Merck Takeover Fuels Speculation of Drug Industry Merger Wave

Bloomberg | Mar 9, 2008

By Trista Kelley

Merck & Co.’s $41.1 billion purchase of Schering-Plough Corp. fueled speculation it won’t be the last big drug-industry merger.

The deal, which comes on the heels of Pfizer Inc.’s $68 billion bid for Wyeth in January and Roche Holding AG’s $45.7 billion offer for U.S. partner Genentech Inc. last week, will spur other drugmakers fearful of falling behind into action, said David Moskowitz, an analyst with Caris & Co. in Washington, D.C.

Sanofi-Aventis SA may next target Bristol-Myers Squibb Co., which sells the French company’s Plavix blood-thinner and the Avapro hypertension treatment in the U.S. Alternatively, Bristol- Myers may be a potential merger partner for U.K. diabetes drug partner AstraZeneca Plc, said Mirabaud analyst Nick Turner. Johnson & Johnson may make a counter bid for Schering-Plough, Sanford C. Bernstein analyst Tim Anderson wrote in a note to clients.

“Most companies now are pretty cheap, really, and anyone sitting on cash can make a bid,” London-based Turner said today in an interview. “This is a trigger for a wave of mergers and acquisitions in the sector.”

The world’s biggest pharmaceutical companies, hoarding about $100 billion in cash, near cash and marketable securities, are seeking acquisitions to replace products nearing the end of their patent life. Merck’s takeover of Schering-Plough, announced today, would win the U.S. drugmaker a larger experimental pipeline and products unhindered by imminent patent losses.

AstraZeneca Gains

AstraZeneca climbed 76 pence, or 3.5 percent, to 2,223 pence in London trading, the most since Jan. 23, on speculation Bristol-Myers would make a bid. AstraZeneca spokeswoman Sarah Lindgreen said the company doesn’t comment on market speculation. Bristol-Myers spokesman Brian Henry also declined to comment.

Sanofi Chief Executive Officer Chris Viehbacher, while not ruling out a large merger, is looking for “small to medium- sized” acquisitions to replace revenue it expects to lose to generic competition in coming years, the 48-year-old executive said last month.

Viehbacher told CNBC in a March 5 interview that the French company’s partnership with Bristol-Myers is “sufficient” for the time being.

Other drugmakers have said they will avoid large mergers. Andrew Witty, head of GlaxoSmithKline Plc, said last month a large transaction would “distract” the company. Glaxo will rely on agreements valued from about $50 million to the “low billions,” he said in a January interview.

AstraZeneca chief David Brennan also favors licensing deals to shore up its pipeline of new products.

Pfizer has lost 7.5 percent of its value since completing its acquisition of Pharmacia Corp. in 2003. Glaxo’s shares have declined 25 percent since the U.K. drugmaker bought Smithkline Beecham Plc in 2000.

“If you can name a merger that worked, I’ll personally give you a bouquet of flowers,” said Mirabaud’s Turner.

Oil price inflation mostly due to pure speculation, instead of demand

60% of oil price inflation due to pure speculation

Global Research | May 2, 2008

by F. William Engdahl

The price of crude oil today is not made according to any traditional relation of supply to demand. It’s controlled by an elaborate financial market system as well as by the four major Anglo-American oil companies. As much as 60% of today’s crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price. How?

First, the crucial role of the international oil exchanges in London and New York is crucial to the game. Nymex in New York and the ICE Futures in London today control global benchmark oil prices which in turn set most of the freely traded oil cargo. They do so via oil futures contracts on two grades of crude oil—West Texas Intermediate and North Sea Brent.

A third rather new oil exchange, the Dubai Mercantile Exchange (DME), trading Dubai crude, is more or less a daughter of Nymex, with Nymex President, James Newsome, sitting on the board of DME and most key personnel British or American citizens.

Brent is used in spot and long-term contracts to value as much of crude oil produced in global oil markets each day. The Brent price is published by a private oil industry publication, Platt’s. Major oil producers including Russia and Nigeria use Brent as a benchmark for pricing the crude they produce. Brent is a key crude blend for the European market and, to some extent, for Asia.

WTI has historically been more of a US crude oil basket. Not only is it used as the basis for US-traded oil futures, but it’s also a key benchmark for US production.

‘The tail that wags the dog’

All this is well and official. But how today’s oil prices are really determined is done by a process so opaque only a handful of major oil trading banks such as Goldman Sachs or Morgan Stanley have any idea who is buying and who selling oil futures or derivative contracts that set physical oil prices in this strange new world of “paper oil.”

With the development of unregulated international derivatives trading in oil futures over the past decade or more, the way has opened for the present speculative bubble in oil prices.

Since the advent of oil futures trading and the two major London and New York oil futures contracts, control of oil prices has left OPEC and gone to Wall Street. It is a classic case of the “tail that wags the dog.”

A June 2006 US Senate Permanent Subcommittee on Investigations report on “The Role of Market Speculation in rising oil and gas prices,” noted, “…there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices.”

What the Senate committee staff documented in the report was a gaping loophole in US Government regulation of oil derivatives trading so huge a herd of elephants could walk through it. That seems precisely what they have been doing in ramping oil prices through the roof in recent months.

The Senate report was ignored in the media and in the Congress.

The report pointed out that the Commodity Futures Trading Trading Commission, a financial futures regulator, had been mandated by Congress to ensure that prices on the futures market reflect the laws of supply and demand rather than manipulative practices or excessive speculation. The US Commodity Exchange Act (CEA) states, “Excessive speculation in any commodity under contracts of sale of such commodity for future delivery . . . causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity.”

Further, the CEA directs the CFTC to establish such trading limits “as the Commission finds are necessary to diminish, eliminate, or prevent such burden.” Where is the CFTC now that we need such limits?

They seem to have deliberately walked away from their mandated oversight responsibilities in the world’s most important traded commodity, oil.
Full Story

Big Oil’s Big Problem: Too Much Money

US giants Conoco and Exxon have more money these days than they know what to do with, so they’re handing it out to shareholders. What they aren’t doing with it is much that will reduce the oil crunch, says MSN Money columnist Michael Brush.

MSN | May 21, 2008

By Michael Brush

While many Americans struggle to fill their gas tanks, big U.S. oil companies are making so much money that they literally don’t know what to do with it.

Instead of reinvesting more of their newfound wealth to increase supplies or develop emerging technologies that might one day reduce energy costs, they are giving much of the loot to shareholders already enjoying outsized gains.

In a capital-intensive business, giving cash back to shareholders is often the equivalent of throwing in the towel. It’s saying “we can’t do anything with this money to improve our business.”

And it certainly doesn’t address the oil crunch that consumers pay for every day at the pump.

Is that what oil giants pay executives exorbitant salaries to do? Especially in a sector where better long-term vision and reserve development 10 years ago might have helped avoid the current mess?
I don’t think so. But that’s what’s happening.

Big money is worried, too

This isn’t just an issue for disgruntled consumers. Analysts debated the issue with ConocoPhillips (COP, news, msgs) execs on its last conference call.

The company made $11.9 billion in net income last year, and it will do even better this year. It plans to give it all back to shareholders, paying more than $3 billion in dividends and spending $10 billion to buy back shares. (Buybacks reduce the number of shares on the market, usually increasing the share price.)

That’s a lot of cash, enough to take 9 cents off the price of every one of the 141 billion gallons of gasoline consumed in the United States in a year.

Michael LaMotte of JPMorgan Chase (JPM, news, msgs) questioned why ConocoPhillips wasn’t devoting more than $15 billion to its capital budget. After all, ConocoPhillips production volumes declined in the last quarter, even without counting production lost when it got booted out of Venezuela.

Citing the juicy returns that energy companies get from finding and producing oil with crude prices are so high, LaMotte expressed exasperation. “I mean, clearly excess cash goes to buyback, but if I look at returns of a buyback program versus (capital spending), what’s the thought process there?” he asked.

Conoco chief James Mulva, who places a big emphasis on cutting costs as a way to raise his company’s stock, brushed off the protest. “We like the discipline of the share repurchase,” he said. “If we find that we have more cash flow, it’s not really going to be going toward capital spending.”

Exxon’s billions

For example, take a look at ExxonMobil (XOM, news, msgs), the biggest publicly traded U.S. oil company. It generated $40.6 billion in net income last year and $36.6 billion in free cash flow. What did it do with those riches?

It gave $38.4 billion back to shareholders — $7.4 billion in dividend payments and $31 billion through share buybacks.

Let’s put that $38.4 billion in perspective. Assume the average household spent $2,200 on gasoline last year, up 10% from the $2,000 the Bureau of Labor Statistics (BLS) says they spent in 2005, the latest numbers available.

• This means the windfall profits that ExxonMobil gave back to shareholders last year were enough to buy all the households in both California and Pennsylvania gasoline for the entire year.

• It was enough to give everyone a 27 cents-a-gallon discount on gas nationwide for the whole year.

Despite ExxonMobil’s generosity with shareholders, it’s made so much money recently that it still had $31.4 billion in cash, net of debt, at the end of the first quarter of 2008. This year, ExxonMobil plans to give $24 billion back to shareholders in the form of buybacks and more than $8 billion in dividends.

This despite the fact that, as my colleague Jim Jubak reported recently, Exxon’s production is falling.

What about the future?

Certainly, there’s nothing wrong with rewarding shareholders; that’s what capitalism is all about. But we should all get a little uneasy when we consider what big U.S. oil companies are not doing with the current windfall.

They’re not spending proportionately more wealth to develop new reserves. At a time when energy experts say gas prices are soaring in part because of a dearth of development over the past decade, this seems shortsighted and irresponsible. But that’s what’s happening.

Thanks to rising energy prices, ExxonMobil’s free cash flow jumped 135% to $36.6 billion last year, from $15.6 billion in 2003. The company has hiked dividends 8.3% a year, annualized, over the past five years, according to Morningstar. The amount of money spent on share buybacks increased 427% to $31 billion last year, compared to 2003. But capital spending only went up 20% in the same time frame, to $15.4 billion.

Gas prices set global records

Americans aren’t the only ones feeling pain at the pumps. In most countries drivers pay more, but in oil-rich Saudia Arabia a gallon costs 45 cents.

ConocoPhillips’ free cash flow increased 300% to $12.7 billion in 2007, compared to 2003. Over the past five years, it increased dividends by 17.3% a year, annualized. It bought back no stock in 2003 and 2004. But stock buybacks advanced to $7 billion last year and will increase again to $10 billion this year. In contrast, capital spending increased only 90% in the same time frame to $11.8 billion.

While ExxonMobil and ConocoPhillips reinvest just 29% and 48% of their cash from operations into their capital budgets, foreign energy giants with prodigious cash flow like Royal Dutch Shell (RDS.A, news, msgs) and Total (TOT) are doing more to assure sufficient energy supplies down the road. They reinvest 71% and 63% of operating cash flow into capital spending.

They’re not spending substantially more on green, sustainable and renewable energy alternatives. While BP (BP, news, msgs) may overplay its green image, as I wrote recently, at least it is spending a decent amount on alternative energy development. Comparable spending at ExxonMobil and ConocoPhillips remains pathetically low, maintains industry critic Antonia Juhasz, a fellow at Oil Change International and author of “The Tyranny of Oil: The World’s Most Powerful Industry, and What We Must Do to Stop It,” due out in September.

BP spent $688 million, or 4.5% of its capital budget, on renewable energy in 2006 (including a few other activities lumped in to this budget line.) ExxonMobil spent nothing that year, says Juhasz. ConocoPhillips spent only 0.5% of its capital budget, or $80 million, on “emerging businesses,” which includes alternative energy along with many other projects, says Juhasz.

Related

Big Oil Screws America

Cheney’s Halliburton Profits Rise As Oil Climbs to Record Highs

Bloomberg | Apr 21, 2008

By Jim Kennett

April 21 (Bloomberg) — Halliburton Co., the world’s second-largest oilfield contractor, said profit rose 5.8 percent after crude topped $100 a barrel, prompting producers to increase spending on Middle East and Latin American projects.

First-quarter net income climbed to $584 million, or 64 cents a share, from $552 million, or 54 cents, a year earlier, the Houston-based company said today in a statement.

The number of drilling rigs active outside North America rose 6.5 percent as New York oil futures traded 68 percent higher than a year earlier. Revenue jumped 18 percent to $4.03 billion as sales gains outside North America made up for pricing pressures in the U.S., Halliburton said.

“The story with Halliburton is international, and the international story is supported by sharply higher oil prices,” said Gene Pisasale, who helps oversee $25 billion in assets, including about 682,000 Halliburton shares, at PNC Capital Advisors in Baltimore. “That bodes well for international exploration, much of which is oil-oriented.”

Competition from rival oilfield contractors is affecting the prices Halliburton can charge on long-term projects in such markets as the Middle East and West Africa, Chief Executive Officer David Lesar told investors on a conference call. Losing a bid can mean the company is out of business in that region for a number of years, he said.

Margin Concerns

Those comments and concern over rising diesel costs, which are narrowing profit margins on some well services, held back Halliburton’s shares today, said Mark Urness, an analyst at Calyon Securities USA Inc. in New York.

Halliburton rose 3 cents to $47.46 in New York Stock Exchange composite trading. All but five companies in the 15- member Philadelphia Oil Service Sector Index had bigger gains. Schlumberger Ltd., the biggest oilfield contractor, climbed 5 percent.

Halliburton’s per-share profit matched the average of 10 analyst estimates compiled by Bloomberg. Earnings from the company’s largest division, which helps clients maximize production from established fields, rose 11 percent.

Demand strength in the Middle East and Latin America made up for a 2 percent decline in North American business and a “relatively flat” environment in Europe, Africa and the former Soviet Union, Halliburton said.

`Next Leg Up’

Lesar, 54, said more demand growth is coming. “The fundamentals of the world oil and gas market are projecting that the next leg up in the extended cycle is near,” he said in the statement.

Schlumberger, based in Houston and Paris, on April 18 reported a 13 percent gain in first-quarter net income. Baker Hughes Inc., the No. 3 oilfield-services company, is scheduled to report its results tomorrow.

Halliburton’s profit from drilling and evaluation services climbed 6.1 percent. The segment includes drill-bits, drilling fluids and directional drilling, which allows a customer to change the direction of a well to target a reservoir.

Worldwide, the number of active rigs rose 2.4 percent from a year earlier, with most of the gains occurring in South America and the Eastern Hemisphere, according to a count by Baker Hughes. North American drilling activity climbed 1.4 percent, driven by a 2.1 percent increase in the U.S.

International Expansion

Halliburton is adding research and training centers from Russia to Singapore as it diversifies away from North America, which accounted for 47 percent of revenue last year. U.S. and Canadian business is dominated by regional natural-gas markets, where weather can cause prices to surge or plummet.

Lesar splits his time between the U.S. and Halliburton’s regional corporate headquarters in Dubai. The Eastern Hemisphere accounted for 41 percent of Halliburton’s first-quarter revenue. Lesar has said he’d like the region ultimately to account for half of sales.

Halliburton derived 54 percent of its profit from North America in the first quarter, down from 58 percent a year earlier. Latin American operations had a 45 percent increase in earnings. Brazil’s recent deepwater discoveries, fields called Tupi and Carioca, will fuel increased spending by oil companies, PNC’s Pisasale said.

“With the recent developments in Brazil, you’re going to see a lot more activity down there,” he said. “The Tupi and the Carioca discoveries, which are particularly huge, multibillion-barrel fields, bode well for service companies like Halliburton and Schlumberger.”

State Oil Companies

Overseas work is being driven by government-owned oil companies that increasingly hire Halliburton and other services providers to do work previously done by international oil companies like Exxon Mobil Corp. Service companies work under contracts, while oil companies take a stake in the field being developed.

Halliburton’s work with state oil companies includes a three-year contract to drill wells at Saudi Arabia’s massive Khurais project and a three-year deal with Mexico awarded in January. Today, the company announced a contract for the offshore portion of Saudi Arabia’s Manifa oil project.

Halliburton is the largest oilfield contractor in North America and the largest provider of so-called pressure pumping, which injects water or sand into rock formations to make gas flow more easily.

Increased competition cut into pricing for pressure pumping, or fracturing as it is sometimes called, in the past two quarters, according to Halliburton.

Rupert Murdoch: News Corp is just like the Jesuits

“I do not like the reappearance of the Jesuits…. Shall we not have regular swarms of them here, in as many disguises as only a king of the gipsies can assume, dressed as printers, publishers, writers and schoolmasters? If ever there was a body of men who merited damnation on earth and in Hell, it is this society of Loyola’s.”

- John Adams writing to Jefferson about the Society of Jesus. May 1816

News Corp ChairmanRupert Murdoch discussed challenges the media faces as technology advances yesterday in Gaston Hall.

Georgetown Voice | Apr 3, 2008

Murdoch defends News Corp

by John Cooke

Rupert Murdoch’s News Corporation is just like the Jesuits, he told a mostly-full Gaston Hall yesterday, “except we don’t insist on vows of poverty or chastity.”

The Australian-born Chairman and Managing Director of News Corporation, which owns MySpace, Fox and other media organizations, described the dilemma faced by newspapers and older media outlets in adapting to new technology, especially the Internet.

News Corp ChairmanRupert Murdoch discussed challenges the media faces as technology advances yesterday in Gaston Hall.
SAM SWEENEY

“You can never be sure where this industry will go,” Murdoch said, “because new technology destroys the old ways of business.”

Murdoch, whose company acquired The Wall Street Journal in August 2007, defended the role of newspapers. Although he admitted that print publications are hemorrhaging profits and audiences, Murdoch described the Journal as “the daily of the American dream,” adding that, as local papers are forced to make more cutbacks due to loss of revenue, national papers like the Journal will play an increasingly prominent role.

“The Wall Street Journal is unique; it’s a national paper read by affluent and influential people,” he said, predicting that the Journal’s reader base will likely read the newspaper for content they wouldn’t be able to find elsewhere.

During the question and answer session, Murdoch touched upon more controversial aspects of his media empire, most notably the alleged bias of the Fox News Channel and his own reputation as a far-right conservative activist.

While admitting that maintaining neutrality is difficult, Murdoch dismissed allegations that he influences the editorial stances of many News Corp outlets. “My personal views don’t affect the editorial pages,” he said, citing his publications’ endorsements of Tony Blair and the new left-wing government of Australia.

“We’ve always been a catalyst for change, so we inspire fear,” Murdoch said in reference to his critics.

In response to concerns about News Corp’s consolidated media ownership, Murdoch repeatedly defended his business tactics, indicating that News Corp facilitates a broader range of voices to be heard.

“Everything we’ve done has been to create competition,” Murdoch said. “We think it’s a public service.”

With $40 billon, Putin ‘is now Europe’s richest man’

 
Compared to Mobutu Sese Seko, the dictator who plundered Congo, and Ferdinand Marcos, the former ruler of the Philippines. Putin has denounced the claims as “trash”

Telegraph | Dec 22, 2007

By Adrian Blomfield in Moscow

President Vladimir Putin of Russia has been likened to an African plutocrat after a controversial political scientist claimed that he had acquired control of £20 billion in energy assets – enough to make him Europe’s richest man.

Stanislav Belkovsky, a colourful figure on the political scene, claimed that Mr Putin had made a multi-billion pound fortune by controlling stakes in three Russian energy companies.

The allegations – if true – would suggest that Mr Putin is one of the wealthiest men ever to hold public office.

Mr Belkovsky alleged that Mr Putin had acquired $40 billion during his eight years in power, through a network of front-men.

He compared the president to Mobutu Sese Seko, the dictator who plundered Congo, and Ferdinand Marcos, the former ruler of the Philippines.

“Russia under Putin is not a version of modern democracy but a typical third world kleptocracy,” said Mr Belkovsky.

But Mr Putin’s spokesman denounced the claims. “It’s nothing but trash,” said Dmitry Peskov.

“Certainly it has nothing to do with seriousness; it has nothing to do with professionalism. It’s just trash.”

According to Mr Belkovsky, Mr Putin controls a 37 per cent stake in Surgutneftegaz, an oil exploration company, as well as 4.5 per cent of Gazprom, the state energy giant, and at least 50 per cent of Gunvor, a Swiss-based oil trading company that has won a series of state contracts.

Mr Belkovsky claimed his information had come from credible sources in the Kremlin – but admitted he had no documentary evidence.

“European and U.S. special services have access to these documents but I don’t,” he said.

Observers were sceptical.

“In a system of state capitalism and total corruption, it would be strange if Putin was not rich,” said Leonid Radzikhovsky, a political analyst.

“But the information about this treasure island seems a little exaggerated. Most Russians do not think about corruption at presidential level or do not want to think about it.”

Mr Radzikhovsky added: “It is difficult to understand Belkovsky. He is known as a source of confusing information and it is hard to treat it seriously.

“He is an adventurer. He may be driven by his own morbid ambitions. He really knows a lot of people in high places but who is he to know the secrets of the person who has all the possible and impossible ways to hide his secrets?”

The endgame of Mr Putin’s presidency, and his plans for the succession, have been thrown off balance by infighting between rival Kremlin clans.

At least three groups, two led by ex-KGB officials, have been in open warfare since October.

On Oct 3, General Alexander Bulbov, deputy head of the federal drug agency, and a member of a hardline clan of “Siloviki” – former KGB and security officials – was arrested by a rival Siloviki faction.

The “liberal” faction was damaged when Sergei Storchak, the deputy finance minister, was arrested last month.

Far from being watertight, Mr Putin’s Kremlin now leaks like a sieve.

The President is theoretically above the clans and tries to balance their clashes.

If he does have a faction, it consists of businessmen who have become very wealthy under his rule.

Mr Belkovsky named at least three of them as front-men for the president’s alleged fortune.

He also cited Igor Sechin, a deputy chief of Kremlin staff, leader of the most hardline “Siloviki” faction and one of the country’s most powerful men.

Mr Putin appeared to have sidelined Mr Sechin’s clan when he announced that Dmitry Medvedev, a relative liberal, would be his successor as president.

Mr Sechin and other ex-KGB figures would never rally around Mr Medvedev.

Mr Putin may calculate that he can keep their loyalty, leaving the new president isolated.

Mr Putin may calculate that he can keep their loyalty, leaving the new president isolated.

What game Mr Belkovsky is playing – and on whose behalf – is unclear.

He has been accused of starting a smear campaign against the oligarch, Mikhail Khodorokovsky, a fierce critic of Mr Putin who was jailed in 2005.

Mr Belkovsky’s allegations about the president’s money first emerged in a book he published last year.

Ranchers Suspect Ted Turner in UN Land Grab

“A total world population of 250-300 million people, a 95% decline from present levels, would be ideal.”

-Ted Turner, creator of the United Nations Foundation, quoted in both an interview with Audubon magazine and in the The McAlvany Intelligence Advisor, June ‘96

“Since I was a little boy, I’ve always been very partial to the U.N. I love the flags.”

-Ted Turner, CNN Interview with Larry King 1997

Turner has donated $1 billion to ‘U.N. causes’ through his United Nations Foundation

Ted Turner massive land purchases called suspicious

Transworld News | Nov 29, 2007

Ted Turner has become the largest private landowner in the country with a total of 2 million acres in 11 different states. Turner recently outbid hopeful ranchers in an auction for 26,630 acres of ranch land in Nebraska.

After paying nearly $10 million dollars for the land, ranchers in the area began questioning the CNN founder’s intentions. Ranchers are suspicious of Turner is going to do with all of his land. The Turner camp says he only wants to be a rancher, but farmers and owners of the neighboring land believe he is trying to put them out of business.

Other theories include Turner attempting to gain power by cornering the land over the Ogallala Aquifer, which is the largest underground water system. Others believe he is conspiring with the United Nations to create a wildlife refuge before turning it over to the federal government.

“With him it’s such a concern. You don’t know what his plan is and what he’s going to do,” said Nebraska landowner Cindy Weller. “The entire way of life here is threatened, and it’s not just Turner, but he’s one reason. The whole area is economically depressed.”

. . .

Related

The U.N.’s global land grab

SEPARATING PEOPLE FROM THEIR WATER

SUSTAINABLE DEVELOPMENT, AGENDA 21 AND PRINCE CHARLES

Turner becomes largest private landowner in US

“The United States has got some of the dumbest people in the world. I want you to know that we know that.”

“If I only had a little humility I would be perfect.”

- Ted Turner

Reports of Turner’s buying spree – like the Associated Press account of his Nebraska purchase – have generated numerous conspiracy theories. One is that he is scheming with the United Nations to create a vast wildlife refuge that would put Nebraska ranchers and farmers out of business.

Independent | Dec 1, 2007

By Leonard Doyle in Washington

Ted Turner gave the world CNN, but the legacy he intends to leave America is not the incessant drumbeat of television news, but millions of acres of wide-open spaces teeming with wildlife and protected endangered species.

Formerly known as the Mouth from the South, the patriarch of cable news is no longer in the media business, having left Time Warner in 2003. Today, he is America’s biggest conservationist as well as its largest private landowner.

Like many American outdoorsmen he is both a committed hunter and environmentalist, except that he has managed to turn his passion into a profit-making business.

Over the past few years, Ted Turner has used his $2.3bn (£1.1bn) wealth to create wildlife sanctuaries across many of the two million acres he owns in 12 states as well as in the southern tip of the Americas, Patagonia.

His mostly western lands are filled with bison, native cut-throat trout and cougars in habitat that he manages in an environmentally sensitive way. Hunters and fishermen pay big fees to bag elk, deer and catch and release rare species of trout, which he has brought back from the brink of extinction. His Nebraska ranches are home to America’s largest herd of buffalo, some 50,000 strong, which supply his restaurant chain, Ted’s Montana Grill, with bison burgers.

The Turner land grab has, however, generated suspicion among ranchers who are complaining that this is another land grab by a rich liberal environmentalist, which is putting them out of business.

But Turner says he is more than a philanthropist, and tries to make money from all his ventures. His Vermejo Ranch in northern New Mexico was once a hideaway for Hollywood celebrities. These days it is a hunting preserve for the wealthy who come to bag elk, deer, antelope and Merriman turkeys. But he is also mining for propane natural gas from the immense coal reserves beneath the ranch – in an environmentally sensitive way, he says.

In the Nebraska Sandhills region, the Turner organisation recently outbid 19 local ranchers to pick up another 26,300 acres of prime ranch land for nearly $10m. The ranch had been in the same family for more than 100 years and is adjacent to a 100,000-acre spread he bought in 1995. According to the general manager, Russ Miller, the Nebraska spread was bought because it offered good grass and good water, despite a persistent drought in recent years.

“We’re resilient, the bison are resilient and the Sandhills are resilient,” Mr Miller said. Turner paid $17.78m for a 58,000-acre ranch in the Sandhills in 2005 and bought a 45,000-acre ranch in Sheridan County in 1998.

Mike Phillips, executive director of the Turner Endangered Species Fund, a Turner spin-off, says his boss is just a “doggone serious rancher,” dedicated to preserving the environment.

Along with his land-buying, Turner has given more than $1.5bn to charity, including the United Nations Foundation, and an initiative aimed at ridding the world of nuclear weapons. The Turner organisation is now in discussions with the World Wildlife Fund and the World Conservation Union about conserving bison.

Both groups are hoping to develop a huge park where bison could once again roam the Great Plains freely. Reports of Turner’s buying spree – like the Associated Press account of his Nebraska purchase – have generated numerous conspiracy theories. One is that he is scheming with the United Nations to create a vast wildlife refuge that would put Nebraska ranchers and farmers out of business.

But Turner spokesmen insist that the driving force behind his land purchases is simply the desire to make money. The Vermejo Ranch offers week-long elk hunting excursions at $12,000 a pop. And there are now more than 51 Ted’s Montana Grill restaurants across the country serving the famous bison burgers.

Oil price rise fueling one of the biggest transfers of wealth in history

Iran, Russia and Venezuela Feel the Benefits

Washington Post | Nov 10, 2007

By Steven Mufson

High oil prices are fueling one of the biggest transfers of wealth in history. Oil consumers are paying $4 billion to $5 billion more for crude oil every day than they did just five years ago, pumping more than $2 trillion into the coffers of oil companies and oil-producing nations this year alone.

The consequences are evident in minds and mortar: anger at Chinese motor-fuel pumps and inflated confidence in the Kremlin; new weapons in Chad and new petrochemical plants in Saudi Arabia; no-driving campaigns in South Korea and bigger sales for Toyota hybrid cars; a fiscal burden in Senegal and a bonanza in Brazil. In Burma, recent demonstrations were triggered by a government decision to raise fuel prices.

In the United States, the rising bill for imported petroleum lowers already anemic consumer savings rates, adds to inflation, worsens the trade deficit, undermines the dollar and makes it more difficult for the Federal Reserve to balance its competing goals of fighting inflation and sustaining growth.

Full Story

Oil price hits record high on Iran tensions

AFP | Oct 26, 2007

World oil prices surged to historic highs Friday, breaching 92 dollars for the first time in New York amid rising tension in crude-rich Iran and tightening US energy supplies.

New York’s main futures contract, light sweet crude for delivery in December, soared to a record intraday high of 92.22 dollars per barrel before settling at an all-time closing high of 91.86 dollars, up 1.40 dollars on the day.

In London, Brent North Sea crude for December delivery struck an all-time pinnacle of 89.30 dollars per barrel Friday. It later settled at 88.69 dollars, up 1.21 dollars.

Crude futures have rocketed by about 10 dollars in a month and by 30 dollars, or 50 percent, in a year.

“Supply tightness and developments surrounding Iran remain the focus of attention,” Sucden analyst Michael Davies said Friday.

The United States on Thursday ratcheted up pressure on Iran over its nuclear drive and alleged backing for terrorism with a raft of new sanctions against the Islamic republic’s military and banks.

Crude futures had leapt by more than three dollars on Thursday in reaction to the news, before extending their gains Friday.

The White House meanwhile rejected any parallels between its Iran rhetoric and the run-up to the Iraq invasion of 2003, adding it had not ruled out the use of force but was “very hopeful” of avoiding war.

Sucden’s Davies meanwhile added that oil prices were winning support from a weak dollar, which makes commodities priced in the US currency cheaper for buyers using stronger units.

The dollar slumped to a record low against the euro on Friday after poor US economic data heightened expectations of a fresh cut to US interest rates next week, dealers said.

Others said oil prices were also being supported by OPEC’s hesitance to increase production and rising tensions elsewhere in the Middle East.

Iraqi ministers held crisis talks Friday seeking to persuade an increasingly impatient Turkey against launching military strikes against rebel Kurd bases in northern Iraq, which is an oil-producing region.

The talks broke up after 90 minutes, however, and it was not immediately known if and when they would resume. But Iraqi defence ministry spokesman Muhammed Askeri said the meeting had produced “positive” results.

Another factor pushing up oil prices are tight energy supplies in the United States, the biggest consumer of energy.

The US Energy Information Administration (EIA) said Wednesday that stockpiles of crude had plunged by 5.3 million barrels in the week ending October 19. The market had expected a gain of 960,000 barrels.

Inventories of US distillates, which include diesel and heating fuel, sank by 1.8 million barrels last week.

The data from the EIA confounded market expectations for a rise of 275,000 barrels.

Heating fuel stocks are a key market focus because demand usually surges during the northern hemisphere winter.

Compared with a year ago, distillates stocks are 7.6 percent lower and crude reserves are down 5.9 percent.

Eric Wittenauer at AG Edwards said the sharp moves were being accentuated by a rush of speculative money into the market.

“We think Wednesday’s (inventory) numbers were the catalyst that brought the bulls and their sidelined money back into the picture,” he said.

“The rejuvenated buying continues the uptrend seen since late August and builds to the momentum in the market.

“While the predominant rally has been rationalized by geopolitical events on the backdrop of tightening supplies, the latest surge, yesterday in particular, did have noteworthy geopolitical moves supporting the bulls. We wouldn’t argue that supplies have tightened,” Wittenauer said.

He said that while US crude oil stockpiles are at a nine-month low, “we don’t think things are as dire as some would like to believe.”