stephen Benavides

Passed in 1978, the Foreign Intelligence Surveillance Act (FISA) set the groundwork for surveillance, collection, and analysis of intelligence gathered from foreign powers and agents of foreign powers, up to and including any individual residing within the U.S., who were suspected of involvement in potential terrorist activity.  On October 26, 2001, a little over a month after 9/11, President George W. Bush signed the USA Patriot Act into law. Two provisions, Sec. 206, permitting government to obtain secret court orders allowing roving wiretaps without requiring identification of the person, organization, or facility to be surveyed, and Sec. 215 authorizing government to access and obtain “any tangible thing” relevant to a terrorist investigation, transformed foreign intelligence into domestic intelligence.

NDAA 2014 builds on the powers granted by both the Patriot Act and FISA by allowing unrestricted analysis and research of captured records pertaining to any organization or individual “now or once hostile to the United States”.  Under the Patriot Act, the ability to obtain “any tangible thing” eliminated any expectation of privacy.  Under NDAA 2014 Sec. 1061(g)(1), an overly vague definition of captured records enhances government power and guarantees indefinite surveillance. 

On May 22, 2013 the Subcommittee on Intelligence, Emerging Threats and Capabilities, one of several Armed Services Committees, met to discuss the National Defense Authorization Act(NDAA) for Fiscal Year 2014.  The main subject of the hearing was Sec. 1061, otherwise known as Enhancement of Capacity of the United States Government to Analyze Captured Records. This enhancement provision of   NDAA 2014 would effectively create a new intelligence agency, one with the authority to analyze information gained under the Patriot Act, FISA, and known spying programs such as PRISM.

Sec. 1061(a) authorizes the Secretary of Defense to “establish a center to be known as the ‘Conflict Records Research Center’” (Center). The main purpose of the center, according to the bill text, is to create a “digital research database,” one with the capability to “translate” and facilitate research on “records captured from countries, organizations and individuals, now or once hostile to the United States.” The authorization also says the Center will conduct research and analysis to “increase the understanding of factors related to international relations, counterterrorism and conventional and unconventional warfare, and ultimately, enhance national security.”

In order to make the Center run, and to accomplish such an incredibly broad scope of “research and analysis,” the Secretary of Defense needs the Director of National Intelligence (DNI) to cooperate in coordinating “information exchanges important to the leadership of the United States Government”.   That coordination would require participation of all 16 member agencies and departments of the U.S. Intelligence Community.  This would leave James Clapper, the man accused of lying to Congress about the National Security Agency’s domestic spying program known as PRISM, in de facto direction of another federal surveillance and data analysis agency.  And while the Center would be officially directed and overseen by the Secretary of Defense, without unfettered access to secret and top secret information, the Center would be completely ineffective.  These information exchanges would most likely include data and records generated by the mass surveillance of everyday people under PRISM, as well as surveillance of those identified as “potential terrorists” or “high value targets” by any one of those 16 intelligence agencies now in operation.

The proposed Center’s information exchanges rely on captured government records.  Under the NDAA 2014, Sec. 1061(g)(1), a captured record is defined as “a document, audio file, video file, or other material captured during combat operations from countries, organizations, or individuals, now or once hostile to the United States.”  But considering that the 2001 Authorization to Use Military Force (AUMF) allows the “War on Terror” to exist in a perpetual and permanent state of combat operations, and that the American public is already existing under an expansive surveillance state, any record may qualify as a “captured record.” Thus, any captured document, audio file, video file, or other material could potentially be submitted to this new intelligence agency for research and analysis, all in the name of national security and counterterrorism, as deemed appropriate by a swelling government surveillance class.

The NDAA 2014 enhancement provision extends and consolidates the government’s authority to further gather and analyze records and data captured during any national security or terrorist related investigation, not just combat operations. But it does so without creating any explicit restriction from violating an individual’s right to privacy, from being subjected to unwarranted searches and seizures, or due process of individuals guaranteed by the Constitution. That’s eerily similar to the NDAA 2013 Sec. 1021 that codified the indefinite military detention of American citizens without requiring they be charged with a specific crime, or given a trial.

Under NDAA 2013, Sec. 1021 allowed the military detention of civilians without a writ of habeas corpus, when a person “was a part of or substantially supported al-Qaeda, the Taliban, or associated forces that are engaged in hostilities against the United States or its coalition partners, including any person who has committed a belligerent act or has directly supported such hostilities in aid of such enemy forces.” Under NDAA 2014, anyone is now subject to surveillance, not based on support of al-Qaeda or its associated forces, but based merely upon whether or not an individual is, or once was hostile to the U.S.  The question of what constitutes “hostility”, is left completely unanswered.

The new enhancement provision, as well as the previous NDAA’s indefinite detention mandate, goes to show how far the legislation has strayed from its stated purpose. According to House Armed Services Committee Chairman Buck McKeon (R-CA), the NDAA “authorizes funding for military activities of the Department of Defense, for military construction, for defense activities of the Department of Energy, to prescribe military personnel strengths, and for other purposes.”

Instead, the NDAA has become the vehicle for the Executive Branch and Department of Defense to bypass Congress, and legislate away any perceived right, liberty, or privilege that conflicts with our current state of permanent war and indefinite surveillance.

In 2012, in an attempt to stop that “indefinite detention” provision, Sen. Dianne Feinstein (D-CA) introduced an amendment that would have prohibited the government from detaining citizens indefinitely using military force.  That proposed law, otherwise known as the “Feinstein Amendment” easily passed the Senate floor, but was later removed by Senate Armed Services Committee Chairman Carl Levin (D-MI).  After removal of the only specific language that would guarantee the US Government would be prohibited from interpreting the act illegally; President Obama, also a Democrat, signed NDAA 2013 into law.

If passed in its current state, NDAA 2014 would authorize approximately $552 billion in total defense spending, with $86 billion going directly to war spending.  This amount exceeds what is allowed under the automatic austerity measures that went into effect as of March 1, 2013.  According to a report released in April 2013 by the Center for Strategic and Budgetary Assessments, “[i]f personnel, operation and maintenance costs keep rising, they may consume the “entire defense budget” by 2024, leaving no funding for weapons procurement, military construction or family housing.”  Any program created by the Enhancement Provision of NDAA 2014 would necessarily burden an already overwhelmed working class, who are most affected by austerity.

While the National Security Agency swears that no citizen was spied on under PRISM, the very fact that cell phone metadata and online activity was gathered from millions of individuals guarantees that information was taken illegally from innocent people .  We’re told that the government is attempting to minimize the amount of information captured from Americans, and that all of that information is being kept in specialized and restricted servers in order to protect our constitutional rights.  But that’s difficult to believe when the Department of Justice is currently fighting the release of a secret FISA Court opinion that details unconstitutional government surveillance.

If indefinite detention became the primary reason for opposing NDAA 2013, then the enhance provision authorizing unlimited indefinite surveillance, may become the same issue for NDAA 2014.  If passed in its current state, NDAA 2014 will further guarantee that people exist not only under indefinite detention and permanent war, but also under indefinite surveillance by its government.

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The Strange Case of Barrett Brown

Amid the outrage over the NSA’s spying program, the jailing of journalist Barrett Brown points to a deeper and very troubling problem.

June 18, 2013

Peter Ludlow

In early 2010, journalist and satirist Barrett Brown was working on a book on political pundits, when the hacktivist collective Anonymous caught his attention. He soon began writing about its activities and potential. In a defense of the group’s anti-censorship operations in Australia published on February 10, Brown declared, “I am now certain that this phenomenon is among the most important and under-reported social developments to have occurred in decades, and that the development in question promises to threaten the institution of the nation-state and perhaps even someday replace it as the world’s most fundamental and relevant method of human organization.”

By then, Brown was already considered by his fans to be the Hunter S. Thompson of his generation. In point of fact he wasn’t like Hunter S. Thompson, but was more of a throwback—a sharp-witted, irreverent journalist and satirist in the mold of Ambrose Bierce or Dorothy Parker. His acid tongue was on display in his co-authored 2007 book, Flock of Dodos: Behind Modern Creationism, Intelligent Design and the Easter Bunny, in which he declared: “This will not be a polite book. Politeness is wasted on the dishonest, who will always take advantage of any well-intended concession.”

But it wasn’t Brown’s acid tongue so much as his love of minutiae (and ability to organize and explain minutiae) that would ultimately land him in trouble. Abandoning his book on pundits in favor of a book on Anonymous, he could not have known that delving into the territory of hackers and leaks would ultimately lead to his facing the prospect of spending the rest of his life in prison. In light of the bombshell revelations published by Glenn Greenwald and Barton Gellman about government and corporate spying, Brown’s case is a good—and underreported—reminder of the considerable risk faced by reporters who report on leaks.

In February 2011, a year after Brown penned his defense of Anonymous, and against the background of its actions during the Arab Spring, Aaron Barr, CEO of the private intelligence company HBGary, claimed to have identified the leadership of the hacktivist collective. (In fact, he only had screen names of a few members). Barr’s boasting provoked a brutal hack of HBGary by a related group called Internet Feds (it would soon change its name to “LulzSec”). Splashy enough to attract the attention of The Colbert Report, the hack defaced and destroyed servers and websites belonging to HBGary. Some 70,000 company e-mails were downloaded and posted online. As a final insult to injury, even the contents of Aaron Barr’s iPad were remotely wiped.

The HBGary hack may have been designed to humiliate the company, but it had the collateral effect of dropping a gold mine of information into Brown’s lap. One of the first things he discovered was a plan to neutralize Glenn Greenwald’s defense of Wikileaks by undermining them both. (“Without the support of people like Glenn, wikileaks would fold,” read one slide.) The plan called for “disinformation,” exploiting strife within the organization and fomenting external rivalries—“creating messages around actions to sabotage or discredit the opposing organization,” as well as a plan to submit fake documents and then call out the error.” Greenwald, it was argued, “if pushed,” would “choose professional preservation over cause.”

Other plans targeted social organizations and advocacy groups. Separate from the plan to target Greenwald and WikiLeaks, HBGary was part of a consortia that submitted a proposal to develop a “persona management” system for the United States Air Force, that would allow one user to control multiple online identities for commenting in social media spaces, thus giving the appearance of grassroots support or opposition to certain policies.

The data dump from the HBGary hack was so vast that no one person could sort through it alone. So Brown decided to crowdsource the effort. He created a wiki page, called it ProjectPM, and invited other investigative journalists to join in. Under Brown’s leadership, the initiative began to slowly untangle a web of connections between the US government, corporations, lobbyists and a shadowy group of private military and information security consultants.

One connection was between Bank of America and the Chamber of Commerce. WikiLeaks had claimed to possess a large cache of documents belonging to Bank of America. Concerned about this, Bank of America approached the United States Department of Justice. The DOJ directed it to the law and lobbying firm Hunton and Williams, which does legal work for Wells Fargo and General Dynamics and also lobbies for Koch Industries, Americans for Affordable Climate Policy, Gas Processors Association, Entergy among many other firms. The DoJ recommended that Bank of America hire Hunton and Williams, explicitly suggesting Richard Wyatt as the person to work with. Wyatt, famously, was the lead attorney in the Chamber of Commerce’s lawsuit against the Yes Men.

In November 2010, Hunton and Williams organized a number of private intelligence, technology development and security contractors—HBGary, plus Palantir Technologies, Berico Technologies and, according to Brown, a secretive corporation with the ominous name Endgame Systems—to form “Team Themis”—‘themis’ being a Greek word meaning “divine law.” Its main objective was to discredit critics of the Chamber of Commerce, like Chamber Watch, using such tactics as creating a “false document, perhaps highlighting periodical financial information,” giving it to a progressive group opposing the Chamber, and then subsequently exposing the document as a fake to “prove that US Chamber Watch cannot be trusted with information and/or tell the truth.” In addition, the group proposed creating a “fake insider persona” to infiltrate Chamber Watch. They would “create two fake insider personas, using one as leverage to discredit the other while confirming the legitimacy of the second.” The leaked e-mails showed that similar disinformation campaigns were being planned against WikiLeaks and Glenn Greenwald.

It was clear to Brown that these were actions of questionable legality, but beyond that, government contractors were attempting to undermine Americans’ free speech—with the apparent blessing of the DOJ. A group of Democratic congressmen asked for an investigation into this arrangement, to no avail.

By June 2011, the plot had thickened further. The FBI had the goods on the leader of LulzSec, one Hector Xavier Monsegur, who went under the nom de guerre Sabu. The FBI arrested him on June 7, 2011, and (according to court documents) turned him into an informant the following day. Just three days before his arrest, Sabu had been central to the formation of a new group called AntiSec, which comprised his former LulzSec crew members, as well as members as Anonymous. In early December AntiSec hacked the website of a private security company called Stratfor Global Intelligence. On Christmas Eve, it released a trove of some 5 million internal company e-mails. AntiSec member and Chicago activist Jeremy Hammond has pled guilty to the attack and is currently facing ten years in prison for it.

The contents of the Stratfor leak were even more outrageous than those of the HBGary hack. They included discussion of opportunities for renditions and assassinations. For example, in one video, Statfor’s vice president of intelligence, Fred Burton, suggested taking advantage of the chaos in Libya to render Lockerbie bomber Abdelbaset al-Megrahi, who had been released from prison on compassionate grounds due to his terminal illness. Burton said that the case “was personal.” When someone pointed out in an e-mail that such a move would almost certainly be illegal—“This man has already been tried, found guilty, sentenced…and served time”—another Stratfor employee responded that this was just an argument for a more efficient solution: “One more reason to just bugzap him with a hellfire. :-)”

(Stratfor employees also seemed to take a keen interest in Jeremy Scahill’s writings about Blackwater in The Nation, copying and circulating entire articles, with comments suggesting a principle interest was in the question of whether Blackwater was setting up a competing intelligence operation. E-mails also showed grudging respect for Scahill: “Like or dislike Scahill’s position (or what comes of his work), he does an amazing job outing [Blackwater].”)

When the contents of the Stratfor leak became available, Brown decided to put ProjectPM on it. A link to the Stratfor dump appeared in an Anonymous chat channel; Brown copied it and pasted it into the private chat channel for ProjectPM, bringing the dump to the attention of the editors.

Brown began looking into Endgame Systems, an information security firm that seemed particularly concerned about staying in the shadows. “Please let HBGary know we don’t ever want to see our name in a press release,” one leaked e-mail read. One of its products, available for a $2.5 million annual subscription, gave customers access to “zero-day exploits”—security vulnerabilities unknown to software companies—for computer systems all over the world. Business Week published a story on Endgame in 2011, reporting that “Endgame executives will bring up maps of airports, parliament buildings, and corporate offices. The executives then create a list of the computers running inside the facilities, including what software the computers run, and a menu of attacks that could work against those particular systems.” For Brown, this raised the question of whether Endgame was selling these exploits to foreign actors and whether they would be used against computer systems in the United States. Shortly thereafter, the hammer came down.

The FBI acquired a warrant for Brown’s laptop, gaining the authority to seize any information related to HBGary, Endgame Systems, Anonymous and, most ominously, “email, email contacts, ‘chat’, instant messaging logs, photographs, and correspondence.” In other words, the FBI wanted his sources.

When the FBI went to serve Brown, he was at his mother’s house. Agents returned with a warrant to search his mother’s house, retrieving his laptop. To turn up the heat on Brown, the FBI initiated charges against his mother for obstruction of justice for concealing his laptop computer in her house. (Facing criminal charges, on March 22, 2013, his mother, Karen McCutchin, pled guilty to one count of obstructing the execution of a search warrant. She faces up to twelve months in jail. Brown maintains that she did not know the laptop was in her home.)

By his own admission, the FBI’s targeting of his mother made Brown snap. In September 2012, he uploaded an incoherent YouTube video, in which he explained that he had been in treatment for an addiction to heroin, taking the medication Suboxone, but had gone off his meds and now was in withdrawal. He threatened the FBI agent that was harassing his mother, by name, warning:

“I know what’s legal, I know what’s been done to me.… And if it’s legal when it’s done to me, it’s going to be legal when it’s done to FBI Agent Robert Smith—who is a criminal.”

“That’s why [FBI special agent] Robert Smith’s life is over. And when I say his life is over, I’m not saying I’m going to kill him, but I am going to ruin his life and look into his fucking kids…. How do you like them apples?”

The media narrative was immediately derailed. No longer would this be a story about the secretive information-military-industrial complex; now it was the sordid tale of a crazy drug addict threatening an FBI agent and his (grown) children. Actual death threats against agents are often punishable by a few years in jail. But Brown’s actions made it easier for the FBI to sell some other pretext to put him away for life.

The Stratfor data included a number of unencrypted credit card numbers and validation codes. On this basis, the DOJ accused Brown of credit card fraud for having shared that link with the editorial board of ProjectPM. Specifically, the FBI charged him with traffic in stolen authentication features, access device fraud and aggravated identity theft, as well as an obstruction of justice charge (for being at his mother’s when the initial warrant was served) and charges stemming from his threats against the FBI agent. All told, Brown is looking at century of jail time: 105 years in federal prison if served sequentially. He has been denied bail.

Considering that the person who carried out the actual Stratfor hack had several priors and is facing a maximum of ten years, the inescapable conclusion is that the problem is not with the hack itself but with Brown’s journalism. As Glenn Greenwald remarked inThe Guardian: “It is virtually impossible to conclude that the obscenely excessive prosecution he now faces is unrelated to that journalism and his related activism.”

Today, Brown is in prison and ProjectPM is under increased scrutiny by the DOJ, even as its work has ground to a halt. In March, the DOJ served the domain hosting service CloudFlare with a subpoena for all records on the ProjectPM website, and in particular asked for the IP addresses of everyone who had accessed and contributed to ProjectPM, describing it as a “forum” through which Brown and others would “engage in, encourage, or facilitate the commission of criminal conduct online.” The message was clear: Anyone else who looks into this matter does so at their grave peril.

Some journalists are now understandably afraid to go near the Stratfor files. The broader implications of this go beyond Brown; one might think that what we are looking at is Cointelpro 2.0—an outsourced surveillance state—but in fact it’s worse. One can’t help but infer that the US Department of Justice has become just another security contractor, working alongside the HBGarys and Stratfors on behalf of corporate bidders, with no sense at all for the justness of their actions; they are working to protect corporations and private security contractors and give them license to engage in disinformation campaigns against ordinary citizens and their advocacy groups. The mere fact that the FBI’s senior cybersecurity advisor has recently moved to Hunton and Williams shows just how incestuous this relationship has become. Meanwhile, the Department of Justice is also using its power and force to trample on the rights of citizens like Barrett Brown who are trying to shed light on these nefarious relationships. In order to neutralize those who question or investigate the system, laws are being reinterpreted or extended or otherwise misappropriated in ways that are laughable—or would be if the consequences weren’t so dire.

While the media and much of the world have been understandably outraged by the revelation of the NSA’s spying programs, Barrett Brown’s work was pointing to a much deeper problem. It isn’t the sort of problem that can be fixed by trying to tweak a few laws or by removing a few prosecutors. The problem is not with bad laws or bad prosecutors. What the case of Barrett Brown has exposed is that we confronting a different problem altogether. It is a systemic problem. It is the failure of the rule of law.

Journalist Michael Hastings, 33, died in a car crash yesterday. Read Greg Mitchell’s obituary here.

Peter Ludlow

June 18, 2013

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Tyranny Advances by Nibbles

By Joy Overbeck

Increasingly, as the concentric circles of perfidy swirl around the White House like filthy water down a drain, there is tyranny. The government we pay for has turned on us, the body politic, as if it were a savage autoimmune disease attacking our most vital tissues. That is, our Constitutional right to express our views as free citizens without the hounds of IRS hell on our heels.

How did it happen? How could this administration think it would get away with persecuting and silencing those who disagree with its march to power? The time-honored template of the dictatorial impulse is no secret. Tyranny always progresses a bite at a time. Caesar cast his eye about the known world, coveted what he saw, and began nibbling away. Nobody stopped him. Hitler sank his teeth into a nation here, a nation there and looked around for reaction. Nobody cared enough to do much about it.

Here, the exploratory nibbles have become extremely ambitious through the past four-plus years until now they’ve escalated to bloody chunks. But there were warnings. Only four months after Obama’s inauguration, the Department of Homeland Security issued a “threat assessment” fingering “rightwing extremism” as a danger to the nation. Remember? This official warning to law enforcement officials says “rightwing extremism in the United States” includes groups that reject federal authority in favor of state or local authority, and “may include groups and individuals that are dedicated to a single issue, such as immigration or abortion.”

Because the report also included returning war veterans in its extremist roster, there ensued a flurry of indignation. But nothing happened. Some of these dangerous groups became Tea Parties and Patriot cabals. We now know that not long after this report, the IRS took up the DHS cudgel by systematically oppressing these vicious “militias” via punishing audits and delay or denial of tax-exemption. By harassing perhaps 500 such groups and eliminating much of the opposition in this aggressive and deliberate way, IRS toadies may also have helped Obama win the election.

Meanwhile, as the secretary of Homeland Security was learning she could do just about any lawless thing she liked without fear of reprisal, so was the president. And the attorney general. When the administration banned drilling in the Gulf of Mexico after the 2010 BP oil spill, Louisiana Governor Bobby Jindal sued, worried it could kill 20,000 more jobs and up to $135 million in wages. The feds fought the lawsuit and lost twice. The Obama government promptly created a new moratorium and redoubled its fight against its citizens.

A judge ruled that the Obama Administration acted in contempt by continuing its ban after the policy was struck down by the courts. And nothing happened. Contempt, the administration learned, is toothless; but government power is a Rottweiler.

And so it was no big deal when in June of 2012 Attorney General Eric Holder became the first sitting member of a president’s cabinet in American history to be held in contempt of Congress. He had defied a Congressional subpoena to disclose internal communications about the Fast and Furious gun-peddling operation that put guns in the hands of criminal cartels who killed border patrol agent Brian Terry and hundreds of Mexican nationals. Surprise, surprise: Holder’s own Justice Department declined to pursue criminal action, although the vote was an astonishing 255-67 against the AG. Mr. Obama helped Holder thwart the Congress by insisting presidential immunity covered his faithful sidekick. And nobody noticed that Holder is not actually the president.

In the current persecution, victims continue to come forward. Not only Tea Party, but Christian pro-life groups, even Billy Graham and his son Franklin Graham’s charities, and Jewish groups aiding Israel’s settlements. Note the recurring theme: all are ordinary citizens opposed to Mr. Obama’s plans for our nation.

The Washington Free Beacon found five pro-Israel charities that were aggressively audited after White House friendlies like the American-Arab Anti-Discrimination Committee (ADC) accused them of opposing Obama’s 2009 dictate that Israeli Prime Minister Bibi Netanyahu stop settlement across the pre-1967 “Green Line.” The ADC filed legal complaints urging the IRS and the Treasury Department to investigate groups “allegedly raising funds for the development of illegal settlements in the occupied West Bank.” Audits followed.

Of course there is nothing in the least illegal about what the charities did. But it’s now apparently illegal to disagree with America’s ruler. This is where the fear comes in. The Free Beacon also reports that many of the groups with which they spoke “asked to remain anonymous out of fear of political retaliation…” It would appear the IRS is now itself a domestic terror organization waging war against the enemies of the state: conservatives, Christians and Jews. And the people fear their government.

“An elective despotism was not the government we fought for.”

— Thomas Jefferson

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A spectacle to behold: Markets usurp central banks

Thu, Jun 13 2013, 09:04 GMT
by Peter Baxter Jr. | Kondratieffwinter.com

K Winter Endgame now playing out in Japan

Mark May 23rd of 2013 as a potential key date in the unfolding of this fourth Kondratieff Winter of the modern era. In the afternoon session of trading in Tokyo that night, at approximately 7:30 PM EST, everything suddenly changed. The juggernaut that had propelled the Nikkei average up almost 90% since early November took a bit of a breather by plunging almost 10% from its peak hours earlier, settling down over 1140 points from the previous close. As of yesterday it had declined 2343 points (15%) in just one week. With one more day like Thursday the Nikkei would have achieved the impossible- a 90% gain in six months that turned into a bear market (20% down) in just one week. Ho, hum, just another day in the life of a world distorted with tens of trillions of central bank intervention.

I suspect this will become the new normal going forward in the next few years that will mark the twilight of the winter cycle phase of this present Kondratieff cycle that began in 1949. Our theory holds that paper assets have never been more overpriced because there’s too much unpayable global debt that will default. Is there a day in our future when our Dow will also plunge over 1000 points in a grand mal seizure from too much debt?

What was so transformative that occurred in that Thursday session in Japan, one that was preceded hours earlier by a sudden whipsaw in US markets? Simple- too much volatility. This grand experiment by central banks is much like a ponzi scheme because it has absolutely no room for error that could undermine confidence. Yet that is what is occurring right before us. Could this be the beginning of the endgame scenario I have promised here for over two years- a dreaded deflationary bust caused not by an economic slowdown but instead by rising yields?

It’s very possible this may be the case given the scale and speed of the move higher in yields all across the globe. Don’t forget here that the entire premise of these massive QE programs by all the global central banks is to keep rates DOWN, not up. They are failing miserably in their primary objective and I implore our readers and all investors to sit up and take notice. It seems the bond vigilantes have now finally emerged from many years of hibernation.

Remember the Apple bonds floated a few weeks ago in the biggest corporate offering in world history? It was way oversubscribed as everyone wanted them so badly. They are now down over 4% in a matter of days losing investors around $700 million in no time on this “safe” investment. Given that global bond markets are 4-5 times larger than stocks the potential for even a small rise in rates would be very devastating. Few may appreciate that nothing could cause more wealth destruction than a large and sustained rise in interest rates.

It seems that peak euphoria was being tested in the US last Wednesday as unfettered exuberance mid-morning gave way in the afternoon to discontent and outright scorn over Fed policy by the end of the session, one that saw the indexes plunge more than 2% on a single day after making an intra-day all-time high that same day. That has only happened twice before and both times (2000 and 2007) marked major cycle peaks in the markets. Could this be true again?

Cycle theory and common sense both say yes in prohibitive terms. Why can we advance this notion? Because if one were to peel back the layers of what has been unfolding recently in many other financial markets you could only come to one conclusion: global central banks have lost control of their mandates. The end must be near when the confusion over the meaning of one or two words from Chief Bernanke could cause such an uproar in the financial markets. Has it really come to this? Valuations are determined through hyper-parsing of nuanced words that are so carefully prescribed as to not achieve that effect?

The unintended consequences caused by policy decisions that could be called quite extraordinary has caused many individual asset classes to have a mid life crisis recently. They have seen explosive moves in all directions in degrees several standard deviations removed from their historic benchmarks. In other words, all hell is breaking loose just about everywhere. Everywhere except in the US, of course, where investors from Japan to Timbuktu have blindly reallocated so much capital since last November.

The action resulting from these audacious central bank moves has been dramatic across the board. The third largest stock market in the world (Nikkei in Japan) has rallied almost 90% in just over six months while their currency has declined against the USD by over 25% in the same period. Both of these moves are so enormous they can hardly be explained in a cogent manner without an overload of superlatives that would understate their true meaning. In the month of May we saw many strange events- gold plunging over $200 in a matter of hours, no fewer than 17 mini flash crashes in five NYSE stocks and silver halted four times in one session due to a lack of bids in a disorderly marketplace to say the least. And as of Thursday the Nikkei had plunged over 15% in just one week. Just another day in the parallel universe created by the global central banks.

These moves are alarming at best and who knows at worst. They are the best evidence yet of true parabolic moves one could expect to see at the end of grand super-cycles of credit such as the tail end of a Kondratieff Winter. And much like the geometric explosion of global debt, they are just not sustainable. My gut tells me two things- 1) markets are out of control,; and 2) very few investors agree these markets are out of control. This can be seen by tame levels of the VIX index and the release this week showing that margin debt had reached an all-time high. It all sounds a bit frothy to me and could signal the end of an era.

But the ludicrous nature of the these awesome moves in certain paper assets just keeps coming. Greek bonds sure to default have tripled in the past year. The Dow Industrials as of the end of May 2013 will not have seen a three day decline for the longest period since 1900 and that defies all sensibilities. It seems to many that there is some force or entity out there (the Fed ?) that’s not willing to allow such an event to occur, perhaps to create a myth that the markets will nudge ever higher. Incredibly, many now think that is the case as they believe the Federal Reserve and other central banks are in complete control. Or so it seems.

Our theme here today is that there is abundant exculpatory evidence hiding in plain sight that indicates the opposite- that central banks are losing control of the markets. In last month’s comments I noted the disturbing explosion of yields in the JGB’s (long term Japan bonds) that sent their prices crashing overnight, beginning a period extreme apprehension over a more serious bond crash could be looming. That worry has only worsened since then as the yield on 10 year JGB is now a whisker away from the 1 % level that is seen as crucial to hold to maintain the appearance that the world’s second largest bond market is not spinning out of control.

One thing that bulls and bears and nearly everyone can agree on this this- bad consequences will occur if global bond yields rise fast and far worse will happen if they rise too fast. The reason for this is that when volatility spikes and endures, leverage is taken off the table and that means lots of securities will be sold. So what are the chances yields could spike higher (making bonds plunge) given this universal belief of the consequences of such an outcome?

I believe the chances of such an outcome are quite underappreciated by investors today all along the the spectrum. This would include brokers, money managers, hedge fund managers, CFO’s managing billions of corporate cash coffers, pension fund managers, individual retail investors, sovereign wealth fund managers, and so many more. Their worldview could be soon shattered if global bond markets usurp the collective actions of global central banks. It would only take one of these markets to crash to induce a large global sell-off. Such an event would finally showcase the folly that rampant global central bank printing is beneficial to modern industrial economies. The central theme of Kondratieff Wave theory holds that the long term credit cycle cannot continue unabated and the excesses of this cycle must be removed. Clearly this is not the case.

Most investors and investment pros are still beholden to a worldview that puts no premium on long wave credit cycles. They insist on owning paper assets such as stock, bonds, and derivatives,etc. These instruments have on balance have been performing well since 1982 but not so well for the past 13 years. They subscribe to the same worldview that emphasizes yesterday’s metrics- PE multiples, PE expansion, cash on the sidelines, nowhere else to put your money other than stocks, and this chase for yield has pushed them into more risk and leverage than they otherwise would have deployed. Such an approach did not work too well in 2000 or 2007 when yields were still historically very low, so this mindset makes even less sense today now given the tens of trillions in global debt that has been added in the past few years.

But a closer look at the performance of money managers over that period since 1982 clearly shows a persistent underperformance by them over time even in bull markets? How can this be? Even in 2013 it is all too clear that hedge funds and professional money managers on balance are prohibitively underperforming the S&P index. Such statistics are meaningful in gleaning what could be missing from their equations. I advance that a coherent appreciation of the existence and the significance of long wave super-cycles would be a good place to start.

If they had an appreciation of the higher truths offered by the K-Wave theory perhaps they would be more likely to realize compounded gains over time from their acumen in the day to day, month to month decisions on asset allocation they are well suited to execute. Typically their lack of performance over the years can be attributed to poor decisions made during those critical inflection points in the the markets that seem to always occur when there is universal agreement upon the near term direction of the market (up in 2000, down in 2002, up in 2007, down in 2009 as recent examples). If they could only avoid the pitfalls at these junctures then I suspect most fund managers would instead outperform the broad market averages. Bubbles are not black swans, they hide in plain sight and lend themselves to distinct patterns that can be useful in making decisions.

Many are bewildered that the market has surged so much higher despite any meaningful help from retail investors. It is worth noting that a key element in the overperformance of the US market in recent years has been the collective impact of corporate stock buybacks by the healthiest US corporations. These buybacks have served to satisfy shareholders over employees or their local or national communities. The end result has been a historic drop-off in cap-ex and R&D and a dramatic increase in layoffs for even the best companies. The mandate of the modern corporation has never been more evident- making profits at any cost. Yet empirical evidence suggest these buybacks occur when stocks are relatively expensive. You wanna bet that some of them may regret this down the road? But why have they been so prevalent lately despite price levels that are so rich?

Large corporations have been for many years enduring the pitfalls of this deflationary Kondratieff winter that assures very low or negative growth rates globally that make it very difficult to grow the top line. So what to do if you are a CFO? Just resort to financial gimmicks such as stock buybacks so that your reduced operating profits during this winter period can be better cloaked with higher EPS through reduced shares outstanding. This behavior, much like the hoarding of cash by commercial banks unwilling to lend but dying to speculate in paper assets tells me the recent new highs in the S&P do not reflect a new bull market, only desperation to please investors at any price. They are creating less and less and investing less and less. Several studies have concluded that perhaps as high as 40% of the rally in recent years can be attributed to these buybacks. At any rate these buybacks I believe have cloaked more serious problems in the financial performance of corporations and their stocks. Global aggregate demand is slowing despite central banks accommodation and exponential increases in the population base. You just can’t hide from deflation.

The gains in stocks have diverged from the macroeconomic landscape for many years now and that trend has really accelerated this year. And we all know why- controversial central bank policies that range from keeping rates too low for too long during the mid- 2000’s to outright destructive ones such as printing several trillions to create a wealth effect whose benefits do not trickle down to the middle class and serves in effect to cushion political leaders from making unpopular structural reforms that are sorely needed. Today developed countries in the western world are staring down the barrel of a gun of their own making that can still be dismantled.

But sadly we have not taken the necessary steps to deconstruct our debt warheads to prevent the collateral damage they could cause. I suspect soon we will reach the brink, stare into the abyss, and determine once and for all if we can thrive in a world dominated by debt. I hope that our financial. corporate, and political leaders can find the will to reign in the central bankers before it’s too late. They may have good intentions but their approach has proven to be a failure and they should be called out on this at once. But time is running out, and several key market metrics described above are now flashing red lights. And remember the long wave chart of the US market still sports and ending diagonal bearish wedge that implies a severe plunge once key support is broken.

Source

Worldwide Field Development News Jun 8 – Jun 14, 2013

This week the SubseaIQ team added 5 new projects and updated 28 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.

Europe – North Sea

Total Locks EPC for Edradour Project Management

Jun 14, 2013 – Total E&P has secured the services of EPC Offshore to support the development of the Edradour gas and condensate discovery in block 206/4 on the UK continental shelf. EPC will provide project management services for the development as part of a 6-month contract worth more than $400,000. Edradour was discovered in 2010 and will be tiebacked to the West of Shetland Laggan-Tormore development project. Total operates Edradour with 75% interest while it partner, DONG, maintains the remaining 25% interest. The partners expect the discovery to begin producing in 2016.

Project Details: Laggan-Tormore

AMEC Secures Position in Bentley Development

Jun 13, 2013 – AMEC has been contracted by Xcite Energy to provide engineering services to support development of the Bentley field in the UK North Sea. Both companies have also entered into a Memorandum of Understanding (MOU) to develop a wider service agreement for the field relating to development scope and ongoing field operations. The MOU includes project and program management and controls, engineering and design through the FEED stage and beyond, fabrication management, sub-contractor management, hook-up and commissioning, operations and maintenance planning and duty holder services.

Project Details: Bentley

WGPSN Receives Beatrice Life of Field Contract

Jun 13, 2013 – Ithaca Energy signed a $200 million managed services contract with Wood Group PSN (WGPSN). The life-of-field contract is a continuation of a contract that WGPSN was awarded in 2008. Terms dictate that WGPSN will operate and manage the Beatrice Alpha and Bravo platforms and the Nigg onshore terminal until the end of their operational life. Production started at Beatrice in 1981 with an estimated 30-year lifespan. Several asset life extension programs have been carried out that have greatly increased the life of the field.

Project Details: Greater Beatrice Area

Appraisal Adds to Johan Sverdrup Potential

Jun 13, 2013 – Statoil announced the results of two appraisal wells that were drilled by the Ocean Vanguard (mid-water semisub) in the western margin of the Johan Sverdrup field. Well 16/2-17S reached a depth of 6,617 feet and penetrated 270-feet of gross oil pay in Jurassic sandstones. A production test was conducted and yielded almost 6,000 bopd with exceptional flow properties in the upper part of the reservoir. Well 16/2-17B was drilled as a sidetrack to the 17S well. Its target was the Cliffhanger South prospect but no hydrocarbons were encountered and the well has been classified as a dry hole.

Project Details: Johan Sverdrup

Mjosa Appears to be Non-Commercial

Jun 11, 2013 – Bridge Energy, minority partner in Norwegian license PL511, indicated that reservoir quality sandstones have been encountered by the Transocean Arctic (mid-water semisub) while drilling exploration well 6406/6-3 on the Mjosa prospect. Initial results indicate the presence of a sub-commercial volume of gas within the reservoir. Data is still being acquired and further interpretation will be needed to determine what potential exists within the prospect. The current plan is to plug and abandon the well upon reaching total depth.

Project Details: Mjosa

Africa – Other

Indian Pair Eyeing Mozambique Area 1 Assets

Jun 11, 2013 – India’s ONGC Videsh (OVL) and Oil India Ltd (OIL) confirmed that they are in advanced negotiations to buy Videocon Industries’ 10% stake in Area 1 offshore Mozambique for $2.47 billion. Several high-profile discoveries have occurred in the area since 2009 and the potential exists for Area 1 to be one of the world’s largest LNG producing hubs by 2018. Recoverable gas reserves for Area 1 are estimated between 35 and 65 Trillion cubic feet (Tcf). If approved, the acquisition will be executed through a 60/40 joint venture between OVL and OIL.

Project Details: Atum

Australia

ConocoPhillips and Karoon Struggle Getting Proteus to Bottom

Jun 13, 2013 – ConocoPhillips and Karoon Gas Australia, partners in WA-398-P, have been forced to sidetrack an exploration well being drilled on the Proteus prospect being drilled by the Transocean Legend (mid-water semisub) off Western Australia. Proteus-1ST1 was successfully kicked-off and drilled to 14,740 feet where a well control event forced the partners to shut-in the well. Drilling will continue once the well control issues are remedied.

Project Details: Proteus

N. America – US GOM

Noble Announces Results of Gunflint Appraisal

Jun 14, 2013 – Noble Energy announced results from the second appraisal well drilled on the Gunflint discovery in Mississippi Canyon block 948 in the US Gulf of Mexico. The well was drilled by the Ensco 8501 (DW semisub) to a depth of 32,800 feet. A net pay of 109 feet was encountered within the primary reservoir targets. Logging results confirmed an estimated gross resource range of 65 to 90 MMboe in the main target. An adjacent three-way structure is a candidate for future exploration. Noble and its partners are likely to develop the discovery as a subsea tieback with project sanction expected later 2013.

Project Details: Gunflint (Freedom)

2H to Provide Julia Riser Design to ExxonMobil

Jun 13, 2013 – 2H Offshore, a subsidiary of Acteon, was awarded a contract by ExxonMobil regarding the first development phase of the Julia project in the Walker Ridge area of the US Gulf of Mexico. Julia will be a subsea development tied back to the Jack/St. Malo floating production unit. Under the contract, 2H will conduct a detailed design study of two 10-inch steel catenary production risers. ExxonMobil and Statoil made the decision to proceed with the chosen development concept in May 2013. Production start-up is planned for 2016.

Project Details: Jack/St. Malo

Subsea 7 Lands Heidelberg Gig

Jun 11, 2013 – Anadarko continues to shop for its Heidelberg development in the US Gulf of Mexico with a recent contract award to Subsea 7. Work scope includes the engineering, fabrication and installation of risers, pipelines and flowlines. The installation work will be performed in over 5,200 feet of water. Project management and engineering will begin immediately with offshore activities to follow near the end of 2014.

Project Details: Heidelberg

Asia – SouthEast

Nido Secures SC58 Drilling Extension

Jun 14, 2013 – Nido Petroleum, operator of Service Contract 58, secured a 6-month extension to its Election to Drill Date from its joint venture partner PNOC Exploration. The extension gives Nido until January 11, 2014 to make the decision to drill one of the prospects identified in the area. Located adjacent to the Malampaya gas field, SC58 covers almost 3,335,922 acres. Water depth exceeds 3,280 feet over most of the block. Promising prospects located in the license include Balyena, Butanding and Dorado.

Project Details: Balyena

Stena Clyde Turns to The Right on Hagana Prospect

Jun 14, 2013 – The Stena Clyde (mid-water semisub) has spud the second well in its current drilling program in the Gulf of Papua off Papua New Guinea. Hagana-1 is being drilled in PPL 244 in almost 350 feet of water. The rig is expected to be on location for roughly 40 days as it tests the Pleistocene sandstone structure. Oil Search (40%) operates the license with support from its partners Total (40%) and Nippon Oil (20%). Hagana has been estimated to contain up to 1.3 Tcf of mean, unrisked, prospective gas resources.

Project Details: Hagana

Otto Receives SC69 Extension

Jun 13, 2013 – Otto Energy received a 6-month extension from the Philippines Department of Energy for Exploration Sub-Phase 3 of Service Contract (SC) 69. Sub-Phase 3, which began February 7, 2011, now has an effective expiration date of November 7, 2013. Three potential drilling targets, Lampos, Lampos South and Managau East, were identified with 3D seismic that was acquired in 2011. Otto will use the extension to complete outstanding technical work, begin well planning and start a farm-down process.

Project Details: Lampos