Start the conversation
The Internet has been spotty, the phones are out, and the only people who can fix it are "off island" for the holidays.
Welcome to the Bahamas.
Of course, Marina and I can hardly complain. The temperature is in the low 80s, the rain falls after dark, and the friends we have built up over more than two decades are here to ring in the New Year.
The down time is certainly welcome...but it hasn't all been sleeping on the beach.
Among the guests were folks from four continents. I call them the "wired money." They include the bankers and investors who finance oil and gas ventures, along with the big company executives.
They've joined us for what has become the most important gathering of the year.
It's a time to look back at the good, the bad, and the ugly and discuss the part I always find the most intriguing: where the "wired" money is going next.
On this occasion, two interesting and profitable trends emerged...
A Lucrative Way to Start the New Year
As cases of Kalik (the local beer) disappeared from the shelves (another "tradition" down here, it seems), our two days of discussions have moved from oil and gas financing to the latest developments in South America.
This first trend is the subject of today's story.
The second will have to wait until after our annual New Year's Night bonfire by the water. This affair is something Marina and I hold each January 1-2 for our friends on the island. Many of them have become a second family. We have watched their children grow, held their hands during tough economic and personal times, laughed at weddings, cried at funerals, and watched each other's backs throughout decades of change.
Normally, this is a social event. But this time, there may be a slight twist.
We assemble late in the evening, following Junkanoo - the traditional January 1 festival. Junkanoo is a local version of Carnival. It involves costumed revelers parading to cowbells, goatskin drums, whistles (many and loud), and homemade instruments.
By 10 o'clock or so, we are back on the beach. Most years, we are still there to greet the rising sun before heading off to breakfast.
However, this time around I have invited a few select other guests...
And while the socializing is underway, we may be back in the house setting up a network for a new energy initiative. I'll let you know all about it on Thursday. But be advised. This one will be written after the festivities, so it may take some effort on this end!
Looking Beyond the American Energy Boom
But back to the weekend sessions and our discussions on oil and gas financing.
You see, there are a few experiments in finance that are currently being phased in, along with several new holding structures designed to oversee developments in every portion of the product stream: involving further integration of upstream (production); midstream (gathering, storage, initial processing, transport), and downstream (refining and distribution) operations.
That means there will likely be numerous investment options for individual retail investors as we move into 2014. So stay tuned on this front.
In fact, the New Year should include significant revisions in where energy investors are going to make their money.
And here's the key: Much of this will not be solely centered on American-based products. So don't be surprised if we begin casting a wider global eye to bank even bigger gains in the year to come.
That includes a situation I've had my eye on for some time. And by mid-morning on Saturday, there was an occasion to move the discussion in that direction. I took it, addressing a pointed question to several of the guests.
They represented two of the biggest Chinese oil and gas producers. I know them well. We have worked with them for several years on a large refinery project in Ecuador.
As many of you will recall, I employ Chatham House Rules at such meetings. Those rules allow the mention of what was discussed during meetings but oblige participants not to associate any particular position with a named individual. It's what allows for a frank and open exchange.
And that certainly was the case last weekend. Everyone had noticed the massive amounts of Chinese money pouring into South American energy, most of it in loans to national oil companies or straight to the budgets of central governments.
In fact, I recently discussed how the Chinese have come to control oil exports from Ecuador as a result and how large financial injections into Venezuela, Brazil, and Peru are mirroring similar moves elsewhere.
So I decided to broach the subject and ask point blank where our Chinese colleagues intended to go with all of this commitment of funds.
About the Author
Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.