The oil exploration debate in The Bahamas is starting to take shape in a very open way. The Minister for The Environment, who is responsible for the country's natural resources, has stated clearly that more analysis is needed before oil exploration is to be taken seriously in The Bahamas.
During the last administration of The Progressive Liberal Party, 2002 to 2007, the Natural Gas/LNG (not exactly crude oil, but a natural resource for energy) was an issue of great contention, the main point being protecting the environment. The second issue has been a national security concern, garnering cooperation from abroad and finding a way to secure the investments from natural or manmade occurrences, which could be disastrous to the environment in addition to it destabilizing a country.
The Bahamas Petroleum Company PLC's company profile page states that it has a license to explore for oil in The Bahamas and wishes to start as early as 2012. Their profile also states that the company has, between the years 1947 and 1986, drilled for oil in onshore and shallow water areas in The Bahamas and that their license has provided them the ability to do so, even though they have not drilled for oil in the last 20 years.
British Petroleum (BP) on the other hand has been in the business of oil exploration for a number of years. A good part of BP's business model has been oil exploration and refining with oil retail second. Comparing them with the other oil company, also known as the "Big 6", they have a smaller market share than all but four out of that group.
This makes the case for BP’s “Deepwater Oil Spill” in 2010 interesting, when looking into BP’s operations model and financial performance compared to that of other oil companies.
BP's average Return on Assets (ROA) when compared to Chevron and Exxon Mobil is nestled at the midpoint between the other companies during the years 2008 to 2010.
There's nothing startling about BP's Return on Equity (ROE) ratios for the same period either, as the numbers appear too vague if we wish to make a case that BP was paying out more money to equity than it was putting back into assets over the same period of time compared to the other companies on a pound for pound basis, with it being un-assessed by duration and intangible variables that can skew ratios through virtue of the net income and expenses payable at any point and time that may affect assets.
What's interesting with this however, is when we subtract ROA over ROE for the same period it tells a different story. BP's ROA over ROE gives us a better insight into how BP was spending its money on assets compared to equity.
While BP's ROA over ROE was less than Exxon and slightly more than Chevron, BP is larger than Chevron in market capitalization and global reach. In addition with Exxon having a negative ROA over ROE and was pumping more money into equity over assets between 2008 to 2010, both Exxon and BP had negative ROA over ROE figures.
All of this matters because ROA shows you how much money a company puts back into its company’s operations at the very first glance. When you subtract ROA from ROE, you have more of an idea of not how much a company puts back into assets, but more importantly how much money a company puts back into assets pound for pound compared to other companies in the same industry, as it eliminates the size and capitalization issue as we have with the oil behemoth Exxon. ROA also matters if a company’s business model is more capital intensive than other companies in the same industry per dollar value compared to other business operations, for example oil retail vs. oil exploration; oil transportation vs. oil refining, and so on and so forth.
It must be noted that while all oil companies mentioned had recent oil spills from mid 2010 up to 2011, BP’s oil spill was much larger by tonnage, which can be attributed to their business model as well as their size, scope and capitalization, relative to the spill’s geographical location- which may have been dictated by all of the factors of their industry and what they were allowed to endeavour in the oil market.
The numbers suggest, among other things, that the larger size tonnage spill is correlated to the company’s size and capitalization and then the ratio of ROA over ROE for each company respectively. While Exxon had more individual oil spills than all of the other companies mentioned, but because of their size, scope and extreme market capitalization, they were able to contain these spills in addition to having the capacity to minimize the fall out more so than BP.
Let’s take for another example the Talmadge Oil Spill that Enbridge Energy was responsible for in 2010, which produced a tonnage spill of nearly 3,500 tonnes, we have to not only look into company financials to see if a disaster could be averted by alerting the public to the company’s performance, but also to the issue of timely mandatory reporting of financials, to assist analysts and persons who have vested interest in these matters with regard to dealing with issues before they become disasters. In fact, aside from BP, the ratio of tonnage spill to revenue for Enbridge is significant and speaks to their business model, size scope and market capitalization in addition to their ROA and ROE performance indicators.
As with Enbridge, their reporting structure is not as strict as BP or the American-International oil companies. But from what we have examined, Enbridge has a negative ROA over ROE over the period of the last several years up until their last open financial report of record, produced in 2005 as reported by Hoovers. Digging a little deeper into the Enbridge financial information on their company website, they have up very basic reports for 2009 and 2010, which states that they have spent more money on company assets and operational equipment over those last two years, but when we calculate the ratios, they have the lowest ROA and also display negative ROA’s over ROE’s over the course of all the years recorded.
Enbridge, by far, is considerably smaller company by capitalization than any of the other Big 6 Oil companies mentioned. They are not intensively involved in the retail side of the oil and natural gas business- as is BP to some extent compared to Exxon and Chevron- with Enbridge being more focused on the exploration and wholesale distribution of crude oil, oil bi-products and natural gas.
This leads me to believe that as The Bahamas moves forward with oil and natural gas exploration, four key things must be essential to protecting the environment and preventing a major disaster:
1. The security of investments from man-made or natural disasters;
2. The business model, size, scope and market capitalization of any oil company in The Bahamas must be adequately categorized in relation to its financial performance and its projections on the possible returns on assets and equity;
3. Accurate and timely reporting of any oil company’s financial and investment information; and
4. Necessary legislation and regulations that curb the overcompensation of equity.
What happened to the Gulf Coast by virtue of this disaster and also what happened to BP's reputation by the Deepwater Oil Spill of 2010 is something that can be avoided in The Bahamas if we look carefully into the factors outlined in this article and then some.
Tuesday, August 2, 2011
Thursday, July 21, 2011
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Sunday, July 3, 2011
DSK is now free to roam!
If you have not heard, Dominique Strauss-Khan, the former head of the IMF has been released from his house arrest over the last week.
Funny thing is that while his release has been seen as an achievement for proponents of his innocence, the woman that has accused him of rape is now coming under much scrutiny.
Apparently the woman- who is still nameless to many- is a hotel maid with a very large bank account. Too large to go unnoticed. In addition to this hotel maid being a very wealthy woman, he boyfriend is also a convicted man currently serving time for drug charges.
The twists and turns are getting twistier and turnier. People have long claimed that it was a set up and the "powers that be" wanted DSK out of the IMF. For what reason is still unknown to many. Other conspiracy theorists state that the other reason why the powers that be wanted to smear DSK was because they wanted to stunt his chances for running for the French Presidency next year.
Whatever it may be, the turn of events with the hotel maid and her now known background, leaves questions to be answered.
Where will it turn from here on in, no one knows just yet.
Funny thing is that while his release has been seen as an achievement for proponents of his innocence, the woman that has accused him of rape is now coming under much scrutiny.
Apparently the woman- who is still nameless to many- is a hotel maid with a very large bank account. Too large to go unnoticed. In addition to this hotel maid being a very wealthy woman, he boyfriend is also a convicted man currently serving time for drug charges.
The twists and turns are getting twistier and turnier. People have long claimed that it was a set up and the "powers that be" wanted DSK out of the IMF. For what reason is still unknown to many. Other conspiracy theorists state that the other reason why the powers that be wanted to smear DSK was because they wanted to stunt his chances for running for the French Presidency next year.
Whatever it may be, the turn of events with the hotel maid and her now known background, leaves questions to be answered.
Where will it turn from here on in, no one knows just yet.
Wednesday, June 8, 2011
Dare To Be Great taping with me!
Hi all,
I was invited to be a guest on a Caribbean eRadio show on an eRadio stationed owned by Charles Lewis from Barbados on the show Dare To Be Great with the host Spence Finlayson. We had a great time. Also we had a co-guest Mr. Andrew Harris from Barbados who has a wealth of experience in the financial services sector.
I was a television guest on Dareto Be Great a few short months back with Spence. He is a fantastic host a master motivator.
I was invited to be a guest on a Caribbean eRadio show on an eRadio stationed owned by Charles Lewis from Barbados on the show Dare To Be Great with the host Spence Finlayson. We had a great time. Also we had a co-guest Mr. Andrew Harris from Barbados who has a wealth of experience in the financial services sector.
I was a television guest on Dareto Be Great a few short months back with Spence. He is a fantastic host a master motivator.
Listen to internet radio with eRadio Broadcast Network on Blog Talk Radio
Monday, June 6, 2011
Is crime an economic concern in The Bahamas?
The focus has been on crime in The Bahamas for the last few years. It's playing such an important part in the social dialogue that reports have it that it has become the number one concern in some quarters, with the economy being a very close second. With such a high premium placed on both the economy and on crime one has to ask the question; are these issues correlated to some extent?
I got an email over the past week stating that in Toronto, where they have five million people, that the murder count was 60 and people were furious over it. In 2010 Toronto had 60 murders in total. In The Bahamas the murder count for the year, 2011 is already 58 and will more than likely be higher by this submission is received by the media outlets that have so graciously shared my correspondence with the public.
With regard to analyzing crime statistics, persons sometimes tend to internalize and personalize crime and isolate the person that committed the crime. Partly because it affects us all in some way – my cousin was shot in back of the head, in broad daylight, with witnesses, but the chief witness was killed a year later before he had a chance to testify.
Without question the issue of crime is deep as it is wide. To that extent, you shouldn’t be blustered with the notion that any one person is able to solve crime with one stroke or within a calendar year. I certainly cannot share with you path breaking information on a one year 100% crime reduction strategy, and I can assure you that no one else can either. I will tell you however that reacting to the crime news and overstating crime statistics instead of analyzing the nature of the criminal behaviour and parameters of this behaviour are not fruitful endeavours.
Going back to the statistics to some extent and to add further value to the Bahamian murder rate statistic, UN reports indicate that the average murder rate for every 100,000 persons in The Bahamas stands at 22. This is the same rate as Brazil, Haiti and Guyana, but far less than Trinidad and Tobago and Jamaica with 43 and 60 per 100,000 respectively. St. Kitts and Nevis on the other hand has a murder rate of 35 persons for every 100,000 and their population is under 75,000.
Let's take a closer look at The Bahamas vs. St. Kitts and Nevis, with the latter suffering under the weight of a severe murder spree. Persons have indicated that the size of the population matters with regard to crime, but this matter can be a wash when we examine the population size of both countries as The Bahamas is four times the population size of St. Kitts and Nevis.
We may say with some degree of rationale however that population density instead of overall population size may be the cause of the differences in crime levels in each country, when we bring into the mix Trinidad with a population density of 254, Jamaica at 252 against that of St. Kitts and Nevis at 164 and The Bahamas at 23.27, all UN reported statistics. Population density as it relates to urbanization and how that relates to the crime phenomenon has been well documented. To date over 85% of the crime in The Bahamas happens in the inner cities of the capital city of New Providence.
Analysts typically link crime between economic performance and criminal activity. Speaking to an authority on the matter in The Bahamas, he assured me that crime is not a result of economic reasons. But the question to be asked is; what economic concerns are we evaluating with criminal statistics?
If we look at GDP per capita in all four of our countries, we see that Jamaica has a lower GDP per capita than all cases and a higher murder rate. But when we look at Trinidad and Tobago we see that they have the second highest murder rate but the second highest GDP per capita and the Bahamas ranked with the highest GDP per capita and the lowest crime rate, relatively speaking.
While analyzing the murder rate alone is not enough to base any determination on with regard to overall crime, so too, can we base any determinations on the crime by virtue of the murder rate as it relates to GDP per capita either, because there is more to economic performance, and the economy for that matter, than just the GDP per capita alone.
When we speak of the economy, we speak of things not only in the performance indicators, but we also speak to the level of un-employment; urbanization; the size of the informal sector; the size and scope of corruption; the illegal vices trade (gambling, narcotics, illegal immigration trade and the trade in sex workers); the level of economic openness and transparency; business ease; and the level of state and social protection in terms of property rights and transfers relative to population size and scope as well as a host of other issues and concerns.
I take the position, absolutely, that over 70% of the total crime in The Bahamas can be traced back to prevailing economic concerns and linked to wider structural deficits in the economic regulatory mechanisms in The Bahamas. Crimes against property in total, realty theft, house breaking and grand theft auto, are crimes that have economic implications, if only from a net positive benefit for the criminal.
To a broader extent when we speak of benefits transfers to underserved citizens- knowing full well that employees of the Department of Social Services were attacked by irate customers only a few short months back- we have to look at the amount of those transfer benefits relative to the economic situation we have today in The Bahamas.
We also must examine to the state’s capacity to provide proper services and deliver adequate benefits under prevailing financial constraints in addition to issue of social protection intervention before the turning point of human attitudinal change, particularly pre-school and secondary school assessments of persons that exhibit anti-social behavioural traits, with issues such as violence against women and overall attitudes against women to be taken into serious consideration as well as with the general lack of respect for authority and property.
While we must submit that crime is not a single entity with one single fix, we must begin to think about the links with crime to the wider economy and by virtue the society. Then, we must disaggregate certain crimes, under certain instances, with certain parameters and then determine if they all can be identifiable under those instances and parameters.
The Bahamas has the ability to build the capacity in its institutions and societies to deal with this matter decisively, and I believe that we can deal with this matter absolutely.
I got an email over the past week stating that in Toronto, where they have five million people, that the murder count was 60 and people were furious over it. In 2010 Toronto had 60 murders in total. In The Bahamas the murder count for the year, 2011 is already 58 and will more than likely be higher by this submission is received by the media outlets that have so graciously shared my correspondence with the public.
With regard to analyzing crime statistics, persons sometimes tend to internalize and personalize crime and isolate the person that committed the crime. Partly because it affects us all in some way – my cousin was shot in back of the head, in broad daylight, with witnesses, but the chief witness was killed a year later before he had a chance to testify.
Without question the issue of crime is deep as it is wide. To that extent, you shouldn’t be blustered with the notion that any one person is able to solve crime with one stroke or within a calendar year. I certainly cannot share with you path breaking information on a one year 100% crime reduction strategy, and I can assure you that no one else can either. I will tell you however that reacting to the crime news and overstating crime statistics instead of analyzing the nature of the criminal behaviour and parameters of this behaviour are not fruitful endeavours.
Going back to the statistics to some extent and to add further value to the Bahamian murder rate statistic, UN reports indicate that the average murder rate for every 100,000 persons in The Bahamas stands at 22. This is the same rate as Brazil, Haiti and Guyana, but far less than Trinidad and Tobago and Jamaica with 43 and 60 per 100,000 respectively. St. Kitts and Nevis on the other hand has a murder rate of 35 persons for every 100,000 and their population is under 75,000.
Let's take a closer look at The Bahamas vs. St. Kitts and Nevis, with the latter suffering under the weight of a severe murder spree. Persons have indicated that the size of the population matters with regard to crime, but this matter can be a wash when we examine the population size of both countries as The Bahamas is four times the population size of St. Kitts and Nevis.
We may say with some degree of rationale however that population density instead of overall population size may be the cause of the differences in crime levels in each country, when we bring into the mix Trinidad with a population density of 254, Jamaica at 252 against that of St. Kitts and Nevis at 164 and The Bahamas at 23.27, all UN reported statistics. Population density as it relates to urbanization and how that relates to the crime phenomenon has been well documented. To date over 85% of the crime in The Bahamas happens in the inner cities of the capital city of New Providence.
Analysts typically link crime between economic performance and criminal activity. Speaking to an authority on the matter in The Bahamas, he assured me that crime is not a result of economic reasons. But the question to be asked is; what economic concerns are we evaluating with criminal statistics?
If we look at GDP per capita in all four of our countries, we see that Jamaica has a lower GDP per capita than all cases and a higher murder rate. But when we look at Trinidad and Tobago we see that they have the second highest murder rate but the second highest GDP per capita and the Bahamas ranked with the highest GDP per capita and the lowest crime rate, relatively speaking.
While analyzing the murder rate alone is not enough to base any determination on with regard to overall crime, so too, can we base any determinations on the crime by virtue of the murder rate as it relates to GDP per capita either, because there is more to economic performance, and the economy for that matter, than just the GDP per capita alone.
When we speak of the economy, we speak of things not only in the performance indicators, but we also speak to the level of un-employment; urbanization; the size of the informal sector; the size and scope of corruption; the illegal vices trade (gambling, narcotics, illegal immigration trade and the trade in sex workers); the level of economic openness and transparency; business ease; and the level of state and social protection in terms of property rights and transfers relative to population size and scope as well as a host of other issues and concerns.
I take the position, absolutely, that over 70% of the total crime in The Bahamas can be traced back to prevailing economic concerns and linked to wider structural deficits in the economic regulatory mechanisms in The Bahamas. Crimes against property in total, realty theft, house breaking and grand theft auto, are crimes that have economic implications, if only from a net positive benefit for the criminal.
To a broader extent when we speak of benefits transfers to underserved citizens- knowing full well that employees of the Department of Social Services were attacked by irate customers only a few short months back- we have to look at the amount of those transfer benefits relative to the economic situation we have today in The Bahamas.
We also must examine to the state’s capacity to provide proper services and deliver adequate benefits under prevailing financial constraints in addition to issue of social protection intervention before the turning point of human attitudinal change, particularly pre-school and secondary school assessments of persons that exhibit anti-social behavioural traits, with issues such as violence against women and overall attitudes against women to be taken into serious consideration as well as with the general lack of respect for authority and property.
While we must submit that crime is not a single entity with one single fix, we must begin to think about the links with crime to the wider economy and by virtue the society. Then, we must disaggregate certain crimes, under certain instances, with certain parameters and then determine if they all can be identifiable under those instances and parameters.
The Bahamas has the ability to build the capacity in its institutions and societies to deal with this matter decisively, and I believe that we can deal with this matter absolutely.
Thursday, May 19, 2011
What to do about the IMF?
In case you have not heard, the IMF (former) Dominique Strauss-Khan was arrested and charged with the sexual assault of a hotel maid. His second in command, John Lipsky, has assumed the role of Managing Director.
Apparently, Mr. Strauss Khan forced himself on a hotel maid in his New York Hotel- lady of African descent- and caused her great distress. Reports from the lady says that he chased her around the room after he appeared from his bathroom naked and ready for action. That's rather unfortunate.
This is not the first time that Strauss-Khan, who has been labeled "The Great Seducer" by his circle of people that know him well, has been in trouble because of his sexual practices. While nothing this severe has ever been reported, he was near expulsion from the IMF because of his relationship with a former employee at the bank. The Hungarian born woman has since left the fund for another international organization and the affair was squashed. Not so easily will this sexual assault charge be dropped however.
Currently Mr. Strauss-Khan was held on bail and now has been released on 1 million dollars bail with a 5 million dollar bond. He was on suicide watch over the past two days but has been released as of today.
This leaves the IMF in a very difficult position. European heads were in France- Strauss-Khan's home country- discussion what to do about the European Debt Crisis. The fund is supposed to be leading the charge on this debt restructuring effort for weaker countries and his presence was greatly expected to lead these discussion. But instead of him being present for the high-level meeting, he was locked away in Rikers Island and the meetings, in turn, discussed what to do about the scandal and how to replace Mr. Strauss-Khan, considering the severity of the situation on both sides.
To make matters even more interesting, Mr. Strauss Khan was a leading candidate for president running under the French Social Party and was set to challenge Nicholas Sarkozy in the upcoming French elections. That most obviously has been set aside as he has to answer charges in New York for sexual assault. But it does make the situation seem as if it is an all out collapse of the front runner for the French Socialist Party.
People wonder if he was set up? And if he was set up, then by whom and for what reason? No doubt conspiracy theories will swirl. I for one do not like the way he was treated, even if it was assault. He is a very important world figure and diplomat and such immunity against certain treatment was expected.
We will monitor this story as things progress. As it stands now, Strauss-Khan has been replaced by his second in command, he is released on bail, he will not be leaving the USA any time soon, and the fund is moving forward with the discussions in Europe about dealing with the Debt Crisis.
Apparently, Mr. Strauss Khan forced himself on a hotel maid in his New York Hotel- lady of African descent- and caused her great distress. Reports from the lady says that he chased her around the room after he appeared from his bathroom naked and ready for action. That's rather unfortunate.
This is not the first time that Strauss-Khan, who has been labeled "The Great Seducer" by his circle of people that know him well, has been in trouble because of his sexual practices. While nothing this severe has ever been reported, he was near expulsion from the IMF because of his relationship with a former employee at the bank. The Hungarian born woman has since left the fund for another international organization and the affair was squashed. Not so easily will this sexual assault charge be dropped however.
Currently Mr. Strauss-Khan was held on bail and now has been released on 1 million dollars bail with a 5 million dollar bond. He was on suicide watch over the past two days but has been released as of today.
This leaves the IMF in a very difficult position. European heads were in France- Strauss-Khan's home country- discussion what to do about the European Debt Crisis. The fund is supposed to be leading the charge on this debt restructuring effort for weaker countries and his presence was greatly expected to lead these discussion. But instead of him being present for the high-level meeting, he was locked away in Rikers Island and the meetings, in turn, discussed what to do about the scandal and how to replace Mr. Strauss-Khan, considering the severity of the situation on both sides.
To make matters even more interesting, Mr. Strauss Khan was a leading candidate for president running under the French Social Party and was set to challenge Nicholas Sarkozy in the upcoming French elections. That most obviously has been set aside as he has to answer charges in New York for sexual assault. But it does make the situation seem as if it is an all out collapse of the front runner for the French Socialist Party.
People wonder if he was set up? And if he was set up, then by whom and for what reason? No doubt conspiracy theories will swirl. I for one do not like the way he was treated, even if it was assault. He is a very important world figure and diplomat and such immunity against certain treatment was expected.
We will monitor this story as things progress. As it stands now, Strauss-Khan has been replaced by his second in command, he is released on bail, he will not be leaving the USA any time soon, and the fund is moving forward with the discussions in Europe about dealing with the Debt Crisis.
Saturday, May 14, 2011
Obama got Osama!
So Obama got Osama. This is a sure way to get re-elected. Do you think it was timed? Perhaps just a little timed. But, I really feel as if they could not find Osama Bin-Laden- the allied NATO forces- for about two to three years after September 11 and after the invasion of Afghanistan. After all, they still have not found Mullah Omar either and he was the cheif Taliban leader.
Reports have it that CIA had the house where Bin-Laden was killed under surveilance for over 6 months. They wanted to make sure that it was in fact Bin-Laden.
To me, I think they should have captured him. Why? So they can find out what in particular was in the mind of Bin-Laden, map his physiology and his brain patterns. There must have been something distinctive about Bin-Laden that made him the way he was.
But, in any case, it is over.... for now. Even as 80 Pakistani recruits and personell were killed two days ago in retaliatory fashion, the Bin-Laden issue is over.
Congrats to President Obama!
Reports have it that CIA had the house where Bin-Laden was killed under surveilance for over 6 months. They wanted to make sure that it was in fact Bin-Laden.
To me, I think they should have captured him. Why? So they can find out what in particular was in the mind of Bin-Laden, map his physiology and his brain patterns. There must have been something distinctive about Bin-Laden that made him the way he was.
But, in any case, it is over.... for now. Even as 80 Pakistani recruits and personell were killed two days ago in retaliatory fashion, the Bin-Laden issue is over.
Congrats to President Obama!
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