NEWS

[GEOPOLITIC] Iran - Brasil give priority to energy, agricultural cooperation

2008-06-20T15:42:00.003+02:00

Deputy Foreign Minister Ali-Reza Sheikh-Attar said on Wednesday that Iran and Brasil give priority to joint cooperation in energy and agriculture sectors. Ali-Reza Sheikh-Attar made the remark in a meeting with Brazilian Deputy Agriculture Minister Afonso Kroetz, adding that the two nations are interested in expanding relations particularly trade exchanges.

According to the Information and Press Department of the Foreign Ministry, Ali-Reza Sheikh-Attar said that the political leaders of both countries are determined to expand bilateral ties in different sectors.

He further called for improvement of bilateral trade relations by adopting innovative policies.n
Pointing to formation of a joint economic commission as a means for drawing up new strategies and paving the way for promotion of mutual cooperation, he supported the idea of joint production of ethanol in Iran.

"We believe that the production of ethanol in Iran can help decrease air pollution and increase incomes," Ali-Reza Sheikh-Attar further said.

Kroetz, for his part, outlined policies of his country in agriculture sector, saying that Brasil underlines the necessity of attracting foreign investments and increasing export of agriculture and animal animal husbandry products. He also expressed his country's readiness for production of ethanol and conduction of research on cattle breeding in Iran.

Source: Islamic Republic News Agency

[INTERNATIONAL RELATIONS] Kissinger and Blair Warn of Conflict.

2008-06-18T20:37:00.004+02:00

Visiting statesmen Tony Blair and Henry Kissinger said Tuesday that countries had to form strategic alliances to face major global challenges like energy security and climate change.

Kissinger, former U.S. secretary of state, and former British Prime Minister Blair were speaking at a Renaissance Capital investment conference, where Kissinger said Russia and the United States, accounting for 90 percent of the world's nuclear arsenal between them, have to set aside their differences to solve issues that cannot be tackled unilaterally.

"None of these [issues] can be dealt with by confrontation between the U.S. and Russia," he said. "It is not in the U.S. interest to keep Russia down, and it is not in the Russian interest to look at the U.S. as an antagonist."

Relations between the Washington and Moscow have been strained as a result of U.S. plans for a missile-defense system in the Czech Republic and Poland and amid growing resentment of what Russia sees as U.S. meddling in its backyard, including its support of Georgia and Ukraine's ambitions to join NATO.

Kissinger, who received the Nobel Peace Prize in 1973, continues to retain considerable influence in foreign policy circles in Washington. He has traveled to Russia on a number of occasions over the past eight years, engaging in behind-the-scenes diplomacy in discussions of U.S.-Russian relations with senior politicians.

Kissinger met for a brief conversation Tuesday afternoon over tea with President Dmitry Medvedev and was expected to meet with Prime Minister Vladimir Putin later in the day.

Asked by a member of the conference audience where the next major international conflict might come from, Kissinger warned that the search for energy security could lead to aggression as countries scramble to secure energy supplies.

"If supply is limited and demand increases, if countries compete for access to energy on a purely national basis, we are bound to see a repetition of the colonial conflicts of 19th century," he said, cautioning that such conditions could degenerate into "intense political rivalry."

Kissinger's words struck a chord.

"This is an early warning signal, but I'm not sure it will do anything to make people move away from that kind of position. If anything, it might even hasten the grab for oil assets," said Marshall Goldman, associate director at the U.S.-based Davis Center.

"At the present time, Russia … is not in a position to worry there won't be enough for Russia. If anything, it might make Russia even more aware of the fact that they are in a very commanding position."

With one-quarter of the world's gas reserves and as the largest oil exporter outside of OPEC, Russia is favorably positioned to take advantage of any race for assets.

The price of oil has reached unprecedented highs in recent months, climbing close to $140 per barrel this week, while industry leaders have warned that it could be many years yet before alternative fuels will be in widespread use.

Kissinger's words were echoed by Blair, the Middle East envoy for the United States, Russia, the United Nations and the European Union — the so-called Quartet — who said world leaders had to respond properly to enormous challenges, through opening up and not protectionism.

"Power is shifting east, and it's shifting fast, not just to China and, in time, to India, but also to the Middle East and to Russia," Blair said. "Political and economic relationships are undergoing profound change."

To laughter from the audience, Blair admitted that Britain and Russia had had their difficulties over the last two years, but he said it was essential to have Russia on board to tackle issues of a global nature.

"We need to engage in strong strategic partnerships with [the] shift in power. Not to engage with this at a strategic level would be a … mistake of a profound nature," he said.

"Global challenges cannot be solved without the participation of countries like Russia," he added.

Relations between Russia and Britain are at a post-Soviet low, stemming back to the murder of Alexander Litvinenko, a former FSB agent, in London in late 2006.

More recently, BP has been embroiled in a battle with the Russian shareholders over the leadership of the 50-50 TNK-BP joint venture. The tie-up was hailed as a landmark in cooperation between the two countries back in 2003, when both Blair and Putin put their signatures to the deal.

Five years on, the project is unraveling and BP claims that the Russian shareholders are trying to take control of the project. TNK-BP, a wholly private company, remains an anomaly in a country that has undergone a creeping renationalization in the resource sector.

In a widely publicized address at last year's conference, Tony Hayward, just one month into his new role as chief of BP, issued an impassioned plea for Western markets to open up to Russian investment as he attempted to defuse the firm's conflict with state officials over the Kovykta gas field.

No representatives from BP attended, with the embattled CEO of TNK-BP, Robert Dudley, pulling out at the last minute.

Finance Minister Alexei Kudrin weighed in on the dispute Tuesday, telling reporters that there was still time to limit the collateral damage from the conflict.

"This is a specific case, and it hasn't affected the investment climate yet," Kudrin said. "The conflict itself isn't as important as how it ends. The conflict should be resolved in a civilized way, so it won't do any harm." he said.

The Russian shareholders, Alfa Group, Access Industries and Renova, or AAR, have called for Dudley's firing and a restructuring of the TNK-BP board.

Tim Summers, the company's chief operating officer, said the conflict, including AAR's threat to take BP to court in Stockholm over its hiring of foreign employees, could affect TNK-BP's operations.

"They are in dialogue with each other, and we hope that dialogue will be constructive and reduce some of the uncertainty for my team in terms of the operations of the company," said Summers, sitting in for Dudley, who had been scheduled to take part in the conference's energy roundtable. "I won't pretend it's been an easy time for our employees."

The fate of 150 BP employees, assigned as specialists, engineers and strategists to TNK-BP, remains uncertain, as their visas run out in July.

A court in the Tyumen region was due Wednesday to hear a lawsuit brought against TNK-BP by Tetlis, an obscure firm with a miniscule holding in the joint venture, which is challenging the legality of the foreign hires.

"The issues at stake are complex," said Summers. "The sooner it gets resolved, the better."

Summers defended the company's record, judged by reserve replacement ratio and dividend payments, following claims by Alfa Group chairman Mikhail Fridman that TNK-BP has underperformed, particularly compared with its Russian rivals.

Bob Foresman, deputy chairman of Renaissance Capital, warned that the dispute was "not helping anybody."

"It's obviously unhelpful for BP. It's very unhelpful for AAR, as it doesn't make them look good. It's unhelpful for the Russian government and administration and it is unhelpful for the market," Foresman said.

At the same time, he said talks with government officials had led him to believe that BP's presence in Russia was not under threat.

"No important decision maker in Russia wants to see BP leave Russia," Foresman said. "It's not about the authorities chasing BP out."

There has been much public speculation that AAR was looking to gain greater control of the joint venture ahead of a sale to a state-owned energy major like Gazprom or Rosenergo.

Gazprom CEO Alexei Miller, speaking at a different event Tuesday, said his firm had made no overtures toward TNK-BP, Interfax reported.

Gazprom has neither made nor received any offers for the purchase of shares in TNK-BP and is not related in any way to the conflict within the company," Miller told reporters at the opening of a new production unit at electricity utility Mosenergo. Notably absent at Tuesday's conference was scheduled speaker Igor Shuvalov, the first deputy prime minister who was publicly upbraided by Putin last week for taking time out from work on domestic issues to speak at the St. Petersburg International Economic Forum last weekend.

Source: The Moscow Times|By Miriam Elder

[GEOPOLITIC] Russia is biggest oil producer. International Energy Agency

2008-06-11T00:56:00.003+02:00

The International Energy Agency says Russia has turned into the biggest crude oil producer, a title traditionally belonged to Saudi Arabia.

The International Energy Agency declared on Tuesday that Russia has been the biggest crude oil producer in the first quarter of 2008, extracting 9.5 million barrels per day, ahead of Saudi Arabia at 9.2 million barrels, AFP reported. The International Energy Agency ranks the United States as the third-biggest producer with 5.1 million barrels per day, followed by Iran, pumping 4 million barrels per day

China is in fifth place with output of 3.8 million barrels per day. In principle, Russia's oil bonanza could continue for years: it has the world's seventh-biggest oil reserves, at 80 billion barrels, according to BP, a British oil firm.

And oilmen reckon there are 100 billion more barrels to find--"the biggest exploration prize in the world", in the words of Robert Dudley, the boss of TNK-BP, BP's Russian joint venture.

Source: PressTV

[MIDDLE EAST] Turkish companies to generate electricity in Iran

2008-05-11T14:29:00.002+02:00

Turkey and Iran continue to improve cooperation on energy, having struck a deal to allow Turkish companies to generate and sell energy in Iran and build a second pipeline between the two countries. Turkish Foreign Trade Minister Kürsad Tüzmen was on a three-day visit to Iran for talks with Iranian officials and hinted at the start of a new process in energy between the two countries.

Noting that Turkey buys electricity from Turkmenistan via Iran and has a contract valued at $1.5 billion with Iran, Tüzmen told Iranian officials that Turkey intends to acquire part of this contract via transmission lines passing through Nakhchivan, located at Turkey's eastern border, with a view to improving economic activity in the region.

He quoted Iranian Energy Minister Parviz Fattah as saying, ""We may start on trilateral technical negotiations on this issue."" Turkey has a contract to import 150 megawatts of electricity from Iran, but half of this amount remains to be imported.

Another issue discussed during the Turkish minister's talks in Tehran was Turkish companies' energy investments in Iran. Tüzmen stated that the two countries have agreed in principle to allow Turkish companies to build natural gas power stations in Iran.

Thus, Turkish companies may construct power stations to generate electricity from natural gas and the power they generate may be sold to Turkey if need be. Tüzmen further indicated that they also discussed Turkey's initiative to build nuclear power plants for electricity generation, in which Iran shows close interest. Under the contract signed by the two countries, Iran is supposed to sell 10 billion cubic meters of natural gas annually to Turkey. However, it was only able to send 6 billion cubic meters last year.

Source: Today’s Zaman

GEOPOLITIC: Russia to Maintain Continuity in Relations with The Islamic Republic of Iran

2008-05-01T12:12:00.005+02:00

Russia will maintain continuity in relations with Iran, said the oral message of President Vladimir Putin that the RF National Security Council Acting Secretary Valentin Sobolev delivered to Iran’s President Mahmoud Ahmadinejad. Sobolev is in Tehran now.

“During the meeting, an oral message of Russia’s President Vladimir Putin was delivered to Iran’s President Mahmoud Ahmadinejad,” Sobolev told RIA Novosti Wednesday.

“It says Russia confirms the principles of relations with The Islamic Republic of Iran and its policy doesn’t depend on who is in power today,” Sobolev said.

Source: Kommersant

GEOPOLITIC: India, Iran to Discuss Pipeline. Ignoring US Fears

2008-04-29T07:42:00.005+02:00

Indian Prime Minister Manmohan Singh and visiting Iranian President Mahmoud Ahmadinejad will attempt to hammer out an agreement today on a delayed gas pipeline through Pakistan, dismissing U.S. fears the project may finance the Middle Eastern nation's nuclear program.

``There will be a proposed review that will be taking place which will discuss the price, review the price, certification and project structure,'' Manu Srivastava, director at the Ministry of Petroleum, said in a telephone interview from New Delhi yesterday. ``There are a lot of issues to be resolved.''

India and Pakistan need natural gas from Iran, with the world's second-largest reserves of the fuel, because a shortage of energy will curb economic growth. India last week rebuffed U.S. calls to push Mahmoud Ahmadinejad to end Iran's nuclear program.

``The success of the pipeline will depend on what cost the gas is made available at to the customers,'' said R. Venkatesan, head of the industry division at the New Delhi-based National Council for Applied Economic Research. ``If you take political considerations it is not worth it.''

India and Pakistan are resisting U.S. pressure to end talks on the pipeline, which they want to complete by December 2012 after a decade of delays. The Bush administration says Iran's nuclear program may be a cover for building weapons, a charge which the Islamic republic denies.

U.S. Concerns
The U.S. would ``counsel against'' the pipeline plan, State Department spokesman Sean McCormack said at a briefing in Washington yesterday.

``Given where Iran is in the international system, being under sanctions, and given its actions within the international system, is now really the time to conclude a pipeline deal with the Iranian government?'' he said.

The U.S. raises issues of international concern over Iran's behavior in areas including ``terrorism and their destabilizing actions in the Middle East,'' McCormack said.

Mahmoud Ahmadinejad is slated to meet his counterpart Pratibha Patil and Singh to discuss ``issues of mutual interest,'' the Ministry of External Affairs said in a statement posted on its Web site.

The pipeline's prospects will hinge on the pricing. India hasn't been able to agree with Iran on the price for the gas or the fees it will pay Pakistan for transporting the fuel, according to the Iranian Oil Ministry.

Gas Demand
``India is a market short of gas. The key question is how much gas at what price,'' said Nagarajan Narasimhan, head of research at Crisil Ltd., the Indian unit of Standard & Poor's. The Indian government may also seek assurances about the pipeline's safety across international borders, he said in a telephone interview from Mumbai.

Oil ministers from India and Pakistan agreed on the principles of the project, they said on April 25. The South Asian neighbors resumed talks on the 2,100-kilometer (1,300-mile) pipeline a month after a newly elected government led by Prime Minister Yousuf Raza Gillani took office in Pakistan.

Ministers discussed the transit fees, transportation costs and project structure, Srivastava said. ``There is a greater agreement on that,'' he said. ``We will be proceeding.''

The pipeline will in the first phase transport 30 million cubic meters of gas each to Pakistan and India and 45 million cubic meters each in the second stage.

India's current gas supplies of 85 million cubic meters a day, including imported liquefied natural gas, fall short of the potential demand of 170 million cubic meters, according to government estimates. Demand may quadruple to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of 7 to 8 percent a year, the government says.

New Delhi Visit
Mahmoud Ahmadinejad will arrive in New Delhi at 4:30 p.m. local time from Sri Lanka's capital, Colombo, and leave for Iran at 9 p.m., the Indian External Affairs Ministry said. Mahmoud Ahmadinejad and Pakistan's President Pervez Musharraf ``resolved all issues'' related to the pipeline project when they met yesterday in Islamabad, the official Associated Press of Pakistan reported.

In Sri Lanka, Mahmoud Ahmadinejad signed six agreements with his counterpart Mahinda Rajapaksa, including one for providing financial assistance for the expansion of the Sapugaskanda oil refinery, an e-mailed release from the government said.

Source: Bloomberg|by Jay Shankar

WESTERN HEMISPHERE: North American leaders for summit of under-fire NAFTA

2008-04-21T08:23:00.005+02:00

The leaders of Canada, Mexico and the United States of America meet in New Orleans (U.S.A.) this monday for the annual summit of the North American Free Trade Agreement, amid sharp criticism of the pact in the US presidential race.

As US President George W. Bush meets with his Mexican counterpart, Felipe Calderon, and Canadian Prime Minister Stephen Harper in New Orleans, US workers' unions and the Democratic White House hopefuls have lambasted NAFTA.

Senators Barack Obama and Hillary Clinton, who are battling for the Democratic nomination, have warned that they are willing to re-negotiate parts of the agreement if elected president in November.

NAFTA, which aims to eliminate tariffs on products traded between the three countries, came into effect on January 1, 1994 under Clinton's husband, then-president Bill Clinton.

The trade pact has been a frequent target of labor union charges that it has helped bleed the United States of manufacturing jobs.

"The leaders will probably use the event to underscore the importance of NAFTA at a time when the agreement is coming under fire from the Democratic candidates in the primary race," said Peter DeShazo at the Center for Strategic and International Studies.

Dan Fisk, the US National Security Council's senior director for the Western Hemisphere, defended NAFTA. US officials "are aware that some of the statements that have been made (by Clinton and Obama) have made actually bigger headlines in Canada and Mexico than they have here," Fisk said.

"We think NAFTA works," Fisk added. "We think the record of its past 14 years shows that it works. There's nothing broken. Why fix a success?"

Canada is the main US trade partner, and Mexico is its third, Fisk said. "In terms of three-way trade, as of last year, it was 930 billion dollars," he said.

"That comes to about 2.5 billion dollars in trade in goods and services on a daily basis. We expect that number to reach the one-trillion-dollar mark by the end of this year."

Trade with Canada and Mexico "is 30 percent of the total global trade of the United States," said Fisk.

DeShazo said the leaders will probably "also use the occasion to express support for regional free trade, including the US-Colombia trade agreement pending ratification," he said.

Colombia signed the trade pact with the United States, but it is stuck in the US Congress, whose Democratic majority has demanded that President Alvaro Uribe improve union protection and investigate links between government officials and far-right paramilitaries. Bush on Saturday urged US congressional leaders to reconsider their opposition to the Colombia trade deal, arguing that there is "a strategic imperative" to approving the measure.

"By obstructing this agreement, Congress is signaling to a watching hemisphere that America cannot be trusted to support its friends," Bush said in his weekly radio address.

On the margins of the main event the three leaders will also likely discuss issues including intellectual property and the safety of trans-border commerce. Immigration may also be on the table, Fisk said.

George W. Bush and Felipe Calderon are scheduled Monday to inaugurate a new Mexican consulate in New Orleans, a city still recovering from the devastation caused by Hurricane Katrina in 2005. The population of Mexicans in the state of Louisiana, where New Orleans is located, is currently around 83,000 -- a 55 percent increase in the last two years, largely due to the flow of Mexican laborers helping rebuild the city. George W. Bush and Felipe Calderon may also discuss details of 1.4 billion dollars in US aid for the Merida Initiative, a plan to battle drug trafficking in Mexico and Central America.

Source: Indian Economic Times

GEOPOLITIC: Mexico - India sign energy, aviation accords

2008-04-19T02:18:00.002+02:00

Mexico and India signed two cooperation accords Thursday on renewable energy and air transport. Indian President Pratibha Devisingh Patil began a four-day official visit to Mexico Thursday.

During a ceremony at the Los Pinos presidential palace in Mexico City, Mexican President Felipe Calderon said, "India holds an important place in Mexico's strategy for the Asia Pacific region."

The renewable energy accord sets the basis for sustainable cooperation, while the other accord establishes a juridical framework for air services and will help increase bilateral investment and tourism. In his speech, Calderon said infrastructure, small- and medium-sized enterprises, automobile production, agriculture, pharmaceuticals and information technology are the sectors in which Mexico is most interested.

Before signing the accords, Calderon and Devisingh Patil held a private meeting, which Calderon described as "fruitful."

Devisingh Patil said Mexico and India share "similar goals" and that their financial and trade opportunities "are huge," and "both countries agree that we must increase bilateral trade and investment." According to statistics issued by the Indian-Mexican Business Chamber, bilateral trade in 2006 totaled some 1.6 billion U.S. dollars.

Source: ChinaView

GEOPOLITIC: China may join Iran-Pakistan gas deal. The peace pipeline

2008-03-26T22:17:00.003+01:00

China is ready to join the Iran-Pakistan gas pipeline if India drops out of the 7.4 billion dollar project, Pakistani sources have said.

Pakistan had urged Iran earlier this month to finalize the Iran-Pakistan-India natural gas pipeline project by April because of its growing demand for gas, while Tehran was holding final talks with India over the deal, reported UPI on Tuesday.

Tehran informed Islamabad if New Delhi remained reluctant to joint the project under the US pressure, Iran would then invite Beijing to participate in it.

According to the report, the Chinese have told Pakistan's Petroleum Ministry that they are ready to join the so-called "peace pipeline" project.

Pakistan and Iran have finalized a gas purchase agreement, but India is yet to complete modalities largely due to differences with Islamabad over the transit fee to be paid for the fuel carried through Pakistani territory. Islamabad has called on Iran to increase the volume of the natural gas it will supply by 50 percent if India opts out of the deal.

Source: PressTV

GEOPOLITIC: India - Brasil may enhance cooperation in oil sector

2008-03-26T15:06:00.003+01:00

Petroleum and Natural Gas Minister Murli Deora on Wednesday emphasised the need for India and Brasil to further enhance cooperation between both countries, especially in the oil and gas sector.

During a meeting with Brazilian Minister for Development, Industry and Foreign Trade, Miguel Jorge, Deora said efforts are afoot in this direction as the two national oil companies of respective countries, Oil and Natural Gas Corporation (ONGC) (India) and Petrobras (Brazil) have entered into an arrangement for exploration and production of hydrocarbons in India and Brazil.

To a suggestion by the Brazilian Minister to enhance ethanol blending Deora informed that Indian Government has already decided to blend ethanol with petrol at 10 per cent against five per cent being blended at present.

Both Ministers expressed satisfaction over the efforts being made to take cooperation between them forward.

Source: India Economic Times

PERSIAN GULF: Uzbekistan to be linked to Persian Gulf via Iran

2008-02-26T05:04:00.002+01:00

Uzbekistan will have access to the Persian Gulf through Iran, wrote Turkmen weekly `Zaman Turkmenistan' in its latest issue.

The weekly said that Uzbekistan's railways and roads will be linked to the Persian Gulf through the Uzbek Republic's Termez city and Afghanistan's Mazar-i-Sharif and Herat cities.

It said Uzbekistan's link to Persian Gulf will cut the distance and expedite cargo transportation between Iran and the Uzbek Republic. He said presently European and Asian states are linked to Uzbekistan through the Iran-Turkmenistan-Uzbekistan railway.

Source: Islamic Republic News Agency

UNITED STATES: Energy policy is foreign policy

2008-02-26T00:25:00.003+01:00

Energy policy is not only a county's priority to provide fuel and power to its citizens, it's also a vital, fluid component in foreign policy for the United States and its major partners and enemies.

Whether the dual policies are a power struggle over resources themselves or a way to punish or reward, the need for energy and the related economic and development consequences are ever present.

"Post-Cold War, there are common interests, even between the United States and Iran, certainly between the United States and other Gulf states," said James Placke, senior associate and Middle East expert at Cambridge Energy Research Associates. "Security interests are still a very important part of it; energy interests are still a very important part of it. Whether the United States gets most of its oil or only a small portion -- and it is a small portion -- from the Gulf region really doesn't matter. There's one oil market and in the supplies to the world market from the Gulf are absolutely critical, and that's what's important to the United States."

Placke, who spent three decades in top posts at the U.S. State Department and Foreign Service, was speaking at a panel at CERAWeek, the world's largest annual energy conference.

Placke pointed to U.S. attempts to keep the Soviet Union from oil and gas, while attempting to shore up as many dedicated supplies as possible. Now, the Bush administration's enemy No. 1 is Iran. And, couched in fears Tehran is attempting to build nuclear weapons capabilities, Washington is leading the charge for even more sanctions.

"In case of Iran, yes energy policy and foreign policy are two sides of same coin, but in a rather perverse way," Placke said. "That's a way of getting Iran to pay a price in the hope that there will be more of an accommodation to the requirements of the international community than there has up until this point."

The U.N. Security Council has approved two sets of sanctions -- nothing new is likely before next month's International Atomic Energy Agency report -- which have had limited impact, said Bijan Khajehpour, chairman of the Iran-based Atieh Bahar Consulting.

"What has had a severe impact on Iran is the unofficial U.S. sanctions" by pressing banks and international companies not to invest. "Right now Iran is very much irritated by U.S. sanctions and if those continue, the opportunity for improved relationship will not be there so easy."

Domestic politics are more focused on the economy than on international relations, Khajehpour said, with inflation, unemployment and gas shortage issues top of the society's agenda. This, however, is not the result of sanctions but internal economic approaches, he added.

Iran's neighbors have their own unique energy-foreign policy blend.

U.S. and Saudi Arabian relations are storied, the latter a former top supplier of oil to the United States and still the largest producer in the world, and Washington ensuring security ties. While its troops have left Saudi Arabia, U.S. forces are in Kuwait, Bahrain, Qatar, United Arab Emirates and Oman.

Now Saudi Arabia is questioning whether the downturn in the U.S. economy is negatively affecting its economy. Since the mid-1980s, its currency has been pegged and exchange rate fixed to the U.S. dollar, but a producer at today's oil prices would prefer interest rates going up, not down as in the United States, said Brad Bourland, head of research and chief economist at Saudi-based Jadwa Investment.

"Back in the 1970s this wasn't a political issue, it was very much, not much of an issue at all," he said. "Today because of the nature of the strained relationship -- 9/11, focus on Saudi Arabia and the United States, plus what's happening globally with Chinese delinking from the dollar, sovereign wealth funds investing in the West, capital flows -- all of this has made it a big issue. So now if Saudi Arabia were to do anything with its dollar relationship it will be seen as having very large political dimensions and a political message to it."

Source: United Presse International|by Ben Lando

IEA: World oil market could be set for lengthy slowdown

2008-02-25T23:41:00.005+01:00

The world oil market could be set for a lengthy slowdown, the International Energy Agency said on Wednesday, signalling a sharp shift in the climate that pushed the oil price to 100 dollars last month.

In light of weaker global economic prospects, the IEA cut its forecast for world demand for oil this year by 200,000 barrels per day. It said it expected world demand in 2008 to grow by 1.9 percent instead of 2.2 percent forecast last July.

"Just as the demand shock of 2004 shaped the oil market for the next three years, so too could the pending slowdown," the agency, which coordinates energy policies for the main industrialised consuming nations, commented in its monthly review of oil trends.

"One of the most indicative factors since we released the last (monthly) report was the negative news on the world economy, especially in the United States, yet the oil price remained unchanged," IEA chief analyst Lawrence Eagles told AFP.

The latest study, which noted that crude oil prices were little changed from mid-January at just over 90 dollars a barrel, said "an economic slowdown has the potential to change the landscape over the next few years: depending on how deep it is and how long it lasts."

But it also noted that projected robust economic momentum in China and the Middle East, two key centers for oil demand growth, stood in contrast to sluggish performances expected in the world's principal industrialised nations.

The IEA findings, according to Natexis bank analyst Moncef Kaabi, point to a "globally balanced oil market this year, apart from geopolitical tensions, but there will be no real price stability as long as Asian demand does not slow."

China's demand for oil is forecast to grow 5.8 percent this year to 7.9 million barrels a day after a 4.5 percent rise in 2007.

But the IEA cautioned that recent widespread power shortages and severe weather in China "have cast a shadow over the 2008 prognosis."

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While power cuts could point to a surge in oil demand for energy generation, recent snowstorms have disrupted transportation during the Lunar New Year holiday and could therefore depress demand for transportation fuel. The IEA found that in January, world oil supply had risen by 745,000 barrels per day to 87.2 million barrels "on new output from Brazil and recovering non-OPEC output elsewhere."

Supplies from the Organization of Petroleum Exporting Countries had remained close to 32.0 million barrels per day on increased output from Angola, the United Arab Emirates, Saudi Arabia and Kuwait, while production had eased in Iraq, Nigeria and Qatar.

However, OPEC's real spare capacity had risen to 2.4 million barrels per day in January.

"We've got low stocks and relatively low spare capacity," Eeagles said.

"Spare capacity is due to grow this year," he continued, adding that much would depend "on whether it is made available by OPEC."

"Spare capacity belongs to OPEC. The non-OPEC producers are producing flat out."

Non-OPEC January output is estimated by the IEA to have come to 50.2 million barrels a day in January, an increase of O.7 percent from December when production from Mexico, the former Soviet Union and China was much lower than preliminary estimates.

Overall, according to the agency, non-OPEC total production -- apart from Ecuador -- for 2007 and 2008 is predicted to remain at 49.7 million barrels a day and 50.6 million barrels a day respectively.

The IEA said that industrial stocks of oil in the area covered by the Organisation for Economic Cooperation and Development had fallen by 39.5 million barrels in December. The agency warned that oil inventories remained low, "as does spare capacity."

Geopolitical issues in Nigeria, Venezuela, Iraq and Iran had helped push up prices. Despite the pressures now bearing down on demand, there was "clearly" a need to rebuild stocks, the IEA said.

Source: Agence France Pressee

GEOPOLITIC: Argentina and Brasil, with a project for nuclear submarine

2008-02-25T05:03:00.002+01:00

Brazil and Argentina have agreed to work together to build a nuclear submarine, laying the groundwork for a South American defence industry, Argentina's media has reported.

Brazilian Defence Minister Nelson Jobim and his Argentine counterpart, Nilda Garre, discussed plans last week to form a bi-national company to construct the submarine and could convene a South American Defence Council in Brazil in October, Jobim said.

South American militaries are fundamentally "deterrent" rather than "expansionist," he said minutes before leaving Argentina on Sunday.

"But that deterrence power can only be exercised if there is behind it a regional military industry that makes us independent of foreign supplies," the newspaper quoted Jobim as saying. A spokesman for Argentina's Defence Ministry had no comment on Sunday's report, and a spokesman for Brazil's Defence Ministry was unavailable.

The project to build Latin America's first nuclear submarine would combine Argentine experience crafting the sort of compact reactor that could power the vessel with Brazilian access to other necessary parts, including nuclear fuel, the reports said.

Jobim travelled to France in January to explore buying a Scorpene class diesel submarine that could be used as a model for the sub. Brazilian President Luiz Inacio Lula da Silva announced USD 540 million in new funding for Brazil's nuclear sub and uranium enrichment programs last year.

Silva and Argentine President Cristina Fernandez agreed in a meeting last week to cooperate in enriching uranium for nuclear power and to consider building a shared reactor.

Source: India Times

INDIA - RUSSIA: Ready to agree to cooperate in civil nuclear power

2008-02-25T03:56:00.004+01:00

Cold War allies India and Russia Tuesday finalised plans for Moscow to build new nuclear power stations here and pledged to boost strategic ties by doubling trade to 10 billion dollars by 2010.

The two countries also decided to step up cooperation in defence, engineering and energy during talks between visiting Russian Prime Minister Victor Zubkov and his Indian host Manmohan Singh in New Delhi.

"We have finalised negotiations... on building additional nuclear power plants in India," Singh said.

Under the terms of the deal, Russia will build four additional reactors at Kudankulam in the southern Indian state of Tamil Nadu.

Moscow is already constructing two 1,000 megawatt light water nuclear power reactors at Kudankulam under the terms of an accord signed in June 1998. But installation of the new reactors will begin only after the 45-member Nuclear Suppliers Group, which controls global nuclear commerce, lifts a three-decade old embargo on atomic trade with India.

India is also negotiating a pact with the International Atomic Energy Agency -- another step towards New Delhi overcoming its status as a nuclear pariah.

Premier Singh said India and Russia had noted the "vast potential" for cooperation in hydrocarbons as he described defence ties as an "important pillar" of their strategic partnership.

Russia accounts for 70 percent of Indian military equipment but late deliveries and commercial disagreements have forced New Delhi to use other suppliers including Britain, France, Israel and the United States.

Singh said New Delhi and Moscow had "agreed to redouble our efforts to tap full potential of our two countries' economies," as Trade Minister Kamal Nath called for the inclusion of transport, services, investment and high technology in the trade basket.

Zubkov noted that "trade last year (2006-2007) grew by 30 percent, touching five billion dollars. If the speed remains the same, I am confident the 10 billion dollar mark will be achieved" by 2010.

Source: Agence France Pressee

INDIA - UNITED STATES: Is time running out for Indian nuclear deal

2008-02-25T01:33:00.001+01:00

The US ambassador to India has warned New Delhi it could be now or never for the controversial India-US nuclear technology deal, saying it was unlikely to be offered again.

US ambassador David Mulford's language was some of the toughest yet by a US representative about delays in India's clearance of the deal which would give New Delhi crucial access to civilian atomic technology.

In a television interview aired on Saturday, he called the agreement India's "passport to the world," adding its collapse would "affect the trust and discretion" in Indo-US relations.

"If this agreement is not processed in the present (US) Congress it is unlikely that this deal will be offered again to India," Mulford told CNN-IBN.

Asked whether it was "now or maybe never" for the deal, Mulford replied, "That's pretty close to it."

The deal -- first agreed by US President George W. Bush and Indian Prime Minister Manmohan Singh in 2005 -- is regarded by the governments of the two nations as a cornerstone of new, warmer Indo-US ties.

But Indian communists have threatened to withdraw backing for the minority Congress government if it goes ahead with the pact without their approval.

They say the accord threatens India's nuclear weapons programme and could allow US intervention in its foreign policy. India's government rejects the claims and says the deal is needed to provide new fuel sources to keep energy-hungry India's economy growing strongly.

Under the accord, India will separate its civilian and military programmes and place 14 of its 22 nuclear plants under unprecedented international safeguards in return for civilian nuclear technology.

Washington, in return, has promised to amend the US Atomic Energy Act which prevents the United States from trading nuclear technology with nations such as India that have not signed the Nuclear Non-Proliferation Treaty.

The deal will enable India to keep its military programme while still benefiting from international civilian nuclear commerce. India tested nuclear weapons in 1974 and 1998 and, as a result, is banned from buying fuel for atomic reactors and related equipment. The pact still needs approval from the International Atomic Energy Agency to place India's civilian nuclear reactors under UN safeguards and the 45-nation Nuclear Suppliers Group which regulates global civilian nuclear trade.

Afterwards the agreement requires final approval by the US Congress where it currently enjoys bipartisan support.

But Washington officials say the deal is running out of time with a tight 2008 legislative calendar ahead of November's US presidential elections and that the ball is in India's court to move it along.

"It certainly would not be revived and offered by any administration, Democratic or Republican before the year 2010," Mulford said. "If it were to be revived it would have to go through the Committee process and I think non-proliferation groups would insist on changes."

Some US critics fear the deal would hurt efforts to prevent the spread of nuclear weapons. An Indian government spokesman had no comment on Saturday but Foreign Minister Pranab Mukherjee said last weekend opposing the deal was "similar to opposing computerisation and automation."

India has begun talks with the IAEA on a safeguards accord but the UN body and New Delhi have yet to find common ground.

Source: Agence France Pressee

MIDDLE EAST: Turkey in Iraq. Invation

2008-02-23T18:09:00.003+01:00

With oil purcolating at $100 a barrel, Turkey upped the pressure and waltzed 10,000 troops into Iraq on Friday to hunt Kurdish separatist insurgents.

Citing Turkish media, News agency Reuters reported fighter bombers were flying in support and referred to an Armed Forces Web site: “The Turkish Armed Forces, which attach great importance to Iraq's territorial integrity and stability, will return home in the shortest time possible after its goals have been achieved,” a General Staff statement said.

Turkish raids into Iraq have been known to trigger oil-trading.

Source: Scandoil

RUSSIA - IRAN: Gazprom and its chessboard

2008-02-21T01:37:00.009+01:00

Gazprom returns to Iran, the russian company has reached an agreement with Iran on the development of the country's largest natural gas deposits, Southern Pars and Kish. The Russian monopoly will form one or more joint ventures with the National Iranian Gas Company.

This is in spite of competition from the Chinese, with whom Iran negotiated the development of the Kish deposit in 2006 and 2007, and the possibility of Iran's supplying as for the Nabucco pipeline.

According to the Iranian Isna information agency, an agreement will be signed in April or May between Gazprom and the Iranian Oil Ministry. The deposit on the island of Kish has reserves of 1.37 trillion cu. m. Gazprom will also agree to build a gas reservoir in Iran and the parties are discussing the construction of an oil refinery in Armenia on the Iranian border.

Gazprom began working on the second and third (out of 18) blocks at Southern Pars in 1997 in a consortium with TotalElf (40%) and Petronas (30%). The complex was sold to National Iranian Oil Co. for $2 billion in 2004. The reserved at that deposit are 10 trillion cu. m. Observers note that the present undertaking may be complicated by international sanctions.

Source: Kommersant

GEOPOLITIC: Gazprom, Sonatrach, Bouteflika and its MiGs

2008-02-21T01:18:00.007+01:00

For the first time in the history of Russian military cooperation, a foreign customers is returning a military hardware purchase. Last week, an agreement was signed on the return of 15 MiG planes acquired by Algeria in 2006 and 2007. Algerian President Abdelaziz Bouteflika begins a visit to Russia today, during which military cooperation will be one of the main topics of talks. Experts say the Algerians actions are not due to objections to the quality of the Russian technology, but because of domestic conditions and problems with third countries.

On February 6, head of the Russian Federal Service for Military-Technological Cooperation Mikhail Dmitriev held talks with the Algerian armed forces chief of staff Salah Ahmed Gaid. Kommersant has learned that proposed returning the planes immediately, that is, before the president's visit to Moscow, “on the basis of an oral agreement,” with documentary formalities to be taken care of later. However, according to a source in the United Aviation Construction Corp., the Federal Service for Military-Technological Cooperation, Rosoboronexport, the MiG Corp. and the Algerian Air Force signed an official agreement on the return of the planes to Russia. The Ministry of Industry and Energy confirmed for Kommersant on Friday that it was aware of “an agreement being reached with Algeria on the MiGs.”

The planes will be returned in the coming months. The contract will not be completely renounced, however, according to a UACC source. He said that Algeria was being offered more up-to-date MiG-29M2 or MiG-35 models or nonaviation hardware in exchange. The cost of one MiG-29M2 or MiG-35 is $5-10 million higher than of a MiG-29SMT. A Kommersant source in the aviation industry says that the lot of Su-30MKI(A) models for Algeria may be increased. In March 2006, a contract was signed for the delivery of 28 Su30MKI(A) jet fighters was signed and three of them were delivered last year. The returned MiGs may be sold to the Russian Ministry of Defense or to a third country. A source in the Federal Service for Military-Technological Cooperation said that it is possible that Algeria will take 15 planes back after they are improved. “It hasn't been determined yet how Algeria will compensate the advances and the forfeiture of the contract, all the more so since the repayment of Algeria's foreign debt was counted into the contract,” said the source.

The $1.286-billion contract for 28 one-seat MiG-29SMT and six two-seat MiG-29UB fighters was signed by Rosoboronexport in March 2006, during the visit of Russian President Vladimir Putin to Algeria. That contract was part of a package of agreements on military-technology cooperation with Algeria worth a total of about $8 billion. Russia agreed to write off Algeria's debt to the former USSR (about $4.7 billion) as the contract as fulfilled. For the first time, the MiG Corp. delivered the planes with a trade-in program. As new planes were delivered, MiG-29SMT/UB models bought by Algeria in the 1990s from Belarus and Ukraine were returned to MiG.

The planes were supposed to be delivered between March 2007 and February 2008, but Algeria refused delivery after May 2007 and demanded that the first 15 planes delivered be returned. Algeria pointed to used or low-quality parts found in the planes. In August, the Algerian president sent a letter about that to Putin. Russia has already received a $250-million advance payment. In addition, since October of last year, Algeria has not made payments of $432 million on other military contracts, tying them to the return of the MiGs. As a result, according to the Russian Finance Ministry, on February 1 of this year, the total of payment received from Algeria on military contracts, recorded in a special account against the country's debt, came to only $1.83 billion.

Russia long insisted that the claims were ungrounded. “The bodies of the planes were produced in the 1990s, but that was stipulated in the contract, and everything inside them, all the equipment, was new,” a source at MiG said, adding that Rosoboronexport representatives demanded an explanation that could serve as the basis for breaking the contract. “Algerian representatives wrote a receipt in Russia and in Algeria, then they began using those MiGs and only after that they made their claims,” a corporation spokesman said.

Experts connect the claims with the situation inside Algeria and France's attempts to advance its Rafale fighter jet in the region. Deliveries of the MiG-29 were become an issue in domestics politics as well. Bouteflika intends to seek a third term. A competing clan is represented in the security forces of that country. They are using the crisis of the Russian planes to weaken the position of Ahmed Gaid Salah, who is loyal to the president. In addition, Center for the Analysis of Strategy and Technology expert Konstantin Makienko notes, “The Russian breakthrough in Algeria in 2006 was accompanied by powerful opposition by France, especially after President Sarkozy came to power.”

Relations between Russia and Algeria have become more complex in other spheres as well. In August of last year, the Algerian minister of energy announced the discontinuation of a memorandum of mutual understanding between Gazprom and the Algerian company Sonatrach, removing the legal basis for cooperation in producing hydrocarbons and liquefied natural gas in Algeria. Nonetheless, Gazprom representatives hope they will be able to return eventually to the joint activities outlined in that document.

Source: Kommersant|by Alexandra Gritskova, Elena Kiseleva, Konstantin Lantratov
Blogalaxia:Algeria fotolog Technorati:Algeria Bitacoras:AlgeriaagregaX:Algeria

ASIA: India must pass by July key India-US nuclear deal. US senators

2008-02-20T07:12:00.000+01:00

India must complete by July all steps needed to conclude a nuclear technology deal with Washington to ensure the US Congress approves it before the presidential polls, three US senators said on Wednesday.

The India-US civilian nuclear energy deal has been held up due to stiff opposition from Prime Minister Manmohan Singh's Communist allies who prop up the minority Congress-led government.

"Time is of the essence," said Joseph Biden, one of three Democratic senators who were on a one-day visit to New Delhi after monitoring Pakistan's parliamentary elections earlier this week.

The pact still needs approval from the International Atomic Energy Agency to place India's civilian nuclear reactors under UN safeguards as well as from the 45-nation Nuclear Suppliers Group, which regulates global civilian nuclear trade.

The agreement, which would give New Delhi crucial access to civilian atomic technology, requires final approval by the US Congress where it currently enjoys bipartisan support.

But Washington officials say the deal is running out of time with a tight 2008 legislative calendar ahead of November's US presidential elections.

"If we don't have the deal back with us clearly prior to the month of July it will be very difficult to ratify the deal -- not on the merits (of the deal) but on the mechanics on which our system functions," Biden told a news conference.

He warned that if the deal did not reach the US Congress in time, "it is highly unlikely the next president will be able to present the same deal.

"It will be renegotiated," he said.

Biden's warning came a week after India's most prominent Marxist politician Prakash Karat said his party wanted to see India and the United States hold fresh talks on the nuclear pact under a new US administration.

India tested nuclear weapons in 1974 and 1998 and, as a result, is banned from buying fuel for atomic reactors and related equipment. India's government, which says the deal is vital to keep its energy-hungry economy growing, has agreed to open 14 of India's 22 reactors to international inspections in return for technology and atomic plants.

But the Communists oppose the deal, saying it threatens India's nuclear weapons programme and allies the country too closely with the United States.

The deal, first agreed to by US President George W. Bush and Singh in 2005, is regarded by the governments of the two nations as a cornerstone of new, warmer Indo-US ties. Former US presidential candidate John Kerry, who accompanied Biden along with US Senator Chuck Hagel, said New Delhi should clear the decks for the deal as soon as possible.

"July is the end -- it's only an even chance even then" that the deal will be cleared by the US Congress, Kerry said.

According to Biden, Singh "appeared to be still optimistic" about the bill's clearance by India despite opposition from the left parties.

Source: AFP