Source: Reuters
By Michael Christie
BAGHDAD, Nov 1 (Reuters) - Talks on forming a new government appear to be in their final stages in Iraq eight months after an election, as incumbent Prime Minister Nuri al-Maliki inches closer to securing the support he needs for a second term.
But weeks of further power tussles are likely before a new government starts work, and the Sunni-backed cross-sectarian alliance that won the most votes continues to oppose Maliki, a Shi'ite, posing the risk of escalating sectarian tensions.
The U.S. military formally ended combat operations in Iraq at the end of August, putting the onus of ensuring security squarely on Iraqi leaders and domestic security forces.
Questions about the capabilities of domestic security forces were highlighted when 52 Catholics and police died on Oct. 31 during a police raid to free more than 100 hostages held by al Qaeda gunmen in a Baghdad church.
While 50,000 U.S. soldiers remain ahead of a full withdrawal by end-2011, a perception President Barack Obama has disengaged from Iraq could worsen sectarian differences and encourage potentially destabilising meddling from others, like Iran.
Iraq has muddled on without a new government since the March 7 parliamentary vote that produced no clear winner.
Projects Iraq has signed with energy majors such as BP
Divisions between Shi'ite-led and Sunni-backed political factions and persistent attacks by insurgents are creating an air of peril that has kept potential non-oil investors away.
The longer the political impasse continues, the longer it will take to address public anger about poor public services, such as a lack of electricity. The perception may also grow that democracy in Iraq does not work, raising the risks of public disturbances or even coup attempts.
Iraq is isolated from world markets and has little credit. Only a few dozen companies are listed on the stock exchange. The Iraqi dinar is thinly traded and the exchange rate effectively determined by the central bank in its dollar auctions. One place to take a punt from afar is on Iraq's Eurobond.
Below are some of the major risks facing Iraq 7-1/2 years after U.S. troops toppled Saddam Hussein.
POLITICAL SQUABBLING, POWER VACUUM
Because no single bloc won a majority in the 325-member parliament in the election, coalition talks are key to forming a government.
After months of haggling, the Shi'ite-led National Alliance, a union of Maliki's bloc and the Iran-friendly Iraqi National Alliance, settled on Maliki as its nominee for prime minister.
While the decision was a breakthrough in the long impasse, Maliki still faces an uphill battle in his bid for a second term. There was dissent within his alliance on his nomination, and his leading rival, the cross-sectarian Iraqiya bloc, has said it will not participate in a Maliki government.
Iraqiya, led by former premier Iyad Allawi, a secular Shi'ite widely supported by Sunnis who view him as a strongman capable of countering Shi'ite power Iran, took 91 seats in the election. Maliki's State of Law bloc won 89 seats.
The INA, which includes anti-American cleric Moqtada al-Sadr, took 70 seats, while minority Kurds control 57.
The Kurds appear to be close to siding with Maliki, but the United States, which has been a protector of the Kurds since the 1991 Gulf War, is urging them to go slowly while it continues to press for a broad coalition that includes Iraqiya.
The long delay in forming a government could undermine security, and marginalising Iraqiya may anger Sunnis, just as U.S. troops leave.
Tensions can emerge between a weak central government and local authorities. Provincial council members backed by local police in Wasit province have tried to enter a Chinese-developed oil field, while provincial officials in Anbar province opposed the government's auction of gas fields on Oct. 20.
What to look out for:
-- A flareup in sectarian violence, as happened during the five months it took to form a government after 2005 polls.
-- A failure by parliament, which cannot function without a government, to pass investment laws, sending a negative signal to firms interested in Iraq but worried about legal uncertainty.
A RETURN TO MAJOR VIOLENCE
Iraq is far less violent than when sectarian killings peaked in 2006-07. Maliki takes credit for security gains. A U.S. troop rise and Sunni militia cooperation also played a big part.
Since March, Iraqi forces backed by U.S. troops have scored major victories against local al Qaeda groups. Yet Sunni Islamist insurgents, who the government says are in league with Saddam's ousted Baath party, still stage attacks.
Sunday's bloodbath in an Assyrian Catholic church in Baghdad was the deadliest attack on Iraq's Christian minority since the 2003 invasion.
In a brazen assault on an Iraqi army base in Baghdad on Sept. 5, suicide bombers and gunmen killed 12 people.
Political feuds, Sunni discontent or an attack on a holy site could spark a renewal in broad violence, as could any Israeli strike on Iran. Such an attack might prompt Shi'ite militias to retaliate against the remaining U.S. forces in Iraq.
Any major violence will push up prices on global oil markets, as Iraq has the world's fourth largest oil reserves.
What to watch:
-- Attacks on oil facilities or foreign oil workers.
-- A strike against a major player like Maliki or Allawi.
-- Signs of a return by militia leaders who fled after a 2008 crackdown on sectarian violence by Maliki.
-- Increased infiltration of the Iraqi security forces by militants or insurgents.
KURD-ARAB CONFLICT
Tensions between Arabs and minority Kurds, who have enjoyed virtual autonomy in their northern enclave for almost 20 years, are festering. Kurds were massacred in Saddam's era, but have gained unprecedented influence since 2003 and hope to reclaim areas they deem historically Kurdish.
Arabs and Turkmen complain Kurds have exploited their new-found prominence at their expense. At the centre of the impasse is Kirkuk, which sits on rich oil reserves.
What to watch out for:
-- Clashes between the army and Kurdish Peshmerga forces.
-- Any breakthrough on oil. Iraqi Kurdistan, which estimates its oil reserves at 45 billion barrels, has signed deals with foreign firms that the national Oil Ministry labels illegal.
-- Passage of modern oil legislation, held up for years. The delay has not deterred oil majors, but other investors view the laws as an indicator of stability and friendliness to business.
NEW AUTHORITARIANISM
Iraq's democratic experiment is rare the Middle East. Many Iraqis believe their country needs a strong ruler. The inability to form a government undermines faith in democracy.
What to watch:
-- Unusual Iraqi troop movements, in particular a lockdown of Baghdad's Green Zone where most government offices are.
-- Any effort to change the constitution to allow leaders to amass power or remain in office.
* For political risks to watch in other countries, click on [ID:EMEARISK] (Editing by Peter Graff)
=====
UPDATE 10-BP, Russia's Rosneft in share swap, Arctic pact15 Jan 2011
Source: reuters // Reuters
* BP will swap 5 pct of its shares for 9.5 pct of Rosneft
* Deal for offshore global, Arctic exploration
* U.S. Congressman calling for scrutiny of deal
* Rosneft's BP stake valued at $7.8 billion
* BP to issue new shares to Rosneft (Adds comment from lawmaker, paragraph 11, and expert, paragraph 19)
By Tom Bergin
LONDON, Jan 14 (Reuters) - BP Plc
BP
The deal covers huge areas of the South Kara Sea in the Arctic that BP said could contain billions of barrels of oil and gas and had been previously off limits to foreign companies.
The pact, which is expected to be completed in a few weeks, highlights a rebound in relations with Moscow both for BP and its Chief Executive Bob Dudley, who was forced to flee Russia in 2008 after heading BP's Russian joint venture, TNK-BP, which is half-owned by BP.
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Dudley said the deal was the first significant cross-shareholding between a nationally owned oil company and an international oil company and called it "a new template for how business can be done in our industry."
Dudley had been the boss for TNK-BP's
The issue has since been resolved and Dudley returned to Moscow for the first time this summer, following his appointment as CEO of BP, to be warmly welcomed by officials.
"It has turned from a fistfight into a lovefest," said Cliff Kupchan, a director at Eurasia Group in Washington.
Russia is a key part of BP's global operation, providing the company with a quarter of its reserves before the U.S. oil spill, so it is vital for Dudley to establish a good working relationship with the world'ss largest oil exporting nation.
U.S. Congressman Edward Markey, who is the top Democrat on the House Natural Resources Committee, immediately called for a review of the deal by U.S. regulators to see whether it affects the national and economic security of the United States. He noted that in 2009 BP was the top petroleum supplier to the U.S. military.[ID:nN14193339]
And Republican Congressman Michael Burgess, who is on the House Energy and Commerce Committee, also said the deal "deserves some analysis and scrutiny" by the government's Committee on Foreign Investment in the United States given BP's ownership of critical oil assets in the U.S.
The U.S. Treasury said it is forbidden by law to comment on investigations, planned or under way, by the committee.
Environmental group Greenpeace, noting the fragility of the Arctic, also lashed out.
"Now BP has bought its way into the Arctic by the back door. It seems the company learned nothing last year in the Gulf of Mexico," Charlie Kronick of Greenpeace said in a statement.
BP has a market capitalization of $150 billion U.S. dollars, while Rosneft is valued at about $83 billion.
ARCTIC EXPLORATION
The venture underscores Europe's dependence on Russia for a rising share of its energy needs -- particularly for clean-burning natural gas. Russia holds one-fifth of the world's reserves of natural gas.
Chris Huhne, British Secretary of State for Energy and Climate Change, welcomed the "groundbreaking" deal and called it "good news for Europe, for the UK's energy security and worldwide."
BP's deal with Rosneft gives BP access to highly sought after reserves of oil and natural gas in Russia's remote Arctic region.
"It tells the world how important the Arctic is to the future of natural resource production, and while the U.S. dillydallies and resists efforts by U.S. companies to push forward into the Arctic, others are moving on, leaving the U.S. behind," said John Hofmeister, the former CEO of Shell Oil Co. and founder of the group Citizens for Affordable Energy.
Russia, the world's top oil producer with output of more than 10 million barrels of oil per day (bpd), estimates that its Arctic zone holds about 51 billion tonnes of oil, or enough to fully meet global oil demand for more than four years.
BP is seen filling a skills and technology gap for Rosneft as it seeks to develop the Arctic region.
"Rosneft is well aware that its ability to do deepwater Arctic work alone is very limited," said Kupchan. "They have been looking for ways to bring in companies with the technology and especially management skills needed to pull off deepwater Arctic work."
Russia wants to encourage oil exploration and production in its icy Arctic waters, but in the wake of BP's Gulf spill, Russian officials and experts warn that a similar accident in the Arctic could turn out far worse.
The BP-Rosneft discussions "are ones that have happened over a number of months and are not in reaction to anything in the United States," said Dudley at a London new conference. "This is part of BP's strategic direction of access to large hydrocarbon basins and we have had a strong relationship with Rosneft for a long time."
Russia has increasingly been looking to raise its influence on the global financial stage, with major companies -- including state-controlled ones -- seeking foreign acquisitions.
Some deals have come under fierce opposition in the countries involved, such as Surgutneftegas's
Prime Minister Vladimir Putin's government has also pledged to ease investors' access into Russia as it looks to foreigners to play a key role in helping to modernize the economy -- including through taking part in a big privatization drive starting this year.
Britain's new coalition government has attempted to improve relations with Moscow -- tense since the murder of ex-KGB agent Alexander Litvinenko in 2006 -- although tensions resurfaced last month with the expulsion of a Russian diplomat from London. [ID:nLDE6BL0SS]
U.S.-listed shares of BP, which had been trading higher, fell slightly to $49.00 in post-market trading. The stock had closed up 3.6 percent at $49.25 on the New York Stock Exchange. (Additional reporting by Volodya Soldatkin, Toni Vorobyova and Darya Korsunskaya in Moscow; Kristen Hays and Chris Baltimore in Houston, Richard Cowan in Washington, Braden Reddall in San Francisco and Mike Erman in New York, writing by Anna Driver, editing by Gerald E. McCormick, Martin Howell, Gary Hill)
===
Day of remembrance: 1 year after Gulf oil disaster
By CAIN BURDEAU and HARRY R. WEBER, Associated Press Cain Burdeau And Harry R. Weber, Associated Press – 1 hr 8 mins ago
NEW ORLEANS – Relatives of some of the 11 men who died aboard the Deepwater Horizon oil rig are flying over the Gulf of Mexico on Wednesday, back to the epicenter of the worst offshore oil spill in the nation's history.
Meanwhile, on land, vigils were scheduled in Louisiana, Mississippi, Alabama and Florida to mark the spill.
On the night of April 20, 2010, the Deepwater Horizon, a rig owned by Transocean Ltd., burst into flames after drilling a well for BP PLC, killing 11 workers on or near the drilling floor. The rest of the crew evacuated, but two days later the rig toppled into the Gulf and sank to the sea floor. The bodies were never recovered.
Over the next 85 days, 206 million gallons of oil — 19 times more than the Exxon Valdez spilled — spewed from the well. In response, the nation commandeered the largest offshore fleet of vessels since D-Day, and BP spent billions of dollars to clean up the mess, saving itself from collapse.
"I can't believe tomorrow has been one year because it seems like everything just happened," Courtney Kemp, whose husband Roy Wyatt Kemp was killed on the rig, wrote on her Facebook page Tuesday. "I have learned a lot of things through all of this but the most important is to live each day as if it were your last ... what matters is if you truly live."
Natalie Roshto, whose husband Shane Roshto also died on the rig, posted a message on Courtney Kemp's Facebook page on Tuesday evening: "Can't believe it's been a year.. It has brought a lot of tears and a great friendship I'm Soooo thankful for.. We are a strong force together!! Love u sista."
In a statement, President Barack Obama paid tribute to those killed in the blast and thanked the thousands of responders who "worked tirelessly to mitigate the worst impacts" of the oil spill.
"But we also keep a watchful eye on the continuing and important work required to ensure that the Gulf Coast recovers stronger than before," Obama said in the statement.
The president said significant progress has been made but the work isn't done.
Transocean invited up to three members of each family to attend the flyover. They were expected to circle the site a few times in a helicopter, though there is no visible marker identifying where their loved ones perished. At the bottom of the sea, 11 stars were imprinted on the well's final cap.
Several families said they didn't want to go on the flyover, and Transocean decided to not allow media on the flight or at a private service later in the day in Houston.
The solemn ceremonies marking the disaster underscore the delicate healing that is only now taking shape. Oil still occasionally rolls up on beaches in the form of tar balls, and fishermen face an uncertain future.
Louis and Audrey Neal of Pass Christian, Miss., who make their living from crabbing, said it's gotten so bad since the spill that they're contemplating divorce and facing foreclosure as the bills keep piling up.
"I don't see any daylight at the end of this tunnel. I don't see any hope at all. We thought we'd see hope after a year, but there's nothing," Audrey Neal said.
"We ain't making no money. There's no crabs," said Louis Neal, a lifelong crabber.
"I'm in the worst shape I've ever been in my whole damn life. I'm about to lose my whole family," he said. "I can't even pay the loans I have out there. That's how bad it's gotten."
His wife said the financial hit was only part of the past year's toll. "Our lives are forever changed," she said. "Our marriage, our children, it's all gotten 100 percent worse."
She said the couple received about $53,000 from BP early on, but that was just enough money to cover three months of debt. They haven't received a dime from an administrator handing out compensation from a $20 billion fund set up by BP, they said.
Still, it's not all so bleak.
Traffic jams on the narrow coastal roads of Alabama, crowded seafood restaurants in Florida and families vacationing along the Louisiana coast attest to the fact that familiar routines are returning, albeit slowly.
"We used to fuss about that," said Ike Williams, referring to the heavy traffic headed for the water in Gulf Shores, Ala., where he rents chairs and umbrellas to beachgoers. "But it was such a welcome sight."
Many questions still linger: Will the fishing industry recover? Will the environment bounce back completely? Will an oil-hungry public ever accept more deepwater drilling?
"It seems like it is all gone," said Tyler Priest, an oil historian at the University of Houston. "People have turned their attention elsewhere. But it will play out like Exxon Valdez did. There will be 20 years of litigation."
Most scientists agree the effects "were not as severe as many had predicted," said Christopher D'Elia, dean at the School of the Coast and Environment at Louisiana State University. "People had said this was an ecological Armageddon, and that did not come to pass."
Biologists are concerned about the spill's long-term effect on marine life.
"There are these cascading effects," D'Elia said. "It could be accumulation of toxins in the food chain, or changes in the food web. Some species might dominate."
Meanwhile, accumulated oil is believed to lie on the bottom of the Gulf, and it still shows up as a thick, gooey black crust along miles of Louisiana's marshy shoreline. Scientists have begun to notice that the land in many places is eroding.
For example, on Cat Island, a patch of land where pelicans and reddish egrets nest among the black mangroves, Associated Press photographs taken a year ago compared with those taken recently show visible loss of land and a lack of vegetation.
"Last year, those mangroves were healthy, dark green. This year they're not," said Todd Baker, a biologist with the Louisiana Department of Wildlife and Fisheries.
Land is eroding on sites where the oil has killed vegetation, he said.
On a tour of the wetlands Tuesday, Robert Barham, Louisiana's wildlife secretary, showed reporters the lingering damage.
Roseau cane is growing again where it was cut away during early cleanup efforts, but Barham said the 3- to 4-foot-high stalks should be a lush green. Instead, they were pale green and brown.
"It's because of oil in the root system," Barham said. He put his hand into the dirt and pulled up mud saturated with oil. Tossing the sludge into nearby water, it released a rainbow-colored sheen.
Barham complained that BP had not done enough to clean the area. "What they've done thus far is not working."
In the remote Louisiana marsh, there's still yellow boom in places — not to keep oil out but to keep the tides from carrying oil to untouched areas.
Confidence in Louisiana's seafood is eroding, too.
"Where I'm fishing it all looks pretty much the same," said Glen Swift, a 62-year-old fisherman in Buras. He's catching catfish and gar in the lower Mississippi River again. That's not the problem.
"I can't sell my fish," he said. "The market's no good."
But the BP spill has faded from the headlines, overtaken by the tsunami and nuclear disaster in Japan, unrest in the Middle East and political clashes in Washington.
"Nationally, BP seems like a dim and distant memory," said Douglas Brinkley, a Rice University historian. But the accident will have long-lasting influence on environmental history, he said.
___
Associated Press writers Melissa Nelson in Pensacola, Fla.; Jay Reeves in Gulf Shores, Ala.; Brian Skoloff in Salt Lake City, Utah; and Harry Weber and Kevin McGill in New Orleans contributed to this report. Videographer Jason Bronis contributed from Baton Rouge, La.
US to settle with BP over Alaska oil pipe spill
03 May 2011 15:21
Source: reuters // Reuters
WASHINGTON, May 3 (Reuters) - The U.S. government said it will announce on Tuesday a "major" settlement with BP Plc
The U.S. Justice Department, Environmental Protection Agency and Transportation Department's Pipeline and Hazardous Materials Safety Administration will announce the settlement at 1 p.m. EDT.
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