A week after failing to deflate record oil prices at a summit in Saudi Arabia, the world's biggest crude producers and consumers will get another chance to tackle the problem at a meeting this week.

More than 3,000 delegates, including leading corporate and political figures, are to meet at the 19th World Petroleum Congress (WPC) in Madrid, which runs from Monday to Thursday after an official opening reception on Sunday.

"It's the Olympics of the oil and gas industry," director of the World Petroleum Congress, Pierce Riemer, told a press conference last week.

The gathering follows a surge in oil prices Friday that took both New York light sweet crude and Brent North Sea crude to record levels beyond 142 dollars a barrel.

The president of the Organization of Petroleum Exporting Countries, the head of the International Energy Agency and ministers from Nigeria, Russia, Venezuela, India, France and the Netherlands are expected to be present.

They are to be joined by the bosses of major international oil groups ExxonMobil of the United States, CNOOC of China, Britain's BP and Shell, Rosneft of Russia and Total of France.

Saudi Arabia convened a hastily arranged meeting of consumers and producers in Jeddah last weekend to tackle the problem of record oil prices, which are forecast by Organization of Petroleum Exporting Countries,'s president to touch 150-170 in the coming months.

Most experts agreed afterwards that the only concrete result was Saudi Arabia's announcement that it would increase daily production by more than 200,000 barrels to 9.7 million -- and that it could significantly step this up if necessary.

The gathering pitted consumer nations, which are calling for an increase in production, against producers.

Most OPEC members remain firmly against any increase in their production and blame speculators and the fall in the dollar for the remarkable run up in prices, which have doubled in the last 12 months.

Jorge Segrelles, the head of the organising committee of the WPC, says the meeting is intended to be "a forum for actively finding solutions."

Given the differences in assessment of the situation between consumer and producer countries, the head of energy at consultancy Capgemini, Colette Lewiner, sees little chance of an agreement.

"There might be declarations of intent, but there will not be a consensus in the short term," she said.

The main event, which will take place in Madrid's Ifema conference centre, also faces competition from a rival meeting of environmentalists called to promote alternatives to crude oil as an energy source. The main event, which will take place in Madrid's Ifema conference centre, also faces competition from a rival meeting of environmentalists called to promote alternatives to crude oil as an energy source.

Organization of Petroleum Exporting Countries President Chakib Khelil predicted that the price of oil will climb to $170 a barrel before the end of the year, citing the dollar's decline and political conflicts.

``Oil prices are expected to reach $170 as demand for fuel is growing in the U.S. during the summer period and the dollar continues to weaken against the euro,'' Khelil said today in a telephone interview. The leader of the Organization of Petroleum Exporting Countries also serves as Algeria's oil minister.

Political pressure on Iran and the depreciation of the U.S. currency have caused a surge in oil prices, Khelil said. New York- traded crude has more than doubled in a year and touched a record $142.99 a barrel yesterday on the New York Mercantile Exchange.

Organization of Petroleum Exporting Countries ministers generally say that oil output is sufficient, even as Saudi Arabia, the biggest producer, pledged to pump an extra 200,000 barrels a day next month to calm the market. ``The market is completely supplied,'' Venezuelan Oil Minister Rafael Ramirez said yesterday. Libya announced possible production cuts, calling the market oversupplied.

The rising cost of crude is not linked to supply, Khelil said today. ``There is more than enough oil in the market to meet the international demand,'' added the Organization of Petroleum Exporting Countries president, who will take part June 30 in an international energy forum in Madrid.

Prices, which are up 38 percent this quarter, are heading for the biggest quarterly gain since the first three months of 1999, when oil traded between $11 and $17.

Declining Dollar

``The decisions made by the U.S. Federal Reserve and the European Central Bank helped the devaluation of the dollar, which pushed up oil prices,'' Khelil said.

Oil may extend gains if the European Central Bank boosts rates on July 3, further weakening the U.S. currency. The dollar has declined 15 percent against the euro in 12 months.

European Central Bank President Jean-Claude Trichet reiterated June 25 that policy makers may increase the main refinancing rate by a quarter-percentage point next month to contain inflation. The Federal Reserve left the benchmark U.S. rate at 2 percent on June 25. On Sept. 18 the Fed began cutting rates to bolster an economy already reeling from the credit crisis.

OGK-1, majority owned by Unified Energy System, said Thursday that it had created a joint venture with TNK-BP, which UES chief Anatoly Chubais hailed as "a sign of a positive future" for the embattled oil firm.

"The decision on the joint venture ... shows that the TNK-BP shareholders, despite the disagreements between them, managed to work out a common position on the project, which is especially important for the Russian energy sector," Chubais said in a statement.

The venture was created to build a third unit with a capacity of 800 megawatts at OGK-1's Nizhnevartovskaya power station, which supplies TNK-BP in the Tyumen region.

The firm's start-up capital will include 100 percent of the Nizhnevartovskaya station shares from OGK-1, while TNK-BP will invest $360 million. The rest of the money needed for the unit's construction -- $800 million to $1.1 billion -- is to be borrowed as a syndicated bank loan, RIA-Novosti reported.

Trade powers will meet next month for a long-awaited attempt at a breakthrough in global trade talks which risk years of further delay if a deal cannot be hammered out soon. World Trade Organisation (WTO) director-general Pascal Lamy yesterday called for a group of ministers to meet, probably for several days, from July 21 to push the Doha round of global free trade talks toward conclusion, diplomats said.

Mexico's ambassador to the World Trade Organisation, Fernando de Mateo y Venturini, announced the date after a briefing by Lamy to ambassadors at the World Trade Organisation's Geneva headquarters.

The meeting would include 35 to 40 ministers representing a range of interests in the fractious negotiations about opening up agriculture, industry and services markets which Lamy is aiming to wrap up this year.

If those ministers can successfully broker trade-offs in farming and manufacturing trade - the most difficult areas of the talks - diplomats said the basics of a Doha accord could go to the World Trade Organisation's full membership as early as the end of July.

Services would be discussed briefly by ministers and finalised later.

"I think it is perfectly imaginable that this deal can be done, but a lot of hard work needs to be done first," said the European Union's top civil servant for trade, David O'Sullivan.

"I agree with him," added US ambassador to the WTO Peter Allgeier, who also participated in Lamy's briefing. The Doha round was launched in 2001, shortly after the September 11 attacks on the US, in the hope of giving the global economy a boost and helping poor countries export more.

Iran will withdraw assets from the European Union in response to the tightening of sanctions imposed over its nuclear programme, Deputy Foreign Minister Mahdi Safari said yesterday.

"We are going to withdraw the money and invest elsewhere," Safari said.

"If you withdraw more than $100 billion, then of course this will bring about a scarcity of money and have an impact on the world economy."

The 27-nation EU agreed new punitive measures on Monday targeting businesses and individuals the West says are linked to Iran's nuclear and ballistic programmes.

An Iranian monthly reported earlier this month that the Islamic Republic had withdrawn $75bn in assets from Europe to prevent their being blocked under new sanctions. But Iran's economy minister on Sunday played down the report "as yet not serious".

The new EU measures include a freeze on the assets of Iran's largest bank, Bank Melli, and visa bans on senior officials such as Revolutionary Guards head Mohammad Ali Jafari, Defence Minister Mostafa Mohammad Najjar and atomic energy chief Gholamreza Aghazadeh.

Safari said that Europeans would lose out as a result of the newly imposed measures.

"We have gas and oil resources everyone wants to buy. Now we are trading mostly with Asian countries," he said.

"Previously our main partners were in Europe - Germany, Italy, France, and also Austria. Now we have other partners."

Deep in the Saudi desert, 28,000 Asian workers are racing to get a giant oil processing complex ready to help King Abdullah keep a vow to meet world demand for crude.

In a year's time, the Al Khurais field will be supplying 1.2 million barrels a day of Arab light crude to thirsty global markets, under a tight schedule set by Saudi Aramco. The king, and other top Saudi officials, promised at an oil summit they hosted in Jeddah on Sunday to increase current production by 200,000 barrels a day to 9.7 million barrels and to supply any further increase in global demand.

In temperatures that seldom fall under 100 degrees Fahrenheit during the day, workers from Indonesia, Bangladesh, India, the Philippines and other nations wear hoods against the sun as they finish the hundreds of kilometres of pipelines, three 600,000 barrel storage tanks, 15,000 horsepower pumps and a bomb proof control centre that make up the $10 billion complex.

Al Khurais is city-sized but can only be reached up a seemingly endless desert road, with truck tyres and carcases of burned out cars strewn along the sides and black camels roaming in the dunes.

The company calls it "the largest industrial project in the world." Together the three fields have estimated reserves of 27bn barrels and their joint daily production of 1.2m barrels will be more than OPEC's three smallest members Indonesia, Qatar and Ecuador, according to Aramco.

World demand is growing by about 1pc a year and Saudi Arabia has vowed to invest tens of billions of dollars to take production capacity to 12.5m barrels by the end of next year and eventually 15m if the demand is there.

Aramco vice-president for production Amin Al Nasser said 500,000 barrels a day will start coming out of its Khursaniyah field in August, and by the end of the year 250,000 barrels will be coming from the Shaybah field and 100,000 barrels a day from the Nuayyim field.

The Saudi firm has embarked on a huge operation to find new fields to add to its estimated 260 billion barrels of crude oil reserves.

Aramco research chief Muhammad Saggaf said that over the next 20 years the company's overall resource base could grow to 900bn barrels from the current level of 735m.

The world's top liquefied natural gas (LNG) exporter Qatar has sent its first shipment of LNG to be carried on giant new tankers to top energy consumer the US, Qatargas said yesterday.

The new tankers have capacity of around 216,000 cubic metres for the gas chilled to its liquid form, about 60 per cent larger than Qatargas' current fleet of vessels with capacity of around 135,000 cubic metres. The vessels are known as Q-Flex and are part of a new fleet to carry Qatar's expanding LNG exports.

Qatar loaded the first Q-Flex in December for delivery to Japan. The cargo is the second to arrive at the new US Sabine Pass LNG terminal in southwest Louisiana. The terminal is owned by Cheniere Energy and received its first cargo in April.

The terminal cost around $1.5 billion to build and will be capable of reheating and pumping around 2.6bn cubic feet of gas per day into the US gas system.

Qatar plans to more than double its LNG capacity to 77 million tonnes in 2010 from around 31m tonnes.

StatoilHydro reports that production on the Oseberg field centre, Oseberg South, Oseberg East and Tune has resumed after the small fire in a switchboard room on the Field Centre on 15 June.

The field centre and the three other fields associated with the field centre's processing plant have been shut down during the cleaning and repairs of the switchboard room and the involved equipment.

The gradual start-up of the oil and gas production and the gas exports from the four fields started Tuesday morning. The fields are expected to be back on full stream in a few days.

Production at Brage, Oseberg C and Vesfrikk, which transport oil through the Oseberg field centre, was resumed on Monday 16 June and has not been affected by the repairs.

No worker at Slovenia's nuclear power plant Krsko was exposed to excessive levels of radiation during a recent leak in the cooling system, a spokeswoman for the plant said on Monday.

"I can assure you that none of the workers that intervened in the repair of the valve in the cooling system was exposed to a level of radiation higher than those allowed by the law," the Krsko plant's spokeswoman Ida Novak told AFP.

Slovenia's sole nuclear power plant had to be shut down earlier this month after a leak in the cooling system that set off a Europe-wide alert. The plant went back on line on June 9 after a successful replacement of the valve that produced the leak.

Novak denied reports by Slovenian weekly Zurnal 24 that six workers who took part in the repair work were contaminated with radioactive isotopes Co-58 and Co-60 since they could not access the leaking valve with their full protective equipment.

"The levels of radiation were within normal levels," Novak said.

The Krsko plant, 120 kilometres (75 miles) east of the capital Ljubljana, produces 20 percent of all electricity used in Slovenia and satisfies 15 percent of the power needs of neighbouring Croatia.

A comprehensive and well detailed report by the International Institute for Strategic Studies, released last week, sheds a pile of information on the state of nuclear proliferation in one of the world's most volatile regions -- the Middle East.

Indeed, as John Chipman, director general and chief executive of International Institute for Strategic Studies, points out in a publication entitled "Nuclear Programs in the Middle East: in the Shadow of Iran," the worrying factor lies in the sudden awakening of several Middle Eastern countries that, now feeling threatened by Iran, see the urge to jump onto the nuclear bandwagon.

"In the span of the 11 months between February 2006 and January 2007, at least 13 countries in the Middle East announced new or revived plans to pursue or explore civilian nuclear energy," said Chipman.

As the International Institute for Strategic Studies director pointed out, this sudden interest by Middle Eastern countries in nuclear energy is "remarkable" in view of the region's abundance of traditional energy sources -- such as natural gas and crude oil.

With the exception of Israel, in the rest of the region, from Morocco in North Africa to the southern tip of the Arabian peninsula, "There is not a single nuclear power plant in operation today," said Chipman.

The other exceptions are those being built in Iran -- the Bushehr facility being built with Russian assistance. It is this facility, as well as the gas-centrifuge plant at Natanz and the heavy water reactor at Arak, against which the Bush administration and the Israelis are threatening to take military action, unless Iran complies with the international community's request that it put a stop to its nuclear program.

These sites, and others scattered throughout Iran, were kept secret by the Islamic Republic and were revealed to the world by the Iranian resistance, the People's Mujahedin of Iran.

Past attempts by Arab countries to develop nuclear power plants have been thwarted before they could reach completion. Such was the case with the Osirak nuclear power plant that Saddam Hussein was hoping to build with French assistance, until the facility and his dreams were shattered in an Israeli air raid on June 7, 1981.

A more recent effort to develop nuclear capability was an attempt by Syria, allegedly with North Korean help, and it too was destroyed by Israel last September. Syria denies it was building a nuclear facility, but a high-ranking European diplomat told this reporter "there was no doubt Syria was building a facility to develop a nuclear program."

The danger stemming from Iran's pursuit of its nuclear ambition, besides the fact it could launch a regional conflict should Israel decide to take military action, is further amplified by the risk of nuclear proliferation throughout the region.



The International Institute for Strategic Studies report states, "Each of the new nuclear-aspirant states announced its decision in terms of electricity needs, energy diversification and the economic benefits of nuclear power." The reality, however, may be somewhat more macabre. As Chipman points out, "Promotion of nuclear energy is one way in which Sunni states are trying to counter the rising sense of Shia empowerment following the 2006 Lebanon war."

Such is the case in Egypt, where President Hosni Mubarak, and more specifically his son Gamal, are seizing upon nuclear power as a national project upon which to promote the son's campaign to succeed his father. Again Chipman: "If Tehran's nuclear program is unchecked, there is reason for concern that it could in time prompt a regional cascade of proliferation among Iran's neighbors."

Already, besides Egypt, Saudi Arabia and Turkey have voiced interest in going nuclear.

The good news, if one can be optimistic enough to find good among reports of numerous countries wanting to arm themselves with nuclear weapons, is that the danger of proliferation in the Middle East, says Chipman, "while real, is not imminent."

What appears to be playing out in the Middle East today is the positioning of the region's powers so they can, if they find the need to move ahead into the nuclear field, arrive there without additional delay. Saudi Arabia, for example, is unlikely to develop its own nuclear program but, as several reports have indicated, it would rely on a defense pact with nuclear-powered Pakistan.

Chipman predicts that over time the Islamic Republic's nuclear program could become a powerful regional proliferation driver. In other words, the result would be, on the one hand, a race between Sunni and Shia and, on the other, between the region's political powers -- that is, assuming the United States and/or Israel would refrain from intervening militarily.