As most of you know I do not post often but do have a fair bit of experience working within the Middle East with the last trip ending in December with Saudi Arabia and Qatar. I am not going to go into what I do except it is with oil & gas companies and goverment entities within the Kingdom and elsewhere.

A few observations:

• there are more Saudi Arabian goverment and oil & gas people coming to Canada in the last couple of weeks than ever before, if you remember my last post when the problems started, there was a sudden stop on their traveling, this traveling has markedly increased in the last two weeks. If it keeps going on the basis on whom I am hosting, it will be way over past years and even more is in the hopper;
• all Kingdom goverment employees today are VERY happy, even those that are in Canada, as they all got a two month wage bonus TODAY;
• the demonstrations in Saudi Arabia did not amount to much due to the extreme security presence, the whole country is heavily policed in ordinary times with checkpoints even on major 4 and 6 lane highways and if you are young you get stopped, then taken out of the car for questioning;
• this policing has increased in the oil region due to its Shiite majority in that area and what is happening across the causeway in Bahrain;
• there always has been a large troop presence in the area and this has increased and as you probably know with some of the Kingdom's troops now having crossed the causeway into Bahrain.

My take, the situation is under fairly good control in Saudi Arabia, the monarchy is worried but my read is that things will not change in the short term and spin out of control.

For everybodies information my usual method of entering Saudi Arabia is Bahrain, get my Visa there and then over the causeway into the Kingdom which is their main but not only oil region. I always felt super safe in Bahrain but for some reason last year flew from Frankfurt direct into the Kingdom and thankfully on reflection missed Bahrain.

What has all of the above got to do with CLL? Well I believe the major factor is going to be the continuing situation in Libya and the realization that oil pricing is constrained by the new forces being unleashed in the region that will keep prices in the $100 range. If you remember I reported in December that it was reported in a Saudi Arabia newspaper that their Minister of Oil and Gas wanted pricing in the $90 range. By giving all goverment members, including security and armed forces a two month bonus today, I believe that there is a growing need to keep the price now not in the $90 range but now at the $100 range to pay for these huge budget increases which is buying a comfort level of the Kingdoms citizens and residents.

A few thoughts now that I am on a little bit of a roll, I reviewed the CLL Year End report of yesterday and todays conference call. I am very SATISFIED with their progress to date, they have embarked upon a classical engineering quality improvement cycle with the SAGD and are hiring great drilling contractors for their light oil play that will quickly increase their revenue stream. A little luck in minimal maintenance downtime on the SAGD will give us a stellar 2011. I am holding what I have and will be buying more on dips.

Just a few thoughts.