Tensions between China and Philippines over contested waters with rich oil and gas potential Reserves

"Tensions between China and the Philippines have spiked in recent weeks as the two sides jostle for control over the Second Thomas Shoal, a potentially oil and gas rich fixture in contested waters. 
Nearly one year after Chinese paramilitary forces and the Philippine Navy squared off precariously over the contested
Scarborough Shoal, the Second Thomas Shoal (known as "Ren'ai" in China and "Ayungin" in the Philippines) has emerged as a new regional flashpoint. 

The newly contested shoal is 168 kilometers off the Philippine western island of Palawan and almost 965 kilometers from the nearest Chinese port. It has been under the de facto control of Philippine forces for over a decade, with Manila arguing that the shoal is well within its 200 nautical mile exclusive economic zone (EEZ). Beijing has repeatedly referred to Manila's claims over island and reefs in the area as "illegal occupations". 

For the Philippines, maintaining control over the Second Thomas Shoal is not only a question of preserving territorial integrity. The shoal also serves as a critical gateway to the currently Philippine-controlled Reed Bank, situated 80 nautical miles from Palawan and estimated to possess among the largest reserves of untapped oil and gas in the Western Pacific. 

In terms of proven and probable reserves of oil and gas, the US Energy Information Administration (EIA) estimates the entire South China Sea holds as much as 11 billion barrels of oil and 190 trillion cubic feet of natural gas. Crucially, the bulk of those projected undiscovered hydrocarbon deposits lies specifically within the Reed Bank and surrounding areas. 
Citing a US Geological Survey, the EIA estimates "between 0.8 and 5.4 (mean 2.5) billion barrels of oil and between 7.6 and 55.1 (mean 25.5) trillion cubic feet (TCF) of natural gas in undiscovered resources" are in the contested northeast end of the South China Sea, encompassing areas of the contested Spratly Islands and the Reed Bank. 

In 1976, the Philippines started exploration and development activities in the Reed Bank area, complementing the nearby Shell-operated Malampaya Natural Gas Field that is responsible for 40%-50% of the power generation for the industrializing northern island of Luzon. 

With the natural gas facility set to exhaust its 2.7 trillion cubic feet of reserves in the next decade, Reed Bank is viewed by Manila as crucial to the nation's future energy security. The Philippines currently imports around 40% of its energy needs, which are fast growing with recent strong economic growth.
In 1976, the Philippines started exploration and development activities in the Reed Bank area, complementing the nearby Shell-operated Malampaya Natural Gas Field that is responsible for 40%-50% of the power generation for the industrializing northern island of Luzon. 

With the natural gas facility set to exhaust its 2.7 trillion cubic feet of reserves in the next decade, Reed Bank is viewed by Manila as crucial to the nation's future energy security. The Philippines currently imports around 40% of its energy needs, which are fast growing with recent strong economic growth

In 1976, the Philippines started exploration and development activities in the Reed Bank area, complementing the nearby Shell-operated Malampaya Natural Gas Field that is responsible for 40%-50% of the power generation for the industrializing northern island of Luzon. 

With the natural gas facility set to exhaust its 2.7 trillion cubic feet of reserves in the next decade, Reed Bank is viewed by Manila as crucial to the nation's future energy security. The Philippines currently imports around 40% of its energy needs, which are fast growing with recent strong economic growth.
For Reed Bank, Manila enlisted the support of the US-based Sterling Energy in 2002 and UK-based Forum Energy in 2005. 
The Recto Bank concession, or SC-72, has so far been composed of three drilled wells located at the southwest end of the complex, with two of the wells testing gas at rates of 3.2 million cubic feet per day (MMCF/D). and 3.6 MMCF/D. Since 2008, Forum Energy has been joined by Monte Oro Resources & Energy Inc, forming an Anglo-Filipino consortium to manage the concession. Forum Energy holds a 70% stake in SC-72. 

Forum Energy's own estimates put the gas field's gross reserves at over 11 TCF, dwarfing the size of the now semi-exhausted Malampaya. In short, the Reed Bank is a viable and potentially game-changing hydrocarbon reservoir close to both China and the Philippines in the South China Sea". 

Source: Asia Times

Deloitte & Touche Consulting:Russian Fed. Oil and Gas Sector in Russian Federation 2012

Deloitte & Touche Regional Consulting Services Ltd, Moscow, Russia;

"The oil and gas sector is the most important part of the economy in
Russia. Resources extraction is beating records. It is based on boosting
prices and on a flexible tax system. At the same time forecasts show a
production plateau may be reached in a few years. In this case the
government is interested in investments to protect current production
levels. Government regulation is significantly different between oil and
gas industries. The oil industry has a variable tax system to attract
foreign and domestic investments. The gas industry is dominated by
monopoly and is much less open for investments. However, taxes are
rising in the gas industry in order to achieve the same taxation level as
in the oil industry. A few main players with more than 90 %
market share dominate the Russian oil industry. They are mainly state-owned
or have private Russian ownership, but international oil companies can
make a successful joint venture (JV) in Russia. Today privatisation is one
of the government’s priorities, but actual decisions of authorities sometimes contradict to this statement. Resources extraction is beating records. It is based on boosting
prices and on a flexible tax system. At the same time forecasts show a
production plateau may be reached in a few years. In this case the
government is interested in investments to protect current production
levels.  They are mainly state-owned
or have private Russian ownership, but international oil companies can
make a successful joint venture (JV) in Russia. Today privatisation is one
of the government’s priorities, but actual decisions of authorities

  Government regulation is significantly different between oil and
gas industries.

Oil is produced all over the Russian Federation. The oil fields in the Ural
and Volga Federal Districts account for the majority of oil production
(61 and 21 % in 2010, respectively). Russia has 77.4 billion barrels (bbl)
of proven oil reserves (see Table 1). However, large parts of the country
are underexplored and there may be significant reserves potential in its
share of the Caspian Sea and in the Arctic waters. Lower reserves
increasing rate rather than production increasing rate is the aim for
oil companies in Russia . Top management of 73 % of oil
companies indicated an increase in the volume for geological exploration.
The main reasons are the gradual decline in already discovered
hydrocarbon sources and the necessity to fulfil license obligations.
Relatively high oil prices and support initiatives from the State also provide
incentives for companies to expand exploration activities.

Natural Gas
By the end of 2011 Russia had produced 660 billion cubic meters (bcm)
of gas, which is 3 % higher than the 2010 results. Russia holds the world's
largest natural gas reserves (it is the second largest producer of natural
gas) and the eighth largest crude oil reserves.
Natural gas reserves in
Russia are estimated to be more than 50,000 bcm.
In 2011, oil production of an estimated 10.5 mn b/d accounted for
around 11.5 % of the world’s total. Russia meets 22 % of the world’s
gas demand with supply estimated at 630 bcm. With a total processing
capacity of around 5.4 mn b/d, Russia is the world’s third largest refiner
after the US and China. On 1 January 2010, the Russian Federation State
balance included 895 free gas fields; 619 of them were in a specified
subsurface resources fund, while those not allocated to the fund had low
resources or were located in hard-to-reach regions with severe climatic
conditions. Russian waters in the arctic are expected to contain
100,000,000,000 tons of oil and gas".

FROM WSJ Fed Chairman Gold isn´t a great hedge against inflation but...

Federal Reserve Chairman Ben Bernanke Thursday said falling gold prices may reflect less concern among investors about “extreme outcomes” for the economy.

“Gold is an unusual asset. It’s an asset that people hold as a sort of disaster insurance,” Mr. Bernanke said in response to a question at a Senate Banking Committee hearing.

Gold prices have dropped near three-year lows in recent weeks as the economy shows signs of improving and the Fed has clarified its plans to eventually roll back its bond-buying program.

Mr. Bernanke said those lower prices may reflect greater confidence about the economy and less concern that Fed programs will cause inflation to spike.

Still, the Fed chairman said gold isn’t such a great hedge against inflation. “Movements of gold prices don’t predict inflation very well,” 

“Nobody really understands gold prices and I don’t pretend to understand them either,” he said.

BlackRock Investors pulled out US$ 1.5 billion from fixed-income ETF´s

According to the Wall Street Journal, the world's largest money-manager isn't immune to fear in the bond market.

Investors pulled a net $1.5 billion from BlackRock  Inc.'s  fixed-income exchange-traded funds during the second quarter of the year through June 30, the company reported as part of its earnings release Thursday. The ETF business, branded iShares, saw total net outflows of $963 million, including outflows from bond funds, according to the company. BlackRock is the country's largest provider of ETFs, which typically track an index and trade on an exchange.

Institutional investors—pension funds and endowments—pulled a net $1.3 billion from fixed-income products during the quarter. BlackRock has total fixed-income assets of about $1.2 trillion.

BlackRock's chief executive and chairman Laurence D. Fink said in an interview with The Wall Street Journal Thursday morning he wouldn't be surprised if 10-year Treasurys closed the year at a 3% yield, although he said rates would likely be tethered around 2.5% "for awhile." Bond yields rise when their prices fall.

Rather than a "great rotation" out of bonds, Mr. Fink said in his investor call that BlackRock is seeing its fixed-income investors move into bond funds that aren't tethered to an index, also known as unconstrained bond funds.

NEC Failure of Japan´s tech industry

Sadly enough, NEC's share price rose 2.6% on the news that it is going to shutter its mobile phone unit. It's a tragic epitaph for what was once a genuinely exciting brand. It's also a sad reminder of the profound failure of Japan's technology industry.

The global smartphone market is currently shaken by a cluster of vital, hungry challenger vendors of China and India, including Huawei, ZTE, Micromax, Karbonn and Spice. Japanese mobile phone powerhouses like Sharp, Toshiba, Matsushita and NEC have been left in the dust. Only Sony still soldiers on, grimly and joylessly.

In the end, NEC fizzled out as a global phone brand despite having pioneered key technologies like color displays, 3G support, dual screens and camera modules. Just like its Japanese peers, NEC was too focused on Japan's domestic market and its idiosyncratic nature to ever really anticipate global trends accurately.

Chinese automakers have demonstrated their ambitions to tap into overseas markets at an ongoing auto show in northeast China.

A large number of automakers, from privately-owned firms to state-owned enterprises, have been making greater efforts to sell their vehicles outside of China, where sales growth has slowed after a decade-long boom.

Geely Motor, a privately-owned automaker that purchased Volvo Car Corp. in 2010, exported 50,438 vehicles in the first half of the year, up 30 percent year on year.

Sales in overseas markets account for about one-fifth of the company's total sales, according to Zhang Lin, vice president of Geely Motor.

Zhang said Geely's earlier efforts to foster overseas sales have matured and the company's international business is on the right track.

Apart from the opening of an assembly plant and the launch of its EC7 sedan in Egypt last year, Geely has completed another project in Uruguay, where the EC7 sedan, a medium- to high-end luxury vehicle launched in 2009, will be put into production with an annual single-shift capacity of about 10,000 units, according to Zhang.

According to a plan previously announced by the company, Geely will expand its overseas production to countries like Russia, Brazil, India and Iran.

Figures from the China Association of Automobile Manufacturers (CAAM) show that China exported 486,800 vehicles in the first six months of the year, down 0.6 percent from the same period last year

Zhang said emerging markets were prioritized in the industry's initial stages of growth. "But we do have plans to enter the European and American markets gradually," he said. Expertise built up in emerging markets will help Chinese automakers gain a foothold in more developed areas.

"Chinese automakers will definitely enter the European and American markets. It is simply a question of time," Zhang said.

Source Xinhua

Global Crisis has given BRICS economies greater prominence on the WTO

The global financial crisis since 2008 has given BRICS economies greater prominence on the world stage, World Trade Organization (WTO) Director General-elect Roberto Azevedo said Wednesday.

BRICS countries need to make their participation in multilateral fora and organizations a state policy as the crisis has also brought greater responsibilities in relation to development and cooperation policies, he told a seminar on development in Brazil's capital Brasilia.

Emerging countries are "one of the main focal points of the global scenario," he said, adding that their development policies are being watched carefully.

Source  Xinhua

Chinese new and existing homes reported higher prices in June

Prices of both new and existing homes continued to rise in most Chinese cities in June, according to official data released on Thursday.

Of a 70-city statistical pool, 63 Chinese cities saw month-on-month home price rises, whereas the number was down from 65 cities that reported higher prices in May, the National Bureau of Statistics (NBS) said in a statement on its website.

According to the NBS, 55 cities reported month-on-month price gains in existing homes in June compared to the previous month. The figure also dropped from 64 cities that saw price rises in May.

The data was in line with market expectations that the trend of price rises would be sustained even though the amount of increases would be tempered.

Liu Jianwei, a senior statistician with the NBS, said that around half the cities saw narrower new home price increases in June from a month ago.

The nation's second and third-tier cities, such as Guilin and Baotou, saw new home price increases narrow by 1.3 and 1.2 percentage points, respectively, Liu said.

The tempered tone in analyzing the June data met criticism online, with many complaining home prices had still increased across a broad range and the current prices remained unaffordable for common people.

In first-tier cities, home prices all witnessed sharp rises last month both on a monthly and yearly basis.

Property prices started to rebound in the second half of 2012. Runaway prices led the government to issue a guideline in March to tighten control on the real estate sector, including higher transaction taxes, restrictions on purchases of multiple homes, and higher down payments.

However, that guideline failed to stop the upsurge of property prices.

Source    Xinhua

Precious Metals Quotes

Gold Price        3months Futures       US$ 1,284.99

Silver Prices     3months Futures       US$     19.43

Precious Metals Quotes

Gold Price    3months Futures        US$   1,275.59

Silver Price  3months Futures        US$        19.31

France: Hollande says recovery is here

Despite a faltering growth and still-rising unemployment, French Socialist President Francois Hollande is banking on his "historic" economic measures to get the ailing economy out from a recession and to achieve financial targets that analysts say are over optimistic.

In a traditional TV interview on France 2 and TF1 channels to mark the National Day on Sunday, Hollande stressed that "the economic recovery is here," arguing that a slight pick-up in industry output and consumption showed that the end of the crisis was in the air.

He added having "an already insurance that the second quarter will be better than the first."

But will France's 2.5 trillion -U.S.- dollar-economy which had not grown since the third quarter of 2011 show some muscles and defy the downbeat outlook?

Working to convince the nation that the economy is in its hands, Hollande's executive staff hoped tailwind will overcome headwinds thanks to their economic roadmap based on public spending squeeze, taxes rise on banks, big firms and the rich to help reduce the public deficit while pumping more funds into state-aided job creation.

In its recent economic report, the Bank of France revised up its gross domestic product forecast to 0.2 percent in the second quarter, citing a slight improvement in businesses in the short term. That would be music to the ears of Hollande who suffered a setback in his approval rating.

Blaming "persistent uncertainty and weakness of economic indicators,"the International Monetary Fund (IMF) lowered its 2013 forecast for the second largest European economy to minus 0.2-percent from a previous forecast of 0.1- percent contraction.

It also pointed that high risks of persistent stagnation in the eurozone may taint the expected "gradual turnaround of economic conditions in the second half of this year."

On Wednesday, local media reported that the government will announce later on the day 3 billion euros in subsidy cuts and tax rebates as part of reforming measures designed to reduce public spending and meet European Uuion-mandated deficit targets which has been extended for two more years to reach 3 percent of French GDP.

Source: Xinhua

China: Overall Mergers & Adquisitions trends and 2013 outlook Part I

There was a sharp overall M&A decline of 25% in China in year 2012,the lowest of the last five years.
Although there was a strong growth of value 50% in China's outbound M&A deals.This trend is expected to continue in 2013.
 Foreign companies are more inclined to sit on their cash, uncertanties hampers M&A deals. They
want to get more familiar with a slower growth rate of GDP and change of Chinese leadership.The latter has resulted in a slowdown in deals in 2012, and those have gone to 2013.
What is leading outbound M&A are Chinese Private Companies. They are adquiring technology and
brands to bring them to the chinese market.
  But also they are growing in confidence to M&A deals in material, energy and power and to grow
in the world market

IMF Outlook for China's Economy Part I

According to the Executive Board of the International Monetary Fund (IMF):
China’s economy is expected to grow at around 7¾ percent this year, notwithstanding a moderate slowdown during the first half, with resilient domestic demand offsetting lingering weakness in the external environment. Inflation has continued its downward path, and with persistently high investment contributing to excess capacity in many sectors, is likely to remain subdued around 3 percent this year and next.
Macroeconomic policies have been supportive toward achieving this year’s growth target. The overall fiscal deficit is likely to be around 2 percent of GDP.
 Strong growth in total social financing is expected to underpin a slight rebound of activity in the second half of this year. Capital inflows have resumed in recent months and the renminbi has appreciated by around 1½ percent against the U.S. dollar in the year through June, and by about 6 percent in real effective terms. International reserves have risen to about US$3.44 trillion at the end of March (up from US$3.31 trillion at the end of 2012).
China’s progress on external rebalancing has been substantial—the current account as a share of GDP is now less than a quarter of its pre-crisis peak in 2007. By contrast, domestic imbalances remain large. National accounts data show that last year gross fixed capital formation grew further as a percent of GDP, while private consumption was broadly unchanged, indicating that a decisive shift toward a more consumption-based growth path has yet to occur. Accelerating the transformation of the growth model remains the main priority, as reaffirmed in recent policy announcements by the new administration.

From WSJ: Increasing investment interest in Palladium and Platinum

"While prices of base metals such as copper wallow and as gold and silver stand on shaky ground, precious metals with industrial uses are rising as their supply outlook tightens, subsequently upping their investment appeal.
Precious metals with industrial uses, platinum and palladium, rose more than gold last week".

 "They have gained on persistent risks to their supply picture, a nuanced demand outlook and continued investor interest.

Labor uncertainty persists in key producer South Africa with Cigroup expecting production to suffer, while some say palladium supply from Russian stockpiles is all but exhausted. Meanwhile on the demand-side, the jewelry sector represents an interesting growth area for platinum and exchange-traded products backed by the white metals continue to receive healthy interest".

Pension Funds and private-equity firms searchig for cheap minig assets

According to the Wall Street Journal, amid the slump of metal prices, long term investors like pension funds, and private equity Institutions are looking to cheap mining assets from Australia to Canada.
"The slide in the price of iron ore and other commodities has hammered mining companies’ share prices, forcing many to shed assets and opening the door to other investors, including big institutions and private-equity firms with no mining experience but with time to wait for prices to rise.
Canada’s two largest pension funds—CPP Investment Board and Caisse de depot et placement du Quebec—are each seeking possible partners for separate bids for Rio Tinto PLC's  59% stake in Iron Ore Co. of Canada, valued at about $4 billion, people familiar with the matter said last week".

"And last month, Japanese trading companies Itochu Corp.  and  Mitsui & Co. agreed to buy stakes in BHP Billiton Ltd's Jimblebar iron-ore mine in Australia for a total of around US$1.5 billion. Itochu agreed to purchase an 8% stake in the mine for around US$800 million, while Mitsui agreed to pay around US$700 million for a 7% stake". 

"Pension funds, known for investment horizons of 20 to 30 years, can wait for prices to rise and the sector to turn around, said Kelly Teoh, a strategist with IG in Singapore. “People are talking about the commodity super-cycle being over, but commodities will always have a place in society because, if you look at global population growth, we are reaching unprecedented levels”

From WSJ China's Slowdown has little effect on Japanese economy

The effects of China's slowdown have rippled through the global economy. But for the region's next-largest economy, Japan, the blow has so far at least been cushioned by its own recovery in domestic demand, and a new boost to exports from the sharply weaker yen, which makes Japan-made goods more competitive on global markets.

Sales of many Japanese products in China were also curtailed sharply last year by a boycott over a territorial dispute, so Japanese shipments are rebounding from that low base to a more natural market share, even as overall demand in China may be softening. And Japanese companies have been gearing up to tap into China's growing consumer market, which is expected to grow in a recalibration of the Chinese economy, even as other sectors decline.For May, the most recent data available, Japan's exports to China rose a healthy 8.3% over the previous year, showing a sharp recovery from recent softness - though not quite as robust as Japan's 10.1% increase in exports overall. That, despite the fact that China reported Monday that its GDP growth slowed to 7.5% in the second quarter, down from 7.7% in the first quarter.

IMF Report China's economy can withstand Schocks.

The International Monetary Fund (IMF) said the Chinese economy has the capacity to withstand shocks, while accelerating growth model transformation remains its main priority.

In its annual China economic assessment report, the IMF said Wednesday that the world's second-largest economy "is expected to grow at around 7.8 percent this year, notwithstanding a moderate slowdown during the first half, with resilient domestic demand offsetting lingering weakness in the external environment."

They predicted that the growth would pick up moderately in the second half of the year, as the lagged impact of recent strong growth in total social financing takes hold and in line with a projected mild recovery in the global economy.

The report also said inflation in China has continued its downward path, and is likely to remain subdued around 3 percent this year and next.

"Macroeconomic policies have been supportive toward achieving this year's growth target," said the IMF, noting that although substantial progress has been made in external rebalancing, domestic imbalances remain large in China with private consumption was broadly unchanged as a percent of the gross domestic product.

"Accelerating the transformation of the growth model remains the main priority, as reaffirmed in recent policy announcements by the new administration," 

"Growth outlook is clouded by mounting domestic vulnerabilities in the financial, fiscal, and real estate sectors. At the same time, potential spillovers from developments in the euro area and major advanced economies continue to pose external risks"

  "China has the capacity to withstand shocks, but considered that a further strengthening of policy buffers over time would be desirable", said the latest FMI report

Source   Xinhua

China´s expansion of property tax plan

The long-discussed expansion of China's property tax plan has once again come under the spotlight following a renewed pledge by tax authorities to research the plan.

The State Administration of Taxation (SAT) said in a circular issued late Tuesday that it will research the possible expansion of property tax pilot programs.

However, like similar statements previously made by other authorities, the circular did not include any details regarding a timetable for the expansion.

The comment is the latest in a string of official statements in which authorities have vowed to implement a property tax plan currently being used in the cities of Shanghai and Chongqing.

Despite repeated emphasis, the government has yet to make any substantial moves regarding the property tax, although recent media reports indicate that several cities, including Hangzhou, Wuhan and Xiangtan, are ready to implement the plan.

The government introduced property taxes in Chongqing and Shanghai on a trial basis in 2010 as part of efforts to cool the property market down amid growing public complaints about skyrocketing property prices.

The Chongqing trial focused on taxing high-end housing, while Shanghai's program mainly targeted the ownership of multiple houses.

But due to limited rates that ranged from 0.5 to 1.2 percent, the taxes imposed were seen as too low to be effective in keeping local housing prices in check.

Source  Xinhua

Government Bonds Quotes.

Goverment Bonds.

U.S. 5 Year			10/32	1.308
U.S. 10 Year			13/32	2.486
U.S. 30 Year			11/32	3.569
Germany 2 Year			0/32	0.091
Germany 10 Year			2/32	1.546
Italy 2 Year			-3/32	2.150
Italy 10 Year			-6/32	4.492
Japan 2 Year			0/32	0.130
Japan 10 Year			2/32	0.818
Spain 2 Year			-2/32	2.034
Spain 10 Year			-8 6/32	4.720
U.K. 2 Year			0/32	0.307
U.K. 10 Year			-8/32	2.295

  Source   WSJ

Precious Metals Quotes

Gold Price      3months Futures         US$     1,281.79

Silver Price    3months Futures         US$          19.67

FMI Spain Latest Report Part I

Implementation of Spain’s financial sector program remains on track. The vast
majority of measures specified in the program have now been implemented, as envisaged
under its frontloaded timetable. Most notably, actions to recapitalize parts of the banking
sector and the asset transfers to SAREB have provided an important boost to the system’s
liquidity and solvency.
Correction of Spain’s large external, fiscal, and financial imbalances is
well underway, with policy actions at both the European and Spanish levels helping to ease
market pressures over the last year. Nonetheless, further adjustment remains, and the process
continues to weigh heavily on domestic demand, with output still shrinking and unemployment
rising to record levels. Financial sector dynamics still contribute to recessionary pressures, with
credit contraction accelerating, lending standards tightening, and lending rates to firms rising.

From Reuters Fed Chairman tap to bond buy program subject to U.S. Economic Conditions

Fed Chairman Bernanke in testimony to Congress said on Wednesday, that the Central Bank will
start to taper its bond buying program, later this year.
"Our asset purchases depend on economic and financial developments, but they are by no means on a preset course," 

In his remarks on Wednesday, Bernanke said the pace of asset purchases could be reduced "somewhat more quickly" if economic conditions improved faster than expected. On the other hand, the current pace "could be maintained for longer" if the labor market outlook darkened, or inflation did not look like it was rising back toward the Fed's 2 percent goal.

"Indeed, if needed, the (Fed's policy-setting) committee would be prepared to employ all its tools, including an increase (in) the pace of purchases for a time, to promote a return to maximum employment in a context of price stability,"

Precious Metals Quotes

Gold Price    3months Futures           US$  1,295.85

Silver Price  3months Futures           US$      20.05

China's Top target coordinated development to raise quality of urbanization

China's top political advisor Yu Zhengsheng on Tuesday underlined the significance of coordinated development in raising the quality of urbanization.

Yu, chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), said at a CPPCC meeting that China should coordinate efforts of industrialization, informatization and agricultural modernization in seeking high-quality urbanization.

The country's urbanization drive should be human-oriented to provide people with better production and living conditions, Yu said.

China should also push forward industrial transformation and upgrading, as well as the development of industrial clusters to create more job opportunities, he said.

In the central economic work conference last year, the government said it would steadily push forward urbanization in 2013, as urbanization is a major driver for domestic demand.

The country's urban population reached 711.82 million at the end of last year, accounting for 52.6 percent of the country's total, official data showed.

Also addressing the meeting, Vice Premier Wang Yang urged the country to accelerate the reform of its household registration system and the drive to provide equal basic public services to all residents.

Australia: facing problems for its Gas Projects. US Shale Gas Boom.

From the WSJ.

 Once a first choice country for energy investment due to its political stability and large
natural-gas reserves.
Appreciation of the currency and higher wages than expected,blowout Capex of Australian Big Gas
Projects.
 "Although those problems have been around for a while, they are becoming more worrisome now that gas prices elsewhere have dropped and buyers have more options for securing energy supply.
The industry has more than US$160 billion of liquefied natural gas investments currently in flight [being built]. But upward of another US$100 billion in potential future projects could be at risk," Chevron Australia Managing Director Roy Krzywosinski said.
Chevron and partners Exxon and Royal Dutch Schell Plc, have delayed work to expand their US$52 billion Gorgon project. Gorgon is Australia's largest natural-gas resource, containing an estimated 50 trillion cubic feet of natural gas—enough to meet U.S. demand for two years. Chevron is the project's operator and largest shareholder. The Browse project has also been delayed.
Project delays carry large risks for companies like Chevron as future supply from Australia would compete for customers with U.S. projects offering cheaper gas. LNG in Asia has traditionally been sold via long-term contracts, with prices linked to relatively expensive crude oil, whereas export deals in North America are based on sharply lower domestic gas prices there. Analysts think Australian gas-export prices may need to fall by as much as 25% to compete with U.S. gas prices.

In May, the U.S. approved Freeport LNG Development LP's $10 billion Quintana LNG-export project in Texas, the second U.S. development to move forward after Chenerie Energy Inc.'s  Sabine Pass project in Louisiana.

Both involve converting old LNG import terminals into export facilities, making them cheaper to build than Australian projects because infrastructure—such as pipelines and storage tanks—is already in place".