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Eurasian Energy Games

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Wednesday, November 14, 2012

BP May Open Britain to Russian Gas

Additional ramifications of the BP-Rosneft deal are now coming to light.  With the purchase of TNK-BP by Rosneft, BP’s Russian partners have agreed to end their legal battles with British Petroleum.  Sources claim that the two sides agreed to settle all their disputes after BP  made a $325 million payment to the Russian consortium AAR.  Supposedly, this move has been taken to give BP the freedom to pursue the development of Arctic oil.  “BP is not taking an equity position in Rosneft as a portfolio investor,” said chief strategist at Sberbank CIB Chris Weafer.  “they are looking at a future relationship through which they can grow production and reserves in Russia.”

It appears, however, that this deal has also cleared the boards for BP to work with Gazprom to bring Russian natural gas to Great Britain.  AAR had previously taken the position that their partnership with BP mandated all BP business opportunities in Russia be run through TNK-BP.  With all claims settled, sources report that the consortium has relinquished all claims on BP’s future Russian activities.  That could include moving into the natural gas market.  Gazprom’s  Chief Executive Alexi Miller reported in June that BP was interested in participating in an expanded Nord Stream pipeline, one that would carry product to Britain.

Such a move is a  questionable investment decision by the British company, given the plummeting price natural gas is commanding, and the large quantities of liquified natural gas (LNG) coming on the market to compete with pipeline gas.

Friday, November 2, 2012

Reprecussions from the sale of TNK-BP

With the recent decision of OAO Rosneft to purchase TNK-BP from its various owners, one of the most strained partnerships in Russian economic history comes to an end.  Rosneft has agreed to pay a total of $54.8 billion to BP plc and the Alfa-Access-Renova consortum (AAR) controlled by four Russian billionaires.  These oligarchs–Mikhail Fridman, German Khan, Viktor Vekeselberg and Len Blavatnik– defied the stated policy of the Kremlin last year to prohibit BP from entering into an artic exploration agreement with Rosneft.  With ill feelings all around, it was apparent that this business union was headed for a divorce.

Initially, AAR offered to buy BP’s 50% ownership in TNK-BP, but this offer was withdrawn when Rosneft offered to purchase AAR’s shares instead.  AAR is slated to receive $28 billion for it’s half of the company.  Rosneft then offered BP the chance to sell its shares, as well.  Anxious to raise capital to pay its Gulf spill-related expenses, BP agreed to accept $10-$15 billion in cash,and a 12.5% share in Rosneft.  BP plans to use part of the cash payment to purchase an additional 5.66% of Rosneft which, combined with the 1.5% share they already hold, will bring their share of ownership to approximately 19.75%.  75% of Rosneft is owned by the Russian state, while the remainder is sold in the market.

Analysts believe that the majority stock holder Russian state will help finance the purchase.  “For Rosneft to buy both AAR and BP to form a fully state-owned oil champion would be the cleaner solution for the Russian state, and is likely to require further state injection into Rosneft, given that the company had previously been sounding out the market for a loan to buy part of BP’s share,” said RBC Capital Markets Corporation’s Peter Hutton.  Not as much cash is required for the deal as the original figures would indicate, since BP and AAR are owed about $2.5 billion in dividends from TNK-BP.  According to journalist Paul Whitfield, this means the cash proceeds from the two deals are actually $26.75 billion for AAR and $15.85 billion for BP, falling to $11.05 billion for BP after its acquisition of Rosneft stock.

Russian President Vladimir Putin appears happy with the deal.  “This is a very good signal for the Russian market.  It is a good, large deal.  I would like to thank you for this work,” he told Rosneft CEO and longtime ally Igor Sechin.  Putin should be happy:  the deal gives Rosneft a seat on BP’s board.  This will give Russia a voice in BP operations outside of Russian territory such as in the Caspian where BP is the lead oil company.

The deal puts Rosneft ahead of Gazprom as the leading energy producer in Russia.  After the deal is consummated, Rosneft will produce 4 million barrels of crude oil a day.  This does not appear to be the result of any inside-Kremlin politics, but economics.  As the price of natural gas declines in the face of the shale revolution, it should be anticipated that Gazprom’s importance would also decline.  Moscow needs revenues, however, and the price of oil remains high.  Igor Sechin, driven out of the cabinet by former President Medvedev, is back in the cat bird seat.

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Bulgaria Playing Both Sides

Against all expectations, Bulgaria has emerged as a key player in the battle for control of the Southern Energy Corridor.  This Black Sea country is astride the most logical route between the gas fields and European markets for both South Stream and TANAP.  Bulgaria has agreed to cooperate with both consortiums, while playing for maximum advantage.
In August 2012, Bulgaria and Gazprom announced they would conclude an investment contract in November for the construction of South Stream.  Simultaneously, Bulgarian Minister of Energy and Economy Delyan Dobrev announced a new gas-supply contract that featured an 11% price in gas for the remainder of 2012.
Once having achieved its goal of obtaining Bulgarian cooperation, however, the Russians appear to have upped the ante.  For construction of South Stream to begin, the Russians declared they wanted $1.3 billion in compensation for the Belene nuclear plant.  This was a project that the former Bulgarian government had contracted with Russia, but that current Prime Minister Boiko Borisov cancelled when he took office last year.  Borisov was outraged.  “We are observing all our commitments on South Stream.  For Belene we continue to negotiate…That is why I think we have been absolutely treacherously surprised by that claim.”  Bulgarian observers pushed back, threatening that the government would be forced to cancel South Stream.  Ilian Vassilev of Innovative Energy Solutions said, “There is no way Bulgaria can pay both the claim and let South Stream happen.”
The dispute has led to a delay in a visit by Russian President Vladimir Putin, who was supposed to be present in Sofia on November 9 for the signing of the South Stream papers.  Instead, Putin has postponed his trip until December, possibly signalling his unhappiness with Bulgaria’s recalcitrance.
Meanwhile, in September 2012 the European Union criticized Bulgaria for  supporting South Stream while lacking sufficient commitment to the EU’s version of a Southern Energy Corridor.  The EU’s concern was that South Stream only diversifies supply routes from Russia, but does not diversify the ultimate, Russian source of supply.  “Bulgaria needs to complete the ongoing investment projects on gas interconnectors with Romania, Serbia and Greece, and make reverse flows possible on its interconnector with Turkey…Bulgaria also needs to play a more proactive part in opening up the Southern Gas Corridor, which has the potential to diversify supply sources,” said a leaked document.

EC Report Slams Bulgaria’s Failure to Commit to Southern Energy Corridor

Energy | September 18, 2012, Tuesday| 1215 views

Bulgaria: EC Report Slams Bulgaria's Failure to Commit to Southern Energy Corridor
Мap of the so called Southern Energy Corridor from REEE

Bulgaria must commit more thoroughly to the development of the EU-sponsored Southern Energy Corridor (also known as Southern Gas Corridor) aimed at diversifying natural gas suppliers to Europe, according to a leaked report of the European Commission.

The draft report of the EC, which is still to be released, criticizes Bulgaria for throwing its weight mostly behind the Russian-sponsored South Stream gas transit pipeline, while lacking sufficient commitment to EU’s attempts to develop the Southern Energy Corridor, EurActiv reported Tuesday citing the leaked report.

Bulgaria needs to complete the ongoing investment projects on gas interconnectors with Romania, Serbia and Greece, and make reverse flows possible on its interconnector with Turkey, the EU executive says.

“Bulgaria also needs to play a more proactive part in opening up the Southern Gas Corridor, which has the potential to diversify supply sources,” the paper reads.

The Southern Gas Corridor is a key element of competing projects to bring natural gas to Europe from the offshore Shah Deniz II field in Azerbaijan.

Up to now, Bulgaria has made commitments to South Stream, a Gazprom-favoured project widely seen as a competitor to the Southern Gas Corridor.

The South Stream pipeline is intended to transport up to 63 billion cubic meters of natural gas to central and southern Europe, diversifying Russian gas routes away from transit countries such as Ukraine.

The pipes will go from Russia to Bulgaria via the Black Sea; in Bulgaria it will split in two – with the northern leg going through Serbia, Croatia, Hungary, and Slovenia to Austria and Northern Italy, and the southern leg going through Greece to Southern Italy. Recent reports have indicated, however, that Russian energy giant Gazprom may give up on the construction of the offshore section of the South Stream gas pipeline to Austria.

The Black Sea underwater section of South Stream between Russia and Bulgaria will be 900 km long, and will be constructed at a maximum depth of 2 km.

The construction of the South Stream gas pipeline will begin in December 2012, and the first supplies for Europe are scheduled for December 2015.

The pipeline’s core shareholders include Gazprom with 50%, Italy’s Eni with 20% and Germany’s Wintershall Holding and France’s EDF with 15% each.

Gazprom has already established national joint ventures with companies from Austria, Bulgaria, Croatia, Slovenia, Greece, Hungary and Serbia to manage the onshore section of the South Stream pipeline.

Bulgaria has committed itself to speeding up the construction of the Russian-sponsored pipeline on its territory, since on January 1, 2013, the EU is introducing new requirements for the access to energy networks.

In the draft gas supply report of the EC, Bulgaria is also urged to increase cross-border network capacity.

Regardless of its more favorable geographic location, Bulgaria is also singled out as one of the energy infrastructure black spots on the EU map.

The Bulgarian Prime Minister was non-plussed.  In an interview with Euronews, Borisov said he was commited to the European vision.  “It is very important that the Turkish Tanap-pipeline reaches Bulgaria and that Nabucco-West and the South East Europe Pipeline move closer to Europe…Regarding the Nabucco project, Bulgaria has done all it can:  the parliament approved its construction.  We have signed all the documents that are required and we can start construction work tomorrow if necessary.  I am looking forward to the launch of the Nabucco project.”
Despite any agreement with Nabucco, however, as of 30 September 2012 there was no agreement between Bulgartransgaz and Turkey’s Botas to connect with the Turkish pipeline network.  Without such a connection, any discussion of Tanap or Nabucco is moot.  To give the country some negotiating room, Bularia delayed its plans one year to connect its gas network with neighboring Balkan countries.  Bulgartransgaz announced the connection would take place in 2014, instead of the originally-planned 2013.

Wednesday, September 5, 2012

Transcaspian Back on the Board

Recent armed spats between Azerbaijan and Turkmenistan in the Caspian Sea placed the future of the Trans Caspian Pipeline in doubt, but European Union-backed talks in Ashkabat appear to have put things back on track.  According to EU spokeswoman Marlene Holzner, the Turkmenistan Energy Minister Myrat Artykow and Azerbaijan Minister for Industry and Energy agreed with EU Energy Commissioner Gunther Oettinger that the project could be an important part of efforts to reduce Europe’s dependence on Russian gas supplies.
Holzner said both Azerbaijan and Turkmenistan had expressed a desire to supply Turkmen gas to Europe, but neither country was willing to make any firm commitments.  “Turkmenistan said it continues to be interested in delivering gas to Europe.  Azerbaijan also confirmed its interest in being an ‘enabler’, meaning it would also be a transit country for gas.”

Despite the expressions of good intentions, who moves first to make the pipeline a reality remains in doubt.  Holzner said that the EU was waiting for a gurantee from Turkmenistan on supply (despite the fact that Turkmenistan President Gurbangulu Berdimuhammedov is on record as promising 40 bcm per year for the project).  At the same time, she said that the EU would neither own the pipeline nor pay for it.  For his part, Berdimuhammedov has previously said that while he would sell the gas to Europe, it would be up to the Europeans to figure how to get it from Turkmenistan.  So, all good wishes aside, no progress appears to have been made other than to get the parties talking again.

Turkmenistan appears to have turned its attention east, with most of its gas sales going by pipeline to China.  For Azerbaijan’s part, the pipeline could be seen as either competition for its own future gas production, or for Gazprom’s South Stream.  In either case, the benefits of a Trans Caspian Pipeline do not appear to be overwhelming.  The one country that would benefit is Turkey, who would like to see Turkmen gas made available to expand the proposed TANAP pipeline.

“With the TANAP project we have created a structure that will allow gas to transit across Azerbaijan and facilitate trade.  This structure is also targeting Turkmen gas.  We are seeking Turkmen gas,” said Turkish Energy Minister Taner Yilmaz.

According to Gulmira Rzayeva of the Center for Strategic Studies of Azerbaijan, an expanded TANAP could increase Turkey’s chances of joining the European Union.  “Turkey can achieve political gains with this pipeline; it can be an ace in terms of its European Union membership negotiations.  With the finalization of this project, Turkey will have a whole new position within the region.”  Whether Turkey wants to join Europe is, of course, an open question.  Turkey’s annual growth continues at around 7%, while Europe continues to stagnate and — possibly–sink back into recession.

Tuesday, August 28, 2012

Potential Backers Lose Interest in TAPI

Despite support from both the United States and the Asian Development Bank, potential investors are backing away from the proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline.  This proposal has been beset with concerns over security of the pipeline route, which passes through some of the most violent prone provinces in Afghanistan.

In the latest development, China has expressed new interest in Turkmen gas.  First, Chinese President Hu Jintao has proposed a new pipeline route that would bring Turkmen gas to China via Afghanistan.  The benefit of this latest proposal is that the pipeline route would traverse a safer route in Northern Afghanistan.  Second, China also signed in May 2012 an agreement with Turkmenistan to increase deliveries through the East-West Gas Pipeline from 30 bcm  per year to 65 bcm.  This pipeline does not pass through Afghanistan, has no security isues, and has been relatively trouble free since it opened in 2009.  Finally, China has assured Turkmenistan that its demand for natural gas will constantly increase over the next five years.  As a result, Turkmenistan’s enthusiasm has “softened” for TAPI, according to Pakistani correspondent Iqrar Haroon.

The Russian National Energy Institute has recommended the Russian government should avoid investing in TAPI because of security concerns, and questions over the viability of the project.  According to the Indian Institute for Defence Studies and Analyses, the proposed increases in Chinese purchases of Turkmen gas will have a negative impact on Russia.  Turkmenistan offers lower-priced gas to China, bringing downward pressure on Russian gas prices.  Russia and China have been in talks since at least June 2009 to import 68 bcm of gas per year, but have not been able to agree on a price.

Monday, August 27

Trans Adriatic Pipeline Receives Funding Commitment

The Trans Adriatic Pipeline (TAP), the southern competitor for carrying Caspian gas from the Turkish border to Europe, has received an economic boost.  British Petroleum and Total have signed an agreement with the State Oil Company of Azerbaijan (Socar) to fund the pipeline, designed to bring natural gas to Italy.   (The proposed Nabucco West would carry gas from the Turkish border to Baumgarten, Austria).  “These funds will contribute toward continued work in several important areas during the period running up to the final routing decision, expected in 2013,” said a TAP spokesman.

Kjetil Tungland, TAP’s managing director, issued a statement, “The signing of this agreement is a significant vote of confidence in the quality of TAP’s technical and commercial solutions from key industrial players, and underpins the cooperation agreement that was signed between TAP and Shah Deniz in June.”

While the Shah Deniz consortium has not yet decided between TAP and Nabucco West, TAP’s chances have been improved by both the funding, and by the pipeline obtaining government support.  Both the Greek and Italian governments have agreed to support the pipeline, something they previously had not done.  According to the Greek Foreign Ministry, Greek Deputy Energy Minister Makis Papagergiou and his Italian counterpart reached a “close cooperation agreement” to support the pipeline.  The Italian Foreign Ministry added, “Athens and Rome have decided to back the project after Aszerbaijan’s Shah Deniz 2 consortium chose TAP to transport gas to western Europe.  Nabucco West remains an alternative…”

With the Shah Deniz consortium sitting on the fence, other interested parties are also trying to cover all their bets.  the European Commission, which had previously said that Nabucco was a priority European project, has backed away.  It now says that it does not favor any project or route over another, as long as it carries Azeri gas, would diversify EU supplies, and would reduce EU dependence on Russian resources.  Similarly, BP is trying to support both TAP and its rival, Nabucco West.  “Our aim is to be involved in all aspects of the project so the aim is to be involved in Nabucco and TAP as well, and this is still being negotiated,” BP spokesman Toby Odone said.

Wednesday, August 22

Gazprom May Punish Hungary for Supporting Nabucco

Faced with Hungary’s approval of an environmental permit for the construction of the Nabucco pipeline, Gazprom may be considering moving west the route for the rival South Stream pipeline.
Reinhard Mitschek, managing director of Nabucco, announced on August 14 that Hungary was the first country to issue the project all its permits.  “The granting of this permit is a substantial step forward in Hungary and signifies the advanced stage of development of Nabucco West,” he said.
Within a week, Gazprom announced they were in talks with Croatia over the South Stream pipeline route.  “An intergovernmental agreement between Russia and Croatia on joint participation in the South Stream project was signed in 2010,” a spokesman commented.  “Currently, based on the results of a pre-investment stage, Gazprom and Plinacro Ltd. are discussing the terms of a shareholder agreement for a joint compnay project with a view to its subsequent establishment.”
The Croatian side is optimistic.  “At the moment the chances are 50:50 that we get the transit route of South Stream,” said a source involved in the Gazprom negotiations.  The reasons for changing the route are uncertain.    According to the Voice of Russia, a Croatian list serve, Jutarnji, listed a number of possible concerns:  lower costs, differences between Gazprom and the Hungarian leadership, uncertainty over ownership shares of various Hungarian companies, and slow work on the Hungarian economic feasibility stateement.  Gazprom’s board chairman Alexei Miller minimized these reasons, however, calling them “not significant.”  An unnamed Plinacro source added that there could be no official confirmation on the status of the talks, as both sides are bound by a mutual confidentiality pledge.
Timing would indicate the talks are retribution for Hungary’s cooperation with South Stream’s rival, Nabucco.  Whether the talks will result in the route change, or are merely a pressure tactic on Hungary by Gazprom officials, is yet to be seen.

Golden Dawn Immigrants-Fake NeoNazi’s

All those links were sent to me on Twitter and I am more than glad to post them,I do beleive I will find more on those people due time.No threats allowed according to the WP policy or the HR declaration. So please stay vigilant of what you are going to post :)I checked all blog categories so that the post can get the most views possible. Regards!

“##Spiros Macrozonaris## IMMIGRANT Golden Dawn Deputy leader in Montreal, Canada” :

Facebook profile :

INTERESTING FACEBOOK POST MR. MACROZONARIS, HE CANNOT EVEN WRITE GREEK! BAD NAZI BAD! :

His NON 100% PURE GREEK son’s Facebook : https://www.facebook.com/macrozonaris?ref=ts&fref=ts

1. Greek Immigrant who married a “foreigner” >>>>>French-Canadian Doris Morrissette, they bore a son, Nicolas Macrozonaris (World-Class Sprinter – CANADIAN Olympian 🙂 ..who unfortunately is not 100% Pure Greek…

2. Conversations with Nicolas on Twitter, lead to nothing, he is ‘pretending’ that he has NO knowledge of what Golden Dawn supports and believes YET he states that he does not condone his fathers “actions”

Twitter @Macrozonaris TWEETER CONVERSATIONS with Nicolas –>

###### MUST WATCH #####
Video from CBC Montreal, from week of Oct 12th – INTERVIEW with Spiros Macrozonaris – next to him sits LOOSER Ilias Hondronicolas : http://www.youtube.com/watch?v=v-3rbLI4K78

#Ilias Hondronicolas ———> on PHOTO second guy from the left :

#MORE HONDRONICOLAS:

(FRIENDS WITH ELENI ZAROULIA SHARING HER PHOTOS!)
( MUST SEE )

#MORE PAPAGEORGIOU:


True Oil Wars

Reference ID Created Released Classification Origin
07BAGHDAD2453 2007-07-25 05:57 2011-08-30 01:44 CONFIDENTIAL Embassy Baghdad

VZCZCXRO1627
OO RUEHBC RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #2453/01 2060557
ZNY CCCCC ZZH
O 250557Z JUL 07
FM AMEMBASSY BAGHDAD
TO RUCNRAQ/IRAQ COLLECTIVE IMMEDIATE
INFO RUEHC/SECSTATE WASHDC IMMEDIATE 2415

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 002453

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/23/2017
TAGS: ECON ENRG IZ PREL
SUBJECT: CODEL BURGESS MEETING WITH MINISTER OF OIL HUSAYN
AL-SHAHRISTANI

Classified By: ECONOMIC MINISTER CHARLES P. RIES FOR REASONS 1.5 (b) an
d (d)

¶1. (C). SUMMARY. On July 22, Congressmen Michael Burgess
(R-TX), Steve King (R-IA), Jim Jordan (R-OH), John Carter
(R-TX), Kevin Brady (R-TX), and David Davis (R-TN) met with
Minister of Oil Husayn al-Shahristani to discuss issues
related to the state of Iraq,s petroleum infrastructure,
plans to improve the infrastructure and revitalize petroleum
exploration and production. Minister Shahristani
acknowledged the important role of the petroleum industry in
Iraq,s economy and the need for passage of the
hydrocarbon-related laws as signaling Iraq,s emergence as a
dominant petroleum producing country. END SUMMARY.

¶2. (C). Minister Shahristani introduced the topic of the
status of Iraq,s petroleum industry by observing that the
industry provides 93% of the country,s budget; that of the
500 known potential petroleum-bearing geophysical structures,
only about 80 have been evaluated and expected to make up the
majority of the 115 billion barrel reserve; and that of these
80 structures, 10 are “super giants,” 10 are “giants,” and 10
are “very large” structures. He also stated that most of
these 80 structures are currently in production although
perhaps not being optimally produced at this time.
Shahristani also predicted that of the 500 known structures,
300 will eventually produce commercial quantities of oil.

¶3. (C). Shahristani observed that even though private oil
companies have not been willing to work in Iraq as a result
of the security situation, the state-owned oil companies have
been able to drill some new wells. He also noted that while
the level of oil production in the country has not risen as
he desired, the rising price oil has allowed Iraq to more or
less maintain a level income from exports.

¶4. (C). Shahristani noted successes in having new meters
installed in the southern export facilities, but also noted
that if problems occur, it is likely the fault of the
American company that required an extra year to complete the
project. He predicted no interruption in oil exports from
the southern facilities, unless problems arise between Iran
and the United States. He encouraged the United States and
Iran to continue their dialogue to solve issues that impact
Iraq.

¶5. (C). A member of the Congressional delegation, having
toured the Bayji oil refinery yesterday asked what
infrastructure improvements were needed to increase the
refinery,s production potential. Shahristani stated that
while foreign companies were not willing to work in Iraq due
to the current security situation, he has asked that they
supply needed equipment, for example for the hydrocracker.
He also stated that he is attempting to replace trained
workers, originally from the south of the country, who have
fled the sectarian violence of the area.

¶6. (C). When asked about the Ministry of Oil,s budget,
Shahristani stated that he had a budget of $2.2 billion. He
complained that the Ministry of Finance had delayed the
allocation of funds for the first quarter of the year and
those funds were not available until the end of March. In
any event, he noted that by the second quarter, he had been
able to spend 25% of his budget and expects to spend 85% of
his budget by the end of the year.

¶7. (C). Shahristani explained that the Council of Ministers
had approved and sent to the Council of Representatives a law
that would encourage investment in Iraq,s oil refineries; he
expected a third reading of this law to occur soon. He
expressed support for the Framework Hydrocarbon Law stating
that “all the right elements were present in the law” and
promised that he would be in the Council of Representatives
(CoR) to explain the law. He also stated that while he could
not predict what the lawmakers would do, he anticipated its
eventual passage. He noted that he had already prepared a
list of those fields to be drilled and produced first.

¶8. (C). A member of the delegation asked about Chinese
exploration and production contracts. Shahristani answered
by explaining that there was one contract in existence with
the Chinese, which was legitimate and was signed by the
previous regime to develop a small field just south of
Baghdad (Adhab) and would produce no more than 100,000
barrels per day of heavy crude. He explained that under the
current draft of the framework Hydrocarbon law, such
contracts must be reviewed and meet the conditions of the new
law. He also stated that this contract would have to be
amended and that the production from this field was not for
export, but rather to supply crude oil to a refinery planned
to be constructed in the area by the Chinese.

BAGHDAD 00002453 002 OF 002

¶9. (C). A member of the delegation asked if the Iraqi
people understood that they could become rich from the
development of their petroleum resources, if only they would
cooperate with each other. Shahristani responded that the
people will not understand the details of the various
hydrocarbon-related laws, but will follow the impressions
created by others and the media. He proceeded to explain
that several local media stations are supported by members of
Saddam,s regime, living mostly in Jordan now, and by the
Saudis and Emirates. He characterized as more damaging, the
influence of Al-Jazeera. He stated that, in his opinion,
Saudi Arabia feels threatened by the prospect of a
significant Iraqi contribution to the international oil
market; Iraq was not a threat to the Saudis as long as
exports remained no greater than 2 to 3 million barrels.

¶10. (C). When asked about exports in the north, Shahristani
noted that the exports brought in about $400,000 per day and
that the Bayji refinery has limited production capacity.
(Note: In the absence of more explanation that was not
provided to the delegation, this statement appears at odds
with the fact that the export pipeline to Turkey operates
only intermittently. Also, the Bayji refinery capacity is
limited primarily by unreliable electricity supply and
limited heavy fuel oil storage capability. End Note.)
Shahristani also noted that northern exports were at the
mercy of the security situation. He stated that the
Strategic Infrastructure Brigades (SIBs) were established by
a “leader of the insurgency” and that he informed the
multi-national forces of this fact. He also stated that
contrary to the opinion of the multi-national force
commanders, the SIBs cannot be retrained to an effective
status. Shahristani stated his expectation that a new effort
to contract with local tribal leaders for security of the
pipelines will be more effective and lead to a resumption of
northern exports in one to two months.

¶11. (C). Addressing Congressional benchmarks, Shahristani
said that he expected the Framework Hydrocarbon and Revenue
Management Laws to proceed in tandem to the CoR and will be
debated together. He assessed that the refinery investment
law, already in the CoR, will be passed soon. He stated that
the Kurdish Regional Government (KRG) has reservations about
the Revenue Management Law, but that KRG representatives will
be in Baghdad in a week, and that he expected the law will go
to the CoR within the next 2 to 3 weeks. He also stated
that, while no one has objection to the Revenue Management
Law in principle, Sunni factions were attacking it for
political reasons. Shahristani stated that there was also
strong Sunni opposition to the Framework Hydrocarbon Law, but
that he agreed with Ambassador Crocker that some Sunni
support for the law was needed.

¶12. (C). Shahristani was asked what he was doing to secure
the petroleum infrastructure in the event coalition forces
left Iraq. He responded that a withdrawal would not impact
the southern pipelines and other facilities since Coalition
Forces are not now protecting those facilities. As for the
northern facilities, he stated that the Bayji refinery could
be shut down, but that would have consequences equally
adverse for the insurgency.

¶13. (C). Shahristani reiterated that he was working hard to
meet the benchmarks, that half of the benchmarks were met and
that the other half could be met if government,s efforts
were supported by the Sunnis, Saudi Arabia, and other Gulf
states. He requested that the USG pressure these other
entities to stop supporting the groups opposing Iraq,s
efforts to meet the remaining benchmarks.

¶14. (C). Minister Shahristani concluded the meeting with an
expression of determination that Iraq will export to the
world oil market “its fair share of resources.” He stated
that he wanted the American public to know that this conflict
was not about oil, but about Islamic fundamentalism. He also
stated that Al-Qaeda was a long-term problem for the world.

¶15. (C). CODEL Burgess did not have an opportunity to clear
this cable.

Reference ID Created Released Classification Origin
07BAGHDAD3071 2007-09-12 06:02 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Baghdad

VZCZCXRO4961
PP RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #3071/01 2550602
ZNR UUUUU ZZH
P 120602Z SEP 07
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 3336
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 03 BAGHDAD 003071

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EPET EINV ENRG IZ
SUBJECT: HUNT OIL SIGNS AGREEMENT WITH KRG UNDER KRG OIL LAW

SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISRIBUTION. PROTECT
SOURCES.

This is a Kurdistan Regional Reconstruction Team (RRT) cable.

SUMMARY
——-

¶1. (SBU) The Kurdistan Regional Government (KRG) recently signed a
production sharing contract (PSC) with Hunt Oil Company that covers
oil exploration and production in “the Dohuk area.” Comments by
Hunt officials indicate that the block is actually in the Ninewa
Governorate’s northern administrative districts. The PSC marks the
first oil deal signed by the KRG, following enactment of the
Kurdistan Region’s hydrocarbons law on August 6, 2007. Considerable
legal ambiguity surrounds the PSC with Hunt Oil, as the districts in
northern Ninewa to be explored by the company are classified as
“disputed territories” under the Iraqi constitution. A senior Hunt
Oil manager told RRT Erbil’s Team Leader that northern Ninewa
province has significant potential for oil production, and that this
factor trumps the legal ambiguities and risks associated with the
company’s PSC with the KRG. The oil potential of northern Iraq
continues to attract significant investor interest. Several other
international energy companies are expected to announce oil deals
with the KRG during coming weeks. Despite the KRG’s aggressive
pursuit of foreign direct investment to develop the Kurdistan
Region’s hydrocarbons production potential, KRG Prime Minister
Nechirvan reiterated the KRG’s commitment to the federal hydrocarbon
revenue sharing agreement that allocates Iraq’s oil wealth to all
Iraqis on a per capita basis. Meanwhile, senior central government
officials expressed their dismay that the KRG enacted a regional
hydrocarbons law, and that the KRG continues to pursue oil
investment from foreign companies in advance of enactment of
comprehensive national hydrocarbons legislation. [NOTE: The ability
of regional governments to sign contracts has been among the key
issues of contention during negotiation of the national hydrocarbon
law. The KRG has reluctantly agreed, at times. to refrain from
finalizing agreements in advance of a national law, but have
maintained that they would not wait indefinitely for national
legislation to be approved by the Council of Representatives. END
NOTE.]

KRG Contract with Hunt in Disputed Territory
——————————————–

¶2. (SBU) On September 8, 2007, the KRG, Hunt Oil Company, and
Impulse Energy Corporation (IEC) jointly announced they had signed a
PSC covering petroleum exploration activities “in the Dohuk area of
the Kurdistan Region.” Hunt Oil’s General Manager for Europe,
Africa and the Middle East, David McDonald, told RRT Erbil’s Team
Leader on September 5 that the envisioned “Dohuk area” of operations
under the PSC consists of the administrative districts of northern
Ninewa province. McDonald did not disclose the exact areas in
northern Ninewa to be initially targeted for exploration by Hunt Oil
but he mentioned Shekkan and Akra as areas they had visited. While
the land to be explored by Hunt Oil has been behind the Green Line
of KRG control for many years and is occupied by a majority Kurdish
population who considers itself part of Dohuk Governorate, the area
falls within the legal boundaries of Ninewa province. Northern
Ninewa is “disputed territory,” according to the Iraqi federal
constitution, and the legal boundaries of the area are eventually to
be decided by a public referendum pursuant to Article 140 of the
federal constitution.

¶3. (SBU) During discussions with RRT Erbil’s Team Leader, McDonald
seemed less than fully informed about the potential ramifications of
Article 140 on Hunt Oil’s negotiations with the KRG. He did not
express concern about the potential controversy surrounding
signature of a PSC with the KRG that covers areas of operation
currently outside the KRG’s legal control. He said, “This is a
significant opportunity that outweighs the legal ambiguity.” Hunt
Oil CEO Ray Hunt also discounted the fact that the northern Ninewa
districts targeted under the PSC are not yet within the KRG’s
legally defined borders. He expressed satisfaction on September 8
that his company was “actively participating in the establishment of
the petroleum industry in the Kurdistan Region of Iraq.”

¶4. (U) Enactment of the KRG’s new oil law may have spurred
completion of the PSC with Hunt Oil. The PSC was announced shortly
after publication of the English translation of the new oil and gas
law on the KRG’s website. Before the law was enacted, only one PSC
had been signed for the Dohuk area – with DNO of Norway. That PSC
covered operations only within the legal boundaries of Dohuk
Governorate. Enactment of the KRG oil law and the subsequent
announcement of the deal with Hunt Oil may accelerate the signing of
PSCs with other international oil companies. Several are
reportedly on the verge of signing PSCs with the KRG during coming
weeks. Article 19 of the KRG law states that “the Federal
Government must not practice any new Petroleum Operations in the
disputed territories without the approval of [the KRG] until such
time as the referendum required by Article 140 of the Federal
Constitution is conducted.” Article 20, however, allows the KRG to

BAGHDAD 00003071 002 OF 003

sign PSCs with foreign oil companies in disputed territories, based
on articles 112, 115 and 121(3) of the Federal Constitution.

Potential Bonanza Trumps Legal Ambiguity
—————————————-

¶5. (SBU) While McDonald said Hunt Oil must conduct further
assessments about the speed and scope of their operational
activities in northern Ninewa, with decisions regarding the focus of
initial seismic tests to begin “by the end of October,” he was
optimistic about the oil potential of the region. McDonald said
portions of the topography in all three districts of northern Ninewa
bode well for oil exploration. He said, “It’s like shooting fish in
a barrel.” A Hunt Oil company spokesman in Dallas said the company
will begin geological survey and seismic work by the end of 2007,
with plans to be in a position to drill an exploration well in
¶2008.

KRG Boldly Enacts Regional Hydrocarbons Law…
———————————————

¶6. (U) The KRG deal with Hunt Oil marks the first PSC signed with a
foreign oil company following KRG enactment of the Oil and Gas Law
of the Kurdistan Region on August 6, 2007. Speaking of the KRG’s
rationale in passing a controversial regional hydrocarbons law while
a draft national oil and gas law remains intensely debated, KRG
Prime Minister Nechirvan Barzani told reporters on August 7,
“Successive governments in Iraq have deliberately left our oil in
the ground as an effort to keep our people [ethnic Kurds] poor and
to deny our aspirations for a better way of life. Today, with the
passage of this new Kurdistan Law in a federal Iraq, we know that
those days are gone.”
¶7. (U) While espousing the benefits of foreign direct investment in
the Kurdistan Region’s oil producing areas, Nechirvan acknowledged
federal constitution provisions that require any oil revenues
generated under the KRG’s hydrocarbons law to be shared equally with
all Iraqis. He confirmed the KRG intends to limit itself to its
constitutionally mandated share of national oil revenues, regardless
of whether the oil is sourced inside or outside the Kurdistan
Region. He said, “We will receive 17 percent of all revenues from
all oil production in all of Iraq.”
¶8. (U) KRG Minister of Natural Resources Ashti Hawrami echoed those
comments. Hawrami said on September 9, “We believe that the [KRG’s]
production-sharing agreements are the best way to move swiftly
forward and help not just the Kurds but all Iraqis.” He envisions
that the Kurdistan Region will produce one million barrels of oil
per day within five years. To achieve this goal, the KRG intends to
sign PSCs with other large international oil companies. On
September 9, Hawrami told Dow Jones, “I think we’ll be having an
announcement with a blue-chip company soon.”

While Criticizing Central Government Paralysis
——————————————— –

¶9. (SBU) Following passage of the KRG hydrocarbons law, KRG
officials recommitted themselves to the February 2007 national
hydrocarbons framework agreement. Nechirvan told RRT Erbil’s Team
Leader on August 28 that he hoped the new KRG law “would spur
movment in Baghdad” to enact a national hydrocarbons law. During
that meeting, however, Nechirvan expressed disappointment with
political developments in Baghdad and pessimism about “whether the
Sunnis and the Shi’a want to live together.” He said the KRG does
not want Iraq’s central government to “hold up development of
regional resources for another ten years.”

Arab Leaders Critical of KRG Oil Law
————————————
¶10. (U) Senior central government officials in Baghdad condemned the
oil deals signed by the KRG in advance of enactment of national
hydrocarbons legislation. Abdul Hadi al Hasani, Deputy Chairman of
the national parliament’s Energy Committee, said recently that such
contracts may be overturned by the federal government, though he
conceded that such a move could discourage potential foreign
investments in Iraq’s oil sector. Sami al Askari, a parliamentarian
and senior advisor to Prime Minister al Maliki, told reporters on
September 7 that a federal oil and gas council to be formed under
the national hydrocarbons law could decide whether to rescind the
KRG’s handful of oil contracts with foreign investors. In a
concession to the reality that foreign direct investment in Iraq’s
oil infrastructure remains both valuable and scarce, the
parliamentarians said the private firms that signed deals with the
KRG should not be blocked from winning future oil contracts in
Iraq.

COMMENT
¶11. (SBU) USG policy has discouraged companies from signing oil
deals with the KRG until Iraq enacts its national hydrocarbon
framework law, as such regional contracts could act as an impediment
to negotiations toward a comprehensive national settlement that
equitably distributes Iraq’s oil wealth. Such contracts also remain
subject to significant legal ambiguity. This has not deterred Hunt
Oil and the other handful of companies that have signed PSCs with

BAGHDAD 00003071 003 OF 003

the KRG. Their concerns about the nebulous political environment
and possible eventual dissolution of their PSCs have been overridden
by the prospect of huge profits – from getting first access to the
choicest oil exploration fields in northern Iraq, and from
establishing productive relationships with key KRG and central
government officials. The potential pitfalls are especially acute
in cases (e.g. Hunt Oil and its junior partner IEC) where investors
will commence operations in disputed territories. It remains
doubtful that the KRG was legally entitled to enter into a binding
contract with Hunt Oil that covers oil exploration and eventual
hydrocarbons production in an area (i.e. northern Ninewa province)
that the KRG does not legally control. Legal considerations aside,
the KRG’s actions complicates enactment of a national hydrocarbons
law.
BUTENIS

 


Lawless Land : Libya



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Published on Apr 23, 2012 by journeymanpictures

Divided Libya awaits election results amid ongoing violence

To see more go to http://www.youtube.com/user/journeymanpictures

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Gaddafi may be gone but Libya is now a country in chaos. Rebel groups are flush with weapons and taking the law into their own hands, persecuting those thought to have been allied to Gaddafi’s regime.

Libya’s power vacuum has been filled by heavily armed rebels who still control much of the war-torn nation. Images of the sprawling refugee camps reveal the extent of the country’s destroyed infrastructure. Mohammed Swehli, a commander of one of the major Misratan Rebel Brigades, denies the widespread allegations of torture and abuse. “They’re not bandits, they’re not militia groups”, he says of the rebels. But video after video has emerged of the torture of perceived Gaddafi loyalists, most of them far too gruesome to broadcast. In some cases the brutal treatment appears to be based solely on the colour of the victim’s skin. This report gained rare access to the prisons where thousands are being held indefinitely without charge. One former prisoner shows pictures of his injuries. “This is when they beat me with electric cables. They called me slave”, he says. With upcoming elections and new fears over a split between the country’s east and west, what does the future hold for post-revolution Libya?

A Film By SBS
Distributed By Journeyman Pictures
April 2012


US upset about Iran-Iraq-Syria alliance-US meddling fuels violence in Syria

Hezbollah Secretary-General Seyyed Hassan Nasrallah confirms the Lebanese resistance movement has sent a drone deep into the Israeli airspace evading radar systems.

The operation code-named Hussein Ayub saw Hezbollah’s drone fly hundreds of kilometers into the Israeli airspace and getting very close to Dimona nuclear plant without being detected by advanced Israeli and US radars, Nasrallah said during a televised speech late on Thursday.

“This is only part of our capabilities,” he stressed, adding that Israelis have admitted to their security failure despite being provided with the latest technologies by Western powers.

 

 

Hezbollah secretary-general stated that Hezbollah’s drones are made in Iran but assembled by the resistance movement.

Hezbollah plans to send more drones over Israel in the future, he added, adding that the operation shows the resistance movement is ready to defend Lebanon.

The resistance leader further dismissed Western accusations of Hezbollah's intervention in the Syrian unrest, describing the allegation as "sheer lie."

"Hezbollah has not fought alongside Syrian forces.... It is not true that Hezbollah is going to take some land from Syria," Nasrallah stated.

Hezbollah's leader also rejected allegations that Abu Abbas was the movement's commander in Syria, and condemned insurgents in Syria for threatening Lebanon.

"Threatening Hezbollah is of no use," he emphasized.

MRS/SS

Lebanon President Michel Sleiman says Hezbollah’s ability to send a drone over Israel shows the need for a new national defense strategy that uses the party’s strength in safeguarding the country.

“The process of dispatching a drone over Israeli enemy territory shows a dire need to approve a defense strategy that would look into the benefits of managing and making use of the resistance’s capabilities,” Sleiman said in a statement on Friday.

He added that Hezbollah’s potential should be used to “safeguard Lebanon and establish a mechanism for issuing a decision to use these capabilities exclusively and under any circumstances in line with national interests [of Lebanon] and the military's defense plans and needs.”

Sleiman’s comments came shortly after Hezbollah’s Secretary-General Seyyed Hassan Nasrallah confirmed that the Lebanese resistance movement has sent a drone deep into the Israeli airspace evading radar systems.

The operation code-named Hussein Ayub saw Hezbollah’s drone fly hundreds of kilometers into the Israeli airspace and getting very close to Dimona nuclear plant without being detected by advanced Israeli and US radars.

"This is only part of our capabilities," Nasrallah said on Thursday.

Sleiman noted that daily Israeli violations of Lebanese sovereignty was a matter “of continuous complaints” made by Lebanon to the UN Security Council.

Israel violates Lebanon's airspace on an almost daily basis, claiming the flights serve surveillance purposes.

Lebanon's government, the Hezbollah resistance movement, and the UN Interim Force in Lebanon, known as UNIFIL, have repeatedly condemned the overflights, saying they are in clear violation of UN Resolution 1701 and the country's sovereignty.

PG/JR/SS

A prominent military analyst says the United States is deeply concerned about the alliance among Iran, Iraq and Syria and their stand against Israel, Press TV reports.

“There are deep concerns within the US that a coalition between Iran, Iraq and Syria will stand against Israel and Turkey which frankly is their long-serving surrogate since Ottoman times,” Gordon Duff said in an interview with Press TV on Friday.

He further stressed that there needs to be a no-fly-zone over Turkey “since they seem to have difficulty following international convention.”

Turkey has beefed up military defenses on its border with Syria over the past weeks, stationing tanks, anti-aircraft missiles, and additional troops in the area.

Turkish Prime Minister Recep Tayyip Erdogan warned on October 9 that Turkey’s armed forces would not hesitate to strike back in response to any strike on Turkish soil after the Turkish parliament authorized cross-border military action against Syria “when deemed right” On October 4.

Tensions have been running high between Syria and Turkey, with Damascus accusing Turkey -- along with Saudi Arabia and Qatar -- of backing a deadly insurgency that has claimed the lives of many Syrians, including security and army personnel.

Syria has been experiencing unrest since March 2011.

Damascus says outlaws, saboteurs, and armed terrorists are the driving factors behind the unrest and deadly violence, but the opposition accuses the security forces of being behind the killings.

Syrian President Bashar al-Assad said in August that the country is engaged in a “crucial and heroic” battle that will determine the destiny of the nation.

TNP/JR

A prominent military analyst says the United States is deeply concerned about the alliance among Iran, Iraq and Syria and their stand against Israel, Press TV reports.

“There are deep concerns within the US that a coalition between Iran, Iraq and Syria will stand against Israel and Turkey which frankly is their long-serving surrogate since Ottoman times,” Gordon Duff said in an interview with Press TV on Friday.

He further stressed that there needs to be a no-fly-zone over Turkey “since they seem to have difficulty following international convention.”

Turkey has beefed up military defenses on its border with Syria over the past weeks, stationing tanks, anti-aircraft missiles, and additional troops in the area.

Turkish Prime Minister Recep Tayyip Erdogan warned on October 9 that Turkey’s armed forces would not hesitate to strike back in response to any strike on Turkish soil after the Turkish parliament authorized cross-border military action against Syria “when deemed right” On October 4.

 

Tensions have been running high between Syria and Turkey, with Damascus accusing Turkey -- along with Saudi Arabia and Qatar -- of backing a deadly insurgency that has claimed the lives of many Syrians, including security and army personnel.

Syria has been experiencing unrest since March 2011.

Damascus says outlaws, saboteurs, and armed terrorists are the driving factors behind the unrest and deadly violence, but the opposition accuses the security forces of being behind the killings.

Syrian President Bashar al-Assad said in August that the country is engaged in a “crucial and heroic” battle that will determine the destiny of the nation.

TNP/JR


Africa: Transcript – Ambassador Johnnie Carson On the Situation in Mali and the Sahel, Somalia and the DRC

The Obama administration is contemplating broad military, political and humanitarian intervention to stop a slide toward chaos and Islamic extremism in Mali, the top State Department diplomat for Africa said Thursday.

The international but largely U.S.-funded effort to expunge al-Qaeda-linked militants and restore political order in Somalia could present a model for Mali, Assistant Secretary of State for Africa Johnnie Carson said.

Since 2007, the United States has spent more than $550 million to help train and supply an African proxy force of about 18,000 soldiers in Somalia, which has brought a measure of stability to the war-torn country for the first time in two decades.

Although the United States has not committed to replicating that approach in Mali, Carson and others are holding up the routing of the al-Shabab militia and conducting of elections in Somalia as a template for actions elsewhere.

“It’s a model that should be reviewed and looked at as an element for what might be effective in that part of the world,” Carson said in an interview, “but it’s not there yet.”

The Somalia comparison offers the clearest view yet of U.S. thinking about the growing terrorism threat from Mali, a landlocked West African country the size of Texas that has imploded politically since a military coup in March.

As in Somalia, the threat to the United States and other countries from Mali is wrapped in a larger problem of lawlessness, poverty, tribal friction and weak governance.

Somalia adopted a provisional constitution in August, and a new federal government was formed after years of chaos that had fueled terrorism, piracy and famine. Security has slowly improved under the proxy force, which is led by the African Union but bankrolled and trained by the United States, European Union and United Nations.

Carson said the internationally backed plan for Somalia’s political reconstruction was working because the country’s neighbors, the United States, E.U. and United Nations had subscribed to a common set of goals.

He cautioned that a regional and international consensus would be required for the approach to work in Mali. “There needs to be that kind of a clear understanding there as well,” he said.

Mali’s military quickly lost control of the country after the March coup, which was led by a U.S.-trained army captain. Since then, Islamist militias affiliated with al-Qaeda have imposed strict Sharia law in northern Mali and, along with Tuareg rebels, declared an independent state. Hundreds of thousands of refugees have fled their homes.

Last week, the remnants of Mali’s central government, France and west African nations led calls at the United Nations for the creation of an African-led force to help Mali confront the militants.

The Economic Community of West African States has said it is willing to send about 3,300 troops to Mali if it gets the backing of the United Nations and Western countries.

The United States has been leery of a French-backed proposal for quick deployment of an internationally backed African force in Mali, preferring a more comprehensive plan that addresses underlying political problems and tribal divisions.

“We want to make sure that it is an African-led international response, and also be very clear that whatever is done out there should in fact be well planned, well organized and well financed,” Carson said.

The U.S. diplomat has also said that it is important to enlist support from Mali’s northern neighbors, especially Algeria and Mauritania, which share a long border with the troubled country and have also fought their own long-running Islamist insurgencies.

U.S. officials have ruled out sending American combat troops to Mali but have said the Obama administration could help train, equip and transport an intervention force drawn from other African countries.

“There will be a need for some type of security response,” Carson said, adding that the United States could support one if it is drawn up correctly.

Africa: Transcript – Ambassador Johnnie Carson On the Situation in Mali and the Sahel, Somalia and the DRC

document

The top United States diplomat for Africa has acknowledged that military action will be needed to break the control of northern Mali by … ( Resource: U.S. Acknowledges Need for Military Action in Mali

New York,New York — Assistant Secretary of State for African Affairs Johnnie Carson held a briefing at the New York Foreign Press Center during which he discussed the situation in Mali and the Sahel, Somalia and the Democratic Republic of the Congo and answered questions from journalists.

MODERATOR: Good afternoon to everyone from the Africa Regional Media Hub of the United States Department of State. And good morning to those joining us from the U.S. I would like to welcome all of our participants. Thank you for joining us. Our speaker today is Ambassador Johnnie Carson, the Assistant Secretary of State for African Affairs. Ambassador Carson will brief us on U.S. foreign policy in Africa as it pertains to the current situation in Somalia, the Democratic Republic of the Congo, and Mali and the Sahel.

We will begin today’s call with remarks from our speaker and then open it up to your questions. To ask a question, please press *1 on your phone and you will be placed in the question queue. As a reminder, today’s call is on the record and will last approximately 45 minutes. And now, I will turn it over to Ambassador Johnnie Carson.

AMBASSADOR CARSON: Yvonne, thank you very much for the warm introduction, and thank you all for participating in this briefing. I would like this morning to talk about the U.S. participation in last week’s UN General Assembly, where there was significant discussion and debate on issues related to the situation in Mali and the Sahel, Somalia, Sudan, and the Eastern Congo. I’d also like to give you a briefing on some of the Secretary’s activities and some of our own engagement.

Last week was an extraordinarily busy week at the UN on African-related issues. Secretary General Ban Ki-moon hosted no less than four regional conferences on Africa – on Sahel, Somalia, Sudan, and the Eastern Congo. Secretary of State Hillary Clinton participated in two of those sessions, one dealing with Sahel and Mali and a second one dealing with Somalia. The U.S. Government was represented at senior levels in the Sudan discussions and in the Eastern Congo, DRC, Rwanda discussions.

In addition, the Secretary of State met in a trilateral meeting with President Kabila of the Democratic Republic of the Congo, and also participating was President Paul Kagame of Rwanda. On Friday afternoon, the Secretary also met with Sudanese officials, including Foreign Minister Ali Karti from Khartoum. The Secretary also participated in sessions on HIV/AIDS hosted by the head of UNAIDS and also a session on food security, where we are also very much engaged.

Let me talk briefly about the four key areas under discussion last week that the Secretary General hosted and talk about where our policy is with respect to each of those four areas. First on Mali and the Sahel, we in the United States are deeply concerned about the ongoing situation in Mali. We think that Mali is an enormously complicated situation, comprising four separate problems that are interrelated. One is an issue of governance and the need for a return to a civilian elected creditable government, which does not exist and has not existed since the coup d’etat that took place in March of 2012.

Second is a political issue related to the Tuareg. That is an issue of political marginalization and a government which has not provided economic and social services to a minority community in northern Mali. The Tuareg feel politically marginalized; this has been a historical problem that dates back prior to Mali’s independence, and it must be resolved politically – not militarily but politically.

Third is a very serious problem, a problem that affects Mali and affects the neighboring states as well, and this is the issue of terrorism – terrorism carried out by AQIM – al-Qaida in the Islamic Maghreb Ã? as well as another associated group, MUJAO. Both of these groups have been responsible for the desecration of historical writings and buildings and artifacts in Timbuktu. They are responsible for trying to impose Sharia law on various parts of northern Mali. They are responsible for terrorism, for kidnapping, and for robbery. This is an issue that must be dealt with through security and military means.

And the fourth problem in Mali is the issue of the humanitarian situation. Always a food deficit region, it has been further impacted by the failure of rains sufficient this year to meet the needs of the community and by a growing refugee population displaced as a result of the al-Qaida and MUJAO activities in northern Mali. So four very complex problems.

Secretary General Ban Ki-moon proposed that the UN establish a position of special envoy to deal with this issue, to coordinate UN activities, to work with the regional governments, and to work with others in the international community. He also said that there would be a strategy developed by the UN that would take into account strategies being worked on by ECOWAS and others in the region. We support the establishment of a UN Secretary General Special Representative for Mali and the Sahel. We support the coordination efforts that would be under this individual. We support the development of a broad-based and comprehensive strategy. And we support the establishment of some kind of a core group or working group that will integrate the work of ECOWAS, Algeria, Mauritania, and Chad – and those three countries are not a part of ECOWAS but have great interest in the situation – as well as the United States, the European Union, France, Great Britain, and Germany, who also have interests there.

So we’re very much focused on the Sahel. We think that some progress was achieved with this meeting, and we hope that the Secretary General will move swiftly to mount a special envoy for the region.

The second major issues under focus was Somalia. Secretary Clinton also participated in this meeting. Somalia is a good news story for the region, for the international community, but most especially for the people of Somalia itself. Over the past 12 months we have seen the completion of the transitional roadmap ending the TFG and creating a new Somali Government. For the first time in nearly two decades, Somalia has a new provisional constitution. It has a newly selected parliament which is half the size of the former parliament and comprises some 18 percent women and whose membership is comprised of some 60 percent university graduates. There’s been a new speaker selected and a new president elected. Great progress has been achieved in Somalia, and this is in large measure because of the combined efforts of IGAD, the African Union, the UN and the international community, and especially the United States.

At this meeting, we heard from Somalia’s new president, Hassan Sheikh Mohamud, and it was broadly agreed that the international community would support the new emphasis in priorities of the government.

For our part in Washington, we are determined to do three things. One is to help the new government put in place the infrastructure so that it can run effectively. This means helping to create effective government ministries, have those ministries staffed with effective civil servants and advisors so that they can carry out their government functions.

The second is to help to create a new Somali national army, an army that is subservient to civilian and constitutional control, an army that is able to work alongside of AMISOM and take on increasingly new responsibilities that are much broader than anything AMISOM has been equipped and manned to do. But creating a new strong Somali army, to eventually replace AMISOM is a second priority. And third priority is to provide assistance to the government so that it can deliver services to the people so that it can rebuild and refurbish and re-staff schools, hospitals, and medical clinics, provide assistance so that it can begin to deal with some of its smaller infrastructure issues, providing clean water to populations, helping to restore electrical power and also opening up markets. We also want to help in developing small enterprise and microcredit operations to help the government as well.

So we will be working there. As I said, Secretary Clinton was there. We think Somalia has made enormous progress. We also believe there has been significant military progress against al-Shabaab. AMISOM deserves an enormous amount of credit in driving al-Shabab out of Mogadishu and its environs and also moving against the city of Kismayo. Much credit for the operations in Kismayo go to the Kenyan forces who were a part of AMISOM, but we must praise the leadership of the Ugandan commanders who have led the AMISOM mission over the last four years. But Uganda, Burundi, Djibouti, Kenya all deserve credit, and they will soon be joined by forces arriving literally today and tomorrow from Sierra Leone to help strengthen AMISOM. But the international community has been in unison with IGAD and the AU, and the U.S. has been a significant and major contributor to this effort.

On Sudan, the third issue which was brought up and hosted by Secretary General Ban Ki-Moon – we have seen very great progress there in the last three days. On Thursday evening in Addis Ababa, we saw an agreement signed by President Salva Kiir of South Sudan and President Bashir of Sudan to help resolve a number of outstanding issues related to oil, to revenue sharing, to citizenship, to pensions, and to debt. We recognize that there are a number of issues still outstanding related to Abyei, related to political consultations with respect to Blue Nile and South Kordofan, and to the important issue of humanitarian access to South Kordofan and Blue Nile, particularly in the Nuba Mountains. But progress has been made there in reducing tensions, reopening the borders, and getting those countries back to a position where we can see two viable states living in peace internally as well as with one another. So much discussion on Sudan. We were represented a high level at those meetings by Under Secretary for Political Affairs Wendy Sherman, and we think progress has been forged there.

On the Eastern Congo, the last issue that was of great focus in New York last week, there was a meeting that brought together all of the regional Great Lakes states, including Tanzania, Uganda, Burundi, but most importantly Eastern Congo with President Kabila and the DRC, with – sorry – and with Rwanda with President Kagame. Our objectives and the objectives of that conference were to do everything possible to reduce the tensions that exist between Rwanda and the DRC, and to restore trust and confidence between the leaders there, and to do as much as possible to help in the recurring violence that persists in the Eastern Congo, largely as a result of the incursion and the rebellion of the M23.

There, we are calling on all states not to support the M23 rebels; to denounce their activities publicly and to contribute as much as possible to the resolution of the problems in the DRC. We believe that it is absolutely critical that the countries in the region respect the sovereignty and the borders of their neighbors, that they not engage in supporting rebel activities across the borders, and that everyone take responsibilities for their action, the protection of their citizens and their resources, the protection of those people who are in their countries, and that they not, in effect, undermine the sovereignty and stability of regional states.

IIIÃ ll stop right there and take your questions.

OPERATOR: Thank you, Ambassador Carson. We are now ready for the question-and-answer portion of our call. To ask a question, please press *1 on your phone. Please state your name and affiliation before you ask your question. And our first question comes from Drew Hinshaw with the Wall Street Journal.

QUESTION: Hi, good afternoon. I wanted to ask – I was hoping you could elaborate a little bit on the outcome of the UN summit. You mentioned that the UN is drafting a strategy that will take into account the strategy being drafted by ECOWAS. I was wondering if you could elaborate. Is it fair to say that the UN is now the primary author of the strategy going forward? Are they working with what ECOWAS has already written? Has ECOWAS presented the broad outlines of a strategy yet? But —

AMBASSADOR CARSON: Thank you for the question. I think that the UN will try to coordinate effectively with all of the players in the region. ECOWAS clearly has a very important role to play. Many of its member states are neighbors of Mali. But we also have to recognize that there are other states in the region that have borders with Mali, whose views also need to be taken into account. And we also must recognize that there is an international dimension to this issue, and so there are reasons to make sure that the wider views of the international community are there.

ECOWAS has played a very valuable and important leadership role, but it is important to make sure that the views of Algeria are included. Algeria has a long border and history and relationship with Mali. The views of Mauritania are also critical, valuable, and important. They too share long borders with Mali. And in fact, Libya also is a critical player because they too have shared borders and shared interests there. All three of those countries – Algeria, Mauritania, and Libya – are not a part of ECOWAS. And in addition, countries like Chad have an interest and they are not a part of ECOWAS. The United States, France, the European community also are concerned about the situation there, and their views should be taken into account.

I stress that in the case of Somalia, where we have seen enormous progress over the last 12 months, and in fact, continuously over the last three, three and a half years, there has been a clear commitment by all who were engaged there to follow a common strategy and adopt a set of common views. EGAD and the East African community, who are the most important players around Somalia, the AU, the U.S., the UN and others have all had a common position. And I think that’s why Somalia has achieved so much success over the last 12 months in terms of moving to a more permanent government and making the strides in success against al-Shabaab. We look to try to have the same kind of both regional and international cooperation on Mali.

OPERATOR: Thank you. Our next question comes from the U.S. Mission in Kampala. Please state your name and your affiliation.

QUESTION: I am Julius Odeke from Kampala. I work with The Independent magazine. My question to Assistant Secretary is that initially, America was looking for a base to be stationed in Africa, but they recently they said they will not do that. Is that a sign that America is withdrawing from its military engagement in Africa?

AMBASSADOR CARSON: Julius, thank you very much for your question. I think you are referring to AMISOM, and I can say that there is at this moment no – and I repeat, no – intention to have an AMISOM headquarters located in Africa. AMISOM is located in Germany, and at this point its headquarters is likely to remain – sorry – I’m sorry – AFRICOM. I’m saying AMISOM; I should have said AFRICOM. AFRICOM is located in Stuttgart, Germany, and there’s no intention to move the AFRICOM headquarters outside of Germany at this point. I said AMISOM; I meant to say AFRICOM.

MODERATOR: Thank you. Our next question comes from Tanzania. Please state your name and your affiliation.

QUESTION: My name is (inaudible). I work for the Tanzania (inaudible) newspaper. My question first of all is about the shift of America’s – or U.S. foreign policy. We have seen a lot of attention paid to Africa. We want to know whether there is any serious concern that what is going to be achieved is going to have an impact on the development of the region. Thank you.

AMBASSADOR CARSON: Yes. Thank you very much for the question from Tanzania. The United States has just recently published a new strategy for Africa. It was published in June of this year and is available on both the White House and the State Department website. That strategy for Africa is very clear. It says that we want to develop our friendship with Africa based on mutual respect, mutual interest, mutual responsibility. We want to base it on a partnership and not patronage. We want to elevate Africa’s importance in the international arena and we want to achieve – work with Africa to achieve four strategic objectives.

One is to strengthen democratic institutions and good governance. The second is to spur economic growth, investment, and trade between the United States and Africa. But we also want to help spur economic growth and trade amongst African states as well. Third, we want to help to bring about greater peace and security across the African continent. And in this area we continue to work with the international community – the UN, and others – to bring about greater peace and stability in places like Somalia, Sudan and South Sudan, and the Eastern Congo. And we will continue to work towards promoting peace, security, and stability in Africa. And fourthly, we want to work to help promote development and greater opportunity for all of AfricaaaÃ?s citizens, and there we will continue to focus on a number of priorities under the Obama Administration, including but not inclusive or exclusively working on things like Feed the Future, which is a program to help promote a green agricultural revolution across Africa, to end food insecurity, to grow agro industry.

And we will also work on public health issues through our Global Health Initiative, working to combat HIV/AIDS, malaria, tuberculosis, cholera, and to help build Africa’s public health institutions so that they are better able to provide services to their people. But we will do this through our USAID missions, we will do this through our centers for disease control, we will do this through the Millennium Challenge Corporation which provides multimillion dollar grants that are used to deal with major economic development and infrastructure challenges. But those are the four things that we will continue to work on.

MODERATOR: Thank you. Our next question comes from Kigali, Rwanda. Please state your name and affiliation.

QUESTION: Thank you very much, Ambassador Carson. My name is Edmund (inaudible). I work for the East African Nation Media Group. My question is about the Congo. I saw in the news in the morning that the U.S. Government has asked Rwanda to denounce M23 rebels. It appears there’s no one asking the DRC Government to address its internal issues, particularly the ones M23 are fighting for. I believe some of the issues they are asking the DRC Government to address are legitimate. So the way forward now, what is the position of the U.S. Government towards the issues inside the DRC? Are we going to see the U.S. Government asking DRC to address the issues now that we see in the papers that (inaudible) speaking Congolese feel that a genocide will happen soon? Thank you.

AMBASSADOR CARSON: Thank you very Ã? Edmund. Thank you very much for that question from Kigali. First of all, our desire is to see peace and security and development in the Eastern Congo just as we see peace and security and development occurring in Rwanda, in Uganda, in Tanzania, and other neighboring states in the Great Lakes. We seek for the people of the Eastern Congo what you enjoy in Kigali, what people enjoy in Tanzania, in Lusaka, in Kampala.

Each of these states in the region have responsibilities, and their leaders have responsibilities. In the DRC, President Kabila clearly has the responsibilities. His challenges are great, but his responsibilities are equally important. President Kabila, amongst other things, must in fact protect all of the Congolese citizens irrespective of their ethnicity and their language, and this includes the large Banyamulenge and Rwandaphone populations that exist there in both South Kivu and in North Kivu. He has that responsibility as the president of his country.

He also has the responsibility to protect women and girls. We know that the Eastern Congo is probably the most violent place in the world for girls and women to live. There must be better protection of the rights of women. He has a responsibility to go after and to eradicate all armed rebel groups operating in his country Ã? the exFARfar, the Interahamwe, the FDLR, and also the M23 as well. They are rebels. They are a dissident group. He has a responsibility to ensure that the minerals of his country are exported and handled in a transparent way and that they are not the source of corruption or misuse. He has the responsibility to improve dramatically his security services so that they protect people and not prey on them. All of these are responsibilities that President Kabila has in his country.

But let me also say that there are responsibilities for the neighboring states as well, and those responsibilities are clear. They are not to support rebel groups operating against the country or a neighboring country. It’s not to train or to politically influence or to ship arms to rebel groups that undermine the security of a neighboring state. And it is not and should not be too much to ask the Government of Rwanda to denounce a rebel group that is preying on the lives of people or undermining the stability of a neighbor. So the call for the Government to reject the territorial and political and rebellious ambitions of the M23 are not and should not be too much. The M23 is led by individuals who are ICC and IT. They’re led by people whoooÃ?ve carried out serious human rights violations. So it should not be too much to ask the Government of Rwanda to do this, to ask that. And that’s a responsibility on that side of the border as well.

There are responsibilities held by all, and it is when everyone exercises those responsibilities appropriately and correctly and transparently that we have peace and stability. It is important that tensions be defused between the regional states, including Rwanda and the DRC, that trust be restored between these two countries, and that confidence be rebuilt. And so each country has responsibilities, and when those responsibilities are lived up to, we have a greater chance for peace, stability, and the harmony that can and should exist throughout that region.

OPERATOR: Thank you. Our next question comes from Jo Biddle. Please state your affiliation.

QUESTION: Good morning. Jo Biddle from Agence France-Presse, phoning in from the State Department. Thank you very much for organizing this call. Last week I was at Ã? I watched the Sahel meeting that was happening in the United Nations, and there were many calls from African countries, supported by France, for a military force to go into Mali and try to flush out the rebels, the Islamic rebels that are spreading terror in that region. You mentioned that you thought the issue of the Tuareg was Ã? should be resolved politically and not militarily, but on the Islamic side of things, is the United States going to support a military ECOWAS-led mission for the Sahel region, and – yeah, could you talk to that, please?

AMBASSADOR CARSON: Let me – thank you very much for the question from Agence France-Presse. The – all four issues that I mentioned earlier are critical, and they must be done simultaneously. It is absolutely critically important for there to be democratic progress in Mali, that there be a restoration of the civilian democratic constitutional government, and that needs to be done as soon as possible. It needs to occur alongside of progress in these other areas.

But let me tell you why I start there, because if you donnnÃ?t have a strong, creditable government in Bamako, the ability to negotiate a political solution with the Tuareg, one that has credibility, one that will be carried out, will be weakened. If you don’t have a strong, creditable government in Bamako, it will be difficult to have a military which is capable of leading as it should the liberation in the northern part of the country. Any ECOWAS military activities in Northern Mali should, in fact, have the Malian military as the lead and ECOWAS fighting alongside of it. But it is not just ECOWAS. It is important that what goes on up there have the support of all of the states in the region. The ECOWAS states, as well as Mauritania and Algeria and others in the area, must also be a part of this policy. After all, the states in the north have long borders with Mali.

But yes, I say that there will have to be, at some point, military action to push the AQIM and the MUJAO out of the north and out of the control that they are exercising over towns like Timbuktu and Kidal and Gao. But any military action up there must indeed be well planned, well organized, well resourced, and well thought through. And it must, in fact, be agreed upon by those who are going to be most affected by it.

So it is not something that should be taken lightly. There were strong calls, including from France, for action to be taken. We, too, in Washington have been appalled by the destruction of many of Mali’s valuable historical texts, by the destruction of mosque and historically important buildings, and by the attempt to impose extremist ideology on the communities. Clearly, some action must be taken. But as I said, it should be well planned, well organized, well executed, and well resourced. I think this is important.

All of these things must be done. They must be done simultaneously. But it is imperative that things move forward democratically in Bamako and that we see a restoration of democracy there. If we don’t have that, it will not – the other activities will not be nearly as effective and strong. All things must be moved simultaneously.

OPERATOR: We now have time for one more question, and that comes from Kevin Kelly with the Nation Media Group.

QUESTION: Yeah, hi. Thanks very much to Ambassador Carson for agreeing to do this, but I actually have two questions. One pertains to his mention before about the United States helping to build a Somali national army. I’m wondering if you could give me details on that, what the timetable and the funding might be for that.

And related to it, do you have concerns, Ambassador Carson, about what will happen next in Kismayo? Do you see that the Kenyan presence there might be interpreted eventually as an army of occupation? As you well know, there’s a lot of nationalist feeling in Somalia that outsiders are not generally welcome in these circumstances. Thanks a lot.

AMBASSADOR CARSON: Thank you very much for those two questions on Somalia. First of all, we applaud the work of AMISOM and what they have done in helping to degrade and defeat and push al-Shabaab out of Somalia’s main cities and towns. We believe that this will help to bring about a return to stability in Somalia and will reduce, over time, the terrorist threat to Somalis and to neighboring states. We believe that the Kenyan role in liberating the south as a part of AMISOM is important and deserves the support of both IGAD, the African Union, and the international community.

We recognize that Kismayo is comprised of a number of clans and sub-clans in Somalia, and that there will be clan competition. We hope that the Kenyan presence there will not be seen as an occupying force, and that the government in Mogadishu, working alongside of AMISOM and the UN, will go in very quickly and establish political stability and a political system that takes into account the various clan and sub-clan interests. The Kenyan presence is not intended to be a military occupation. It is intended to be a part of a temporary – a very temporary liberation strategy that quickly allows Somali leadership to take control. And this leadership should come from Mogadishu, should come from the new government led by President Hassan Sheikh Mohamud.

I think that the Kenyans have no interest in trying to establish political authority there. They simply want to help drive out al-Shabaab, help liberate the country, help create the stability that has been long absent. But we hope that the Somali Government will move in quickly, working with IGAD to restore the political leadership that’s important for running Kismayo. But this has been a major step forward. We should applaud what has been done. And we want to work to encourage the political forces to move in to help stabilize the situation.

On this – on the first question that you asked, we have in Washington been strong supporters of AMISOM, major contributors to the AMISOM effort, largely by training and equipping AMISOM battalions that have gone into Somalia to help fight the al-Shabaab. Going forward, we would anticipate that most of our new and additional resources, as they come to us, will be directed at helping to train and provision a new Somali military, not to continue to expand AMISOM. The focus should be on creating a national Somali army that will take over from AMISOM and will assume the responsibilities of providing national security and defense for the nation.

I do not at this time have any dollar figures that I can share with you on what we would be providing to the Somali Government to train Somali military forces. We have done some of this in the past. We have trained small units of Somali TFG troops in Bihanga, Uganda at a military camp. We would expect that we will, over time, continue to do this and expand it and to make more of the training local in Somalia for both cost effectiveness and for political reasons. But we look at the focus going forward being directed at strengthening the Somali national military and not expanding the AMISOM effort, which has been extraordinarily valuable and important.

MODERATOR: That concludes today’s call. I would like to thank Ambassador Johnnie Carson for joining us, and thank all of our callers for participating in today’s call. I know many of you did not get the opportunity to ask your questions, so if you have any questions about today’s call, you can contact the African – the Africa Regional Media Hub at AFMediahub@state.gov. Thank you.

Source: Africa Regional Media Hub

 


Iran,Iraq,Syria,Russia :Mission NOT accomplished for Big Oil

23 August 2012

 

Published (with an intro by Tom Engelhardt) on TomDispatch

In 2011, after nearly nine years of war and occupation, U.S. troops finally left Iraq. In their place, Big Oil is now present in force and the country’s oil output, crippled for decades, is growing again. Iraq recently reclaimed the number two position in the Organization of the Petroleum Exporting Countries (OPEC), overtaking oil-sanctioned Iran. Now, there’s talk of a new world petroleum glut. So is this finally mission accomplished?

Well, not exactly. In fact, any oil company victory in Iraq is likely to prove as temporary as George W. Bush’s triumph in 2003. The main reason is yet another of those stories the mainstream media didn’t quite find room for: the role of Iraqi civil society. But before telling that story, let’s look at what’s happening to Iraqi oil today, and how we got from the “no blood for oil” global protests of 2003 to the present moment.

Here, as a start, is a little scorecard of what’s gone on in Iraq since Big Oil arrived two and a half years ago: corruption’s skyrocketed; two Western oil companies are being investigated for either giving or receiving bribes; the Iraqi government is paying oil companies a per-barrel fee according to wildly unrealistic production targets they’ve set, whether or not they deliver that number of barrels; contractors are heavily over-charging for drilling wells, which the companies don’t mind since the Iraqi government picks up the tab.

Meanwhile, to protect the oil giants from dissent and protest, trade union offices have been raided, computers seized and equipment smashed, leaders arrested and prosecuted. And that’s just in the oil-rich southern part of the country.

In Kurdistan in the north, the regional government awards contracts on land outside its jurisdiction, contracts which permit the government to transfer its stake in the oil projects — up to 25% — to private companies of its choice. Fuel is smuggled across the border to the tune of hundreds of tankers a day.

In Kurdistan, at least the approach is deliberate: the two ruling families of the region, the Barzanis and Talabanis, know that they can do whatever they like, since their Peshmerga militia control the territory. In contrast, the Iraqi federal government of Prime Minister Nouri al-Maliki has little control over anything. As a result, in the rest of the country the oil industry operates, gold-rush-style, in an almost complete absence of oversight or regulation.

Oil companies differ as to which of these two Iraqs they prefer to operate in. BP and Shell have opted to rush for black gold in the super-giant oilfields of southern Iraq. Exxon has hedged its bets by investing in both options. This summer, Chevron and the French oil company Total voted for the Kurdish approach, trading smaller oil fields for better terms and a bit more stability.

Keep in mind that the incapacity of the Iraqi government is hardly limited to the oil business: stagnation hangs over its every institution. Iraqis still have an average of just five hours of electricity a day, which in 130-degree heat causes tempers to boil over regularly. The country’s two great rivers, the Tigris and Euphrates, which watered the cradle of civilization 5,000 years ago, are drying up.  This is largely due to the inability of the government to engage in effective regional diplomacy that would control upstream dam-building by Turkey.

After elections in 2010, the country’s leading politicians couldn’t even agree on how to form a government until the Iraqi Supreme Court forced them to. This record of haplessness, along with rampant corruption, significant repression, and a revival of sectarianism can all be traced back to American decisions in the occupation years. Tragically, these persistent ills have manifested themselves in a recent spate of car-bombings and other bloody attacks.

Washington’s Yen for Oil

In the period before and around the invasion, the Bush administration barely mentioned Iraqi oil, describing it reverently only as that country’s “patrimony.” As for the reasons for war, the administration insisted that it had barely noticed Iraq had one-tenth of the world’s oil reserves. But my new book reveals documents I received, marked SECRET/NOFORN, that laid out for the first time pre-war oil plans hatched in the Pentagon by arch-neoconservative Douglas Feith’s Energy Infrastructure Planning Group (EIPG).

In November 2002, four months before the invasion, that planning group came up with a novel idea: it proposed that any American occupation authority not repair war damage to the country’s oil infrastructure, as doing so “could discourage private sector involvement.” In other words, it suggested that the landscape should be cleared of Iraq’s homegrown oil industry to make room for Big Oil.

When the administration worried that this might disrupt oil markets, EIPG came up with a new strategy under which initial repairs would be carried out by KBR, a subsidiary of Halliburton. Long-term contracts with multinational companies, awarded by the U.S. occupation authority, would follow. International law notwithstanding, the EIPG documents noted cheerily that such an approach would put “long-term downward pressure on [the oil] price” and force “questions about Iraq’s future relations with OPEC.”

At the same time, the Pentagon planning group recommended that Washington state that its policy was “not to prejudice Iraq’s future decisions regarding its oil development policies.” Here, in writing, was the approach adopted in the years to come by the Bush administration and the occupation authorities: lie to the public while secretly planning to hand Iraq over to Big Oil.

There turned out, however, to be a small kink in the plan: the oil companies declined the American-awarded contracts, fearing that they would not stand up in international courts and so prove illegitimate. They wanted Iraq first to have an elected permanent government that would arrive at the same results. The question then became how to get the required results with the Iraqis nominally in charge. The answer: install a friendly government and destroy the Iraqi oil industry.

In July 2003, the U.S. occupation established the Iraqi Governing Council, a quasi-governmental body led by friendly Iraqi exiles who had been out of the country for the previous few decades. They would be housed in an area of Baghdad isolated from the Iraqi population by concrete blast walls and machine gun towers, and dubbed the Green Zone.  There, the politicians would feast, oblivious to and unconcerned with the suffering of the rest of the population.

The first post-invasion Oil Minister was Ibrahim Bahr al-Uloum, a man who held the country’s homegrown oil expertise in open contempt. He quickly set about sacking the technicians and managers who had built the industry following nationalization in the 1970s and had kept it running through wars and sanctions. He replaced them with friends and fellow party members. One typical replacement was a former pizza chef.

The resulting damage to the oil industry exceeded anything caused by missiles and tanks. As a result the country found itself — as Washington had hoped — dependent on the expertise of foreign companies. Meanwhile, not only did the Coalition Provisional authority (CPA) that oversaw the occupation lose $6.6 billion of Iraqi money, it effectively suggested corruption wasn’t something to worry about.  A December 2003 CPA policy document recommended that Iraq follow the lead of Azerbaijan, where the government had attracted oil multinationals despite an atmosphere of staggering corruption (“less attractive governance”) simply by offering highly profitable deals.

Now, so many years later, the corruption is all-pervasive and the multinationals continue to operate without oversight, since the country’s ministry is run by the equivalent of pizza chefs.

The first permanent government was formed under Prime Minister Maliki in May 2006. In the preceding months, the American and British governments made sure the candidates for prime minister knew what their first priority had to be: to pass a law legalizing the return of the foreign multinationals — tossed out of the country in the 1970s — to run the oil sector.

The law was drafted within weeks, dutifully shown to U.S. officials within days, and to oil multinationals not long after. Members of the Iraqi parliament, however, had to wait seven months to see the text.

How Temporary the Victory of Big Oil?

The trouble was: getting it through that parliament proved far more difficult than Washington or its officials in Iraq had anticipated. In January 2007, an impatient President Bush announced a “surge” of 30,000 U.S. troops into the country, by then wracked by a bloody civil war. Compliant journalists accepted the story of a gamble by General David Petraeus to bring peace to warring Iraqis.

In fact, those troops spearheaded a strategy with rather less altruistic objectives: first, broker a new political deal among U.S. allies, who were the most sectarian and corrupt of Iraq’s politicians (hence, with the irony characteristic of American foreign policy, regularly described as “moderates”); second, pressure them to deliver on political objectives set in Washington and known as “benchmarks” — of which passing the oil law was the only one ever really talked about: in President Bush’s biweekly video conferences with Maliki, in almost daily meetings of the U.S. ambassador in Baghdad, and in frequent visits by senior administration officials.

On this issue, the Democrats, by then increasingly against the Iraq War but still pro-Big Oil, lent a helping hand to a Republican administration. Having failed to end the war, the newly Democrat-controlled Congress passed an appropriations bill that would cut off reconstruction funds to Iraq if the oil law weren’t passed. Generals warned that without an oil law Prime Minister Maliki would lose their support, which he knew well would mean losing his job. And to ramp up the pressure further, the U.S. set a deadline of September 2007 to pass the law or face the consequences.

It was then that things started going really wrong for Bush and company. In December 2006, I was at a meeting where leaders of Iraq’s trade unions decided to fight the oil law. One of them summed up the general sentiment this way: “We do not need thieves to take us back to the middle ages.” So they began organizing. They printed pamphlets, held public meetings and conferences, staged protests, and watched support for their movement grow.

Most Iraqis feel strongly that the country’s oil reserves belong in the public sector, to be developed to benefit them, not foreign energy companies. And so word spread fast — and with it, popular anger. Iraq’s oil professionals and various civil society groups denounced the law. Preachers railed against it in Friday sermons. Demonstrations were held in Baghdad and elsewhere, and as Washington ratcheted up the pressure, members of the Iraqi parliament started to see political opportunity in aligning themselves with this ever more popular cause. Even some U.S. allies in Parliament confided in diplomats at the American embassy that it would be political suicide to vote for the law.

By the September deadline, a majority of the parliament was against the law and — a remarkable victory for the trade unions — it was not passed. It’s still not passed today.

Given the political capital the Bush administration had invested in the passage of the oil law, its failure offered Iraqis a glimpse of the limits of U.S. power, and from that moment on, Washington’s influence began to wane.

Things changed again in 2009 when the Maliki government, eager for oil revenues, began awarding contracts to them even without an oil law in place. As a result, however, the victory of Big Oil is likely to be a temporary one: the present contracts are illegal, and so they will last only as long as there’s a government in Baghdad that supports them.

This helps explain why the government’s repression of trade unions increased once the contracts were signed.  Now, Iraq is showing signs of a more general return to authoritarianism (as well as internecine violence and possibly renewed sectarian conflict).

But there is another possibility for Iraq. Years before the Arab Spring, I saw what Iraqi civil society can achieve by organizing: it stopped the world’s superpower from reaching its main objective and steered Iraq onto a more positive course.

Many times since 2003 Iraqis have moved their country in a more democratic direction: establishing trade unions in that year, building Shi’a-Sunni connections in 2004, promoting anti-sectarian politicians in 2007 and 2008, and voting for them in 2009.  Sadly, each of these times Washington has pushed it back toward sectarianism, the atmosphere in which its allies thrive.  While mainstream commentators now regularly blame the recent escalation of violence on the departure of U.S. troops, it would be more accurate to say that the real reason is they didn’t leave far sooner.

Now, without its troops and bases, much of Washington’s political heft has vanished. Whether Iraq heads in the direction of dictatorship, sectarianism, or democracy remains to be seen, but if Iraqis again start to build a more democratic future, the U.S. will no longer be there to obstruct it.  Meanwhile, if a new politics does emerge, Big Oil may discover that, in the end, it was mission unaccomplished. [source]

Putin backs Russian push for Iraqi oil

 

President Vladimir Putin lobbied Iraq’s prime minister on Wednesday to support Russian energy investment, as the oil arm of gas export monopoly Gazprom (GAZP.MM) pushes for a foothold in the semi-autonomous region of Kurdistan.

Gazprom Neft (SIBN.MM) is still interested in Kurdistan’s oil, company sources and the province’s spokesman said, rebutting reports it had frozen projects in the Iraqi province.

Putin, a vocal opponent of the U.S.-led invasion of Iraq in 2003, called for Russia to strengthen its presence in the OPEC oil producer state at talks with Prime Minister Nuri al-Maliki at his residence near Moscow.

“Our companies are boosting their activities in Iraq – the whole list of our large energy companies,” Putin said. “I hope their work will develop step by step and we are very much hoping for your support, Mr Prime Minister.”

Russia’s second-largest crude producer LUKOIL (LKOH.MM) is developing the vast West Qurna-2 oil, while mid-sized Bashneft (BANE.MM) is teaming up with Britain’s Premier Oil PLC (PMO.L) after they won the right to tap oil in the Middle East country.

LUKOIL bought Norway’s Statoil (STL.OL) out of their partnership in West Qurna-2 in March, and CEO Vagit Alekperov said he would be open to taking on board a new partner.

“We bought it, 100 pct, if there is a good offer we can sell part of it, so far we feel comfortable with it,” Alekperov told Reuters. Asked if there was an offer in the works, he said “at the moment no, only outline ideas.”

Russia signed $4.2 billion worth of arms deals with Iraq on Tuesday.

DEAL NOT FROZEN

Late on Tuesday, the International Oil Daily cited Iraqi Oil Minister Abdul-Kareem Luaibi as saying Baghdad had received a letter from Gazprom, in which the company said it had frozen its contract with Kurdistan.

Baghdad has been angered by the plans of some international majors, including ExxonMobil (XOM.N), to tap oil and gas in the northern region. The central government says the deals are illegal.

A spokesman for the Kurdistan Regional Government (KRG) said Gazprom Neft had informed the KRG on Wednesday that it remains committed to its contract in the Kurdistan region.

Sources at Gazprom Neft also knocked down the report.

In August, Gazprom Neft acquired interests in two blocks in Kurdistan.

“Gazprom Neft is still working on these projects. The company keeps its interest in Kurdistan,” a Gazprom Neft source told Reuters.

Another source at the company said Gazprom Neft would be able to go ahead with the projects once the Iraqi central government and KRG resolve their differences.

He also said Gazprom Neft management will travel to Kurdistan before year-end to discuss oil development in the province. A company spokeswoman declined to comment.

Gazprom Neft already has a project in Iraq, near the Iranian border, where it expects to produce about 15,000 barrels per day from 2013. [source ]

 

And the other side “de la moneda” Judge for yourselves

 

October 11, 2012 

Iraq today stands on the brink of total control by Iran and the establishment of a new dictatorship. 

The dream for which so many American soldiers believed they were fighting is slipping away as Iraq moves in the opposite direction – toward Iran. 

Iran’s presence is already visible in Iraq, from the droves of pilgrims at Shi’ite holy sites to the brands of yogurt and jam on grocery shelves, and Iraqis see clear Iranian influence since the US troops left at the end of last year. 

It could be considered a natural step for the only two Shi’ite Muslim-led governments in the Sunnidominated Middle East to expand their relationship. However, many Iraqi Shi’ites are cautious of intrusion of their country’s sovereignty and afraid of being overrun by the Iranian theocracy. 



Iraqis are accusing Iran of meddling in Iraqi affairs to destabilize the new democracy and strengthen Iran’s influence over it and its neighbors. Top Iranian officials maintain they are only strengthening diplomatic and economic ties with Iraq, as they have sought to do since the 2003 ouster of Saddam Hussein. On the other hand, head of Iranian al-Quds Brigades General Qasim Sulaimani announced recently that Iraq and South Lebanon are submissive to Tehran’s will, stating that his country could regulate any movement with the aim to form Islamic governments in both countries. 

Not to mention the close relationship between Iran and Syria. This is the goal of the Iranians: to form the Shi’ite crescent – Iran, Iraq, Syria and Southern Lebanon – controlled by Hezbollah. The aim is to encircle Israel. Israel should worry about Iraq acquiring F-16 aircraft from the United States, especially since their pilots will be selected from among the Shi’ites most loyal to the regime in Tehran. “Iran wants to make Iraq a weak state,” said Maj.- Gen. Jeffrey S. Buchanan, a US military spokesman in Iraq, a few years ago. 

This issue has also worried many American officials who have long feared what they described as Iranian meddling in Iraq and its potential to sow unrest across the Middle East. Those worries were a chief driver of failed efforts to leave at least several thousand American troops in Iraq beyond the end of last year’s withdrawal deadline. 

“The more you think about it, the more examples there are of Iranian influence,” says Buchanan. “They’re circumstantial, but that’s how behind-thescenes influence works.” Since Iraq’s 2010 election, Iraqis have witnessed the subordination of the state to Prime Minister Nouri al- Maliki’s Iranian-backed Da’awa party, the erosion of judicial independence and intimidation of opponents. All of this happened during the Arab Spring while other countries were ousting dictators in favor of democracy. Iraq has become a sectarian battleground in which identity politics have crippled democratic development. 

Maliki has laid siege to his political opponents’ homes and offices, surrounded them with his security forces, all with the blessing of politicized judiciary and law enforcement systems that have become virtual extensions of his personal office. 

This is a typical textbook definition of “lawfare.” His national security adviser has complete control over the Iraqi intelligence and national security agencies, which are supposed to be independent institutions but have become a virtual extension of Maliki’s Da’awa Party; and his Da’awa loyalists are in control of the security units that oversee the Green Zone. The Iraqi prime minister uses secret prisons under the supervision of his elite security apparatus, and the Red Cross has conclusive evidence about these prisons. 

It was stated in its recent report that there is evidence detainees being tortured to extract confessions and information. The report mentioned that some of the torture sessions were attended by Iraqi judges. The Red Cross reported that there are three secret prisons in the Green Zone alone that are linked to Maliki’s office. The political process in Iraq is going in a very wrong direction; it’s going toward a dictatorship, while Iran views Maliki as its man in Baghdad and has dictated the shape of the current government. 

This Shi’ite Islamist government bodes ill for the country’s future. Today in Iraq, we see Maliki silencing and eliminating his opponents, using the law as a silent weapon for a quiet war. MALIKI IS using the judicial system to attack his political opponents, and the security services in Iraq have become part of the problem as they have been proven to be managing secret detention centers where torture is practiced under the personal supervision of the Office of the Prime Minister. It was revealed recently that 36 out of 38 inspectors-general at Iraqi ministries are from Maliki’s Da’awa Party. 

What we also see in Iraq now is that Iraq supports Syria, weapons from Iran being transported to Syria through Iraq, violations of UN security council resolutions against Iran and money laundering through Iraqi banks in favor of Iran with the full knowledge and support of the Office of the Prime Minister. The Iranian government played an important role in the revitalization of money laundering in Iraq by private banks in coordination with the Office of the Prime Minister. Armed groups backed by Tehran receive millions of dollars monthly in salaries and benefits from Iraqi banks under the guise of bank transfers or investment projects or grants to civil society organizations. It has been confirmed that Tehran-backed armed groups present in southern, central and northern Iraq are dealing with specific banks in these areas and receive their funds facilitated by the Da’awa Party. By consistently thinking of Maliki as a Shi’ite rather than an Iraqi Arab, American officials overlooked opportunities that once existed in Iraq but are now gone. Thanks to their own flawed policies, the Iraq they left behind is more similar to the desperate and divided country of 2006 than to the optimistic Iraq of early 2009. When American forces withdrew from Iraq at the end of last year, it was thought that they would be leaving behind a country that was politically unstable, increasingly volatile, and at risk of descending into the sort of sectarian fighting that killed thousands in 2006 and 2007. Nothing like this actually happened or will happen; instead we see Iraq falling under the full control of Iran. It is controlled by Iran’s embassy in Baghdad and its many consulates in other Iraqi cities. From a strategic standpoint, one can say that Iraq, with all its territory and capabilities, has become Iran’s strategic depth, supplementing its regional expansion. 

Iran controls the political decision-making and economy of Iraq. For all of its potential, Iraq has become merely an advanced strategic base for Iran. Iran may want to strike Israel via Hezbollah, and Iraq, due to its geographical location and the nature of the ruling powers, will be a key player in this regard. 

This is especially true when we observe in Iraq today that there is education, promoted by the Shi’ite parties linked to Iran, saying that the expulsion of Jews from the land of Palestine will be only at the hands of the Islamic Republic of Iran. It should also be noted that Iran is not crazy enough to attack the Gulf States and risk losing its legitimacy, as happened with Iraq when it invaded Kuwait. Iran must not be seen attacking Muslim states, which will antagonize the Muslim world. Iran will certainly target Israel first; this is the issue, aided by warmongering media campaigns, that would garner sympathy for Iran among the ignorant people of the Islamic world.[source]