Afghanistan - Natural Gas Pipeline

[Trinity]

Afghanistan will safeguard Turkmen gas pipeline: Minister
Afghanistan will ensure the safety of a proposed gas pipeline from Turkmenistan through Afghanistan to Pakistan, an Afghan government minister said on Wednesday.

The long-delayed project envisages a $3.3 billion pipeline running 1,600 km (1,000 miles) and providing Turkmenistan with a new outlet for its gas, Afghanistan with transit revenue and Pakistan with much needed energy.

Among reasons for the delay have been worry about security in Afghanistan and questions over the size of the reserves in Turkmenistan's Dauletabad gasfield.

But Afghan Minister for Mines and Industries Mir Mohammad Sediq said he hoped security would not be an issue.

"We have taken the steps for the assurance in terms of security for all ongoing projects in Afghanistan," Sediq told reporters after meeting Pakistani Prime Minister Shaukat Aziz.

"Once this project starts, we hope, there will not be any problem," he said.

The pipeline is expected to cross the southern province of Kandahar where Taliban guerrillas still launch raids on international and Afghan government troops and other targets.

Ministers from the three countries involved in the project are having two days of talks in the Pakistani capital.

Turkmen Minister for Oil Industry and Mineral Resources Amangeldy Pudakov said he was confident reserves in the Dauletabad gasfield would be sufficient for the project, but he gave no figures.

"We assure all the sides that this gas reserve will be sufficient for this project," Pudakov told reporters.

"EXAMINING ALL OPTIONS"

According to Turkmen estimates, Dauletabad has reserves of 1.7 trillion cubic metres, making it the world's fourth largest gasfield.

Energy-rich Turkmenistan, bordering Afghanistan and Iran, had long sought to free itself of its dependence on Russia's Soviet-era gas pipeline network.

Proposals to build a pipeline through Afghanistan have been on the table since the 1990s when the radical Taliban ruled the country.

U.S. energy firm Unocal withdrew from a plan in 1998, in which it was to lead an international consortium, because of fighting between the Taliban and Afghan opposition groups and concern about Taliban's human rights record and its sheltering of al Qaeda chief Osama bin Laden.

Pakistan, which is expected to face a major shortage of oil and gas by 2010, is considering three trans-regional gas projects, including pipelines from Iran and Qatar.

"We are examining all options and we will adopt the best," Pakistan's Petroleum Minister Amanullah Khan Jadoon said.

India is also hoping to get gas supplies via Pakistan, now that relations between the South Asian rivals are improving, but the United States has expressed opposition to a proposed pipeline from Iran, through Pakistan, to India because of questions over Iran's nuclear programme.

http://www.hindustantimes.com/news/7598_1319039,000500020005.htm

[Trinity]

The Asian Development Bank (ADB), for instance, is providing $20 million to rebuild parts of the Khulum-Naibabad-Mazar-i-Sharif-Balkh and Naibabad-Hairatan link with Uzbekistan. Several other road and tunnel projects are in the works as well, in addition to improvements on Afghanistan's other infrastructure (on December 23, 2003, for instance, the World Bank approved a $95 million plan for rural reconstruction activities as part of Afghanistan's National Solidarity Program).

~snip~

Energy Overview
Between the 1960s and mid-1980s, the Soviets had identified more than 15 oil and gas fields in northern Afghanistan. Only three gas fields -- Khwaja Gogerdak, Djarquduk, and Yatimtaq – were developed in the area surrounding Sheberghan, which is located about 120 kilometers west of Mazar-i-Sharif. Afghan natural gas production reached 275 million cubic feet per day (Mmcf/d) in the mid-1970s. The Djarquduk field was brought online during that period and boosted Afghan natural gas output to a peak of 385 Mmcf/d by 1978. About 100 mmcf/d of this amount was used locally in gas distribution systems in Sheberghan and Mazar-i-Sharif as well as at a 100,000 mt/y urea plant located near Mazar-i-Sharif. One oil field, Angot, was developed in the late 1960s, but aside from production tests, oil production was intermittent, with daily outputs averaging 500 b/d or less.

Northern Afghanistan has proved, probable and possible natural gas reserves of about 5 trillion cubic feet (Tcf). This area, which is a southward extension of the highly prolific, natural gas-prone Amu Darya Basin, has the potential to hold a sizable undiscovered gas resource base, especially in sedimentary layers deeper than what were developed during the Soviet era. Afghanistan’s crude oil potential is more modest, with perhaps up to 100 million barrels of medium-gravity recoverable from Angot and other fields that are undeveloped. Afghanistan also may possess relatively small volumes of gas liquids and condensate.

Outside of the North Afghan Platform, very limited oil and gas exploration has occurred. Geological, aeromagnetic, and gravimetric studies were conducted in the 1970s over parts of the Katawaz Fault Block (eastern Afghanistan – along the Pak border) and in the Helmand and Farah provinces. The hydrocarbon potential in these areas is thought to be very limited as compared to that in the north.

The Soviets had estimated Afghanistan's proven and probable natural gas reserves at up to 5 trillion cubic feet (Tcf) in the 1970s. Afghan natural gas production reached 275 million cubic feet per day (Mmcf/d) in the mid-1970s. The Djarquduk field was brought online during that period boosted Afghan natural gas output to a peak of 385 Mmcf/d by 1978-79. After the Soviet pullout and subsequent Afghan civil war, most gas wells at Sheberghan area fields were shut in due to technical problems and the lack of an export market in the former Soviet Union.

At its peak in the late 1970s, Afghanistan supplied 70%-90% of its natural gas output to the Soviet Union's natural gas grid via a link through Uzbekistan. In 1992, Afghan President Najibullah indicated that a new natural gas sales agreement with Russia was in progress. However, several former Soviet republics raised price and distribution issues and negotiations stalled. In the early 1990s, Afghanistan also discussed possible natural gas supply arrangements with Hungary, Czechoslovakia, and several Western European countries, but these talks never progressed further. Afghan natural gas fields include Djarquduk, Khowaja Gogerdak, and Yatimtaq, all of which are located within 20 miles of the northern town of Sheberghan in Jowzjan province. In 1999, work resumed on the repair of a distribution pipeline to Mazar-i-Sharif. Spur pipelines to a small power plant and fertilizer plant also were repaired and completed. Mazar-i-Sharif is now receiving natural gas from the pipeline. The possibility of exporting a small quantity of natural gas through the existing pipeline into Uzbekistan also is reportedly being considered.

Soviet estimates from the late 1970s placed Afghanistan's proven and probable oil and condensate reserves at 95 million barrels. Most Soviet assistance efforts after the mid-1970s were aimed at increasing gas production. Sporadic gas exploration continued through the mid-1980s. The last Soviet technical advisors left Afghanistan in 1988. After a brief hiatus, oil production at the Angot field was restarted in the early 1990s by local militias. Output levels, however, are though to have been less than 300 b/d. Near Sar-i-Pol, the Soviets partially constructed a 10,000-b/d topping plant, which although undamaged by war, is thought by Western experts to be unsalvageable.

Petroleum products such as diesel, gasoline, and jet fuel are imported, mainly from Pakistan and Uzbekistan, with limited volumes from Turkmenistan and Iran serving regional markets. Turkmenistan also has a petroleum product storage and distribution facility at Tagtabazar ( Kushka – it’s on the Turkmen side) near the Afghan border, which supplies northwestern Afghanistan.

Besides oil and natural gas, Afghanistan also is estimated to have 73 million tons of coal reserves, most of which is located in the region between Herat and Badashkan in the northern part of the country. Although Afghanistan produced over 100,000 short tons of coal annually as late as the early 1990s, as of 2000, the country was producing only around 1,000 short tons.

~snip~

Afghanistan as an Energy Transit Route
Due to its location between the oil and natural gas reserves of the Caspian Basin and the Indian Ocean, Afghanistan has long been mentioned as a potential pipeline route, though in the near term, several obstacles will likely prevent Afghanistan from becoming an energy transit corridor. During the mid-1990s, Unocal had pursued a possible natural gas pipeline from Turkmenistan's Dauletabad-Donmez gas basin via Afghanistan to Pakistan, but pulled out after the U.S. missile strikes against Afghanistan in August 1998. The Afghan government under President Karzai has tried to revive the Trans-Afghan Pipeline (TAP) plan, with periodic talks held between the governments of Afghanistan, Pakistan, and Turkmenistan on the issue, but little progress appears to have been made as of early June 2004 (despite the signature on December 9, 2003, of a protocol on the pipeline by the governments of Afghanistan, Pakistan and Turkmenistan). President Karzai has stated his belief that the project could generate $100-$300 million per year in transit fees for Afghanistan, while creating thousands of jobs in the country.

Given the obstacles to development of a natural gas pipeline across Afghanistan, it seems unlikely that such an idea will make any progress in the near future, and no major Western companies have expressed interest in reviving the project. The security situation in Afghanistan remains an obvious problem, while tensions between India and Pakistan make it unlikely that such a pipeline could be extended into India and its large (and growing) gas market. Financial problems in the utility sector in India, which would be the major consumer of the natural gas, also could pose a problem for construction of the TAP line. Finally, the pipeline's $2.5-$3.5 billion estimated cost poses a significant obstacle to its construction.


http://www.eia.doe.gov/emeu/cabs/afghan.html

[Trinity]

What's at Stake for Whom
Afghanistan

At a Glance:


During the Soviets' decade-long occupation of Afghanistan, Moscow estimated Afghanistan's proven and probable natural gas reserves at around five trillion cubic feet. In the mid-1970s, production reached 275 million cubic feet per day.

But Afghanistan's significance to the balance of energy and power in Central Asia stems from its geographical position as a potential transit route for oil and natural gas exports from Central Asia to the Arabian Sea.

In January 1998, an agreement was signed between Pakistan, Turkmenistan, and the Taliban to arrange funding for a proposed 890-mile, US$2 billion natural gas pipeline project. The proposed pipeline would have transported natural gas from Turkmenistan's Dauletabad natural gas field to Pakistan, and most likely would have run from Dauletabad south to the Afghan border, through Herat and Kandahar in Afghanistan, to Quetta, Pakistan. The line would then have linked with Pakistan's natural gas grid at Sui. U.S. oil company Unocal was to finance the bulk of the project. As it happened, Unocal pulled-out of the deal, citing political instability in Afghanistan.

In addition to the gas pipeline, Unocal also had considered building a 1,000-mile oil pipeline that would link Chardzou, Turkmenistan with Pakistan's Arabian Sea coast via Afghanistan.

Currently, a pipeline brings natural gas from Uzbekistan to Bagram and another brings natural gas to Shindand.

Population: 26,813,057 (July 2001 est.)

http://www.worldpress.org/specials/pp/afghan.htm

[Trinity]

Trade accounts for a small portion of the documented Afghan economy, and there are no reliable statistics relating to trade flows. In 2002-03, exports--not including opium or re-exports--were estimated at $100 million and imports estimated at $2.3 billion, a significant increase over 2001-02. Since the 1989 Soviet withdrawal and the 1991 collapse of the Soviet Union, other limited trade relationships with Central Asian states appear to be emerging. Exports to Iran and Pakistan account for about one-half of total exports. Belgium, Russia, Germany, the United Arab Emirates, and the United States each account for 5% or more of Afghanistan’s exports. Japan, Korea, and Pakistan account for about 40% of imports. Other significant sources of imports are Germany, India, Iran, Kenya, Turkmenistan, and the United States. While the United States revoked Afghanistan’s most-favored-nation (MFN) trading status in 1986, it reestablished normal trade relations in June 2002. Most of Afghanistan’s exports (excluding illegal or smuggled exports) are agricultural products and carpets.

Afghanistan is endowed with a wealth of natural resources, including extensive deposits of natural gas, petroleum, coal, copper, chromite, talc, barites, sulfur, lead, zinc, iron ore, salt, and precious and semiprecious stones. In the 1970s the Soviets estimated Afghanistan had as much as five trillion cubic feet (tcf) of natural gas, 95 million barrels of oil and condensate reserves, and 400 million tons of coal. Unfortunately, ongoing instability in certain areas of the country, remote and rugged terrain, and inadequate infrastructure and transportation network have made mining these resources difficult, and there have been few serious attempts to further explore or exploit them.

The most important resource has been natural gas, first tapped in 1967. At their peak during the 1980s, natural gas sales accounted for $300 million a year in export revenues (56% of the total). Ninety percent of these exports went to the Soviet Union to pay for imports and debts. However, during the withdrawal of Soviet troops in 1989, Afghanistan's natural gas fields were capped to prevent sabotage by the mujahidin. Restoration of gas production has been hampered by internal strife and the disruption of traditional trading relationships following the collapse of the Soviet Union. Gas production dropped from a high of 290 million cubic feet (Mmcf) per day in the 1980s to a low of about 22 Mmcf in 2001.

Trade in goods smuggled into Pakistan once constituted a major source of revenue for Afghan regimes, including the Taliban, and still figures as an important element in the Afghan economy. Many of the goods smuggled into Pakistan originally entered Afghanistan from Pakistan, where they fell under the Afghan Trade and Transit Agreement (ATTA), which permitted goods bound for Afghanistan to transit Pakistan free of duty. When Pakistan clamped down in 2000 on the types of goods permitted duty-free transit, routing of goods through Iran from the Gulf increased significantly. Shipments of smuggled goods were subjected to fees and duties paid to the Afghan Government. The trade also provided jobs to tens of thousands of Afghans on both sides of the Durand Line, which forms the border between Afghanistan and Pakistan. Pakistan's closing its Afghan border in September 2001 presumably curtailed this traffic

http://www.state.gov/r/pa/ei/bgn/5380.htm

[Trinity]

(regional issue)

Business ; Gas pipeline, 'a worthwhile project': India, Pakistan:
Sunday, April 17, 2005


[Business News] New Delhi, India - American reservations notwithstanding, India and Pakistan Sunday agreed that the proposed multi-billion dollar trilateral gas pipeline deal between Iran, India and Pakistan is a "worthwhile project."

The pipeline project that will bring Iranian natural gas to India through Pakistan figured during the delegation-level talks between Indian Prime Minister Manmohan Singh and Pakistan President Pervez Musharraf here Sunday.

Briefing reporters on the talks, Foreign Secretary Shyam Saran quoted Manmohan Singh as having said that the two sides should "remain in touch with each other" on the project.

Musharraf said that considering the growing energy requirements of Pakistan and India, not only the Iran-Pakistan-India pipeline but also other similar projects, including one to transport gas from Turkmenistan via Afghanistan, should be part and parcel of the overall development efforts of the two countries.

"Overall, it was agreed that these projects are worthwhile projects and we should remain engaged," Saran said.

During her visit to India and Pakistan in March, US Secretary of State Condoleeza Rice had said that Washington had conveyed its reservations to both countries over the pipeline project with Iran, which it accuses of pursuing a clandestine nuclear weapon programme.

http://www.keralanext.com/news/indexread.asp?id=182252

[Trinity]

Feasibility report on Pak-Afghan-Turkmenistan gas pipeline to be discussed
Pakistan Times Federal Bureau Report

ISLAMABAD: The feasibility report of Turkmenistan-Afghanistan-Pakistan gas pipeline has been prepared and would be put before the tri-nation ministerial steering committee slated to meet here on Tuesday.

Turkmenistan will produce credible international certification of its gas deposits before the committee to pave the way for laying the trans-Afghanistan gas pipeline to Pakistan.

Highly placed official sources said on Saturday that study has been started on the gigantic project and underground storage of imported gas in unused depleted gas wells within the country to enable Pakistan store the gas being purchased from more than one countries.

Talks with Iran for the gas pipeline will also go ahead when Iranian and Indian ministers for petroleum and natural gas would be visiting Islamabad in mid-May.

The Route

A pipeline through sea from Qatar to Pakistan will be yet another subject of active discussion when a high-level delegation headed by Secretary Petroleum and Natural Resources Ahmad Viqar Chaudhry will be visiting Doha for two days on 24th of this month.

With this Pakistan has accelerated the pace of efforts to finalise deals for fulfilling its future needs of energy which are supposed to increase manifold in the years to come in the face of increasing development activities.

The delegation will also discuss the supply of Liquefied Natural Gas in Doha that can be used for future requirements of Karachi and coastal areas of the country. Pakistan is also planning to take up the issue of LNG supply with Iran.

Sources said the ministerial steering committee of Pakistan-Afghanistan and Turkmenistan is meeting for the eighth time. It would discuss a number of important aspects of the pipeline.

The gas certification will be on the top while the route security from Afghanistan to Pakistan would be another vitally important issue to come up for discussion as the comfort level regarding security of the pipeline could attract any international consortium/investor to come forward and make heavy investment in the project involving billion of dollars.

The gas pipeline will start from Daulatabad gas field in Turkmenistan and pass through Herat and Kandahar provinces of Afghanistan before entering Chaman in Balochistan.

Pakistan donates ten ambulances to Afghanistan

Meanwhile, another news report from Quetta says that Pakistan has donated ten ambulances to the Afghan Government for the hospitals in Qandahar, Hilmand and Hirat provinces.

A ceremony in this regard was held here Saturday in which Director General Afghan Trade Development Cell Brig (R) Mohammad Anwar Khan handed over the ambulances to Afghan Consul General Ahmed Ali Babak.

Speaking on the occasion, Brig (R) Anwar said that Pakistan is extending special cooperation to Afghan Government in all sectors including reconstruction of Afghanistan and rehabilitation of its people.

He said Pakistan is donating ten ambulances to Afghanistan out of which five would be provided to hospitals in Kandahar, three to Hirat and two to Hilmad provinces. Another five ambulances would soon be provided to hospitals in Kabul and Jalalabad, he added.

He informed that the Pakistan would also provide 100 buses to Afghan Government out of which 35 would be handed over during the current month. School bags, stationery items, food stuff and other things would also be provided for the school-going Afghan students.●

http://pakistantimes.net/2005/04/10/top6.htm

[NYC]

Wow, Trinity I totally missed this one. Good stuff

[Trinity]

(Slightly outside the realm of Afghanistan)

Iran-India gas pipeline can be named line of peace: Rowhani


TEHRAN (IRNA) -- Secretary of the Supreme National Security Council Hassan Rowhani here on Sunday reaffirmed Iran's determination to make use of peaceful nuclear technology.

Signing the additional protocol to the Non-Proliferation Treaty (NPT) by Iran is considered as the best sign of confidence-building and also Iran's best commitment to peaceful nuclear activities, he noted in his meeting with the Undersecretary of Indian Ministry of External Affairs Rajiv Sigri.

Rowhani made the remark on the threshold of the 2005 review of the nuclear Non-Proliferation Treaty (NPT) set to kick off on Monday, May 2, at the UN Headquarters in New York.

He called for dismantling all nuclear weapons throughout the world and underlined the need for respecting legal rights of all NPT member states to make use of peaceful nuclear technology.

He stressed that if the United Nations structure is reformed and the current biased attitudes are removed, it would help to extend peace, security and stability to the world.

Elsewhere, he expressed satisfaction with the progress made in Iran-Pakistan-India gas pipeline project, suggesting that the gas pipeline could be named the line of peace, stability and friendship among the three countries.

Last month, Iran, India and Pakistan agreed on a tripartite deal over an energy project worth $4.1 billion, based on which Iran-India gas pipeline will pass through Pakistan.

India is seeking to import natural gas from Iran through a 2,600-km pipeline, 760-km of which will cross Pakistani territory.

Rowhani attached importance to Iran-India relations and termed the joint regional and international interests and responsibilities placed upon Tehran and New Delhi as key factors. "Mutual cooperation in political, economic and cultural areas as well as regional cooperation in such fields as transit and security of the region are regarded as the new chapters of strategic relations between Tehran and New Delhi."

Referring to the issues in Iraq and Afghanistan and the need for securing stability and security to these countries, he underlined the process of reconstruction in the two countries by preserving their territorial integrity and national sovereignty.

"Multilateral relations in the region could strengthen cooperation for all the countries in the area," he said, adding that India and Pakistan could also follow this model to strengthen mutual ties.

At the meeting, the Indian official termed as important the strategic aspect of relations between Tehran and New Delhi, saying the economic prosperity and welfare of Iran's nation is correlated with economic development of India.

Relations between India and Pakistan will be strengthened should the gas pipeline project among Iran, Pakistan and India be implemented, Sigri added.

However, he stressed that India would like to cooperate and consult with Iran in a bid to reform UN structure.

He attached importance to the mutual cooperation on issues related to Afghanistan and Iraq, stressing that Iran has played a very responsible role in the crises of Afghanistan and Iraq. "To India, security in the Persian Gulf, from the strategic viewpoint, is of high importance." Elsewhere, he noted, "India has not signed up the NPT but we are for nuclear disarmament provided that it is universal. We do believe that the countries have the right to atomic energy. Besides, it is worth it from the viewpoint of national sovereignty and global environment." He reiterated, "We do believe that Iran's nuclear case should be resolved only within the framework of International Atomic Energy Agency, IAEA."

The Indian official termed Iran as a great country with ancient civilization, history and culture, saying that no ultimatum could help Iran's nuclear case to reach a breakthrough.

He stressed that Iran-Europe negotiations should be maintained so interaction and peaceful resolve will be proceeded.

http://www.tehrantimes.com/Description.asp?Da=5/2/2005&Cat=2&Num=008

[Trinity]

Implications of EU enlargement for the CIS, particularly the central Asian countries

Few studies have so far been undertaken to examine enlargement effects on other countries of the region, for instance, on those of Central Asia.

Russia, Ukraine, Belarus and the Republic of Moldova will obviously be the most affected, due to their more developed economic and social connections with both the EU and the acceding countries.

Most discussions on the implications of EU enlargement for the CIS focus on the countries sharing a common border with one or more candidate country. However, one may assume that to the extent that Russia is affected, there will be consequences for Kazakhstan or Kyrgyzstan, as most of the countries in the region are economically interdependent.

Studies of the effects of EU enlargement on some sectors like trade, and energy in non-acceding countries forecast some short-term negative implications that could be mitigated by increased cooperation in a Wider Europe. There is some dispute about the investment effects of EU enlargement on non-acceding countries. Most of the region’s countries have already attracted FDI in their natural resources, especially hydrocarbons. New investment decisions by foreign and domestic firms, say, in Kazakhstan and Turkmenistan in this sector, will depend on the world oil price fluctuations. Since there is no obvious evidence that this will be influenced by EU enlargement, it is very uncertain that the candidate countries’ accession to the EU will influence investment inflows to countries in Central Asia, particularly in the energy sector. FDI in non-acceding countries in non-energy sectors will depend on further progress in reforms in the countries and could be accelerated by prospects for an enlarged free trade area.


Russia as a major player in the Central Asian region

Russia’s transformation has been one of the most significant features of the last 10 years. Its future relationship with the EU is thus an issue of profound importance for Europe.

Russia plays a leading role in the Central Asian region, as a legacy from the Soviet Union and also because of the scale of the Russian economy.

The so-called “successor States” have during the last decade opened up new channels of cooperation with the “outside world”, but they have also renewed their links with Russia. Most of these countries depend on Russia for their trade and for the transport of gas and oil.

For instance, in 1996, Kazakhstan and Kyrgyzstan signed a quadripartite agreement with Russia and Belarus, which supplemented the existing Customs Union by providing for the coordination of economic and social-cultural policies. Kazakhstan wishes to preserve its close relationship with the CIS in spite of the fact that in 1995 it became a member of the Organisation of the Islamic Conference (OIC) and the Islamic Development Bank.

Recently, on 23 February, 2003, President Putin and the Presidents of Ukraine, Belarus and Kazakhstan reached an agreement on the creation of a provisional joint economic space including the four countries mentioned before. The ultimate goal of this economic alliance will be the creation of a regional-integration arrangement with the intention not of replacing the CIS but of giving priority to economic links over political relations.

Russia and most of the CIS have Partnership and Cooperation Agreements with the EU. Currently, the EU and Russia are negotiating bilaterally to create a Common Economic Space, and we will undoubtedly hear more about this during today’s meeting.


http://www.unece.org/press/execsec/2003/bs030407.htm

[NYC]

from the May 13, 2005 edition - http://www.csmonitor.com/2005/0513/p05s01-wosc.html

Afghan 'pipe dream' draws closer to reality
A proposed gas pipeline from Turkmenistan to Arabian Sea could boost jobs, investment.
By Scott Baldauf | Staff writer of The Christian Science Monitor

KABUL, AFGHANISTAN - Back in the days of the Taliban, Mir Sediq was an engineer for Unocal, working on a pipe dream: bringing natural gas from Turkmenistan down through Afghanistan to Pakistani ports on the Arabian Sea.

Today, Mr. Sediq is minister for Afghanistan's energy, mining, and industrial sector, and he's confident that the pipeline is coming close to reality.

Driven by a Pakistani economy growing at nearly 7 percent a year and higher energy prices, the pipeline, on paper, is the closest thing to a win-win scenario as one can find in Central Asia. For Pakistan, expected to run out of its own reserves in five years, the pipeline will help sustain growth. For Turkmenistan, it helps to provide a market for its substantial gas reserves. And for Afghanistan, it could mean from $200 million to $350 million per year in transit fees.

In the rough parlance of oil industry executives, that beats a kick in the head.

"This pipeline is an opportunity for Afghanistan, and we would like to keep Afghanistan a place that is open and attractive for foreign investment," says Sediq. "The foreign investment rate of return is 17.5 percent, based on the assumptions that the gas reserves in Turkmenistan are enough and the consumption rate in Pakistan remains high. Only security of the pipeline is left, and the government of Afghanistan is capable of providing security."

It wasn't so long ago that the pipeline was thought to be dead. Taliban attacks in the south appeared to be on the increase, and other sources of energy, such as Iran or Qatar, were more attractive. But growing Pakistani demand, increased Afghan stability, and higher energy prices for Turkmenistan have made the pipeline increasingly feasible. This week, President Hamid Karzai told donor countries the project was a top priority - on a par with the war on terror and opium eradication.

As yet, there are no foreign investors vying for the project, but talks between Turkmenistan, Afghanistan, and Pakistan are proceeding. In mid-April, the three countries and the Asia Development Bank held their eighth round of meetings to hammer out details of what Turkmenistan has, how much gas Pakistan needs, and whether Afghanistan is safe enough. The next round comes in July, but Sediq is expected to travel to the Turkmen capital of Ashkabad Friday to see if the government's survey of reserves will be finished in time.

"The biggest question is certification of gas reserves in Turkmenistan," says Mary Louise Vittelli, an adviser to the Afghan Ministry of Mines and Industry. "We need to know if there is enough gas for the next 30 years. There are lots of pipelines in countries where there is war, so security is a question, but not a deal breaker. [Y]ou can have all the security you want, but if the price is five times higher than getting gas from Qatar, then the deal is broken."

When first proposed back in the early 1990s, the Turkmenistan-Afghan-Pakistan pipeline (nicknamed TAP), was planned to be roughly 1,100 miles long. The Afghan portion would have been 466 miles long, much of it following the Herat-Kandahar road.

Now, Afghan officials and foreign engineers are exploring a possible route across the northern provinces and through Kabul.

If started Today, the pipeline could be completed in seven years. That comes two years too late for Pakistan, which is running out of reserves.

While Pakistan has doubled its energy output since 1999 - to 4 billion cubic feet per day - its roaring economy is expected to deplete gas reserves by 2010. By 2015, it will need to buy 2.5 billion cubic feet per day from abroad.

"We cannot sustain our economic growth if we don't get additional energy," says Ahmad Waqar, Pakistan's secretary for petroleum and natural resources. "We need gas."

In all likelihood, Pakistan will need more than one pipeline project. Pakistan is negotiating with Qatar and Iran over separate projects. The Qatari pipeline is the most politically stable, but it has technical problems. The Iranian pipeline - which would distribute gas to both India and Pakistan - is technically the simplest. But it faces substantial US opposition, as US law precludes giving a government contract to a US company doing business with Indian or Pakistani firms working on the Iranian pipeline. Both India and Pakistan are so desperate to find gas that they are working together as joint customers on the Iranian pipeline.

The TAP pipeline is expected to cost $3.8 billion, and create hundreds if not thousands of jobs for Afghans. Afghan officials say that it might be one of the first projects to generate revenue for the state.

"There is the opportunity to create 3,000 Afghan jobs for 30 years," says Sediq. Hiring local labor will help increase security, he adds. "When they are the part of the project, they will not let anyone attack it."

[Ethyl]

US plays spoiler in India-Pakistan pipeline accord

NEW DELHI - India's 10-day campaign to tie up a deal on a fresh source of energy has met with resistance from the United States. Reports, confirmed by Foreign Ministry officials in New Delhi, say the US has warned Pakistan of sanctions if it goes ahead with the proposed $4 billion, 2,600-kilometer Iran-Pakistan-India gas pipeline. The US has been seeking democratic reforms in Iran and a clampdown on its nuclear program, which the Iranians maintain is for peaceful purposes.

The latest US threat comes in the wake of a marathon nine-hour meeting between Indian and Iranian officials in Tehran that reiterated both countries' firm commitment toward building the pipeline. Apart from the pipeline issue, India signed a US$22-billion deal to buy liquefied natural gas (LNG) from Iran over 25 years starting 2009. India recently signed a LNG deal with Qatar as well to tide over its energy shortages.

Pakistan's newspaper Dawn, as well as The Times of India, quoted officials in Washington saying that the US warned Pakistan of sanctions if it went ahead with the project, disregarding US concerns over Iran's nuclear plan. This is despite Pakistan's Foreign Minister Khurshid M Kasuri making a strong plea in favor of the pipeline given the potential revenue ($700 million in transit fees alone) and the country's need for energy security. Kasuri, who was in the US last week, impressed upon US Secretary of State Condoleezza Rice that Pakistan cannot abandon the project. However, the US believes that given the $1-billion-plus yearly aid that it has been advancing to Pakistan since 2002, the country should fall in line.

It's understood that Rice suggested to Kasuri that Pakistan should look at other options, including a pipeline from Qatar or the central Asian republic of Turkmenistan. Rice reportedly said that even if the US gave up its resistance to the pipeline, powerful groups within the US Congress would ensure that the project is derailed.

Reacting to the new US pressure, Iran's Oil Minister Bijan Zanganeh said: "It is unreasonable to prevent India and Pakistan from accessing Iranian gas. Energy markets should be depoliticized. We sell crude oil and LNG. Why can't we be allowed to sell piped gas?" The minister told reporters on the sidelines of the Asia Oil and Gas conference that a decision on the pipeline would be inked within two weeks. But it is easier said than done, given Pakistan's dependence on, as well as proclivity toward, the US.

Striking a more diplomatic note, India's Petroleum Minister Mani Shankar Aiyer, who recently met with Pakistan President Pervez Musharraf on his Pakistan-Iran trip to seal the pipeline deal, said: "We are sensitive to US concerns and trust they are aware of our requirements. It is impossible for India to secure its energy requirements without access to natural gas resources in the extended neighborhood, especially Iran...I hope that even as we work with the US and Iran in the International Atomic Energy Agency (IAEA) to meet international concerns, the US will work with us in securing our vital energy requirements."

There is a lot at stake for Iran, Pakistan and India in this pipeline. Negotiations on the mega pipeline began in 1994, but no headway has been made until last year because of tensions between Pakistan and India, and the project's massive cost. The warming of ties between the two South Asian rivals has now resulted in a renewed focus on building the pipeline. For Iran, which holds the world's largest gas reserves after Russia, India is as important as the European market, which it hopes to access through a pipeline across Turkey. India, which imports nearly 70% of its annual energy needs, has been using ships to ferry LNG.

In the new environment of improved Indo-Pak relations, India feels it can pull off the construction of the pipeline from Iran through Pakistan, which will make the gas transport much easier and cheaper. It is estimated that unless India taps new energy sources, given the rising international price of crude, it will be impossible to grow at the projected 7-8%. So the pipeline is an absolute must.

But even as India and Pakistan have reconciled to a deal that would have been dismissed as impossible even a couple of years ago, the US seems bent on playing spoilsport. The US stand vis-a-vis India has been that it will assist India's long-term energy needs if New Delhi forgoes the proposed gas pipeline. Asia Times Online had earlier reported that Rice, during her visit to India, had made it clear to her Indian counterpart, Foreign Minister Natwar Singh, that if India proceeds with the pipeline it could invite US ire under the Iran-Libya Sanctions Act (ILSA) that empowers President George W Bush to order punitive measures against any international company that invests more than $20 million a year in Iran's energy sector. Rice is now reported to have reiterated the same threat to Pakistan.

The ILSA disallows any move that would aid Iran's economic expansion, as the US considers the country a "safe haven for terrorists". The sanctions provisions apply only to investments in Iran and not to any purchase of oil or gas, thus not affecting the Indo-Iran LNG deal that the two sides just signed.

While India does not want to annoy the US, it favors a de-linking of issues concerning energy security and Iran's supposed nuclear aspirations. "We live in a very complex neighborhood, surrounded by governments and rulers of different orientation - communists, military dictatorships, monarchies...we hope the US understands the difficult choices we have to make for the well-being of our people," India's Ambassador to the US, Ronen Sen. A US official has been quoted as saying that the pipeline issue is a "minor wrinkle" in growing Indo-US relations.

But with Pakistan, it clearly seems more than that for the US. Pakistan Tuesday asserted that the decision whether or not it would allow the pipeline to run through its territory would solely be taken in consideration for its national interest, hinting that external pressures from the US or others wouldn't make any difference. Foreign Office Spokesman Jalil Abbas Jilani said Pakistan is aware of US concerns, but Islamabad's national interest came first. He said the Iranian oil minister would visit Pakistan on June 20-21 at the invitation of his Pakistani counterpart to discuss the project. He also said that during their recent meetings in Islamabad, Pakistani and Indian ministers agreed to set up a joint working group to discuss all aspects of the project, including technical, financial and pricing issues.

Pakistan has of late adopted the policy of welcoming all schemes to transport oil in any shape through pipelines. Two other pipeline projects are being actively discussed in Pakistan. One is for oil to be brought from Sharjah under Persian Gulf waters through a pipeline - US interests seem to have some minor share in the project. The other plan is a major three-country project: hydrocarbons sourced in Turkmenistan carried through a pipeline to Afghanistan and Pakistan's newest port at Gawadar, to be exported to the rest of the world. The company that will set up that pipeline and manage distribution of these hydrocarbons is a composite subsidiary of major US oil corporations, so it is not surprising that Washington is keen that this project succeeds.

When and if this UNOCAL project - intended to transport as many hydrocarbons from Turkmenistan, Uzbekistan, Kyrgyzstan and Kazakhstan as possible - succeeds, the US may have attained its objective of acquiring access to most of the oil from the former Soviet republics in Central Asia, which is considered to be more secure than Middle Eastern oil and does not involve an implicit subsidy to Islamic fanatics. Russia is not involved in UNOCAL, or the new pipeline from Baku to a Turkish port via Georgia.

The pipeline projects illustrate the geopolitical rivalry between the world's hyper-power and the two giants of Asia: Russia and China. Both are trying to win over the rulers of Kazakhstan, Uzbekistan and Kyrgyzstan to their side and to meet their fuel needs on a secure and permanent basis. The US-favored UNOCAL pipeline has to run the gauntlet of a simmering guerrilla war in Afghanistan and an unpredictable law and order situation in Pakistani Balochistan. Even the Iranian pipeline will have to traverse Balochistan, albeit west-to-east. The law and order situation in that region can, however, vastly improve if good governance and political savoir faire can be brought to bear on it. The Afghanistan situation cannot be said to be as amenable to improvement as Pakistan's because the continued presence of foreign troops - vital to the survival of the Karzai regime - is an incitement to rebellion.

The Iranian nuclear crisis casts a long shadow on all the three proposed pipelines: from Iran, Sharjah, and Turkmenistan. The economics of the Sharjah pipeline is likely to knock it out of the running in any case. Any US intervention in Iran would create a situation like 15 or 20 Iraqs. Nothing can be said about the future in that case.

http://spiritofchennai.com/news/national-news/a0266.htm

[Ethyl]

Indo-Iran LNG deal heralds new era

Sunday, June 19, 2005 (Islamabad, Tehran):


Iran and India have finally signed a $20 billion deal between to supply Liquefied Natural Gas (LNG).

This will assure supply over the next 25 years, a key milestone for a gas guzzling economy like India which has huge demand supply gaps.

For Indian Petroleum Minister Mani Shankar Aiyar, it's also a clear sign that his oil diplomacy blitzkrieg has taken off.

Advantage India

The shopping list from Iran has been substantial:


India will get 5 million tonnes of LNG every year, starting 2009, at competitive rates


Negotiations for an additional 2.5 million tonnes of LNG are on


LNG will be used as a key raw material for power and fertiliser plants
The implications only get better for India, which also gets 10 per cent stake in Yadavaran oil field and full control of the Juffyr oil field, giving India an assured supply of 60,000 million barrels oil per day.

In addition, ONGC Videsh has bagged a stake in the North Pars gas field, while Indian Oil got to team up with Iranian energy major Petropars for an LNG and petrochemical complex.

"India and Iran are entering into a new era of energy agreement. This involves both LNG shipments and pipeline," said Bijan Zanganeh, Oil Minister, Iran.

Tough task

The $ 4.6 billion pipeline is supposed to bring natural gas all the way from Iran to India via Pakistan.

It remains the flagship venture even though India just signed its biggest-ever commercial deal with Iran involving LNG shipments.

In-fact, New Delhi and Teheran are now looking at a 2010 deadline to pump gas upto the Indian border.

However, that will be no cakewalk, with the US reportedly threatening economic sanctions on transit country Pakistan if it joins the tri-nation venture.

Other options

Aware of the possible roadblocks ahead, Islamabad and New Delhi have chalked out two possible alternatives.

One of these is a shallow, deepwater and overland gas pipeline from Qatar, which is an expensive proposition.

The other is a pipeline from Turkmenistan, Afghanistan and Pakistan, and then possibly to India. That runs the risk of being derailed in Afghanistan. Besides, there is still no exact estimate of Turkmenistan's reserves.

Bilateral ties

Observers say the threat of US arm-twisting is actually bringing India and Pakistan closer, and the outcome of Aiyar's recent visit, the first time across the border as the Indian Petroleum Minister, is a clear example.

Within 72 hours, Aiyar got a commitment for the pipeline from the top political establishment in Pakistan, including President Pervez Musharraf and Prime Minister Shaukat Aziz.

The spirit of change was for all to see, with both countries agreeing to exchange data and improve co-ordination. A joint working group was also set up to examine legal, commercial, technical issues.

"Whether it is in terms of pipeline or LNG, I think a great beginning, maybe a historic beginning, has been made," Aiyar said

The economic diplomacy is also likely to influence diplomatic and political relationships between the two countries.

Gas requirements

Islamabad's eagerness also stems from the fact that its own gas reserves are fast depleting, making it desperate to find alternative sources.

Currently, 50 per cent of the Pakistani energy economy runs on natural gas. They are now self-sufficient in gas production at 110 million mmscmd gas per day. However, the country will be gas deficient within the next five years.

By 2025, the situation is likely to be even more acute with a shortfall of 200-300 mmscmd.

"If Pakistan and India are on the same side of the negotiating table, the economies of scale will ensure that we come out with a better commercial mechanism," said Munawar B Ahmad, Sui Southern Gas Company.

Great wave

Aiyar's single-minded effort to diversify India's energy supply also saw him unleash a maverick plan to access 5-6 million tonnes of Caspian crude every year.

This means joining the great game that is currently being played in Central Asia.

India wants to join the new Baku-Tblisi-Ceyhan pipeline to bring gas from the landlocked Caspian Sea to the southern coast of Turkey, then ship the gas to north Israel to the port of Ashkelon.

The gas then travels through another pipeline to the southern Israeli port of Eilat on the Red Sea, to then be shipped to India.

The idea of involving the Israelis have not gone down well in the Arab world. Sources say ships that will bring the gas to Israel also stand the chance of getting blacklisted all over West Asia.

Thus, Aiyar also discussed other options with his Azerbaijani counterpart, including the option of shipments through the Suez Canal.

http://www.ndtv.com/money/showbusinessstory.asp?slug=LNG+deal+heralds+new+er a&id=25708

[Ethyl]

China's CNOOC to bid for US oil company Unocal


CNOOC Ltd., China's biggest offshore oil and gas producer, may bid about $20 billion in cash for Unocal, the eighth-biggest U.S. oil company, in a counter bid against Chevron, America's second largest oil group.

The Hong Kong public company is expected to offer about $71.50 a share, 10 percent higher than a bid made by Chevron on April 2nd.

The booming Chinese economy needs to stabilise its oil supply network and the annual cost of paying with borrowed funds would cost state-controlled CNOOC about $1.2 billion in yearly interest payments, similar to Unocal's net income in 2004.

Chevron is offering about $62 a share in cash and stock for Unocal. The acquisition would boost its daily output by about 16 percent.

Unocol has more than 6,000 employees and its principal oil and gas activities are in Asia and North America. Unocal has no refining or marketing operations.

In last year's controversial movie, “Fahrenheit 9/11,” film-maker Michael Moore sought to link President George W. Bush with a visit by Afghanistan's Taliban leaders to the US in 1997, in connection with Unocal's then plans to build a gas pipeline in Central Asia.


CNOOC has to move fast as the US Securities and Exchange Commission is about to approve the disclosure documents on Chevron's bid. The Federal Trade Commission, the US antitrust regulator, approved Chevron's takeover plan on June 10th.

The Chinese bid is likely to raise objections in the US Congress. Two Republican congressmen, Richard Pombo and Duncan Hunter, on June 17th wrote to President George W. Bush seeking a review of any bid by CNOOC for Unocal on national-security concerns, the Asian Wall Street Journal reported on Monday.

http://www.finfacts.com/irelandbusinessnews/publish/article_10002306.shtml

[Ethyl]

THE CIS AND BALTIC PRESS ON RUSSIA

UZBEKISTAN

Human rights advocates among the media were particularly critical of Defense Minister Sergei Ivanov's statement about Russia's refusal to support NATO in its appeal for international investigation of the Uzbekistan events this May. One publication carries a sensational open letter to the Russian defense minister from Mr. Petrenko, the executive secretary of the international association For Democratic Reforms and Rights of Ethnic Minorities in Uzbekistan. "Even the well-established media machine of totalitarian Uzbekistan refused to repeat your nonsensical statements." (Musulmansky Uzbekistan, June 12.)

The press once again accuses Russia of ignoring the interests of its compatriots. "Russian speaking people had enough time to understand that the Russian leadership does not care much about them. They are now left to face dictators and nationalists all alone. ...You have exchanged Russians for gas. You and the Supreme Commander (who is also the [Russian] president) have exchanged Russians for geopolitical interests." (Musulmansky Uzbekistan, June 12.)

~~~~~~

TAJIKISTAN

Ramazan Abdulatipov's appointment as Russia's ambassador in Tajikistan had an interested response in the press. The media say the new ambassador called Tajikistan an important area of Russia's foreign policy and promised to solve migrants' problems. (Asia-plus, June 9.)

The press expresses doubts as to the timeliness of Russian border guards passing over control of the Tajik-Afghan border to their Tajik collegues. "The US deployment in Afghanistan threatens the interests of Russia - the key player in the region and Tajikistan's strategic partner. After the withdrawal of Russian border guards, Tajikistan will be left to wrestle with Afghan problems on its own." (Asia-plus, June 9.)

"The border control departments and the government hurried too much. Above all, internal economic issues need to be solved, as border guards will not be able to provide dependable security on the border, considering the current economic situation in the country." (Avesta, June 10.)

The press also writes about the meager opportunities that Tajik students have in Russia. "Students who are already studying in Russian universities have no rights at all, the Tajik embassy cannot provide them with any tangible support, and there is no legislative framework to defend Tajik students' rights in Russia." (Avesta, June 12.)

http://en.rian.ru/analysis/20050620/40552004.html

[Ethyl]

Largest natural gas find

Gujarat has discovered an estimated reserve of 20 trillion cubic feet of natural gas worth nearly Rs 2,00,000 crore in the Krishna-Godavari basin after investing Rs 250 crore for the purpose.

Announcing this to mediapersons after Cabinet meeting on Sunday, Gujarat Chief Minister Narendra Modi claimed that it was the largest find in the country. Describing the find as a historic event for India’s hydrocarbon sector and a leap forward for Gujarat, Mr Modi said the deposit was located 6 km away from Yanam-Kakinada shore of Andhra Pradesh, after drilling up to 5,061 metres at a temperature of 400 degrees Farenheit.

The Government of India awarded the “KG-OSN/2001.03” basin to the consortium comprising Gujarat State Petroleum Corporation (GSPC), GeoGlobal Resources of Canada and Jubilant Enpro of Noida. There was stiff competition from the ONGC and the Reliance Group.


Gujarat started drilling operations with the first well on July 31, 2004. The GSPC would try to bring it on-shore by 2007, he said.

Answering a question, Mr Modi said the gas could be brought all the way to Gujarat and the states on the route could also be offered some quantity of it. Gujarat, he said, would also explore the possibility of a barter mechanism once the commercial production stage was reached.

He said the money generated from this project would be utilised for the education of children living below the poverty line.

According to Mr Modi, the discovery will nearly double the gas production of the country. The project would be known as “Deendayal” (Saviour of the poor), he added.

http://www.deccanherald.com/deccanherald/jun272005/index225182005626.asp

[Ethyl]

Russia's natural gas transport network overloaded - Gazprom head

Moscow, June 24 (RIA Novosti) -- Russia's natural gas transport network is overloaded, said the head of Gazprom said today.

When addressing the Russian natural gas monopoly's annual shareholders' meeting, chief executive Alexei Miller said network capacity had reached its technical limit.

"Seventeen per cent of the natural gas pipelines have been operating for 35 years, and another 41% are approaching the same age," he said. "Thirty-one per cent of the pipelines were built 10-20 years ago and only 11% have been built in the past 10 years."

"Major capital investments are necessary to support the network and adapt it to growing gas production," the chief executive said. He added that the expansion of the gas transport network was a priority for Gazprom.

According to Miller, 65% of investment is allocated for that purpose.

He also said the Russian unified gas supply system had transported 687.4 billion cubic meters of gas in 2004.

"Gazprom granted access to its network to 33 independent natural gas suppliers, ensuring the transportation of about 100 billion cubic meters of natural gas, which is 4.5 billion more than in 2003," the head of Gazprom said.

http://en.rian.ru/business/20050624/40754445.html

See:

http://www.wincoast.com/forum/showthread.php?t=9652

[Ethyl]

China signs economic agreements and statements of intent with Russia and Central Asian countries

The 5th Shanghai Cooperation Organisation summit opens today focusing on political and economic cooperation between China, Russia and Central Asian countries.


Astana (AsiaNews) – Cooperation and shared views on the fight against terrorism, international politics and the economy are three of the issues that will be discussed at the 5th summit of the Shanghai Cooperation Organization (SCO) that opened today in Astana (Kazakhstan). Leaders from China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan e Uzbekistan are attending—Pakistani Prime Minister Shaukat Aziz and Indian Foreign Minister Natwar Singh are present as observers.

Chinese President Hu Jintao said that collaboration among SCO members was desirable, adding that that there were strong chances that it would involve all areas of interests to member states.

The construction of pipelines to ship oil and natural gas eastward is also on the discussion table. Reactivating the currently unutilised Russian oil network is under consideration.

Hu arrived in Kazakhstan after a summit in Russia with Russian President Vladimir Putin where the two leaders discussed this last possibility.

In a joint statement released on July 4, the Chinese and Russian leaders said that they shared a common position on terrorism, UN reform and the North Korean nuclear question. They also agreed that the world had changed and become multipolar and that this required a new world order.

Both Putin and Hu said that the SCO was an important factor in shaping international politics and in creating a different, more just and rational economic order.

Mr Hu stressed that, although the SCO was set up in order to fight the three evils terrorism, extremism, and separatism, it offered a great potential in terms of economic cooperation and trade.

In a joint statement that confirmed the ‘statement of intent’, Mr Hu and Kazakh President Nursultan Nazarbayev agreed to give their full support to ensure the completion of the Atasu-Alataw Pass oil pipeline. They also announced plans to build a gas pipeline between their respective countries.

The summit is taking place amidst important changes in Central Asia. In Kyrgyzstan, a popular revolt forced President Askar Akayev out of power. New elections have not however taken place.

In Uzbekistan, its close US partner has called for democratic reforms and an international commission of inquiry following a bloody crackdown that left hundreds of unarmed demonstrators dead. But Uzbek President Islam Karimov rejected the US request and was instead welcomed with full honours in Beijing.

At NATO’s June summit, Russian Foreign Minister Sergei Ivanov stated there was no need for an international inquiry into the Uzbek events.

Referring to the Uzbek crisis, SCO Secretary General Zhang Deguang reiterated his organisation’s commitment to fighting terror following the “lesson of Andijan” which showed the need to be on guard against terrorism. (PB)

http://www.asianews.it/view.php?l=en&art=3643

[Ethyl]

Text of Indo-Pak. statement on gas pipeline project




New Delhi, July. 13 (PTI): Following is the text of the joint press statement issued by India and Pakistan at the end of 1st Joint Working Group meeting on the over 7-billion dollar Iran-Pakistan-India gas pipeline project:

"The first meeting of the India-Pakistan Joint Working Group (JWG) on cooperation in transnational pipelines was held in New Delhi on July 12-13, 2005. The Indian delegation was led by S C Tripathi, Secretary, Ministry of Petroleum and Natural Gas, while the Pakistani delegation was led by Ahmad Waqar, Secretary, Ministry of Petroleum and Natural Resources.

Besides having substantial delegation level discussions, the Pakistani delegation called on Mani Shankar Aiyar, Indian Minister of Petroleum and Natural Gas, who conveyed the firm support of the Government of India to the Iran-Pakistan-India pipeline project and other transnational pipeline proposals under consideration. He urged the two delegations to prepare a time frame in respect of various items pertaining to the project.

The discussions between the two delegations were marked by a positive and constructive approach and were held in an atmosphere of mutual understanding. Both sides conveyed their serious commitment to address various issues pertaining to the project so as to maintain the momentum of the dialogue. They agreed that dialogue on the basis of bilateral joint working groups between India, Pakistan and Iran, interspersed with periodic interactions at the ministerial level, provided a satisfactory mechanism to address and resolve all matters pertaining to the project.

The two delegations had an indepth discussion on the technical, financial, commercial and legal aspects of the project. The two sides agreed that in order to realise a safe and secure world class project, arrangements would need to be provided for in every aspect of the project, including technical, commercial, financial and legal matters.

The two sides agreed that once basic issues pertaining to the project had been satisfactorily resolved between the three countries concerned, they would enter into a 'Framework Agreement'. In this regard, it was agreed that the Indian side would submit a draft text to the Pakistani side before the next meeting of the JWG.

The two sides agreed that they shared an immediate commonality of interest in regard to the technical aspects of the project such as the size and specifications of the pipeline, the quantity of gas, the quantum of gas required by the two countries and the build up period. It was agreed that technical experts of the two countries would meet quickly in oder to harmonize the position of the two sides in this area to achieve a project of international standard.

The proposed pipeline routes and delivery point were also discussed. It was agreed that these would be established on the basis of techno-economic considerations.

The two sides agreed that the price of the gas as well as the project structure were of crucial importance. Various approaches to determine a reasonable price of gas as also various options pertaining to project structure were discussed by the two delegations. It was agreed that these matters would be pursued in greater detail at subsequent meetings of the JWG.

The two sides agreed on the crucial importance of urgently appointing their respective financial advisory consortium to advise on project structure and related technical, financial, commercial and legal matters. They agreed that every effort would be made to appoint the respective financial advisory consortium at the earliest.

The two sides noted with satisfaction that each of them had initiated the process of joining the Energy Charter, initially with 'Observer' status. They agreed that in the various inter-governmental agreements entered into by them in respect of the project, the provisions of the Energy Charter would be referred to.

In order to carry the process forward, the two sides agreed that the next meeting of the JWG would take place in Islamabad by the end of August 2005. The two sides discussed the other pipeline proposals under consideration by them, i.e. the Turkmenistan- Afghanistan-Pakistan (TAP) pipeline and the Gulf-South Asia (GUSA) pipeline. They noted that India had been invited to attend the next meeting of the Steering Committee of the TAP project. The Pakistani side briefed the Indian side on the latest developments pertaining to the project as also on their recent discussions pertaining to the GUSA project."

http://www.hindu.com/thehindu/holnus/003200507131612.htm

[Ethyl]

Nations race for oil

VIENNA, Austria (AP) — Iran, Sudan, Venezuela, Syria — nations shunned by America as nuclear threats, insurgent havens or human rights violators are increasingly being wooed by China and India in a race for oil and influence that is challenging Washington on the energy and security fronts.

The most recent U.S. concerns have focused on China's bid for Unocal Corp., America's ninth largest oil company. American congressmen, senators and former CIA director James Woolsey have described it as a threat to U.S. national security.

But less high-profile maneuvers by the two Asian powerhouses also are raising questions.

Besides their involvement in energy projects worth billions of dollars in countries America views with concern, India and China also have bought into Russia's oil and gas sector. And Beijing, with Moscow's apparent blessing, is reaching out to energy-rich former Soviet republics in central Asia where the Americans have military outposts.

The all-out energy offensive by the two Asian powers was documented this year by the National Intelligence Council, the U.S. government think thank which advises the Central Intelligence Agency and senior U.S. policymakers.

"The likely emergence of China and India as new major global players ... will transform the geopolitical landscape," said the report titled "Mapping the Global Future."

"In the same way that commentators refer to the 1900s as the 'American Century,' the early 21st century may be seen as the time when some in the developing world, led by India and China, come into their own."

The report also says energy demand through 2020, especially by India and China, "will have substantial impacts on geopolitical relations."

In Asia's former Soviet republics, such moves threaten to hurt U.S. interests by skewing alliances in a key part of the world on the doorstep of the oil-rich Caspian basin and also close to Iraq and Afghanistan.

The need for a U.S. military toehold — established during the Afghanistan offensive — is already being questioned by the governments of Uzbekistan and Kyrgyzstan.

The Uzbek Foreign Ministry last month said that other than for overthrowing Afghanistan's Taliban regime, "any other prospects for a U.S. military presence ... were not considered by the Uzbek side." And a week ago, Kyrgyzstan's president, Kurmanek Bakiyev, said it was time to "begin discussing the necessity of the U.S. military forces' presence."

The Shanghai Cooperation Organization, a regional alliance led by China and Russia, this month called on the United States to set a date for withdrawing forces from the two ex-Soviet republics. Gen. Richard B. Myers, chairman of the U.S. Joint Chiefs of Staff, called it an attempt to "bully" the two U.S. allies — a charge Moscow sharply rejected.

Strategic maneuvering has always been a part of world rivalries and most nations aren't that choosy — Saudi Arabia, the world's largest oil producer, remains crucial to Washington despite its human rights record. But the imperative of making friends with energy-rich nations has grown over the past two years as oil prices rise and consumption grows.

Most of the oil still is pumped by the Organization of Petroleum Exporting Countries, based in Vienna, Austria, whose powerhouse is Saudi Arabia.

But billions of barrels of the world's reserves are in countries hostile to the United States such as Iran, OPEC's second largest oil producer, where U.S. sanctions have locked out American oil companies. Billions more are in countries and regions with uncertain loyalties.

These countries "are a magnet for oil-hungry countries," says Michael Klare, author of "Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency."

Chinese oil demand now is second only to America's and within 20 years is it is expected to increase to 21 million barrels a day. That's what America consumes now — and most of it will be imported. India's oil consumption over the same period is expected to double to a daily 5.3 million barrels — also mostly imported.

Klare says China's worries about American dominance in the Persian Gulf, and the Straits of Hormuz through which the tankers pass, have hastened its scramble for oil rights elsewhere.

"Right now, they get most of their oil from the ... Gulf countries but they are fearful that if the U.S. closes the Straits of Hormuz, then China would be starved of oil."

Beijing is also casting a wider oil net because the U.S. presence in Iraq — thought to have the world's second-largest oil reserves — has derailed Chinese attempts to establish a toehold there.

Chinese and Indian investments in countries and regions of U.S. concern include:

— a 50-percent Chinese stake in the sprawling Yadavaran oil fields of Iran, which the United States accuses of trying to make nuclear weapons. The Chinese last year also signed deals worth an estimated $70 billion for 250 million tons of Iranian liquefied natural gas;

— majority Chinese control in the consortium dominating the oil industry of Sudan, which once sheltered Osama bin Laden and whose government is accused of human rights abuses linked to massacres in the Darfur conflict;

— Chinese ownership of 60 percent of a major Kazakhstan oil and gas enterprise and plans to build a pipeline for Kazakh crude into China;

— India's multibillion dollar project to pipe in Iranian gas via Pakistan — a plan criticized this month by U.S. Secretary of State Condoleezza Rice;

— Billion-dollar investments by India's main oil and gas enterprise in far-flung projects that include Syria — accused by Washington of failing to prevent insurgents from crossing its border into Iraq and of suppressing democracy in Lebanon. India has also signed a pipeline deal with gas-rich Myanmar's hard-line military junta.

— Chinese and Indian interest in Venezuela, the fourth largest U.S. oil supplier, whose president, Hugo Chavez, is a fierce critic of U.S. foreign policy. Chavez is trying to rewrite concessions to U.S. oil companies and has invited China and India to participate in oil exploration.

Both Beijing and New Delhi deny that their efforts constitute a threat to the United States.

Alluding to concerns about Iran, the Chinese Foreign Ministry told The Associated Press that "China's development of friendly relations with another country ... won't harm any other country's interests." A ministry statement said Beijing is "devoted to developing constructive and cooperative relations with the United States."

And Sanjana Baru, media adviser to Indian Prime Minister Menmohan Singh, says the pipeline is nothing more than a "bilateral issue between ... India and Iran."

Still, such alliances have already resulted in some U.S. setbacks.

Washington is believed to have used its influence with Panama in past years to reduce Chinese access to the Panama Canal. But China last year signed a deal with Venezuela and neighboring Colombia for a pipeline to bypass the Panama Canal and ship Venezuelan oil directly to Colombia's Pacific outlets for loading onto Chinese tankers.

Iran, whose nuclear ambitions are among Washington's greatest security concerns, also is reaping benefits beyond the cash and energy-related expertise provided by China and India.

Chinese sales of anti-ship missiles and other military hardware to Iran have been documented by U.S. authorities and international nongovernmental agencies. They have also drawn repeated U.S. sanctions — most recently last year against eight Chinese companies accused of selling missile technology to Tehran.

China, for its part, has hinted it would block any U.S.-led attempt for U.N. Security Council sanctions on Iran over the nuclear issue, saying it "does not support referring the Iranian nuclear question to the Security Council."

Gary G. Sick, a member of the National Security Council under former President Jimmy Carter, says sanctions on Iran effectively means embargoing Iranian oil.

"The Chinese approving a resolution that imposes a sanction on (Iran's) oil — I don't see it happening," he says.

http://www.saukvalley.com/news/291682568608563.bsp

[Ethyl]

India's Energy Nuked by Geopolitics


India, one of the world's big guzzlers of energy, is caught between securing future supplies of depleting conventional energy sources, especially petroleum, and opting for nuclear power complete with an energy-intensive development pattern.
In recent years India has been gravitating towards the first option, reflected in frenzied attempts to tie up oil and gas supplies from such diverse sources as Vietnam, Burma, Bangladesh, Qatar, Sudan, Venezuela, Nigeria, Russia and Kazakhstan.
Above all, India moved towards signing a deal for a 2,600 km-long pipeline carrying natural gas from Iran through Pakistan. The 7.4 billon US dollar project has been seen as the star of the country's energy show.
Yet, 10 days ago, the government's preference suddenly shifted towards nuclear power. Official statements say India will promote it for its ''energy security'' and as a clean, safe means of producing electricity.
This is strange considering that nuclear power accounts for under three percent of India's electricity, and less than one percent of its energy consumption, and that the country's experience with nuclear energy, especially safety, has not been happy.
What explains the shift is not so much energy planners' calculations, technical factors, or social considerations, as geopolitical calculations.
Crucial here is Prime Minister Manmohan Singh's Jul. 17-20 visit to Washington, where he signed a far-reaching nuclear cooperation agreement with President George W. Bush.
Under this, the US has agreed to sell nuclear materials and technology to India, and pledged to relax export restrictions and other controls in the global non-proliferation order, especially those imposed by the 44- state Nuclear Suppliers' Group (NSG).
India will, in return, identify and distinguish civilian and military nuclear facilities from each other and place the civilian ones 'voluntarily' under International Atomic Energy Agency (IAEA) safeguards, while toughening export controls.
''This is indeed a landmark agreement which admits India into the world's exclusive Nuclear Club as a de facto nuclear weapons-state'', says Kamal Mitra Chenoy, of the Coalition for Nuclear Disarmament and Peace, and a professor at the School of International Studies at Jawaharlal Nehru University.
''It signifies India's abandonment of its decades-long commitment to global nuclear disarmament. There isn't a word in the Bush-Singh declaration about a nuclear weapons-free world. Indian policy-makers have decided to play a purely cynical game: join the Nuclear Apartheid regime, which they stridently condemned for decades''
If it does go through, the Bush-Singh deal will open avenues for imports of civilian nuclear materials into India. India is running out of uranium as its old mines get depleted and new mining projects face popular opposition.
Uranium imports, like those of power reactors, could give a temporary boost to India's nuclear power program, which has performed below par for decades. Against the promise of 10,000 Mw of nuclear electricity by 2000, India's current nuclear capacity is just 3,300 Mw.
Singh's decision to pump adrenalin into the nuclear power sector has astonished many.
In a Jul. 21 interview to The Washington Post, Singh raised doubts about the viability and bank ability of the Iran-Pakistan-India pipeline project: ''There are many risks, because considering all the uncertainties of the situation there in Iran. I don't know if any international consortium of bankers would probably underwrite this''.
This has been widely seen as Singh's effort to placate Washington, which has repeatedly voiced its opposition to the pipeline and warned that under its domestic laws, it will have to impose sanctions on any project that helps Iran part of the 'Axis of Evil'.
Politically and strategically, the nuclear power paradigm fits in with an alliance with the US. Nuclear trade with India will help the languishing US nuclear equipment industry. The US has ordered no new power reactor since 1973. It will also keep India closely aligned with the global North, which accounts for the bulk of international nuclear supplies.
Most important, the lure of recognition of India as a 'responsible' nuclear weapons-state will keep India in line with American priorities.
By contrast, the oil pipeline outlines a paradigm of South-South economic cooperation and political solidarity. It also has huge positive 'externalities' such as a breakthrough in relations with Pakistan, as well as better ties with Iran, an emerging power.
Pakistan stands to gain over 500 million dollars a year as transit fees from the pipeline. The pipeline will also signify a high level of confidence and mutual comfort between the two neighbors.
There is even a proposal to extend the pipeline to China and to develop yet another conduit from Central Asia via Afghanistan and Pakistan.
Singh supported South-South energy cooperation at the 50th anniversary of the Afro-Asian Conference in Jakarta in April saying: ''While our continents include both major producers and consumers of energy, the framework within which we produce and consume energy is determined elsewhere''. He called the role of Western governments and companies, an 'anomaly'.
The idea was widely welcomed in South Asia. But now Singh seems to be retreating from it, citing purely commercial and technical grounds.
Argues economic writer M K Venu: ''If you were to make a purely technical argument, no nuclear power plant in the world runs purely on commercial principles. There is implicit sovereign guarantee in regard to the mitigation of costs and other risk factors such as ensuring regular supply of fuel. You cannot buy enriched uranium from any private party, like you buy coal for a thermal power plant''.
India's own experience with nuclear power has not been pleasant. Nuclear power has claimed over a quarter of the country's energy research budget, but yielded very little energy, and that too of indifferent reliability. Wind turbine generation has already overtaken nuclear power in capacity without fuss, high subsidies or environmental problems.
Nuclear power's generic problems of occupational and environmental safety are greatly magnified in India. ''Nobody can claim nuclear power is environment-friendly,'' says M.V. Ramana, from the Centre for Interdisciplinary Studies in Environment and Development in Bangalore. ''Nuclear power leaves wastes that remain radioactive for tens of thousands of years. No solution exists to the problem of storing such wastes''.
Nor is the claim credible that nuclear power will help mitigate global warming. However, argues Ramana, ''There is no empirical evidence that increased use of nuclear power has contributed to reducing a country's carbon-dioxide emissions''.
The best case study is Japan, a strongly pro-nuclear energy country. From 1965 to 1995, Japan's nuclear plant capacity increased by over 40,000 Mw, but carbon dioxide emissions tripled!
''Nuclear power tends to require and promote a supply-oriented energy policy. The high cost of nuclear power also means that any potential decreases in carbon emissions due to its adoption are expensive'', added Ramana.
If India yields to US pressure on the Iran pipeline, India is likely to be stuck with the wrong paradigm and court energy insecurity. If it follows its South-South instincts, India will improve relations with its neighbors and create greater security and prosperity for South and West Asia.

http://www.focus-fen.net/index.php?focus=analys&a=2&aid=7385&acat=5

[Ethyl]

US again raises the Indo-Iran gas pipeline bogey

Washington: After the Baloch insurgency, it’s Washington’s meddling, that might pour water over the much-hyped Indo-Iran gas transnational gas pipeline project.

Washington has reportedly expressed ‘serious concerns’ over India’s plan to buy natural gas from Iran.

A senior State Department official told a Senate hearing in Washington, that India and China’s energy deals with Iran “raised concerns under US law and policy”.

The Assistant Secretary of State for Economic and Business Affairs, E. Anthony Wayne, also objected to the proposed Iran-Pakistan-India gas pipeline, and said that such negotiations had the possibility of undermining US energy policies.

“A troubling aspect of the recent surge in overseas energy deals by China and India is their willingness to invest in countries that are pursuing policies that are harmful to global stability. Both Chinese and Indian firms have been involved in oil and gas sector deals in Iran that raise concerns under US law and policy,” the Dawn quoted Wayne as saying to the Senate Foreign Relations Committee.

Wayne said that despite US objections earlier also, “Indian and Pakistani officials were engaged in detailed discussions on the technical, financial and legal aspects of building the four billion dollars pipeline that would bring Iranian natural gas to Pakistan and India”.

He further said that oil deals with Iran and Sudan “could undermine efforts to encourage policy changes that will reduce global instability and energy security for all”.

The utterances have not gone down well with many.

Subir Raha, the chief of Oil and Natural Gas Corporation (ONGC) has slammed Washington for its statements, and said that the US would be “stupid” to attack Iran and risk imposing record oil prices on the global economy.

“You launch one more attack and you can’t even guess where the speculation will go. With the stalemate in Afghanistan, stalemate in Iraq and elsewhere, you already have a price of 55 dollars a barrel. I see no reason why India’s priorities should be subservient to US priorities. The US is chasing oil and gas as badly as China or India or anybody else,” the paper quoted Raha as saying.



(ANI)


http://www.newkerala.com/news.php?action=fullnews&id=9911

[Ethyl]

Iran-India gas project finalized: FM


TEHRAN (IRNA) -- Foreign Minister Manuchehr Mottaki in a meeting with his Indian counterpart Natwar Singh here Saturday announced that the project on transfer of gas from Iran to India via Pakistan has been finalized and various committees are now working on its executive strategies.

Speaking to reporters after the first round of his talks with Singh, he added that during the meeting the tripartite gathering of the oil ministers of Iran, Pakistan and India before the end of the current year (March 20, 2006) was underlined.

Mottaki and Singh attended a press conference after the meeting and responded to the questions raised by reporters.

"During the first round of talks, the issues on the agenda were reviewed and strategic collaboration between the two countries, major joint projects and cooperation in other domains including trade were discussed," added Mottaki.

Expressing satisfaction with the execution trend of the provisions of the documents inked between the two sides, he stated that agreement was mutually reached on expediting the process of the gas pipeline project by eliminating any bureaucracy.

He added that during the meeting it was agreed to hold Iran-India Economic Commission meeting in the first half of March 2006. For his part, Singh elaborated on a question raised on the Indian government's opinion about the report released by the Director General of the International Atomic Energy Agency (IAEA) on Iran's nuclear activities and said, "I have not yet discussed the issue with Mottaki, since the issue will be on the agenda of the next round of our meeting."

He put the value of the trade exchange between the two countries at four billion dollars and assessed the mutual economic relations as satisfactory.

Singh noted that during the meeting it was decided to hold the joint economic commission meeting in early March 2006.

"The gas pipeline project was discussed in yesteray's meeting and agreement was reached about appointing a consulting company. I hope that during the tripartite oil and energy ministers meeting in November the issue would be finalized," he added.

The annual trade exchange between the two countries exceeds three billion dollars and given the affordable potentials, the figure is predicted to rise.

India is expected to annually import five million tons of liquefied natural gas (LNG) from Iran from 2009. Meanwhile, preliminary negotiations on Iran-Pakistan-India tripartite gas pipeline project has already been conducted. Implementation of the project will be put on the agenda of tripartite talks from 1385.

Establishment of north-south transit corridor network through Iran-India-Russia's initiative is another regional project which is on the agenda of Iran-India negotiations.

As two major regional powers, Iran and India share common views quite similar to each other about reconstruction of Afghanistan, establishment of legal structures in Iraq, Middle East developments and dismissal of unilateral policies.

Pakistan, India agree on Iran gas transit fee procedure

Pakistan and India have agreed to adopt international standards for calculating transit fee for the Iran-Pakistan-India pipeline.

Both countries have also agreed to jointly ask India to get an independent third party certification of dedicated gas reserves for the $7.2 billion gas pipeline, Dawn newspaper reported on Saturday.

Pakistan Cabinet approved the Energy Charter Treaty early this week.

This will enable Pakistan to make a request to the Energy Charter Conference for the observer status.

Meanwhile, an official of the Ministry of Petroleum and Natural Resources told IRNA here that the next round of the Pakistan-India joint working group in Islamabad on September 7-8. The first round of talks was held in New Delhi few weeks back.

He said that the meeting, participated by the oil secretaries of both countries would deliberate upon issues relating to a framework agreement, land acquisition, reserve certification, gas demand in Pakistan and India, transit fee, project structure, gas pricing mechanism and pipeline size.

The proposed project surfaced in the mid-90s, but no tangible progress could be made towards its realization, mainly because of Pakistan-India tensions on the seething Kashmir problem.

However, the peace process launched last year has shown both countries' narrowing down differences on the Iran-Pakistan-India pipeline to meet growing energy needs of New Delhi and Islamabad.

Pakistan is also considering two other options i.e. Qatar pipeline and Turkmenistan-Afghanistan-Pakistan pipeline. However, experts have described the Iran gas pipeline option as the most viable.

The official pointed out that the joint working group would report back its deliberations to the ministers who are expected to hold a series of meetings before their agreement on the aspects of the project.

The top leadership of the three countries could be present on the possible signing of an agreement on the proposed 2670-kilometer pipeline, the official said.
http://www.tehrantimes.com/Description.asp?Da=9/4/2005&Cat=9&Num=019

[Ethyl]

Indian External Affairs Minister to visit Iran
Aug 29, 2005




In the first high-level political contact with the new Iranian leadership, India's External Affairs Minister K. Natwar Singh will pay a three-day visit to Tehran from September two, for talks on the entire gamut of bilateral ties, including the proposed 7.4 billion dollar gas pipeline to India via Pakistan and security issues, reports Press Trust of India (PTI).

Singh will call on President Mahmoud Ahmedinejad and hold extensive parleys with his counterpart Manouchehr Mottaki. He is also likely to meet the new chief nuclear negotiator Ali Larijani.

The minister is likely to affirm that India will maintain and further consolidate its strong civilizational links with Iran.

On the US opposition to the gas pipeline project and Iran's nuclear program, New Delhi has made it clear that the project was purely a bilateral one based on commercial considerations and it would not bow to any international pressure on it.

Keen to carry forward the ambitious project, Petroleum and Natural Gas Minister Mani Shankar Aiyar visited Tehran in June this year during which the two sides decided to set up a joint working group to study all aspects of the project.

Official sources said Singh will convey to the Iranian leadership that India desired to work closely with the new Government to further implement the Joint Declaration signed by the two nations in 2003 for forging strategic partnership.

The Declaration had put forth a vision of strategic partnership touching all aspects of bilateral relations -- cooperation in economic, hydrocarbons, science and technology, information technology, education and training, reconstruction of Afghanistan, international terrorism and other global issues.

As a follow-up, two countries have entered into agreements for cooperation on a number of areas, including transit of goods, urban water management and operationalization of a line of credit.

http://www.iranian.ws/iran_news/publish/article_9244.shtml

[Ethyl]

India for investing in Russian energy sector

India-Russia-Energy
Identifying energy as a major area of cooperation, India today said it was keen to invest in the Russian energy sector and its leading oil company ONGC had already made a proposal to Gazprom to source oil and gas, reports Press Trust of India (PTI).

"We have identified areas of interest to us where potentially, if conditions are created, India would be willing to invest substantial sums in Russia's energy sector," Indian Ambassador to Russia Kanwal Sibal said here at a CII conclave.

ONGC, ONGC Videsh and Gas Authority of India Ltd (GAIL) have signed strategic cooperation agreements with Gazprom and Rosneft, he said, adding that with a view to step up cooperation in the sector, Petroleum Minister Mani Shankar Aiyar would be visiting Sakhalin by end of this month.

Sibal said Russia's response on ONGC taking block in Sakhalin 3 was still awaited.

In fact, he said Russia was keen to join the Iran-Pakistan-India gas pipeline project through Gazprom.

Similarly, India has also expressed its interest in gas pipeline project in Russia, he said, adding that stepping up energy cooperation has been subject of discussions between the top leadership of the two countries and political signalling seems favorable.

Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL), the two national companies and a few private and joint venture companies are engaged in exploration and production of crude oil and natural gas in the country.

Crude oil production in the country during 2001-02 was 32.03 MMT.

Production of natural gas during the same period was about 29.6 billion cubic meters.

India is highly dependent on energy imports for meeting demands from its rapidly expanding industrial sector.

The gross import of crude oil and petroleum products (including imports by private and parallel marketers) during 2003-04 was 98.428 MMT valued at Rs 93,721 crore, whereas the net import of crude oil and petroleum products (excluding exports) during the same year was 84.176 MMT valued at Rs 77,404 crore.

The export of petroleum products including private parties was 14.252 MMT valued at Rs 16,317 crore.

A cursory look at the import-export figures shows the serious energy issue that sits at the heart of India's growing economy.

Most of India's hyperactive efforts to conclude energy deals and seek out partners all over the world is aimed at filling the energy gaps in the strategy of development that India is seeking over the next two decades.

http://www.irna.ir/en/news/view/menu-236/0509166287185719.htm

[Ethyl]

Oil India on acquiring spree


Wednesday, 14 September , 2005, 15:58

Guwahati: State-owned Oil India Ltd (OIL), after registering an all time high profit of Rs 1,071 crore, is now setting its eyes on acquiring more properties abroad. Today in Sify Finance

The Oil-Indian Oil Corporation Ltd (IOCL) consortium has already acquired an onshore exploration block at Libya while trying to get more such field at Myanmar, Russia and African countries.

Presenting the last annual report of his tenure as the Chairman cum Managing Director of OIL, R K Dutta said, ''OIL is also actively pursuing some exploration and production properties in neighbouring Myanamar and hopes to acquire a few such blocks in the near future.'' In Farsi block in offshore Iran, where OIL has a 20 per cent participating interest, five drilling locations have been identified.

Dutta said in recognition of its excellent performance and enormous potential, a high-powered synergy in energy committee, constituted by the Union Government, has recommended a much higher rate for OIL in the countries efforts for acquiring equity oil abroad.

OIL registered an all-time high net profit of Rs 1,061 crore against a total income of Rs 4,097 crore, while total assets increased to Rs 5,775 crore.

The company recommended a final dividend of 100 per cent on the paid up capital over and above the interim dividend of 60 per cent paid earlier.

Crude oil production showed a healthy growth of about 6.7 per cent during the year. Gas production surpassed the 2 billion SCM barriers with a growth of around 6.3 per cent and gas sales increased by about 7 per cent.

These enhancements, together with a rising trend in crude oil prices resulted in a revenue growth of around 23.5 per cent.

Sustaining its rising trend in crude oil production from the previous year, OIL ended the year with an annual crude oil production of 3.20 million tonnes and a terminal crude oil production rate of 3.43 MTPA. The Chairman emphasised that, 'most significantly, along with increased production, the total volume of crude delivered to the refineries during the year had also risen to 3.146 mmt compared to 2.951 mmt in the previous years.

Sharing his thoughts on the new strategic initiatives, the CMD said that as an E&P company, exploration and production of hydrocarbons continue to be its focus areas.

''In the domestic front, the current focus areas for exploration are the north east frontier (NEF) and the NELP acreages, in addition to the ongoing exploration activities in the main producing area in the south bank of river Brahmaputra.

Earlier, OIL signed a MoU with Assam Gas Company Ltd (AGCL) for jointly creating the infrastructure for transportation of natural gas beyond Numaligarh refinery up to Guwahati initially and further at a later date.

Additional potential customers of OIL gas near Guwahati are IOC refinery and ASEB power project at Chandapur.

With these initiatives in hand OIL's gas sales should double in the northeast in the next 4-5 years.

With the help of a series of successful work over operations, gas production in Rajasthan has been increased from the level of 0.40 mmscmd to a level of 0.70 mmscmd since October 2004.

The company has also signed a MoU with Numaligarh refinery for laying and operating a product pipeline from Numaligarh to Siliguri.

Government clearance for the Rs 664 crore project is in its final stages and all preparatory activities have been initiated to undertake the execution of the project.

In addition, the working for upgrading the trunk pipeline communication system is on. This will also serve as the backbone for the Assam statewide area network (ASWAN) project of the state government.

http://sify.com/finance/equity/fullstory.php?id=13940097

[Ethyl]

CPI(M) for wider India-China-Russia cooperation

CHANDIGARH: While the Communist Party of India (Marxist) has favoured a wider trilateral cooperation and understanding among India, China and Russia, to check the growing trend of creating a unipolar comity of nations, it understands that there is no scope for a strategic axis, especially in the present international scenario.

The viewpoint was expressed by CPI(M) general secretary Prakash Karat while informally interacting with reporters after he presided over a meeting of the party's Punjab council here on Saturday. He said that while India-Russia relations had their own strength, recent indications of upgrading the China-India ties to a strategic level were quite appreciable.

Mr. Karat said that while China was expected to emerge as a major economic power, India's potential was also being recognised at the international level. The creation of a multi-polar world was in the interest of India, he said.

Responding to the appeal of U.S. Secretary of State Condoleezza Rice for joining together against Iran on the nuclear proliferation issue, Mr. Karat said India, China and Russia must consult each other before taking any official position. He said the controversy around Iran's nuclear programme must be resolved under the ambit of the International Atomic Energy Agency.

Ties with Iran


Mr. Karat said India could not allow its relations with Iran to be held hostage by the United States. He said that while Iran, a signatory of the Non-Proliferation Treaty (NPT) had rights to pursue its programme, India also had its energy needs. Iran has agreed to sell 5 million tonnes of LNG through a gas pipeline and another 2 million tonnes by ship, he pointed out.

Regarding Prime Minister Manmohan Singh's meeting various world leaders during the U.N. General Assembly session, Mr. Karat appreciated the continuation of a positive trend in the improvement of ties between India and Pakistan. He said that along with bilateral efforts, the Union Government must hold more talks with representatives of all groups from different regions to resolve the Kashmir imbroglio. He favoured the opening of more routes to facilitate the exchange of people and increase the volume of trade with Pakistan.

No poll alliance in Bihar


Mr. Karat reiterated that the party would not have any formal alliance with the Congress in the Bihar elections and later in Punjab, while it would face the Congress' challenge in West Bengal and Kerala. In Bihar, while the party would have an arrangement with the Rashtriya Janata Dal (RJD), it would not form part of the RJD-Congress alliance. He discounted that the electoral dichotomy at the State level would have any impact on the future of the UPA Government at the Centre.

On the issue of establishing a Dalit identity to counter the violence against the underprivileged sections, Mr. Karat said the party was contemplating replicating in the North some of the initiatives taken by it to organise the oppressed sections of society in the South. Reiterating the importance of class and caste struggles, the Communist leader opposed politics based on caste fissures.

Job guarantee scheme


Mr. Karat said the CPI(M) was quite satisfied with legislation on the Rural Employment Guarantee Act during the last session of Parliament. While expressing some reservations about the implementation of the programme, he appreciated that a beginning had been made to provide employment to the poor in rural areas.

Mr. Karat said the party was awaiting an official communication from the Union Government regarding its assurance of shelving the plan to sell its equity in the Navratna PSUs.

http://www.hindu.com/2005/09/18/stories/2005091807080800.htm

[Ethyl]

India to buy 70% of gas from Iran pipeline, Pakistan 30%

* Indian petroleum secretary says threat of sanctions against Iran not yet a consideration
* Joint press conference after talks end today

By Khalid Mustafa

ISLAMABAD: India will buy 70 percent and Pakistan 30 percent of the gas Iran exports through the proposed $ 7.2 billion Iran-Pakistan-India pipeline.

This was decided on Thursday at the start of a two-day technical meeting of the Pakistan-India Joint Working Group (JWG). Federal Petroleum Secretary Ahmed Waqar headed the Pakistani side while Indian Petroleum Secretary Sushil Chand Tripathy headed the Indian side at the talks.

A senior government official who participated in the meeting told Daily Times that Pakistan and India would announce a tripartite framework on Friday aiming to expedite the process of developing consensus on all technical, commercial and financial issues prior to initiating the project.

The official said that the tripartite framework would take into account the technical talks between Iranian and Indian experts in August. “Iran will give a preliminary undertaking to both countries to sell the gas and extend its terms sheet to them by December. Both countries will then negotiate the price of gas with Iran,” he said.

He said the transit fee that Pakistan would take for gas transported to India was not discussed at the meeting, and would be finalised after gas volume, the length and diameter of the pipeline, and its entry points at the Pakistani border and exit points at the India border were decided. He said Pakistan would ask for transit fee based on international standards.

The official said that from 2010, Pakistan’s gas requirements would surge from 30 (mmcfd) million cubic feet per day to 70 million cubic feet per day. Pakistan’s side at the meeting said that the government would soon appoint a financial advisor for importing liquefied natural gas from Qatar

India brought up the prospects of a Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline. Pakistan said it would share the findings of a gas-certification study of the Daulatabad gas field in Turkmenistan when the study was completed. Asked what effect the threat of UN sanctions against Iran would have on the project, Tripathy told Reuters: “As far as we are concerned, we are going ahead. We are going ahead with the development of a project structure ... so we can put together a project feasibility.”

A press release issued later said that the JWG meeting reviewed progress made after the first JWG meeting in July in New Delhi and discussed technical, commercial, financial and legal aspects of the project. The meeting will continue tomorrow, after which there will be a joint press conference.

In his opening remarks, Waqar said that negotiation between Pakistan and India on the project were going well and was hopeful of a successful conclusion. Tripathy shared these sentiments and added that the project would help promote peace between the two countries. In the morning, Tripathy paid a courtesy call on Mir Muhammad Mengal, minister of state for petroleum. Mengal briefed him on government measures to expand the energy sector.

http://www.dailytimes.com.pk/default.asp?page=story_9-9-2005_pg1_4

[Ethyl]

Iran, US: India's Catch 22

India's relations with Iran -- accused by Washington of attempting to build nuclear weapons -- is possibly the first major hiccup in the New Delhi-Washington honeymoon.
'We are telling our Indian friends that they can't have it both ways,' a senior US administration official was quoted as saying by the International Herald Tribune.

He was obviously referring to India's recent nuclear pact with the US, which would give India access to nuclear material and technology earlier prohibited under US law, and Delhi's close relationship with Tehran.

Last month, soon after the June elections saw Tehran Mayor Mahmud Ahmadinejad elected president, Iran rejected economic and other incentives offered by France, Germany and the UK and restarted uranium conversion, sparking further fears about its nuclear weapons programme.

India commits support to Iran's N-programme

Yet when push comes to shove at the weeklong meeting of the International Atomic Energy Agency which begins September 19, India, (along with Russia and China, permanent members of the UN Security Council) is unlikely to endorse the call led by the US and Europe (France Germany and Britain) to refer Iran to the Security Council for violating the provisions of the NPT.

Why is the US worried?

Washington is certain that Iran -- labeled as one of the three axis of evil nations by President George W Bush way back in January 2002 -- has been secretly developing nuclear weapons, which could radically destabilize the already tense region.

Iran admits fudging N-claims

Bush has recently assured India -- subject to Congressional approval -- of nuclear co-operation in the civilian sector provided New Delhi agreed to international inspections and separated its civilian and military nuclear facilities.

India's rapidly growing relations with Iran, whose chief nuclear negotiator visited Delhi days before the Prime Minister left for the UN summit (PM at UN: complete coverage) in New York, has obviously raised eyebrows in Washington.

Earlier this month, External Affairs Minister K Natwar Singh visited Tehran and is reported to have pledged support for Iran's 'peaceful nuclear energy program.'

This led to questions being raised in the US about the possibility of American nuclear technology proposed to be shared with India finding its way to Tehran.

Despite Washington's reservations on the subject, Natwar Singh also declared that the 'concerned ministers' of India, Pakistan and Iran were close to an agreement on the Iran India gas pipeline over Pakistan, and could 'finalize a framework agreement by December 31.'

Bush expresses concern

The Bush administration has not-so-subtly warned India that unless it supported a US-sponsored demand to refer Iran to the UN Security Council for breaching its obligations under the Non-Proliferation Pact, the India US nuclear agreement would become that much harder to push through Congress.

What are the ties that bind Iran with India?

It was Afghanistan which brought India and Iran together in the early 1990s.

Prior to that, the two nations had viewed each other with suspicion and mistrust left over from the Cold War, in which Tehran sided with Washington and Islamabad against New Delhi's ally Moscow.

The Iranian revolution of 1979 brought about a radical revision in Iran's ties with the US and Pakistan. But that did not really lead to a rapprochement with India, either, until the Sunni Taliban overran Afghanistan, which borders Shia Iran.

Both India and Iran found themselves supporting Ahmed Shah Masood's Northern Alliance against the Taliban.

Iran's hand in the Afghan mess

The relationship blossomed, and in January 2003, Iranian President Mohammad Khatami was invited as the chief guest for India's Republic Day celebrations, during which he signed not huge energy deals, but also put in place a strategic partnership which involved joint military exercises and the training of Iran's military forces.

Reports that the two nations had signed a pact giving India access to Iranian airfields in the event of a war with Pakistan rattled Islamabad and the West.

Since then, the relationship has grown in leaps in bounds, with Indian oil majors setting up shop in Iran. Iran is also seen as a gateway to the resource rich Central Asian republics, which energy-starved India is keen to gain access to.

Rashtrapati Bhavan cooks up a surprise for Khatami

And finally, as the peace process with Pakistan unfolded, India agreed to a proposal for a gas pipeline from Iran to India over Pakistani soil.

Soon afterwards, Washington, which had earlier stayed non-committal on the deal while privately encouraging it as a tool for peace, voiced objections to Iran being the source of the pipeline.

Privately, Washington also expressed fears that the nuclear technology it proposes to give India could find its way to Iran.

At the recent UN summit in New York, Iran insisted that its nuclear programme was for peaceful purposes, and dared the US to refer it to the UN Security Council, (which could impose sanctions). Tehran also warned that if the situation so warranted, it could not only start processing weapons grade material but sell its nuclear technology to other states.

What are Iran's interests in India?

One, India is the largest market for the natural gas in its southern oilfields.

Two, by cosying up with India, it hopes to negate some of its international isolation.

Three, Iran hopes to benefit from India's expertise in information technology, science and medicine.

Four, Iran hopes a strategic agreement with India will help modernize its defence forces.

Uttam's Take: The Iran Web

What are the main areas of cooperation between India and Iran?

According to India's Ministry of External Affairs web site updated in July 2005, India-Iran commercial relations are dominated by Indian import of Iranian crude oil (US$ 1.67 billion (41%) in 2003-2004). The total volume of annual bilateral trade was US$2.8 billion in 2003-2004 registering 24% growth over the previous year.

Iran: Tough nut for US to crack

Other interesting remarks on the MEA web site:

Air links with India/convenient travel routes: There are no Indian national carriers flying to Iran. Mahan Air, a private airline in Iran, operates three flights per week to Delhi and Iran Air flies twice weekly to Mumbai.

Indian Banks: No Indian banks are currently operating. A representative of State Bank of India is stationed at Tehran.

Links to local organizations dealing with India: There is no such organization in Iran.

Estimated NRI/PIO population: About 500 families, mainly located at Tehran.

Important NRI/PIO Associations and their contact details : No such organization exists.

Major Indian ethnic papers/television channels with contact details: There are no Indian ethnic papers or television channels in Iran.

What is India's position on Iran at the moment?

After a meeting with US President George W Bush in New York, Prime Minister Manmohan Singh clarified that India was against Iran acquiring nuclear weapons, but that diplomacy, not force, was likely to yield results on this issue.

''We are not holding any brief for Iran. Another nuclear state in our neighbourhood is not desirable. But diplomacy must be given scope. The IAEA should be given a chance to work out a consensus,'' Prime Minister Singh told a press conference before winding up his visit.

Iran downplays PM's comments

India also urged Iran to honor its commitment to the NPT, of which it is a signatory -- unlike India, which is not an treaty signatory and hence did not violate any treaty obligations when it conducted nuclear tests in May 1974 and May 1998.

However, 'You have to allow a certain learning process to take place in Tehran rather than banging them on the head,' the Herald Tribune quoted an un-named Indian official as saying.

Iran threatens to use oil as weapon

In Delhi, analysts believe that India, which now has robust ties with Iran and its opponents Israel and the US, can use its influence and become a major power broker in the region.

Defending Delhi's ties with Iran, a senior Indian official noted that the US has an relationship with Pakistan which is independent of its ties with India, and hence there was no reason why India could not maintain independent relations with both the US and Iran.

http://us.rediff.com/news/2005/sep/19spec3.htm?q=tp&file=.htm

[Ethyl]

Re:Afghanistan & motivations

see:

Afghan leader wants U.S. military out
http://www.wincoast.com/forum/showthread.php?p=352067#post352067

and

Karzai says Iran is a friend of Afghanistan

http://www.wincoast.com/forum/showpost.php?p=283581&postcount=81

[Ethyl]

Redrawing India's Geostrategic Maps with China and the United States

India has been revising its strategic maps with China and the United States, both literally and figuratively. During early spring of 2005, Chinese Premier Wen Jiabao handed Indian Prime Minister Manmohan Singh a map reformatted to reflect the long-contested region of Sikkim as part of India. By summer, the United States handed India defense, nuclear, and space technology proposals, promising to transform more than just physical territory. Articles in India-based Bharat Rakshak Monitor attribute the warming of Sino-Indian ties as a means to counter the U.S. presence in Asia.[1] China's Party organ People's Daily (Renmin Ribao) asserts that strengthened Indo-U.S. relations are targeted at containing China's rise.[2] In both analyses, China and the United States are portrayed as focusing their strategic concerns squarely upon each other, while India maneuvers to secure political, economic and military benefits.



Yet, there remains a crucial and often missed difference between the Chinese and the U.S. approaches toward engaging India. China's current inducements for India primarily focus on economic integration and energy development. By contrast, the U.S. has made dual-use technology transfer the centerpiece of its engagement strategy. At India's level of technological sophistication, however, U.S. dual-use nuclear, space, and military cooperation promises to enhance India's political weight and military footprint in ways that are more likely to conflict with long-term U.S. strategic goals than with those of China. Rather than encircling China as the People's Daily foresees, the United States may instead be containing its own long-term interests.



China and the United States Engage India



On April 1, 2005, China and India took a symbolic step toward strategic cooperation as Chinese Premier Wen Jiabao and Indian Prime Minister Manmohan Singh issued the India-China Strategic and Cooperative Partnership for Peace and Prosperity.[3] This joint statement lauded the "global and strategic character" of Sino-Indian relations. It offered economic incentives for expanded cooperation, with the objective of nearly doubling bilateral trade to $20 billion by 2008. The two parties also announced the formation of a China-India Steering Committee on Scientific and Technical Cooperation in education, science, healthcare, tourism, cultural exchange, and agriculture. India and China provisionally resolved the long standing dispute over Sikkim and agreed to cooperate in developing foreign petroleum and natural gas resources.[4]



Only a few months later, on June 28th, India's Defense Minister Pranab Mukherjee met with U.S. Secretary of Defense Donald Rumsfeld to sign the New Framework for the U.S.-India Defense Relationship.[5] This agreement set forth detailed measures involving joint military exercises, defense and technology trade, missile defense, and exchanges on defense strategy, and intelligence. On July 18th India's Prime Minister Manmohan Singh and U.S. President George W. Bush issued a joint statement, further expanding the scope of the existing India-U.S. Next Steps in Strategic Partnership (NSSP) and High Technology Cooperation Group (HTCG). The United States committed to signing a Science and Technology Framework Agreement, building closer ties in space exploration, satellite navigation and launch, facilitating a U.S.-India Working Group on Civil Space Cooperation, removing Indian organizations from the Department of Commerce's Entity List, seeking adjustment of U.S. laws for full civil nuclear cooperation and trade with India, including reactor fuel supplies, and support for India's participation in the International Thermonuclear Experimental Reactor (ITER) and in the Generation IV International Forum.[6] These proposals are under debate in the U.S. Congress and will require amendment of the Atomic Energy Act of 1954 and the Nuclear Nonproliferation Act of 1978, as well as the acquiescence of the Nuclear Suppliers Group (NSG) before full cooperation begins.[7] This time lag offers an opportunity to reflect on the impact of dual-use cooperation on India, China, and ultimately the United States.



U.S. Assistance, Indian Indigenization, and the Impact on China



In spite of emphasizing self-reliance in the wake of sanctions following its 1998 atomic tests, India is not new to foreign assistance.[8] Nor is India a novice in creating linkages between its civilian nuclear and space advances and its nuclear weapon and missile programs. India's initial nuclear test in 1974 utilized plutonium from its Canadian and ostensibly civilian Cirus nuclear reactor, while its 1989 launch of the first Agni ballistic missile comprised technology gained from the U.S. Scout satellite launcher. Similarly, the dual-use technology mentioned under the Indo-U.S. defense framework and joint statement may assist India in its ongoing pursuit of advances in nuclear weapons technology, longer range ballistic missiles, and submarine-launched ballistic missiles.



Indigenization and Nuclear Assistance



The most significant shift in U.S. policy brought on by the July 18th U.S.-Indian joint statement relates to dual-use nuclear cooperation. India has already managed to parlay decades of Russian, U.S., German, and French assistance into what is now a robust indigenous civilian and military nuclear program. While nuclear power only occupies an estimated 3.3 to 5 percent of India's energy production, India is actively pursuing nuclear power development with important civilian as well as military implications.[9] In October 2004, India launched the commercial phase of its 500 MWe Prototype Fast Breeder Reactor (PFBR) at Kalpakkam.[10] Four more such fast reactors have been announced for construction by 2020. During April 2005, the Bhabha Atomic Research Center (BARC) also commissioned an Integral Test Loop (ITL) to simulate the main heat transport system and safety system of the thorium-based Advanced Heavy Water Reactor (AHWR).[11]



For uranium-poor and thorium-rich India,[12] the development of thorium-fed fast breeder reactors makes it even less susceptible to the vagaries of international fuel supply and sanctioning. Fast breeder reactors produce more than they consume, offering India a steady and renewable future supply of weapons grade fuel. AHWRs in particular burn thorium/U-233 oxide producing spent fuel that can be reprocessed.[13] India's PFBR at Kalpakkam and its Kamini 40 MWt Fast Breeder Test Reactor (FBTR) both breed U-233.[14] While less of a proliferation risk due to its high radioactivity, U-233 has fissile properties comparable to U-235 used for nuclear weapons production.[15] India's recent technical developments suggest that it has made significant strides towards mastering, indigenizing, and expanding the scope of its nuclear fuel cycle.



However, not all components of India's nuclear program are moving forward. David Albright, executive director of the Institute of Science and International Security (ISIS), and Henry Sokolski, executive director of the Nonproliferation Policy Education Center, have pointed to India's less than proven track record in successfully operating its fast breeder reactors and reprocessing plants.[16] This is where U.S. technological assistance to India's civilian nuclear program can offer a degree of streamlining for both India's civilian and, by extension, military nuclear programs. Fusion technology, whether garnered through the ITER project or under the U.S.-India Energy Dialogue, could help overcome some of India's civilian and military technological gaps.[17] India's alleged failed detonation of a thermonuclear weapon during its multiple 1998 tests is just one such lacuna.[18] Fusion technology not only has applications in thermonuclear weapons, but also could assist in nuclear warhead miniaturization to extend missile launch range and payload capacity. This will enable India to produce a higher nuclear yield and to successfully mount its nuclear weapons on missiles to fly greater distances.



Beyond hypothetical assistance and rhetoric, as of August 30, 2005, the United States has already removed Tarapur (TAPS 1 and 2), Rajasthan (RAPS 1 and 2), and Kudankulam (1 and 2) from the U.S. Entity List, mitigating export licensing requirements.[19] For these particular reactors, assistance will be monitored under International Atomic Energy Agency (IAEA) safeguards. However, for other reactors and facilities demarcating the dividing line between civilian and military use will be a tedious, and many Indian and U.S. analysts suggest impossible, process. Although management of the AHWR unveiled in August 2005 has been ostensibly transferred to the civilian Atomic Energy Regulatory Board (AERB), the unit has the ability to produce U-233 that can be reprocessed for nuclear weapons. Furthermore, it was designed by BARC, a known contributor to India's nuclear weapons program.[20] Due to the overlap between India's civilian and military programs, there remains the potential for diversion of technology, equipment, and potentially even materials to nuclear weapons programs.



Nuclear Impact on China



Whether U.S.-assisted or indigenous, India's nuclear advances carry strategic weight for Sino-Indian relations. Both countries espouse a nuclear doctrine based on minimum deterrence. Yet, India continues to engage in fissile material production to augment its stockpile. The 2005 edition of the book Deadly Arsenals has already expanded its Indian weapons estimates to 75-110 nuclear devices.[21] ISIS further provides an indication of India's capabilities for future nuclear arsenal expansion, estimating in August 2005 that India possesses a total of between 13.9 and 14.9 metric tons of civilian and military highly enriched uranium (HEU) and plutonium (Pu).[22]



In comparison, China has stopped fissile material production, but is believed to have a sufficient stockpile, estimated at 31.1 civilian and military metric tons of HEU and Pu[23] to double or triple its current arsenal of approximately 400 nuclear weapons.[24] Despite the current differential, there is nothing in the U.S.-India joint statement that suggests India will be constrained in its current fissile material build-up. Any future commitments to a contentious Fissile Material Cut-Off Treaty aside, India has repeatedly stated that it will continue to build up its plutonium stockpile until it reaches a level that provides a strategic comfort zone vis-à-vis China and Pakistan. If India continues to expand its fissile material stockpile and receives U.S. technological and material transfers, China's willingness and incentive to maintain a freeze on its own fissile material production may erode. This could lead to intensified efforts by China to assist Pakistan's weapons programs, to expand its own arsenal, or both.



In the meantime, China's current nuclear capabilities, stockpile, and arsenal gives it the edge over India. If India maintains its stance of minimum deterrence, it is unlikely to attempt to surpass China's nuclear strength. Instead, U.S. nuclear assistance to India has a greater potential for proliferation ricochet to other countries. Among suppliers, Britain quickly followed the U.S.-India joint statement in July by announcing its decision to modify its own sanctions against India in August.[25] Russia voiced its own approval in September with its sights set on legitimizing its nuclear trade with India and, by extension, Iran.[26] After winning a deal to supply India with 6 submarines and 43 Airbus planes, France also acknowledged and pledged to work within the NSG for "full international cooperation with India in the civilian nuclear field."[27] Pakistan also staked its own claim in September with its ambassador to the United States, a former Army chief, stating that the U.S. deal with India "should leave the door open for other countries that meet the same criteria."[28] As Iran, North Korea, and countless others witness acceptance of and the benefits accrued by a country that has rejected the NPT and tested nuclear weapons, voluntary nuclear freezes on incipient nuclear weapons programs or fissile material production may vanish for more parties than just China.



Indigenization and Ballistic Missile Assistance



Dual-use space technology cooperation under the India-U.S. joint statement will also help India upgrade systems with military potential that were originally established using U.S. and Russian transfers as a base. As early as December 2001, the U.S. National Intelligence Council (NIC) issued a report that India could convert its Polar Space Launch Vehicle (PSLV) into an intercontinental ballistic missile (ICBM) within a year or two.[29] In May 2003, India launched its second Geostationary Satellite Launch Vehicle (GSLV), hoisting a 1,800 kg payload, the "heaviest payload ever launched from Indian soil."[30]



India has demonstrated the technical ability in its space program to domestically manufacture cryogenic engines, develop solid-propelled missiles for more rapid deployment, deliver significant payloads, and create staged missiles for longer-range ballistic missile launches. These advances do not make future U.S. assistance obsolete, rather they indicate a much faster rate of absorption, reverse engineering, and improvements if such technology is transferred. U.S. supercomputer technology, which can be used in nuclear weapon and missile design, is just one of the types of transfers that promises to assist India's burgeoning supercomputer industry.[31]



Under Phase I of the NSSP, by the end of 2004, the United States has already agreed to provide India's Saha Institute of Nuclear Physics with a Cray XD1 supercomputer, equipped with 96 computer processors capable of over 422 billion calculations per second.[32] In April 2005, India's Tata Institute of Fundamental Research (TIFR) also announced a partnership with U.S. company Hewlett Packard to implement High Performance Computing (HPC) solutions at its Computational Mathematics Laboratory (CML).[33] In any number of technologies relating to space and nuclear programs, the United States can offer India technology relating to computer simulations, as well as missile launch, staging, guidance, and range.



Beyond hypothetical developments and rhetoric, in September 2004, the United States removed India's Indian Space Research Organization (ISRO) from the Department of Commerce Entity List.[34] By August 2005, the United States also removed several key ISRO subsidiaries, including ISRO Telemetry, Tracking and Command Network (ISTRAC), ISRO Inertial Systems Unit (IISU), and Space Applications Center (SAC).[35] ISRO as the parent organization is responsible for the gamut of India's space launch vehicles that possess the same technology as applied in ballistic missile launch, guidance, and tracking. The three ISRO subsidiaries focus on satellite technology, such as high-resolution commercial imaging that can be used in missile targeting accuracy and digital inertial navigation systems that can be used in Post Boost Vehicles (PBVs) to enhance ballistic missile accuracy on reentry. U.S. fusion technology may also be applied to super-conductive magnets employed in strategic military developments in outer space and ballistic missile defense. U.S. technology will contribute to a space program that has tremendous military potential not only in missile development, but also in the weaponization of space.[36]



Ballistic Missile Impact on China



India is highly motivated to expand its missile program, not only to counter threats from its neighbors but also to strengthen its regional competitiveness and boost its scientific and international prestige. China poses a distant strategic threat to India, while Pakistan's barrage of tactical and strategic missile improvements keeps India occupied in an immediate contest. Pakistan's test of its nuclear-capable Babur cruise missile less than a month after India announced mass production of the Brahmos cruise missile is a recent example.[37] Predictably, an Indian Defense Ministry official stated that the Babur looks like a repainted Chinese missile.[38] Prasun K. Sengupta has further alleged in the magazine New Delhi Force that China's state-owned China National Precision Machinery Import and Export Corp (CPMIEC) transferred this technology to Pakistan's state-owned National Development Complex (NDC).[39] Bilateral Indo-Pakistani competition, which India continues to view as fueled by China, has led the two countries to advance their ballistic missile ranges well beyond each others borders.[40]



One significant measure of India's missile program is its ability to target Chinese cities. In April 1999, India first test-fired its Agni-II, whose range of more than 2,000 km[41] enables it to reach China's ancient capital of Xi'an. With a test launch of the 3,000-3,500 km-range Agni-III anticipated by the end of 2005, India is rapidly approaching the range necessary to reach Beijing with a nuclear payload.[42]



Despite delays and concerns over the speed of its missile development, such as postponement of a test in 2003,[43] India appears ready to make the next leap towards an Agni-III on the basis of indigenous resources. Despite warnings on Indian PSLV capabilities, the ICBM dubbed Surya remains a source of speculation at this stage.[44] U.S. assistance to India's space program, especially in guidance and staging, could play a critical role in enabling it to achieve the next level of accuracy and range, and in acquiring ICBM capabilities that would effectively start to bring not only China but also the U.S. and its allies into range.



Submarine-Launched Ballistic Missile Indigenization and Assistance



U.S.-Indian cooperation in the transfer of conventional military hardware and dual-use technology also promises a boost to India's military modernization. The Soviet Union traditionally dominated this trade, providing India with Foxtrot Class submarines in 1968 and a Charlie Class nuclear powered submarine in 1988.[45] Russia continued this trend throughout the 1990s and by April 2004, concluded a lease agreement to supply India two Akula-II class nuclear submarines.[46] Yet there have been increasing reports of Russian submarine mishaps and the quality of Russian naval vessels sold to India has been less than optimal, with the aircraft carrier Admiral Gorshkov requiring significant retrofitting.[47] While still central, the Russian Navy is rapidly becoming an outmoded supplier for India's naval modernization.[48]



Currently, India has a total of approximately 15 submarines, 10 of them diesel-powered, known as the EKM or Sindhu class. Among the missile systems, India has sought to launch the short-range Sagarika or Prithvi-III from a submarine base. Indian analysts boast that the system will offer India a second strike capability against Pakistan while serving as a long-range nuclear deterrent. These analyses suggest an expansion of missile range to 2,500 kilometers.[49] A modest 300 km test in October 2004 suggests, however, that the Sagarika has a long way to go before developing into a long-range strategic nuclear deterrent.[50] Since its inception in 1992, the Sagarika missile program, like India's submarine program, has suffered numerous delays.[51]



India's Sagarika and submarine programs could benefit from U.S. conventional military equipment transfers and space-related technology transfers, invigorating India's pursuit of the final leg of its nuclear triad.[52] However, aside from anticipated naval drills and potential transfer of the outdated USS Trenton,[53] there is little current indication of U.S. support for India's naval programs. In naval terms not much has changed from the Cold War. Although a joint naval exercise is scheduled for late September 2005, U.S. naval sales continue to show a greater inclination toward Pakistan, which is destined, according to a September 2005 media report, to receive two U.S. frigate warships and eight P-3C Orion Patrol aircraft.[54] India remains dependent on Russian assistance as with the Akula-II. The relative lack of U.S. focus on India's naval development may demonstrate that China is not the only country leery of India's ability to dominate the Indian Ocean.



Submarine-Launched Ballistic Missile Impact on China



Of all the potential theaters for conflict, the Indian Ocean is the most likely locus of Chinese, Indian and U.S. contention.[55] India's Ministry of Defense report of 2003-2004 pinpointed Chinese development of a blue water navy, enhanced ties with India's neighbors, and growing presence in the South China Sea and Indian Ocean as emerging challenges.[56] Access to sea lanes will grow in importance as competition grows for oil and military and trade routes. Deployment of a submarine-launched ballistic missile (SLBM), especially an intermediate range one, would assist India in gaining depth, flexibility, and second-strike capability in its targeting of Pakistani and Chinese territory. An SLBM could also play a tactical role if short in range and conventional in payload. Yet, India's nuclear submarine and Sagarika program, which both began in the early 1990s, have been slow in meeting the advancing demands of regional development and security. The Sagarika has yet to prove itself as a strategic deterrent with the range to strike within China's borders.



Like India, China has been struggling with building its own submarine fleet with reports of fire, leakage, and accidents. China's submarine force currently consists of four Kilo attack submarines from Russia, an indigenous diesel Song attack submarine, five Han nuclear attack submarines, and one nuclear-powered ballistic missile submarine known as the Xia.[57] The U.S. Department of Defense in its Annual Report on the Military Power of the People's Republic of China suggests that China's next-generation nuclear submarine programs are likely to receive a "significant amount" of Russian assistance.[58] By contrast, India will have access to not only Russian technology and equipment but also U.S., European, and Middle Eastern sources. The delayed but much-anticipated arrival of the Scorpene submarine from France is just one example.[59] Even if the European Arms Embargo on China were to be lifted, China would continue to face U.S.-initiated obstacles to suppliers.

Despite increased naval competition, India and China are not necessarily on a collision course for resources and access to shipping lanes in the Indian Ocean. Chinese and Indian companies are already partners in Sudan's Greater Nile Oil Project.[60] They also plan to cooperate in a joint $4 billion oil pipeline project with Iran following establishment in April 2005 of a Joint Working Group for joint projects in oil exploration and notification.[61] India and China are also actively cooperating in regional energy transport links. India's petroleum minister, Mani Shankar Aiyar, following India's recent loss of a bid to China for Kazakhstan's third-largest oil producer PetroKazakhstan Inc. stressed the "need for China and India to adopt a collaborative approach in bidding."[62] China also has the incentive to cooperate with India to avoid a "Malacca Dilemma," through which India or another country blocks China's access to oil imports from the Middle East and Africa.[63] Indeed, India and China are expected to sign memorandums of understanding in November 2005 focusing on oil exploration and development in the Caspian Sea region, Central Asia, Africa and Latin America on behalf of India's Oil and Natural Gas Commission (ONGC) and the Indian Oil Corporation and China's Sinopec, China National Petroleum Corporation, and China National Offshore Oil Corporation (CNOOC).[64] The agreements not only promise to solidify their economic and resource cooperation but indicate the expanded geographic reach of both nations.



Sino-Indian Realities Versus Perceptions



United States conventional military cooperation, combined with missile assistance in the guise of space technology, has the potential to strengthen India's quest for parity with China. In the near-term, however, China is likely to dominate militarily. This assessment is based on qualitative improvements and a defense expenditure that is twice to four times that of India's, depending on whether Chinese or U.S. estimates are used.[65] Despite U.S. efforts to hinder its military growth, China remains engaged in extensive military modernization, with a declared military budget of $29.9 billion for 2004.[66] China has announced increases in military spending nearly every year for more than a decade, with U.S. estimates for China's modernization even higher. These advances, in line with China's rapid economic growth, highlight the difficulties that India will face should it seek to "catch-up" to China.



Depending on which Chinese defense figure is used for comparison, India's own growth in military spending, while a strong 27 percent increase reaching approximately $17.6 billion for the period from 2004 to 2005, is at best a little over half that of China.[67] However, there is one area in which India is rapidly gaining speed: procurement. According to an August 2005 U.S. Congressional Research Service report, India ranked first in the world in the value of arms transfer agreements from all countries by $500 million between 1997 and 2004.[68] In 2004 alone, India ranked first in this area among all developing nations weapons purchasers, with $5.7 billion in such agreements.[69] The U.S. is the world leader in arms sales to developing nations with deliveries estimated at $9.7 billion in 2004.[70] Even if India does not buy U.S. wares, it enjoys the long-term negotiation and planning leverage that China lacks. India's nuclear and missile program quest for indigenization has been supplemented by pursuit of supplier diversification.



In spite of incitements to react, the Chinese government response to the U.S.-Indian joint statement and defense agreement of 2005 has been relatively muted. China has focused more on threats posed by the United States than those created by a well-armed or technologically-advanced India. In fact, Chinese popular and official media portray India as a developing nation that has been duped by the United States. The People's Daily cloaks its views behind unnamed "analysts" (fenxizhe) to say that the U.S.-Indian defense framework and joint statement have expanded U.S. efforts to encircle and contain China.[71] It also lambastes U.S. hypocritical assistance to India, in light of U.S. tandem efforts to convince Iran and North Korea to abandon their nuclear programs and to pressure Europe to maintain its arms embargo against China.[72]



China adds India to a long list of countries or territories, including Taiwan, Japan, South Korea, Kazakhstan, and Afghanistan, that have been incorporated into expansive U.S. strategic, military and economic frameworks directed toward containing China. China's own policies of establishing regional cooperative groups like the Shanghai Cooperation Organization (SCO) and its growing cooperative relationships with ASEAN and Indian Ocean nations may be understood in part as efforts to create patterns of regional solidarity to forestall this perceived U.S. encirclement. India's observer status in the SCO combined with its attendance at August 2005 Sino-Russian military exercises, euphemistically dubbed "Peace Mission 2005," are indicative of Chinese efforts at inclusive diplomacy, keeping its partners close and potential adversaries even closer: economically, politically, and increasingly militarily.[73]



In 2003, China and India engaged in unprecedented naval exercises as a major step toward military confidence building measures at a time when they were beginning to undertake joint energy programs.[74] Articles on future Indian participation with China and Russia in SCO military exercises also fuel speculation of counterbalancing U.S. hegemony.[75] There is abundant evidence that China seeks to strengthen its economic, political, cultural, and even military ties with India to pre-empt U.S. incorporation of yet another state at its borders. Yet, India and China also share concerns ranging from energy development to trade in the Indian Ocean and elsewhere, suggesting that the United States is significant but not the only driving force in their desire to cultivate cooperation over competition.



India has made a major strategic shift in its perceptions of China, from the time when officials such as former Indian Prime Minister Atal Behari Vajpayee and former Defense Minister George Fernandes cited China as the primary impetus behind India's nuclear tests and Agni missile program.[76] Recognizing the potentially adverse effects on Sino-Indian economic and political relations, Indian authors and politicians alike have been extremely careful to emphasize that cooperation with the United States does not target China. India's Prime Minister Manmohan Singh has repeatedly stated variations of the following: "We see new horizons in our relations with China. What we have done with the United States is not at the cost of China or any other country."[77]



At the same time, Indian authors are cautious not to exaggerate the warming trend in Sino-Indian relations. While Chinese articles tend to discount the threat posed by India, for Indian strategic analysts China remains a source of concern for perceived designs on regional hegemony. The 1962 India-China conflict still looms in the writings of many Indian analysts. The litany of Indian articles on China's contributions to Pakistan's Babur missile illustrates ongoing perceptions of China using a regional proxy to threaten India. India maintains a complex combination of emulation and distrust when it comes to China.[78] Emulation for China's rate of growth and ability as a developing country to place itself on the geopolitical map. Distrust over China's growing economic and military strength, and expansive diplomacy, focused on discussion of its "real intentions".[79] In addition to the anticipated technological benefits gained from cooperating with the United States, India seeks a counterweight even as it pursues cooperative relations with China.



China also serves as an asset for India in its efforts to cultivate stronger relations and inducements from the United States. U.S. relations with Pakistan and historical assistance to its military programs during the Cold War mark Indian perceptions of questionable U.S. loyalties and unreliability. Even with the economic and technological gains contained in the joint statement with the United States, numerous Indian articles lament that India's defense and arms relationship with the United States is tantamount to selling off the Indian Ocean, relinquishing its nuclear autonomy, and constraining its future fissile material production. India prides itself on preserving its position as an independent actor and continues to be acutely sensitive to discrimination or power politics.[80]



Continued Indian efforts to promote multilateralism with China and Russia, while courting the United States, suggests Indian wariness not only toward China but also toward the U.S.



Conclusion



For both China and the United States, cooperation with India is emblematic of India's growing political, economic and military strength. Among the many goals of issuing a joint statement with India, the United States may have designs on bolstering India vis-à-vis China.[81] If this is the case, however, the effect may prove to be the reverse. China has been pushed to accelerate and expand its own incentives, in part, to avoid United States entrenchment in another country on its borders. Similarly, the United States is compelled by China's actions to stifle any move toward a Sino-Indian alliance or Sino-Indian-Russian triangle.[82] In the midst of this array of partnerships, India has been able to diversify its political partners, just as it has diversified its suppliers of technology.



China is but one factor in U.S. technological and military engagement with India. Also present is the realization that many of India's nuclear and missile developments are already indigenous and increasingly beyond U.S. control and sanctions. Concurrently, while a technological innovator, India has also become one of the largest recipients of foreign arms agreements and transfers. The United States is faced with a choice of participating as a supplier or running interference as Russia, Israel, France and other countries attempt to benefit from India's procurement frenzy. Profit motive may be guiding the United States as much if not more than the strategic considerations involving China and regional hegemony.



Regardless of motive, the United States is systematically removing licensing requirements on many firms that contributed to India's nuclear weapons and missile programs. Lifting of these sanctions combined with the joint statement on dual-use technology can only strengthen efforts by other countries defying U.S. and international nonproliferation norms. U.S. dual-use technology is also likely to contribute to assisting India in realizing advanced fusion technology for its nuclear weapons and advances in targeting and staging for its missiles, placing the United States and its allies in nuclear-capable ballistic missile range. Even U.S. anticipation of garnering enhanced Indian support for its agenda abroad is diminished by India's long-standing cooperation with Chinese and Russian multilateral initiatives.



China and the United States have long engaged India's adversaries, while demonstrating reluctance to form strategic partnerships with India. Despite similar early trajectories and lingering ties to Pakistan for both countries, current Chinese and U.S. cooperation with India is distinctly different. China has worked to reduce tension with India by establishing a relationship based on stronger cooperation in the realms of trade, cultural exchange, and energy exploration. Politically and economically, the United States has also created inducements for closer Sino-Indian cooperation. Yet, by making dual-use transfers in nuclear and space technology the core of the United States' other economic, political and strategic inducements to India, the long-term strategic price may be greater than the dollars or short-term political leverage earned. The technology and military hardware provided by the United States promises to expand India's political, strategic and military footprint even beyond China. U.S. interference further strengthens China's incentives to cooperate with India. Rather than pitting India against China, the United States may be setting up India to instead serve as a future strategic counterweight to U.S. interests in Asia and abroad.



Notes



[1] "India's China Policy: Importance of a Strategic Framework," in "India Urged to Formulate 'Clear' China Policy to Achieve Strategic Objectives," New Delhi, Bharat Rakshak Monitor, FBIS SAP20050714000091, April 1, 2005.; "The New Chapter of Relationship," in "Editorial Lauds Growing India-China Friendship to Counter US Dominance in Asia," New Delhi Rashtriya Sahara, FBIS SAP20050413000025, April 13, 2005.



[2] Lu Yansong, "Short-sighted Nuclear Deal," in "PRC: RMRB Article Views US-India 'Nuclear Deal,' US Plan to Counter PRC with India, Japan," Beijing, Renmin Ribao, FBIS CPP20050819000088, August 19, 2005.; "RMRB Cites Huanqiu Shibao Article on Washington Drawing India in Against China," Beijing, Renmin Ribao, FBIS CPP20050708000034, July 7, 2005.; Palash Kumar, "AFP: US Feting India to Balance Power in China-Dominated Asia: Analysts," Hong Kong AFP, FBIS JPP20050719000088, July 19, 2005.



[3] "Full Text of Joint Statement of China, India," People's Daily Online, April 13, 2005, available at http://64.233.187.104, accessed on August 13, 2005.; "PM's Statement in the Lok Sabha on the Visits of Chinese Premier and Pakistan President," Indian Embassy, April 20, 2005, available at http://www.indianembassy.org/press_release/2005/April/15.htm, accessed on August 13, 2005.



[4] "The Joint Communiqué of the Informal Meeting Between the Foreign Ministers of the People's Republic of China, the Russian Federation and the Republic of India," Foreign Ministry of the People's Republic of China, June 3, 2005, available at http://www.fmprc.gov.cn, accessed on August 13, 2005.



[5] "New Framework for the U.S.-India Defense Relationship," United States Embassy, New Delhi-India, June 28, 2005, available at http://newdelhi.unembassy.gov/wwwhipr062905.html, accessed on July 14, 2005.



[6] "India -- USA Joint Statement," Department of Atomic Energy, Government of India, available at http://www.dae.gov.in/jtstmt.htm, accessed on July 20, 2005.



[7] Sharon Squassoni, "U.S. Nuclear Cooperation with India: Issues for Congress," Congressional Research Service Report for Congress, July 29, 2005, pp. 4, 5.



[8] "Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions," U.S. Central Intelligence Agency, 1 January Through 30 June 2002, available at http://www.cia.gov, accessed on August 31, 2005.



[9] "Nuclear Power in India and China," World Nuclear Association, September 2004, available at http://world-nuclear.org, accessed on February 17, 2005.; Aziz Haniffa, "'India Will Consume More Energy to Fuel Economic Growth,'" India Abroad, Vol. 35, No. 46, August 12, 2005, p. A8.



[10] Sunil Saraf, "Prime minister marks beginning of India's commercial breeder," Nucleonics Week, October 28, 2004, available at http://www.lexis.com, accessed on August 17, 2005.



[11] "BARC Commissions Integral Test Loop Facility for AHWR: Banerjee," The Press Trust of India, April 12, 2005, available at http://www.lexis.com, accessed on August 31, 2005.; T. S. Subramanian, "Advanced Heavy Water Reactor Construction Next Year," The Hindu, October 24, 2003, available at http://www.lexis.com, accessed on August 31, 2005.



[12] Estimates in the World Nuclear Association online journal suggest that India has approximately six times more thorium than uranium in its domestic mineral deposits. "Thorium," Information and Issue Briefs, World Nuclear Association, November 2004, available at http://www.world-nuclear.org/info/inf62.htm, accessed on September 7, 2005.



[13] "Thorium," Information and Issue Briefs, World Nuclear Association, November 2004, available at http://www.world-nuclear.org/info/inf62.htm, accessed on September 7, 2005.



[14] "Advanced Nuclear Power Reactors," Nuclear Issues Briefing Paper 16, May 2005, available at http://www.uic.com.au/nip16.htm, accessed on September 7, 2005.



[15] "A 'Proliferation-Proof' Reactor?" NUKEM Market Report 1997, NUKEM Nuclear Technologies, available at http://www.nukem.com/, accessed on September 7, 2005.



[16] David Albright and Kimberly Kramer, "Separated Civil Plutonium Inventories: Current Status and Future Directions," Institute of Science and International Security, June 10, 2005, Revised July 8, 2005.; Henry Sokolski, "The India Syndrome -- U.S. Nuclear Nonproliferation Policy Melts Down," The Weekly Standard, August 1, 2005, pp. 15, 16.



[17] Andre Gsponer and Jean-Pierre Hurni, "ITER: The International Thermonuclear Experimental Reactor and the Nuclear Weapons Proliferation Implications of Thermonuclear-Fusion Energy Systems," Independent Scientific Research Institute, Switzerland, August 10, 2005.; Sridhar K. Chari, "India on Way to Joining the Fusion Club," The Tribune, August 24, 2005, available at http://www.tribuneindia.com, accessed on August 26, 2005.



[18] "India May Test Again Because H-Bomb Failed, U.S. Believes," Nucleonics Week, Vol. 39, No. 48, November 26, 1998, pp. 1, 9, 10.



[19] "Removal of License Requirements for Exports and Reexports to India of Items Controlled Unilaterally for Nuclear Nonproliferation Reasons and Removal of Certain Indian Entities from the Entity List," Bureau of Industry and Security, U.S. Department of Commerce, Federal Register, Vol. 70, No. 167, August 30, 2005, available at http://www.bxa.gov, accessed on August 30, 2005.



[20] "BARC Commissions Integral Test Loop Facility for AHWR: Banerjee," The Press Trust of India, April 12, 2005, available at http://www.lexis.com, accessed on August 31, 2005.



[21] Aziz Haniffa, "Deadly Arsenals: India, Pakistan Can Have 110 Nuclear Bombs," India Abroad, Vol. 35, No. 47, pp. A1, A7.; Joseph Cirincione, Jon B. Wolfsthal, and Miriam Rajkumar, Deadly Arsenals -- Nuclear, Biological, and Chemical Threats, Second Edition, Washington, DC: Carnegie Endowment for International Peace, July 2005.



[22] "Table 2 Plutonium and HEU Holdings by Country, end 2003, in Tonnes," Global Stocks of Nuclear Explosive Materials: Summary Tables and Charts," Institute for Science and International Security, July 22, 2005, Revised August 22, 2005.



[23] Ibid.



[24] "Global nuclear stockpiles, 1945-2002," The Atomic Scientists Bulletin, available at http://www.thebulletin.org, accessed on September 5, 2005.



[25] "Britain to ease nuclear sanctions against India," Press Trust of India via India Info, August 11, 2005, available at http://news.indiainfo.com/2005/08/11/1108uk-india-nuclear.html, accessed on September 7, 2005.



[26] Abbas Razza Khan, "Russia endorses nuclear pact between US and India," Press Trust of India, September 16, 2005, available at http://www.india-defence.com, accessed on September 16, 2005.



[27] "France Backs India's Nuclear Energy Plans After Winning Sub, Airbus Deal," Yahoo News, September 12, 2005, available at http://news.yahoo.com, accessed on September 13, 2005.



[28] Foster Klug, "Pakistan Wants Civilian Nuclear Deal," The Associated Press via The Washington Post, September 8, 2005, available at http://www.washingtonpost.com, accessed on September 8, 2005.



[29] "Foreign Missile Developments and the Ballistic Missile Threat Through 2015," National Intelligence Estimate, National Intelligence Council, December 2001, available at http://www.cia.gov/nic/PDF_GIF_otherprod/missilethreat2001.pdf, accessed on August 11, 2005.



[30] K. S. Jayaraman, "GSLV Launch Helps Move India Closer To Self-Reliance in Space," Space News, available at http://209.73.219.100/spacenews/archive03/gslvarch_052003.html, accessed on August 25, 2005.



[31] After delivery of Norwegian Norsk Data ND 100 and ND 500 type computers between 1983 and 1984 and arrival of a U.S. Cray XMP-14 supercomputer in 1987, by September 2002 the Bhabha Atomic Research Center (BARC) developed the ANUPAM-PIV 64-node supercomputer with a speed of 43 giga flops. In 2003, India's Centre for Development of Advanced Computing (C-DAC) went one giant step further by developing the PARAM Padma which has a speed of one teraflop, a trillion floating point operations per second. "Norsk Data Computers Used in Indian Nuclear Program," Oslo, Dagbladet, May 4, 1990, FBIS JPRS-TND-90-011, accessed on September 7, 2005.; "India's BARC develops fastest supercomputer in the country," Asia Pulse, September 16, 2002, available at http://www.lexis.com, accessed on August 31, 2005.; Sharad Purohit, R.K. Arora, S.P. Dixit, N. Mohan Ram, P.K. Sinha, V.C.V. Rao, "PARAM Padma -- A Teraflops Computing System And High Performance Computing in India," Centre for Development of Advanced Computing, 2003, available at http://www.cdac.in/html/ctsf/padma/spurohit.asp, accessed on September 5, 2005.



[32] Indrani Bagchi, "India hopes to get sanctions revoked," Times of India, October 11, 2004, available at http://timesofindia.indiatimes.com/articleshow/880726.cms, accessed on September 11, 2005.; "Foreign Secretary: India Wants 'More Symmetrical Relationship' With US," Mumbai, The Times of India, October 11, 2004, FBIS SAP20041011000006, accessed on August 30, 2005.



[33] "TIFR announces tie-up with HP," in "India: Pune-Base Supercomputer Param 1000 Announces Tie-Up With Hewlett Packard," Chennai, Business Line, April 20, 2005, FBIS SAP20050421000073, accessed on August 30, 2005.



[34] "Announcement on U.S.-India Next Steps in Strategic Partnership," Bureau of Industry and Security, U.S. Department of Commerce, September 2004, available at http://www.bis.doc.gov/News/2004/US-IndiaNextStep.htm, accessed on February 16, 2005.



[35] "Removal of License Requirements for Exports and Reexports to India of Items Controlled Unilaterally for Nuclear Nonproliferation Reasons and Removal of Certain Indian Entities from the Entity List," Bureau of Industry and Security, U.S. Department of Commerce, Federal Register, Vol. 70, No. 167, August 30, 2005, available at http://www.bxa.gov, accessed on August 30, 2005.



[36] Indian Air Force Chief Marshal, Srinivaspuram Krishnaswamy stated as early as October 2003 that India has begun "conceptualizing" space weapons command systems and operational command. In November 2003 and again in December 2004, India made a potentially significant step in this direction by signing onto Russia's Global Navigation Satellite System (GLONASS), a space platform that could be used for improving the accuracy of its missile systems and expansion into other weapons systems. "IAF Working on Weapon Platforms in Space," The Hindu, October 7, 2003, available at http://www.lexis.com, accessed on August 24, 2005.; "India Working on Space Weapons: IAF Chief," The Press Trust of India, available at http://www.rediff.com, accessed on August 29, 2005.; "Memorandum of Understanding Between the Russian Aviation and Space Agency and the Indian Space Research Organization on Cooperation in the Exploration and Use of Outer Space for Peaceful Purposes," The Embassy of the Russian Federation in the Republic of India, November 11-13, 2003, available at http://www.india.mid.ru/summits/01_07.html, accessed on August 31, 2005.; "India and Russia to Revive Glonass," Flight International, December 14, 2004, available at http://www.lexis.com, accessed on August 30, 2005.



[37] Vivek Raghuvanshi, "Pakistan's Missile Tests Jolts India," Defense News, August 22, 2005, p. 50.



[38] Ranjit Kumar, "China Gave 'Babar' to Pakistan," in "India: US Military Expert Says Pakistani 'Babar' Missile Imported from China," New Delhi Navbharat Times, FBIS SAP20050823000021, August 23, 2005, August 26, 2005.



[39] Prasun K. Sengupta, "Babur's Flight," in "India: Report Notes China's Involvement in Pakistan's Hatf VII Cruise Missile," New Delhi Force, FBIS, September 9, 2005, SAP20050909000103, accessed on September 10, 2005.



[40] G. Parthasarathy, "Cruise Missiles in Neighborhood -- A Result of Sino-Pak Growing Nexus," Bharat Rakshak, August 29, 2005, available at http://www.bharat-rakshak, accessed on August 30, 2005.



[41] "Proliferation: Threat and Response," Office of the Secretary of Defense, U.S. Department of Defense, available at http://www.dod.gov, accessed on August 28, 2005, p. 24.; Amitabh Mattoo, "Indian Agni-II Missile Said Aimed at China," Calcutta The Telegraph, available at http://www.lexis.com, accessed on August 25, 2005.



[42] Rahul Bedi, "New Delhi Reveals Latest Schedule for Missile Tests," Jane's Defense Weekly, November 12, 2003, p. 4



[43] "Indian Defence News," New Delhi, Chanakya Aerospace and Maritime Review, Vol. 31, No. 5, May 1, 2005, FBIS SAP20050623000018, accessed on August 15, 2005.; "Proliferation: Threat and Response," Office of the Secretary of Defense, U.S. Department of Defense, available at http://www.dod.gov, accessed on August 28, 2005, p. 24.



[44] Press reports as early as 1999 suggest an imminent test of India's ICBM. "India to Test New Long-Range Ballistic Missile: Official," AFX News Limited, November 7, 1999, available at http://www.lexis.com, accessed on August 25, 2005.; "India: Ballistic Missiles Under Development," BBC Monitoring South Asia, May 18, 1999, available at http://www.lexis.com, accessed on August 25, 2005.



[45] Mark Gorwitz, "The Indian Strategic Nuclear Submarine Project -- An Open Literature Analysis," December 1996, available at http://www.fas.org/nuke/guide/india/sub/ssn/, accessed on August 29, 2005.



[46] "Indian Military Bolstered by Foreign Purchases, Cooperation," JINSA Online, April 23, 2004, available at http://www.jinsa.org, accessed on September 7, 2005.



[47] "No Gorshkov, but Accords Look to the Future," Times of India via Bharat-Rakshak, February 9, 2002, available at http://www.bharat-rakshak.com, accessed on September 7, 2005.



[48] "Bellona To Seek Intl Action Over Sunken Russian Sub," Moscow Interfax, FBIS CEP20050830950045, August 30, 2005.



[49] Vivek Raghuvanshi, "Salvaging the Sagarika: India Seeks Russian, Israeli Help in Missile Development," Asia and Pacific Rim, Defense News, February 21, 2005, p. 14.



[50] T. S. Subramanian, "Prithvi-III Test Fired for First Time," The Hindu, October 28, 2004, available at http://www.lexis.com, accessed on August 11, 2005.



[51] Rahul Roy-Chaudry, "India-Defense: India Developing Sea-Based Missile System," IPS-Inter Press Service, September 29, 1994, available at http://www.lexis.com, accessed on August 25, 2005.; "N-Submarine Project Yet to Take Off," The Hindu, October 28, 1998, available at http://www.lexis.com, accessed on August 31, 2005.



[52] "New Army 'Doctrine' Ready for Release," India, The Statesman, October 24, 2004, available at http://www.lexis.com, accessed on August 11, 2005.



[53] "Navy: Busy Year of War Games Ahead," in "Indian Navy to Join War Games with US, Russia, France," New Delhi, The Asian Age, July 5, 2005, FBIS, SAP20050715000020, accessed on September 7, 2005.; Shashank Sinha, "Indian Navy Interested in USS Trenton," in "Indian Defense Think Tank Says 'USS Trenton' May Be 'Great Asset' for Navy," New Delhi, India Defense Consultants, August 15, 2005, FBIS SAP20050815000054, accessed on September 7, 2005.



[54] "Talks with India Remained Warm for Six Months, Now There is Chilliness: Chief of Naval Staff," in "Pakistan Gets 8 P-3C Orion Aircraft, Two Frigates from US; CNS Lauds US Help," Rawalpindi, Nawa-e Waqt, September 1, 2005, FBIS SAP20050902000048, accessed on September 7, 2005.



[55] China is not the only concern of Indian strategists charting developments in the Indian Ocean. The U.S. driven Proliferation Security Initiative (PSI), under which illicit transfers are interdicted during shipment, has also come under scrutiny. A number of Indian critics have expressed concern that the United States is manipulating their partnership to gain "back door entry" into the Indian Ocean for the PSI, which many deem as already on shaky legal ground given Part VII of the 1982 UN Convention on the Law of the Sea. India's own reluctance to fall in line with the United States has been made particularly evident with the omission of PSI from the Indo-U.S. joint statement and India's refusal to join August 2005 U.S.-organized multinational PSI naval exercises in Southeast Asia. Seema Mustafa, "India Surrenders Ocean to US," in "India Said to Surrender Ocean to US in Defense Pact," New Delhi, The Asian Age, FBIS SAP20050706000017, July 2, 2005.; Ranjit Kumar, "India Did Not Join the PSI Military Exercise," in India Stays Away from Joint Naval Exercise to Monitor Illegal Arms Transport," New Delhi, Navbharat Times, August 17, 2005, FBIS SAP20050817000023, accessed on September 7, 2005.



[56] "Annual Report -- 2003-2004," Ministry of Defence, Government of India, available at http://mod.nic.in/reports/MOD-English2004.pdf, accessed on August 15, 2005.



[57] "The Military Power of the People's Republic of China," A Report to Congress Pursuant to the National Defense Authorization Act Fiscal Year 2005, Office of the Secretary of Defense, U.S. Department of Defense, 2005, pp. 23, 24, 33.



[58] Ibid.



[59] Rajat Pandit, "Wait For Scorpene May Soon Be Over," The Times of India, March 16, 2005, available at http://www.lexis.com, accessed on August 11, 2005.



[60] "China, India Seek Cooperation in Global Oil Quest," Embassy of the People's Republic of China in India, April 4, 2005, available at http://www.chinaembassy.org, accessed on August 15, 2005.



[61] "India, China to Set Up Joint Group to Forge Oil Cooperation Deals," New Delhi, The Press Trust of India, August 9, 2005, FBIS SAP20050809000099, accessed on August 10, 2005.



[62] Penny Macrae, "AFP: India Says China Oil Cooperation at Early Stage," Hong Kong Agence France Presse, August 26, 2005, FBIS JPP20050826000017, available at http://www.lexis.com, accessed on August 26, 2005.; "China Beats India to Acquire PetroKazakhstan," New Delhi, The Press Trust of India, August 22, 2005, FBIS SAP20050822000064, available at http://www.lexis.com, accessed on August 26, 2005.



[63] "The Military Power of the People's Republic of China," A Report to Congress Pursuant to the National Defense Authorization Act Fiscal Year 2005, Office of the Secretary of Defense, U.S. Department of Defense, 2005, p. 33.



[64] "India says China oil cooperation at early stage, will still compete," Agence France Presse, August 26, 2005, available at http://www.yahoo.com, accessed on August 31, 2005.



[65] "The Military Power of the People's Republic of China," A Report to Congress Pursuant to the National Defense Authorization Act Fiscal Year 2005, Office of the Secretary of Defense, U.S. Department of Defense, 2005, pp. 21, 22.



[66] Ibid.



[67] "Defense Expenditure, 2004-2005," Ministry of Defense, Government of India, available at http://mod.nic.in/aboutus/body.htm#as6, accessed on September 8, 2005.



[68] Richard F. Grimmett, "Conventional Arms Transfers to Developing Nations, 1997-2004," Congressional Research Service Report for Congress, August 29, 2005, available at http://fpc.state.gov/documents/organization/52179.pdf, accessed on September 9, 2005.



[69] Ibid.



[70] Ibid.



[71] "Mei Dui Yin Kaiqi He Da Men -- Yu Lianhe Yindu Ezhi Zhongguo Fazhan," (The United States Opens the Nuclear Door to India -- In a Desire to Contain China's Growth), People's Daily, July 20, 2005, available at http://www.people.com.cn, accessed on August 14, 2005.



[72] "Mei Yin He Hezuo Shi Yi Zhao Xianqi Hai Shi Yiji Miaozhao?" (Is Nuclear Cooperation between the United States and India a Dangerous or Clever Chess Move?), CCTV.com, July 21, 2005, available at http://bbs.cctv.com.cn, accessed on August 14, 2005.; "Mei Dui Yin Kaiqi He Da Men -- Yu Lianhe Yindu Ezhi Zhongguo Fazhan," (The United States Opens the Nuclear Door to India -- In a Desire to Contain China's Growth), People's Daily, July 20, 2005, available at http://www.people.com.cn, accessed on August 14, 2005.



[73] "Indian Defence Officials Watch China-Russia Military Exercises," New Delhi, The Press Trust of India, FBIS SAP20050823000109, August 23, 2005, available at http://www.lexis.com, accessed on August 26, 2005.



[74] "Zhong Yin Nengyuan Xuqiu Zengjia Tiaozhan Meiguo?" (Will China and India's Energy Needs Increase the Challenge to the United States?), Muzi News, Latelinenews.com, August 12, 2005, available http://latelinenews.com/ll/chinese/1374352.shtml, accessed on August 14, 2005.; Christopher Bodeen, "China, India Conduct Joint Naval Exercise," The Associated Press, The Washington Post, November 14, 2003, available at http://www.washingtonpost.com, accessed on November 14, 2003.



[75] "Zhong Yin E Goujian Zhanlue Sanjiao -- Xin Anquan Guanzhu Daoxia Chuanmian Hezuo," (China, India, and Russia Build a Strategic Triangle -- Their New Concept of Security Spans All Areas) Army News, Tom.com, June 10, 2005, available at http://army.news.tom.com/1019/1021/2005610-37971.html, accessed on August 14, 2005.; "Russia-China-India Maneuvers May Be Held in 2006," Moscow, Agentstvo Voyennukh Novostey, August 26, 2005, FBIS CEP20050826027004, accessed on August 26, 2005.



[76] George Perkovich, India's Nuclear Bomb -- The Impact on Global Proliferation, University of California Press, Berkeley, 1999.



[77] "India, United States Not Ganging Up Against China, Indian PM," Agence France Presse, August 3, 2005, available at http://news.yahoo.com, accessed on August 15, 2005.; "India, US Ink Pact for Comprehensive Defence Cooperation," The Press Trust of India, June 29, 2005, available at http://www.lexis.com, accessed on August 17, 2005.



[78] Sheela Bhatt, "The Big Question: Can Singh Emulate China?" India Abroad, Vol. 35, pp, A1, A12.



[79] Dr. Subhash Kapila, "China-India Strategic Alliance -- Should Not Be Unthinkable: An Analysis," South Asia Analysis Group, Paper No. 1375, May 12, 2005, available at http://www.saag.org, accessed on August 13, 2005.



[80] "Treat India Like Other N-States," The Hindu, October 29, 1998, available at http://www.lexis.com, accessed on August 31, 2005.; S. G. Roy, "Gandhi: India Will Reprocess Nuclear Fuel," United Press International, August 11, 1982, available at http://www.lexis.com, accessed on August 31, 2005.



[81] "Engaging India as a Global Strategic Partner," Republican Policy Committee, United States Senate, July 19, 2005, available at http://rpc.senate.gov/_files/July1905IndiaDF.pdf, accessed on September 8, 2005.



[82] "PRC Scholar 'Broad Prospects' for India-Russia-China Strategic Triangle," Beijing, Beijing Review, FBIS CPP20050804000129, available at http://www.lexis.com, accessed on August 15, 2005.

http://www.zmag.org/content/showarticle.cfm?SectionID=66&ItemID=8791

[Ethyl]

ENERGY: ADB VOICES CONCERN OVER TURKMENISTAN GAS PIPELINE PROJECT

Islamabad, 23 Sept. (AKI/DAWN) - The Asian Development Bank (ADB) has said that the delivery of gas to India and Pakistan from Turkmenistan’s Daulatabad field might not be possible through the 3.3-billion-dollar trans-Afghanistan pipeline, due to the lower than expected gas production. However, it said the two countries would require three pipeline projects for gas imports to meet their rising energy demand. The ADB has also floated the idea of gas imports from Oman, as well as Iran and Qatar, and expressed optimism about the seven billion dollar Iran-Pakistan-India (IPI) project.

The bank has been brokering the 1,700-km pipeline project from Turkmenistan since 2002, promoting it as a win-win example of regional cooperation - a pioneering effort to link gas-rich Central Asia with energy-deficient South Asia, through Afghanistan.

The project, according to ADB’s original plan, was to bring clean fuel at competitive costs to India and Pakistan, much-needed transit fees to Afghanistan, and new markets for Turkmenistan.

A senior ADB energy specialist, Dan Millison, said: “Turkmenistan’s Daulatabad gas field has gross reserves of 1.4 trillion cubic meters of gas, but production forecasts are lower than expected, causing analysts to doubt that it can meet the proposed target of piping 30 billion cubic meters (BCM) of gas a year to South Asia”.

“The reserves information shows that Turkmenistan could supply enough gas for the first few years but then production is predicted to decline instead of increasing,” said Millison.

He said Turkmenistan would need to find gas from other fields to meet pipeline design targets.

However, future demand for natural gas in South Asia is projected to be strong enough to require gas to be piped from both Turkmenistan and Iran, he said.

He said the reserves information released from Turkmenistan showed lower than expected gas deliverability for a proposed 3.3 billion dollar pipeline project to carry gas from Turkmenistan via Afghanistan to India and Pakistan.

Meanwhile, a seven billion dollar scheme to pipe natural gas from offshore Iran to Pakistan and India is gaining momentum. The 2,700-km pipeline would cost more than double the Turkmen scheme, but leaves out Afghanistan, where security concerns remain, he said.

“However, with the long term gas demand from India and Pakistan estimated at 50 BCM a year, there is a need for more than one pipeline,” said Millison.

India already imports gas, and demand will soar in the next decade. Pakistan, with its own reserves declining, is expected to begin importing gas after late 2008. In fact, projected demand in South Asia is so strong that there might be a need for a third pipeline from Qatar or Oman, he noted.

With the new gas reserves data in hand, as well as a draft security analysis report, the next step is for the project’s steering committee to meet and discuss inviting an international consortium of investors to build the pipeline.

Turkmenistan is one of the world’s largest gas exporters. However, while its 4.5 million people receive free gas, electricity and water, incomes are among the lowest in Central Asia and health and education services are declining.

http://www.adnki.com/index_2Level.php?cat=Business&loid=8.0.211379314&par=0

[Ethyl]

South Asia needs 2 gas pipeline schemes: ADB expert

Manila, Sept 22 (PTI) Future demand for natural gas in South Asia is projected to be strong enough to require gas to be piped from both Turkmenistan and Iran, Asian Development Bank (ADB) said today.
Dan Millison, a senior ADB energy specialist, said recently released reserves information from Turkmenistan shows a lower-than-expected gas deliverability for a proposed 3.3 billion dollar pipeline project to carry gas from Turkmenistan via Afghanistan to India and Pakistan.

ADB has been brokering the 1,700 km pipeline project since 2002, promoting it as a win-win example of regional cooperation - a pioneering effort to link gas-rich Central Asia with energy-deficient South Asia through Afghanistan.

The project would bring clean fuel at competitive costs to India and Pakistan, transit fees to Afghanistan and new markets for Turkmenistan.

Turkmenistan's Dauletabad gas field has gross reserves of 1.4 trillion cubic meters of gas, but production forecasts are lower than expected, causing analysts to doubt that it can meet the proposed target of piping 30 billion cubic meters (BCM) of gas a year to South Asia.

"The reserves information shows that Turkmenistan could supply enough gas for the first few years but then production is predicted to decline instead of increasing. They will need to find gas from other fields to meet pipeline design targets," Millison said.

The USD7 billion scheme to pipe natural gas from offshore Iran to Pakistan and India is gaining momentum. This 2,700 km pipeline would cost more than double the Turkmen scheme but leaves out Afghanistan. "However, with long term gas demand from India and Pakistan estimated at 50 BCM a year, there is a need for more than one pipeline," says Millison. PTI
http://www.ptinews.com/pti%5Cptisite.nsf/0/924D27E46DA45E8C6525708400598707?OpenDocument

[Ethyl]

Security and energy in the post-crisis period
Jean-Claude Renaud,
The Secretary General's Special Adviser for
Economic Policy Affairs

1991
~snip~

For a long time, it was believed that the Cold War implied a threat to the security of raw material supplies, accompanied by the feeling, substantiated or not, that the Soviet Union's policy towards the Arab world was aimed partially at exposing the West to the danger that its oil supplies from the Middle East might be cut off. These suspicions with regard to the USSR even generated tensions within the Alliance at a time when the Americans - it was in 1982 - were expressing worries about the security situation of some of the allies, following the signature of agreements with the Soviet Union for gas supplies to France and Germany.

What we see at present is that, even though the Soviet Union has apparently aligned itself with the rest of the international community, the threat to our supplies is not accordingly reduced. The essential source of the danger lies in our dependence on the Middle East, which is the main reservoir of crude oil, with 66 per cent of world reserves at an extraction price of less than US$4 a barrel and deliveries accounting for approximately 50 per cent of total consumption. Whatever form the post-crisis takes, this region will remain, for many years to come, an area of great instability. The prosperity and development of Europe, North America and the non-oil producing developing countries cannot continue to depend so vitally on the events arising in this part of the world.

Guaranteeing the security of energy supplies

The setting-up of a new energy order should be one of the results of the discussions which will follow the present crisis, and should be - why not? - the "peace dividend" earned by all those countries which, as members of the United Nations, have opposed the Iraqi aggression. This is tantamount to saying that the system must encompass every country, whether it be developed or less developed. An order of this kind should incorporate the following features:
The price of oil will have to be stabilized at a reasonable level compatible with the economic development of the consumer countries as well as of the producers or potential producers. A reasonable price would be understood to be a price which enables the development needs of the producer countries - including those like the United States and the USSR where the reserves are expensive to extract - to be reconciled with the unimpeded growth of the consumer countries, including the poorest (at the moment, a reasonable price would be around US$20725 a barrel). This objective calls for close and permanent collaboration between OPEC and the IEA, (3) in the United Nations between the developed and developing countries, and, of course, with the oil companies. Collaboration of this kind seems to be a self-evident need, but it is more difficult to implement than it might seem, since it demands that the energy policy of many countries be reviewed. This is particularly true of the United States, which has, for years, unsuccessfully sought to reconcile the essential requirements of its economy, founded on cheap energy, with the constraints linked to the high cost of exploration and the exploitation of its large oil resources.
http://www.nato.int/docu/review/1991/9101-04.htm

[Ethyl]

Sino-U.S. Energy Competition in Africa

With oil prices hitting record levels of US$70 per barrel in recent weeks, major energy consuming countries are engaging in an increasingly heated competition for energy resources on the world stage. Nowhere is this more evident than between the United States and China, the world's first and second largest energy consuming countries respectively. In the contest for energy resources, numerous "stages" of competition are emerging, including the Middle East, Central Asia, Latin America, and the East and South China Seas. However, Africa is fast emerging as one of the most volatile stages of Sino-U.S. energy competition, given its vast reserves of energy resources and concentration of internal security crises. [See: "Setting the Stage for a New Cold War: China's Quest for Energy Security"]

Africa owns about eight percent of the world's known oil reserves with Nigeria, Libya and Equatorial Guinea as the region's leading oil producers. Seventy percent of Africa's oil production is concentrated in West Africa's Gulf of Guinea, which stretches from the Ivory Coast to Angola. The low sulphur content of West African crude makes it of further strategic importance.

However, the region is also vulnerable to instabilities ranging from piracy to terrorism, interstate and tribal conflict, AIDS and political uncertainties. Given the weak governments and significant Muslim populations of the region, the African continent may also emerge as a hub for al-Qaeda-linked terrorist groups.

Finally, oil-rich countries in Africa have been unable to escape the "curse of oil," which has fueled corruption, conflict, and environmental degradation across the region. For instance, while Nigeria has earned US$300 billion in oil revenues over the last 25 years, per capita income remains below US$1 per day. Nigeria is also subject to ethnic violence, oil strikes and sporadic attacks on oil infrastructure by the Niger Delta People's Volunteer Force. Adding Sino-U.S. energy competition to this volatile mix could further destabilize the region.

U.S.-Africa Energy Relations

The U.S. currently derives 15 percent of its oil supplies from Africa as compared to 22 percent from the Persian Gulf. Within the next ten years, the U.S. could be depending on Africa for a quarter of its oil supplies according to the U.S. National Intelligence Council. Nigeria alone is the fifth biggest source of U.S. oil imports with the United States accounting for half of Nigeria's oil exports. Washington has also re-established diplomatic and energy relations with Libya following the removal of economic sanctions in September 2003 after Libya abandoned its nuclear weapons program.

In addition to securing energy supplies in the region, the U.S. has a burgeoning economic relationship with the region and has been increasingly concerned with Africa's security situation, political freedoms and human rights record. U.S.-Africa trade stood at US$44.5 billion in 2004 with oil-rich Nigeria being the second-largest source of U.S. investment after South Africa. Since the September 11 attacks, the U.S. has also stepped up security cooperation with African states. The U.S. Coast Guard has increased patrols of the region as well as engaged in training, intelligence sharing and public relations exercises with numerous states including Sao Tome and Principe, Cape Verde, Ghana, Benin, and Equatorial Guinea.

Meanwhile, the U.S. State Department's Trans-Sahara Counter Terrorist Initiative has trained troops in Niger, Mauritania, Mali and Chad. The U.S. also maintains a military base in Djibouti from where it coordinates anti-terrorism operations on the continent. [See: "Do Al-Qaeda's East Africa Operations Pose a Threat to U.S. Interests?"]

Nevertheless, with military assets tied up in Afghanistan, Iraq and the Persian Gulf, the U.S. has not been able to devote the necessary attention to Africa, which in turn has allowed other countries such as China to make further inroads.

Sino-Africa Energy Relations

China currently derives a quarter of its oil imports from Africa, with oil interests in Algeria, Angola, Chad and Sudan and increasing stakes in Equatorial Guinea, Gabon, and Nigeria. China's energy interests in Chad are of particular interest given that Chad still maintains diplomatic relations with Taiwan.

China's growing energy partnership with Sudan represents one of a number of areas where Sino-U.S. energy interests diverge in Africa. China National Petroleum Corporation established oil exploration rights in Sudan in 1995. Two years later when Washington cut ties with Sudan, China filled the vacuum making Sudan China's largest overseas production base. More than half of Sudan's oil exports go to China, accounting for five percent of China's total oil imports. C.N.P.C. owns a 40 percent stake in the Greater Nile Petroleum Operating Company and pumps over 300,000 barrels per day in Sudan. Another Chinese firm, Sinopec, is constructing a 1500 kilometer (932 miles) pipeline to Port Sudan on the Red Sea, where China's Petroleum Engineering Construction Group is building a tanker terminal.

As in the case of U.S. relations with Africa, China's relations with Africa are multidimensional. However, in recent years China's political, economic and military relations with Africa have been subordinated to its quest to secure energy resources in the African continent as energy resources are being secured in exchange for aid, arms or infrastructure investment. China's goodwill with African states can be traced back to its support for anti-colonial struggles in the 1960s. However, China's relations with Africa have shifted from holding a strong ideological bias in support of communist regimes and Marxist insurgencies to being led by market and resource considerations.

Today the only ideological component to Sino-African relations is the One China principle, although there are even exceptions to this as seen in the case of growing Chinese energy interests in Chad, which still has diplomatic relations with Taiwan. At present, only seven African states hold diplomatic relations with Taiwan. African states are also drawn to China by its non-ideological, non-interventionist approach, which contrasts with the Western approach that places an emphasis on democracy, governance, human rights and humanitarian intervention.

China has also appealed to Africa through numerous goodwill gestures. For example, the Chinese foreign minister has maintained a policy of making his first official overseas trip to the African continent every year. For decades, China has also supported numerous infrastructure projects across Africa, as well as sending doctors and nurses to the region, establishing scholarships for African students to study in Chinese universities, providing training to African businessmen and trade officials, and supplying funds to encourage Chinese businesses to invest in Africa.

China also maintains dialogue with Africa through several bilateral and multilateral forums such as the Asia-Africa Summit and the China-Africa Business Council, which was jointly established with the United Nations Development Programme in November 2004 to support China's private sector investment in Cameroon, Ghana, Mozambique, Nigeria, South Africa and Tanzania. In 2000, China also initiated the China-Africa Cooperation Forum comprising 46 of the 53 African countries. Among its accomplishments is canceling US$1.2 billion in debt for 31 African countries. China is also engaged in negotiations to create a free trade area with the Southern African Customs Union, as well as coordinating with African states in international organizations such as the World Trade Organization and United Nations.

On the economic front, Sino-Africa trade increased by 50 percent between 2002 and 2003 to US$18.5 billion, which is expected to grow to US$30 billion by 2006. At present, 700 Chinese companies operate in 49 African countries and eight African countries have been granted the status of "officially approved travel destinations" by China. China has also expanded its military presence in the region as seen with its deployment of peacekeepers to Liberia in December 2003, which occurred two months after Liberia switched its diplomatic recognition from Taiwan to China. China has also sent a peacekeeping contingent to the Democratic Republic of Congo, as well as providing uniforms to Mozambique's army, helicopters to Mali and Angola, and weapons to Namibia and Sierra Leone.

Many of China's diplomatic initiatives in Africa are in direct conflict with U.S. policy toward the region. For example, Beijing supplied US$1 billion in arms to both Ethiopia and Eritrea during their war from 1998 to 2000. Zimbabwe's President Robert Mugabe, whose regime has been isolated from the West due to its forced eviction of slum dwellers and white farmers, has also turned to China for aid. Chinese investment in Zimbabwe amounted to US$600 million in 2004. China has upgraded Zimbabwe's transport infrastructure, provided roofing material for Mugabe's US$9 million palace, and provided the regime with Chinese-made Karakoroum military trainer jets, MA60 passenger planes, and radio-jamming equipment for a military base outside Harare, which has been used to block transmissions by opposition parties.

China is also one of Sudan's leading arms suppliers. Sudan is the largest recipient of Chinese overseas investment and up to 10,000 Chinese nationals work in the country. The Sudanese government, which has recently concluded a peace agreement with the Sudan People's Liberation Movement/Army (S.P.L.M./A.) in the south, is still engaged in a conflict in the Darfur region of western Sudan using proxy militias such as the Janjaweed. In 2004, the U.N. Security Council was forced to water down a resolution condemning atrocities in the Darfur region to avoid a Chinese veto. China abstained in the vote over the final weaker resolution. With Sudan and Iran together supplying China with 20 percent of its oil imports, U.S. attempts to contain these regimes bring it into direct conforntation with China's energy security policies. [See: "Intelligence Brief: Sudan"]

The United States and China are not the only states vying for energy resources in Africa. Recently, Korea National Oil Corporation obtained 65 percent oil and gas production rights in two Nigerian offshore blocks, while India's Oil and Natural Gas Corporation Videsh obtained a 25 percent stake. South Korea and India are the world's fourth and sixth largest energy consumers respectively. India and China both hold stakes in the Greater Nile Oil Project in Sudan with India having invested US$700 million in Sudan's oil sector. China and India have also been engaged in direct competition for African energy resources, as seen in October 2004 when China outbid India to buy an interest in an offshore block in Angola. [See: "Economic Brief: China's Energy Acquisitions"]

Conclusion

Sino-U.S. relations are going through a cold spell as a result of disputes over U.S. quotas on Chinese-made textiles and China's military expenditures, exchange rate policy, intellectual property rights infringements, human rights record, and relations with dictatorial "rogue" or anti-U.S. regimes including Iran, Myanmar, Nepal, Uzbekistan, and Venezuela. The recent postponement of the much-anticipated meeting between Chinese President Hu Jintao and U.S. President George W. Bush in Washington as a result of the relief efforts for Hurricane Katrina is likely to add insult to injury among some in Beijing. [See: "Economic Brief: Textile Quotas"]

While there have been gestures of rapprochement in Sino-U.S. relations such as the recently initiated Sino-U.S. Strategic Dialogue and both states along with India, Australia, Japan and South Korea establishing an energy partnership known as the Asia Pacific Partnership on Clean Development, the competition to secure energy resources on the world stage could fuel their already shaky relationship.

The recent failed bid by Chinese energy company China National Offshore Oil Corporation to acquire U.S. energy company Unocal is evidence of this. Facing a plethora of internal crises ranging from poverty to poor governance and civil war, Africa is likely to emerge as a volatile stage of Sino-U.S. energy competition. African states have been drawn to China by its non-interventionist, non-ideological approach in conducting relations, although China's attempts to secure energy resources in conflict-ridden states by offering aid or arms-for-oil could heighten instability in the region.

http://www.asiantribune.com/show_article.php?id=2753

[Ethyl]

China Irks U.S. as It Uses Trade To Embellish Newfound Clout

China has a new calling card: champion of free trade.

Since March, Beijing has opened free-trade talks with South Korea, Pakistan, Australia and Iceland. In November, it inked deals with Thailand, Malaysia and eight other Southeast Asian countries. Even though China's government still controls large swaths of the country's economy, it has sealed or is seeking free-trade pacts with 25 countries -- up from zero two years ago.

China's pursuit of trade deals, combined with a flurry of big-ticket bids for energy and other assets, underscores its desire to don the uniform of a great power. Having created a credible army and a booming economy, China is positioning itself as a leader of global trade and investment, rivaling the U.S. in one of its traditional spheres of influence. As a result, China's market clout is making it a rallying point for countries looking for a counterweight to the world's lone superpower.

All this is raising alarms within the Bush administration, whose own trade agenda has lost momentum amid rising protectionism in Congress. A U.S. trade deal with five Central American countries squeaked through Congress by two votes this summer after months of Republican arm twisting. In particular, Washington is fretting over China's courting of countries on the outs with the U.S., including Venezuela, Cuba, Sudan and Uzbekistan.

"China's involvement with troublesome states indicates at best a blindness to consequences and at worst something more ominous," U.S. Deputy Secretary of State Robert Zoellick said in a speech in New York last month. He said China's new prominence has stirred "a cauldron of anxiety."

Chinese officials say they are not trying to rival the U.S. or stir trouble. Beijing's trade and investment agenda, they say, is designed to support an economy dependant on exports that also has a thirst for energy and raw materials. In addition, for decades, U.S. presidents have urged China to join the international economy and to take its rightful place on the diplomatic stage.

"Ironically, now our teachers are getting worried because we, the students, followed your advice so faithfully and became so successful," said Long Yongtu, a former deputy trade minister who led China into the World Trade Organization, in a May speech to the Institute for International Economics in Washington, D.C. "As the students, we believe that our teachers should not be worried about that."

China's own economy still remains relatively closed. It doesn't allow a free flow of capital, restricts foreign stakes in key sectors, such as autos, telecommunications and banking, and restrains its population's movements. But in the narrower sphere of international trade, its alacrity in signing trade deals is making the U.S. appear sluggish.

China took just two years to strike a pact with 10 Southeast Asian countries. The agreement whittles import tariffs on commodities such as fruits and vegetables to zero by 2010. During the same period, in the Asian arena, Washington inked one 1,200-page deal with Singapore. Talks with Thailand have been halting and likely won't wrap up until 2006 at the earliest. Efforts to get negotiations under way with South Korea continue to falter amid misgivings in Seoul.

One reason for the slowdown, say trade experts, is that U.S. negotiators are forced to load up agreements with environmental and labor conditions to help them pass through Congress. They also have to try to protect sensitive U.S. markets by maintaining tariffs or quotas. China generally eschews such niceties.

"The U.S. is losing the competition for influence in Southeast Asia," said Singapore's ambassador at large, Tommy Koh, in remarks late last year that echoed around the region. "The winner, at least for the time being, is the People's Republic of China." Mr. Koh, speaking at a forum sponsored by the San Francisco-based Asia Foundation, offered the Bush administration a pointed bit of advice: "Resist new protectionist measures" and stand firm by America's "longstanding policy of free trade and open investment."

Bush officials argue that U.S. trade deals are much trickier propositions to negotiate than those sought by China. In the Thai negotiations, for example, U.S. companies want access to Thailand's telecom and banking sectors even though American sugar growers and truck makers are reluctant to reciprocate with their own concessions. China's objectives, on the other hand, meshed neatly with those of South Asia's countries: lower barriers on farm and manufactured goods with few strings attached.

Beijing can now claim an unusual roster of friendly countries: North and South Korea, Iran and Iraq, Pakistan and India. It is also getting closer to traditional American allies such as Australia and Canada. Canada and China have held months of discussions about Chinese participation in developing the vast oil sands of Alberta and other energy-related projects.

Standing Ovation

Talking trade, and little else, has assured Chinese President Hu Jintao a warm welcome around the world. Beijing began negotiating a free-trade agreement with Australia in May and Australia's usually prickly parliament gave Mr. Hu a standing ovation in late 2003. "We are ready to be your long-term and stable cooperation partner, dedicated to closer cooperation based on equality and mutual benefit," the Chinese president told legislators. President George W. Bush was heckled the day before addressing the same body with a speech largely focused on terrorism and the war in Iraq.

Chen Yonglin, a recent defector from the Chinese consulate in Sydney, Australia, told a congressional panel in July that China sees trade as a way to drive a wedge between Australia and the U.S. He said China also wants Australian help to marginalize local chapters of Falun Gong, a religious group outlawed in China.

Beijing agreed to buy Australian liquid-natural gas "to obtain both Australia's natural resources and its political compromises," said Mr. Chen.

U.S. officials, meanwhile, tick off a lengthening list of examples where China has wooed tainted leaders for commercial gain. For example, Uzbek President Islam Karimov received a red-carpet welcome in Beijing in late May, just 12 days after his troops killed hundreds of protestors in a town square in eastern Uzbekistan. The Uzbek government contends that Islamic militants sparked the unrest and that 187 people were killed, including government security forces. The U.S. and its North Atlantic Treaty Organization allies called for an international inquiry, but Chinese leaders greeted the Uzbek leader as a "reliable friend."

During his visit, Mr. Karimov inked a $600 million deal giving China National Petroleum Corp., a state-owned giant, access to 23 Uzbek oil fields.

Mr. Zoellick, the U.S. deputy secretary of state, says in an interview he quizzed China's top diplomats on this issue when he was in Beijing in August, asking them: "What advantage do you really gain over time if you are associated with genocide and guys who are running their countries into the ground?"

Mr. Zoellick says the U.S. welcomes China's participation in international markets, as long as it isn't to the exclusion of the U.S. Another message he says he delivered: If China hoped to use its trade leverage "to push the U.S. out, they would get a counter reaction."

Throughout history, China has veered between embracing and rejecting international trade. In the early-to-mid 19th century, Britain and other imperial powers pried open the country's doors in a struggle that culminated in the Opium Wars. The Communists who took power in 1949 strived for self-sufficiency and turned the country's gaze inward. Only in 1978 did Chinese leader Deng Xiaoping decide to open the economy to foreign investment to fuel export growth. In the 1980s, China cultivated ties with Western countries through deals to modernize telecommunications, energy production and auto manufacturing. Trade has underpinned China's economic rise.

Even before China's re-emergence on the international scene, the blending of economic and diplomatic interests was a tool of statecraft. In 1972, for example, the year of President Richard Nixon's historic visit to China, Beijing bought 10 Boeing 707s.

But China's booming growth in the past few years has created a new set of challenges. The nation's demand for oil, gas, iron ore, copper and aluminum has strained domestic supplies and bid up global prices. A middle class has developed a taste for foreign goods. Ambitious Chinese companies have headed overseas and discovered receptive markets.

As a result, Mr. Hu launched an "economic diplomacy" campaign soon after he became China's leader in 2003. The idea, which had been percolating in Beijing for several years, was to use China's economic allure to cement friendships abroad. That would have the added benefit of suggesting that China doesn't pose a long-term threat to Asia's stability, despite, for example, its coveting of Taiwan.

In summer 2004, Mr. Hu met with China's ambassadors to determine how the strategy should be applied to developing countries. During the Cold War, China was a leader of the Nonaligned Movement, an association of countries largely set up as an alternative to the U.S. and Soviet blocs. China, which retained these ties, has seen its clout among developing countries soar in recent years, especially within bodies like the United Nations and the World Trade Organization. Many see China as a potential bulwark against U.S. hegemony.

'A Lot of Goodwill'

In South America, Venezuelan leader Hugo Chavez is touting his China strategy, playing Beijing against Washington using his country's oil riches as leverage. Likewise, Zimbabwe's embattled leader Robert Mugabe has trumpeted his strong ties to Beijing as his "eastern strategy."

"There's a lot of goodwill for China," says Christopher Mutsvangwa, Zimbabwe's ambassador in Beijing, who recalls firing Chinese-made AK-47s as a guerrilla soldier in the 1970s.

A year ago, China's Ministry of Commerce issued new guidelines for Chinese companies investing overseas. They included a list of 135 countries, mostly in Africa and Asia, where China's central government doesn't need to approve new investments. Among the exceptions: the U.S., Japan and the United Kingdom.

To smooth the way for trade and investment, China is dropping barriers to its own market and pressing other countries to do the same. Over the past 13 years, China has slashed average import tariffs to 9.9% from 43.2% in 1992. That has spurred imports: 60% of China's sales overseas are made from imported materials.

"Countries don't need to fear China's rise," argues Zhou Yongsheng, a foreign-policy analyst in Beijing and the author of a book on Chinese economic diplomacy. "Our rise benefits many, especially American companies."

China critics in Congress and within U.S. industry accuse Beijing of cheating the trade system. Chinese companies, for example, export many knock-off versions of Western brand-name goods. In recent months, U.S. officials have also taken aim at China's management of its currency system, saying the Chinese yuan is pinned at a level that allows the country to sell goods overseas at an artificially low price. In July, China slightly widened the band in which its currency trades.

Concern that the U.S. may be losing influence in Asia is now widespread within the U.S. government. Late last year, China endorsed holding a 13-country East Asia Summit that wouldn't include the U.S. The proposal sparked a flurry of communiqués between the State Department and embassies in Asia, although U.S. officials now maintain that the forum isn't a big deal. The first such event, which will include Australia and New Zealand, is set for December in Malaysia.

China has also been scoring diplomatic and economic victories in Central Asia, a region rich in oil and home to several American military bases. In addition to its recent deals in Uzbekistan, China recently signed several oil-exploration deals with Kazakhstan, part of a campaign to increase its access to oil. Beijing is also funding construction of a $248 million port in the obscure Pakistani fishing village of Gwadar, which opens onto the Arabian Sea and is positioned to feed China with gas and oil from Central Asia and the Middle East.

Administration officials say they suspect that China, along with Russia, would love to see the U.S. out of Central Asia. China has worked hard in recent months to make the Shanghai Cooperation Organization, a regional group founded in 2001 to combat terrorism in Central Asia, a more aggressive outfit.

In July, the group demanded that the U.S. put down a timetable for withdrawing from air bases in the area. Weeks later, amid a spat with Washington over his recent military crackdown, Uzbekistan President Mr. Karimov, gave the Pentagon an eviction notice for the Khanabad air base. It's a key supply point for the U.S. military in Afghanistan.
http://www.truthabouttrade.org/article.asp?id=4518

[Ethyl]

Aiyar invites Jadoon to finalise agreement on gaslines

NEW DELHI: Petroleum Minister Mani Shankar Aiyar has invited his Pakistani counterpart to Delhi to finalise a bilateral framework agreement on cooperation between the two countries in the petroleum sector.

The suggested dates for the visit are November 30 to December 2. Aiyar has also offered to host a meeting of the Turkmenistan-Afghanistan-Pakistan (TAP) steering committee for the natural gas pipeline project to coincide with Amanullah Jadoon’s visit.

Since Pakistan has declined to hold the steering committee meeting at Islamabad on November 29 and 30 as suggested by the Asian Development Bank (ADB) in view of the earthquake engaging its attention, Aiyar has suggested that it could be held in Delhi from November 28 to December 2 and the ministers meet on December 1 and 2. The ADB that is to finance the project to help out Turkmenistan is keen for an early meeting while Pakistan is stressing that the steering committee should not meet until an independent certification of the reserves in the Daulatabad gas field are made available. Pakistan has already suggested the ADB fix a meeting in January or early February 2005 subject to the convenience of the Afghan and Turkmen oil ministers. Aiyar has, therefore, suggested that Amanullah should make it November end at least to ink the bilateral framework agreement that is to be fine-tuned by the India-Pakistan joint working group on hydrocarbon cooperation in Delhi on November 21 to 23.

Security measures and price of gas India and Pakistan wants to import are among the issues listed for discussion by the working group, sources said. They said Aiyar would be quite busy whole of November as he had tied up eight engagements in and out of India. He is visiting China from November 9 to 18 for the finalisation of the memorandums of understanding and then go to Saudi Arabia on November 18 and 19 and Doha on November 20 and 21. Back in Delhi, Aiyar will be busy with a round table of Asian oil ministers on November 25 and 26, followed by the bilateral visit of Turkish Energy Minister Dr Menmet Hilmi Gulner on November 27 through 29.

http://www.dailytimes.com.pk/default.asp?page=2005%5C10%5C26%5Cstory_26-10-2005_pg7_50

[pixikill]

my dogs butt=natural gas pipeline.:food_04:


ewww, and you know what else? this paricular dog takes on water thru his butt when we send him off for a swim. when he gets out of the water, he could put out a fire with his butt.
he was a rescued dog, and husb says he was sexually abused.....:add09:

sorry ethyl....continue.....

[Ethyl]

Court OKs PetroKazakhstan acquisition


OCT. 26 7:45 A.M. ET A Canadian court has approved a $4.2 billion takeover of PetroKazakhstan by China's largest oil company, China National Petroleum Corp., clearing the final potential obstacle to China's biggest foreign acquisition yet.

The Alberta Court of Queen's Bench approved the purchase on Tuesday and the deal was due to close on Wednesday, a news release said. Calgary, Alberta-based PetroKazakhstan has all of its energy assets in the former Soviet republic of Kazakhstan.

The purchase at $55 cash per share by a unit of state-owned China National Petroleum, or CNPC, is the biggest in a series of overseas takeovers by Chinese companies. It also is a coup for Beijing in its effort to secure foreign energy supplies for its booming economy.


China has been acquiring oil and gas assets across the globe, in Sudan, Venezuela and Australia. PetroKazakhstan fits well with its strategy of tapping Central Asian oil to help fuel industries in inland and western parts of the country. A pipeline between the two countries is already under construction.
The court's approval foiled an effort by Russian oil company Lukoil to stall the deal, which was approved by 99 percent of PetroKazakhstan's shareholders, until its right to shares in a 50-50 joint venture, called Turgai Petroleum, could be determined.

Turgai Petroleum holds about 20 percent of the Canadian company's total reserves.

Lukoil contended that its agreement with PetroKazakhstan gave it right of first refusal to buy PetroKazakhstan's stake. It said it was prepared to acquire 100 percent of PetroKazakhstan at the same price and on the same conditions as CNPC's offer if the court did not approve the deal.

The Russian company said it tried but failed to reach an agreement with CNPC to buy 50 percent of Turgai Petroleum at a "fair price."

Other major oil companies, including a joint venture of India's ONGC Videsh, a unit of Oil and Natural Gas Corp., had also expressed interest in PetroKazakhstan.

CNPC's purchase follows a failed bid by Hong Kong-based CNOOC Ltd., a unit of China's biggest offshore oil company, to buy California-based Unocal Corp. following opposition from U.S. politicians. China's biggest foreign acquisition to date has been Lenovo Group's $1.75 billion purchase of International Business Machines Corp.'s personal computer business earlier this year.

PetroKazakhstan's shares closed at $54.45 on Monday on the New York Stock Exchange. The stock has stayed at roughly the same level since the deal with CNPC was announced in August, above its previous 52-week high of $46.92.

http://www.businessweek.com/ap/financialnews/D8DFMORG4.htm?campaign_id=apn_tech_down&chan=tc

[Ethyl]

Pakistan ties up with Russian gas major

ISLAMABAD: : The Pakistan Government and Gazprom of Russia signed on Friday a Memorandum of Understanding (MoU) to cooperate in development and operation of transnational gas pipelines, research and development of gas fields, and conversion of diesel engines to run on natural gas.

Gazprom, the world's biggest company dealing in natural gas extraction, has also shown interest in the construction of the $7.4-billion Iran-Pakistan-India pipeline to bring gas from Iran's South Paras fields. The company, along with TotalFinaElf of France and Malaysian Petronas, is a major shareholder in these fields.
The agreement, signed in the presence of Prime Minister Shaukat Aziz here deals with privatisation of oil and gas companies in Pakistan and development and operation of underground gas storage systems, besides provision of training facilities for Pakistani experts in oil and gas sectors.

`Fast track basis'


Mr. Aziz termed the agreement an important development, saying Pakistan had sought the assistance of the Russian company to work on a "fast track basis" in natural gas development projects.

He said Gazprom would provide technical expertise in the use of old gas fields for gas storage.

The construction of underground gas storage facility would help the country meet its energy needs during winter when the demand was high.

A Coordination Committee would be established under the MoU, which would set up Working Groups to discuss cooperation in specific areas.

He said the MoU would help to further strengthen the political and diplomatic relations between the two countries. Gazprom supplies almost all the gas needs of central and Eastern Europe and the former Soviet Union.

With sales of $31 billion in 2004, it accounts for about 93 per cent of Russian natural gas production.

Overwhelming response


To a question, Mr. Aziz said Pakistan was appointing a financial expert to prepare the feasibility report on the Iran-Pakistan-India gas pipeline project.

There had been an overwhelming response of investors to the project from around the world.

Gazprom Chairman Alexei B. Miller was appreciative of the business environment in Pakistan and said his company was interested in investing in construction of new pipelines and gas storage facilities, and also wanted to participate in privatisation of Pakistani gas companies.

Pakistan is studying four gas pipeline projects including the Turkmenistan-Afghanistan project, the Qatar-Pakistan underwater gas pipeline and LNG from Qatar.

The joint working group of Pakistan and India has agreed on a 56-inch diameter pipeline to provide about 5.6 bcfd (billion cubic feet per day) of gas by 2015 from Iran.

Congenial business climate


Earlier, the Mr. Miller called on President Pervez Musharraf and discussed operations of trans-national gas pipelines. He told Gen. Musharraf that his company positively viewed investment opportunities in Pakistan, thanks to the congenial business climate, fast-expanding economy and key geographic location.
http://www.hindu.com/2005/10/08/stories/2005100816431700.htm

[Ethyl]

Peace Pipe

It is being called the Peace Pipe. The natural gas pipeline running from Iran to India through Pakistan may be a reality early 2006. India's Petroleum Minister Mani Shankar Iyer made this announcement during his recent visit to Islamabad.
The project can immensely benefit South Asia. Both politically and economically. Leaders in Iran, Pakistan and India have now realised this.

The earlier fears in India of the pipeline being sabotage in Pakistan are now being dismissed as highly improbable. The reason is simple. It is felt in the corridors of power in New Delhi that if ever Pakistan wants to cut out gas supplies, India can do the same in its Western State of Gujarat. The onshore pipeline travels from Iran's South Pars (world's largest gas field), enters Pakistan, makes a detour into Gujarat, re-enters Pakistan before hitting India again, its final destination.

And in today's global scenario where economics forms the basis for core political decisions, nobody in his right senses will kill the hen that lays golden eggs, to use a cliché.

Iran has the world's largest gas reserves after Russia, and Teheran views India as a very important market. Pakistan, on the other hand, will receive a hefty annual transit fee. And India, an energy deficient market, needs the gas for its booming economy.

Iran is OPEC's second largest oil producer and has 10 percent of the world's proven oil reserves. It also holds the globe's second largest natural-gas reserves. As a major energy producer, Iran will be an increasingly important player in Asia and in particular South Asia. Teheran is on the lookout for new markets, and India is certainly one among them.

Iran hopes to build strong trade relations with India and gain New Delhi's political support. India having forged close relations with Israel, the U.S., the European Union and the states of Southeast and Northeast Asia could be useful to Iran, particularly now during its difficult phase with Washington, which is peeved over Teheran's nuclear programme.

Pakistan will receive a windfall from the pipeline project. It will be a major source of income for Pakistan. Without investing much, Islamabad will reap about $500 million to $ 600 million in annual revenue. The project will also end up easing Pakistan's energy scarcity to an extent. Its economy is also growing mandating greater power needs. A third of the gas will be supplied to it and the rest to India.

Politically, the project will be a major confidence building measure between New Delhi and Islamabad. "Pakistan can redefine its identity as a transit state in the region and can pave the way for peace and prosperity," says a BBC report.

With a fast growing economy, India's demands for oil and gas are expected to double by 2020. Its oil imports are projected to rise from 70 percent at the moment to 85 percent by 2020. And India manages to produce only half of its natural gas requirements. Domestic gas production stands at 74 million cubic metres a day. The coming year will see the projected demand for gas rising to 188 million cubic metres a day. In 2025, it is expected to be 322 million cubic metres a day.

To maintain a growth rate of 6 to 8 percent, India requires adequate cost effective energy from internal as well as external sources. Natural gas is one of the best options, as it is economic, efficient and environment-friendly.

New Delhi also considers Iran to be a corridor to access Afghanistan and Central Asia's natural resources. It hopes to strengthen its ties with Tehran. The pipeline project is one sure way to do this.

Finally, India feels that the pipeline, accompanied by the riches of revenue, will create a constituency within the Pakistan establishment that will root for normal relations with India, and rival the vested interests in the Pakistani army, which is known to promote anti-India militancy. A pipeline that promises peace, hopefully.
http://theseoultimes.com/ST/?url=/ST/db/read.php?idx=2253

[Ethyl]

Turkmenistan Pursuing Alternate Routes for Energy Export

Ashgabat, 9 November 2005 (nCa) --- Turkmenistan is pursuing alternate energy export routes as an integral part of its economic security policy , told K Khalylov, chief geologist of Turkmengaz, during a presentation Wednesday in the first-day session of the annual conference Oil and Gas Turkmenistan (OGT-2005).

“Energy has always been closely related to the matters of economic of both the supplier states and consumer states and in this context President of Turkmenistan has set a goal for Turkmenistan’s oil and gas industry to secure alternative routes for export of natural gas,” he said.


He said, “Therefore, we are currently holding talks on supply of Turkmen natural gas to Pakistan and India via Afghanistan, whifh will require construction of a gas pipeline Turkmenistan-Afghanistan-Pakistan (TAP) and further to India.”


He described the primary parameters of TAP:


Throughput capacity – 30 billion cubic meters per year
Operating pressure – 100 atmosphere
Pipeline diameter – 1420 millimeters
Pipeline length – 1680 kilometers (145 kilometers in Turkmenistan, 735 kilometers in Afghanistan and 800 kilometers in Pakistan)


Khalylov said that construction of gas pipelines to Ukraine and China was also in the discussion stage.


He assured, “It should be noted that sufficient natural gas reserves for each of these gas pipelines have been explored separately and they are located in separate territories.”


“For the Ukrainian (or Caspian Sea) gas pipeline with a design capacity of up to 35 billion cubic meters per year the resource base will be the fields of natural and associated petroleum gas produced on the shelf of Turkmenistan sector of the Caspian Sea and onshore fields,” he said.


“Fields located on the right bank of Amudarya will provide a resource base for the pipeline to China. Parameters of this pipeline have not yet been determined,” Khalylov added.
http://www.newscentralasia.com/modules.php?name=News&file=print&sid=1567

[Ethyl]

Pak oil minister arriving; Aiyar to discuss gas via TAP

NEW DELHI, NOV 10: Petroleum and natural gas minister Mani Shankar Aiyar has invited Amanullah Jadoon, oil minister of Pakistan, for talks on Turkmenistan-Afghanistan-Pakistan (TAP) pipeline from November 28 to December 2 in New Delhi.
This comes in view of the fact that Pakistan has declined to hold the steering committee meeting for the natural gas pipeline project at Islamabad on November 29 and 30 as suggested by the Asian Development Bank (ADB) in view of the earthquake engaging its attention.
According to MEA sources, since the Pakistan minister’s visit to India is slated for the the last week of November, Mr Aiyar made this offer to hold the meeting in New Delhi.

ADB, which will finance the project to help out Turkmenistan, is keen on an early meeting, while Pakistan says the steering committee should not meet until an independent certification of the reserves in the Daulatabad gas field are made available.

However, Mr Aiyar, suggested that Mr Jadoon should try to set up dates towards November end at least to ink the bilateral framework agreement that is to be fine-tuned by the India-Pakistan joint working group on hydrocarbon cooperation in Delhi from November 21 to 23.

It is being reported that Pakistan had suggested to the ADB to fix a meeting in January or early February 2006 subject to the convenience of the Afghan and Turkmen oil ministers.

Security measures and price of gas that India and Pakistan want to import are among the issues listed for discussion by the working group, sources said. Sources said that Mr Aiyar would be reasonably busy whole of November as he had tied up eight engagements in and out of India.

He is visiting China for the finalisation of the memorandums of understanding and then to Saudi Arabia, followed by Doha, Qatar,later this month.
http://www.financialexpress.com/fe_full_story.php?content_id=108294

[Ethyl]

Export of technical, engineering services, up by 100%

TEHRAN, Nov. 13 (MNA) –- The contracts concluded during the past seven months for the export of technical and engineering services hit 967,222,578 dollars. The figure, as compared with the last year’s 484,309,622 dollars, indicates a hike of about 100 percent, a fax released by the Trade Promotion Organization of Iran (TPOI) said on Sunday.
Various overseas projects are currently being developed by Iranian contractors some of which include building suspension bridge, cement production plant, commercial and residential complexes, natural gas pipeline, natural gas storage stations, electricity substations, water conveyance and road construction projects, building power plants, etc. in Syria, Indonesia, Kazakhstan, Yemen, Republic of Azerbaijan, Afghanistan, Senegal, the United Arab Emirates (UAE), Zimbabwe, Armenia, Sudan and Turkmenistan.



Allocating bank credits and assistances, making use of the resources offered by the Forex Reserve Fund (FRF), issuance of suitable and competitive exchange guarantees, establishing credit lines, in-time information disseminations, dispatching marketing delegates, offering export bonuses to the technical and engineering companies, etc. as well as creating a suitable atmosphere for participating in the international bids and offering competitive prices, the government’s political and economic supports for the contractors are among the major elements contributing to the significant growth in the number of the contracts to be developed by domestic contractors in foreign countries.





RA/MA

END


http://www.mehrnews.ir/en/NewsDetail.aspx?NewsID=252992

[Ethyl]

Dream Come True?

Despite the United States' looming threat of sanctions against Iran, owing to its nuclear ambitions and America's nuclear energy carrot to India which may be extended to Pakistan some time later, the two key South Asian neighbours still seem determined to go ahead with the long-term gas purchase agreement with Iran.

The 7.4-billion dollar Iran-India-Pakistan (IPI) natural gas pipeline project is seen as a vital energy link for the South Asian economies. In her last visit to South Asia in March and subsequent diplomatic interactions, Secretary of State Condoleezza Rice and her team have been telling India and Pakistan that any act which gave Iran a long-term role in international politics and offered monetary benefits would invoke American disapproval. The US has been using a variety of tactics to convey its displeasure not only to Pakistan and India but also to Iran. Washington is also perturbed over India's import of liquid gas worth 22 billion dollars from Iran.
In March, Dr Rice reportedly urged Islamabad to consider redirecting the pipeline to Qatar or the Central Asian Republic of Turkmenistan in order to bypass Iran. She also reportedly warned Pakistani Foreign Minister Khurshid Kasuri that the pipeline project could be in violation of the US, Iran and Libya Sanctions Act of 1996, which prohibits investments in the Iranian oil sector of over 22 million dollars.

Some observers believe that if the pipeline deal goes through, the US could impose sanctions on Indian companies involved in the project.

Pakistan and India have already gone into the details of the project after forming a joint working group headed by their oil ministry secretaries to assess the technical, financial, and legal aspects of the proposed 4 billion dollar Iran-Pakistan-India gas pipeline.

After the Islamabad meeting of the joint working group (JWG) in September, Pakistan and India are in the phase of conducting independent third party 'certification' of the hydrocarbon reserve in South Pars allocated by Iran to a gas pipeline for South Asia.

Iran has expressed its readiness to designate phase 9, 10, 15, 16, 17 and 18 of the South Pars gas field for the IPI project. Tehran claims that its gas reserves - to the tune of 14 trillion cubic feet - are enough to meet its export demands. Iran has the world's second largest gas reserves after Russia, but they have yet to be independently certified.

There are various international companies such as DNM, Ryder Scott, Schlumberger, PGS etc which have the expertise to carry out hydrocarbon reserve certification which involves geological, reservoir capacity and engineering aspects.

India and Iran have jointly indicated around 140-150 million standard cubic meters per day of gas but the final decision to firm up quantities is expected in the next JWG meeting in November.

Pakistan has indicated it would need 30 million standard cubic meters per day (mmscmd) of gas during 2010-11 which would go up to 60-70 mmscmd in 2014-15, while India has stated a minimum requirement of 90 mmscmd of gas.

Islamabad and New Delhi have also agreed to finalise the tripartite framework agreement on the Iran-Pakistan-India pipeline. In the mid-November meeting scheduled for New Delhi, the Indian side will provide drafts of the tripartite agreement. The second meeting of JWG concluded with the production of a joint statement, which noted that the Iranian side had provided the technical portion of the pre-feasibility report for the project.

Both the sides examined in detail the various technical, financial, commercial and legal aspects of the project. The JWG discussed the gas reserve certification and allocation, gas quality, system configuration and project structure besides other issues like pipeline routing, delivery points, transportation tariff, transit fee and operating costs and pipeline security.

"The IPI pipeline project should be a safe and secure world class project," said the joint statement. India and Pakistan agreed to "adopt the best international practices and standards." At the same time, the joint working group also agreed to adopt international standards relating to health, safety and the environment in the implementation of the project.

After the finalisation of the tripartite agreement, the work on the project would begin by June 2005 while the gas supply may resume by 2010, according to Pakistani Petroleum Secretary Ahmad Waqar. The responsibility for the security of the pipeline would be on the Pakistan Army, and Islamabad would charge an additional 100 million rupees for providing this facility. A decision may be reached on the entry point of the pipeline into Pakistan from Iran in the next JWG meeting in New Delhi.
In yet another forward move on the project despite US opposition, the Pakistan side will be soon appointing its financial advisory consortium for the project while the Indians have already appointed an international company, M/s Ernst & Young, as financial consultants and initiated action to appoint technical and legal consultants who would support the financial consultant.

The Pakistani government has also decided to join the Energy Charter Treaty as an observer while the Indian proposal for the same is under process of approval by the body concerned.

Pakistani Petroleum Minister Amanullah Jadoon said: "We welcome India in the project and sincerely hope that the project would be seen as the most credible CBM [confidence-building measure] between the two countries."

India has so far been hesitant to join the project because of its volatile relations with Pakistan, against which it has fought three wars since 1947.

The pipeline would extend over 2,758 kilometers across southwest Asia, including 755km of Pakistani territory. The international community has also shown growing interest in the Iran-Pakistan-India pipeline, with the World Bank and Japan's Sumitomo Mitsui Banking Corporation expressing their willingness to finance the project. It is most likely that the proposed multi-billion-dollar project will become a reality by 2010.

To this effect, a Memorandum of Understanding was signed between Iran and India in 1993 for a 4-billion-dollar pipeline from Iran's South Pars field to India, through Pakistani territory.

Subsequently, Pakistan offered security guarantees for the pipeline, vowing that gas flow will not be "switched off" even during periods of Indo-Pak tensions or hostilities.

On a very positive note and taking advantage of US isolation in the project, the Russian firm Gazprom is sending a high-level delegation to Pakistan early next month, attempting to lead a consortium for the construction of the Iran-Pakistan-India gas pipeline. Gazprom Chairman Alexey Miller Borisovich will lead the delegation to Islamabad on October 6 to hold talks. Gazprom is the world's largest gas company with an over 20 per cent share in global gas production. The Gazprom chairman had to cancel his last visit to Pakistan in 2000 at the eleventh hour owing to strong opposition from India where President Vladimir Putin was paying an official visit at the time.

Gazprom, along with TotalFinaelf of France and Malaysian Petronas, is a major shareholder in the Iranian South Pars field, from where Iran would supply gas to Pakistan and India through the multi-billion dollar trans-national pipeline.
The Russian energy giant has already held numerous rounds of talks with authorities in Iran and India to lead or at least become an active player in the consortium to lay the gas pipeline from Iran to India through Pakistan. Indian companies like Indian Oil Company (IOC) and GAIL are also expected to join the consortium.

Besides the pipeline, Pakistan is also interested in involving the Russian firm in other oil and gas sectors, including petrochemical and other upstream and downstream activities. Gazprom is part of at least six of the 12 trans-national pipelines which Pakistan and India have selected as models for detailed engineering, pricing, transit fee and legal issues.


Iran and India are also holding talks over awarding Indian companies exploration rights for the Jofeir oil field and the Yadavaran gas field in Khuzestan province.

Indian Prime Minister Manmohan Singh recently said, "China is ahead of us in planning for its energy security - India can no longer be complacent." India, as the world's number six energy consumer, is in a desperate situation compared to its peers. For example, oil imports account for two-thirds of India's oil consumption while China imports one-third of its crude oil consumption. Furthermore, China's proven oil reserves stand at 18 billion barrels, compared to five billion barrels in India. The Indian-owned Oil and Natural Gas Company (ONGC) has invested 3.5 billion dollars in overseas exploration since 2000 while the Chinese-owned China National Petroleum Corporation (CNPC) has made overseas investments of an estimated 40 billion dollars. Indian policymakers have initiated numerous policies to address India's growing energy needs. For example, India is pushing for the creation of 15-45 days of emergency reserves in Rajkot, Mangalore and Vishakapatnam. India is also diversifying beyond oil to access other energy resources such as nuclear power, coal, natural gas and renewable energy resources as well as stepping up exploration activities within its borders. Nevertheless, for the short to medium term, India will have to rely on an increasing amount of imported oil and gas to meet its energy needs.

At the beginning of 2005, India also completed a 40-billion-dollar deal with Iran to import 7.5 million tons of liquefied natural gas annually over a 25-year period as well as obtaining stakes in the development of Iran's largest onshore oilfield, Yadavaran, as wellas the Jufeir oilfield. The Yahavaran oilfield is a Sino-Indian-Iranian collaboration with India holding a 20 per cent stake, China a 50 per cent stake and Iran 30 per cent. In exchange for Iranian gas, India is investing in Iran's ports and energy infrastructure. Iran and India have agreed to jointly develop the Iranian port at Chabahar as well as the road linking the port to Afghanistan and Central Asia, and grant India exclusive rights to the port.
Cooperation in the energy arena is mirroring relations in other arenas including trade and military cooperation. Bilateral exchanges of defence and intelligence officials are routine and in 2003 both states conducted joint naval exercises. These developments have not only concerned India's traditional adversaries, China and Pakistan, but also its newly found allies, Israel and the US, who fear that military technology supplied to India could be diverted to Iran.
In an interview, Manmohan Singh told the Financial Times that "energy security is second only in our scheme of things to food security." Thus India's dependence upon secure oil and gas supplies represents a vital national interest, as manifested in its energy firms' quest for equity holdings in Russian, Angolan, Sudanese, Venezuelan, and, most of all, Iranian energy fields, or for major deals with states like Iran. Accordingly, in November 2004, India's state-run oil corporation announced a 3 billion dollar deal with Iran's Petropars. At the December 3-4, 2004, summit with Russia, India announced a 3 billion dollar Indian investment in the Sakhalin-3 oil field and the joint Russian-Kazakh Kurmangazy oil field in the Caspian. India's Energy Minister, Mani Shankar Aiyar has stated that, "what I am talking about is the strategic alliance with Russia in energy security, which is becoming for India at least as important as our national security."

There is no denying the fact that India's quest for energy is and would become an increasingly more assertive driving factor in its foreign policy not only in its relations with Pakistan and Iran but also with the Middle East and Central Asia and Caspian countries. The influence has mounted to such a degree that India has agreed to have the national oil and gas company ONGC enter what was a transparent dummy bid for the remnants of Yukos in Russia. Presumably, this favour will lead to enhanced access to Russian energy and heightened cooperation with Russian energy firms.

This strong Indian drive results from the realisation of its heightening economic vulnerabilities and the inherent dilemmas of the economic dimension of its ties with the United States. Many policy makers in India believe that New Delhi should balance its dependence upon Iranian and Russian energy with its need for US support.

Completion of these oil and gas deals with Iran would also enhance the already positive ties between New Delhi and Tehran and create a stronger community of interest between those two governments. But India's new drive for secure sources of energy in Central Asia and around the globe is based not only on its own needs but also on fears that China might be cornering the remaining markets that are not already captured. This India cannot allow if it is to be able to compete with China. India and China look to Central Asia for reasons of internal security against Islamic extremism, energy access, economic opportunities, and defence against foreign threats.

Stability in the energy market assumes a stable Middle East, a highly questionable assumption. If problems in the Middle East, in the bilateral Sino-Indian relationship, or with the United States preclude the Middle Eastern option, Indo-Chinese rivalry over Central Asia will grow. To a significant degree, the outcome of their current policies in Central Asia depends on factors beyond either of these states' control. In other words, the Indo-Chinese competition for energy sources that we now see taking shape will interact profoundly with local developments in Central Asia and no less profoundly shape the future politics and economics of both Central Asia, and Asia in general.

Analysts believe that Tehran has embarked on a 'good neighbour' campaign designed to highlight its role as a potential catalyst for peace and prosperity in the Caucasus and Central Asia. Even in nuclear programme-related talks with the European nations, energy has served as Khatami's calling card.

But on the other hand, as the EU3 (Britain, France, Germany) at the International Atomic Energy Agency (IAEA) push for sending the case of Iran's covert enrichment of nuclear fuel to the UN Security Council, Tehran has threatened to get out of the Non-Proliferation Treaty (NPT), restart enrichment of uranium, and use its oil to line up other states behind it.

The EU and its member-states have initiated energy investment and cooperation with Iran without regard to U.S.-imposed restraints on trade. There is modest progress, motivated mainly by Teheran rather than by the EU, in developing the project to take Iranian natural gas into Pakistan and across Pakistan into India. Of course, the United States would not allow its companies and banks to participate and similar conditions would apply to the British multinationals leaving great room for Russian, Chinese, Brazilian and other competitors in the world to be part of the consortium.

The pipeline will create a scenario for complex interdependence in a volatile region with Indian influence extending beyond Iran on one end and to the Caspian and Qatar on the other. The massive investment, according to some estimates, may soar to 7.4 billion dollars, and would surely affect foreign policies of all the primary players in the project.

However, the big power status cannot come easy. India will have to sacrifice something to get the best of both worlds. Doubtlessly, India gave priority to its new strategic relationship with Washington in the IAEA, voting over the Iran-Pakistan-India pipeline anda proposed LNG import deal, of which it would have been the ultimate beneficiary.
In a knee-jerk reaction, Iran has put India on notice over her controversial vote at the IAEA governing board meeting, saying that its offer to supply gas to New Delhi hinged on future behaviour.

Certain circles believe that the political, diplomatic and even commodity price for LNG import would soar for India to uncomfortable levels.

Meanwhile, the United States has termed India's vote in favour of an IAEA resolution on Iran's controversial nuclear programme "very significant."

The Indian newspapers suggest that her position on the Iranian nuclear question at the International Atomic Energy Agency (IAEA) appears to have been one of the key conditions to the successful negotiation of the India-U.S. nuclear deal on July 19.

The detailed transcript of the hearing of the House International Relations Committee (HIRC) on September 8, eleven days before the crucial IAEA Board of Governors (BoG) meeting, suggests this.

Notwithstanding the alleged remarks by the Indian External Affairs Minister, Natwar Singh, in Tehran in early September - which the Ministry of External Affairs (MEA) proceededto deny - the India-US nuclear deal seems to have been clinched only after India gave, inter alia, a "reciprocal" assurance - if not an absolute commitment - of its support at the IAEA on the Iran issue. The United States had categorically told India that it would not be willing to enter into an agreement without a visible and verifiable set of commitments from the Indian government.

On the other hand, Iran cannot afford to punish the 22 pro-IAEA countries, as oil accounts for 80 per cent of Iran 's export earnings. Tehran's threats, therefore, may be a negotiating ploy meant to force more countries to see things its way in the current fracas over Iran's apparent violation of NPT provisions.

Islamabad has not bent backwards with regard to the gas pipeline demand from Washington for a variety of factors, the topmost being Iran's clear warning of not allowing the Qatar pipeline project which would pass through its territorial waters if the IPI did not go ahead smoothly. Moreover, given the scant improvement in Afghanistan's security situation, the Turkmenistan-Afghanistan-Pakistan pipeline still remains a distant dream. For Pakistan, the IPI project offers a rare chance to gain due respect for its sovereignty and importance in the region. Not only would the Indian economy be greatly dependent on a peaceful situation in Pakistan but the business lobby would gain greater influence on New Delhi's approach towards Islamabad.
http://www.newsline.com.pk/NewsOct2005/newsbeatoct2005.htm

[Ethyl]

Putin Backs Turkey as Energy Hub

SAMSUN, Turkey -- The leaders of Russia, Turkey and Italy pledged on Thursday to boost oil and gas cooperation and bring Europe greater energy security after inaugurating a natural gas pipeline under the Black Sea.

The inauguration of the Blue Stream line also capped a big improvement in economic ties between Russia and NATO member Turkey as they set aside historic rivalries in favor of trade.

President Vladimir Putin raised the possibility of a second pipeline carrying Russian natural gas and oil to Turkey, while Turkish Prime Minister Tayyip Erdogan said his country aimed to become a key energy hub for Europe and the Middle East.

"The launch of the Blue Stream pipeline [linking Russia and Turkey] is ... a step toward strengthening our continent's energy security and diversifying energy supplies to consumers," Putin said at the ceremony in Turkey's Black Sea port of Samsun.

Italy's Eni and Russia's Gazprom built the pipeline.

"There is an opportunity to build another oil or gas pipeline under the Black Sea," Putin said.

Elucidating Putin's remarks, a senior Turkish energy official said Russia planned to build an oil pipeline along the route of Blue Stream.

The official, speaking on condition of anonymity, said Russia also hoped to increase the capacity of Blue Stream itself, including, if necessary, a second gas pipeline.

Putin said Russian companies were ready for further cooperation in the Turkish oil and gas market, not only increasing exports but also taking part in building infrastructure and exploration and extraction of oil including taking equity.

"Blue Stream gives us an opportunity for shipping gas to other third countries ... There is the opportunity for building new oil and gas transport systems delivering to southern Italy, to the south of Europe as a whole and to Israel," Putin said.

"This year Blue Stream will transport 3.7 billion cubic metres of gas. If Blue Stream reaches its planned capacity, then overall Russian gas exports to Turkey will be 30 billion cubic meters a year," he said.

Gazprom chairman Alexei Miller told reporters his company was thinking of building a liquefied natural gas plant in Turkey with an annual capacity of 5 million tons, either in Izmir on the Aegean Sea or in Ceyhan.

"It is possible to increase the Russian gas going to Israel and to deliver Russian gas to be turned into LNG in Turkey and then to export that LNG to third countries," he said.

Erdogan tried to convince Putin and Italy's Prime Minister Silvio Berlusconi of the value of a pipeline carrying Russian crude from Samsun to Turkey's Mediterranean port of Ceyhan. This would help relieve congestion in Turkey's Bosporus.

"The line will provide safe transportation of oil to the Mediterranean and will increase security in [the Bosphorus] by reducing tanker traffic," Erdogan said.

A Turkish official said the Russians seemed favorable to the pipeline, despite earlier fears they were hostile. Eni chief executive Paolo Scaroni also expressed interest.

For Russia and other Black Sea states, the Bosporus provides the only outlet to world markets for oil and products exports.

http://www.moscowtimes.ru/stories/2005/11/18/042.html

[Ethyl]

Growing international tension over the Arctic

Strained relations between Norway and Russia in the Arctic region have in recent months produced a series of territorial and environmental disputes. Though this has mainly expressed itself in conflicting claims over fishing rights, both countries are vying to control oil and gas extraction and transportation rights in the still largely pristine Arctic Ocean.

The Arctic region is estimated to contain 40 billion barrels of oil and as much as a quarter of the world’s natural gas reserves. Due to the extreme environmental conditions, polar drilling has been considered largely uneconomical until recently. However, Arctic reserves are now being considered more seriously as other oil and gas fields become exhausted.

Russia and Norway are amongst the world’s largest net oil exporters and both recognise the vital importance of expanding their industries into largely untapped northern reserves. New drilling operations have already begun, and output from the region is expected to rise significantly over the next decade. The two countries have competing claims over sovereignty in the Barents Sea, which lies between their Arctic coasts and is the most likely area for new large-scale production.

The disputed claims produced an international incident in October when a Russian trawler was boarded by two Norwegian fisheries inspectors near the Svalbard Islands in the Barents Sea. Another Russian vessel in the same area was put out of action after a net thrown from a Norwegian coast guard helicopter disabled its propeller. The Russian vessel still in operation made its way back to its home port of Murmansk, with the two inspectors on board, chased into Russian waters by Norwegian coast guard ships.

Days of diplomatic exchanges and rival claims from Moscow and Oslo followed. A week later, the Norwegian coast guard again intercepted two Russian fishing vessels off the Svalbard Islands, claiming that the Russians were “illegally transferring fish.”

Russia has long disputed Norway’s right to inspect foreign vessels in the seas around the Svalbard Islands, with confrontations between the countries becoming common. Norway’s claim to the Svalbard Islands was internationally accepted in the 1920 Spitsbergen Treaty. What is at issue is Oslo’s claim, first made in 1925, to a 200-nautical-mile ocean territory around the islands, a claim rejected by the Soviet Union and now Russia. Though ostensibly about fishing rights, the territorial dispute was all but ignored until the 1970s and the development of the North Sea oil industry in Norwegian waters.

Sverre Lodgaard, the director of the Norwegian Institute of International Affairs, has stated that “The Barents region is about to become a geopolitical hub,” with a considerable proportion of the world’s oil and gas to be extracted there and transported through it in the near future.

Not only do Russia and Norway want to expand drilling in the Arctic, but Russia also has plans to build a major energy pipeline to the Barents Sea port of Murmansk, creating another outlet for its vast energy reserves onto the world market and making the port one of the world’s most important energy distribution centres. Norway has objected to Russian plans to expand drilling and transportation in the region, superficially on the basis that Moscow has a poor record of enforcing environmental protection measures compared to its own.

Complaining that “Norway has no clear policy in the north,” Lodgaard has pointed out that the country’s refusal to join the European Union (EU) has left it without enough clout to push its energy interests in the Arctic. “[T]he European Union may favour Russian claims over Norway’s because Moscow is more important to the EU than Oslo,” he stated.

Germany’s reliance on Russian oil and gas and current close cooperation with Moscow has placed further pressure on Norway to find a means of securing its Arctic interests. Norway’s status outside the EU has lent its relations with the United States added weight.

The Norwegian bourgeoisie has looked to Washington as its main Great Power ally since it gained independence from Sweden in 1905. The administration of Theodore Roosevelt was the first government in the world to recognise Norway’s independence and, in part thanks to America’s large Norwegian immigrant population, has remained a key ally. The country was a founder member of NATO and during the Cold War was a useful base for Washington’s military manoeuvres against the USSR’s Arctic Fleet.

The relationship continues to the present, with soldiers from Norway serving in Afghanistan. A small military detachment also participated in the occupation of Iraq.

The king and queen of Norway and an entourage of government and business figures recently toured America, including a visit to Houston, to promote investment in Arctic oil and fields to US executives. The response of the American companies to Norway’s solicitations was reported to be less than enthusiastic given the costs involved in oil and gas extraction in the Barents. Nonetheless, the Artic reserves are too great to be ignored by US imperialism for long.

Lodgaard has suggested that Oslo is looking to the Bush administration to “broker” a deal between Norway and Russia. In effect, this would be used as a mechanism for Washington to advance the interests of its energy companies, with Norway as junior partner, against their Russian rivals.

This would turn the Arctic into another front in the ongoing conflict between Moscow and Washington. American imperialism has repeatedly acted to limit or roll back the sphere of Russian influence, including orchestrating pro-US coups d’état in Georgia and the Ukraine, with the aim of advancing US domination of the natural resources of the former Soviet Union.

However, the growing debacle facing the Bush administration in Iraq has compelled Norway’s recently elected Labour-led government to distance itself from Washington by withdrawing its small military contingent. Given the historic reliance of Norway on the US, this withdrawal will doubtless be compensated for. Norway could send more troops to aid the US occupation of Afghanistan or use its diplomatic links, such as brokering the Sri Lankan “peace” agreement, to Washington’s advantage.

There are also calls for Norway to advance its own military weight in the Arctic, with Aslaug Marie Haga of the Centre Party, a partner in Oslo’s coalition government, demanding a militarisation of the Barents Sea, “to secure Norwegian interests.”

No move by Norway could effectively occur independently of the US, or the EU, should Germany’s relationship with Russia sour. Therefore, weak Norwegian imperialism must throw its lot in with a major power.
http://www.wsws.org/articles/2005/nov2005/arct-23n.shtml

[Ethyl]

Gas grid to cost $22.4 bn`

Ernst & Young and Tracteble Engineers and Constructions today proposed a 22,491-km Asian gas grid at an estimated cost of $22.4 billion.

A study by the firms identified Iran, Uzbekistan, Turkmenistan, Russia, Kazakhstan, Azerbaijan, Myanmar, Bangladesh and Afghanistan as potential sellers with 70 trillion cubic feet (tcf) of natural gas supply which would be much more than the 40 tcf demand generated in Turkey, Thailand, Taiwan, South Korea, Pakistan, Japan, India and China.

The benefits of such a grid would be to the tune of $55.37 billion by the end of 2025 assuming that importing countries get $1 per million British thermal units and exporting countries get $2 considering the benefits accruing through development in the downstream sector.

The study said Asian economies, including India, China and South Korea, are currently growing at rates far higher than the United States and the Western Europe and the trend is likely to continue in future.

The spurt in international oil and gas prices had stimulated high interest in commodity prices, putting energy infrastructure higher on lender agenda, said the study. Globally, 170 pipeline projects have been planned, with $135 billion investment earmarked for them.

The creation of an Asian Gas Grid will not only lead to exchange of trade but also development of the electricity, petrochemicals and fertiliser industries.

http://www.business-standard.com/common/storypage.php?storyflag=y&leftnm=lmnu2&leftindx=2&lselect=1&chklogin=N&autono=206709

[Ethyl]

Uzbekistan, Azerbaijan can join pipeline project: India

NEW DELHI: India, which is toying with the idea of being a party to the ADB-assisted Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline, on Saturday mooted a proposal to rope in Azerbaijan and Uzbekistan so as to exploit Caspian Sea reserves.

It also proposed a pipeline from Azerbaijan to the Arabian Sea to transport Caspian oil to the sub-continent, one of the fastest growing consumption centres.

Petroleum and Natural Gas Minister Mani Shankar Aiyar suggested that the TAP pipeline originate in Azerbaijan and end in India during an interaction with Idriz Rzabeyov, head of the Energy Department, Ministry of Energy, Azerbaijan.

Alongside, Mr. Aiyar suggested to the Minister for Foreign Economic Relations, Investment and Trade, Rustam Sodykovich Azimov, that gas from Uzbekistan pass through the TAP pipeline.

India, Mr. Aiyar told newspersons here, decided to attend as observer the TAP pipeline steering committee meeting in January before committing itself to be a party in the project.

Turkmenistan's reserves


The Minister had enquired from his Turkmenistan counterpart about his country's total gas reserves and the availability of fuel feedstock for movement through the TAP pipeline.

"The gas reserve figure conveyed to me was very, very high, much beyond what is being talked about. I cannot tell you because of the confidentiality clause."

Turkmenistan gave the assurance that it would have adequate gas reserves for feeding the TAP pipeline even after meeting its commitments to Russia, Mr. Aiyar said.

At bilateral meetings, public sector companies showed a keen interest in oil and gas exploration and in participating in the downstream refining and petrochemical business in these three countries.

The Indian Oil Corporation expressed keenness in downstream oil refining, petrochemical and LNG collaboration with Uzbekistan. ONGC Videsh Ltd. (OVL) showed interest in acquiring a stake in Turkmenistan's state-owned oil and gas company.

Seminar on pipeline security


Mr. Aiyar proposed to host a seminar of the BTC (Baku-Tiblisi-Cehyan) oil pipeline, namely, Azerbaijan, Georgia and Turkey, during April-June in 2006 to get a brief on pipeline safety and security. These measures could, in turn, become a reference point for the TAP-India and Iran-Pakistan-India gas pipelines.
http://www.hindu.com/2005/11/27/stories/2005112705450900.htm

[Ethyl]

Indian Minister of Petroleum & Natural Gas Mani Shankar Aiyar said he hoped that with the appointment of the new Iranian oil minister the gas pipeline project from Iran to India via Pakistan would be finalized at the earliest.

The minister, in his inaugural speech, emphasized the importance of ensuring security in the energy sector, saying discussions on the project are in the final stages and, with the appointment of Iran's new oil minister of Iran, there would not be any further delays in finalizing the project and the LNG deal as well.

He also said that India was seriously pursuing the Myanmar Gas pipeline project via Bangladesh and the Turkministan Gas pipeline proposed for India via Afghanistan as well.

Apart from all those projects India is also interested to participate in overseas activities in the energy sectors in countries like Azarbaijan and Russia by investing in their oil and gas fields in order to have a number of options that could provide long-term energy security for India, he said.

The minister said the increase in various economic and industrial activities and the flow of foreign direct investment (FDI) into India has compelled New Delhi to search for new avenues for investment in hydrocarbon sectors around the world.

In the one-day forum that was organized by the India Energy Forum at Punjab, Haryana and the Delhi Chamber of Commerce and Industry (PHDCCI) here today, Talmiz Ahmed, additional secretary of the ministry of petroleum and natural gas, T.N.R. Rao, former secretary of the ministry of petroleum, and ambassadors from key Asian countries such as Sri Lanka, Mayanmar, Bangladesh, Turkministan and China, and a representative from the Iranian embassy along with experts from various related sectors also participated.

http://www.irna.ir/en/news/view/menu-234/0512135606151745.htm

[Ethyl]

Petro-Canada sells Syrian assets

Petro-Canada said Tuesday it is selling its oil-producing assets in Syria to a joint venture of the Chinese and Indian state oil companies for $676-million.

The sale, to India's Oil and Natural Gas Corp. Ltd. and China National Petroleum Corp., is retroactive to July 1. It's expected to close early next year, subject to Syrian government consent, the Calgary-based company said.
Petro-Canada decided in September to put the mature assets up for sale. Since then, the company said it received multiple final offers for the assets in mid-November.

“The sale of these mature assets aligns with our strategy to increase the proportion of long-life and operated assets within our portfolio,” said Peter Kallos, executive vice-president of its international division, in a release.

Petro-Canada said it will still have a presence in the country. “Syria remains an important part of our North Africa and Near East producing region, with an active exploration program in Block II and the continued pursuit of new opportunities.”

The interests being sold represent about 58,000 barrels of oil equivalent per day, before royalties, of Petro-Canada's expected 2006 production.

Harrison Lovegrove and Co. Limited advised Petro-Canada in the transaction.

Petro-Canada shares rose 68 cents or 1.5 per cent to $47.32 in Toronto.

http://www.theglobeandmail.com/servlet/story/RTGAM.20051220.wpetrocan1220/BNStory/Business/

[Ethyl]

Malaysia Petronas To Open 557 Gas Stations In Indonesia
JAKARTA (Dow Jones)--Malaysia's Petronas (PET.YY) will spend around IDR4.30 trillion ($436 million) to set up 557 gas stations in Indonesia by 2011, an Indonesian government official said Friday.

"The permits have been granted, and now it's looking for locations," said Ery Soedarmo, the processing and commercial director at the Mines and Energy Ministry.

Petronas will open next month its first Indonesian gas station, currently being constructed in Cibubur, southeast of Jakarta, Soedarmo added.

The government is allowing foreign companies to operate gas stations across the country. Previously, only state-owned oil and gas company PT Pertamina (PTM.YY) could do so.
http://sg.biz.yahoo.com/051223/15/3xh09.html

[Ethyl]

Half of Rhum gas field in UK belongs to Iran

Sunday, December 25, 2005 - ©2005 IranMania.com

Related Pictures



LONDON, December 25 (IranMania) - Iran and the United Kingdom have already started a joint venture project in the largest offshore gas field of Rhum in the North Sea for production and export of gas, deputy minister of Oil in International Affairs Seyyed Hadi Nejad-Hosseinian said.

According to MNA, the NIOC (National Iranian Oil Company) holds 50% of the share in this 350 mlnpounds venture and it is expected that by drilling two new wells the production to increase by 170 mlncubic ft. from the current 130.

Moreover, the methods used in this project by the assistance of Iranian experts are of considerable technical complexities due to high pressure and temperature of the field.

Rhum Gas Field, discovered in 1977, is 109 meters deep below the sea and is located 240 miles offshore from northeast of Aberdeen.

http://www.iranmania.com/News/ArticleView/Default.asp?ArchiveNews=Yes&NewsCode=39084&NewsKind=CurrentAffairs

[Ethyl]

Russia ready to cut off Ukraine's gas supply
Last Updated Sat, 31 Dec 2005 19:13:59 EST
CBC News
Russia appears set to cut off gas supplies to Ukraine Sunday after officials with the state-owned energy monopoly said their latest offer was rejected.

Gazprom wants to hike gas prices by 460 per cent, a move Ukraine has resisted.

On Saturday, Russian President Vladimir Putin gave Ukraine a midnight deadline to agree to a three-month price freeze, followed by the implementation of the higher price.

But early Sunday local time, Gazprom spokesman Sergei Kupriyanov said Ukraine rejected the offer.

"Literally 40 minutes ago, we received an official answer from the Ukrainian side. The answer said: 'We cannot sign it' and that is all," said Kupriyanov.

Ukrainian gas industry officials said heating needs will be met from other supplies.

Ukraine had been paying $50 US per 1,000 cubic metres of gas, a price reflecting Soviet-era subsidized rates. Russia plans to hike the price to $230 US per 1,000 cubic metres.

Russia supplies about 30 per cent of Ukraine's gas supplies.

The conflict has set off alarm bells in Western European nations, who receive some of their gas supplies via pipelines winding through Ukraine. Moscow insists there will be no disruption of European supply, but European Union officials will meet on Jan. 4 to discuss the crisis.

Ukrainian President Viktor Yushchenko, who has offered to pay $80 per cubic metre, says the price hike is politically motivated because of his pro-Western ties.

Yushchenko, who took office after the Orange Revolution helped defeat a Kremlin-backed candidate, wants Ukraine to join the EU and NATO.

Gazprom charges $120 to the Baltic states, $110 for former Soviet Caucasus states and $47 to pro-Russian Belarus, said Yushchenko.

http://www.cbc.ca/story/world/national/2005/12/31/ukraine-gas051231.html

[Ethyl]

Pakistan rebels blow up gas pipeline
NEW DELHI, Jan. 5 (UPI) -- Pakistan tribal rebels in Baluchistan blew up a gas pipeline, shutting down supply to a U.S. and British power plant.

The two blasts damaged a 24-inch diameter pipeline at two places in Dera Murad Jamai area near Quetta.

"The blast cut off gas supply to the nearby Uch private power plant, "said a report in the Indian Express from Quetta.

Rebels in Baluchistan have been waging an armed struggle against the government demanding greater autonomy and control over its natural resources. They have been frequently targeting gas pipeline. Baluchistan is Pakistan's natural gas source.

Pakistan government has set up military installation in the region and also launched military attacks against the rebels.

Islamabad says Baluch tribal rebels have been promoting militancy and the region has become a heaven for militants.

India had asked Pakistan to stop armed attack on the rebels and initiate political dialogue. Islamabad took exception to New Delhi's remarks.

Pakistan said it would not entertain outsiders views on military operation in Baluchistan.

"India should settle down its own conflicts. Action by security forces against miscreants would continue, "said President Gen Pervez Musharraf.

The human right activists in Pakistan also criticized the government for its military action in violence hit Baluchistan, a Pakistani province bordering Afghanistan.

http://www.upi.com/InternationalIntelligence/view.php?StoryID=20060105-035726-2780r

[Ethyl]

ESTONIA

The North European gas pipeline is still on top of the news as the media calls upon a concerted action between the countries the pipeline bypasses to exert pressure on the international community to prevent the project from getting on stream.

"Small Baltic countries have been kicked out of the political playground. The international law is of little help now, so maybe the time has come to harness the environment again, like we did in the phosphate war in the 1990s [the successful campaign of Estonian environmentalists against a phosphates production site in Estonia]... Maybe there is a prospect for a Tallinn-Helsinki sea tunnel... The two Finno-Ugric nations live 80 km from one another, while the fresh-welded pipe big nations are making still has 800 km to go to the Baltic. We need to act like Putin and Schroeder did - without asking anyone's consent." (Parnu Postimees, December 22.)

LATVIA

Gazprom, Russia's natural gas monopoly, is seen as an arm in Kremlin's anti-U.S. game on the post-Soviet territory.

"With Gazprom under their belt, the leaders of our Eastern neighbor have taken off the mufflers that had impeded their punches on America's long-insensitive body...

"Washington's first bruise in the fight with Moscow was Gazprom's agreement with Kazakh state-owned transit company KazMunaiGaz... That done, any country buying natural gas in Central Asia will have to pass Russia's face control first, and all commercial agreements will be dictated from Moscow. Gazprom is going to be equally unceremonious with Ukraine, at a time when Washington, according to U.S. officials, has second thoughts about its foreign policy." Business & Baltija, December 22.)

Latvian media suggests that if Putin comes to the Riga NATO summit in late November 2006, this will be a signal that he supports Vaira Vike-Freiberga's candidacy as NATO Secretary General.

"To invite Putin to Riga would be a logical move - after all, Russia is a NATO and 'new' EU members' neighbor. He was expected at the latest Istanbul NATO summit but did not come. In any case, while Vladimir Putin's absence would be another blow to Russian-Latvian relations, his arrival would be seen as a gesture toward Vaira Vike-Freyberga, a green light for her to become NATO Secretary General." (Vesti Segodnya, December 22.)

LITHUANIA

Lithuanian media sees Russia's natural gas policy as a "new imperial weapon" that Russia could turn against "short-sighted" Europe in the long term.

"Is there a need in Europe to give Vladimir Putin this new imperial weapon? Worse, is Russia likely to turn this weapon against gas-hungry Europe some day? Getting a former German chancellor to run a company that might give the Russian president the ability to manipulate the EU economy is a result of a dangerous deal with Putin. Should Putin decide to put a price tag to our values or to our capability to criticize Russia, for instance, over war-torn Chechnya - the Europeans look more likely to shut up than run the risks of high energy prices, or even an energy blockade, like what Ukraine is facing now." (Veidas, December 27.)

There are some critical articles on Lithuania-unfriendly investment climate in the Kaliningrad region.

"Complex bureaucratic processes are in place. They take time businesspeople just do not have. Moreover, this is a guarantee of high level of corruption... Of about 600 companies partly owned by Lithuanians and registered in the Kaliningrad region, fewer than 30 operate at full speed." (Vakaru ekspresas, December 27.)

UKRAINE

Many publications warn against what they describe as unpromising and unjustified Kiev's argument with Moscow over Russia's Black Sea Fleet stationed in Sevastopol.

"On the surface, Moscow loses a great deal. In fact, the Black Sea Fleet is a money-hungry burden." (Obozrevatel[e1], , December 21.)

"The dispute around the Black Sea Fleet is a direct threat to the nation's territorial integrity and independence... The issue of the status of Sevastopol, including state jurisdiction over the city, will again be put to the fore. Russia could even revert to the Crimea issue... It is easy to predict the result of a Crimean referendum." (Oligarh.net, December 21.)

Many media reports suggest blackmail in the bilateral natural gas dispute will only raise Russia's demands, let alone bring Ukraine to victory.

"A hope that a dispute around the Sevastopol base will get Russia to compromise on gas prices is light-minded. Russia has a great supply of reserves and range of pressure engines, of which the gas price is the simplest and already operational. What Moscow needs to do is not listen [to us] but utter nonchalantly: $220, $230, $240..." (From-ua, December 26.)

Meanwhile, some publications see the gas scandal as a blessing for both sides. While Russia is interested in destabilizing Ukrainian energy-consuming and export-dependent economy, hoping that poorly powered Ukrainian factories will be up for grabs at bargain prices and will free up some more gas that could be sold to Europe, Kiev's firm stance could bring about a fully independent modernized economy and suppress the popularity of pro-Russian parties in the Ukrainian East.

"Russia's gain is clear, as a less consuming Ukraine will free up some more gas for Europe. Gazprom is rightfully suspicious about Ukraine's gas transit credentials and is of course trying to run the Ukrainian pipeline network itself...

"Ukraine's political dependence on Russia will go down, and so will the overall energy dependence. Sooner or later, the economy will adapt to new gas prices. Demonstrating Russia's pressure for the pipelines and [leader of the pro-Russian political forces Viktor] Yanukovich's [electoral] victory, the authorities have a chance to unite the people, ... which will result in a new political pattern unfavorable to the 'blue side' [during the Orange Revolution a year ago, Viktor Yanukovich's supporters chose blue as opposed to Viktor Yushchenko's orange]." (Obozrevatel, December 21.)

MOLDOVA

The pro-Romanian press ironically describes the new gas prices and the new Russian plan to federalize Moldova as "Christmas presents" from Russia. Journalists believe that Moscow is exerting economic pressure in order to split Moldovan political forces, "to tilt the political balance and bring pro-Kremlin groups into power." "Guided by its own geopolitical interests, Moscow is hitting directly at Moldovan people, aggravating their economic situation... This outside pressure requires an urgent consensus of all political forces in Moldova. A clear expression of general attitudes formulated on a broad basis, without anti-Russian sentiments, would have a positive feedback both in the country and from the international community, showing to everyone that Moldovan society cannot be split by blackmail." (Flux, December 21.)

ARMENIA

Some publications express the view that the rise in Russian gas prices may reverse Armenia's attitude towards Russia. "Our 'friend' Russia treats us any way it sees fit. There is nothing we can do about it: Russia can do anything it wants to its 'outpost.' It can, for example, take away plants, raise gas prices or even hinder the construction of another pipeline, so that the 1,500-mm gas pipe from Iran becomes 750-mm in Armenia lest we - Lord forbid! - should start selling it to others, infringing on Russia's interest." (168 Zham, December 21.)

The mass media write that due to the peculiarities of Armenia's domestic political situation, Yerevan is incapable of putting up resistance to Russia's political and economic pressure. "In this situation, a strong and geo-politically independent parliamentary opposition would be efficient... But there is no opposition... The fate of Armenian gas will depend on how pitiful [President] Robert Kocharyan will look and how touched Vladimir Putin will be." (Aikakan Zhamanak, December 21.)

GEORGIA

There is a wide coverage of the news that Gazprom is interested in the privatization of the Georgian main gas pipeline. The mass media maintain that in case of refusal, the Russian gas giant has promised to double gas prices for the country again. "It has turned out that if Gazprom does not get control over the pipeline in one form or another, it will rise gas prices to $200 per 1,000 cu m from 2007. In addition, in this case Gazprom will demand advance payments from Georgia and will not put up with accumulating debts for gas supplies. If Gazprom does get the pipeline, a contract will be signed and in 2006-2016 Russian gas will be supplied to Georgia at $110 per 1,000 cu m. Georgia has a year to think it over and to find alternative sources." (Rezonansi, December 26.)

The mass media traditionally pin hopes on the U.S. in this issue. "The U.S. has serious strategic interests in Georgia, linked with its influence in Central Asia and a brewing conflict with Iran. In this situation the United States will never allow Georgia to sell its gas mainline to Gazprom." (Ahali Taoba, December 27.)

AZERBAIJAN

The press stresses Azerbaijan's role in the Russian-U.S. confrontation on the oil and gas market, which promises to liberate the country from the northern neighbor's political dictate. "The looming prospect of 'energy shortage' has heated up the 'political atmosphere' in the global energy sector, where the confrontation between Russia and the United States promises to become soon the main topic on the agenda. Specifically, it will be Washington's desire to restrict Russia's role on the global energy market... There is no doubt that having won the casting vote on the international oil market, Russia will not hesitate to use energy supplies as a means of political pressure... Here it is useful to recall that it is Azerbaijan and Kazakhstan (and for the latter our country means access to the global oil market) that are the most viable oil sources for Europe, and an alternative to Russian supplies. It is here that the collision of Russian and American interests will become most acute and evident. Obviously, Azerbaijan is running out of time for pursuing a 'balanced policy' and delaying the moment of making its choice." (Ekho, December 24.)

The initiative to merge the Republic of Adygea with the Krasnodar Territory has received negative coverage. "The process of merging and enlarging Russian regions is gaining momentum... In fact, Adygea is to be dissolved in the Krasnodar Territory with its notoriously chauvinistic leaders. Besides, this is being done solely in the interests of the Slavic community, whose representatives do not want to be a non-eponymous minority... Apparently, Moscow realizes that an ethnic explosion in the region cannot be prevented and is trying to deprive future fighters for the independence of the Caucasus of the chance to contact the outside world bypassing Russia." (Ekho, December 23.)

KAZAKHSTAN

Most media write about the clash of Russian and Kazakh oil and gas interests, saying that Moscow is annoyed by Kazakhstan's independent projects and fears losing one of its instruments of pressure on the country. Journalists conclude that Russia is unlikely to choose to damage good partner relations with Kazakhstan and will therefore respect its interests.

"Problems are holding back the two countries' talks on extending the capacity of the Caspian Pipeline Consortium. Kazakhstan wants to increase oil production and export to the West; Russian companies are appalled because they also plan to increase oil production. They want to monopolize the export of energy resources from the former Soviet countries to Western Europe. Kazakhstan is one of the few post-Soviet states with which Russia has no problems, and so it will not want to create them without solid reason." (Navigator-II, December 21.)

KYRGYZSTAN

The biggest event of the outgoing year was Russia's "return" to Central Asia.

"Russia's strategy of conditional support of the region's political regimes has proved more effective and desirable than the United States' strategy of spreading democracy. The Central Asian leaders have seen that their utmost respect for the interests of the U.S. resulted in numerous destabilizing responses aimed at making the region's political regimes more democratic and at legalizing the opposition. As a result, the Central Asian political regimes have made a U-turn toward restoring relations with Moscow. Russia is indeed ready to bring investment and state projects to Central Asia, ensure the security and sovereignty of the rising national states, sign agreements on union relations, and supply arms and hardware." (Obshchestvenny reiting, December 21.)

Many publications write about the problems of Russian capital on the Kyrgyz market. Russia's Ambassador to Kyrgyzstan Yevgeny Shmagin confirms this in his statement to the press: "Russian private business is having a hard time in Kyrgyzstan. All businessmen suffered as a result of the March events, which is why the Russian business community is wary of Kyrgyzstan." (Gazeta.KG, December 20.)

UZBEKISTAN

The local press writes about Russo-Chinese rivalry in Central Asia, noting the growing number of clashes between the interests of Russia and regional states despite their foreign policy accord. It writes that the two powers' interest in the region will grow in the future.

"Central Asia is not suffering from the lack of attention to its resources, since China and Russia have a major interest in them, and India has recently joined the club. China is not pleased with Russia's growing influence on the former Soviet states; likewise, Russia is not content with the possibility of China 'taking over' these states. Therefore, China-Russia relations in the region are regulated by this restraining factor, which prevents unceremonious interference in the region's affairs and resources. Full China-Russia agreement on the exclusion of the United States from the region is reinforcing the effect of this factor." (TRIBUNE-uz, December 26.)

The republican media welcomed the news about the agreement on the delivery of 29 Russian Tor-M1 air defense missile systems to Iran. "In the last 60 years, the U.S. has launched wars against North Korea, Vietnam, Lebanon, Grenada, Panama, Iraq, Somalia, Yugoslavia and Afghanistan, but never against Iran. So, who is the aggressor? How can one protect oneself from such threats as are repeatedly made against Tehran or Pyongyang? This can certainly encourage a country to get the bomb, because nobody rattles the saber at the countries that have it." (Vesti.uz, December 21.)

TAJIKISTAN

Writing about Russia's need for labor migrants, the Tajik press cites statements by a spokesman of the Russian-based New Eurasia Foundation, which has drafted a program of settling migration problems in Russia and the Commonwealth of Independent States. Its first stage is to be implemented in Tajikistan, Kyrgyzstan and Kazakhstan. "Migrants are not a burden, and Russia is not a stepmother to immigrants from the CIS," the spokesman said. "Our intention is to support the operation of centers for comprehensive information, reference, legal and medical assistance to immigrants." (Avesta, December 23.)

http://en.rian.ru/analysis/20051230/42801633.html

[Ethyl]

http://www.wincoast.com/forum/showpost.php?p=497572&postcount=3

[Ethyl]

Political pipeline opens for natural gas network
Chavez: New era of regional cooperation in South America

BRASILIA, Brazil (AP) -- Venezuelan President Hugo Chavez said Thursday that Brazil, Argentina and his country would move forward on a proposed natural gas network spanning much of South America, adding that the agreement heralded a new era of regional cooperation with less U.S. influence.

"This is the end of the Washington consensus," Chavez said, referring to a set of U.S.-backed free market policies meant to solve South America's economic woes. "It is the beginning of the South American consensus."

After a three-president summit in the Brazilian capital, Chavez, Argentina's Nestor Kirchner and Brazil's Luiz Inacio Lula da Silva confirmed plans to develop a proposed 8,000-kilometer (5,000-mile) natural gas pipeline they hope will spread economic prosperity across vast swaths of South America.

The three leaders -- representing South America's three biggest economies -- have committed their "political will" to carry out the project and will meet again March 10 in Mendoza, Argentina, Chavez said after the meeting.

Kirchner and da Silva did not talk to reporters but in a joint statement at the end of the summit the three leaders instructed their energy ministers to give priority to the plan.

The pipeline would stretch from Caracas, Venezuela, to Buenos Aires, Argentina, cutting through Brazil's Amazon rain forest. It would also link to Bolivia, Paraguay, and Uruguay.

Chavez played down concerns that the pipeline would create competition for Bolivian natural gas and called on that country's president-elect, Evo Morales, who takes office Sunday, to sign on to the plan.

"I have spoken with Evo, and I can say there is nothing to fear," Chavez said. "There will be gas for 200 years of development."

The pipeline "is not to compete with but to complement" the economies of South America, he added.

"Evo has said he will nationalize the gas industry. I hope he does it soon," Chavez added, saying Morales' election had "paved the way" for the pipeline.

Chavez also predicted the pipeline would be completed within seven years and dismissed doubts about the technical feasibility of the project, saying, "The Russians built a 4,000-kilometer (2,500-mile) pipeline to supply gas to Europe."

The Venezuelan president predicted no difficulty in paying for the project, estimated at $20 billion (euro 16.6 billion). Chavez said several big Asian companies were willing to invest in the pipeline, including firms from China, though he did not identify them.
All countries involved will help finance the project, and Venezuela's state-run oil conglomerate will pour in "several billion" dollars, Chavez said, adding that "there will be more financing than we might need."

It wasn't clear how much each country would invest, but Chavez said the investments would pay for themselves if some countries -- especially Brazil and Venezuela -- change their gasoline-powered automobiles to natural gas.

According to Chavez, that shift alone would allow for a massive increase in gasoline exports by both Venezuela and Brazil, generating as much as $15 billion (euro 12.4 billion) in annual revenue.

Argentina has the world's largest fleet of cars running on natural gas, followed by Brazil.

Chavez said a first draft of the proposal will be announced by March 9, including plans for centers of development along its path.

http://edition.cnn.com/2006/WORLD/americas/01/19/brazil.summit.ap/

[Ethyl]

Georgia Shivers as Russia and Azerbaijan Rush to Restore Gas

TBILISI, Georgia, Jan. 23 - Azerbaijan and Russia restored partial natural gas flow to Georgia today, using an alternate pipeline to begin alleviating an energy shortage that developed after saboteurs exploded two Russian pipelines and an electricity transmission line on Sunday morning.

Despite the new gas flow, much of it sent from Russia through Azerbaijan while technicians worked to repair the damaged infrastructure, Georgia suffered a day with little heat and with scattered electrical blackouts.

Schools and factories were closed, and at nightfall, as temperatures hovered near freezing, large sections of the capital here fell dark. Many shops sold goods by candlelight, and unlit streets were black. It will be at least two days before electricity is fully restored, and as long as a week before gas lines are back to normal pressure, according to Georgian officials.

But with hospitals provided with heat and electricity available for more than half of all households, the officials said they had avoided a catastrophe.

Partial gas flow, they said, had been restored because of swift help from neighboring Azerbaijan, which agreed to sell Georgia an emergency fuel supply through a long-abandoned pipeline that had been repaired for use only in 2004 and 2005.

The gas, some from Azeri reserves, was mingled with increased flow into Azerbaijan from Russia, and sent along to Georgia, where supplies were running out.

The flow from Azerbaijan was switched on Sunday night, and by nightfall today the pipeline was expected to carry about two-thirds of Georgia's daily requirement of 4.5 million cubic meters a day, according to Georgia's deputy energy minister, Aleko Khetaguri.

"Hour by hour, the pressure is increasing," Mr. Khetaguri said. The repaired pipeline, he said, was the remnant of an old Soviet network that carried natural gas from Iran through Azerbaijan to Georgia before the 1980's.

Georgian officials appeared visibly pleased, and said that whatever the cause of the sabotage, the disruption to Georgia had been minimized by the use of this newly restored pipe. "If this had happened one year ago, the whole system would have collapsed," Georgia's president, Mikheil Saakashvili, said in an interview.

The cut in Russian gas lines also severed fuel flow to Armenia, which is downstream from Georgia in the pipeline network. Armenia, however, had fuel reserves and reported fewer problems.

There was no new insight into what caused the four explosions that toppled two power trellises and exploded two gas pipelines in southern Russia Sunday morning.

Several Islamic groups operate in the area, often in collaboration with Chechen separatist fighters and terrorists. Armed irregular formations also operate inside Georgia, inside the separatist enclave of South Ossetia.

So far, no one has claimed responsibility for the sabotage. That it occurred in wintry mountainous terrain and at widely separated locations suggests that the saboteurs were technically sophisticated and aware of the workings of the energy system.

President Vladimir V. Putin of Russia ordered the Federal Security Service, the domestic successor to the Soviet K.G.B., to increase security at energy plants in the region, and instructed the head of Russia's police to assist in the investigation, Russian news agencies reported.

But Russian officials, who have suggested that militants might be involved, offered no further public suggestion about whom they believed was responsible for the sabotage.

"It would be incorrect to jump to any conclusions before the end of the investigation," said Mr. Putin's envoy to the region, Dmitry Kozak, according to Interfax news agency.

Mr. Saakashvili, who said on Sunday that he suspected Russia had orchestrated the blasts to put political and economic pressure on Georgia, repeated his remarks today.

"The whole circumstances look very dubious to us," he said, adding that by his reading of the map, the areas where the explosions occurred are under Russian border guard control and are not used by any one insurgent group.

Mr. Saakashvili's government also stepped up its public accusations against Russia, calling for Moscow to turn over to Georgia two men it says are members of Russia's intelligence services and who it accuses of organizing sabotage against Georgian power lines in 2004.

Russia has refused to hand over the men in the past, and seemed unlikely to change its position.

Demonstrators outside the Russian embassy also carried anti-Russian placards, and an image of Mr. Putin that read "Gasputin," a scornful play on Rasputin. But although Georgia, formerly under Communist rule, has broken from Moscow's sphere and pursued a distinctly pro-Western course, some Georgian residents expressed dismay at the latest sour turn in relations.

In the Samgori district at Tbilisi's edge, Ivetta Bakradze, a schoolteacher, had sealed off most of her three-room apartment and limited herself to her kitchen. There she was huddled against the chill, bundled beneath sweaters and a scarf, hoping to preserve the little heat emitted by a single propane burner.

She was less interested in the political exchanges, she said, than in having her utilities restored.

Since the collapse of the Soviet Union, blackouts and heating shortages became almost synonymous with Georgia. But this year, Ms. Bakradze said, as widespread repairs and upgrades had made gas and electric service reliable, those problems had been almost forgotten.

The sudden loss of heat was an unwelcome reminder. "We have been seeing Georgia getting revived: streets are lighted, the city looks different," she said.

Then she pointed at the dim, cold room. "Now, she said, "it's catastrophic."

http://www.nytimes.com/2006/01/23/international/europe/23cnd-georgia.html?_r=1

[Ethyl]

Georgians shiver as gas supplies rushed from Iran

TBILISI (Reuters) - Georgians shivered without gas and power on Saturday in the coldest winter for a decade as officials rushed to secure new gas supplies from Iran.

Georgia was left without gas after explosions last Sunday at a pipeline in Russia. The blasts also cut a major power line and on Thursday high winds severed another cable leaving the country without electricity.

New gas supplies from Iran would arrive by Sunday night at the earliest, officials said, but it might take days for the gas to flow through pipes to reach Georgians, who are trying to keep warm around makeshift wood-burning stoves.

"My kids are freezing and my patience is running out," said Lia Davitashvili, a Tbilisi resident who has been trying to keep her two children warm without gas for a week and without electricity for three days.

She was using an oil stove after queueing for three hours on Friday for subsidised oil supplied by the government. The temperature in Tbilisi rose to 2 Celsius (35.6 Fahrenheit) on Saturday.

Georgia, a Caucasus state of 4.5 million on the Black Sea, agreed with Iran on Friday to bring gas via neighbouring Azerbaijan, but it was unclear if the additional supply could cover demand in the coldest winter for a decade.

Supplies from Russia are still cut, cooling relations between Moscow and Tbilisi even further.

President Mikhail Saakashvili, who rose to power on the back of the "Rose Revolution" in 2003, has accused Russia of deliberately blowing up the gas pipeline and then dragging its heels over repairing it to put pressure on Georgia.

Moscow denied the allegation, accused Tbilisi of hysteria and said it was doing everything to repair the pipeline.

Russian gas workers quoted by the Itar-Tass news agency said they hoped the gas pipeline to Georgia would be repaired by the end of the weekend.

Tbilisi's mayor, Gigi Ugulava, told Reuters by telephone that the capital was still undersupplied with electricity.

"This means that about 30 percent of Tbilisi's residents are not getting electricity," Ugulava said.

He added that city officials had organised a revolving timetable so that every district had some power and that wood and bread were being given out free to the poor.

"We are waiting for supplies of natural gas from Iran, which are expected to arrive on Monday," he said.

Supplies from Iran were agreed on Friday but it was unclear how long it would take for the gas to get to people's homes.

Georgia is expecting to receive about 2 million cubic metres of gas a day from Iran and 2.5-3 million cubic metres a day from Azerbaijan. The daily requirement for the whole country is between 5 and 6 million cubic metres.

http://today.reuters.co.uk/news/newsArticle.aspx?type=worldNews&storyID=2006-01-28T113758Z_01_L28639722_RTRUKOC_0_UK-GEORGIA-POWER.xml&archived=False

[Ethyl]

Russian gas flows to Georgia once more

TBILISI (Reuters) - Russian gas started to flow to Georgia again on Sunday, a week after pipeline explosions cut supplies during the coldest winter in a decade, straining relations with its northern neighbour, officials said.

The unexplained blasts in Russia also cut a major power line and high winds later in the week severed another cable, starving Georgia of electricity.

Georgians have been shivering around makeshift stoves, reduced to queuing for kerosene and foraging for wood, bringing back unwelcome memories of the chaos that plagued the years after the collapse of the Soviet Union.

"Russian gas has already crossed the Georgian border," Georgian Prime Minister Zurab Nogaideli told reporters.

He added that some houses in Tbilisi would have gas from 12 p.m. British time and expected supplies to the rest of the country to get back to normal on Monday.

Temperatures in Georgia have been well below freezing, bitterly cold for a country better known for its vineyards and balmy Black Sea resorts.

Georgia has also agreed with Iran to bring gas via neighbouring Azerbaijan. "It is very important for us to keep that alternative source of gas supply," Nogaideli said.

The Georgian capital had electricity once more on Sunday, but officials warned it could be several days before the damaged power lines were mended to restore power to the whole country.

FROSTY

The gas emergency has damaged relations between Moscow and Tbilisi, already frosty since President Mikhail Saakashvili, who rose to power after a "Rose Revolution" in 2003, made it clear he wanted to align his country more closely with the West.

He accused Russia of deliberately blowing up the pipeline and then dragging its heels over repairs to put pressure on Georgia, a Caucasus state of 4.5 million people, to surrender ownership of its domestic network to Moscow.
finish repairs.

"The after-effects of the accident have been wholly eliminated. The pipeline started to be filled with gas ... immediately after the completion of repair work," Russian state gas monopoly Gazprom said in a statement.

Russia is the world's second largest oil exporter and provides a quarter of Europe's gas. But its reputation as a reliable supplier was shaken in the New Year after gas flows to Europe suffered when it cut Ukraine's supply over a pricing row.

Ukraine's pro-Western leadership has said Moscow was using its vast energy sources as a political weapon.
http://today.reuters.co.uk/news/NewsArticle.aspx?type=businessNews&storyID=uri:2006-01-29T134240Z_01_L29475540_RTRUKOC_0_UK-GEORGIA-POWER.xml&pageNumber=1&summit=

[Ethyl]

Shell will invest despite decline in earnings

THE HAGUE Royal Dutch Shell on Thursday reported a 4 percent fall in fourth quarter net profit and a 2 percent fall in sales from a year earlier, as the damage from hurricanes Katrina and Rita outweighed the high price of oil.

Net income fell to $4.4 billion from $4.6 billion in the year earlier period, the company, based here, said. Profit excluding changes in inventory values gained 3 percent to $5.4 billion, in line with analysts' median forecasts.

The drop in earnings contrasts with Exxon Mobil, which this week said fourth-quarter profit climbed 27 percent to a record $10.7 billion.

Shell's chief executive officer, Jeroen van der Veer, is increasing capital spending this year by 27 percent to $19 billion, more than BP, as Shell seeks new reserves, which at current rates will run out faster than those of its main competitors.

"The real dilemma they have is future reserve growth," said Chris Tinker, head of equity research at ICAP in London. "Shell isn't up to the game compared with BP."

Shell is recovering from a major accounting scandal in which it was forced repeatedly to reduce the size of its estimated oil reserves in 2004 and 2005, ultimately forcing the departure of then-chief executive officer, Philip Watts.

It also led the company to merge its British and Dutch arms into a single company.

In comments on the results, Van der Veer tried to emphasize the positive: "record cash and earnings" in the full year 2005 and "success in exploration and gaining access to new resources."

The company said it expected to add about 750 million to 850 million barrels to proven reserves this year, and expected to return to a "100 percent reserves replacement" by 2008.

Antoine Leurent, an analyst with KBC Peel Hunt, said the results were more or less in line with expectations and that the reserve replacement showed Shell was "getting back on its feet again."

Shell said it expected the hurricane damage to production to total about $275 million, of which $130 million had already been spent. It said it did not know how much of that it would ultimately get back from insurance companies. Shell and BP suffered more damage from the hurricanes than other oil companies.

Shell last year discovered six large fields known as "big cats" in countries including Norway, Nigeria, Australia and Malaysia, according to Credit Suisse. Big cat exploration projects are those where Shell hopes to find at least 100 million barrels.

Shell, which last year merged its Dutch and British holding companies, ending a century-old separation, is the third of the world's top-five oil company "supermajors" to report fourth-quarter earnings. Together, profit may reach $29 billion for that period, according to the companies and estimates by Credit Suisse.

Earnings at Exxon Mobil, the world's largest oil company, capped the most profitable year for any company in U.S. history. Chevron said Jan. 27 that fourth-quarter profit rose 20 percent to a record $4.14 billion.

BP, the second-biggest oil company, is expected to report earnings of $4.6 billion on Feb. 7. Total, based in France, may post $4 billion on Feb. 15, Credit Suisse said.

Brent crude oil averaged $57.85 a barrel in the quarter, 29 percent more than a year ago, and this has been a boon to many oil companies.

Benchmark U.S. natural gas rose 77 percent to a record high. Oil prices peaked at $70.85 a barrel in New York on Aug. 30, a day after Katrina struck the United States. Rita swept through almost four weeks later, and production has yet to return to normal.

http://www.iht.com/articles/2006/02/02/business/shell.php

[Ethyl]

http://www.wincoast.com/forum/showpost.php?p=547824&postcount=1

[Ethyl]

Nine foreigners abducted in Nigerian oil attacks

LAGOS (Reuters) - Nigerian militants launched a string of attacks on the world's eighth largest oil exporter on Saturday, abducting nine foreign workers, bombing a major oil tanker terminal and sabotaging two pipelines.

The Movement for the Emancipation of the Niger Delta said the raids were a response to military helicopter gunship attacks on villages in Delta state earlier this week and would be followed by another wave of attacks "on a grander scale".

"We decided in response to pleas from our kin in these communities, to carry out strikes against oil and gas facilities in Delta state," the group said in an email.

The armed militants stormed an offshore oil services barge operated by U.S. oil services company Willbros and abducted nine foreign workers -- three Americans, one Briton, two Thais, two Egyptians and a Filipino.

"These individuals and facilities were well guarded by a large number of soldiers who resisted for an embarrassingly short period before escaping to ensure their personal safeties," the group said in an email, naming all nine hostages.

A senior oil industry source said Royal Dutch Shell suspended loadings at the 380,000 barrel-a-day Forcados terminal after militants bombed the tanker loading platform.

The company is still trying to ascertain the damage to the platform, which is located three miles (5 km) offshore, but has already begun shutting oilfields in the area which feed the terminal, the source added.

Militants also attacked a major Shell crude oil pipeline at Ekeremor-Yeye, and a gas pipeline running from the delta to a refinery in northern Nigeria operated by state-run Nigeria National Petroleum Corp.

The impact on operations was not immediately clear.

MORE ATTACKS TO FOLLOW

Militants said this series of attacks was specifically focussed on Delta state in response to the military attacks earlier in the week, and that another wave of attacks "on a grander scale" would follow shortly.

Delta state accounts for about a quarter of Nigeria's 2.4 million barrels per day production.

"Workers in the oil industry are hereby requested to vacate all installations with immediate effect," the militants said.

The movement is believed to be a coalition of existing militant groups in the delta and wants more local control over the oil wealth of the Niger Delta.

Militancy in the delta, a vast region of mangrove swamps and creeks that accounts for almost all of Nigeria's output, is rooted in the extreme poverty of the majority who live there.

Their resentment at a multibillion dollar industry that has brought few benefits for them, and a breakdown of law and order, have fuelled a cycle of attacks, army repression, kidnappings, sabotage and oil theft.

The military said their attacks this week were aimed at gangs stealing crude oil from pipelines in Delta state, but community leaders said they targeted villages suspected of harbouring militants.

Militants had killed at least 14 soldiers in an attack on an oil platform on Jan 13 and held four foreign oil workers for 19 days. The earlier wave of militant attacks in December and January cut up to 10 percent of the OPEC nation's output.

"Expatriates must realise that they have been caught up in a war and the Nigerian government can do nothing to guarantee the security of anyone," the militants said.

http://today.reuters.co.uk/news/newsArticle.aspx?type=topNews&storyID=2006-02-18T120430Z_01_L18515509_RTRUKOC_0_UK-ENERGY-NIGERIA-ATTACKS.xml

[Ethyl]

Pakistan Grants Exploration License To Malaysia Petronas

ISLAMABAD (Dow Jones)--Pakistan Monday granted a petroleum exploration license to Malaysia-based Petronas Carigali Sdn. Bhd.

In a statement Monday, the Ministry of Petroleum and Natural Resources said the new block is located in southern Sindh province covering an area of 1838.09 square kilometers.

The company will invest $10.15 million in the initial period of three years, the statement said.

Petronas is presently the operator of two exploration blocks in Pakistan and is producing 32 million cubic feet of gas a day and 109 barrel of condensate oil a day, according to the statement.

Pakistan meets more than 80% of its energy requirements through imports.

According to official estimates, Pakistan has 27 billion barrels of expected oil reserves, of which only 3% has been explored.

The country also has 280 trillion cubic feet of natural gas, of which only 42% has been explored so far.

The government has been encouraging domestic and foreign firms to step up domestic exploration activities.

http://sg.biz.yahoo.com/060306/15/3z62f.html

[Ethyl]

Japan cuts Iran oil imports over N-issue
(wierd source, eh?)


TOKYO. March 17, 2006. KAZINFORM - Japan’s top oil company is slashing crude imports from Iran as a precaution given the risk to supply from the Islamic republic in the deepening crisis over its nuclear program, analysts said yesterday.
While privately-run Nippon Oil is unlikely to have any political agenda, its move is bound to attract the attention of Iranian leaders who count on Japan as their biggest oil customer, they added, KAZINFORM refers to Agence France Presse.

Nippon Oil said its imports from Iran will be cut 15 percent this year due to a change in brokers and in part due to the international standoff over Tehran’s nuclear ambitions. Japan, the biggest buyer of Iranian oil, as a result becomes the first country to reduce its exposure to Iran since President Mahmoud Ahmadinejad took office in August, upping confrontation with the West.

“Japan is one of the most conservative countries in the world when it comes to the supply of oil for the refineries,” said Tony Nunan, manager for energy risk management at Mitsubishi Corp. “With Iran, there’s concern that if there are any sanctions, either imposed by the UN — which we don’t expect — or retaliation by Iran against other sanctions, there could be problems with supply,” he said. “It could have been that (the contracts were) up for term renewals and Nippon Oil decided to simply reduce its volume at an appropriate time.”

Asia’s largest economy is nearly entirely dependent on foreign oil. It is Iran’s biggest oil customer, taking around a quarter of its exports, although it buys more in total from Saudi Arabia and the United Arab Emirates. Iran is the second-largest producer within the OPEC oil cartel with an output quota of 4.11 million barrels per day (bpd). Other major Japanese refineries contacted by AFP said they had no plans to reduce imports from Iran.

Nippon Oil itself played down its decision, saying it would not reduce direct imports, only those done through brokers. “Trade between Iran and our company will never decrease. It could increase in the future,” Nippon Oil President Fumiaki Watari said, as quoted by a company spokesman.

In 2004, Japan inked a $2 billion contract to develop Azadegan in southwestern Iran, considered one of the world’s biggest untapped oil reserves. On the other side, Nippon Oil’s move could add to Iranian conspiracy theories that the United States is trying to exert pressure via Japan, said Hidenobu Sato, an Iran researcher at the Middle East Research Institute of Japan. “From a business standpoint, the announcement will have no effect on either Japan and Iran. Iran has many options to sell its oil,” Sato said.

Oil prices were flat in Asian trade yesterday as the market balanced a jump in US crude stockpiles against concerns over Iran and Nigeria, where rebels threatened to step up attacks on foreign oil workers and facilities. Nippon Oil shares shed five yen to close at 891 on the Tokyo Stock Exchange.
http://www.inform.kz/txt/showarticle.php?lang=eng&id=140551

[Ethyl]

U.S. opposes Iran oil pipeline as dollar fluctuates
By Saeed Shabazz
Staff Writer
Updated Mar 20, 2006, 04:57 pm

UNITED NATIONS (Finalcall.com) - Phyllis Bennis, senior fellow, Middle East/UN Affairs expert for the Washington-based Institute of Policy Studies, told the Inter Press service back in December that “2006 would be the crucial year” in determining whether the United Nations could “reclaim its role as an independent actor on the world scene, or whether the virulent United States choice of either sidelining or undermining the global organization would prevail.”
Ms. Bennis is the author of the book “Calling The Shots: How Washington Dominates Today’s UN.” When asked by The Final Call during a recent telephone interview, if the U.S. would be able to use the UN Security Council to get its way on sanctions against Iran, she said she feared that the present UN Security Council was not as strong as the one that would not give the U.S. and Britain permission to attack Iraq.

“The U.S. won’t find the type of opposition from the (15-member) Security Council this time that it faced in the run up to the war in Iraq,” Ms. Bennis said.

Ms. Bennis also said that, because of the UN’s culture of secrecy and non-answerability, there would not be any open discussion on what some say is the real reason for the U.S. pushing for sanctions; and that is Iran’s threat to sell oil only using the euro.

The U.S. says it wants Iran before the Security Council, accusing the Islamic Republic of secretly developing nuclear weapons.

Iran’s retort is its nuclear research is peaceful and that the U.S. charge is politically motivated.

“The U.S.’s true intentions for going after Tehran may have more to do with what’s hidden beneath Iran’s arid soil than their nuclear ambitions,” writes Joshua Frank, author of “Left Out! How Liberals Helped Reelect George W. Bush,” in a Jan. 24 story on Znet “War with Iran, It’s More Than Nuclear.”

In an email response to the question on how would the U.S. get Iran before the Security Council, Mr. Frank said: “The U.S. will most likely approach China and Russia before really trying to push the Iran nuclear issue to the Security Council. I am not sure if the U.S. wants to be embarrassed by China and Russia by pushing this thing too fast. They don’t want an Iraq, part two here.”

Mr. Frank repeated what he wrote in his Znet piece. “Underlying most of this isn’t really the nuclear issue. It is Russia and China’s economic interests in Iran that are at stake. And oil is at the top of the list,” Mr. Frank said.

“Currently, the second largest untapped oil reserve in the world is in Iran. Iran has five times more oil than the U.S.. Iran is also the number two producer in the Organization of Petroleum Exporting Countries (OPEC),” writes Mr. Frank in his Znet article.

He said China has its sights set on Yadavaran, one of Iran’s largest untapped oil fields. According to the article, Russia ships crude to Iran, where it is refined for domestic consumption; and in return, Iran delivers an equivalent amount of oil to Russia.

Iran has announced that there would be a reduction in oil production if it is sanctioned by the UN, according to tehrantimes.com.

Reuters reported on Jan. 27 that crude had jumped to $67 a barrel “as nagging supply disruption worries” centering on problems facing major producers Nigeria (separatist attacks on reservoirs) and Iran.”

A chief economist for the European Central Bank told reporters, on Jan. 23, that higher oil prices may spur acceleration in inflation; and that monetary policy was likely to become more euro-favorable, according to Bloomberg.com, which also reported that the European Central Bank reports that there has been a faster economic growth in the 12 nations that share the euro, than was anticipated.

All of this talk about the growth in the euro has the Bush administration up in arms as observers say the U.S. will never allow the Iranian government to open an oil exchange (bourse) that trades petroleum in euros. Analysts note that America monopolizes the oil trade, and Iran’s threat to open its exchange in March dealing only in euros would force the falling dollar to go nose-to-nose with a more stable currency such as the euro. (The dollar now accounts for 68 percent of global currency reserves, up from 51 percent just a decade ago.)

The U.S. has already begun its program of arm-twisting, as is evident in the statement that, if India did not vote for referral of Iran to the Security Council during the Feb. 3-4 meeting of the International Atomic Energy Agency (IAEA) in Vienna, the U.S. would pull out of a deal with India concerning nuclear energy cooperation.

India has also announced that it may opt out of the Iran oil pipeline project worth $7 billion, fearing hostile reaction from the U.S. But, Pakistani President Pervez Musharraf, in a Jan. 26 interview with Agence France Presse, stated that his nation was standing firm on building the pipeline with Iran amid pressure from the United States.

The Bush administration has publicly opposed the project, arguing that Tehran needed to be isolated until it was willing to give up its nuclear program.

http://www.finalcall.com/artman/publish/article_2489.shtml

[Ethyl]

Russia holds the solution to its neighbour's shortage

THE man with the solution to China’s fuel problems arrives in Beijing today, but there are no signs that a convoy of fuel tankers from Siberia is following President Putin.
China is desperate for new and reliable supplies of crude oil. Its energy companies are scouring the globe for opportunities, but the most obvious solution remains out of reach. Only a trickle of Russian oil, about 5 per cent of China’s daily requirement, arrives across the northern border by rail, a frustration for planners in Beijing, who have lobbied for a pipeline between Siberian oilfields and Chinese refineries.



Talks between Mr Putin and Hu Jintao, his Chinese counterpart, will focus on Russia’s East Siberia-Pacific oil pipeline, a project that started last December after years of wrangling between Moscow, Beijing and Tokyo. The first leg of the 4,100-kilometre (25,475-mile)pipeline will be built from Taishet in East Siberia, skirting north of Lake Baikal, to Skovorodino in the Amur region. From there, a second leg will send the oil to a Pacific port.

Anxious to preserve its energy security and prevent China’s rampaging economy from gobbling up Siberia’s reserves, Japan has lobbied for the pipeline be built to Russia’s Pacific coast before any link is built to China. Beijing has tried to persuade the Kremlin that the main priority should be a spur line to China’s hungry refineries. CNPC, the Chinese state oil company, last year helped Rosneft, the Russian state oil company, with a $6 billion (£3.4 billion) loan to finance its purchase of Yganskneftegaz, the main asset of Yukos.

Chinese officials expressed frustration with Russia’s indecision over which Asian customer to favour or disappoint. “One moment Russia is saying they have made a decision, the next saying that no decision has been made. The Sino- Russian pipeline question is one step forward, two steps back,” Zhang Guobao, vice- minister of the National Development and Reform Commission, said.

The pipeline has been dogged by controversy. Its route in close proximity of Lake Baikal, the world’s largest deposit of fresh water, angered Russian environmental groups.

The Kremlin’s indecision is more likely to reflect historic tensions between Russia and China, worsened by the extraordinary expansion of China’s economy and fears that Russian oil will be captured by its dynamic Asian neighbour.

The International Energy Agency reckons that China will consume an extra 400,000 barrels of oil per day this year, a 6 per cent increase from 2005 and more than three times the rate of global demand growth. China’s refineries are straining against government price controls that create incentives to export fuel to more profitable markets, a major factor in the country’s fuel shortages.

Russia cannot ignore China’s energy market, but it is anxious to maintain control over its export routes. Mikhail Khodorkovsky’s attempts to negotiate unilateral oil export deals with China were the Yukos chief’s undoing. This time the deal will be done by President Putin or not at all.

http://business.timesonline.co.uk/article/0,,13132-2095074,00.html

[Ethyl]

Oil, Gas Reserves Found In Afghanistan
Geologists in Washington said Afghanistan holds 18 times as much oil and triple the amount of natural gas that was previously thought, AP reported on March 14. The survey, put forward by the U.S. Geological Survey and Afghanistan's Ministry of Mines and Industry, was aimed at drawing energy companies into considering the development of petroleum fields in Afghanistan. The survey said some 1.6 billion barrels of oil exist mostly in the Afghan-Tajik basin, while about 15.7 trillion cubic feet of natural gas sits mainly in the Amu Darya Basin. Afghan President Hamid Karzai called the survey's estimates "very positive findings," especially since Afghanistan imports most of its energy. "Knowing more about our country's petroleum resources will enable us to take steps to develop our energy potential, which is crucial for our country's growth," he said. The independent U.S. trade and development agency paid $2 million for the assessment, which took nearly four years to complete. MR
http://www.azadiradio.org/en/dailyreport/2006/03/15.ASP

[Ethyl]

On the recent Ukranian vote and Russian influence by turning off its gas supply...

http://www.wincoast.com/forum/showthread.php?p=602129#post602129

[Ethyl]

Bush drops objections to an Iranian gas pipeline to India and Pakistan

March 7, 2006, 9:48 AM (GMT+02:00)

Winding up his tour of Afghanistan, India and Pakistan, President George W. Bush said in Islamabad Saturday, March 4: “Our beef with Iran is not the pipeline, our beef with Iran is in fact they want to develop a nuclear weapon and I believe a nuclear weapon in Iranian hands will be very dangerous for all of us.”

He refused to replicate the civilian nuclear deal with Pakistan he had just signed with India, but said: “We understand the need to get natural gas into the region, that’s fine.”

The US-India deal gives New Delhi access to US nuclear technology without signing the Non-Proliferation Treaty.

Pakistan, India and Iran are meeting his month to finalize a deal for a $7 bn pipeline, 2,600 kilometers that will bring Iranian natural gas to the growing economies of the two subcontinental powers.
http://www.debka.com/headline.php?hid=2027

[Ethyl]

:happy_12: Delhi's options beyond Iran

When US President George W Bush was in India this month, he caused a flurry of commentary, especially in the Indian media, by appearing to lift long-standing American objections to the construction of a natural gas pipeline from Iran through Pakistan to India.

"Our beef with Iran is not the pipeline," he said in Islamabad. "Our beef with Iran is the fact that they want to develop a nuclear weapon ... We understand that you [Pakistan] need to get natural gas, and that is fine."

Yet as recently as mid-January, the United States had reiterated once more its opposition to an Iran-Pakistan-India pipeline. A week later, US Energy Secretary Samuel Bodman was in Islamabad to offer clarifications. The US continued to have "serious reservations" about the project. "Other pipeline projects are very good and we are ready to help."

If this was not clear enough, a White House National Security Council spokesman added: "As we stated before, the US government does not support the Iran-Pakistan-India [IPI] pipeline. We have repeatedly expressed concerns about international participation in energy projects with Iran." The genie was back in the bottle. Or was it?

A project for Indian importation of Iranian gas was first discussed in 1993, when relations with Pakistan were much worse and an undersea pipeline was proposed. This, however, turned out to be much too exorbitant, so Pakistan was eventually brought into play. Islamabad lifted its reticence to let Iranian gas cross its territory to India in early 2000, a few weeks after US president Bill Clinton, visiting India, met there with the Ambani family.

The Ambanis run Reliance Industries, a likely buyer of gas from Iran that has built an enormous petrochemical complex in Gujarat state near India's border with Pakistan.

Bodman's trip occurred coincidentally only a few days before the first trilateral meeting on the pipeline among the Iranian, Pakistani and Indian sides. Taking place in Tehran, it was supposed to prepare for a trilateral ministerial meeting set for April. Until relatively recently, all contacts had been bilateral, either between Iran and India or between Iran and Pakistan.

Last year, however, saw more than a half-dozen India-Pakistan meetings about the pipeline project. Meanwhile, construction costs for the pipeline itself, estimated at almost US$5 billion near the beginning of the decade, have now risen to over $7 billion.

Iran insists that India sign a "take-or-pay" contract, meaning that India would be obliged to pay for gas whether the gas was actually imported and consumed. India has coyly suggested a "supply-or-pay" arrangement in which Iran is contractually obligated to deliver gas at the Indian border with Pakistan, or else pay for the quantity not delivered.

Further complicating the situation, the gas would be of poor quality. India has asked to receive gas rich in such petrochemicals as butane, propane and ethane; but Tehran has rejected the idea. (This is one of several reasons why the level of Iranian gas exports to Turkey remain relatively low: Tehran insists on selling low-quality gas at high prices.)

Also, the sides are still far apart on the price. A year ago, erstwhile Indian petroleum minister, Mani Shankar Aiyar, stated that Iran wanted India to pay LNG (liquefied natural gas) rates for regular natural gas. LNG is more expensive because of the cost of liquefaction and subsequent regasification processes. According to Aiyar, the total including transportation and transit fees would be 50% higher than Indian industry was generally willing to pay. Aiyar suggested, moreover, that discounts from the correctly calculated price would be proper for large-quantity purchases.

The pricing of natural gas domestically within Pakistan is likewise an issue. The Pakistani government heavily subsidizes that price, and any attempt to raise it would surely provoke unrest. Yet if the pipeline were built, Pakistan, for its part, would reap an estimated $700 million or more per year in transit fees and also get to use the gas domestically.

Yet Pakistan is prospecting for natural gas on its own territory and seeks the right not to consume contracted quantities of Iranian gas if it does not need it. Thus Bodman's trip to Islamabad was specifically intended to help provide American technical assistance for prospecting natural gas on Pakistani territory, and so decreasing its need for imports, especially from Iran.

The recent agreement whereby the US will help India build nuclear power plants is likewise designed in part to provide groundwork for satisfying India's growing energy demand by means other than Iranian natural gas. In the end, it is far from certain that India need rely on Iran. Recent finds (since 2002) include 57 billion cubic meters (bcm) by Cairn Energy offshore of Andhra Pradesh, 400 bcm by Reliance also offshore of Andhra Pradesh, and 28 bcm by Reliance offshore of Orissa.

Importing gas from Bangladesh was an option for India, but Bangladesh did not want to export until domestic supply questions were clarified and reserve figures better calculated. In 2004, Unocal, the lead on the Bangladesh project, lost interest after years of delay. A pipeline from Myanmar across Bangladesh to the Indian state of West Bengal remains a possibility. Shell has contracted to receive LNG supplies from Oman at its terminal in Gujurat.

As a result of current conjuncture, the Turkmenistan-Afghanistan-Pakistan (TAP) pipeline has been getting a second look. Originally conceived in the mid-1990s, this project was shelved during the Taliban's years in power in Kabul. However, the Russian-Ukrainian gas conflict at the beginning of this year finally brought home to President Saparmurat Niyazov Turkmenbashi the danger of Turkmenistan's near-exclusive dependence on Russian pipelines for exports.
Although pipeline security in Afghanistan remains at present problematic, recent attacks on energy infrastructure in Pakistani Balochistan (an energy-rich region but one still poor and disfavored by the present government) raise equally the question of the security of an IPI pipeline. An interesting variant of the TAP project sees it extended beyond Pakistan into India.

India's natural gas consumption in 2003 was 27.4 bcm, projected to rise to almost 40 bcm by 2010 and over 50 bcm in 2015. However, the growth of demand for natural gas in India is dependent on the domestic power generation industry, which at present is about two-thirds fed by coal, but is projected to be one of the biggest consumers of natural gas.

The Electricity Act of 2003 foresees unbundling and eventually privatizing the assets of India's state electricity boards into generation, transmission and distribution companies. Yet the Turkish experience is a noteworthy caution. In the late 1990s, Turkey planned huge increases in natural gas imports during the present decade, while legislating a similar dismantlement of state-owned and state-run electricity enterprises.

Turkey went so far as to amend its constitution so that power industry companies were no longer required to be state-owned. However, the process of unbundling and privatization has flagged. As a result, the government in Ankara recently revised significantly downward its projected gas import needs for the remainder of the decade. One should therefore be cautious about projections in the growth of Indian natural gas import requirements, and hence about whether a pipeline from Iran would be necessary or cost-effective, especially given other potential suppliers.

The US knows that it cannot veto single-handedly the construction of a natural gas pipeline from Iran to India via Pakistan, but it continues to discourage the attempt. In fact, external factors have made such a pipeline impractical until now. In the future, other import options for India and Pakistan, as well as prospecting and resource development on the territories of the two states and developments in their electricity sectors, may well make dependence on Iran unnecessary.

http://www.atimes.com/atimes/South_Asia/HC28Df06.html

[candypreet]

good posts there

[Ethyl]

CENTRAL ASIA: Weekly news wrap

ANKARA, 7 April (IRIN) - This week in Central Asia, Human Rights Watch (HRW) on Thursday criticised Germany's decision not to launch an investigation into Uzbekistan's former interior minister, Zokirjon Almatov, for alleged crimes against humanity during an uprising in the eastern Uzbek city of Andijan last May.

German law allows prosecution of cases of torture and crimes against humanity regardless of where they were committed and the nationality of the perpetrators and victims. But in this case, federal prosecutors have refused to proceed on the basis that the Uzbek government would not cooperate with an investigation given its record of serious human rights abuses.

The European Union (EU) imposed a visa ban against 12 top Uzbek officials it considers responsible for the Andijan crackdown, with Almatov at the top of the list. However, Almatov sought medical treatment in Germany and was granted a visa, a few days before the ban came into force. Eight Uzbek victims, accompanied by HRW, submitted the complaint and will challenge Berlin's decision.

Turkmenistan signed an energy agreement with China on Monday on the construction of a gas pipeline between the two countries, Radio Free Europe/Radio Liberty reported on Tuesday. According to the agreement, signed in Beijing, Turkmenistan will supply China, a rapidly growing economy , with 30 billion cubic metres of natural gas every year for 30 years, beginning in 2009. Turkmenistan has the fourth largest reserves of natural gas in the world.
At the meeting, Turkmenistan's Niyazov and his counterpart Hu Jintao also discussed cooperation in fighting terrorism and Chinese investment in Turkmenistan, RFE/RL reported.

The US has pledged to give the former Soviet republic US $450,000 to help combat drug trafficking and improve security, English Politics News reported. Washington has sought cooperation on security issues with Turkmenistan, which borders Iran and Afghanistan. The country will also be given additional US funds to help develop the justice system, maritime security and English language training projects.

An ethnic Uighur political dissident from China, with Canadian citizenship, was arrested in the Uzbek capital on 27 March, AFP reported on Wednesday.

The man was a political activist in China and fled the country in 1996. Beijing has been widely criticised for its poor human rights record in its eastern autonomous region of Xinjiang Uighur. He was given refugee status in Canada in 2002, but was in Uzbekistan to visit his parents who live in the former Soviet country. He now faces possible extradition to China, RFE/RL reported on Wednesday.

http://www.alertnet.org/thenews/newsdesk/IRIN/eee0c5a7186b58527104824a38efa0e6.htm

[oslonor]

The Rise of Afghan Empire

These are reasons that we think an "Afghan Empire" is necessary and is possible.

1. Afghanistan is culturally a homogenous country. In anthropology, Afghans are regarded as an Iranian people. (Note: This has nothing to do with Citizens of Iran, the neighboring country, we are talking about anthropology). The majority speak some branch of an Iranian language. Tajiks, Pashtuns and Nuristanis are the major Iranian groups. Hazaras are non-Iranian but speak dari, an Iranian language. Uzbeks are turks, but their language and culture have been deeply influenced by the Iranian culture and language. Even Uzbek grammar has been affected by Iranian language grammar rules.

2. An "Afghan Empire" is supported by the all regional powers and the Great powers outside the region. India, China and Russia and US will support an "Afghan Empire".

3. Even Iran will reluctantly support an "Afghan Empire". The reason is cultural and historical. Iran under Azeri rule has no problem in confrontation with "The Republic of Azerbaijan" despite that these ruling groups are ethnically related. Iran supports Armenia a Christian country against "The Republic of Azerbaijan" who is ethnically Azeris and related to Azeris in Iran. But Iran does not want any confrontation with Afghanistan because Afghanistan claims to the Persian heritage and history is much stronger than Iran's claims to Persian history.

3. Afghanistan can claim a historical and cultural leadership over Central Asia and it will accepted by those countries in Central Asia with no questions asked.

4. An alliance of Persians and Afghans would make it possible for Presians to remove Azeri-Turks from power and extend Afghan power into Iran. This can be done in several stages where Khorasan economy can be integrated into Afghan economy. This requires major investments by Americans in Afghanistan. That is the gradual way. The fast way would be a few declarations by Afghanistan governmetn about the Persian heritage of Afghanistan. That would create political chaos in Iran and would lead to the fall of Azeri Turk regime in Tehran. Either way Azeri Turks will lose power in Iran.

5. Afghanistan culture and traditions makes it possible to oppose any attempts to impose "Multi-Culturalism" whereby foreign forces import large number of people from some poor country into another country in order to destroy the ethnic identity of that country and enable foreign control of the country. That is no invasion of Pakistanis or Azeri Turks allowed into Afghanistan.

6. The center of this empire should be moved to Herat from Kabul as it has been in the past history. This would reorient Afghanistan from Pakistan to Khorasan and Central Asia.

7. What connects Afghanistan with Central Asia and Iran is Afghanistan has a central Asian culture which they share with Central Asia. Half of Iran has Central Asian culture. The other major culture in Iran is the Azeri Turk culture which connects it to Caucasus. There is a big difference between these two cultural areas.

The Rise of Afghan Empire
http://afghanempire.blogspot.com/

[Ethyl]

Turkmenistan-China pipeline project implications

Turkmen President Saparmurat Niyazov has grown increasingly unhappy with his country's role as a natural-gas reservoir feeding Russia's ambition to reinvent itself as a 21st-century energy superpower. After a number of high-profile moves in recent months to raise the price of Turkmen natural gas for Russia, Ukraine, and Iran, Niyazov has now signed a deal with China to build an export pipeline to the east that would break Russia's monopoly on export routes for Turkmen gas. Experts have cast doubt on the project's feasibility, but whether or not it becomes a reality, it underscores the emerging contours of energy geopolitics in Eurasia.

Daniel Kimmage for RFE/RL (11/04/06)

Niyazov arrived in China for a rare visit on 2 April amid anticipation that a pipeline deal was in the works. The two countries inked the framework agreement the next day. A text of the pipeline agreement published by official Turkmen news agency TDH states that China will buy 30 billion cubic meters (bcm) of Turkmen gas each year for 30 years, starting in 2009. The initial agreement leaves the nuts and bolts of pipeline construction to be worked out by 31 December 2006. Official reports were mum on financial details, but Russia's "Kommersant" reported on 3 April that Niyazov would use his visit to China to try to convince the Chinese side to finance the pipeline project.

A Turkmen television report on 8 April suggested an earlier start date and provided additional information about the pipeline route. "In the first phase [of the project], we plan, starting from 2008, to deliver some 30 bcm of Turkmen gas [annually] via Uzbekistan and Kazakhstan, to Urumci [western China] and beyond it, to Shanghai [eastern China], and to increase these volumes to up to 50 bcm by 2010," the station reported.

Many skeptics
Outside observers reacted skeptically to the deal, raising doubts about both Turkmenistan's ability to meet additional export commitments and the project's overall feasibility. In an interview with the Turkmen opposition website gundogar.org, Dr. Roland Goetz, an energy expert at Germany's Institute for International and Security Affairs, noted that no one really knows how much gas Turkmenistan possesses. Official statistics put Turkmenistan's total production in 2005 at 63 bcm, with exports amounting to 45 bcm (see "RFE/RL Newsline," 12 January 2006). Estimating Turkmenistan's maximum export potential at 100-120 bcm/year and noting that the pipeline to China would have to traverse 4,000 kilometers, Goetz concluded, "I doubt the economic feasibility of this entire idea." He added, however, that for China, political and military factors might outweigh economic considerations. Goetz also noted that since the new pipeline would give Turkmenistan a measure of independence from Russia, "Ashgabat will do everything possible to bring the project to completion."

Others views of Turkmenistan's production potential are grimmer. In a contribution to "The Washington Post" on 6 April, Nadejda M. Victor, a research fellow at the Program on Energy and Sustainable Development at Stanford University, wrote that "Turkmen gas production is poised to decline and Turkmenistan's gas industry is barely functional because the country's political environment is scary for long-term investors."

China is serious about its desire to ensure energy shipments from the West. It recently spent more than US$4 billion to acquire an oil company with production assets in Kazakhstan (see "RFE/RL Newsline," 19 October 2005) and has reached an agreement with Russia to build a natural-gas pipeline from Siberia (see "RFE/RL Newsline," 22 March 2006). Nevertheless, the doubts about the Turkmen project are well-founded, and other projected Turkmen pipelines - across Afghanistan and across the Caspian - have remained pipe dreams. But the framework agreement signed in Beijing is still a serious indicator of Turkmenistan's intentions, the outlines of future geopolitical jostling for primacy in the Eurasian energy sphere, and problems on the horizon for Russia.

Message From Ashgabat
One obvious message the Turkmen-Chinese framework agreement sends is that Turkmenistan will continue its push for higher prices in its negotiations with current customers (Russia, Ukraine, and Iran). The agreement does not specify a price for the Chinese gas purchases that are to begin in 2009, but it states that the price "will be set on a reasonable and just basis, based on a comparable price on the international market," and paid "exclusively in U.S. dollars". President Niyazov said in February that Turkmenistan intends to raise the export price of its natural gas from US$65 to US$100 per 1,000 cubic meters in the fall (see "RFE/RL Newsline," 13 February 2006). The framework agreement suggests that Russia and Ukraine should take note.

Another message the agreement entails is that the first serious clash between Russian and Chinese interests in Central Asia will likely occur in the energy sphere. Russia's Gazprom is set to become increasingly dependent on Central Asian imports to maintain the company's sagging gas balance and can be expected to exert political leverage to defend its interests in this vital region. If China makes a serious push to gain access to Central Asian gas - replete with investments in a pipeline that links Turkmenistan, Uzbekistan, and Kazakhstan - it could set the stage for Central Asian competition between Beijing and the Kremlin.

Gazprom squeezed
Finally, the emerging contours of competition for access to energy resources in Central Asia are another cloud on the horizon for Gazprom. Gazprom's short-term strategy envisages a major increase in purchases of Central Asian gas. Vladimir Milov, from the Institute for Energy Policy, explained in a briefing at the Carnegie Endowment in Washington, D.C., on 16 March that Gazprom will have no means to offset declining domestic gas production beginning in 2008, and by 2010 will be purchasing 100 bcm of gas from Central Asia. Gazprom is counting on Turkmenistan to provide the bulk of that gas, with purchases slated to go to 70-80 bcm a year as early as 2007-08.

Gazprom's future plans assume that Turkmenistan will sell virtually all of its export production to Russia. But the draft agreement between China and Turkmenistan implies that if the new pipeline becomes a reality, it could be a priority commitment for Turkmenistan. The text states that the gas for export to China will come from fields on the right bank of the Amu-Darya River, but it adds, "If additional volumes of gas are required to build the Turkmenistan-China gas pipeline, the Turkmen side can guarantee gas shipments from other gas fields."

Both Milov and Victor warn that Russia, a key supplier of gas to Europe, could face a supply crunch in the not-so-distant future. Goetz stresses that Turkmenistan's negotiations with China point in exactly this direction: "For now, Ashgabat is, so to speak, loyal to Moscow, but if President Niyazov suddenly changes his mind, this could have implications for the entire energy situation, including the situation in Europe."

http://www.isn.ethz.ch/news/sw/details.cfm?ID=15459

[Ethyl]

‘Petroleum sector got over $1b foreign investment’

ISLAMABAD: Minister for Petroleum and Natural Resources Amanullah Khan Jadoon has said that Pakistan’s petroleum sector has attracted over US$ 1 billion direct and indirect foreign investment in the last few years owing to continuation of policies and deregulation and restructuring measures.

He said this while addressing a two-day Caspian and Black Sea Oil and Gas Summit 2006 in Ankara on Tuesday. According to an official statement issued by the ministry of petroleum and natural resources, the conference is organized by the Turkish ministry of petroleum and being attended by the oil ministers and senior officials from Russia, Iran India, Pakistan, Afghanistan, Kazakhstan, Azerbaijan, Georgia and Ukraine.

The minister said that Pakistan would become an energy hub in the region due to its strategic location and would serve as a corridor for the international supply routes of energy to the landlocked Central Asian States for transporting their oil and gas to the world markets.

Mr Jadoon said that Pakistan has taken some bold steps during the last one year, which would conceivably bring about a major shift in the approach of regional countries to address the issues of energy supply on a mutually assured benefits basis. He invited the participants to visit Pakistan and see for themselves the immense opportunities available in the energy sector, adding “our government and oil and gas companies will fully facilitate investment and joint ventures.”

The minister said that the government has accorded top priority to the speedy development of the oil and gas sector and allout efforts are being made to exploit the indigenous hydro-carbon resources in order to meet the growing energy need of the country. He said that during the last few years 1.5 billion cubic feet gas per day were added in the main transmission system from the newly discovered fields. The minister said that to bridge the energy shortfall after 2010, the government is judiciously working on Iran, Turkmenistan and Qatar Gas Pipeline Projects besides looking for imports of LNG fuel.

http://www.dailytimes.com.pk/default.asp?page=2006%5C03%5C29%5Cstory_29-3-2006_pg5_6

[Ethyl]

World oil prices strike historic highs

LONDON: World oil prices hit record peaks on Tuesday above $72 in London and close to $71 in New York as the market fretted over possible military conflict between the US and Iran.

The price of New York's light sweet crude hit a historic high of $70.88 per barrel, beating the previous record $70.85 set on August 30, 2005, when Hurricane Katrina had ravaged oil facilities on the US Gulf Coast.

Also on Tuesday, the price of Brent North Sea crude oil hit a record $72.20 per barrel as the market feared that an attack on Iran could lead to a disruption of its oil exports.

Washington accuses Iran, the world's fourth biggest crude producer, of working secretly to build nuclear weapons under cover of a nuclear energy programme it is developing with Russian assistance.

Iran denies this charge and says the programme is strictly for producing nuclear energy.

Tensions over Iran come at a time of strong demand for energy.

The Organisation of Petroleum Exporting Countries said on Tuesday that global oil demand grew by almost one million barrels per day in 2005.

At about 1120 GMT New York's main contract, light sweet crude for delivery in May, had climbed 30 cents from Monday's close to $70.70 in electronic deals before the market's official opening.

Brent crude for June delivery jumped 35 cents to $71.81 in electronic deals.

Adjusted for inflation, current oil prices remain below levels reached after the 1979 Iranian revolution when they surged to upwards of $80 per barrel in today's money.

"People are still concerned about Iran and potential military action," Global Insight analyst Simon Wardell said Tuesday.

"It looks like there's going to be a run towards $75," he added.

But he warned that prices could rocket to above $150 per barrel should Iran retaliate to any US attack by disrupting the world's busiest oil shipping lanes.

Because its shores line the narrow Straits of Hormuz, Iran could quickly hit both military and commercial shipping with missiles launched from land, air or sea as well as cripple maritime traffic with mines or sunken ships, analysts have said.

"If they close the Gulf for a length of time to shipping, then certainly we could look at $150, probably higher."

London's Brent contract has been striking record highs since April 10 on market concerns that the US might launch strikes at uranium enrichment facilities in Iran.

The US administration said on Monday that Iran's announcement that it was working on advanced P-2 centrifuges to enrich uranium was a further signal that the Islamic republic's nuclear programme was not purely civilian.

Further fuelling tensions in the Middle East region was a suicide bomb attack in Israel's commercial capital of Tel Aviv late on Monday that left nine people dead and dozens wounded, dealers said.
http://www.dnaindia.com/report.asp?NewsID=1024780

[Ethyl]

EDITORIAL: Chessboard moves on Iranian pipeline

President Pervez Musharraf has talked to President Ahmadinejad of Iran on the phone and the two are reported to have “agreed to speed up work on the Iran-Pakistan-India (IPI) gas pipeline”. The same day, the energy ministers of the three countries met in Doha, Qatar, at the International Energy Forum, after which the ministers from Iran and Pakistan (not India) let it be known that “Iran, India and Pakistan are close to signing a gas pipeline deal”. In an understandably defiant tone, the Iranian minister said the matter would be clinched in June at the next IPI meeting. The Indian minister, however, remained tight-lipped. Given the facts on the ground, the act sounded like a bluff.

The IPI project ran into snags soon after getting the green signal from India. Meanwhile, the cost of the project has gone up from $4 billion to $7 billion for a pipeline that will carry 150 million cubic metres of gas per day for 25 years. The United States did not want India and Pakistan to get involved with Iran on such a big project for it would blunt Washington’s strategy of making Iran suffer for its nuclear ambitions. Pakistan was supposed to be more vulnerable to American pressure than India but it was India that succumbed first after signing a nuclear “energy” deal with the US that would make it an acknowledged nuclear power without signing the NPT.

Pakistan followed up by asking the US to also give it the same sort of nuclear deal as India but was refused. Islamabad then thought it could tell the people of Pakistan that although the pipeline project was in the doldrums it had still got a good nuclear deal from the US for civilian energy as compensation — General Musharraf told the media that the US would help build a 1,000 MW nuclear power plant and China would pitch in with another 600 MW plant. Meanwhile, the IPI talks continued as a kind of window-dressing for brandishing the “sovereignty” of the three regional states. Questions of pricing hung fire as gas was fast approaching the value of oil all over the world and President Ahmadinejad was busy threatening to annihilate Israel and take on the United States and Europe together. So the IPI project went “off the air”, as it were. What’s the position now? Why is President Musharraf suddenly keen to revive it with a telephone call to Mr Ahmadinejad, the very man who has thrown a spanner in the works by being belligerent?

It is possible that this is part of chessboard moves against the United States, which is not ready to fully compensate Pakistan for making an exclusive nuclear deal with India. Apart from that, however, it remains true that Pakistan is in a bit of a fix about meeting its energy needs in the near future. Pakistan makes 80 percent of its electricity from the gas extracted domestically, much of it from the Sui gas fields of Balochistan. The Sui deposits are estimated to start running out in 2008, after which Pakistan will have to look elsewhere. Needless to say, it will have to import liquefied natural gas (LNG) — if gas prices don’t rise too much.

No alternative, it seems, is without snags. If Iran is problematic because of its isolationist spat with the West, Afghanistan is no less of a problem for the construction of the Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline, even if Turkmenistan were able or willing to supply the gas, which it isn’t now having sold off its reserves to Russia and Europe and committed a bit to China. Pakistan first thought in the 1990s that after helping the Taliban conquer the country it could bring it through Afghanistan. However, the Taliban gave priority to being defiant — just like Iran today — and everyone in the region suffered because of that attitude. Afghanistan is now under occupation, but Turkmenistan is off the energy map for Pakistan. Meanwhile, too fixed on Iran, Pakistan was slow in tying up with Qatar for future supplies, and now Qatar’s gas too has been sold to other buyers.

The new moves by the three countries can only be seen as ploys to get the US to respond to the situation its policy has created in South Asia. There never was a consensus in Washington over accepting India as a legitimate nuclear power, and the snags that the nuclear deal has hit in consequence are being tackled by New Delhi in a style that some American diplomats have noted in the past. New Delhi will not succumb and it will get the US to decide according to its preferences. It will use the IPI deal to present Washington with a flanking move. Islamabad too appears keen to shore up its declining fortunes in Washington by showing a little defiance even though it knows that the IPI project continues to be dicey on many counts. *

SECOND EDITORIAL: ERRA in trouble in Azad Kashmir

The trouble related to payment of compensation was in the offing for some time and has finally hit Azad Jammu and Kashmir, with police firing warning shots to disperse protesting citizens. The government had decided to pay cash compensation of Rs 175,000 for every house destroyed in the calamity. Protest meetings and processions were staged last month against the Earthquake Reconstruction and Rehabilitation Authority (ERRA) asking it not to start another house-checking drive and pay the outstanding amounts. Admittedly the protest was also politicised as rival parties tried to use the issue to attract public support.

The trouble is that a first tranche of Rs 25,000 was paid quickly. Then, before the rest could be paid, ERRA thought of suspending the payment and starting a re-survey to make sure that the money went to the right people. After six months, the money for the houses destroyed has still not been paid. Those affected say if the survey starts now, the payment will not be made this year and they will face another winter without shelter. Since the compensation has been delayed and the matter politicised, the homeless want the compensation doubled — in the NWFP the rate is higher — and they want it paid to every affected family rather than for every house destroyed. The only way ERRA can avoid getting into bigger trouble is to expedite the payment by curtailing the time spent on the house-survey. The sooner this is done the better. The political blowback of not doing so could nullify the good impression created by the Musharraf regime in its rescue and relief work and put a dampener on rehabilitation and reconstruction. *

http://www.dailytimes.com.pk/default.asp?page=2006%5C04%5C24%5Cstory_24-4-2006_pg3_1

[Ethyl]

Tribal rebels blow up gas pipeline in Pakistan

QUETTA, Pakistan - Tribal militants blew up a natural gas pipeline in Pakistan’s restive southwestern Baluchistan province on Tuesday, disrupting supplies to two districts, police said.


The used heavy explosives to blow up the pipeline that was supplying gas to Mustung and Qalat districts, local police official Hamid Shakeel said.

“Around 100,000 people living in the two districts are now without gas,” he said adding that the pipeline would be restored after 24 hours.

In separate incident, militants attacked a telephone exchange with rockets in Noshki district, 160 km (100 miles) southwest of provincial capital Quetta.

A simmering conflict in Baluchistan, home to Pakistan’s largest gas field, flared anew in December after tribesmen mounted a rocket attack on Kohlu town during a visit by President Pervez Musharraf.

Fighting for greater autonomy and more control over the mineral riches, tribal militants regularly blow up gas pipelines, railway lines and electricity transmission lines, and launch rocket attacks on government buildings and army bases.

To win back support in the poorest of Pakistan’s four provinces, Musharraf has announced plans for major infrastructure projects in Baluchistan, which borders Iran and Afghanistan.

http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/subcontinent/2006/April/subcontinent_April688.xml&section=subcontinent&col=

[Ethyl]

Chad's Oil Troubles

Introduction
The oil pipeline agreement involving the World Bank, a U.S.-led oil consortium, and the government of Chad was hailed as a model to help developing nations dig their way out of poverty and avoid corruption. Under the deal, spurred by World Bank funding, most of Chad's revenues would go to development projects. But in December, Chad's parliament voted to modify the revenue management law. Officials canceled a "future generations" fund that put 10 percent of the project's revenues towards Chad's post-oil future, increased the portion of funds that could escape scrutiny, and funneled more revenue toward purchasing arms, saying security was also essential to poverty reduction. The World Bank responded in January by suspending disbursement of loans and freezing the country's $125 million in assets in a London-based account. Experts see potential civil war, troubles near Chad's border with Sudan, and the weakening of President Idriss Déby's authoritarian regime threatening the pipeline deal and casting doubt on the prospects for transparency in future development projects in the region.

What is the Chad-Cameroon pipeline project?
Low-quality crude oil was discovered in Chad in the late 1960s, but investors hesitated to pour resources into the central African nation because of fears over political instability and corruption. But in 1999, the World Bank proposed a plan that it hoped would be a test case for creating transparency and poverty reduction in resource-rich developing nations. In June 2000, the bank, the government of Chad, and an ExxonMobil-led consortium of oil production companies agreed on the proposal for a 650-mile pipeline project running from Cameroon to the Gulf of Guinea. The Bank provided an initial $190 million to kick-start the $3.7 billion project, and oil began pumping through the pipeline, ahead of schedule, in late 2003.

What are the elements that made up the pipeline agreement?
As part of the agreement, Chad's parliament passed the 1999 Petroleum Revenue Management Law. One goal of the law was transparency, and it required that Chad's 12.5 percent share of direct revenues from oil production flow into a London-based Citibank escrow account (monitored by an independent body created to oversee the account's management).

Another main goal of the revenue management law was to channel Chad's revenue into poverty reduction programs. The "future generations" fund accounts for 10 percent of annual revenue and was created so that the country would have funds in reserve for the period after oil reserves are exhausted. Eastern Logone, Chad's oil-producing region, receives 5 percent of the royalties, and 15 percent of royalties and dividends go to the federal government. The remaining funds from Chad's portion of the revenue were earmarked for what the bank terms "priority sectors," including public works, health, education, rural development, and environmental projects.

Aside from direct revenue from the project, Chad also receives indirect revenues in the form of taxes, which are unsupervised and used for government expenditures.

How important are oil profits to the Chadian economy?
Chad's production of about 160,000 barrels per day is relatively small, but its value has grown for the country as world oil prices have soared near historic highs. As of December 2005, Chad had exported 134 million barrels of oil and earned close to $400 million in direct revenue, $256 million of which funded poverty reduction projects in the priority sector areas outlined by the agreement. In addition, Chad's gross domestic product soared from 3.9 percent from 1997 to 2001, to 29.7 percent in 2004, the first full year of oil production, according to an International Monetary Fund report in October 2005 (PDF). The same report also shows a projected trade balance swing from minus 31.8 percent in 2002 to plus 34.7 percent in 2005.

But despite economic advances, Chad has continued to be plagued by the instability, corruption, and destitution it has known since gaining independence from France in 1960. A large country of 10 million people, four out of five citizens of Chad live in poverty and the average life expectancy is less than forty-four years. Chad was ranked, along with Bangladesh, as the most corrupt nation in the world by the watchdog group Transparency International in 2005.

Why did Chad decide to revise legislation on oil profits?
Chad had been relatively stable since President Déby seized power in a 1990 coup following three decades of civil war. Last year, Déby angered opposition leaders when he changed Chad's constitution so he could seek a third five-year term in elections on May 3. But his grip on power has weakened since October, when members of the military began defecting in large numbers to join a coalition of rebel groups known as the United Front for Change (FUC), which includes some of Déby's own family members. In April, government forces clashed with rebels on N'Djamena's outskirts and put down a coup attempt. Déby's regime accused neighboring Sudan of supporting the rebels, and threatened to close the border, which would hinder relief efforts helping the 210,000 Sudanese refugees who fled the violence in neighboring Darfur province, as well as the 500,000 displaced that remain in Sudan.

With rebellion growing, Déby looked to oil revenues as a way of bolstering his defenses. Robert O. Collins, an expert in African history and professor emeritus at the University of Santa Barbara, California, says even when the pipeline project was being hailed as a model for transparency, there were cynics who said: "That's going to work until Déby wants to buy some guns." In December 2005, Déby overhauled the Petroleum Revenue Management Law, doing away with the "future generations" fund, and doubling the portion of direct revenue that would go directly to the federal government to 30 percent. Another change to the law was the inclusion of security as one of the priority poverty reduction measures to allow more arms spending.

Scott Pegg, assistant professor of political science at Indiana University-Purdue University, says the move to amend the law "drove a dagger through the heart of the project." A recent CFR Task Report on Africa says that "benefits have been flowing to parts of the population from early proceeds" but cites concerns about growing instability and Déby's changes to the revenue management law. A paper by the humanitarian group Catholic Relief Services says the Chad project threatens to be victimized by the all-too-familiar "resource curse" (PDF) that hits developing nations when they suddenly gain riches from resources such as oil or minerals.

How did the World Bank respond to Chad’s amendment of the Revenue Management Law?
The World Bank responded in January by suspending disbursement of $124 million in loans to Chad, and froze the country's $125 million in assets in the London-based Citibank escrow account. In a statement after those moves, World Bank President Paul Wolfowitz said bank officials were still committed to resolving the problem through dialogue. "We can find common ground that addresses the legitimate concerns of the government of Chad and our objective of ensuring Chad's oil revenues benefit that country's poor," he said.

However, officials from the World Bank and Chad's government found no way around the stalemate when they met in early April, and Chad has threatened to stop pumping oil if the World Bank does not release the funds.

What is the U.S. role in the pipeline project stalemate?
The United States has tried to help resolve the disagreement, and Chad has responded by postponing its "no pump" threat. U.S. Deputy Assistant Secretary of State for African Affairs Donald Yamamoto arrived in N'Djamena on April 24 to meet with government officials and ExxonMobil representatives to assist in brokering a deal. Experts say that the United States may be able to help keep the oil flowing. "It's certainly positive in terms of bringing another party in that Chad will listen to," says Pegg. What the talks might mean for the future of the project and the Petroleum Revenue Management Law is less clear. Princeton Lyman, a CFR senior fellow for Africa policy studies, says that even if a deal is reached, it will likely be an interim agreement.

What do problems with the Chad pipeline mean for other developing nations?
Both experts who hoped the deal would lead to a new model for achieving transparency in developing nations and those who were more skeptical about the Petroleum Revenue Management Law believe that the setbacks in the Chad-Cameroon pipeline project signal obstacles for future projects in the region. "While Chad crude exports are not significant in global volume supply terms, the importance of any Chadian oil production disruption will be symbolic," says Florence Fee, a former executive with Chevron and Mobil and president of a London-based energy risk management company. "It could signal to investors that the interior of Africa is too high risk politically to warrant high capital investment," says Fee, who also suggests that if there is a disruption, it could open the door to Chinese investment in Chad. The China National Petroleum Corporation is already actively involved in oil production in neighboring Sudan, as well as in Angola and Algeria.

In terms of achieving a model for fighting corruption, "governments will be able to see that they can get around transparency," says Lyman, who believes it is less likely that a mechanism similar to the World Bank's test case will be set up in the future. Collins concurs: "It's a big setback for the development of revenue in poverty-stricken countries. The first question to rulers is going to be: 'Will you do what Déby's done?'"
http://www.cfr.org/publication/10532/

[Ethyl]

China's Hu Signs Oil Deal With Nigeria

ABUJA, Nigeria -- Chinese President Hu Jintao said Thursday his government will seek closer ties with Africa _ a resource-rich frontier for the world's fastest growing economy _ after signing a series of major business deals with oil-rich Nigeria.

Hu, on the second and final day visiting Africa's largest oil producer before heading to Kenya, said China is seeking "a strategic partnership" with the continent that would improve living standards for Africa.

Hu and Nigerian President Olusegun Obasanjo signed an agreement Wednesday that requires Nigeria's petroleum ministry to give China's state oil firm preferential access to four blocks of oil exploration rights in return for China taking over a money-losing refinery in the northern city of Kaduna.

China also agreed to build a hydroelectric power station in the northeastern Mambilla plateau and a fast-rail system linking the capital, Abuja, with the economic capital, Lagos.

And two Chinese telecommunication firms will install rural telephone service across large swathes of Nigeria with the help of Chinese government loans worth more than $200 million.

China's interest and growing profile in Africa has worried Western rivals for the continent's resources and markets. And some Africans have complained about being flooded with cheap Chinese goods.

Nigeria is the top African producer of crude and the seventh-largest in the world, normally pumping 2.5 million barrels per day. It was the first sub-Saharan Africa stop on a tour by Hu that has included the United States, Saudi Arabia and Morocco.

Militants claiming responsibility for oil-installation attacks and kidnappings that have shut down more than 20 percent of Nigeria's oil production this year vowed more violence in response to the Chinese deals.

"They should go back to China and do all these things they say for the millions of starving Chinese. We want control over our resources, not Chinese management and development," the Movement for the Emancipation of the Niger Delta said in an e-mail to The Associated Press.

China is hungry for the energy, timber, minerals and other raw materials Africa can provide, and in January, China's state-controlled oil firm, CNOOC, announced it had reached a deal to pay $2.3 billion for a 45 percent stake in a Nigerian offshore oil field.

Obasanjo's office said as Hu wrapped up his visit Thursday that China had granted Nigeria $5.7 million in aid to be used in part to buy anti-malaria medicines and to train Nigerians in malaria control and prevention.

With 130 million people, Africa's most populous country is also a major market for Chinese-produced goods. Chinese companies have been accused of flooding local markets with fake and substandard goods, notably textiles. In December, Nigerian officials took the dramatic step of shutting down several shopping centers run by Chinese traders in Lagos.

In the last five years, China's trade with Africa has grown fourfold, to $40 billion in 2005.

The world's most populous country, with 1.3 billion people, has also set new development targets to increase its gross domestic product and lower energy consumption, the Chinese leader told Nigerian lawmakers Thursday.

"By the year 2020 ... GDP would quadruple that of 2000 to reach $4 trillion, averaging $3,000 per head," Hu said.

China, a veto-wielding U.N. Security Council member, also has offered key diplomatic support to some governments shunned by the West, like Sudan and Zimbabwe
http://www.washingtonpost.com/wp-dyn/content/article/2006/04/27/AR2006042701066.html

[Ethyl]

(BW) ExxonMobil Announces Startup of Nigeria Erha Development

IRVING, Texas--(BUSINESS WIRE)--April 28, 2006--Exxon Mobil Corporation (NYSE:XOM) announced today that its affiliate, Esso Exploration and Production Nigeria Limited (EEPNL), has started production from the world-class Erha deepwater development located approximately 60 miles (97 kilometers) offshore Nigeria in 3,900 feet (1,200 meters) of water.


The development includes Erha and Erha North, a satellite development due to come onstream in the third quarter of this year. This is EEPNL's first operated production from Nigeria's deepwater Block 209. Erha production is expected to ramp up to 150,000 barrels a day by the third quarter, and Erha North will contribute another 40,000 daily barrels by year-end for a total production output of 190,000 barrels a day. Erha North will be on production within 30 months of discovery, setting a Nigeria deepwater record. Associated natural gas production from the projects will be about 300 million cubic feet a day, which will be reinjected for reservoir management.

The Erha and Erha North developments consist of 32 subsea wells tied to a Floating Production Storage and Offloading (FPSO) vessel. A single-point mooring buoy, one of the world's largest, will be used for crude carrier docking and product transfer. The facilities were constructed within budget and total cost for the two developments, including facilities and drilling, is approximately $3.5 billion.

Stuart McGill, senior vice president of Exxon Mobil Corporation, said, "Erha and Erha North are another demonstration of ExxonMobil's global project execution capability and deepwater technology expertise. Along with our other successful West Africa deepwater developments, Erha and Erha North are helping ExxonMobil meet growing global demand for oil. In addition, these major projects demonstrate our continued commitment to support Nigeria in meeting national goals. Erha and Erha North, along with the recent startup of the Yoho full-field facilities, underscore our commitment to increasing local business development and capacity."

The Erha developments included contract awards to several Nigerian companies for in-country fabrication services, logistics support as well as training, development and employment of Nigerians. Activities involved fabrication of the mooring buoy, subsea manifolds, drilling unit pilings, and modules for the FPSO such as the flare tower, pipe racks and riser protection frames.

Another example of helping to develop local business capability was the subsea system integration test conducted prior to the Erha startup. This test, the first performed in West Africa, ensured all subsea systems and controls worked properly prior to installation. It was held at the Willbros Yard in Port Harcourt, Rivers State, a facility that can now serve as a regional center for future subsea component testing for global deepwater development projects.

EEPNL is the operator of the Erha and Erha North developments and has a 56.25 percent participating interest in the Block 209 contract area, with Shell Nigeria Exploration and Production Company holding the remaining 43.75 percent.

Erha is the second major facility startup for ExxonMobil affiliates in Nigeria this year. In February, Mobil Producing Nigeria Unlimited (MPN) started production from the full-field facilities of the Yoho project, with estimated recoverable resources of 440 million oil barrels. Yoho is currently producing about 160,000 barrels of oil a day, and consists of a central production processing platform, 33 wells, living quarters platform, and a Floating, Storage and Offloading (FSO) vessel.

Like the Erha developments, the Yoho project also contained significant Nigerian content. Approximately one-third of direct project costs, including engineering, procurement, construction, facility installation and drilling were expended in the country. The project contributed direct and indirect benefits to the Nigerian economy through project spending and training, development and employment of Nigerians.

http://www.chron.com/disp/story.mpl/conws/3826969.html

[Ethyl]

Pakistan, Iran continue discussing on gas pipeline project

ISLAMABAD, April 29 (Xinhua) -- Pakistani and Iranian experts on Saturday continued discussion on the 7.1 billion U.S. dollars worth Iran- Pakistan-India (IPI) gas pipeline project.

They both expressed determination to implement the project as soon as possible, officials said.

The Pakistan and Iran Joint Working Group discussed technical and financial issues involved in the project, route and pricing formula, a Pakistan petroleum ministry statement said.

Pakistan had sent a draft gas pricing formula to Iran based on domestic gas pricing mechanism and the two sides discussed the formula in the talks.

"The two sides expressed full satisfaction over the pace of dialogue over the project," the statement said.

The two sides would finalize the talks on Sunday, it said.

Leaders of both sides will address a joint press conference at the conclusion of the three-day talks.

The Pakistan side was led by Secretary Petroleum Ahmed Waqar while Deputy Oil Minister of Iran Mohammad-Hadi Nejad Hosseinian headed his eight-member delegation.

A trilateral meeting of Iran, Pakistan and India on the projectis to be held in the third week of May.

Hosseinian said Friday that Iran was interested in the early implementation of the project.

The 2,670-km pipeline has about 1,115 km length in Iran, 705 kmin Pakistan and 850 km in India. Enditem

http://news.xinhuanet.com/english/2006-04/29/content_4492590.htm

[Ethyl]

Afghanistan set to open oil & gas sector to bids

KABUL: Afghanistan is drawing up oil and gas exploration blocks and will soon be seeking production-sharing agreements with foreign companies to develop what it hopes are larger-than-expected reserves.
The US Geological Survey (USGS) says there could be up to 36.5 trillion cubic feet of natural gas and 3.6 billion barrels of crude oil lying undiscovered under Afghanistan, mostly in its generally peaceful north. "We have to explore. We have to divide these areas in blocks and then we will privatize all of these blocks, we will award them to companies," minister of mines Ibrahim Adel told Reuters.

"The exploration and development of these area will be given to the private sector," Adel, who is responsible for hydrocarbons and minerals, said in an interview late on Sunday. A recent U.S.-funded assessment of Afghanistan’s energy potential, undertaken by the USGS and Adel’s ministry, gave mid-range estimates of about 1.6 billion barrels of crude oil and 15.7 trillion cubic feet of natural gas.

That’s nothing compared with Opec heavyweight Saudi Arabia, which has about 260 billion barrels of proven oil reserves, and Russia’s 1.68 quadrillion cubic feet of natural gas reserves - both the world’s largest.

But impoverished Afghanistan’s hydrocarbon reserves could provide its agriculture-based economy with a vital boost.

"We have to explore, we have to develop and export and use for our local demand," said Adel, whose nomination as minister of mines was approved by parliament last month after President Hamid Karzai announced a cabinet reshuffle.

The World Bank helped Afghanistan draft a hydrocarbons law and the best way for the cash-strapped government to develop its reserves was through production-sharing agreements, he said.

"It’s difficult for the government to consider all of the risks of exploration. At the same time, with the experts we have it isn’t possible we can do it ourselves.

"Also, the difficulty of the market, how to reach the market ... The best way is we encourage the companies to invest here, explore and develop and give it to the market."

Only a fraction of Afghanistan has been explored for hydrocarbons, mostly by then Soviet engineers in the north decades ago.

"It’s just an evaluation from the north, but even that is not complete ... We have just explored some parts of Shiberghan and a small part of Sar-i-Pul province, the other provinces have not been explored," Adel said of northern provinces.

Adel said he was hopeful new technology could find bigger, and perhaps deeper, reserves.

"The Russian technology was not so modern and they couldn’t drill more than 3,500 metres (11,500 feet). I think our deposits may be deeper," he said.

In the 1970s, Afghanistan exported natural gas to the Soviet Union but now its only gas output is feeding a fertilizer plant and supplying a small community in Shiberghan.

But in future, Afghanistan will look south for markets.

"In the past, the main way was through Russia, now we have to move towards the market, to Pakistan, to Iran, to India, through these countries to the international market," he said.

Under an agreement on a proposed gas pipeline from Turkmenistan, through Afghanistan to Pakistan, Afghanistan will be able to feed its output into the pipeline, Adel said. Adel said he expected considerable interest when bidding for blocks is opened up, within six months to a year.

Up to 25 companies - from Russia, Central Asia, China, South Asia, Europe and the United States -had expressed interest in just a small oil reserve in Sar-i-Pul province, he said.

http://paktribune.com/news/index.php?id=142581

[Ethyl]

Cheney's Kazakhstan Trip Focuses
On Future U.S. Oil Investments

ASTANA, Kazakhstan -- A day after criticizing Russian President Vladimir Putin for political repression, Vice President Dick Cheney held a series of friendly meetings with the autocratic leader of Kazakhstan to discuss future U.S. investment in developing its huge oil resources.

The meetings in Kazakhstan's glittering new capital, Astana, underscored just how much oil -- and access to it -- matter in the current global economy.

Thursday, at a conference of fledgling Eastern European democracies in Lithuania, the vice president blasted Russia for its political shortcomings, saying Mr. Putin's government has "unfairly and improperly restricted the rights of the people" and used its control over energy to "intimidate or blackmail" neighboring democracies. Friday, in oil-rich Kazakhstan, where the U.S. has become the biggest source of investment, Mr. Cheney lauded that country's political progress, although its record on free elections, while improving, falls short of international standards, and its 65-year-old president, Nursultan Nazarbayev, has held office since it declared itself independent in 1991.

At a news conference, Mr. Cheney expressed his "admiration" for Kazakhstan's progress over the past 15 years. He added that its record on political development "speaks for itself." But he often hedged his comments by speaking broadly about its political and economic maturation.

In economic terms, at least, the country's progress has been considerable, and its population of 15 million now includes the beginnings of a solid middle class, administration officials say. In addition to oil resources, it has substantial uranium resources and a base of high-tech know-how stemming from the Soviet Union's nuclear-research program in the country.

The White House also admires Kazakhstan's mix of ethnic and religious groups, including substantial proportions of Sunni Muslims and Russian Orthodox Christians, as well as its relative tolerance and moderation. Mr. Cheney cited the country's willingness to give up its nuclear-weapon stockpile after achieving independence, and suggested that Iran might consider following its example. The U.S. also is encouraging Kazakhstan to become a stabilizing influence on other emerging Central Asian republics.

Mr. Nazarbayev and Azerbaijan President Ilham Aliev, another autocratic leader who met with President Bush at the White House late last month, are eager to see the U.S. help their countries produce and export energy, unlike Russia, which wants to control that business itself.

Messrs. Cheney and Nazarbayev have met twice before, once when Mr. Cheney ran Halliburton Co., and again soon after he was elected vice president. On Friday, they had a one-on-one meeting that lasted more than an hour at the new marble-floored, blue-domed presidential palace, followed by a meeting with aides, then dinner -- including horse-meat appetizers, a local delicacy -- and capped off the evening with coffee together at the hotel where Mr. Cheney stayed. While details of their discussions were still scarce Friday night, Mr. Nazarbayev told reporters that the two countries had signed a memorandum of understanding for co-financing of Kazakhstan projects through 2010, and agreed on a U.S. allocation of $158 million for specific defense-related projects.

Earlier in the day, a senior administration official said the leaders would discuss several planned and proposed pipeline projects, including one that would connect Kazakhstan's substantial natural gas to an existing pipeline running from neighboring Azerbaijan to Europe. The broad U.S. aim was to expand availability of Kazakhstan's oil and gas resources, the official said.

At the session with reporters, Mr. Cheney also reiterated his concerns about what he termed Russia's resistance to "the development of strong democracies" on its borders, as well as its control over energy resources "to gain political leverage" on those countries.

http://online.wsj.com/article/SB114685954895645195.html?mod=googlenews_wsj

[Ethyl]

http://www.wincoast.com/forum/showpost.php?p=654763&postcount=3

[Ethyl]

Venezuela to go into natural gas business in Bolivia

LA PAZ (AFX) - Venezuela will go into the newly nationalized natural gas business in Bolivia, Bolivian oil minister Andres Soliz said.

President Evo Morales and his ally and counterpart Hugo Chavez of Venezuela plan to sign the deal next Thursday, under which Petroleos de Venezuela (PDVSA) will fund exploration, drilling, production, sales, marketing and other activities, on terms favorable to Bolivia. PDVSA will take potential profits of 5-10 pct.

Morales caught world attention when he announced the nationalization of Bolivia's gas and oil industry, fulfilling a campaign promise to the people of the poorest country in South America.

Yesterday, Bolivia and Brazil announced an agreement to negotiate new natural gas contracts following the nationalization. Bolivia's gas is exported to Brazil and Argentina.

http://www.forbes.com/markets/feeds/afx/2006/05/11/afx2740660.html

[Ethyl]

Malaysia's Petronas to start commercial production of oil in Turkmen sector of Caspian Sea
Saparmurat Niyazov has signed a decree authorizing the Ministry of oil and gas and mineral resources to make an agreement on the extraction of crude oil at the Dyarbekir field with Petronas Chiragli (Turkmenistan) Sdn. Bhd. (Malaysia) operating in offshore contract zone Block 1 in accordance with the law of Turkmenistan "On hydrocarbon resources" and the Production Sharing Agreement.

As the Ashgabat correspondent of Turkmenistan.ru reports, the documents provide legal bases for the start of commercial production of oil in 2006 in the contract zone Block 1. In particular, the presidential decree instructs Turkmenneft state concern to ensure the reception and transportation of crude oil due to Turkmenistan under the PSA on the contract zone Block 1, as well as its delivery to Turkmenbashi complex of oil refineries for further refining.

According to the Ministry of oil and gas of Turkmenistan, Malaysian company specialist obtained the flow of commercial oil at a rate of 1,5 thousand tons a day at a depth of over 4,9 km at the Dyarbekir field, 50 km off the coast of Turkmenistan. Thus, after almost 10 years of prospecting works, Petronas has become the second foreign company extracting oil in the Turkmen sector of the Caspian Sea. British-Arabian Dragon Oil has been the only offshore oil extracting company until this moment.

As provided by the PSA between the Malaysian company and the government of Turkmenistan (1996), 60% of the oil cost is meant to cover oil extractions expenses and the remaining 40% is equally shared as profit. Commercial inflows of hydrocarbons were obtained at the earlier drilled wells, including Ovez and Makhtumkuli situated in the contract zone Block 1, the ministry said.

The Turkmen sector of the Caspian Sea is estimated to contain 11 bln tons of oil and 5,5 trillion cub. m of gas, according to surveying firm Western Geophysical. According to official information, over half of oil reserves and 25% of natural gas reserves of Turkmenistan are concentrated in the sea bed. Turkmenistan produced 63 bln cubic meters of gas and over 9,5 mln tons of oil in 2005.
http://www.turkmenistan.ru/?page_id=3&lang_id=en&elem_id=8109&type=event&sort=date_desc

[Ethyl]

India, Hesitant of Iran's Nuclear Row, Turns to Turkmen Gas

With their eyes on the Iran nuclear crisis rather than the Iran-Pakistan-India (IPI) natural gas pipeline, India is putting the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline on its agenda.

India’s Energy Ministry, looking for alternatives to meet the increasing daily energy demand, believes the TAPI pipeline will be able to cover a great amount of country’s energy need.

In addition, the TAPI natural gas pipeline will play an important role in future foreign relations.

In his letter to the Oil and Natural gas Ministry, Secretary of Foreign Affairs Shyam Saran noted the TAPI pipeline will strengthen the IPI pipeline project.

The secretary designating the Iran pipeline is important for many reasons, said it seems difficult to turn the IPI pipeline project into reality.

The TAPI project will be convenient not only for India’s long term ties in Central Asia, but also for the United States policies in Central Asia.


India’s Oil and Natural Gas Ministry is expected to submit the TAPI project for the parliament’s approval.

http://www.zaman.com/?bl=hotnews&alt=&trh=20060511&hn=33042

[Ethyl]

Ambassador: Iran opposes laying of oil, gas pipelines on Caspian seabed

Iran's Ambassador to Almaty Ramin Mehmandoost said here Sunday that the Islamic Republic of Iran is opposed to laying oil and gas pipelines on Caspian seabed.

Speaking to IRNA, he said Iran has repeatedly declared its position on the issue.

There are two reasons for Iran's opposition to the plan namely:
there is 'no legal regime has been defined for Caspian Sea' and the existing problems pertaining to protecting the sea's environment, he said.

To implement the plan, the legal regime of the Caspian Sea should be drawn up, all five countries sharing common coastline around the Sea should agree with the plan and ensure that the plan does not threaten the environment and is in conformity with international standards.

Turning to his recent talks with Kazakh Minister of Energy and Mineral Resources Baktykozha Izmukhambetov, he said that at the meeting the Kazakh minister called for Iran's consent and cooperation with the construction of pipelines to transfer Kazakh oil and gas to Europe via Caspian Sea waters and Iran declared of its concerns accordingly.

Given the newly built facilities in Neka port in north of Iran, he said the two sides also discussed exchange of Kazakh oil via Iran, he said.

Kazakh Prime Minister Danial Akhmetov at the end of ECO meeting in the Republic of Azerbaijan, said the country is to study construction of pipeline to transfer oil and gas via Caspian Sea.

The project will seek to transfer Kazakh oil and gas to Europe via Caspian Sea, Azerbaijan and Turkey, he said.

http://www.irna.ir/en/news/view/menu-234/0605143309184123.htm

[Ethyl]

Critics warn Pakistan-don't align with U.S. against Iran

As the crisis around Iran over its alleged nuclear ambitions grows, Pakistan once again finds itself under enormous political pressure because of aggressive U.S. policy toward Muslim neighbor.

The Pakistan government is under fire from powerful Islamist groups and political parties for supporting the U.S.-led "war on terror" in Afghanistan, especially in the border areas of North West Frontier Province. Now, the U.S. is pressing both Pakistan and India to forego the economically advantageous Iran-Pakistan-India gas pipeline project and find other ways to meet their energy requirements to show support of the U.S. position against Iran's expressed nuclear ambitions. The U.S. has told Pakistan that it can expect funding and other assistance if it instead pursues alternate Turkmenistan-AfghanistanPakistan oil pipeline project.

India also is being pushed by Washington to give up the Iran gas deal, in return for cooperation on civilian nuclear technology. Indian participation in the project would make the pipeline more attractive for Pakistan in terms of an annual $700 million in royalties.

Iranian Oil Minister Kazem Vaziri recently announced at the International Energy Forum at Doha, Qatar, that Iran, India and Pakistan were close to concluding the $7 billion gas pipeline deal. Subsequently, both Pakistan's Oil Minister Amanullah Khan Jadoon and his Indian counterpart Murli Deora confirmed the plan, although observers say much can happen in Iran between now and the actual signing of the tripartite agreement in June.

"Superficially, it looks as if the U.S. is not capable of going to war with Iran. Considering it's unfinished business in Iraq and Afghanistan, the idea of adding an even bigger country to the list of targets would not make sense," said Karachi University professor and international affairs expert Jafar Ahmad. "But on the other hand, the American administration has piled up strong rhetoric and would seem to be preparing for military action. Some say that the logic of the Iraq war would demand that the Americans take strong military action against Iran also.

"Iran is unlikely to prove a soft target like Afghanistan and Iraq and retaliation is certain," Ahmad said. "Pakistan, being a neighbor, is vitally concerned and this is a reason why American pressure is particularly considerable over Pakistan. No military action in Iran can be taken without some sort of understanding and support from Pakistan."

But, Iran has considerable leverage, he said.

"It can close the Straits of Hormuz, the narrow neck through which all oil trade to eastern Asia has to pass,... by sinking a few medium-sized cargo ships. The kind of new equipment that Iran has recently demonstrated makes U.S. naval armadas in the Persian Gulf vulnerable."

Then, there is the question of oil.

"Should Iran stop exporting oil for an extended period of some months, it can cause a tremendous upheaval in the oil market. The oil prices will go through the roof. World economic activity would be severely affected," Ahmad said.

"What is truly troubling is that Iran is in a position to hit Israel directly just as Israel is loudly thinking of making a unilateral attack on Iran," said the wellknown academic.

A groundswell of opinion now building against any support by Pakistan for military action against Iran is not confined to Islamist groups, but also extends to academics, intellectuals and wellknown secular politicians.

Prominent politician and leader of the National Workers Party, B.M. Kutty said, "Pakistan and Iran are neighbors and we had better not collude with the Americans against that country. No doubt, there is great pressure on Pakistan stay aligned with the Americans. But, that is not something that should be taken for granted."

Kutty said that while Pakistan President Gen. Pervez Musharraf was under pressure from Washington, it was still possible to put up resistance.

"Pakistan ought to have been able to line up with those who are against this likely war such as China and Russia. Pakistan's national interests do not demand any break with Iran," he said.

As the Afghanistan experience has shown, by supporting Washington's military adventures, Pakistan risks exacerbating fault lines that exist between its many ethnic groups, besides angering the religious establishment.

"Pakistan runs the risk of intensifying its sectarian divide-lining up with the Americans would jeopardize social peace since large swathes of nationalist opinion in Balochistan, Sindh and NWFP do not favor any anti-Iranian stance," Kutty said. "Pakistan should counsel caution with its supposed ally America. Any military action in Iran by America or by Israel would cause a tremendous impact on much of southern Asia and also Central Asia-what forces would be unleashed cannot be foreseen."

According to Anis Haroon, general secretary of the Pakistan chapter of the India-Pakistan Peoples Forum for Peace and Democracy, "Pakistan has no business to support possible American action against Iran. The official line taken is correct. But, it is weak. It should be stronger in favor of peace and more pro-Iran.

"It is time that Pakistan made it clear that we are not prepared to be pushed around. There is no case for American military action against Iran,'" she said. "The whole brouhaha of war has been created on the basis of what Americans think Iran wants to do. Whether Iran makes a bomb or not would depend largely on international situation and has to be seen against the fact of Israel possessted ing a large number of nuclear weapons. No Middle East power, which is not part of the American alignment, can be complacent about that fact. For the longerterm, the Israeli desire to remain the sole nuclear power in the region is purely self-serving and ill-intentioned. Others cannot go on tolerating it, least of all Iran.

"The Americans should do a proper cost-benefit analysis on maintaining peace with Iran or going to war-what outweighs the other is for the Americans to decide. We can only hope and demand that America opts for peace in the end," said Haroon.

"The Americans have virtually killed the nuclear NonProliferation Treaty (NPT) by not implementing their part to disarm in good faith, while others are expected to abjure making nuclear weapons," explained former law minister Syed Iqbal Haider: "Pakistan cannot remain unaffected, should aggression be committo against Iran. 'It will have direct political, social and psychological impact on Pakistan. In an important way it is directly linked with Pakistan's own social and political peace.

"Pakistanis have always counted Iranians as their friends and are likely to continue to do so in future-where Iran is concerned Pakistan has to keep away from the Americans," Haider said. "For once, Pakistan should take a strong independent line."

http://www.frostillustrated.com/news/2006/0517/News/010.html

[Ethyl]

Shelve India-Iran gas pipeline, urges US

As a high level Iranian delegation, headed by First Vice President Parviz Dawoudi, arrives in Islamabad next week, the United States has again pressured Pakistan to abandon the multi-billion gas pipeline project with Tehran.

Dawoudi accompanied by the Foreign Minister Manouchehr Mottaki will hold talks with President General Pervez Musharraf and Prime Minister Shaukat Aziz on ways and means to defuse the mounting tension on US-Iran nuclear stand-off.

Official sources said here yesterday the other major item on agenda is discussion on the proposed $7 billion gas pipeline with the top Pakistani leadership as both the sides have made it clear to go ahead with the project whether India join it or not, he said.

As the Iranian delegation visits Islamabad, he said the United States has once again asked Pakistan to distance itself from the pipeline project through diplomatic channels.

However, he said Pakistani leadership was so far adamant in its refusal to constant US demands as it believed the project was vital for meeting the country’s ever-growing energy needs.

Another senior official when contacted confirmed that the talks on gas pipeline with the Iranian First Vice President could prove to be decisive as Pakistan has no other option but to go ahead with the proposed gas pipeline from Iran after the United States refused to help meet its energy requirements through extension of civilian nuclear re actors.

He said talks on the gas pipe line were at quite advanced stage and both the sides could go for some concrete development during the month of June. As for Iran’s nuclear stand-off with the western states Pakistan was doing its best to help end the crisis in a peaceful manner through diplomatic norms and means, the official said.

He said the United States has been told that Islamabad would not support any military action against Iran, as it would be catastrophic for regional peace and stability.

The Iranian delegation led by foreign minister will also participate in the Pakistan-Iran Joint Economic Commission meeting to be held here on May 24, the official said.

Earlier, Hasan Nawab, managing director of Inter State Gas (Pvt) Ltd, said the estimated cost of the project for Pakistan would be around $2.5bn.

“Whether India joins or not, Pakistan cannot delay the project. (But) if India joins, the project would be more feasible,' Hasan said.

http://www.thepeninsulaqatar.com/Display_news.asp?section=World_News&subsection=Pakistan+%26+Sub-Continent&month=May2006&file=World_News2006051645215.xml

[candypreet]

good thread again

[Ethyl]

It will be interesting to see what choice India makes with respect to their pipeline arrangement.

[candypreet]

It will be interesting to see what choice India makes with respect to their pipeline arrangement.
I agree.

[Ethyl]

AZERBAIJAN TO IMPORT MORE GAS FROM IRAN
[May 21, 2006, 13:55:03]

Experts have already completed the feasibility study of the project allowing Azerbaijan to get 1 billion cubic meters of gas from Iran, press service of the Azerigaz Closed Company announced.

The agreement was reached between the Presidents of Azerbaijan and Iran.

The imported gas will be used to fuel an electric power station in Ali Bayramli region.

The volume of gas imported from Iran to the Autonomous Republic of Nakhchivan will also be increased.

http://www.azertag.com/en/index.shtml?language=english&catid=&news_year=&news_month=&news_day=&newsid=178150&themes_viewing=&themes_page=&themeid=&news_page=

[Ethyl]

~snip~

The new centers of power are arising in the world, said the Belarusian President.

“This is connected with rise in prices of energy source. China, India, Persian Gulf countries and Latin America are all standing on their feet. The main thing is that Russia is rising too,” he said.

http://www.wincoast.com/forum/showthread.php?t=33017

[Ethyl]

MOSCOW, May 23 (Reuters) - Russia's top oil producer LUKOIL (LKOH.RTS: Quote, Profile, Research) on Tuesday reported a 2005 net profit of $6.4 billion, slightly above a Reuters poll of eight analysts whose average net profit forecast was $6.3 billion.

LUKOIL's net profit totalled $4.25 billion in 2004. The results were reported under U.S. GAAP standards.

"The increase in net income resulted from favourable price conditions in 2005 and effective cost control," LUKOIL said in regulatory documents.

"However, an increased tax burden has restrained growth of our profitability."

Revenues increased to $56.22 billion from $34.06 billion, also above analysts' expectations of $55.82 billion.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) amounted to $10.40 billion, roughly in line with analysts' forecasts of $10.19 billion.

The figures "are moderately above forecasts and so they are unlikely to have a very big impact," said Adam Landes, an analyst at Renaissance Capital.

http://today.reuters.com/business/newsArticle.aspx?type=naturalResources&storyID=nL23117911

[Ethyl]

Iran opposes laying of oil, gas pipelines on Caspian seabed

Iran's Ambassador to Kazakhstan Ramin Mehmandoost stated Sunday that the Islamic Republic of Iran is opposed to laying oil and gas pipelines on Caspian seabed.


Speaking to IRNA, he said Iran has repeatedly declared its position on the issue.

There are two reasons for Iran's opposition to the plan namely: there is 'no legal regime has been defined for Caspian Sea' and the existing problems pertaining to protecting the sea's environment, he said.

To implement the plan, the legal regime of the Caspian Sea should be drawn up, all five countries sharing common coastline around the Sea should agree with the plan and ensure that the plan does not threaten the environment and is in conformity with international standards.

Turning to his recent talks with Kazakh Minister of Energy and Mineral Resources Baktykozha Izmukhambetov, he said that at the meeting the Kazakh minister called for Iran's consent and cooperation with the construction of pipelines to transfer Kazakh oil and gas to Europe via Caspian Sea waters and Iran declared of its concerns accordingly.

Given the newly built facilities in Neka port in north of Iran, he said the two sides also discussed exchange of Kazakh oil via Iran, he said.

Kazakh Prime Minister Danial Akhmetov at the end of ECO meeting in the Republic of Azerbaijan, said the country is to study construction of pipeline to transfer oil and gas via Caspian Sea.

The project will seek to transfer Kazakh oil and gas to Europe via Caspian Sea, Azerbaijan and Turkey, he said.

http://www.today.az/news/business/26066.html

[Ethyl]

Eight Oil Workers Abducted From Rig Off Nigeria

Armed rebels raided an oil drilling rig 40 miles off the Nigerian coast early today and kidnapped eight foreign oil workers, in the latest of a string of violent incidents meant to disrupt oil production in the country's oil-rich Niger Delta region.

The abducted workers — one American, six Britons and a Canadian — were part of a crew of 84 aboard the rig, the Bulford Dolphin, according to a statement by Fred Olsen Energy ASA, the Norwegian company that operates the rig.

"There has been contact from the group that is holding the eight personnel," said Sheena Wallace, a spokeswoman for Fred Olsen Energy, which is based in Oslo. She said the attackers sought negotiations, but gave no indication yet of who they were or what they were seeking.

While the incident itself did not directly affect oil production, it added to widespread concerns that global oil supplies remain particularly vulnerable to disruption, at a time when there is little or no spare capacity available.

Oil prices rose on the news; in New York, the benchmark contract for crude oil to be delivered next month was up by a dollar a barrel in early trading today.

Also adding to today's anxiety on world energy markets was the political standoff surrounding Iran's nuclear program. Iran appeared to dismiss an opening provided by the United States, Russia, China and Europe, which agreed on Thursday to offer a packaged of incentives meant to resolve the dispute. Energy experts worry that a worsening of the dispute may affect Iran's oil exports at a time when supplies are already tight and demand is growing.

Echoing these concerns, representatives from the Organization of the Petroleum Exporting Countries, who were meeting in Caracas yesterday, decided to keep pumping as much oil as they could, ignoring calls by Hugo Chavez, the president of Venezuela, to pare production.

After a few weeks of relative calm, the volatile situation in Nigeria reclaimed the attention of oil traders today.

In recent months, militant groups have been demanding that the coastal region receive a greater share of national oil revenue, and have been pressuring the government by attacking oil facilities. A previously unknown group, the Movement for the Emancipation of the Niger Delta, claimed responsibility for previous kidnappings and attacks against pipelines and export terminals.

Because of these incidents, Nigeria's oil production has fallen by 20 percent, or more than 550,000 barrels of oil a day, since the beginning of the year.

Today's abduction is the fourth involving foreign oil workers this year. In the first two episodes, the hostages were released unharmed within a few weeks. But in an apparent escalation of violence last month, an American working for Baker Hughes, an oilfield services company, was shot and killed in Port Harcourt.

Nigeria, which produces a type of light crude oil that is favored by refiners, is the fifth-largest oil exporter to the United States and the largest producer in Africa.

http://www.nytimes.com/2006/06/02/world/africa/02cnd-nigeria.html?hp&ex=1149307200&en=1c46768f873ac3a9&ei=5094&partner=homepage

[Ethyl]

Oil: leading Iran to success or failure?

Oil is an ace up Iran's sleeve. Any sign of turbulence in the fourth largest oil producer of OPEC will disturb the international crude market and thus put the West on jitters.

Oil is also Iran's Achilles' heel. The big refined oil importer, as well as a big crude exporter, will face severe challenges if economic sanctions cut off gasoline imports. That underlies Iran's eagerness for nuclear power development.

The high international crude prices hovering around 70 US dollars per barrel this year has benefited Iran greatly, making its petrodollar special fund hitting a record of 24 billion US dollars.

An AP journalist in Tehran said that it was a long-held dream of the Iranian government to accelerate its economy and build an economic power in the Middle East. But the US blockade and restrain have denied its access to foreign investment and advanced technologies.

In this case, the rising oil prices on the world market inflates Iran's forex holding and heats up the domestic investment. The capital shortfall has been eased in this way.

In the meantime, Iran is also a big refined oil importer with 40 percent of its 75 million liter gasoline consumption per day coming from other countries.

For the Iranian people, especially the younger generation born after the Islamic Revolution in 1979, cars are part of their life and transportation basically depends on trucks.

Auto possession is still increasing there, leading to much reliance on imported gasoline.

An official with the National Iranian Oil Company also recognized that it was a paradox in Iran's economy with oil being both its strongest and weakest point.

Western countries apparently also have realized that. A article titled How to stop Iran without firing a shot on the Wall Street Journal by Bret Stephens proposed four initiatives beyond military actions to deal with Iran, including "a gas quarantine".

In European Union's package of addressing the Iran nuclear issue, embargo on refined oil is also one of the possible punitive measures in the case of Iran's rejection to the package.
http://english.people.com.cn/200606/03/eng20060603_270768.html

[Ethyl]

Azerbaijan exported 1.356.032 ton oil to world states

State Oil Company of Azerbaijan Republic (SOCAR) Marketing and Economic Operation Office exported 334.058 ton oil productions to world countries in May 2006.

Generally, with 5 month of current year, the volume of oil productions reached to 1.356.32 ton, SOCAR press service has told APA. Diesel fuel among the productions exported in May consisted of 158.470 ton (627.152 ton in early year), petroleum for automobile 44.468,6 ton (generally 105.20 ton), fuel for plane 16.879 ton (106.521 ton), black oil 106.332,3 ton (475.323,5 ton), lubricating oil 3.239 ton (6.927,5 ton), oil bitumen 4.668,6 ton (5.122,7 ton). Previous month automobile petroleum was the most expensive oil production in the world market. In May 1 ton of automobile petroleum was sold 704,69 dollar, as well as directly filled petroleum’s one ton was 677,11 dollars, one ton of mazut for 337,97 dollars, diesel fuel’s one ton for 624,04 dollars./APA/

http://en.apa.az/news.php?id=10568

[Ethyl]

Oil gains as Iran warns of Gulf supply disruption

Oil prices rose on Monday after Iran warned Washington that a "wrong move" in the standoff over Tehran's nuclear ambitions would endanger flows from the Gulf, which pumps nearly a quarter of the world's crude.

The remarks from Supreme Leader Ayatollah Ali Khamenei raised concerns growing tension between the West and Iran, the world's No. 4 oil exporter, could disrupt crude shipments from the region. Iranian officials previously had said Tehran would not use oil as a weapon.

"The threat, whilst remote, would be serious in the context of global oil markets operating with little more than 2 million barrels per day of spare capacity," a Citigroup report said.


U.S. crude <CLc1> settled 27 cents higher at $72.60 a barrel after jumping to $73.84 earlier in the day. London Brent <LCOc1> rose 34 cents to $71.37.

U.S. oil futures briefly traded lower in late activity after Federal Reserve Chairman Ben Bernanke said the Fed needed to be vigilant to ensure inflation stays under control even as the economy starts to show a slower pace of growth.

Analysts have been concerned that rising energy costs, which hit records in recent months on geopolitical tensions, could spur inflation and hurt the economy.

Gains also were tempered by a U.S. government report showing offshore crude production rising 115,000 barrels per day since early May as oil companies made strides recovering from last year's devastating hurricanes.

Tension between Iran and the United States over Tehran's nuclear program has helped drive oil's 20 percent rally this year.

U.S. Secretary of State Condoleezza Rice reacted to Khamenei's comments by counseling a wait-and-see approach.

Washington offered to join European countries in talks with Iran about its atomic work, but said Tehran must first suspend uranium enrichment. Iran so far has rejected the demand, saying enrichment is a national right.

President Mahmoud Ahmadinejad said Saturday Iran would consider proposals on incentives to stop nuclear work from the United States, Russia, China, France, Germany and Britain but insisted the crux of the package was unacceptable.

EU foreign policy chief Javier Solana was to present the proposals to Iran Tuesday.


Oil prices were also boosted by production problems at U.S. refineries during the start of peak summer fuel demand.

"Every bump in refinery operations and every tropical storm will keep gasoline prices quite bullish, relative to crude oil," PFC Energy said in a report.

The disruptions came at the start of what was expected to be another busy storm season in the U.S. Gulf, where hurricanes last year wrecked refineries and drove oil to record highs.

OPEC producers agreed last week to leave output limits unchanged and keep pumping at near full rates in a bid to ease prices, which they worry will spur inflation that could slow economic growth and sap oil demand.

OPEC linchpin Saudi Arabia said it cut output to 9.1 million barrels a day in April due to a drop in refinery demand, not a desire to lower stock levels, the Wall Street Journal quoted Oil Minister Ali al-Naimi as saying.

http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-06-05T201452Z_01_SP342982_RTRUKOC_0_US-MARKETS-OIL.xml&archived=False

[pixikill]

ethyl, is your new suv on natural gas and not petrol???? or is it a hybrid?

[Ethyl]

ethyl, is your new suv on natural gas and not petrol???? or is it a hybrid?

oh the shame and horror!

no, it's petrol. =/ I bought a Ford.

[Ethyl]

Iran May Try to Join Caspian Oil Pipeline

A top Iranian energy official said Wednesday that Iran could negotiate pumping its oil from prospective Caspian oil fields through the U.S.-backed pipeline intended to carry the rich Caspian Sea oil resources to Western markets.

Mahmood Khaghani, the Caspian department chief in the Iranian oil ministry, said that Iran's relations with Azerbaijan were solid enough to discuss an opportunity for Iran to pump its crude into the pipeline that carries oil from Baku, Azerbaijan, to Turkey's Mediterranean port of Ceyhan.

"We are currently exploring for oil in the southern Caspian," Khaghani told reporters when asked whether Iran could join the pipeline consortium. "Our relations with Azerbaijan have been developing so successfully that, if we get positive results in the southern Caspian, we could discuss the issue."

He said, however, that "the companies which today are pumping crude through the Baku-Ceyhan pipeline could decide tomorrow that it's more feasible to carry oil to world markets via the Iranian territory." "Economic feasibility should be the main factor," said Khaghani, who attended a Caspian energy conference in Baku.

The U.S.-backed Baku-Ceyhan pipeline, which opened in May 2005, allows the West to tap oil from the rich Caspian Sea fields, estimated to hold the world's third-largest reserves, bypassing Russia and Iran.

The full official launch of the 1,760-kilometer (1,100-mile) pipeline will take place in the southern Turkish port of Ceyhan on July 13. It is eventually expected to bring 1 million barrels a day of Azerbaijani crude to Ceyhan for export to the West.

British oil giant BP PLC is the pipeline consortium's main participant and the largest foreign investor in Azerbaijan's oil sector.

http://www.chron.com/disp/story.mpl/ap/fn/3946968.html

[Ethyl]

Morocco boosts oil stocking capacity

Projects that Morocco has launched in the field of energy will boost the country's stocking capacity. These projects will also improve the supply conditions of the market in preparation for the liberalisation of the oil sector by 2009.

Speaking on Wednesday during question time at the House of Representatives, Energy and Mines Minister, Mohamed Boutaleb gave the example (of these projects) of the Tanger-Med Special Agency (TMSA), which allowed for the construction of a new depot for oil products. The depot is due to be operational by end 2008 with a capacity of 308 000 sq meters in the port of the northern town of Tangier.

Other projects of building new depots with a stocking capacity of 300 000 sq meters will be launched soon in western Morocco, he said.

The minister recalled that the government and the state-owned oil refinery, SAMIR have signed an agreement under which the company will invest about $600 million to modernise refinery equipment in the western town of Mohammedia.

The government had to resort several times to the increase of oil products' prices to mitigate the budgetary constraints that the State is facing because of the continuing upsurge of oil prices in the international market.

http://northafrica.andnetwork.com/index?service=direct/1/Home/recent.titleStory&sp=l45712

[Ethyl]

3 Filipino gas workers abducted in Nigeria

Three Filipinos were abducted by unidentified gunmen on Friday on their way to work at a natural gas export plant in southern Nigeria, police said.

The abduction of the contractors working at the Nigeria Liquefied Natural Gas complex in Bonny follows the abduction of a German from the nearby city of Port Harcourt on Thursday, and comes amid an increasingly bloody insurgency by militants fighting for local control over the Niger Delta's oil wealth.

"A group of gunmen intercepted their car, shot their tyre, fired into the air and took three Filipinos away in a speedboat," a police spokeswoman said.

Militants from the Movement for the Emancipation of the Niger Delta (MEND) have waged a campaign of kidnapping and sabotage against the world's eighth largest oil exporter, which has cut crude output by a quarter since February.

A MEND spokesman told the agency they were not involved in the abduction of the German.

"He was taken by a criminal band for ransom," the spokesman said in an email.

Well armed criminal groups, some involved in large-scale theft of crude oil from pipelines, regularly attack oil and gas installations and workers to extort money or get other concessions from companies.

Hostages are usually released unharmed after a few days after the payment of a ransom, which analysts say fuels the cycle of violence.

The Niger Delta is a vast wetlands region almost the size of England which is home to all Nigeria's oil and gas.

Most of its people live in poverty and much of the money meant for local development is stolen by elected officials.

The Nigeria Liquefied Natural Gas complex in Bonny is one of the world's largest such plants, exporting 18 million tonnes of frozen, pressurised gas in tankers to power stations in Europe and the United States.

Company officials were not immediately available for comment.

http://www.hindustantimes.com/news/181_1760662,00050006.htm

[Ethyl]

Iran hits out at US remarks on IPI gas pipeline project

Hitting out at Washington after an American official's comments about the Iran-Pakistan-India (IPI) gas pipeline, Tehran on Tuesday said the United States should support such projects for the benefit of the international community instead of polluting political atmosphere.

Speaking at a business meeting organized by Federation of Indian Chamber of Commerce and Industry (FICCI), here, US assistant secretary of state for South and Central Asian Affairs Richard Boucher on Monday said Washington considers Iran to be "not a reliable partner" and India could tap Central Asia to meet the fuel needs of her growing economy, Asian Age reported here today.

The embassy of the Islamic Republic of Iran, here on Tuesday retaliated by putting out a statement that read: "The interests of the nations of the region require support of all global players to the projects which may bring about prosperity and development and would also help in reducing tension and terrorism.

"It would be better to consider the economic, political and social benefits of such big regional and trans-regional projects for the the international community, instead of polluting political atmosphere, encouraging arms race and imposing political pressure on responsible countries."
The statement also said, "It should be understood that independent countries have rights and capacity to take decision on the basis of their national interests.

The US is backing the Turkmenistan-Afghanistan-Pakistan gas pipeline project and its possible extension to India as an alternative to the India-Pakistan-Iran pipeline.

The US is opposed to the over dlrs 7 billion 2,100-kilometer pipeline project as revenues from gas sales would help Tehran further its nuclear program, which Washington alleges is for military purpose.

Tehran, however, denies the allegation. "Our experience with Iran makes us realize that it is not a reliable partner," Boucher said.

"We think by opening up Afghanistan and making it a place for transit, we have made a positive change," he added.

Boucher, however, said it was for India to decide whether to go ahead with the pipeline project based on commercial viability and its own experience of working with Tehran.

http://www.irna.ir/en/news/view/line-16/0608091700154241.htm

[Ethyl]

Explosion causes fire on newly inaugurated Caspian oil pipeline to Turkey

ANKARA, Turkey (AP) - An explosion caused a huge fire on the newly inaugurated Caspian Sea pipeline to Turkey on Saturday, paramilitary police said.

The explosion occurred near the town of Patnos in Turkey's eastern province of Agri.

A paramilitary police official in Patnos said the fire was visible from kilometres away. He was speaking on condition of anonymity because of regulations that bar military officials from speaking to journalists without prior authorization.

The cause of the explosion was not immediately clear but autonomy-seeking Kurdish rebels are active in the region.

Private NTV television said sabotage was suspected.

The 1,768-kilometre pipeline stretches from the oil fields in Baku, Azerbaijan, to the Turkish Mediterranean port of Ceyhan.

The presidents of Turkey, Azerbaijan and Georgia formally inaugurated the pipeline in July.

Some 430,000 barrels of oil are flowing through the pipeline each day.

http://www.brandonsun.com/story.php?story_id=27071

[candypreet]

India to join Turkmenistan-Afghanistan-Pak pipeline project

Even as the proposed Iran-Pakistan-India natural gas pipeline is stuck over pricing, India is all set to join the Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline project. A top official said India, which is looking for alternative sources of gas, would participate in the TAP meeting scheduled for September to join as a partner in the project.

A high-level team of the Petroleum Ministry is expected to participate in the meeting. Some of the issues, which are likely to be discussed, include finalising amendments to the inter-governmental and framework agreements of the project. Though TAP is not being considered as an alternative to the Iran-Pakistan-India pipeline, it would be easier to implement as it is supported by the Asian Development Bank (ADB). In mid-February, the Steering Committee of TAP had given India three months' time for submitting a formal request to join the $3.3-billion project. The feasibility report has been prepared by ADB, which is the lead development partner.

TAP is expected to transport 100 mmscmd (million standard cubic metres per day) of gas, of which India's share at best is likely to be 60 mmscmd. The Union Cabinet had in May approved participation of India in the TAP natural gas pipeline project. With this participation TAP would become TAPI - Turkmenistan, Afghanistan, Pakistan and India. The Cabinet had authorised the Ministry of Petroleum and Natural Gas to submit a formal request to join the project to the governments of Afghanistan, Pakistan and Turkmenistan, a process, which was facilitated by the ADB.

The proposed pipeline would stretch from the Turkmenistan/Afghanistan border in south-eastern Turkmenistan to Multan, Pakistan (1,271 km), with a 640-km extension to India. The proposed pipeline will carry natural gas from the Dauletabad Field in south-eastern Turkmenistan.

http://www.moneycontrol.com/india/news/economy/iranpakistan/indiatojointurkmenistanafghanistanpakpipelineproje ct/market/stocks/article/236152

[candypreet]

India needs guarantees for 'gas' through Pak

PRESS TRUST OF INDIA
Posted online: Wednesday, August 23, 2006 at 1714 hours IST
Updated: Wednesday, August 23, 2006 at 1737 hours IST


http://www.financialexpress.com/latest_full_story.php?content_id=138153

[Ethyl]

Turkey to Bargain with Iran and Russia on Natural Gas

After the official opening of the Baku-Thiblisi-Ceyhan (BTC) pipeline last month, the energy focus has shifted to the Sahdeniz Project.

Turkey will be able to access $120 Azeri Gas beginning from September 30 in the frame of the Sahdeniz Project if no major difficulties occur before then. The project will be turkey’s second prestigious project after the BTC pipeline. Turkish Energy Ministry will have a stronger hand against Russia and Iran as this project gives them the opportunity to purchase cheaper Azeri gas. The price of Russian gas was $243 and Iranian gas was $263 at the end of 2005. Natural gas prices had increased in recent months parallel to oil prices. Sources close to the ministry noted there are some negative developments in the Sahdeniz project due to the attitude of British Petroleum (BP). It is claimed that the British company plans to cancel the contract in order to sell the $120 gas to other countries at a higher price.

A top level Botas authority admitted there has been a gas problem between Georgia and Russia and added that Georgia wants to reduce the amount of gas it buys to two billion cubic meters down from 6.6 billion cubic meters. The authority said Russia wants to change Azerbaijan’s policy and increase the price of natural gas so it plans to reduce the amount of gas that Azerbaijan will sell to Turkey. The authorities accuse BP of provoking the situation and added: “Azerbaijan and other partners want to increase the gas price. They make statements on different platforms for this reason; however, our contract is strong enough to deal with this.” It is reported that Georgia established connections with Turkey to buy gas however the authorities of Energy Ministry rejected this considering Turkey’s need for gas.

BP authorities said they do not want to lose Turkey as a market and added they are not planning to sell Azeri gas to Georgia or any other countries. The very same authorities claim that Azerbaijan, which also buys gas from Russia, might be considering reducing the amount of gas it promised to sell Turkey. Gunsayil Company, which oversees the Turkey leg of the project, defended there is no delay in the project as claimed and the 225 kilometer pipeline will be completed by late September.

BP has the largest share among the partners in the Sahdeniz project. The distribution of shares in the project among the companies is as follows: BP 25 percent; Statiol 25 percent; Sca, Total, Nico and Lucoil companies 10 percent each and TPAO 9 percent. The Azeri gas will be taken from Georgia-Turkey border and will be connected to the pipeline coming from Iran via the 225 km long Sahdeniz Natural Gas Pipeline Project. After that the Azeri gas will reach to Ankara, 1,200 kilometers away. Greece is expected to receive 750 million cubic meters of the total 6.6 billion cubic meters to be purchased.

Turkey’s biggest Supplier Russia

Turkey focused on the natural gas issues after Russia had problems with Turkmenistan and Ukraine and following a jump in oil prices. Turkey meets the majority of its need for gas from Russia and Iran and took action to increase the variety of its natural gas suppliers. The aim of Turkey here is to provide supply security and reduce the price of the gas purchased from Russia and Iran. Turkey plans to buy 6.6 billion cubic meters of natural gas annually for 15 years as part of the Sahdeniz Project. The $150-160 priced Egyptian natural gas, with 10 billion cubic meters capacity, will be available for Turkey in Early 2008.

http://www.zaman.com/?bl=economy&alt=&hn=35998

[Ethyl]

Report: Amaranth Advisors to shut down

NEW YORK — The founder of a hedge fund that lost about $6 billion because of bad energy trades said in a letter to investors this week the fund is preparing to shut down, according to a published report.

Nicholas Maounis of Amaranth Advisors LLC wrote that the fund is suspending all redemptions for Sept. 30 and Oct. 31 so that it could "generate liquidity for investors in an orderly fashion, with the goal of maximizing the proceeds of asset dispositions," The New York Times reported.

Messages left with Greenwich, Conn.-based Amaranth Friday were not returned.

As recently as Sept. 22, Maounis said in a conference call that he had hoped to stay in business.

"We have every intention of continuing in business and generating for our investors the same consistently high-risk adjusted returns which have been our hallmark, and we are fully committed to doing so," Maounis said.

But in the letter, he acknowledged that investors have asked for their money back in recent days. Redemption fees and charges will be waived once investors are allowed to take their money out, and cash will be distributed proportionately, the letter said.

Amaranth's implosion is one of the biggest hedge fund losses to date and comes as fund investment has poured into energy markets. The fund's energy desk had made significant bets on natural gas, but found itself in positions too large to liquidate this month after some prices fell.

Amaranth's energy and commodities portfolio was responsible for a big chunk of the fund's previous success, booking a $1.26 billion profit in 2005 and $2.17 billion for this year to the end of August.

It began incurring large losses in natural gas in the week starting Sept. 11, and on Sept. 14, Amaranth lost roughly $560 million on its natural gas position as prices for the commodity plummeted to a two-year low.

http://www.chron.com/disp/story.mpl/ap/business/4226304.html

[Ethyl]

WASHINGTON CHALLENGED BY GEORGIAN-RUSSIAN CRISIS

As US Secretary of State Condoleezza Rice prepares to visit Moscow on October 21, the rapid increase in Georgian-Russian tension is posing a serious diplomatic test for the United States. American policy makers must walk a fine line in trying to encourage a compromise between Moscow and Tbilisi, without assuming too great a diplomatic liability through over-involvement.

Georgia may have overplayed its hand by arresting Russian military intelligence officers on espionage charges in a very public fashion in late September, instead of just expelling them quietly -- the normal modus operandi in such cases. In response to the arrests, Moscow recalled its ambassador from Tbilisi, imposed punitive measures designed to disrupt Georgian trade, and halted issuing visas to Georgian citizens.

Bearing the brunt of Russian retaliatory measures is the 1-million-strong Georgian Diaspora in Russia. Ethnic Georgians, including children, who presumably were staying in Russia illegally, have been forcibly repatriated. Prominent Georgian intellectuals who are Russian citizens are being harassed by the tax police. Georgian businesses in Moscow are being singled out by law enforcement authorities. The handling of this crisis is further damaging Russia’s international standing as a dependable member of the G-8.

Since President Mikheil Saakashvili rose to power in the Rose Revolution of 2003, Russia has watched Georgia become an arch-nemesis of the Kremlin’s geopolitical interests. In recent years, Georgian leaders have pushed to terminate Russia’s military presence on Georgian territory; aggressively pursued membership in the NATO alliance; opposed Russian membership in the World Trade Organization; and tried to weaken Russian influence in the separatist regions of Abkhazia and South Ossetia. In response, the Putin administration has embargoed Georgia’s key exports into Russia: Borjomi mineral water and wine.

Russia has not concealed its desire to witness regime change in Tbilisi. The level of existing tension means that the outbreak of armed conflict is a very real possibility. In September, South Ossetian separatists, who receive Russian military support, fired on Georgian helicopter carrying Georgian Minister of Defense Irakli Okruashvili. This provocation, if it had succeeded in downing the helicopter, could have led to a renewal of war in the small secessionist territory that is a part of Georgia.

Russia’s regional and global strategic aims explain why Moscow is escalating its conflict with Georgia. First, this is not the first time that Russia has attempted to block NATO enlargement into former Soviet territory. In 1999, Russia fulminated against the Baltic States’ NATO membership. But at that time, Russia was extricating itself from a 1998 economic crisis, while, concurrently, a political succession struggle was playing out in Moscow. In part because energy prices were much lower in 1999, Western European countries supported the Baltic states’ NATO bid despite Russian protests. Today, with Europe dependent on Russia’s Gazprom, EU leaders are taking Russia’s foreign policy positions much more seriously.

Second, the Kremlin is now buoyed by $250 billion in petro-dollar reserves. These funds can buy a lot of hardware for the Trans-Caucasus Military District and pro-Russian separatists in Abkhazia and South Ossetia.

Third, Russia is wary about the Baku-Tbilisi-Ceyhan oil pipeline, which takes Azerbaijani oil to Mediterranean markets, crossing Georgia and bypassing Russia. Soon the Baku-Tbilisi-Erzurum natural gas pipeline will come online, bringing Azeri gas to Turkey and Europe, once again bypassing Russia. Gazprom fears that this gas pipeline may eventually allow Turkmenistani and Kazakhstani natural gas to circumvent its pipeline network on its way to Europe.

If Georgia comes under the Russian sway, neighboring Azerbaijan would feel the full weight of Russian influence. Foreign policy experts in Moscow believe that the Russian government is angry that Azerbaijan has not allocated enough oil patches to Russian companies, and has facilitated its oil exports via Turkey instead of Russia. With increased power in the region, Russia is likely to act on these concerns.

If a pro-Russian administration were to come to power in Georgia, the Kremlin would enjoy self-evident geopolitical benefits. Russia would regain its stranglehold on the development and export of Caspian Basin energy resources. It would also put to rest American ambitions in Central Asia, and could cut off strategically important Kazakhstan from the western energy markets.

At this stage, however, the only scenario under which Russia could get its wish is via the use of force – an inherently risky proposition with potentially unforeseen consequences and side-effects, not only for Moscow itself, but also for the United States and all countries in the region, including Iran.

The United States today is preoccupied with Iraq, Afghanistan, Iran, and North Korea. Russia is a key player in all of these. Its increased cooperation in these disputes, so far insufficient, would be welcome. The future of US-Russian relations and global security requires that Moscow behave responsibly and constructively. Quickly defusing the Georgian crisis through diplomacy would be a good place to start. Washington should encourage the European powers, the European Union, and Turkey to become more engaged in diffusing the Georgian-Russian confrontation. Finally, Washington should advise Georgia not to escalate its rhetoric on Russia unnecessarily, or needlessly antagonize its large neighbor. After all, a peaceful and prosperous Caucasus is in Russian, Georgian, and American interests.

http://www.eurasianet.org/departments/insight/articles/eav101806a.shtml

[Ethyl]

Serious troubles have erupted in the Pakistan province of Baluchistan since the assassination of an opposition leader in August. Pressure for independence is growing in this region bordering Iran and Afghanistan, which challenges Pakistan's authority.
__________________________________________________ _________


THE slow-motion genocide being inflicted on Baluch tribesmen in the mountains and deserts of southwestern Pakistan does not yet qualify as a major humanitarian catastrophe compared with the slaughter in Darfur or Chechnya. "Only" 2,260 Baluch fled their villages in August to escape bombing and strafing by the US-supplied F-16 fighter jets and Cobra helicopter gunships of the Pakistan air force, but as casualty figures mount, it will be harder to ignore the human costs of the Baluch independence (1) struggle and its political repercussions in other restive minority regions of multi-ethnic Pakistan (2).

Already, in neighboring Sindh, separatists who share Baluch opposition to the Punjabi-dominated military regime of General Pervez Musharraf are reviving their long-simmering movement for a sovereign Sindhi state, or a Sindhi-Baluch federation, that would stretch along the Arabian Sea from Iran in the west to the Indian border. Many Sindhi leaders openly express their hope that instability in Pakistan will tempt India to help them, militarily and economically, to secede from Pakistan as Bangladesh did with Indian help in
1971.

Some 6 million Baluch were forcibly incorporated into Pakistan when it was created in 1947. This is the fourth insurgency they have fought to protest against economic and political discrimination. In the most bitter insurgency, from 1973 to 1977, some 80,000 Pakistani troops and 55,000 Baluch were involved in the fighting.

Iran, like Pakistan, was then an ally of the United States. Shah Mohammed Reza Pahlavi, who feared that the insurgency would spread across the border to 1.2 million Baluch living in eastern Iran, sent 30 Cobra gunships with Iranian pilots to help Islamabad. But this time Iran is not a US ally, and Iran and Pakistan are at odds. Tehran charges that US Special Forces units are using bases in Pakistan for undercover operations inside Iran designed to foment Baluch opposition to the regime of President Mahmoud Ahmadinejad.

Much of the anger that now motivates the Baluch Liberation Army (BLA) is driven by memories of Pakistani scorched earth tactics in past battles. In a climactic battle in 1974, Pakistani forces, frustrated by their inability to find Baluch guerrilla units hiding in the mountains, bombed, strafed and burned the encampments of some 15,000 Baluch families who had taken their livestock to graze in the fertile Chamalang Valley, forcing the guerrillas to come out from their hideouts to defend their women and children.

`Indiscrimate bombing'

In the current fighting, which started in January 2005, the independent Pakistan Human Rights Commission has reported that "indiscriminate bombing and strafing" by F-16s and Cobra gunships are again being used to draw the guerrillas into the open. Six Pakistani army brigades, plus paramilitary forces totalling some 25,000 men, are deployed in the Kohlu mountains and surrounding areas where the fighting is most intense.

Musharraf is using new methods, more repressive than those of his predecessors, to crush the insurgency. In the past Baluch activists were generally arrested on formal charges and sentenced to fixed terms in prisons known to their families. This time Baluch spokesmen have reported large-scale kidnappings and disappearances, charging that Pakistani forces have rounded up hundreds of Baluch youths on unspecified charges and taken them to unknown locations.

The big difference between earlier phases of the Baluch struggle and the present one is that Islamabad has so far not been able to play off feuding tribes against each other. Equally importantly, it faces a unified nationalist movement under younger leadership drawn not only from tribal leaders but also from an emergent, literate Baluch middle class that did not exist three decades ago. Another difference is that the Baluch have a better armed, more disciplined fighting force in the BLA. Baluch leaders say that rich compatriots and sympathisers in the Persian Gulf provide money needed to buy weapons in the flourishing black market along the Afghan frontier.

President Musharraf has repeatedly accused India of supplying weapons to the Baluch insurgents and funds to Sindhi separatist groups, but has provided no evidence to back up these charges. India denies the accusations. At the same time New Delhi has issued periodic statements expressing concern at the fighting and calling for political dialogue.

India brushes aside suggestions that it might be tempted to help Sindhi and Baluch insurgents if the situation in Pakistan continues to unravel. Indian leaders say that. On the contrary, India wants a stable Pakistan that will negotiate a peace settlement in Kashmir so that both sides can wind down their costly arms race. But many India media commentators appear happy to see Musharraf tied down in Baluchistan and hope that the crisis will force him to reduce
Pakistani support for extremist Islamic insurgents in Kashmir.

Unlike India, Iran has its own Baluch minority and fears Baluch nationalism. The Baluchistan People's party, one of the leading Baluch groups in Iran, said on 5 August that a radical Shia cleric, Hojatol Ibrahim Nekoonam, recently installed as the justice minister of Iran's Baluchistan province, has launched a campaign of military and police repression spearheaded by the Mersad clerical secret police, in which hundreds of Baluch have been rounded up and, in many cases, executed on charges of collaborating with the US.

Apart from being smaller in number, the Baluch in Iran are not as politically conscious or as well organised as those in Pakistan, and their principal leaders dismiss the idea of secession or of union with the Baluch in Pakistan. The Baluchistan People's party is part of a coalition with groups representing other disaffected minorities in Iran – the Kurds, Azeri Turks and Khuzestani Arabs -- which is seeking a federal restructuring in which Iran would retain control over foreign affairs, defence, communications and foreign trade, but cede autonomy in other spheres to three minority autonomous regions.

Goal of the insurgency

In Pakistan, where the Baluch have been radicalised by their periodic military struggles with Islamabad, many Baluch leaders believe that the goal of the insurgency should be an independent Baluchistan, unless the military regime is willing to grant the provincial autonomy envisaged in the 1973 constitution, which successive military regimes, including the present one, have nullified. What the Baluch, Sindhis, and a third, more assimilated ethnic minority, the Pashtuns, want above all is an end to the blatant economic discrimination by the dominant Punjabis.

Most of Pakistan's natural resources are in Baluchistan, including natural gas, uranium, copper and potentially rich oil reserves. Although 36% of the gas produced in Pakistan comes from the province, Baluchistan consumes only a fraction of production because it is the most impoverished area of the country. For decades, Punjabi-dominated central governments have denied Baluchistan a fair share of development funds and paid only 12% of the royalties due to it for its gas. Similarly, the Sindhi and Pashtun areas have consistently been denied fair access to the waters of the Indus River by dam projects that channel the lion's share of the water to
the Punjab.

In a television speech on 20 July, devoted mostly to Baluchistan, Musharraf dismissed Baluch charges of economic discrimination and announced a $49.8m development programme for the province, half for roads and other infrastructure projects. The "real exploiters" of the Baluch, he said, are the tribal chieftains, known as sardars, who "have stolen development funds for themselves". He claimed that the armed forces have been sent into Baluchistan to protect the Baluch from their leaders while development proceeds. Musharraf blamed the insurgency on the sardars, principally Akbar Bugti, who was killed on 26 August when the army blew up a cave where he was hiding. But the current insurgency is not being led by the tribal elders but by a new generation of politically conscious Baluch nationalists.

What makes negotiations on autonomy difficult are the economic issues relating to taxation and to the terms for sharing the resulting revenues from the development of oil, gas and other natural resources. In most proposals for a devolution of power to the provinces, Baluch and Sindhi leaders have argued that taxes collected by the central government should not be allocated, as at present, solely on a population basis, which favours the Punjab; instead, it has
been suggested, half should be allocated on a population basis, while the rest should be distributed in accordance with the amount collected in each province. Since the provinces have equal representation in the Senate, even under the 1973 constitution, the upper chamber should be given greater powers, with the Senate, rather than the president or prime minister, empowered to dissolve a provincial legislature or to declare an emergency.

A more extreme demand is that Baluch, Pashtuns, Sindhis and Punjabis should have complete parity in both chambers of the National Assembly as well as in civil service and military recruitment, irrespective of population disparities. All factions among the minorities give priority to radically upgraded representation in the civil service and the armed forces, and all want constitutional safeguards to prevent the central government from arbitrarily removing an elected provincial government, as Prime Minister Zulfiqar Ali Bhutto did in 1973. The issue of safeguards against arbitrary central intervention is likely to be a non-negotiable one for the minorities, since they are seeking not only the substance, but also the feeling, of autonomy.

A tiny minority

The Baluch are only 3.57% of Pakistan's 165.8 million people, and the three minorities combined claim only 33%. Yet they identify themselves with ethnic homelands that cover 72% of Pakistan's territory. To the Punjabis, it is galling that the minorities should advance proprietary claims over such large areas. For this reason, the prospects for a restoration of
the 1973 constitution appear bleak.

In the final analysis, the possibility of a constitutional compromise is inseparably linked with the overall course of the struggle for democratisation. With continued military rule, the Baluch insurgency and the growing movement for Sindhi rights will be radicalised. But it is unlikely that the Baluch could prevail militarily over Pakistani forces and establish an independent state, even with Sindhi help, unless India intervenes as part of a broader confrontation with Islamabad. The prospect in late 2006 is for a continuing, inconclusive struggle by the Baluch and Sindhis against Islamabad, that will debilitate Pakistan.

In the eyes of the Baluch and Sindhis, the US has a major share of the blame for the present crisis because US military hardware is being used to repress the Baluch insurgency, and a cornucopia of US economic aid to Islamabad since 11 September 2001 has kept Musharraf afloat. Military aid to Musharraf since 9/11, including the sale of 36 F-16s, recently approved by Congress, has totalled $900m so far, and another $600m is promised by 2009. Economic aid has not only included $3.6bn in US and US-sponsored multilateral aid but also the US-orchestrated postponement of $13.5bn in overdue debt repayments to aid donors.

Instead of pressing Musharraf for a political settlement with the minorities, as some European Union officials have done, the Bush administration has said that its ethnic tensions are an "internal matter" for Pakistan itself to resolve. Human rights organisations have called for international pressure on Musharraf to pursue a settlement, and critics in the US argue that the diversion of US-equipped Pakistani forces from the Afghan frontier to Baluchistan undermines even the limited operations against al-Qaida and the Taliban that Musharraf is pursuing in response to US pressure. Until Bush's departure, however, the US commitment to Musharraf is likely to remain firm, barring the outside possibility that he will step down in the face of growing domestic pressure and permit former prime ministers Benazir Bhutto and Nawaz Sharif to participate in the presidential elections scheduled for next year.

http://www.zmag.org/content/showarticle.cfm?SectionID=32&ItemID=11197

[candypreet]

good one here

[Ethyl]

State television: Turkmen leader negotiating with UAE on gas deliveries

ASHGABAT, Turkmenistan Turkmen President Saparmurat Niyazov is negotiating with the United Arab Emirates on delivering natural gas through Afghanistan, state television reported Thursday.

"We are conducting talks with Persian Gulf countries," Niyazov said in televised remarks to the parliament. "One variant would be to bring the gas through Afghanistan to the Emirates."

He expressed confidence that Afghanistan would be peaceful one day, allowing the opening of a new energy export route.

"We already have a project for laying a gas pipeline through Afghanistan, Pakistan and India. God willing, we will be sending 30 billion cubic meters of gas through it every year," Niyazov said.

Turkmenistan is the second largest natural gas producer in the former Soviet Union, after Russia, and its vast gas resources are playing an increasingly important role in the geopolitics of the region. The Russian gas giant Gazprom controls the only transit route for Turkmen gas exports to other ex-Soviet states and Europe.

In 2003, Russia and Turkmenistan signed a 25-year deal for cooperation in the gas sector. In April, Turkmenistan concluded an agreement to build a gas pipeline to China. Beginning in 2007, it will export 14 billion cubic meters of gas annually to Iran.

http://www.iht.com/articles/ap/2006/10/26/business/AS_FIN_Turkmenistan_UAE_Gas.php

[Ethyl]

President Aliyev to sign energy memo between Azerbaijan and EU

During his visit President will meet with Belgian officials and carry on negotiations in the European Union and NATO headquarters, Azerbaijani Embassy in Belgium told the APA.

President is planned to meet with EU Secretary General for the Common Foreign and Security Policy Javier Solana, the President of European Commission Jose Manuel Barozzo, EU Energy Commissar Andris Pibalgs, the President of the European Parliament, Belgium Senate speaker. President will also make speech in Belgium Royal Institute for International Relations.

During the visit energy memorandum on strategical cooperation between Azerbaijan and EU will be signed. Ilham Aliyev will visit NATO headquarters on November 8, meet with Secretary General and other officials.

On the same day the President is expected to meet with OSCE Chairman-in-Office, Belgian Foreign Minister Karl De Gucht. The problem of the settlement of Nagorno Karabakh conflict will be discussed at the meeting.

http://www.today.az/news/politics/32274.html

[Ethyl]

. Azerbaijan Chamber of Commerce :: :: Azerbaijan Oil Fund and the Bank of New York Sign Depositary Agreement

11/6/2006

Azerbaijan Oil Fund and the Bank of New York Sign Depositary Agreement

The State Oil Fund of Azerbaijan has signed an agreement with the Bank of New York for depositary services, the Oil Fund said in an official statement.

"The Bank of New York is one of the world's leading banks for the provision of depositary services. At the moment the Bank of New York provides depositary services for assets worth $12 trillion. The bank provides services in 100 countries," the statement said.

The Bank of New York won a tender to appoint a financial organization to provide depositary services. The Bank of New York will provide services to keep the fund's money and cooperate with foreign fund managers.

The State Oil Fund was set up by an Azeri presidential decree from December 29, 1999, and is an off-budget state institution, answerable to the head of state. Revenue from the implementation of oil contracts is accumulated in the fund.

Source: Interfax

http://www.usacc.org/news.php?nid=720&cid=0

[Ethyl]

Afghanistan affair cannot split Pak-Iran relation: Rafsanjani

TEHRAN: Iran's former president and Chairman Expediency Council Ayatollah Ali Akbar Hashemi Rafsanjani said Saturday that Iran’s relation with Pakistan is far more important than Afghanistan affair and this affair can in no case create rift in Pak-Iran relationship.

Talking to Pakistani media persons here, he said that he likes Pakistan and visited Pakistan several times, adding that he was not satisfied with the relations between the two countries.

“Had Pakistan and Iran cooperated with each other, the conditions in Afghanistan would not have been the same as they are now,” he said adding that if the relations between the two countries weakened just because of Afghanistan, it would not be good for Pakistan and Iran.

Ali Akbar Hashemi Rafsanjani said that there is distance between the two governments; however, Iran does not approve of any interference by any third country in bilateral relations.

The former Iranian president said that Iran and Pakistan kept Afghan refugees for several years, but both the countries were badly affected by the illegal drug smuggling from Afghanistan.

Commenting on gas pipeline project, he said that pipeline project would be complete one day; as Pakistan and India both need natural gas.

The former president of Iran said that Iraq problem would not be easily resolved, adding that the US troops presence in Middle East is meant for geographical changes in ME; however, America would not be able to succeed in its attempts there.

http://www.thenews.com.pk/update_detail.asp?id=13511

[Ethyl]

IPI Gas Pipeline Project: Musharraf, Ahmadinejad Pledge to Expedite
By Aziz Malik ‘Pakistan Times’ Federal Bureau Chief
ISLAMABAD: President General Pervez Musharraf on Saturday talked to Iranian President Mahmud Ahmadinejad on telephone and discussed measures to expedite the US $ 7 billion Iran-Pakistan-India gas pipeline project.

The two leaders agreed to remove impediments in the 2600 km gas pipeline project that aims at supplying natural gas from Iran to Pakistan and then onwards to India.

Both leaders also discussed the tariff issue and called for an early resolution of the gas price mechanism and commencement of the project.

President Musharraf said the project will be a win-win for the people of the two countries and will further strengthen their strong brotherly ties.

In-depth

President General Pervez Musharraf on Saturday talked to Iranian President Mahmud Ahmadinejad on telephone and discussed measures to expedite the US $ 7 billion Iran-Pakistan-India gas pipeline project.

The two leaders agreed to remove impediments in the 2600 km gas pipeline project that aims at supplying natural gas from Iran to Pakistan and then onwards to India.

Both leaders also discussed the tariff issue and called for an early resolution of the gas price mechanism and commencement of the project.

President Musharraf said the project will be a win-win for the people of the two countries and will further strengthen their strong brotherly ties.

Auto-plant in Pakistan

Meanwhile, a report from Lahore says that Iran has expressed interest in setting up an auto plant in Pakistan like similar units put up by Tehran in Azerbaijan and Syria.

This transpired in a meeting between Federal Minister for Industries, Production and Special Initiatives Jahangir Khan Tareen and Iran’s Commerce and Industry Minister Alireza Tahmasebi, who was here to participate in the ECO ministerial meeting, which concluded in the Punjab metropolis.

Tareen also held meetings with the industries ministers of Turkey and Afghanistan to discuss bilateral and multilateral industrial cooperation.

Tareen apprised the Iranian minister about the progress made by Pakistan in auto industry and assured him of the fullest support and assistance on behalf of the government for having Iranian investment in this area.

The meeting with the Turkish Minister for Industries Ali Coskun focused on promoting the bilateral trade relations. The Turkish minister observed that the trade relations between Turkey and Pakistan did not match their business potential and spirit of brotherhood.

He invited Mr Tareen to visit Turkey so as to look into the areas of industrial and commercial collaboration between the two countries.

Afghan Minister of Commerce and Industry Meer Muhammad Amin discussed the plan for initiating ROZs in the tribal areas between Afghan-Pakistan borders. He disclosed that the plan in this regard would be finalised by end of this month.●

http://www.pakistantimes.net/2006/12/03/top1.htm

[Ethyl]

China to use foreign reserves to buy resources


China will take advantage of its huge foreign exchange reserves to expand its stock of strategic resources such as oil and minerals, state media reported yesterday, citing a top official.
Deputy Prime Minister Zeng Peiyan told leaders of the national legislature that the government plans to step up exploration for key resources such as oil, gas and coal. It also intends to use the opportunity afforded by the country's more than $1 trillion in foreign reserves to improve strategic resource bases, the reports said.
Zeng, who is a top economic planner, decried China's relatively weak resource base compared with its huge population.

http://www.thestar.com/Business/article/165641

[Ethyl]

China planning underground oil stockpile in second stage

BEIJING: China’s top energy policymaker has confirmed that Beijing was likely to use underground caverns to stockpile emergency crude in a second phase of development, but he did not say when they might be ready for use.
China this year completed construction of its first strategic oil reserve facility and industry sources say it has filled the above-ground tanks with at least 11mn barrels of crude. Three more such sites will complete the first phase by 2008.

“For the next set we are researching setting up reserves in underground salt caves and water-tight caverns,” Ma Kai, chairman of the National Development and Reform Commissions, which sets China’s energy policy, said in prepared remarks given to reporters as US and Asian energy ministers met in Beijing.
He gave no details on the timing or capacity of the underground caverns.

The US government stores its 700mn barrels of strategic crude – about half of the world’s total strategic reserves – in four underground sites in Louisiana and Texas.
China’s government is rushing to build up a reserve equal to 60 days worth of its consumption – more than 400mn barrels at current demand rates – in an effort to protect against supply disruptions as its reliance on imported crude nears 50%.

Its first facility in Zhenhai, near eastern Ningbo port, can hold 33mn barrels, while local media have reported that the first 7.5mn barrels worth of above-ground tanks at the second site in Aoshan, Zhoushan, will be ready by year-end.
Western nations have expressed concern that Beijing might try to use its stocks to influence world oil prices, but Ma Kai’s deputy Zhang Guobao told Reuters earlier this week that the government-controlled reserves would be used in emergencies only.

Local media have reported several possible sites for the second-phase reserves, estimated to hold 28mn tonnes (200mn barrels), including Hainan island, Tangshan in Hebei province and Zhanjiang and Maoming in Guangdong province. – Reuters

http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=123490&version=1&template_id=48&parent_id=28

[Ethyl]

Azerbaijan becomes gas supplier to Europe

Azerbaijan’s Industry and Energy Minister, Natig Aliyev, expressed hope for acceleration of the implementation of Project Phrase 2 on development of Shah Deniz gas and condensate field.

“If, before, BP- the project operator- had planned to start up production on Phase 2 in 2012, today, it is favorable to step up the project and bring forward to 2010,” he says.
In opinion of the minister, the natural gas prices are quite high and the market is hungry for gas. The forth advanced well has been drilled which is able to produce 1 billion cubic meters of additional gas, the forth exploration well is being drilled. It is possible to further accelerate advanced drilling next year,” he underlines.

Here, Natig Aliyev’s words differ from what he said earlier. Partners concluded after doing market research that Azerbaijan is the best market in implementation of Phrase 2.
This intension doesn’t agree with plans for export of Shah Deniz gas to Europe via Greece and Turkey. It follows that oil companies amended their plan amid high price in the world.

Going back to the nearest history, an intergovernmental agreement to build a pipeline connecting Turkey to Greece has been concluded. Greeks say this pipeline from Turkey to Greece onward to Europe enables deliver 30 billion cu m of gas annually. Before applying to Azerbaijan and Turkey, Greek experts had explored and studied Europe’s market to find out what countries need this gas.

The pipeline will go in two directions: the first to France and Italy, the second - Slovenia, Bosnia and Herzegovina and Croatia.
Shah Deniz field is estimated to have some 1 trillion cubic meters in reserve. An appraisal well is being drilled in southeast of the field which will enable to measure the reserve. However, the SOCAR claims the reserve of this field is 2 trillion cubic meters. If confirmed, this amount will suffice for the domestic market and export.

To break good news, on June 26 in Vienna, the Energy Ministers of Austria, Bulgaria, Hungary, Romania, and Turkey as well as the European Union’s Energy Commissioner Andris Piebalgs signed a Ministerial Statement of commitment to the Nabacco gas pipeline project to deliver Caspian gas. According to Piebalgs, the EU regards the planned pipeline from Turkey to Austria bypassing Russia as "essential to Europe and the EU’s most important gas supply project."

If implemented as planned, the project will open for the first time a transit corridor for Caspian and Mideastern gas into EU territory; contribute to diversification of the EU’s supplies, reducing dependence on Russia overall; end Gazprom’s outright monopoly in Hungary, Romania, and Bulgaria and cut its 65% dominance in Austria; turn Turkey and Austria into international hubs for gas transport; and provide some non-Russian options for German and Italian markets.

Dr Martin Bartenstein, President of the EU Energy Council, underscored the pipeline is one of the most vital energy project in Europe.
The project envisions a start to construction work in 2008, commissioning of the pipeline in 2011, an annual throughput capacity of 8 billion cubic meters (base case) or 13 billion (high case) in the first phase from 2011 onward, and reaching 25 billion cubic meters (base case) or 31 billion (high case) per year by 2020 and thereafter. Half of the annual gas throughput would be consumed in the four countries along the pipeline route, the other half to reach the transportation knot at Baumgarten in eastern Austria. From there, the Austrian and German markets can be targeted, with Italy also an option.

Construction costs are estimated at EUR4.6 billion, or $5.8 billion.
At this stage, Nabucco’s supplier countries seem defined only tentatively. The consortium’s representatives mention Azerbaijan, Kazakhstan, and Turkmenistan as possibilities. Even Gazprom is vaguely being mentioned as a possible supplier of part of the overall volume via Turkey. Inasmuch as Gazprom’s inclusion could defeat the project’s basic rationale, such mentions may be seen as purely tactical; but may soon boomerang if such references are seen as indicating difficulties in lining up other suppliers. The west part of the pipeline will go from western border of Georgia through Turkey, Bulgaria, Romania, Hungary and Austria.

If Azerbaijan is really keen on exporting its gas to European market, it is high time to give a start to Phrase 2 of Shah Deniz project.
Of course, Azerbaijan can re-export Kazakh and Turkmen gas to Europe as a transit state which can bring further political and financial dividends. Export of its gas will allow Azerbaijan to occupy the niche in the European market. Shah Deniz gas is not the only target. There are still left lots of unexplored and untapped fields in the Azerbaijani sector of the Caspian.
Also, the second exploration well will be drilled in Inam field. Some experts believe the reserve of this field must be quite much. Anyway, Azerbaijan should occupy its deserved place in the European market, even if Shah Deniz gas export is not so much greater. Europe is glad to make Azerbaijan a transit country for transportation of Kazakh and Turkmen gas.
Besides, four workgroups will be set up within the agreement on strategic partnership between the EU and Azerbaijan signed in Brussels on November 6. Natig Aliyev says this agreement expresses deep concern over Europe’s dependence on a single energy source, and is seeking an alternative. The Caspian basin is in the foreground.
The first group will deal with juridical problems, production, transit and pricing of energy supplies.
“This group of experts will work on adaptation of Azerbaijan’s legislation to the EU’s,” underscores Natig Aliyev.
The second will work on infrastructure. Implementation two giant projects-the Baku-Tbilisi-Ceyhan pipeline and South Caucasus pipeline is that significant for Europe.
“Azerbaijan is the only nation capable of carrying out two mega-projects. This encourages Europe, but doesn’t suffice,” says Aliyev.
He adds that Europe is interested to have Kazakh oil via Azerbaijan.
“There is a great potential to transport Kazakh and Turkmen gas through Azerbaijan within Nabacco project. There is one option envisioning delivery of the Caspian gas to Europe through the Crimea crossing under the Black Sea,” he points out.
The third workgroup will deal with restructuring of the energy complex of the country.
“It is a reform to bring energy facilities more mobile and commercial and non-state,” he says.
The forth group will be engaged in experience sharing.
In conclusion, we come to the point that Azerbaijan is going to become not only a gas supplier to Europe, but also a bridge between Europe and Asia. /APA/

http://en.apa.az/news.php?id=19472

[Ethyl]

ENERGY: IRAN CALLS FOR 3-WAY SUMMIT ON GAS PIPELINE

[/URL] (javascript:aumenta();)


Tehran, Feb. 8 (AKI/Asian Age) - India's external affairs minister Pranab Mukherjee returned to New Delhi on Wednesday evening after a hectic round of discussions with Iranian leaders in the Iranian capital Tehran where the key issues were discussed without a breakthrough. Iran asked for a trilateral summit to discuss the Iran-Pakistan-India (IPI) gas pipeline, India asked Iran to implement the 22-billion dollar liquefied natural gas (LNG) deal, and both sides spoke their minds on the nuclear issue without bridging the gap in positions and perceptions.

Mukherjee met Iran foreign minister Manouchehr Mottaki for substantive discussions with dates for India's prime minister Manmohan Singh’s visit to Iran now to be worked out through diplomatic channels.

Mukherjee said India wanted the International Atomic Energy Agency (IAEA) to play a central role in resolving the issue and called for restraint and flexibility by all sides. Mottaki said Iran had the legal right to pursue a peaceful civil nuclear programme and would not accept any preconditions for talks.

The price differences over the IPI pipeline continued to prevent a final decision and Iran made it clear that it would like the top leadership of the three countries to discuss this directly.

A Pakistan delegation will be visiting Iran for further discussions on the price, which is an issue of concern to both New Delhi and Islamabad. The price negotiations for the LNG supplies were also not particularly successful, although both India and Iran took care to emphasise their excellent relations.

India wanted the IAEA to play a central role in resolving the nuclear issue, but this proposal did not generate much enthusiasm here in Tehran. "The IAEA should play a central role in resolving the outstanding issues," Mukherjee said, adding that a peaceful, negotiated solution would be facilitated by enhanced cooperation between Iran and the IAEA. Mottaki said Iran was ready to work to strengthen nuclear non-proliferation and was open to all suggestions.

Mukherjee’s visit was more essential to bridge the deficit of trust that has overtaken Iran ever since the controversial vote by India against Iran at the IAEA governor’s meeting.

This is very apparent even on the roads with the first words of welcome being followed almost immediately with "but are you not very close to the United States?" A young Sikh businessman whose family is settled in Iran for 75 years now said the vote against Iran had really "cracked relations" between the two countries. He said that as an Indian living here he and others felt the difference. "Before the vote we were sought after, and the Iranians were very friendly and warm. After the vote even if I get into a taxi the driver wants to know why we voted against Iran. The strain is visible and there is a tension that was not there before," he said.

Iranians love to speak about the long journey of India-Iran relations, the good times, the common perceptions, such as the India-Iran cooperation in Afghanistan, but, somehow, this one "breach of trust" has taken away completely from the bilateral warmth. Nishad, a businessman who has many Indian friends, said he expected India to stand by Iran now, to tell the world that "we are together and we trust Iran when it says it is not building nuclear weapons". He insisted that nothing "less than this will do".

The Iranian government has treated Mukherjee’s visit with caution and has taken care not to treat it as a major event.

The small Indian community, of course, was well aware of it but the state media did not highlight the visit, or project it as a major step forward in mending relations. Iran has been particularly keen on a summit-level meeting, and this could be the only real outcome of Mukherjee’s quick visit to Iran.

As an astute taxi driver here said, "We know America does not want the pipeline, but we also know that if we make it cheap enough, India will not care about America and will sign the deal."

Incidentally, Mukherjee’s visit was at the initiative of the Indian government with some speculation here on why "your minister wanted this visit". The Iranians were expecting an Indian visit for the joint commission, which was expected to meet in a couple of months, but a decision about this has still to be taken.


[URL]http://www.adnki.com/index_2Level_English.php?cat=Politics&loid=8.0.384303521&par=0

[candypreet]

good post ethyl

[Ethyl]

tough choices to make. If you are ready to go it alone, power to ya. I couldn't support someone who supported Iran, but I wouldn't think less either, given geo-graphical realities.

[Ethyl]

Pakistan `Peace Pipeline' May Fail to Secure Finance

Feb. 19 (Bloomberg) -- Pakistan may fail to secure natural gas from Iran because banks are reluctant to finance a $7.4 billion pipeline, intensifying the search for domestic deposits to avoid shortages within three years.
A decade after the ``Peace Pipeline'' from Iran to Pakistan and India was suggested, none of the three governments have committed any money to the project, said Faraz Farooq, an energy analyst at JS Global Securities Ltd. in Karachi.
The government expects annual economic growth of as much as 8 percent for the next five years in Pakistan, where natural gas meets half the energy needs. President Pervez Musharraf is banking on growth to eradicate poverty, and curb Islamic militants fighting to end government support for the U.S. in the war against the Taliban in neighboring Afghanistan.
``Pakistan's focus at present is encouraging companies to aggressively explore for fuels in offshore and onshore regions,'' said Mohsin Ahsan, an energy analyst at Invisor Securities Ltd. in Karachi.
South Asia's energy needs and new drilling areas are on the agenda at the 3rd Pakistan Oil & Gas Conference that started in Islamabad last night. Pakistan will seek proposals by explorers to revise incentives in the five-year petroleum policy that ended last year, Ahsan said.
Prime Minister Shaukat Aziz said at the conference yesterday a new policy within 30 days will increase incentives to boost output.
Oil, Gas Shortage
Pakistan produces about 65,000 barrels of oil a day, or 21 percent of its domestic needs, and the remainder is imported, according to JS Global's Farooq. About 11 local companies and 16 overseas companies such as BP Plc, Petroliam Nasional Bhd., Petroleo Brasieiro SA and OMV AG are exploring in Pakistan.
The Islamic nation's daily output of 3.8 billion cubic feet of natural gas meets present demand, Farooq said. By 2010, output will be 1 billion cubic feet less that required, he said. Energy demand is growing 7 percent annually in line with economic growth, he said.
The pipeline from Iran was initially stalled by hostile relations between India and Pakistan, which have fought three wars over the disputed region of Kashmir since independence from Britain in 1947.
``The political issue will remain a big hurdle to overcome for a transnational pipeline, especially involving two rather hostile neighbors,'' said Victor Shum, senior principal at Purvin & Gertz in Singapore. ``There are many challenges.''
Investors are hesitant to fund a pipeline that may become a target for attacks by militant groups opposed to Indian rule in Kashmir, said Praveen Martis of U.K.-based Wood Mackenzie.
`Risk Premium'
``Our basic stance is that the project faces significant hurdles in terms of price and security of supply to India,'' Martis said. ``The risk premium will add to project costs.''
Bomb blasts on a cross-border train from India to Pakistan killed at least 64 people yesterday, Indian Railways Minister Lalu Prasad Yadav told reporters in New Delhi today.
``The blasts are aimed at derailing peace talks,'' Prasad told reporters in a briefing in Hindi.
The Attari Express runs between Delhi and the Indian border town of Attari and from there to Lahore in Pakistan as the Samjhota Express. Samjhota means concord in Hindi.
India, the world's second-fastest-growing major economy, is essential to the project because Pakistan's consumption is insufficient to justify the investment.
`Prize in India'
``India needs to be on board for the project to take off,'' Martis said. ``The prize is in India.''
Pakistan plans to proceed with plans to build a gas pipeline from Iran even if India pulls out from the project, Prime Minister Aziz said.
``Pakistan is committed to the Iran gas pipeline,'' Aziz said in Islamabad yesterday at the opening of the conference. ``We have enough investors in Pakistan to build the infrastructure for gas import.''
Pakistan, Iran and India are close to an agreement on the pricing and volume of gas to be imported from Iran, Aziz said.
``My ministry is keen and optimistic for the implementation of this project and consider it a symbol of regional cooperation,'' Bonakdar Hashemi, director general, Oil & Gas Corp., Ministry of Petroleum, Iran said in Islamabad today.
In the past year, the U.S. has pressured Pakistan and India to abandon the pipeline from Iran and isolate the Middle Eastern country because of concern its nuclear program masks a plan to build atomic weapons.
U.S. `Focus'
``The project doesn't come at the right time as the focus right now in Washington is to reduce investment in Iran's energy sector,'' said Gal Luft, executive director for the Institute for the Analysis of Global Energy in Washington.
Investments to boost domestic gas output may be hindered by concern that rebel tribes may damage installations, Luft said. Rebels in Baluchistan, a desert region in western Pakistan bounded by Iran, Afghanistan and the Arabian Sea, damaged a gas pipeline on Feb. 14. Baluchistan produces 25 percent of the nation's gas.
The Baluchi tribes are demanding a greater share in the province's gas and mineral wealth. Supporters of tribal leader Nawab Akbar Khan Bugti, who led demands for a larger portion, accused the army of killing him in his mountain hideout in August. Bugti was wanted by the government for allegedly ordering bomb attacks on natural gas pipelines and oil installations, prompting Musharraf to deploy 3,000 soldiers in the sparsely populated province in 2003.
`Untapped Gas'
``They have a lot of untapped gas in Baluchistan but they'll have to pacify the Baluchis so that more exploration can take place,'' Luft said.
Musharraf, 63, who became a key U.S. ally in its war on terrorism after withdrawing support for Afghanistan's former Taliban regime in 2001, said Pakistan has arrested more than 600 terrorist suspects since 2001. The Pakistani army is searching for remnants of Taliban and al-Qaeda networks in its tribal region bordering Afghanistan.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aIcfI00l9EAM&refer=asia

[Ethyl]

Iranian, Armenian presidents open gas pipeline

Iranian President Mahmoud Ahmadinejad and Armenian President Robert Kocharyan on Monday inaugurated a gas pipeline intended to ensure Armenia's energy security.
The ceremony took place in the Armenian settlement of Agarak on the border between the two countries.
Robert Kocharyan underlined that he regards completion of the gas pipeline project as the new proof of friendship between Tehran and Yerevan.
The two presidents signed a protocol on broadening cooperation and rea