Connect with us

Latest

Analysis

News

Financial Times: Russia’s oil and gas industry booming BECAUSE of sanctions

Financial Times shows sanctions have triggered a technological boom and a successful restructuring within Russia’s oil and gas industry

Alexander Mercouris

Published

on

5,106 Views

The sectoral sanctions the Western powers imposed on Russia in July 2014 because of the conflict in the Donbass continue to have paradoxical results.

The financial sanctions, which effectively prevented Russian companies from borrowing in Western financial markets, instead of causing the Russian economy to implode, have caused it to deleverage at an unprecedented rate, hugely strengthening Russia’s financial sector and the balance sheets of Russia’s companies, setting the scene for a coming investment boom.

The counter-sanctions Russia imposed prohibiting the importation of Western foodstuffs into Russia have led to a huge boom in Russia’s agriculture sector, as even the Financial Times was recently forced to admit, making Russia almost completely self-sufficient in food, and making it a major food exporter.

However perhaps the most paradoxical result of all has been in Russia’s oil and gas industry.

Western sanctions were supposed to cripple this industry – wrongly assumed in the West to be existentially important for Russia’s very existence – by depriving it of the technology it needed to develop the huge untapped oil and gas reserves Russia is known to have in the Arctic, and making development of its huge shale reserves, which are known to dwarf those of the US, impossible.

In the event the Financial Times has now admitted in a lengthy article that within less than three years of the sanctions being imposed the Russian oil and gas industry is in the throes of a technological boom, as Russian companies forge ahead with Arctic drilling, successfully replicating the very same Western technologies which were supposed to be beyond them

………..a drill began its 5,000m journey downwards, in search of oil deposits that the country is banking on to provide more than a quarter of its future output. Perched on the edge of a peninsula deep in the Arctic Circle, Tsentralno- Olginskaya-1 will be Russia’s northernmost oil well. Closer to the North Pole than to any city, it is a feat of engineering that uses equipment shipped 3,600km through icy waters navigable only for two months of the year.

The well is one of the most technologically challenging ever attempted in Russia. With the deposits located beneath the icy, frequently frozen waters of the Laptev Sea, cutting-edge horizontal drilling techniques will be used to reach up to 15,000m from the main site.

But it was also a moment of triumph for Mr Putin, who was beamed in via video conference from St Petersburg as Mr Sechin braved the frigid elements and who celebrated the start of drilling as an act of homegrown ingenuity.

Three years ago, when the US and EU imposed sanctions on the country that restricted companies such as Rosneft from foreign capital and technology, complex wells were exactly the kind of ambitious projects that were supposed to be rendered impossible. Western governments hoped that pressure on Russia’s main energy companies would help change Mr Putin’s political calculations. But as projects like Tsentralno-Olginskaya-1 attest, Russia’s oil and gas majors have found ways to carry on regardless.

“Horizontal drilling is a complex and high-tech operation. This is just the first well. There is much more work ahead,” Mr Putin told Mr Sechin in the heavily scripted conversation.

It seems according to the same article that the Russians are forging ahead with shale technology as well

……..2,000km south-west of Tsentralno-Olginskaya-1 in western Siberia, Gazprom Neft, Russia’s third-largest oil producer, is showing few ill effects. Late last year, it became the first Russian company to demonstrate shale oil fracking expertise with a 1km-long horizontal well 2.3km below ground at a site in the vast Bazhenov field, estimated to be the world’s largest shale oil deposit.

Gazprom Neft was able to use homegrown technology that it was forced to develop after the sanctions prompted its international partners to walk away from the project.

“We are like a snowball,” says Sergey Vakulenko, head of strategy and innovation at the company, a unit of gas giant Gazprom. “The harder you squeeze, the harder we get.” ……

“Sure, in terms of shale technology, we are a little behind the Americans. But in time, and definitely before we absolutely need to, we will get to where we need to be, sanctions or no sanctions,” says Mr Vakulenko.

“We could do it now, but we don’t need to,” he adds, referring to even more complex fracking techniques that will be required to fully exploit the Bazhenov field’s 75bn barrels of estimated reserves. “Why go after the high-hanging fruit when there is lower stuff available right now?”

The point about Russia not needing to go after the high-hanging fruit when there is an abundance of lower-hanging fruit for it to exploit is not bragging or propaganda.  It was made to me a few months ago in person by a Russian scientist who is an expert in hydraulic fracking.

Perhaps even more striking than this news of technological advances is the Financial Times’s admission that the effect of the sanctions has been to make the Russian oil and gas industry financially stronger and more efficient

“In terms of today’s projects, we are not at all affected [by the sanctions],” [Yakulenko] says in an interview at the company’s St Petersburg offices, where engineers use vast computer screens to remotely control drills at more than 600 wells across the country. “At their current configuration, they aren’t and won’t be painful, irrelevant of how long they are in place.”

Between 2013 and 2016, Russian crude oil production rose almost 6 per cent, more than twice as much as the rise in combined output from the Opec group of countries. Revenues at the country’s three largest producers have risen 11 per cent in that period.

The curtailment of foreign cash forced many to restructure their balance sheets with the help of domestic lenders, cut loss-making or costly new projects, and increase their efficiency.

Acquisitions and international expansion projects have followed. “The accepted narrative is that there is only upside risk from sanctions [being lifted] as the majority of the companies affected have shown few ill effects,” says the head of a western bank in Moscow. “In fact, lots of them have been forced to be smarter and have increased their competitiveness.”

Articles such as this one in the Financial Times are still comparatively rare.  The orthodoxy amongst Western governments and in the Western media is that Russia is suffering badly from the sanctions.  That is one reason why there is still so much resistance to any move whether by the Trump administration or by anyone else to lift them.

The truth is that though the sanctions caused the Russian economy genuine difficulties in late 2014, when Russian companies had to repay debts they struggled to finance because of the sanctions and the oil price fall, once Russia got through those initial difficulties the effect of the sanctions on the Russian economy has been entirely beneficial, and is becoming more so.

The West seriously underestimated Russia in 2014.  It failed to realise to what an extent the country had advanced beyond the disastrous times of the 1990s.

Whereas the sort of sanctions the West imposed on Russia in 2014 would have crushed the Russian economy if they had been imposed in say 2000, today Russia is fully capable of developing its economy by drawing on its own financial resources and its own technology, both of which it has in abundance.

What the West did in 2014, by imposing the sanctions at a time when there was an oil price fall, was force the Russians to do this more efficiently and more quickly than they would have done if they had been left alone.

Westerners always seem to cling on to their idea of Russia as a poor, technologically backward, ill-governed, irredeemably corrupt, ‘third world’ country (“Upper Volta with missiles”).  This is what leads them to make foolish decisions, such as the decision to impose sectoral sanctions, which they took in July 2014.

On the subject of Russia being ill-governed, the Financial Times quotes Apurva Sanghi, lead economist for Russia at the World Bank in Moscow, as having this to say

There is a pretty uniform consensus that the oil price shock dwarfed the sanctions.  If you look at what the authorities have done over the past few years for macro stability, it has been pretty outstanding and the results are there to be seen.

On the macro-economic facts, it is impossible to disagree with this assessment, and on the oil and gas industry facts as described in the Financial Times article, it is impossible to say anything different.

On 27th May 2016, when I discussed the West’s failed attempt to stop Russia floating a eurobond, I made this point in relation to how the West’s actions had actually strengthened Russia’s financial system

Truly Western governments when it comes to Russia seem intent on proving Nietzsche’s dictum true: that which does not break us makes us stronger.  Certainly that has been true of Russia’s eurobond sale.  By trying and failing to sabotage it the West has only managed to make Russia stronger.

The same it turns out is true of Russia’s oil and gas industry.

Liked it? Take a second to support The Duran on Patreon!
Advertisement
Click to comment

Leave a Reply

avatar
  Subscribe  
Notify of
DS Analysis
Guest
DS Analysis

Most people understand the basic theory of “free” trade and how it theoretically is better for everyone. That would be true if trade was actually free like it is in the micro economy. The reality is, international trade is anything but free. The whole system is based on the US dollar monopoly and Federal reserve cartel that the US controls at gunpoint. Increased production by a country leads to a higher value currency which leads to cheaper food and energy which leaves more discretionary income to save or spend on other things. That is how free trade is supposed to… Read more »

Simon
Guest
Simon

Excellent article. But that FT – as ever, so condescending, even in praise. Didn’t the Russian barbarians do well. All by themselves. Who would have thought it. It must be stolen technology (nudge nudge wink wink). But hold on – Rosneft’s output is bigger than Exxon. Gazprom alone is like BP+Shell+Total combined. It seems those Russians do know something about extracting oil and gas from below the ground after all. Still – it’s Russia, so their companies must be worth less. Much less. Just don’t look at Big Oil’s balance sheet debt or worry about their ridiculous share prices pumped… Read more »

Le Ruscino
Guest
Le Ruscino

This list is the Industry Joke !

Why is it a Joke ? Just look at the reserves to asset value ratios as can be seen – Rosneft in truth sits on more crude oil reserves than any oil company on the planet & Gazprom is massively bigger.

What’s more interesting is that Russia has always under declared their assets & by how much is anyone’s guess but its minimum 30% but could be over 100% ?

Simon
Guest
Simon

Agreed. Those numbers are actually production, but your point about reserves is also absolutely correct. The Russian companies are massively undervalued.

Stavros Hadjiyiannis
Guest
Stavros Hadjiyiannis

Several factors contribute so that Russian corporations are so grotesquely undervalued: a) The state has controlling stakes, this makes some undervaluation legitimate. b) RUS energy corporations don’t have the downstream business that Western and Chinese corporations do. c) Active economic sabotage from “Western partners”

Simon
Guest
Simon

You are right of course.
But I’d still rather own 10% of Surgutneftagas than 1 % of Conoco, and take my chances (and Surgut is the darkest horse of the lot!) 😉

Stavros Hadjiyiannis
Guest
Stavros Hadjiyiannis

Those are excellent stats. Good work.

Stavros Hadjiyiannis
Guest
Stavros Hadjiyiannis

This is of course not the first time that the “West” has grossly underestimated Russia. On the article itself, these are my observations/comments: a) In my opinion, the oil and gas industry is indeed of existential importance to Russia, on this NATO was correct. What they failed to fully integrate into their calculations is that Russia is in fact the world’s most efficient and low-cost producer of hydrocarbons. If Russia’s oil & gas reserves were not easily and cheaply exploitable, then the oil price crash would have bankrupted Russia very quickly, there would have been no need for NATO to… Read more »

Kimppis
Guest
Kimppis

I wouldn’t necessarily say that the oil and gas sector is existentially important for Russia. After all, it’s something like 15-20% of the overall GDP. That said, it’s certainly the single most important sector. Also, Russia’s GDP per capita isn’t actually low. It’s reasonably high, something like $25 000. I’m obviously talking about purchasing power parity here. And that is for almost 150 million people, so the PPP GDP is comparable to Germany. That explains it all, really. So the per capita GDP is considerably higher than the world average. If you look at the list of countries that have… Read more »

DS Analysis
Guest
DS Analysis

Yeah as you said, oil/gas is 15% of the economy now. It was 40% in the 90’s.

And the west uses dollar bloc GDP figures that don’t account for production that is consumed within Russia. This is where all of this “California has a bigger econ”nonsese comes from.

Alex Popoff
Guest
Alex Popoff

Russian standards of accounting GDP varie from the western. For example till recent times military inner payments between army and military factories weren’t acoountable into GDP.

Large gvmnt sector in economy is badly accountable regarding GDP issue, because whole GDP concept was invented for other type of economy.

So Russia could be estimated as Poland with high technologies, 3,5 times population higher and endless resourses.

Le Ruscino
Guest
Le Ruscino

Agree wholeheartedly with your well informed comment. There is a sad point to note & its that the US would cut off its arm to bleed on Russia’s shirt & this is exactly what they have done. US oil reserves are high cost for lifting as are Canada’s (Shale & Tar) & as you say Russian lifting costs are low mainly due to traditional nature of underground caverns being tapped aided by good tech. The BIG double whammy here is that Global oil consumption never stopped marching toward 100mio bbls per day & with low prices investment in new projects… Read more »

AMHants
Guest
AMHants

Didn’t Obama and Saudi miscalculate oil/gas GDP and the Russian economy, when they decided to play with the oil market? Believing it made 50% of Russian GDP, rather than 16%? Together with forgetting that Russia could produce a barrel of oil for $12 dollars, production costs being in ruble and selling in $USD. So how much does it cost the US to produce a barrel of oil? How many of their oil companies ended up facing bankruptcy?

DS Analysis
Guest
DS Analysis

There was shale oil plays that were not profitable at $100 a barrel. The whole shale industry in the US has not yet even faced a US recession. Just like US banks, there is tons of zombie shale producers out there that will be taken out back and shot in the next recession.

AMHants
Guest
AMHants

Nice one as Russia gets stronger at the expense of those who decided to have a teenage or perhaps toddler temper trantrum, based on envy and greed. Also, with Exxon begging the US to let them ignore the sanctions and help Russia offload the oil in The Black Sea, would Russia actually need there help?

Has anybody seen the latest Ukraine hissy fit?

Ukraine demands confiscation of Gazprom property… http://www.fort-russ.com/2017/04/ukraine-demands-confiscation-of-gazprom.html

Gary Sellars
Guest
Gary Sellars

“Has anybody seen the latest Ukraine hissy fit?”

Does anyone really care what the 404 nation says, wants, thinks or does?

AMHants
Guest
AMHants

Sadly the idiots that run our nations and those so supportive of the failed state.

Kyler Phoenix
Guest
Kyler Phoenix
AMHants
Guest
AMHants

Hahahaha -Newsweek. Really and who controls Newsweek? Personally I look at what the debt clock has to say. Russia Foreign Exchange Reserves US Foreign Exchange Reserves Russia Gold Reserves Russia National Debt: $155,410,825,045 Interest per Year $9,541,556,000 Interest per Second $303 Debt per Citizen $1,062 Debt as % of GDP 15.59% GDP $997,000,000,000 Population 146,300,000 United States National Debt: $19,853,203,835,571 Interest per Year $442,585,040,366 Interest per Second $14,034 Debt per Citizen $61,209 Debt as % of GDP 106.31% GDP $18,675,300,000,000 Population 324,352,551 Russia, a creditor nation, in control of their vast wealth of natural resources. The middle class sector on… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

The information shared can be verified online on myriad sites. Your info comes from?

AMHants
Guest
AMHants

A myriad of sites? Can you site them in an academic paper? National Debt Clock … http://www.nationaldebtclocks.org/ US Foreign Exchange Reserves http://www.tradingeconomics.com Federal Reserve (America) Russia Foreign Exchange Reserves http://www.tradingeconomics.com Russia Central Bank Russian Central Bank Gold Reserves… http://goldsilverworlds.com/wp-content/uploads/2014/07/Russian-Gold-Reserves-June-2014.jpg Your article, just happend to cite Moscow Times. Did you know that the paper has no loyalty to Russia? However, doesn’t Genie Energy Murdoch still have shares in Moscow Times, despite who he sells it to? There was no facts in that article that could be substantiated. Except for GDP. However, they ignore GDP Debt. Russia, as shown by the debt… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

That is not an argument nor does it speak to their current economy. Are you a dropout? You are quoting Russian government sources.

AMHants
Guest
AMHants

Are you a dropout? Russian Government Sources? When has the National Debt Clock been Russian? Russian Gold Reserves Since when has Trading Economics been part of the Russian Government? ‘… ABOUT US Trading Economics provides its users with accurate information for 196 countries including historical data for more than 300.000 economic indicators, exchange rates, stock market indexes, government bond yields and commodity prices. Our data is based on official sources, not third party data providers, and our facts are regularly checked for inconsistencies. TradingEconomics.com has received more than 270 million page views from more than 200 countries. ..’ http://www.tradingeconomics.com/about-te.aspx http://goldsilverworlds.com… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

So, BS right wing blogs huh? Any credible sources? You look like a fool, cretin.

AMHants
Guest
AMHants

You argue with legality. You argue with fact. Failing that you spit you dummy out, throw your toys out of the pram and use personal abuse. That is so media disinformation agent style. What is the script they are given? Besides the 5Ds? Deny, discourse, disagree, derail, discredit. ‘…5. Sidetrack opponents with name calling and ridicule. This is also known as the primary attack the messenger ploy, though other methods qualify as variants of that approach. Associate opponents with unpopular titles such as “kooks”, “right-wing”, “liberal”, “left-wing”, “terrorists”, “conspiracy buffs”, “radicals”, “militia”, “racists”, “religious fanatics”, “sexual deviates”, and so forth.… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

No, you share irrelevant, cherry picked facts. No one denies the facts about the Russian economy. It is easily verifiable. You discredited yourself with obvious BS, cretin.

AMHants
Guest
AMHants

Pot, kettle, black, cutie.

‘…You discredited yourself with obvious BS, cretin…’

Kyler Phoenix
Guest
Kyler Phoenix

I shared verifiable facts. You shared fantasy.

AMHants
Guest
AMHants

Rothschilds darling. Can you cite cnbc in an academic paper, based on assumption? The same article as the Moscow Times. World Bank – Rothshcild and who has minimal debt and is not in need of a Rothschild loan? Didn’t the World Bank fail to notice the crash of 2008? The Diplomat – 2016 Time.com – 2015 Well, all I can say is BRICS. Now what is happening there, besides the AIIB Bank and the BRICS Bank? The $6 trillion, currency reserves, between the 5 nations. The New Silk Road Project. Not forgetting their dominance in the manufacturing and service industries.… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

Everyone is lying except you and some blogs huh? You must be proud. Is that why you hide. Or is there another reason. Let’s find out…https://www.fbi.gov/contact-us

AMHants
Guest
AMHants

Everybody is lying except me? Hahahaha. Darling, one makes up their own opinion, whatever side of the argument. I am more than happy to own my opinion, but, have no desire to take the responsibility of others. I actually care nought about who believes what. However, owing to simple facts, I do not believe Russia is on her knees.

Now why on earth would I wish to contact the FBI?

Kyler Phoenix
Guest
Kyler Phoenix

Iam contacting them. I get a weirdfeeling about youraccount. You definitely are not American and you are spewing pro-Russia propaganda that flies in the face of facts. Good luck.

AMHants
Guest
AMHants

Contact them and I have never said I am American.

I am English. Like the people of America, one gets sick and tired of living in the land of the free, with fascist rules. You explain it perfectly. Report me to the FBI because I had the audacity to poste the findings of the National Debt Clock and Russian and American Foreign Exchange Reserves, with a chart showing how much Russian Gold they have in their vaults.

Excuse me whilst I laugh and have a good day.

Kyler Phoenix
Guest
Kyler Phoenix

No, you aren’t. You posted cherry picked facts that inno way disproved what anyone can easily research and see, the Russian economy is bad. It is forwarded.

AMHants
Guest
AMHants

Yeeah, whatever cutie pie. They have had a file on me since the 70s, am I bovvered? Not at all. If I walk out the door and end up in dead in a briefcase, three bullet holes in the head or worse, but, arranged as a suicide, it is covered. Who cares, I can walk across the road, but, it does not mean I will get to the other side. Death does not bother me, what does bother me, is keeping my mouth shut and being frightened to open it. What a waste of a life. We all come with… Read more »

Kyler Phoenix
Guest
Kyler Phoenix

You seem mentally ill. It is forwarded. You can stop replying now, if you have the ability to control yourself.

Kyler Phoenix
Guest
Kyler Phoenix

Oh, and what would you know of any academic paper, wantwit?

Isabella Jones
Guest
Isabella Jones

Ah, that wonderful Law of Unintended Consequences. All we need now is a couple more plus a Black Swan event against America and that will be the end of the Empire of Cowards and it’s blood money $.

Kyler Phoenix
Guest
Kyler Phoenix
Bente Petersen
Guest
Bente Petersen

very good reporting thank you… The Duran delivers !!!!!

Latest

Claims of Khashoggi death by fistfight expose Saudi brutality

The brutality of both state claims and unproven allegations in Khashoggi’s death raise serious questions about American alliances.

Seraphim Hanisch

Published

on

On October 2, 2018, Muslim Brotherhood member and Washington Post journalist Jamal Khashoggi entered the Saudi Arabian embassy in Turkey, never to be seen or heard from again.

This chilling report has been answered with some horrifying and grisly stories about what happened – that he was dismembered while still alive, that his body parts were dissolved completely in acid, leaving nothing left.

Now after two weeks, the Saudi official word on what happened came out: He died in an unexpected fistfight in the embassy.

Really. That is the Saudi’s explanation. A fistfight. In an embassy. With 18 people detained as suspects in the investigation.

And apparently the Saudi government expects the world to accept this explanation and just let it go.

This situation has just exposed the true nature of this “ally” of the United States. Even Rush Limbaugh, a staunch supporter of all conservative positions in America, has spoken from time to time about the amazing disconnect in American foreign policy with regards to Saudi Arabia. He continued that on his radio programs on both October 18th and 19th, 2018, as shown in this excerpted transcript, with emphasis added:

I’m simplifying this, folks, but generally that’s what happens. So, by the same token, you could say that this militant terrorist Islam that we’ve known since 9/11 and maybe 10, 15 years prior, that has been sponsored by Saudi Arabia, by the Saudi royal family. It’s why so many people have been upset with so many American presidents being buddy-buddy with the king, whoever he happens to be. The Saudis always fund former presidents’ libraries. I mean, the Saudis had a good thing going. They had relationships with every president, former president and so forth.

And while they were selling us oil, sometimes. Cooperative or uncooperative, depending on the time, with price. But during all of that, they were the primary thrust for Wahhabi Islam. Now, here comes MbS (Mohammed bin Salman, the Crown Prince of Saudi Arabia), and he wants to just reform the hell out of the country, get rid of Wahhabism, bring in petrodollars competitors such as Hollywood and Silicon Valley and basically bring Saudi Arabia into the twenty-first century instead of the seventh. And there’s some people that don’t want that to happen.

And from the 19th:

Wahhabi Islam is where the really radical clerics and Imams are who are welcoming anybody they can into their mosques and just literally converting them into suicide bombers, terrorists, and what have you, under the auspices of Islam. And the Saudi royal family stood by and let it all happen. Whether they were instrumental in advocating it, don’t know, but Saudi-funded charities all over the world promoted Wahhabism.

And that’s when I went back to Mr. Buckley and said, “I don’t see how the Saudi royal family, the Saudi government can be separated from these 19 hijackers.”

Now in the rest of these transcripts, which are very interesting, Rush explains that Khashoggi was a Muslim Brotherhood member, and as such, stood opposed to MbS’ reform plans and actions. However the brutality of the alleged murder of Mr. Khashoggi, and the official “State version” account of his death are almost equally brutal. Death by fists? How is it that the United States considers such people allies?

President Trump is on record as saying that this explanation by the Saudi government is “credible.” However, this statement alone is out of context, so we bring you the entire statement:

This is not to be misunderstood as a Trump endorsement of belief. He points out that this is a first step, and that in his view it is a good one, but that is all.

Still, these events throw the real nature of the Saudi kingdom into sharp relief. They are the number one customer for US military equipment, now considered allies against Iran. In the complicated field of Middle East relations, the president’s caution is probably very wise for the moment. However, this is a nation which produced most of the 9/11 hijackers, which is said to be the last voice in what Islam is, and so promotes a very violent interpretation of an already violent faith.

CLICK HERE to Support The Duran >>

The news and information media got a great lesson in following something like “due process” with this matter, and while the President is doing that, this situation still invites some strong speculation. Allies that simultaneously seek an allied nation’s destruction do not seem like allies much at all. And embassies are usually held to be very safe places for people, not places where they meet their death in any way at all, let alone the cruel means alleged and later claimed.

This event may actually be very damaging to the Saudi Crown Prince’s effort to bring his nation out of Wahhabism and into some more kind interpretation of Islam, and indeed the West’s assessment of Khashoggi has taken to calling him a “teddy bear” when he is a Muslim Brotherhood member. Former US President Obama supported the Muslim Brotherhood in Egypt, and these people were so violent, killing Christians and destroying homes and businesses, that the Muslim Brotherhood’s uprising was followed by a second uprising from the more reasonable people in Egypt (which Obama promptly dropped).

If reports are to be believed, Mohammed bin Salman wants to end Wahhabism. It would seem to logically make sense that his agencies were involved in what happened to Kashoggi, who is a known critic of bin Salman. But if it really is true that the Saudi royals were not involved, then whoever it was certainly succeeded in stopping bin Salman’s efforts to modernize his country, at least for now.

 

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

The future of war: UAE hires U.S. mercenaries to assassinate political leaders (Video)

The Duran – News in Review – Episode 137.

Alex Christoforou

Published

on

An investigation by BuzzFeed News has revealed that Middle East Monarchy, United Arab Emirates, hired U.S. mercenaries to assassinate political leaders and religious clerical leaders in war torn Yemen.

The U.S. ex-military, elite soldiers were paid by to kill those designated as “terrorists” by the UAE.

The UAE worked with the U.S. based mercenary-for-hire Spear Operations Group, founded by Israeli-American Abraham Golan, who told BuzzFeed News…

“There was a targeted assassination program in Yemen. I was running it.”

Spear Operations Group’s first target in Yemen was Anssaf Ali Mayo, the local leader of the Islamist political party Al-Islah, a party whose members include Nobel Peace Prize Laureate Tawakkul Karman.

Is this the future of war?

The Duran’s Alex Christoforou and International Affairs and Security Analyst via Moscow, Mark Sleboda discuss the stunning Buzzfeed News article that exposes the dangerous and dark assassination strategy of the United Arab Emirates, hiring American ex-soldiers to target and kill political enemies.

Remember to Please Subscribe to The Duran’s YouTube Channel.

Follow The Duran Audio Podcast on Soundcloud.

Authored by Aram Roston via BuzzFeed News…


The operation against Mayo — which was reported at the time but until now was not known to have been carried out by American mercenaries — marked a pivot point in the war in Yemen, a brutal conflict that has seen children starved, villages bombed, and epidemics of cholera roll through the civilian population. The bombing was the first salvo in a string of unsolved assassinations that killed more than two dozen of the group’s leaders.

The company that hired the soldiers and carried out the attack is Spear Operations Group, incorporated in Delaware and founded by Abraham Golan, a charismatic Hungarian Israeli security contractor who lives outside of Pittsburgh. He led the team’s strike against Mayo.

“There was a targeted assassination program in Yemen,” he told BuzzFeed News. “I was running it. We did it. It was sanctioned by the UAE within the coalition.”

The UAE and Saudi Arabia lead an alliance of nine countries in Yemen, fighting what is largely a proxy war against Iran. The US is helping the Saudi-UAE side by providing weapons, intelligence, and other support.

The press office of the UAE’s US Embassy, as well as its US public affairs company, Harbour Group, did not respond to multiple phone calls and emails.

The revelations that a Middle East monarchy hired Americans to carry out assassinations comes at a moment when the world is focused on the alleged murder of dissident journalist Jamal Khashoggi by Saudi Arabia, an autocratic regime that has close ties to both the US and the UAE. (The Saudi Embassy in the US did not respond to a request for comment. Riyadh has denied it killed Khashoggi, though news reports suggest it is considering blaming his death on a botched interrogation.)

Golan said that during his company’s months-long engagement in Yemen, his team was responsible for a number of the war’s high-profile assassinations, though he declined to specify which ones. He argued that the US needs an assassination program similar to the model he deployed. “I just want there to be a debate,” he said. “Maybe I’m a monster. Maybe I should be in jail. Maybe I’m a bad guy. But I’m right.”

Spear Operations Group’s private assassination mission marks the confluence of three developments transforming the way war is conducted worldwide:

  • Modern counterterrorism combat has shifted away from traditional military objectives — such as destroying airfields, gun emplacements, or barracks — to killing specific individuals, largely reshaping war into organized assassinations.
  • War has become increasingly privatized, with many nations outsourcing most military support services to private contractors, leaving frontline combat as virtually the only function that the US and many other militaries have not contracted out to for-profit ventures.
  • The long US wars in Afghanistan and Iraq have relied heavily on elite special forces, producing tens of thousands of highly trained American commandos who can demand high private-sector salaries for defense contracting or outright mercenary work.

With Spear Operations Group’s mission in Yemen, these trends converged into a new and incendiary business: militarized contract killing, carried out by skilled American fighters.

Experts said it is almost inconceivable that the United States would not have known that the UAE — whose military the US has trained and armed at virtually every level — had hired an American company staffed by American veterans to conduct an assassination program in a war it closely monitors.

One of the mercenaries, according to three sources familiar with the operation, used to work with the CIA’s “ground branch,” the agency’s equivalent of the military’s special forces. Another was a special forces sergeant in the Maryland Army National Guard. And yet another, according to four people who knew him, was still in the Navy Reserve as a SEAL and had a top-secret clearance. He was a veteran of SEAL Team 6, or DEVGRU, the sources told BuzzFeed News. The New York Times once described that elite unit, famous for killing Osama bin Laden, as a “global manhunting machine with limited outside oversight.”

The CIA said it had no information about the mercenary assassination program, and the Navy’s Special Warfare Command declined to comment. A former CIA official who has worked in the UAE initially told BuzzFeed News there was no way that Americans would be allowed to participate in such a program. But after checking, he called back: “There were guys that were basically doing what you said.” He was astonished, he said, by what he learned: “What vetting procedures are there to make sure the guy you just smoked is really a bad guy?” The mercenaries, he said, were “almost like a murder squad.”

Whether Spear’s mercenary operation violates US law is surprisingly unclear. On the one hand, US law makes it illegal to “conspire to kill, kidnap, maim” someone in another country. Companies that provide military services to foreign nations are supposed to be regulated by the State Department, which says it has never granted any company the authority to supply combat troops or mercenaries to another country.

Yet, as BuzzFeed News has previously reported, the US doesn’t ban mercenaries. And with some exceptions, it is perfectly legal to serve in foreign militaries, whether one is motivated by idealism or money. With no legal consequences, Americans have served in the Israel Defense Forces, the French Foreign Legion, and even a militia fighting ISIS in Syria. Spear Operations Group, according to three sources, arranged for the UAE to give military rank to the Americans involved in the mission, which might provide them legal cover.

Despite operating in a legal and political gray zone, Golan heralds his brand of targeted assassinations as a precision counterterrorism strategy with fewer civilian casualties. But the Mayo operation shows that this new form of warfare carries many of the same old problems. The commandos’ plans went awry, and the intelligence proved flawed. And their strike was far from surgical: The explosive they attached to the door was designed to kill not one person but everyone in the office.

Aside from moral objections, for-profit targeted assassinations add new dilemmas to modern warfare. Private mercenaries operate outside the US military’s chain of command, so if they make mistakes or commit war crimes, there is no clear system for holding them accountable. If the mercenaries had killed a civilian in the street, who would have even investigated?

The Mayo mission exposes an even more central problem: the choice of targets. Golan insists that he killed only terrorists identified by the government of the UAE, an ally of the US. But who is a terrorist and who is a politician? What is a new form of warfare and what is just old-fashioned murder for hire? Who has the right to choose who lives and who dies — not only in the wars of a secretive monarchy like the UAE, but also those of a democracy such as the US?

BuzzFeed News has pieced together the inside story of the company’s attack on Al-Islah’s headquarters, revealing what mercenary warfare looks like now — and what it could become.

Full Story at BuzzFeed News…

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

Saudis Admit Khashoggi Killed At Consulate “In Fist-Fight”, King Salman Fires 5 Top Officials

Saudi Arabia confirmed tonight that Washington Post columnist Jamal Khashoggi was killed at its consulate in Istanbul on 2 October.

Published

on

Democrat Congressman Adam Schiff has weighed in on the Khashoggi murder admission from KSA claiming “the Saudi report of Khashoggi is not credible.”

The White House issue a statement…

Via Zerohedge


Saudi Arabia confirmed tonight that Washington Post columnist Jamal Khashoggi was killed at its consulate in Istanbul on 2 October.

In a statement put out on Saudi state television, citing an initial investigation by Saudi prosecutors, SPA said that:

“an argument erupted between him [Khashoggi] and others whom he met in the Saudi consulate in Istanbul leading to a fistfight which led to his death.”

Prosecutors said the investigation was still ongoing and that 18 people, all Saudi nationals, had so far been arrested, SPA reported.

“The Kingdom expresses its deep regret at the painful developments that have taken place and stresses the commitment of the authorities in the Kingdom to bring the facts to the public,” the statement said.

Additionally, Saudi Arabia’s King Salman has removed a key royal adviser and a senior intelligence official..

King Salman issued an order to remove Saud al-Qahtani, an adviser to Crown Prince Mohammed bin Salman, according to the state-run Ikhbariya television.

The monarch also relieved deputy intelligence chief Gen. Ahmed al-Assiri.

This follows the narrative reported by The New York Times on Thursday that Riyadh is looking to blame Assiri for the purported murder of Khashoggi in an effort to shield Crown Prince Mohammed bin Salman from the blame.

Saudi King Salman has also ordered the formation of ministerial committee led by crown prince Mohammad bin Salman to restructure the general intelligence agency.

As Ali Shihabi, Founder, The Arabia Foundation, tweets:

“The removal of two top officials, a cabinet ranking, very powerful and close advisor of MBS and the Deputy Head of Foreign intelligence + 4 other Generals in foreign intelligence (virtually its whole top leadership) cannot be written off as a cover up. This is unprecedented.”

This is not saying “rogue killers” but implicating virtually the whole top leadership of foreign intelligence. They carried out a mission that went sour very quickly and tried to cover it up initially. Bad news travels slowly to the top.”

We await President Trump’s “very severe consequences.”

 

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

JOIN OUR YOUTUBE CHANNEL

Your donations make all the difference. Together we can expose fake news lies and deliver truth.

Amount to donate in USD$:

5 100

Validating payment information...
Waiting for PayPal...
Validating payment information...
Waiting for PayPal...
Advertisement

Advertisement

Quick Donate

The Duran
EURO
DONATE
Donate a quick 10 spot!
Advertisement
Advertisement

Advertisement

The Duran Newsletter

Trending