Petrodollars: how the 3 will maintain investment levels and meet refinancing obligations ?

Yamal, Russia's gas megaplan, becomes symbol of sanctions defiance Fri, Sep 19 07:09 AM EDT image 1 of 3 By Katya Golubkova and Dmitry Zhdannikov MOSCOW (Reuters) - Dozens of Russian energy ventures are in jeopardy due to Western sanctions on technology and funding. Looming over them all, a giant project the Kremlin is bent on saving no matter what. The Yamal plan, a $27 billion investment to tap vast natural gas reserves in northwest Siberia, aims to double Russia's stake in the fast-growing market for liquefied natural gas. If it stays on track, it will also show the West that the world's largest energy industry is not cracking under sanctions. Russia has said it will make sure Yamal has the resources it needs to keep building. But that pledge will be tested: Yamal's gas is so far in the Arctic North that it requires specialised technology often provided by Western partners - many of which will not be able to operate because of the restrictions. And while Yamal's shareholders have already invested $6 billion in it, U.S. and EU action has now effectively cut off the Russian energy firm's access to Western lending. Nonetheless, bankers and analysts returning from a recent trip to Yamal said they were impressed by the project's status. Some said it was hard to tell that Yamal's controlling shareholder, gas firm Novatek, and its billionaire co-owner Gennady Timchenko were subject to some of the most severe U.S. and EU sanctions targeting Putin after he annexed Crimea in eastern Ukraine and lent backing to pro-Russia separatists. "I was astonished by the pace and amount of work that has been done," said Maxim Moshkov, oil analyst at UBS. Some 6,000 people are currently working on the project and the number will rise to 15,000 next year. "They work day and night... Having been there, I realised the project will most likely become a reality," Moshkov said. Andrey Polishchuk from Raiffeisen bank said: "They are building a new airport, storage tanks. Ships are coming to a nearby port one after another. Some are unloading goods, some are waiting to unload". POWERFUL PARTNERS Yamal has powerful partners - French oil major Total and China's CNPC. Total said this week that despite the sanctions it would not be stopping work on Yamal and has suggested that, given Europe relies on Russia for a third of its gas, it would be risky to slow down the project. Yamal will start exports from 2018 and has already pre-sold most of its future output to buyers in Europe and Asia. It will ultimately export 16.5 million tonnes of LNG a year - equal to 6 months of French gas consumption. Novatek, along with gas monopoly Gazprom, has so far escaped European sanctions, but the fact that it is on the U.S. sanctions list makes it almost impossible for it to raise money for the project. So Total is still clear to participate in Yamal. But its ability to finance its share in it through U.S. or European banks has been drastically limited. "Can we live without Russian gas in Europe? The answer is no. Are there any reasons to live without it? I think - and I'm not defending the interests of Total in Russia - it is a no," Total boss Christophe De Margerie told Reuters. Timchenko, co-owner of Novatek, is also a force to be reckoned with - his closeness to Russian President Vladimir Putin giving him heft even as it makes him a target for sanctions. In March 2014, the United States slapped the first round of sanctions on him, explaining: "Timchenko's activities in the energy sector have been directly linked to Putin". Putin subsequently made Timchenko Russia's point person for business relations - including the development of key gas projects - with China. Timchenko has said China, which has a 20 percent stake in Yamal through CNPC, has agreed to lend $20 billion before the end of 2014. But there is still work to do to win that loan. "We have had communications from higher management over compliances that we shall strictly follow international rules," a Chinese banking executive told Reuters on condition of anonymity given the delicate nature of the negotiations. "Basic principles are - we shall not deal with entities that are sanctioned...We don't want the U.S. to find excuses to give us trouble." SUPPORT FROM HOME If China can't put up the money, Putin is likely to. The Russian government, which has accumulated the world's third largest forex reserves of $460 billion, has said it will invest money in profitable projects which can guarantee hefty payouts to state coffers in the future. Various officials have pledged support to Gazprom, state oil firm Rosneft and pipeline and railway monopolies Transneft and RZhD. And Prime Minister Dmitry Medvedev told Novatek's chief and co-owner Leonid Mikhelson that Russia would support other companies too, irrespective of their ownership structure. "Should (their Chinese lending) plan fail, they can count on state support. The government has made it clear it will not allow it to fail," said a Western oil executive close to the project. The crunch point for Yamal will come next year when France's engineering firm Technip needs to deliver the core liquefaction plant - technology that Russia is lacking. Technip told Reuters this week it was moving forward with the project. It had earlier warned about the risks to its income from sanctions on Russia. If Technip should run into difficulties - the pace at which sanctions have evolved in the past months suggests more could yet be in the offing - Russia might be able to source the technology from China, which has in recent years become able to design and build large LNG plants. "There might be an opportunity lurking in terms of supplying our own gas liquefaction technology," said an engineering executive at CNPC. (Additional reporting by Aizhu Chen, Vladimir Soldatkin, Denis Pinchuk and Sandrine Bradley; Editing by Sophie Walker) ============ Sanctions against Russia could spur $150 oil – Former BP chief Published time: September 15, 2014 08:53 Edited time: September 15, 2014 11:53 Get short URL Reuters/Stefano Rellandini Oil, Russia and the global economy, Sanctions Western sanctions against Russia, coupled with ongoing political instability in Libya and the advance of ISIS militants in Iraq, could leave the global oil supply exposed and push up oil prices to $150 per barrel, former BP chief Tony Hayward has warned.

The former CEO of BP and now chairman of Glencore Xstrata said the recent boom in US shale production has painted an unrealistic image of the world’s global oil supply, and created a false sense in energy security. “The world has been lulled into a false sense of security because of what’s going on in the US,” Hayward said in an interview with the Financial Times. The hydraulic fracturing boom in the US began in 2008 and has increased US crude output by 60 percent, but Hayward warned it could wane. “When US supply peaks, where will the new supply come from?” Hayward said. Instability in oil producing countries in the Middle East, such as Libya and Iraq, in theory would have driven up oil prices to $150 per barrel, had it not been for the new supply from North America.

So far, Brent crude has fallen from about $108 a barrel at the start of the year to about $97 today. Hayward said oil supplies from the North Sea and Alaska are nearing maturity, and the world oil supply is dependent on new wells in places such as Russia, Iraq, and Canada. Rosneft's Bazhenov field may be even larger than the North Dakota Bakken shale shelf, which currently produces 1 million barrels of oil per day and has brought about the shale revolution in the America. Sanctions may stymie output Russia, the world’s second-largest oil producer, outputs about 10.5 million barrels of oil per day, shy of the record from the Soviet era. His comments followed decisions from the EU and US to widen sanctions against Russia on Friday, targeting state-run and private oil and gas companies, including Gazprom, Rosneft, Transneft, and Lukoil. They can no long obtain US or EU technology or equipment for extracting deep water, Arctic, or shale oil. Analysts believe there will be no sudden shock to the Russian oil and gas industry, but that future projects and long-term development are at risk. “Because of financial sanctions, the big gorillas are going to start cutting their activities,” Hayward said, speaking about Russian companies. The sanctions will also create problems for Western companies like Exxon Mobil, BP, Shell and others, who have joint ventures worth billions in Russia. ExxonMobil, for example, has a joint venture with Rosneft to explore Russia’s Arctic, and also owns a 19.75 percent stake in the company. ======== Petrodollars: What do Russian oil companies do in the wake of sanctions? By Rosemary Griffin | September 15, 2014 12:01 AM Comments (0) Sanctions against Russia are moving closer to the country’s big oil companies. In this week’s Oilgram News column Petrodollars, Rosemary Griffin looks at the choices that companies such as Rosneft face. ——————————- EU sanctions introduced Friday limit some state-owned Russian oil companies’ access to European financing in a move that could drive Rosneft, Transneft and Gazprom Neft to look to alternative sources. The US added to the Russian oil sector’s woes later in the day, by further restricting Rosneft’s access to US financing, as well as blocking its four biggest crude producers from accessing technology essential to Arctic, deepwater and shale oil technology. In the short term, analysts see the latest measures as unlikely to significantly change the financial profile of the big three oil companies targeted, as previous sanctions had already seriously restricted Russian companies’ access to Western capital markets. But the measures have fuelled debate on how the three will maintain investment levels and meet refinancing obligations going forward. Company representatives declined initial comment, but analysts’ see Rosneft, with its significant debt portfolio as the most exposed to the latest restrictions. Rosneft has been on something of a spending spree in the past two years, most significantly swallowing up what was Russia’s third largest crude producer TNK-BP in 2013, in a mega-deal which saw Rosneft hand over a combined total of over $30 billion to former shareholders AAR and BP. Analysts estimate that Rosneft needs to refinance around $29 billion over 2014 and 2015. It has around $18 billion in cash to cover refinancing this year if necessary, and is expecting its cash flow to be boosted by pre-payments coming in next year. Rosneft holds a key position in the Russian economy, with the government highly likely to intervene if it seems to be in any kind of trouble, something officials have confirmed in recent weeks. Russian Prime Minister Dmitry Medvedev said that the government is looking into ways to support the company to maintain investment and production levels. Rosneft already asked for a massive Rb1.5 trillion (around $42 billion) injection from the state’s national welfare fund in mid-August, but whether the government will stretch quite so far, or promise to underpin all of the company’s ambitious capex plans, remains to be seen. ——————————- Meanwhile, analysts estimate that Transneft needs to refinance around $3 billion of debt in 2014/2015. The company has around $10 billion on its books, and some analysts have pointed to its smooth repayment schedule of around $1.4-$1.5 billion/year over the next few years, as well as its relative flexibility to cut investment compared to most other majors, as key advantages in dealing with the latest restrictions. If it does get into trouble, Transneft is likely to follow Rosneft’s approach. As the company responsible for crude and oil products shipments across Russia, it is a priority for the Russian government to build out infrastructure, particularly to boost crude movements to China. If the government balks at direct cash injections, it could also grant the company greater flexibility in imposing tariffs on its transportation services, although the government has attempted to limit state-owned companies’ tariffs in recent years. The two state-owned giants could also look to Asian partners to meet any shortfall in financing. Rosneft has already offered Chinese partners a direct stake in its most promising greenfield project in East Siberia Vankor, which analysts see as a direct consequence of financial pressure from Western sanctions. Asian investors are already present in many Russian projects and have said they are interested in opportunities arising from Russia’s shift in focus to Asian markets. They are likely to drive a hard bargain though, if Russian companies seem desperate to sell off stakes in their prize assets in return for financing. For Gazprom Neft the situation is slightly different. Some analysts see the company as less exposed as its refinancing requirements in 2014/2015 are estimated to be the smallest of the three, at $2 billion. The company has an estimated $3 billion in cash. Furthermore Gazprom was planning to scale back its investment program from next year, initially by around 10% year on year in 2015. There are indications that company is concerned about how sanctions could impact its financial operations, however. Gazprom took a significant hit from currency conversion rates this year, suffering a Rb5.3 billion (around $143 million) loss on its dollar-denominated debt in the first half, more than double equivalent losses in the same period of 2013. Some analysts believe restricted access to Western capital markets could drive the company’s bid to raise the proportion of its ruble-denominated debt and turn to domestic lenders. In the summer it was also the first Russian oil company to raise the prospect of shifting supply contracts away from the dollar to other currencies, such as the ruble or the euro if the situation continues to worsen.— Rosemary Griffin in Moscow

Sony says Dubai dealers sold Iran $12.8 million in equipment (Reuters) - Sony Corp said some dealers in Dubai resold about $12.8 million worth of its video equipment and medical instruments to Iranian ministries, in a move that could possibly attract U.S. penalties. The dealers resold some equipment to Iran's broadcasting unit and health ministry, and some also planned to sell equipment to the information technology department of the country's police, the firm said in a filing with the U.S. regulator.

"If the relevant authorities were to impose penalties or sanctions against Sony (Xetra: 853687 - news) , the impact of such sanctions could be material," the company said in Thursday's filing with the U.S. Securities and Exchange Commission.

Sony said it followed policies and procedures designed to keep transactions with Iran in line with applicable economic sanctions laws, but there could be no assurance such measures would be effective. It listed four Iran-related transactions, in three of which it made net profit of less than $500,000, while taking a loss in the fourth, but did not say how much. Washington has been cracking down on companies accused of evading Iran sanctions. The United States and Europe have imposed sanctions against specific Iranian individuals, state institutions or companies in so far unavailing efforts to persuade Tehran to rein in enrichment of uranium and open up to U.N. inspectors in exchange for phased relief from tightening financial isolation. Western nations believe the Islamic Republic is attempting to develop the means to build atomic bombs. Iran says the nuclear programme is solely for electricity generation and medical uses. Sony said it may conduct additional future sales in Iran through third-party owned dealers or distributors, which may require disclosure under U.S. laws. "Sony intends to conduct any such sales in accordance with applicable law," it added. (The story corrects net profit in paragraph 5 to less than $500,000, not $500 million.) (Reporting by Sakthi Prasad in Bangalore; Editing by Clarence Fernandez)

India’s Energy Ties With Iran Unsettle Washington

India’s relentless search for hydrocarbons to fuel its booming economy has managed the rather neat diplomatic trick of annoying Washington, delighting Tehran and intriguing Baghdad, all the while leaving the Indian Treasury fretting about how to pay for its oil imports, given tightening sanctions on fiscal dealings with Iran. On 7 June the US State Department reluctantly announced that it was renewing India’s six-month waivers for implementing sanctions against Iran, along with seven other countries eligible for waivers from the sanctions owing to good faith efforts to substantially reduce their Iranian oil imports. In New Delhi’s case, it is the U.S. and EU-led sanctions rather than any willingness on India’s part that has seen a fall in its Iranian oil imports. India is the second largest buyer of Iranian oil, a nation with whom it has traditionally had close ties. U.S. Secretary of State John Kerry said that India, China, Malaysia, South Korea, Singapore, South Africa, Sri Lanka, Turkey, and Taiwan had all qualified for an exception to sanctions under America's Iran Sanctions Act, based on additional significant reductions in the volume of their crude oil purchases from Iran. Kerry told reporters, "Today's determination is another example of the international community's strong and steady commitment to convince Iran to meet its international obligations. This determination takes place against the backdrop of other recent actions the administration has taken to increase pressure on Iran, including the issuance of a new executive order on June 3. The message to the Iranian regime from the international community is clear: take concrete actions to satisfy the concerns of the international community, or face increasing isolation and pressure." Related article: Japan-India Nuclear Deal, Last Piece in Corporate Nuclear Game But even with Washington’s beneficence, New Delhi is struggling to find ways to pay for its Iranian oil imports. The U.S. and European sanctions have deeply affected Iran’s international oil trade, reducing its exports by more than 50 percent and costing Iran billions of dollars in revenue since the beginning on last year. Tightening the screws, the Obama administration is now attempting to reduce Iran’s oil exports even further, to less than 500,000 barrels per day through tighter sanctions. Nevertheless, despite plummeting sales overseas, Iran, OPEC’s second largest oil exporter, remains one of the world's largest oil producers, with sales bringing in tens of billions of dollars in revenue annually. And Iran is anxious to keep India as a favored customer. Last month Iran offered India lucrative terms for developing its oilfields, routing a proposed natural gas pipeline through the sea to avoid Pakistan as well as insurance to Indian refiners provided New Delhi raised oil imports. Making its case, Iran sent a high-level delegation led by Oil Minister Rostam Ghasemi to India to urge New Delhi to raise its oil purchases, which slid to 13.3 million tons in 2012-13 from 18 million tons in 2011-12. Heightening Iran’s concerns, later this year Indian imports are slated to fall further to around 11 million tons. After meeting Ghasemi Indian Oil Minister M. Veerappa Moily issued a statement noting, “The Iranian side encouraged the Indian side to increase its crude purchase. “The Indian side explained that it would encourage companies to maintain their engagement in terms of crude oil purchase, taking into account their requirements, based on commercial and international considerations.” While Iranian-Indian trade ties continue to deepen, with Indian-based Consul General of Iran Hassan Nourian predicting that bilateral trade between India and Iran will be worth $25 billion by 2017, India is hedging its bets about energy imports, and where to make up the shortfall from the increased sanctions regime. …and what better place to look than the Middle East’s rising petro-state, Iraq? India’s External Affairs Minister Salman Khurshid is heading for Baghdad for a two-day visit beginning 19 June. Related article: Oil Demand in China and India Falling – Proof Prices are Too High! Top of the agenda? Oil - Iraq is now India’s second largest supplier of oil after Saudi Arabia, having replaced Iran and become a “critical partner” of India. It is a potential marriage made in heaven. Iraq needs an assured market for its increasing crude production, having set itself a production target of 7 million bpd from its current 3 million bpd, while India is in search of a long-term partnership with a major oil producer. While such deepening ties will thrill Washington as much as they distress Iran, there is still a wild card in the Iraqi mix – China, now Iraq’s biggest customer, already purchasing nearly half the oil that Iraq produces, almost 1.5 million barrels a day. Worse still for Indian aspirations, China is now trying for an even bigger share, bidding for a stake currently owned by Exxon Mobil in one of Iraq’s largest oil fields, West Qurna. New Delhi’s choices are stark – make Washington happy, alienate long-time partner Iran, and keep fingers crossed that Beijing doesn’t stitch up any further Iraqi concessions. Tough call. http://www.financialsense.com/contributors/oil-price/indias-energy-ties-with-iran-unsettle-washington =========================== Exclusive: China Mobile, Etisalat weighing bids for Pakistan telco - sources Tue, Jun 25 07:08 AM EDT By Dinesh Nair and Matt Smith DUBAI (Reuters) - Pakistan mobile operator Warid Telecom has been put up for sale by its Abu Dhabi owners and is likely to draw interest from China Mobile and Etisalat, sources familiar with the matter said on Tuesday. The Abu Dhabi Group, a conglomerate led by a ruling family member in the oil-rich emirate, is seeking to sell all 100-percent of shares in Warid Telecom, two of the sources said, speaking on condition of anonymity. The third source, however, said the company would also be prepared to sell a smaller controlling stake. Pakistan's mobile telecommunications sector has five operators and is ripe for consolidation after a period when a troubled economy, increasingly high levels of market penetration and stiff competition has forced companies' margins lower. The sellers have mandated U.S. investment bank Lazard and British lender Standard Chartered as advisers for the process, the sources said. One estimated a sale could fetch about $1 billion. Walid Irshaid, the chief executive of Pakistan Telecommunications (PTCL), a unit of United Arab Emirates-based Etisalat, said the company is weighing a potential bid. "We are interested to see if it makes sense for us, but it's not only us. Warid is an existing operator that has been here for many years and so we're saying 'let's look at the prospects,'" he told Reuters. "There are too many players in Pakistan. Margins have eroded for everybody and the market must consolidate - we're all operating under low margins and low ARPU (average revenue per user) and that isn't long-term sustainable." Warid Telecom declined to comment. China Mobile, which has increased its subscriber base by nearly three-quarters since 2010-11 and operates under the Zong brand, was not immediately for comment. SHRINKAGE Warid launched its cellular services in Pakistan in May 2005 and had 12.54 million subscribers at the end of March of this year, down from 17.39 million in 2010-11, making the company the country's smallest operator. Pakistan's total subscriber base rose 12.2 percent to 122.1 million over the same period, meaning Warid's market share fell to 10.3 percent from 16 percent. The other operators in Pakistan are Oslo-based Telenor and Orascom Telecom, which operates under the name Mobilink and is the sector leader. Neither was immediately available for comment. PTCL's mobile business is under the Ufone brand, while it has a 95 percent share of the country's fixed line subscribers. "The board (Warid Telecom) has been looking for a business partner to add value to Warid," a second source familiar with the matter said, adding China Mobile and Etisalat had both expressed interest in acquiring the company. In 2007, Singapore Telcommunications bought a 30-percent stake in Warid for about $758 million. That stake purchase gave Warid Telecom an enterprise value of about $2.5 billion. SingTel sold back that stake in January for $150 million and a right to receive 7.5 percent of the net proceeds from any future sale, public offering or merger of Warid. The Abu Dhabi conglomerate also agreed to sell Warid Telecom's Uganda business to Bharti Airtel in April without revealing the financial details of the transaction. Bharti recently agreed to buy the remaining 30 percent in Warid Telecom Bangladesh after taking a 70 pct stake in that business in 2010. The Abu Dhabi Group, led by ruling family member Sheikh Nahayan Mabarak al-Nahayan, invests in emerging markets and also has large investments in Pakistan including Bank Alfalah Ltd, Al Razi Healthcare and Wateen Telecom. (Additional reporting by Devidutta Tripathy in New Delhi and Lee Chyen Yee in Hong Kong; Editing by Patrick Graham) ======================

Iran begins vote to choose Ahmadinejad's successor

Iran's Khamenei says big election turnout will frustrate foes Wed, Jun 12 12:01 PM EDT 1 of 6 By Yeganeh Torbati DUBAI (Reuters) - Iran's supreme leader urged voters to turn out in big numbers for a presidential election on Friday, saying such a show of strength would frustrate Tehran's enemies. Ayatollah Ali Khamenei was speaking on the last day of a subdued campaign that has not produced a leading candidate from three main hardliners and one moderate. The winner will replace Mahmoud Ahmadinejad but inherit an economy struggling with high unemployment and inflation, and buckling under the weight of international sanctions imposed over Iran's disputed nuclear program. The new president will also have little leeway to change major policies such as Iran's enrichment of uranium for nuclear fuel or its support for President Bashar al-Assad in the Syrian civil war. Both are decided by Khamenei.

"My insistence on the presence of the majority of people in the elections is because the strong presence of the Iranian nation will disappoint the enemy, make it reduce pressures and follow another path," Khamenei said in a speech on Wednesday, reported on his web site. "It is possible that some people, for whatever reason, do not want to support the Islamic Republic establishment but they do want to support their country. They should also come to the polls. Everyone should come to the polls," Khamenei said

. With 678 people who registered as candidates barred from standing in the election, the United States and the Israel - top of Iran's list of enemies - have both criticized the ballot as neither free nor fair. Voters now have six candidates remaining to choose from - a slate dominated by conservatives who tout their loyalty to Khamenei and offer little in the way of real policy differences. As there are no independent, reliable opinion polls on voting intentions in Iran, it is hard to gauge who will win. Reformist leaders said the last presidential election in 2009 was rigged to return Ahmadinejad to office and many mainly middle-class, more liberal voters may fail to turn out this time in the belief the same thing could happen. Iranian authorities say all polls are open and democratic. Moderates and reformists united on Tuesday behind centrist cleric Hassan Rohani, hoping to attract the vote of Iranians hoping for more freedoms and better relations with the West. IDEOLOGY OR PRAGMATISM? A high turnout could favor Rohani, but the more liberal Iranians he is most likely to appeal to may be the ones most likely not to vote. However Iranians, analysts say, recognize the difference between bad and worse and may turn out anyway. "People are not eager to go and vote themselves, but they are worried about who will get elected," said Zoha, a 28-year-old dental student in Tehran. "I will vote for Rohani. I will only vote because it might help prevent someone like Jalili getting elected," she said. "He is a hardliner who will only take away our freedom even more." Following some reports of youths wearing Rohani's purple colors gathering in the streets, his campaign appealed to his followers to respect the law. Riot police cracked down hard on reformist supporters celebrating in the streets believing their candidate had won the 2009 vote. Rohani's conservative opponents meanwhile appeared no closer on Wednesday to deciding on a unified candidate. Saeed Jalili, Iran's nuclear negotiator has run a strong campaign, but has been heavily criticized, even by fellow hardliners, for his intransigence in talks with world powers and failing to stop the imposition of tough international sanctions. Jalili is alone among the candidates in defending Iran's current robust, ideologically driven foreign policy. "The smallest flexibility in defending our country's rights will lead to more pressure," state television quoted Jalili as telling supporters. Other conservative candidates, while not necessarily disagreeing with the substance of Iran's present policies, have emphasized what they say will be their more inclusive approach domestically and their more pragmatic style abroad. Former foreign minister Ali Akbar Velayati said on Wednesday his government would consult widely before taking decisions "Our problem is that we have gone to extremes and one of my government's plans is to take a moderate approach," ISNA quoted him as saying. The other major hardline hopeful, Mohammad Baqer Qalibaf, has brought in experts to help him run Tehran as the capital's mayor and largely avoided ideologically motivated unpopular interference in people's private lives. But the lack of unity among the conservative "Principlists" could badly split their vote. "Isn't the presence of one Principlist candidate with many votes better than the scattering of votes among Principlists?" wrote Hossein Shariatmadari, the editor of influential hardline Kayhan newspaper. (For an Interactive timeline of Mahmoud Ahmadinejad as president of Iran please click on http://link.reuters.com/cas68t )) (Additional reporting by Zahra Hosseinian; Editing by Jon Hemming and Angus MacSwan) ================= Iran begins vote to choose Ahmadinejad's successor Fri, Jun 14 00:17 AM EDT 1 of 4 By Yeganeh Torbati DUBAI (Reuters) - Iranians began voting on Friday in a presidential election unlikely to result in seismic shifts in its troubled relations with the West and Gulf Arab neighbors, but which could bring a softening of the confrontational style personified by outgoing president Mahmoud Ahmadinejad. World powers embroiled in talks with Iran over its nuclear program are looking for signs of a recalibration of its negotiating position after eight years of intransigence under fiery populist Ahmadinejad. Iran's Gulf Arab neighbors are also wary of Iran's influence in Iraq next door and its backing for President Bashar al-Assad and his Lebanese allies Hezbollah in the Syrian civil war. The Sunni Arab kingdoms are backing the rebels in Syria. Of five hardline candidates professing unwavering obedience to Supreme Leader Ayatollah Ali Khamenei, three are thought to stand any chance of winning the vote, or making it through to a second round run-off in a week's time. Of those three main conservative hopefuls only one, current chief nuclear negotiator Saeed Jalili, advocates maintaining Iran's robust, ideologically-driven foreign policy. The other two, Tehran mayor Mohammad Baqer Qalibaf and former foreign minister Ali Akbar Velayati, have pledged never to back away from pursuing Iran's nuclear program but have strongly criticized Jalili's inflexible negotiating stance. They face a single moderate candidate, the only cleric in the race, Hassan Rohani. Though very much an establishment figure, suspicious of the West, Rohani is more likely to pursue a conciliatory foreign policy. 2009 CRACKDOWN With no independent, reliable opinion polls in Iran, it is hard to gauge the public mood, let alone the extent to which Khamenei and the Revolutionary Guards will exert their powerful influence over the ballot. State media reported that polling began on schedule at 0330 GMT. Voting lasts for 10 hours, though this can be extended if need be. There are more than 50 million Iranians eligible to vote, 1.6 million of them first-time voters. But security has been tight and campaigns subdued compared to the euphoric rallies that preceded the last presidential election in 2009, when reformist supporters thought they scented victory and the prospect of change in Iran. Those hopes were dashed when Ahmadinejad was returned to office by results the reformists said were rigged. The large street protests that broke out were met with a tough crackdown in which several people were killed and hundreds arrested. The reformist candidates who lost in 2009 are now under house arrest and have little contact with the outside world. Human rights groups have criticized Iran for further arrests and curbs on activists and journalists ahead of Friday's poll and the disqualification of 678 people registered as candidates, including Akbar Hashemi Rafsanjani, one of the founders of the Islamic Republic. Iranian officials dispute accusations of human rights abuses and call the charges politically motivated. They also say elections in Iran are free, fair and democratic. (Writing by Jon Hemming, Additional reporting by Zahra Hosseinian, Editing by Andrew Roche and William Maclean ======================================== Iranians count on president-elect Rohani to bring change Sun, Jun 16 11:05 AM EDT 1 of 10 By Zahra Hosseinian DUBAI (Reuters) - Thousands of Iranians celebrated on the streets into Sunday's early hours, counting on moderate president-elect Hassan Rohani to follow through on promises of better relations abroad and more freedom at home after routing hardliners at the polls. A mid-ranking Shi'ite cleric, Rohani is an Islamic Republic insider who has held senior political and military posts since the 1979 revolution and maintained a good rapport throughout with theocratic Supreme Leader Ayatollah Ali Khamenei, Iran's most powerful man who has the last word on all the big issues. While no reformer himself, Rohani gained the backing of politically sidelined but still popular reformist leaders. His call for an end to the "era of extremism" won over many voters disgruntled over economic crises and crackdowns on free speech and dissidents that marked Mahmoud Ahmadinejad's presidency. Rohani's surprise win however is not expected to quickly resolve the stand-off with the West over Iran's disputed nuclear ambitions or break its commitment to backing President Bashar al-Assad in Syria's civil war. But the new president will run the economy of the sprawling OPEC member state of 75 million people and exert influence when Khamenei decides on national security matters. His victory goes some way to repairing the legitimacy of the Islamic Republic, punctured four years ago when dozens were killed in protests after an election reformists said was rigged, and may help pragmatic voices muzzled since then to re-emerge. Thousands of young Iranians took to the streets of the capital Tehran and other big cities as soon as the poll results were announced on Saturday, making sure their voices and expectations of the new president were clearly heard. The president-elect, known in the West as Iran's main nuclear negotiator in 2003-05, immediately sought to build bridges on Sunday, expressing approval of the street parties but also having talks with the conservative speaker of parliament. "With their celebrations last night, the Iranian people showed they are hopeful about the future and God willing, morals and moderation will govern the country," Rohani told state TV. Hardliners whose power comes from their unquestioning loyalty to Khamenei both badly miscalculated the public mood and failed to set aside their own factional differences and field a single candidate, analysts said. Both Khamenei and the powerful hardline Islamic Revolutionary Guard Corps that controls large swathes of the oil-dependent economy said the election was a victory for all. Whether Rohani succeeds in ushering in change to Iran, or whether the next four years yield the same stalemate that marked the 1997-2005 presidency of reformist Mohammad Khatami, will hinge on his ability to balance the demands and expectations of the people with the interests and constraints of those who hold the pivotal instruments of power in the Islamic Republic. ROHANI MAY HAVE ADVANTAGES OVER KHATAMI Rohani's reputation as a mediator and someone who has worked within the corridors of power should be an advantage that Khatami, who was director of the national library before he became president, never enjoyed. "Rohani is the ultimate regime insider. In contrast to Khatami, who held no governmental position when he was catapulted into the presidency, Rohani has never been out of power or Khamenei's good graces," said Ali Vaez, Iran analyst at the International Crisis Group. "Also, Rohani is a centrist politician, with a unique bridge-building ability. He is unlikely to alienate competing power centers, who can stymie his reforms," he said. A big test will be whether Rohani pushes for the release from house arrest of Mirhossein Mousavi and Mehdi Karoubi, two reformist leaders held under house arrest since 2011. That demand was a constant chant of Rohani supporters at his campaign rallies and on the streets of Tehran and elsewhere overnight. "This will in my view be the first real test of how sincere this election has been. Then we will know the caliber of Mr Rohani," said Ali Ansari, professor at St Andrew's University in Scotland. "Much depends on the political will of the fractured elite and the willingness of Khamenei to pull back. There is some anxiety that the powers that be, having got their 'popular election', will now settle back into their comfort zones." Despite similarities between Khatami and Rohani's upset election victories, political realities "are fundamentally different", said Yasmin Alem, a U.S.-based Iran expert. "The supreme leader is more powerful, the Revolutionary Guards are more influential, and the conservatives are more in control. However, Rohani is a crafty statesman and stands a better chance ... of navigating Iran's political minefield." Rohani has a tough task ahead of him dealing with Iran's myriad domestic and foreign policy problems, she said. "Iranian voters should demonstrate the same maturity and patience they did at the polls, if they want to avoid the disillusionment that followed Khatami's presidency." Rohani himself called for patience soon after his win was announced on Saturday. "The country's problems won't be solved overnight and this needs to happen gradually and with consultation with experts," he told the state news agency IRNA. But Rohani, whose conciliatory style contrasts with the confrontational populism of Ahmadinejad, said there was a new chance "in the international arena for ... those who truly respect democracy and cooperation and free negotiation". Post-election revelers were optimistic. "I am hopeful about the future, hopeful that we will have more social freedoms, more stability in Iran, better relations with other countries and hopefully a much better economy," said Hoda, 26, from Tehran. As well as chanting "Long live Rohani!" and wishing good riddance to the current president with "Ahmadi, bye bye!", jubilant crowds did not shy from feting Mousavi, the reformist leader defeated in the election four years ago. "Mousavi, Mousavi, congratulations on your victory!" the crowds shouted. Pictures and videos of the celebrations showed more people wearing the green colors of Mousavi's 2009 campaign than Rohani's purple. Police stood by and even shared jokes with some people in the throng. Others had an ironic take on the "death to dictator" chants of the huge 2009 protests at which security forces opened fire, shouting "thank you dictator" for allowing a fair vote now. ==================== سینیٹر فیصل رضآ عابدی کا خطاب سیمینار امامِ خمینی اور اسلام کی بیداری سے ، عوام کا بھرپور استقبال میں ماضی سے ایک مثال دیتا ہوں ، جب نہ سوشل میڈیا تھا نہ آذاد ٹی وی ، جب ملعون ضیاء کا دور تھا ، اس دور میں ہم کچھ پاکستانی جب امام خمینی کے افکار سننا چاہتے تھے تو یہ ملعون بین لگا دیتا تھا ، امام خمینی کے ان فرامین نے ہی مجھے اس قابل بنایا کہ میں بر ملا امریکہ مردہ باد کا نعرہ لگاتاہوں۔ میں نے آج ایک صحافی کو جواب دیا جس نے کہا کہ خمینی کو فوت ہوئے عرصہ گزر گیا ، میں نے کہا کہ اگر آج بھی ایران پر پابندیاں موجود ہیں تو خمینی زندہ ہے۔ تمام یذید اس کے خلاف ہیں تو خمینی زندہ ہے ۔ ایرانی قوم کو اس قابل امام خمینی نے ہی بنایا کہ وہ دنیا کا مقابلہ کر رہی ہے ، احمدی نژاد جیسے صدر کے لئے ایرانی قوم جیسی قوم چاہئے ۔۔۔۔۔ اتحاد بین المسلمین کی سوچ خمینی نے دی ، آجب بھی بشارالاسد کی صورت میں ، حسن نصراللہ کی صورت میں ، رہبر کی صورت میں ، پاکستان میں آپ علماء کی صورت میں قائم ہے ، لبیک یا رسول اللہ لبیک یا حُسین کے فلک شگاف نعرے ، کل کوئٹہ میں خواتین کو شہید کیا گیا ، سلام ہے ان ماؤں پر جنہوں نے کہا کہ پاکستان پر اپنی بچیاں قربان کر دی ، اب حکمرانوں کا کام ہے کہ ہمیں بتائیں کہ انہوں نے کیا کیا؟؟ فرقہ واریت کا بانی امریکہ ہے ، جو اتحاد کا دشمن ہے ، یہ تکفیری اس کے ایجنٹ ہیں ، امریکہ نے شام میں باغیوں کی امداد کا اعلان کیا ، مصر نے مدد کا اعلان کیا باغیوں کی ، لعنت ہو ان ملعونوں پر اصل میں یہ گریٹر اسرائیل کی سازش ہے ، مسلمان کو مسلمان سے لڑایا جا رہا ہے ،یہ اسلام کی برھتی ہوئی تبلیغ سے پریشان ہیں ، ان کی سازش ہے کہ مزارات کی توہین کرو، ان کے راستے بند کرو ، تاکہ اسلام کی تبلیغ محدود ہو جائے

Rafsanjani's last-minute entry transforms Iranian race

Khamenei adviser enters Iran's presidential contest Source: Reuters - Fri, 10 May 2013 09:10 AM Author: Reuters DUBAI, May 10 (Reuters) - An adviser to Iran's Supreme Leader Ayatollah Ali Khamenei joined the presidential race on Friday, with authorities keen to make the June vote a peaceful contrast to the upheaval that followed the disputed 2009 poll. Reformist groups have been suppressed or sidelined since then and the next president is likely to be picked from among a handful of politicians known for fealty to Khamenei, minimising the chances of political rifts leading to post-election chaos. Lawmaker and former parliament speaker Gholam-Ali Haddad-Adel registered to run, state news agency IRNA reported, becoming the first of a trio of Khamenei loyalists to do so. Khamenei, who in theory stands above the political fray, is thought to want a reliable follower in the presidency after Mahmoud Ahmadinejad's two turbulent terms - and to thwart any attempt by the outgoing president to promote his own successor. Allied with Haddad-Adel are former Foreign Minister Ali Akbar Velayati and Tehran mayor Mohammad Baqer Qalibaf - Iranian media say two of them will step aside later in favour of whoever appears to have the best chance of winning the election. "Our final choice will be announced after the Guardian Council's decision," the semi-official Fars news agency quoted Haddad-Adel as saying after registering, referring to a body which vets applicants before they are allowed to run. The conservative council, made up of six clerics and six jurists, will publish the final candidate list later this month. The June 14 vote is a test for Iran after Ahmadinejad's re-election in 2009 ignited the worst street protests in the Islamic Republic's history, badly denting the legitimacy of its entrenched leaders and its hybrid clerical-electoral system. Khamenei, who has the final say in all major state affairs, endorsed Ahmadinejad's victory, rejecting opposition charges of election fraud. But the president later alienated the supreme leader by pursuing his own policies in often provocative ways. Among other candidates who registered on Friday was reformist Mohammad Reza Aref, who served as vice-president under former moderate President Mohammad Khatami. Khatami, who was elected in landslide victories in 1997 and 2001, has not made clear whether he will run this time. Candidate registration started on Tuesday and ends on Saturday. (Reporting by Zahra Hosseinian; Editing by Alistair Lyon) Sat, May 11 13:02 PM EDT By Yeganeh Torbati and Marcus George DUBAI (Reuters) - Former president Akbar Hashemi Rafsanjani threw himself into Iran's election race on Saturday as a flurry of heavyweight candidates rushed to beat the registration deadline in the most unpredictable contest for decades. Iranian media reported that Rafsanjani - a relative moderate - had registered for the June 14 presidential election with just minutes to spare. His candidacy radically alters what was previously seen as a contest between rival conservative groups. The former president could scupper the hopes of 'Principlists', loyal to Supreme Leader Ayatollah Ali Khamenei, who are aiming to secure a quick and painless transition and paper over the deep fissures between the opposing camps. Rafsanjani, 78, who was president from 1989 to 1997, is expected to draw some support from reformists because he backed the opposition movement whose protests were crushed after the last, disputed election in 2009. The election comes at a critical moment, as Iran reels from international sanctions over its disputed atomic program and faces the threat of attack by Israel if it crosses what the Jewish state calls a 'red line' towards acquiring a nuclear weapon. Tehran strenuously denies it wants an atomic bomb. A vast field of more than 400 candidates have thrown their names into the ring as potential successors to outgoing president Mahmoud Ahmadinejad, who has long been at odds with the supreme leader. NUCLEAR NEGOTIATOR Shortly before Rafsanjani's announcement, Saeed Jalili, a hardline conservative who is seen as close to Khamenei and has led rounds of so far unsuccessful nuclear talks with world powers, entered his name as a candidate. Soon afterwards Esfandiar Rahim Mashaie, an aide to Ahmadinejad and a man viewed with intense distrust by conservatives, registered for the race, gripping Ahmadinejad's hand as the two flashed peace signs for photographers. Khamenei's camp sees Mashaie as leading a "deviant current" that seeks to set aside clerical influence in favor of a more nationalistic doctrine. The presidential vote is the first since Ahmadinejad's disputed re-election four years ago, when mass "Green movement" protests erupted after the defeat of reformist candidates Mirhossein Mousavi and Mehdi Karoubi. Dozens were killed in the worst unrest since the 1979 revolution. The outcome of next month's contest will signal the extent of Khamenei's control at the summit of power in the Islamic Republic. It will also show whether he feels the need to reach out to opposition groups and whether the reformists are capable of making a comeback. Proponents of greater social and political freedoms have been suppressed or sidelined: Mousavi, his wife and Karoubi have been under house arrest for over two years. "SO MANY WILD CARDS" After a day of intense speculation about his intentions, the last-minute entry by Rafsanjani was a moment of political drama. Iranian television showed him smiling and waving as he sat in the crowded office where he registered his candidacy. "He knows if he runs he can have both the reformists' vote, and have some of the principlists. Rafsanjani is not the type to put aside power," said Mohammad Hossein Ziya, who campaigned for reformist Karoubi in 2009 and now edits Karoubi's website from the United States. Another reformist ex-president, Mohammad Khatami, endorsed Rafsanjani on Friday. "Rafsanjani is a pillar of the Islamic Revolution, whereas Khatami is a standard bearer of the reform movement," said Yasmin Alem, a U.S.-based expert on Iran's electoral system. "In the 2005 presidential poll, their constituencies competed against each other. But, since then, both have been marginalized and are now playing on the same side. "With so many wild cards now in the game, the fate of the election is now concealed in a smoke screen." The candidacy of Jalili promised to move the nuclear dispute to the forefront of the election campaign, and may also affect the tortuous negotiations between Iran and a six-power group consisting of the United States, Russia, China, Britain, France and Germany. "In any scenario, Jalili's candidacy is likely to put nuclear diplomacy on hold for a while," said Ali Vaez, Iran analyst at the International Crisis Group "He can't pursue the nuclear talks and his electoral campaign simultaneously. And if he is elected president, there will be a learning curve for his successor." Jalili is one of a host of Khamenei loyalists to put themselves forward, including charismatic Tehran Mayor Mohammad Baqer Qalibaf, former foreign minister Ali Akbar Velayati, and Mohsen Rezaie, who headed the Revolutionary Guards and lost to Ahmadinejad in 2009. Ahmadinejad's vice-president Mohammad Reza Rahimi also registered on Saturday. All candidates must be vetted by a conservative body of clerics and jurists known as the Guardian Council, which can disqualify any candidate without offering a justification. It typically narrows the field to just a handful of men. But there appears to be little of the popular enthusiasm that marked the run-up to the 2009 election, when many sensed a possibility of real change. In comments gathered before Saturday's rush of developments, ordinary Iranians said they were more preoccupied with the economy than with political infighting. "I only want to be able to feed and provide for my family. Anyone who can bring down inflation, create more jobs and lower rents will have my vote," said Majid, who works in a publishing company. Clothing designer Sotoudeh, 32, said: "I won't vote at all, no matter who comes. They stole our vote four years ago and I see no point in voting now." (Additional reporting by Zahra Hosseinian, Editing by Mark Trevelyan) ======================================================================== News Iran electoral watchdog hints at Rafsanjani rejection Mon, May 20 08:13 AM EDT By Yeganeh Torbati DUBAI (Reuters) - Iran's electoral watchdog said on Monday it would bar physically feeble candidates from running for president, in an apparent hint that it could disqualify 78-year-old former President Akbar Hashemi Rafsanjani from the race. Rafsanjani, if he is allowed to run, would be a significant challenge to conservative hardliners who are ultra-loyal to Supreme Leader Ayatollah Ali Khamenei and who otherwise dominate the field for the June 14 presidential election. The wily, pragmatic cleric, who has often been close to the heart of power since Iran's 1979 Islamic Revolution, shook up the election contest earlier this month when he joined the race. But the Guardian Council, a conservative body of clerics and jurists that vets all candidates, may disqualify him, along with Esfandiar Rahim Mashaie, a close ally of President Mahmoud Ahmadinejad, who also registered to run at the last moment.

"If an individual who wants to take up a high post can only perform a few hours of work each day, naturally that person cannot be confirmed," Guardian Council spokesman Abbas Ali Kadkhodai said on Monday, according to the ISNA news agency.

Kadkhodai did not name Rafsanjani. The council is due to present a final list of approved candidates on Tuesday to the Interior Ministry, which then has two days to announce it. Hardline legislators demanded last week that Rafsanjani and Mashaie be banned from running. Rafsanjani earned hardliners' ire for criticizing the crackdown on opposition protests after Ahmadinejad was re-elected in 2009 in a vote that reformists said was rigged. Conservatives are suspicious of Mashaie, saying he holds an unorthodox view of Islam and seeks to sideline clerical rule. Lawmaker Ali Motahari, who is close to Rafsanjani, told reporters on Monday that a rejection of Rafsanjani's candidacy would put the very principles of the state under question, "because Hashemi (Rafsanjani) had the biggest role in the Islamic revolution", according to the ILNA news agency. He derided the idea that Rafsanjani was too old, saying: "How do they know whether Hashemi can run the country or not?" Motahari also suggested that Khamenei could step in to push the Guardian Council to approve Rafsanjani's candidacy if it is initially rejected. The body re-qualified two reformist presidential candidates in 2005 after Khamenei intervened. Parliament proposed age restrictions for presidential candidates last year, but dropped the measure after opposition from the Guardian Council. Many Iranians would view Rafsanjani's disqualification on the basis of age as a political pretext - and it might look awkward for Khamenei, who reinstated Rafsanjani as head of the Expediency Council, an advisory body, in 2012. "It is hard to fathom a justification for Rafsanjani's disqualification," said Farideh Farhi, an Iran analyst at the University of Hawaii. "His disqualification on the basis of not being sufficiently committed to the Leader will also challenge the Leader's judgment." (Additional reporting by Marcus George; Editing by Alistair Lyon)

Iran will destroy Israeli cities if attacked: Khamenei

Iran will destroy Israeli cities if attacked: Khamenei Thu, Mar 21 10:41 AM EDT By Marcus George DUBAI (Reuters) - Iran's clerical supreme leader said on Thursday the Islamic Republic would destroy the Israeli cities of Tel Aviv and Haifa if it came under attack from the Jewish state. "At times the officials of the Zionist regime (Israel) threaten to launch a military invasion but they themselves know that if they make the slightest mistake the Islamic Republic will raze Tel Aviv and Haifa to the ground," Ayatollah Ali Khamenei said in an address to mark the Iranian new year. Israel has threatened military action against Iran unless it abandons nuclear activities which the West suspects are intended to develop nuclear weapons. Tehran denies this, saying it wants nuclear energy only for civilian purposes. In his televised speech, Khamenei said Iran's struggles over the past year against international sanctions imposed over its disputed nuclear program resembled a battle and that its enemies had confessed to trying to "cripple the Iranian nation". "What happened last year, we need to learn a lesson," he said, alluding to what he described as Iran's significant scientific and military advances. "This vibrant nation will never be brought to its knees." Khamenei also called for Iran's "natural right" to enrich uranium for nuclear energy to be recognized by the world. Western powers have refused, saying Iran has hidden nuclear work from U.N. inspectors and stonewalled their investigations. Talks between Iran and six world powers - the United States, China, Russia, Britain, France and Germany - are to resume early next month in a further attempt to strike a deal on Iranian nuclear aspirations. But Khamenei was cool to a U.S. suggestion of direct talks between the two countries, which severed diplomatic relations after Iran's 1979 Islamic Revolution. "I am not optimistic about these talks. Why? Because our past experiences show that talks for the American officials do not mean for us to sit down and reach a logical solution ... What they mean by talks is that we sit down and talk until Iran accepts their viewpoint," he said. "Iran only wants its enrichment right, which is its natural right, to be recognized by the world." (Reporting By Zahra Hosseinian and Marcus George; Editing by Mark Heinrich)

Noam Chomsky: The Gravest Threat to World Peace,

India approves plan to develop Iran's Chabahar port By AFP Published 3 days ago The port in southeast Iran is central to India's efforts to circumvent Pakistan and open up a route to landlocked Afghanistan. – File Photo/AFP The port in southeast Iran is central to India's efforts to circumvent Pakistan and open up a route to landlocked Afghanistan. – File Photo/AFP NEW DELHI: India will float a company to develop Iran's Chabahar Port, a government statement said on Saturday, as New Delhi aims to take advantage of a thaw in Tehran's relations with world powers. The port of Chabahar in southeast Iran is central to India's efforts to circumvent Pakistan and open up a route to landlocked Afghanistan where it has developed close security ties and economic interests. Iran and six world powers are engaged in talks to agree on a deal easing sanctions against Tehran before a late-November deadline. The powers want Iran to scale back its uranium enrichment programme to ensure it cannot produce nuclear bombs. Iran says the programme is for peaceful purposes. India plans to sign an agreement with Iran for the development of the port and New Delhi intends to lease two berths at Chabahar for 10 years, the statement said. The planned Indian company will invest $85.21 million in one year to convert the berths into a container terminal and a multi-purpose cargo terminal, the statement said, adding India would consider the participation of Iranian firms if needed. ============= Noam Chomsky: The Gravest Threat to World Peace Americans are kept in the dark about consequences of a possible nuclear-armed Mideast, and the US's potential role. January 4, 2013 | Reporting on the final U.S. presidential campaign debate, on foreign policy, The Wall Street Journal observed that "the only country mentioned more (than Israel) was Iran, which is seen by most nations in the Middle East as the gravest security threat to the region." The two candidates agreed that a nuclear Iran is the gravest threat to the region, if not the world, as Romney explicitly maintained, reiterating a conventional view. On Israel, the candidates vied in declaring their devotion to it, but Israeli officials were nevertheless unsatisfied. They had "hoped for more 'aggressive' language from Mr. Romney," according to the reporters. It was not enough that Romney demanded that Iran not be permitted to "reach a point of nuclear capability." Arabs were dissatisfied too, because Arab fears about Iran were "debated through the lens of Israeli security instead of the region's," while Arab concerns were largely ignored – again the conventional treatment. The Journal article, like countless others on Iran, leaves critical questions unanswered, among them: Who exactly sees Iran as the gravest security threat? And what do Arabs (and most of the world) think can be done about the threat, whatever they take it to be? The first question is easily answered. The "Iranian threat" is overwhelmingly a Western obsession, shared by Arab dictators, though not Arab populations. As numerous polls have shown, although citizens of Arab countries generally dislike Iran, they do not regard it as a very serious threat. Rather, they perceive the threat to be Israel and the United States; and many, sometimes considerable majorities, regard Iranian nuclear weapons as a counter to these threats. In high places in the U.S., some concur with the Arab populations' perception, among them Gen. Lee Butler, former head of the Strategic Command. In 1998 he said, "It is dangerous in the extreme that in the cauldron of animosities that we call the Middle East," one nation, Israel, should have a powerful nuclear weapons arsenal, which "inspires other nations to do so." Still more dangerous is the nuclear-deterrent strategy of which Butler was a leading designer for many years. Such a strategy, he wrote in 2002, is "a formula for unmitigated catastrophe," and he called on the United States and other nuclear powers to accept their commitment under the Nuclear Non-Proliferation Treaty (NPT) to make "good faith" efforts to eliminate the plague of nuclear weapons. Nations have a legal obligation to pursue such efforts seriously, the World Court ruled in 1996: "There exists an obligation to pursue in good faith and bring to a conclusion negotiations leading to nuclear disarmament in all its aspects under strict and effective international control." In 2002, George W. Bush's administration declared that the United States is not bound by the obligation. A large majority of the world appears to share Arab views on the Iranian threat. The Non-Aligned Movement (NAM) has vigorously supported Iran's right to enrich uranium, most recently at its summit meeting in Tehran last August. India, the most populous member of the NAM, has found ways to evade the onerous U.S. financial sanctions on Iran. Plans are proceeding to link Iran's Chabahar port, refurbished with Indian assistance, to Central Asia through Afghanistan. Trade relations are also reported to be increasing. Were it not for strong U.S. pressures, these natural relations would probably improve substantially. China, which has observer status at the NAM, is doing much the same. China is expanding development projects westward, including initiatives to reconstitute the old Silk Road from China to Europe. A high-speed rail line connects China to Kazakhstan and beyond. The line will presumably reach Turkmenistan, with its rich energy resources, and will probably link with Iran and extend to Turkey and Europe. China has also taken over the major Gwadar port in Pakistan, enabling it to obtain oil from the Middle East while avoiding the Hormuz and Malacca straits, which are clogged with traffic and U.S.-controlled. The Pakistani press reports that "Crude oil imports from Iran, the Arab Gulf states and Africa could be transported overland to northwest China through the port." At its Tehran summit in August, the NAM reiterated the long-standing proposal to mitigate or end the threat of nuclear weapons in the Middle East by establishing a zone free of weapons of mass destruction. Moves in that direction are clearly the most straightforward and least onerous way to overcome the threats. They are supported by almost the entire world. A fine opportunity to carry such measures forward arose last month, when an international conference was planned on the matter in Helsinki. A conference did take place, but not the one that was planned. Only nongovernmental organizations participated in the alternate conference, hosted by the Peace Union of Finland. The planned international conference was canceled by Washington in November, shortly after Iran agreed to attend. The Obama administration's official reason was "political turmoil in the region and Iran's defiant stance on nonproliferation," the Associated Press reported, along with lack of consensus "on how to approach the conference." That reason is the approved reference to the fact that the region's only nuclear power, Israel, refused to attend, calling the request to do so "coercion." Apparently, the Obama administration is keeping to its earlier position that "conditions are not right unless all members of the region participate." The United States will not allow measures to place Israel's nuclear facilities under international inspection. Nor will the U.S. release information on "the nature and scope of Israeli nuclear facilities and activities." The Kuwait news agency immediately reported that "the Arab group of states and the Non-Aligned Movement (NAM) member states agreed to continue lobbying for a conference on establishing a Middle East zone free of nuclear weapons and all other weapons of mass destruction." Last month, the U.N. General Assembly passed a resolution calling on Israel to join the NPT, 174-6. Voting no was the usual contingent: Israel, the United States, Canada, Marshall Islands, Micronesia and Palau. A few days later, the United States carried out a nuclear weapons test, again banning international inspectors from the test site in Nevada. Iran protested, as did the mayor of Hiroshima and some Japanese peace groups. Establishment of a nuclear weapons-free zone of course requires the cooperation of the nuclear powers: In the Middle East, that would include the United States and Israel, which refuse. The same is true elsewhere. Such zones in Africa and the Pacific await implementation because the U.S. insists on maintaining and upgrading nuclear weapons bases on islands it controls. As the NGO meeting convened in Helsinki, a dinner took place in New York under the auspices of the Washington Institute for Near East Policy, an offshoot of the Israeli lobby. According to an enthusiastic report on the "gala" in the Israeli press, Dennis Ross, Elliott Abrams and other "former top advisers to Obama and Bush" assured the audience that "the president will strike (Iran) next year if diplomacy doesn't succeed" – a most attractive holiday gift. Americans can hardly be aware of how diplomacy has once again failed, for a simple reason: Virtually nothing is reported in the United States about the fate of the most obvious way to address "the gravest threat" – Establish a nuclear-weapon-free zone in the Middle East. © 2012 Noam Chomsky -- Distributed by The New York Times Syndicate ========================== Published on Jan 5, 2013 The United States has imposed fresh sanctions on Iranian media despite Washington's claims of respecting free speech. Sanctions have all been applied under the umbrella of concern for Iran's nuclear program becoming militarized. The CIA and IAEA have constantly reported that Iran is not developing nuclear weapons while mainstream American media have promoted that Iran has or is producing a nuclear bomb. Many observers though contend that the many sanctions on Iran are an act of war as part of Western colonialism and imperialism that also serves the Zionists of Israel. To further discuss the issue, Press TV's News Analysis has conducted an interview with Joe Iosbaker, Stop FBI Repression, from Chicago, Kevin Barrett, a founding member of the Muslim-Jewish-Christian Alliance, from Wisconsin, and Daniel Pipes, founder and director of the Middle East Forum, from Philadelphia. Follow our Facebook on: https://www.facebook.com/presstvchannel Follow our Twitter on: http://twitter.com/presstv Follow our Tumblr on: http://presstvchannel.tumblr.com

Iraq, Saudi on OPEC collision course over next oil curb

Iraq, Saudi on OPEC collision course over next oil curb

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Related NewsUPDATE 10-Oil up on more Fed stimulus, OPEC holds output target 4:08pm EST U.N. nuclear agency ready to go to Iran's Parchin site 1:33pm EST CORRECTED-UPDATE 2-IEA sees sluggish oil demand in 2013, good supply 9:47am EST UPDATE 9-Oil up on OPEC output decline, ahead of group's meeting Tue, Dec 11 2012 UPDATE 3-OPEC set for easy oil deal, secretary-general dispute Tue, Dec 11 2012Analysis & OpinionA local obstruction in the fracking pipeline Obama faces only hard choices in Mideast By Amena Bakr and Peg Mackey VIENNA | Wed Dec 12, 2012 5:52pm EST VIENNA (Reuters) - A new rivalry at the top of OPEC has emerged, pitting up-and-coming Iraq against undisputed oil cartel heavyweight Saudi Arabia. Having overtaken Iran as OPEC's second biggest producer, a rejuvenated Iraq is beginning to worry Riyadh. At Wednesday's meeting of the Organization of the Petroleum Exporting Countries the opening salvos were fired in the struggle over who takes responsibility for cutting output if oil prices, comfortable for now at $109 a barrel, start falling. OPEC agreed to retain its 30-million barrel-a-day output target and meet next on May 31, but many market observers think supply restrictions will be needed sooner rather than later if producers want to prevent slow global growth and fast-growing inventories sending prices tumbling. After 20 years of war, sanctions and civil strife that left its oil industry in disarray, Iraq is no mood to consider curtailing output just as it starts to take off. "Iraq will never cut production," said Iraq's OPEC Governor Falah Alamri. "Some countries that have increased their production in the last two years - they should do so. This is a sovereign issue, not an OPEC issue." That was a clear reference to Saudi Arabia, which this summer lifted output to a 30-year high above 10 million barrels a day to prevent oil prices ballooning after Western sanctions on Iran halved its production. The view from Riyadh, said delegates at the meeting, is that Iraq should contribute to the next round of OPEC supply curbs. A senior Iraqi official warned that if Saudi pushed that line there would be "dark days ahead" for OPEC, saying Baghdad would not even consider output restraints until 2014. "Every additional barrel that Iraq produces reinforces its confidence and its expectations that higher production is achievable - and it will negotiate on that basis," said Iraqi expert Raad Alkadiri of Washington consultancy PFC Energy. "Now OPEC is dealing with a much more confident Iraq and Baghdad is looking at regional politics and is less willing to compromise." "Iraq is impervious to arguments. It says that it was subject to sanctions for so long that it has a free pass to rebuild its economy," said Neil Atkinson, director of energy research at Datamonitor. Output from OPEC is already down sharply from the highs of the summer when the Saudi surge took the 12-member group to nearly 32 million bpd. Production in November was down to 30.8 million with Saudi easing to 9.5 million. But OPEC may need to ease further to balance the market in the first half of next year when, demand depressed by a stagnant economy, its own forecasts indicate the requirement for OPEC crude will come in at only 29.25 million bpd. "We're concerned by the drop in demand and the high level of stocks," said Algerian Energy Minister Youcef Yousfi. "There is rising oil from places like the United States and Iraqi output is rising quite sharply. There's a risk that we see a sharp drop in price next year," said Atkinson. IRAQ RISES The world's fastest growing crude exporter, Iraq expects more gains next year as foreign companies push production towards the highest level ever, Iraqi Oil Minister Abdul-Kareem Luaibi told reporters on Sunday ahead of the Vienna meeting. Output began to rise in earnest in 2010 after Baghdad secured service contracts with companies such as BP (BP.L), Eni (ENI.MI), Exxon Mobil (XOM.N) and Royal Dutch Shell RDSa.L. Flows have now reached 3.4 million bpd - up nearly a million bpd from when companies got down to work three years ago. Luaibi said output in 2013 is expected to average 3.7 million bpd - just shy of an all-time high of 3.8 million, hit in 1979 with exports running at 2.9 million bpd, including 250,000 bpd contributed by the semi-autonomous northern Kurdistan Regional Government (KRG). While that may be ambitious, 3.5-3.6 million appears possible. The changing shape of Middle East politics after the U.S.-led overthrow of Saddam Hussein in 2003 and the 2011 Arab Spring plays into OPEC dynamics. "Political issues sit behind this rivalry," said PFC's Alkadiri. "Regional alliances are pitting Saudi Arabia, Iraq and Iran against each other." That was illustrated at Wednesday's meeting by a quarrel over the appointment of OPEC's next secretary-general, the group's public face and head of its Vienna headquarters. Iran dropped its nomination to back Iraq's candidate against Saudi Arabia but neither Riyadh or Baghdad would give way and Libya's Abdullah al-Badri was reappointed for another year. "It is clear that both sides view the issue in the context of growing sectarian and regional tension in the Middle East, making the issue even more difficult to resolve than usual," said PFC Energy. FRACKING HEAT ON OPEC Adding to the heat on OPEC is the dramatic rise in oil output from the United States, spurred by hydraulic fracturing, or fracking, of shale reserves. The U.S. Energy Information Administration said on Tuesday that U.S. output will increase 760,000 bpd in 2012, the fastest pace since commercial oil production began in 1859. "It is obviously something we are looking at very carefully because it is increasing and we expect it will have a major impact on OPEC producing countries," said Nigerian Oil Minister Diezani Alison-Madueke. After years outside OPEC's quota system because of low output, Iraq was brought into the fold a year ago when OPEC set its 30 million bpd target for all 12 producers. But unlike previous OPEC deals no individual quotas were assigned. That suited Saudi Arabia, leaving it free this year to balance the markets by using its spare capacity as it saw fit. But in the event of a build in inventories that hits prices, OPEC may need to restore quotas if it is to enforce a credible production cut. That is likely to prove very difficult, not just because of Iraq but because Iran is very unlikely to accept a quota anywhere near its sanctions-constrained production. Venezuela too could resist a lower quota after disputing independent estimates of its output for years. "Quotas would become a big issue if we see a price drop and then everyone would have to come to the table," said Datamonitor's Atkinson. "That would cause enormous problems for Iran and Venezuela." OPEC can only hope that a difficult decision is postponed by a continued stand-off between Western powers and Iran over Iran's nuclear program, and the threat of Israeli military action, keeping oil prices high. That could mean a repeat of 2012, with oil prices supported in 2013 for fear of an attack on Iran, even if demand is poor and market fundamentals weaken. "Lady luck has been a huge help for OPEC because the macro numbers do not add up to 2012 being a successful year," said oil brokers PVM. "She has come in the form of geopolitical tensions and supply uncertainties which have kept speculative interest in oil lively and stimulated stock building." (additional reporting by Alex Lawler, Reem Shamseddine, Emma Farge, editing by Richard Mably, William Hardy) =================== UPDATE 2-BP proposes cuts to Iraq's Rumaila target-sources inShare0Share this Email Print Related NewsUPDATE 5-Iraq, Saudi on OPEC collision course over next oil curb Wed, Dec 12 2012 UPDATE 10-Oil up on more Fed stimulus, OPEC holds output target Wed, Dec 12 2012 UPDATE 9-Oil up on OPEC output decline, ahead of group's meeting Tue, Dec 11 2012 UPDATE 9-Brent oil gains after Chinese oil imports grow Mon, Dec 10 2012 UPDATE 9-Oil falls after US gasoline inventories leap higher Wed, Dec 5 2012Analysis & OpinionBP’s other victims: shareholders shut out by Morrison Related TopicsEnergy » Industrials » Thu Dec 13, 2012 8:42am EST By Aref Mohammed and Ahmed Rasheed BASRA, Iraq Dec 13 (Reuters) - Oil major BP is close to reaching a deal with Iraq to cut the final production target for the supergiant Rumaila oilfield to between 1.8 million and 2.2 million barrels per day (bpd), oil ministry and industry sources said. Officials from BP, Iraq's state-run South Oil Co. (SOC) and its oil ministry have been in talks for the past four months, studying BP proposals to lower the target of 2.85 million bpd, which they agreed to in 2009. The negotiations are the latest sign of trouble in Iraq's southern oilfields, where logistical bottlenecks and weak infrastructure have eroded investor interest at the same time that the autonomous Kurdistan region in the north attracts oil majors. Soon after signing multi-billion service contracts with foreign oil majors, Iraq had said it aimed for an overall production capacity of 12 million bpd, but the OPEC member has reduced that target to 8.5-9 million bpd. "BP has submitted three figures to lower Rumaila production. Iraq has initially accepted to cut output, and a final deal is expected by year-end," a senior SOC official who is involved in the discussions said. "BP's offer included cutting Rumaila production to 1.8 million barrels per day and extending this final plateau until 2029," the official added. The final plateau period is the time during which peak production is sustained after it is first reached in 2017. "We aim to discuss and agree a full field development plan in 2013. Any discussions we have with the government are commercially confidential," a BP spokesman said in response to a request for details. Rumaila, the workhorse of Iraq's oil industry which BP operates with China's CNPC, has estimated reserves of 17 billion barrels and currently produces around 1.35 million bpd - more than a third of Iraq's total output of 3.4 million bpd. But crumbling infrastructure, red tape and a lack of clear oil legislation have stunted investor interest and made it difficult for Iraq to achieve its ambitious production plans. Royal Dutch Shell in March also started talks with Iraq to slash its production target at Majnoon oilfield, the first company to begin negotiations with the government to reduce unrealistic output goals. "We have to re-negotiate the final production target not only with BP or Shell, but with other companies also," an oil ministry official said. "We don't have suitable infrastructure to deal with future mega production." LOWER TARGETS A lower target suits Baghdad, officials say, because the government worries that adhering to existing agreements will result in large volumes of unused capacity and deplete more than half of its proven reserves over the life of the 20-year agreements. Cash is also a concern for the government, which had estimated an investment of some $180 billion would be needed to finance its original countrywide production targets. "Out of BP's three figures, the 1.8 and 2 million barrels per day have found their way onto the discussion table. We are weighing all economic and technical aspects and will decide on a single figure at the end of this month," said another oil official who helped draft the Rumaila service contract. Iraqi officials said the Rumaila oilfield had shown significant signs of fast-track production growth but also of a lack of adequate oil pipelines, storage and crude production facilities and that accepting the BP proposals made a target reduction necessary. Production from Rumaila is expected to hit 1.450 million barrels per day in 2013 from 1.350 mln bpd now. For 2013, a development program has been set to drill new 110 oil wells, including injection wells to help sustain production, an oil industry source close to Rumaila activities said. While negotiating to cut production targets for its southern oilfields, Baghdad has seen majors including Exxon and Chevron sign deals with the Kurdistan Regional Government in the north. Those agreements have increased tensions with the central government over control of Iraq's oil reserves. Exxon has told the Iraqi central government that it wants to pull out of a $50 billion oil project in the south, while it focuses on exploration deals with the Kurdish region. ========================= Iraq launching road show for Iraq-Aqaba oil export pipeline in London Friday. Cos registered to attend +100 including all major banks. Iraq, Jordan to Build Oil Pipeline Posted on 26 September 2012. Tags: Aqaba, Jordan, oil exports, pipelines Iraq and Jordan have agreed to build a pipeline to supply Jordan with crude oil and natural gas, according to Petra, the Jordan News Agency. Iraqi Oil Minister Abdul Karim Luaibi [Elaibi] said that the pipeline would carry crude oil to the Jordanian refinery in Zarqa for use in Jordan, and to the port of Aqaba for export. The agency quotes an Iraqi official as saying that authorities in Baghdad have already signed a contract with an international consultant company to prepare a report on the project, which has a planned capacity of 1 million bpd. Jordan and Iraq also agreed to increase the volumes of crude oil provided to the Kingdom from 10,000 barrels per day to 15,000. The Jordanian Minister of Energy and Mineral Resources, Alaa Batayneh, said that Jordan has only received 25 per cent of the quantities the two countries agreed on due to logistic issues and technical reasons related to standards of oil requested by the refinery. He added that a joint committee, to be chaired by ministers from both countries, will convene every six months, while subcommittees, to be headed by secretaries general, will meet every three months to follow up on implementing the memorandum of understanding. ============== Iraq Boom Hands Naimi 2013 Oil-Supply Challenge By Grant Smith & Mark Shenk - Dec 15, 2012 3:47 AM GMT+1030. . Facebook Share LinkedIn Google +1 1 Comment Print QUEUE Q .. Iraq’s biggest jump in oil production since 1998 is increasing the burden on Saudi Arabia to lower crude exports to prevent price declines next year. The kingdom curbed crude output in November to a 13-month low, according to OPEC. Iraq plans next year to pump as much as it did when Saddam Hussein came to power three decades ago, its oil minister said Dec. 9. Supply will also rise in Libya and Nigeria while the U.S. experiences an oil shale bonanza. Enlarge image Ali al-Naimi, Saudi Arabia's oil minister, needs to keep prices high enough to fund social spending plans without incurring the wrath of consumers for hurting the global economy. Photographer: Vladimir Weiss/Bloomberg Enlarge image Saudi Arabia reduced its output to 9.67 million barrels a day last month. Photographer: Phil Weymouth/Bloomberg . “Saudi Arabia’s dilemma is that while it is the key OPEC player willing to cut back oil production in order to sustain prices at desired levels, it is also accommodating Iraq’s rising output and market share,” said Julius Walker, global energy markets strategist at UBS Securities LLC in New York. “Ultimately, there will need to be an agreement between the two as how to balance these ambitions.” Saudi Arabian Oil Minister Ali Al-Naimi needs to keep prices high enough to fund social spending plans without incurring the wrath of consumers for hurting the global economy. Iraq, now the second-biggest supplier in the Organization of Petroleum Exporting Countries, has a different priority: to rebuild its industry after decades of war and sanctions. Arab states are spending billions of dollars on housing and local projects to allay popular unrest after uprisings toppled leaders in Libya, Egypt and Tunisia and sparked a civil war in Syria. Saudi Arabia has committed more than $600 billion in social and infrastructure projects in coming years. Iraq Surge Iraq’s production surged 650,000 barrels a day this year to 3.35 million, the biggest annual gain in 14 years, according to data compiled by Bloomberg, amid assistance from foreign oil companies that are paid a fixed amount per barrel produced, regardless of international price levels. The Middle Eastern state plans to boost output to an average 3.7 million barrels a day in 2013 and at some point in the year match the 1979 record of 3.8 million, Oil Minister Abdul Kareem Al-Luaibi told reporters in Vienna on Dec. 9. The nation has been free of strict OPEC quotas since 1998 and the resumption of any allocation is a “sovereign issue” rather than a decision to be made by an organization, Falah al- Amri, Iraq’s governor on the OPEC board, said on Dec. 12. Brent crude traded as high as $109.48 a barrel today on the ICE Futures Europe exchange. It may sink to $88 by June if OPEC fails to rein back supply, according to Leo Drollas, chief economist at the London-based Centre for Global Energy Studies, which was founded by former Saudi Oil Minister Sheikh Ahmad Zaki Yamani in 1990. Iran Sanctions Saudi Arabia’s task will become more difficult should Iran resolve its standoff with the international community over nuclear research and resume pumping oil at normal rates. Sanctions against the Islamic republic, once OPEC’s second- biggest producer, have cut its exports by 50 percent, according to the International Energy Agency. While acknowledging its output will exceed customer needs in 2013, OPEC refrained from cutting its group target at a meeting in Vienna two days ago, judging prices were high enough for now. Iraq, Iran and Saudi Arabia also failed to agree on the appointment of a new OPEC secretary-general, opting instead to keep Abdalla El-Badri in the role for a further year. Saudi Arabia reduced its output to 9.67 million barrels a day last month, according to a monthly report from OPEC that cited secondary sources for its data. In its own direct communication to OPEC, the kingdom said November production was even lower, at 9.49 million. Minimum Level The country can tolerate crude oil prices falling no lower than about $90 a barrel, according to Jamie Webster, a Singapore-based consultant at PFC Energy. The CGES estimates that Saudi Arabia’s budget-balancing price is $95 a barrel, more than $10 below current levels. Arab Light, Saudi Arabia’s largest export grade, was at $107.22 today, according to data compiled by Bloomberg. National Commercial Bank, the nation’s largest lender by assets, said in a Nov. 27 report that the kingdom’s budgeted oil price for next year is $65. Demand for OPEC’s crude will shrink to 29.7 million barrels a day in 2013, the organization’s secretariat said in a statement at the end of its meeting in Vienna. That’s 300,000 barrels a day less than its official target and 1.1 million a day below November’s actual output, OPEC data show. Iran Slump Iranian oil production, which slumped to 2.65 million barrels a day in October, the lowest level since February 1990, may climb if a new government can come to an agreement with Western nations, according to JBC Energy GmbH. The country pumped as much as 6 million barrels a day in the 1970s before the Islamic revolution, which was followed by U.S. sanctions and the 1980-1988 Iran-Iraq War. Iran’s insistence on atomic research led to a toughening of sanctions this year, including an embargo by the European Union and reduced insurance cover for supertankers carrying its oil. An Iranian presidential vote is scheduled for June. Libya, rebuilding its oil industry after last year’s uprising against Muammar Qaddafi, plans to raise output to 1.7 million barrels a day next year from about 1.5 million a day this month, Oil Minister Abdulbari Al-Arusi said in Vienna. Nigeria, Africa’s largest producer, expects output to reach normal levels in the first quarter, Oil Minister Diezani Alison- Madueke said after the Vienna meeting. Output was hampered in the past months by floods, theft and pipeline leaks that forced several producers, including Exxon Mobil Corp. (XOM), Royal Dutch Shell Plc (RDSA), Total SA (FP) and Eni SpA (ENI), to halt pumping, curbing national production by as much as 500,000 barrels a day. Outside of OPEC, the U.S. is producing oil at the fastest rate in almost two decades, using horizontal drilling and hydraulic fracturing, known as fracking, to unlock shale resources in North Dakota, Texas and Oklahoma. The nation pumped 6.85 million barrels a day in the week to Dec. 7, the most since January 1994, and met 83 percent of its energy needs in the first eight months of 2012, the Energy Department said. Al-Naimi, Al-Luaibi and other OPEC ministers plan to meet next on May 31, by which time the group will have a better notion of how economic growth and supply are affecting 2013 prices. OPEC has “rolled over the whole discussion you need to have about the Iraqis, on how to bring in production,” PFC’s Webster said in Vienna. “The timing of the discussion is going to be dictated by the market.” To contact the reporters on this story: Grant Smith in Vienna at gsmith52@bloomberg.net Mark Shenk in Vienna at mshenk1@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net ================= The Governor's Solution: How Alaska’s Oil Dividend Could Work in Iraq and Other Oil-Rich Countries Todd Moss, editor 11/05/2012 #Oil2Cash Reliance on natural resource revenues, particularly oil, is often associated with bad governance, corruption, and poverty. Worried about the effect of oil on Alaska, Governor Jay Hammond had a simple yet revolutionary idea: let citizens have a direct stake. The Governor’s Solution features his firsthand account (PDF) that describes, with brutal honesty and piercing humor, the birth of the Alaska Permanent Fund dividend, which has been paid to each resident every year since 1982. Thirty years later, Hammond’s vision is still influencing oil policies throughout the world. This reader, part of the Center for Global Development’s Oil-to-Cash initiative, includes recent scholarly work examining Alaska’s experience and how other oil-rich societies, particularly Iraq, might apply some of the lessons. It is as a powerful reminder that the combination of new ideas and determined individuals can make a tremendous difference—even in issues as seemingly complex and intractable as fighting the oil curse. Contributors: Todd Moss (Center for Global Development), Jay Hammond (governor of Alaska 1974–1982 and creator of the Alaska Permanent Fund Dividend), Scott Goldsmith (University of Alaska-Anchorage), Nancy Birdsall (Center for Global Development), Arvind Subramanian (Peterson Institute for International Economics and Center for Global Development), and Johnny West (journalist and founder of Open Oil). 20% discount code: KCB2 The Governor’s Solution is available for purchase in paperback now. Free chapter: Diapering the Devil: How Alaska Helped Staunch Befouling by Mismanaged Oil Wealth by Governor Jay Hammond For review or exam copies, please send a note to publications@cgdev.org with details about the potential review or the course you are teaching. The Governor’s Solution: How Alaska’s Oil Dividend Could Work in Iraq and Other Oil-Rich Countries is available for purchase through Hopkins Fulfillment Service, P.O. Box 50370, Baltimore MD 21211-4370. Tel: 1-800-537-5487. 6 X 9, 135 pp. paper, 978-1-933286-70-9, $17.95 ======================= Reuters: Iraq ups its selling game on path to oil's top tier http://uk.reuters.com/article/2012/12/21/iraq-oil-idUKL5E8NKD2B20121221 Fri Dec 21, 2012 11:46am GMT * Total, BP renew Basra Light crude volumes for 2013 * Not all sold yet; buyers wary on price, quality-sources * China to increase 2013 Iraqi purchases LONDON, Dec 21 (Reuters) - Iraq is sharpening a push to sell its swelling crude output and sit at oil's top table with Saudi Arabia, sweetening terms for contract buyers next year, its customers say. Iraqi Oil Minister Abdul-Kareem Luaibi held court to oil executives in Vienna's Hotel Imperial last week on the sidelines of an OPEC meeting. Some buyers have said they were concerned by higher prices and variable quality. "The Iraqis have become more active and serious in their marketing effort," said a Western oil executive from a firm that buys from Baghdad. "They're willing to be very competitive on pricing and want to solve existing problems." The world's fastest growing oil exporter is working to expand market share and is emerging as a rival to Saudi Arabia in the Organization of the Petroleum Exporting Countries, as Iran's output is reduced by Western sanctions. Baghdad is targeting crude exports of 2.9 million barrels per day (bpd) next year, up from 2.62 million bpd in November, as investment by foreign oil companies pushes production towards its highest level ever. Some clients have complained of high official selling prices (OSPs) and variable quality of the Basra Light and Kirkuk grades, raising the prospect Baghdad could struggle to shift all the crude in 2013 term contracts. Initially, BP and Total wanted to reduce their 2013 volumes of Basra. However, both are expected to take similar volumes to 2012, about 135,000 bpd each, trade sources said. BP will also receive unspecified volumes as repayment for its investment in Iraq's upstream industry. "The Iraqis say they will stabilise the quality of Basra and understand they will need to be competitive on price," a second Western executive said. "They have to somehow place their additional production." The quality of Iraq's Basra and Kirkuk crudes has been variable due to the erratic flow of Kurdistan oil into the Kirkuk stream and the start-up of new fields in the south. These concerns persist, deterring some buyers. "I don't think Iraq has termed up all," a third executive said. "They know the prices are out of line mostly because the quality has been too variable for both Kirkuk and Basra. Until they resolve it, I don't think many will up their volume." Some companies have trimmed Kirkuk volumes for 2013. ENI and Total each plan to take 10,000 bpd less of Kirkuk in 2013, industry sources said. Less Basra will be heading to the United States, where Chevron has cut its volumes, a source added. "The issue is simply price. The OSP is too high, made worse by the variations in quality and unreliability in Basra deliveries," said a fourth executive. "Given there is some slack in the market, no one will pay over the odds." An Iraqi oil official declined to comment for this story, and BP, Total, Eni and Chevron declined to comment on their plans to buy Iraq oil. MORE TO CHINA Just two years into the oil expansion drive, which had been held back by decades of wars and sanctions, Iraq has vaulted past Iran to become OPEC's second-largest producer behind Saudi Arabia. That growth has not been lost on Riyadh, and a reinvigorated Iraq has led to a new rivalry at the top of OPEC, according to officials at last week's meeting of the producer group. "This was bound to happen. Iraq has to sell more crude and get a bigger market share," a Western oil company source said. "And they want to understand how to do it in a practical way." Opportunities for Iraq and Saudi Arabia to sell more into Asia - particularly China - were created after Iran's exports plunged by more than 50 percent, or over 1 million bpd, due to international sanctions aimed at halting its nuclear programme. Chinese state refiner Sinopec will nearly double the amount of term crude it buys from Iraq next year to 270,000 bpd as it looks to replace oil from Iran, trade sources said. But cuts by other refiners mean China's total volume under one-year contracts with Iraq will rise by just 8.2 percent to 568,000 bpd next year. That still leaves Iraq some distance behind Saudi Arabia in terms of market share. There are signs Baghdad may become more aggressive on pricing to the Far East - perhaps a concrete step it is delivering on officials' pledges over pricing. Despite an increasing supply, Basra Light has been more expensive for Asian buyers than a rival crude from Saudi Arabia, Arab Medium, prompting buyers to grumble. For January 2013, however, Iraq chose to leave its Basra Light price to Asia unchanged, while Saudi Arabia increased the prices of its Arab Light, Medium and Heavy crude to customers in the East. Concern about pricing is likely to linger nevertheless. "It's one thing to get the top people to say they want to fix it, but quite another to get the people who actually set the OSPs to fix it," an industry source said. "It looks like it won't happen overnight." (Additional reporting by Muriel Boselli and Giancarlo Navach; Editing by Jane Baird and William Hardy) ======

Any attack on Iran may lead to withdrawal from NPT: envoy

Any attack on Iran may lead to withdrawal from NPT: envoy Fri, Nov 30 06:48 AM EST VIENNA (Reuters) - Any military attack on Iran's nuclear facilities may lead to the country withdrawing from the Non-Proliferation Treaty (NPT), a pact designed to prevent the spread of nuclear arms, a senior Iranian official said on Friday. In case of an attack, "there is a possibility that the (Iranian) parliament forces the government to stop the (U.N. nuclear) agency inspections or even in the worse scenario withdraw from the NPT," nuclear envoy Ali Asghar Soltanieh said in a statement in English to the U.N. agency's 35-nation board. There has been persistent speculation that Israel might attack Iran, which it accuses of seeking a nuclear weapons capability. Iran denies the charge and says Israel's assumed nuclear arsenal is a threat to regional security. (Reporting by Fredrik Dahl; editing by Andrew Roche)

Merchants bring down shutters in Tehran bazaar after clashes

Iran blames economic "conspiracy" as price rises loom Fri, Oct 05 10:38 AM EDT By Marcus George DUBAI (Reuters) - Iran will defeat a "conspiracy" against its foreign currency and gold markets, an adviser to supreme leader Ayatollah Ali Khamenei said on Friday, as pressure mounts on authorities to deal with the rapid collapse of the rial. Riot police fought demonstrators and arrested money changers in and around the Tehran bazaar on Wednesday during protests triggered by the fall of the Iranian currency, which has lost a third of its value against the dollar over the last ten days. Protesters called President Mahmoud Ahmadinejad a traitor because of what many say is his serious mismanagement of the economy, which has also been badly hit by U.S.-led Western sanctions imposed over Iran's nuclear program. But there has so far been no public criticism of Khamenei, the Islamic Republic's most powerful authority. "Iran is overcoming the psychological war and conspiracy that the enemy has brought to the currency and gold market and this war is constantly fluctuating," Gholam Ali Haddad Adel, a close ally of Khamenei, Fars news agency reported him as saying. "The arrogant powers, in their crude way, think that the nation of Iran is ready to let go of the Islamic revolution through economic pressure but we are establishing Iran's economic strength," he said. The fall in the rial over the past year has been caused by economic mismanagement and sanctions, a U.S. official said. Iran could relieve the pressure if it resolves concerns about its nuclear work, David Cohen, undersecretary for terrorism and financial intelligence at the U.S. Treasury, said in London. "The Iranian leadership has within its capacity the ability to relieve the pressure its people are feeling," he said. Ayatollah Ahmad Khatami, a hardline cleric, called on the various branches of government to work together to solve the country's economic problems. "It is expected that the authorities solve the problems with empathy. Treating the pain will solve the problem, not apportioning blame," he said in a sermon at Friday prayers. Most of the bazaar was shut on Thursday, but business associations said it would reopen on Saturday under the supervision of the security forces. It is traditionally closed on Fridays. Analysts say any further discontent could spread quickly if it is allowed to gain a foothold. The bazaar, whose merchants were influential in bringing an end to Iran's monarchy in 1979, wields significant influence and this week's unrest is a clear signal that the economic hardship is having a profound effect on businessmen and residents alike. "EVERYTHING SO EXPENSIVE" "I have a good salary and I can still afford the shopping and expenses for my family," Ali, 42-year-old Iranian engineer, told Reuters by telephone. He earns $1,000 a month. "But everything has become so expensive and so difficult for people. I'm just glad I have a job." This week's plunge in the rial has had a small but noticeable impact on groceries and Ali fears more price rises are imminent. "Eggs, milk, cheese, infant formula, cooking oil, rice and beans have all increased over the last six days," Kia, a Tehran-based blogger, wrote in an email. "I've seen people buying lots of food and some of them are stockpiling," said Kia, alluding to further rises on the way. The cost of food and fuel has shot up in the last year as rampant inflation has taken hold. Iranians now pay nearly three times more for chicken and red meat than a year ago. Farmers say they are forced to pass on the increased costs of animal feed and vaccines, which are often imported and directly affected by the fluctuations in the exchange rate. The rial's losses have accelerated despite the government's attempts to stem the slide by setting up an "exchange center" designed to supply dollars to importers of some basic goods at a special rate, slightly cheaper than the market rate. Instead of allaying fears about the availability of dollars, the center seems to have intensified the race for hard currency. "This is a very serious situation. There is a lot of pressure on Khamenei to remove Ahmadinejad but they will need to find a way to do it without losing face," said Iranian-born Mehrdad Emami, an economics adviser to the European Union. "Ahmadinejad is pushing ahead and that could create continuing unrest which will need a lot of security on the streets," he added. Iran's leaders could stabilise the currency if they take the right decisions, say analysts. Foreign currency reserves, though depleted, are still enough to prop up the rial. (Additional reporting by William Maclean; Editing by Giles Elgood) =========== Top News Merchants bring down shutters in Tehran bazaar after clashes Thu, Oct 04 09:26 AM EDT By Marcus George and Yeganeh Torbati DUBAI (Reuters) - Shops in Tehran's Grand Bazaar stayed shut and police patrolled the area on Thursday as authorities struggled to restore normalcy a day after security forces clashed with anti-government protesters angered by the collapse of the currency. Traders from the bazaar, whose merchants supported Iran's 1979 Islamic revolution, told Reuters by telephone that most stores were closed because their owners had stayed away for safety reasons. On Wednesday, riot police scuffled with demonstrators and arrested money changers in the area during protests triggered by the plunge of the Iranian rial, which has lost about a third of its value against the dollar over the past 10 days. Pressure on President Mahmoud Ahmadinejad mounted as business associations blamed him for much of the country's economic crisis, which has been fuelled by Western sanctions imposed over Iran's disputed nuclear program. Associations representing production, distribution and service sectors said Ahmadinejad's administration had devastated the economy with mistaken policy decisions, the semi-official Mehr news agency reported on Thursday. But in a sign that the protests still do not threaten Iran's Islamic system of government or Supreme Leader Ayatollah Ali Khamenei, a statement by the associations stressed that "they continue to adhere to the system and the revolution", Mehr said. The associations agreed that the Grand Bazaar, one of the capital's main shopping areas, would reopen on Saturday in the presence of security forces, Mehr reported. Ahmadinejad also came under fire from enemies in parliament. The head of parliament's committee for social affairs, Abdulreza Azizi, criticized him for insisting that currency speculators, not his own government's policies, had caused the rial's tumble. EXPORTS SLASHED The rial has lost about two-thirds of its value against the dollar since June last year as the sanctions have slashed Iran's earnings from oil exports. The currency's losses have accelerated in the past 10 days after a failed government attempt to stabilize it with a new foreign exchange centre. The slide has cut living standards, forced Iran to reduce its imports and fuelled job losses in the industrial sector. It has also boosted inflation, which Steve Hanke, an economics professor at Johns Hopkins University in the United States, said had now become hyperinflation. The government officially puts the annual inflation rate at around 25 percent but Hanke estimated that in the past 10 days, prices in Iran had started rising at a rate which would mean 50-60 percent inflation in a single month. This is "throwing a monkey-wrench into the stability of the economy. Iran is really getting buffeted around," he said. One single parent contacted by Reuters in Tehran said she had been unable to buy meat for her two small children for the past two months because of soaring prices. An elderly resident said pharmacies in the city had stopped stocking his German medicine for Alzheimer's disease a few weeks ago. The residents declined to be named because of political sensitivities. Free-market trading in the rial appears to have almost ground to a halt because of the immense volatility and the government's assault on money changers, traders said. Iranian media reported that Ahmadinejad had met economic ministers on Wednesday and issued orders on controlling the currency market, but they did not say what those orders were. POLITICS Hanke said that if the government was determined to ride out the economic turmoil, it could probably do so for some time. But the involvement of the bazaar in this week's demonstrations could signal a change of political wind in Tehran. Merchants there and in other major cities were largely absent in the pro-democracy protests that followed Ahmadinejad's disputed re-election in 2009. "Up to now, the bazaar has been a bulwark of support for the state," said Shaul Bakhash, an Iran historian at George Mason University in the United States. The protests, he said, "could be signs that the merchant and shopkeeper community have lost patience with the government and its handling of the dollar crisis the country is facing." Some analysts therefore think Khamenei could reshuffle the government to placate public opinion - and conceivably allow Ahmadinejad's old rival Akbar Hashemi Rafsanjani, known as a pragmatist, to regain influence. Ahmadinejad has been greatly weakened after a public dispute with Khamenei last year and by law cannot run again for president in elections scheduled for June 2013. If the government can find ways to deploy its financial resources more effectively, it has a good chance of stabilizing and even strengthening the rial, some analysts believe. (Additional reporting by Zahra Hosseinian; Writing by Andrew Torchia; Editing by Giles Elgood) Email Article Next Article in Top News Home » Top News Search | Quotes | Videos | Currency | Slideshows | Top News | Oddly Enough | Business | Entertainment | Sports | Deals | Hot Stocks | Technology | Politics | More Categories =========================