oil related 290907

Iran, Pakistan agree over gas sales without India

Fri Sep 28, 2007 11:41pm BST

By Edmund Blair

TEHRAN, Sept 28 (Reuters) - Pakistan has agreed to details of a deal for buying gas from Iran, officials from both sides said on Friday, adding that the proposed tri-nation pipeline would be viable even if India, the third party, walked out.

India stayed away from this week's talks in Tehran on the proposed $7 billion pipeline, saying it wanted to agree transit costs through Pakistan on a bilateral basis first, an Iranian official said. But he said India had not said it was quitting.

"The economics of the project will improve with Indian participation but ... the project is economically viable as a bilateral project also," Mukhtar Ahmed, the energy adviser to Pakistan's prime minister, told reporters in Tehran.

Hojjatollah Ghanimifard, international affairs director of the National Iranian Oil Company (NIOC), said the three sides had previously planned for gas sales and purchase agreements (GSPAs) to be negotiated separately by India and Pakistan.

"So far, the information formally we have from the authorities of India is that they are willing to join us. They have just their internal problems, including that they need to finalise the transit fee with our good Pakistani friends," Ghanimifard said after talks late on Friday.

Iran's oil minister said on Wednesday his country would still sign a deal with Pakistan if India decided not to join.

Mukhtar said Pakistan and India had agreed in principle how to tackle issues like transportation tariffs and transit fees.

"We don't see transit through Pakistan as a problem. We've had bilateral discussions with India on this subject," he said, although he said more talks were be needed.

Speaking of Pakistan's talks with Iran, Mukhtar said: "We have agreed upon everything that we needed to agree on with regard to the gas sales and purchase agreement and the inter-governmental framework agreement."

He said the details would be drawn up in final documents to be examined at bilateral talks in Islamabad on Oct. 15-19.

Mukhtar did not give details for the price of the gas agreed but said it would be linked to the price of oil. He also they also agreed on a price review clause -- an issue that had been pending -- but he did not elaborate.

In July, Ghanimifard said India and Pakistan had accepted Iran's demand for gas price reviews based on market changes. He denied reports by some Indian newspapers that the pipeline talks had failed after Iran demanded a review every three years.

The pipeline would initially carry 60 million cubic metres of gas daily to Pakistan and India, half for each country. The pipeline's capacity would later rise to 150 million cu metres. Pakistan says it could want 60 million cu metres for itself in the future.

Iran says it has completed 18 percent of the work for the pipeline to bring gas from its South Pars field up to Iran-Pakistan border. Pakistan has yet to begin work on a 1,000 km (625 mile) stretch of the pipeline to link Iran with India.

Iran has the world's second-largest gas reserves after Russia. But sanctions, politics and construction delays have slowed its gas development, and analysts say Iran is unlikely to become a major exporter for a decade.

Source: Reuters

Pars LNG project to be done without Total

TEHRAN (Dispatches) -- Iran's acting oil minister says Iran can proceed with completing the Pars LNG project even in the absence of French oil company, Total.

Gholamhossein Nozari noted that French President Nicolas Sarkozy should know that if France's Total does not finalize the Pars LNG contract with Iran, Tehran could continue with the project on its own.

The minister termed the main reason for not finalizing the Pars LNG project with Total as Iran's refusal to accept Total's proposed price concerning the project, Fars news agency reported.

""Total has proposed $11.2 billion for investment in Phase 11 of the South Pars project which has been rejected by Iran,"" he added.

Nozari pointed out that Iran can complete its oil and gas projects by domestic firms without seeking the help of foreign companies.

However, he noted that investment in Iran's projects is important for Total because Iran is rich in oil and gas resources.

On the other hand, Total reiterated on Thursday it was still in talks with Iran to carry out a multibillion dollar gas project but added a decision on investment was not in sight, Reuters reported.

""We are still in talks as costs have spiraled,"" a Total spokeswoman said. ""We are not in a position to take a decision on investment now,"" she added.

""We have no date as to when we will finish studying (the costs),"" the spokeswoman said. ""And we don't comment on a minister's comment,"" she added.

Under a deal agreed in 2006, Total is slated to exploit the Phase 11 of Iran's giant South Pars gas field to produce liquefied natural gas (LNG) for export and to build a liquefaction plant.

Source : Teheran Times

Jordan begins receiving Iraqi oil: minister

29-09-07

AMMAN (AFP) — Iraq resumed deliveries of oil to neighbouring Jordan on Friday after a four-year hiatus caused by the US-led invasion in 2003, Jordan's energy ministry announced.

Eight tankerloads were delivered across the border, the first of a consignment expected to reach 100,000 barrels per day under an agreement signed by the neighbours last year.

"Eight tankers of Iraqi oil have begun being emptied into Jordanian tankers ... and will be transported to a refinery in the town of Zarkaa, northeast of Amman," the official Petra news agency quoted a ministry spokesman as saying.

Iraq "has informed the Jordanian authorities that 166 tankers have left Kirkuk (northern Iraq) and are on their way to Jordan," he added.

The agreement, signed by the two countries in August 2006, provides for a "gradual increase from 10,000 to 100,000 barrels a day," the spokesman said.

Iraq was to have begun providing 100,000 bpd -- 30 percent of Jordan's daily needs -- at preferential rates last September, but delivery was stalled over technical and security problems on the Iraqi side.

Iraq's Finance Minister Bayan Jabr Solagh said in June the oil would be sold at 18 dollars a barrel below market price.

Jordan was entirely dependent on Iraq for its oil before the toppling of Saddam Hussein, importing 5.5 million tonnes a year by road, half of it gratis and the remainder at preferential rates.

Source: AFP

Sunni Shia relations 290907

Iran: As Tensions Rise, So Does Rhetoric

By Jeffrey Donovan

September 28, 2007 (RFE/RL) -- To any reader of the English-language blogosphere, September appeared destined to be the month of the Iran war media blitz.

A first sign of an impending war of words over Iran came in late August. In an Internet blog, professor Barnett Rubin, a highly respected authority on Afghanistan at New York University, said a Bush administration insider told him there would be an "Iran war rollout" in the media in September.

Yet it was in Paris, not Washington, that perhaps the first salvo in the war of words with Iran was fired -- a drumbeat of rising rhetoric over the last month that Admiral William Fallon, the top U.S. military commander in the Middle East, has called "not helpful" and "not useful."

On August 27, French President Nicolas Sarkozy, speaking to a group of French diplomats, called a nuclear-armed Iran "unacceptable." He added: "I underline France's full determination to support the alliance's current policy of increasing sanctions, but also to remain open if Iran makes the choice to fulfill its obligations. This policy is the only one that will allow us to escape an alternative, which I consider to be catastrophic. Which alternative? An Iranian bomb or the bombing of Iran."

Iran Media Blitz

As if on cue, the language of U.S. President George W. Bush, speaking the very next day, also took a confrontational turn toward Tehran.

"Iran's active pursuit of technology that could lead to nuclear weapons threatens to put a region already known for instability and violence under the shadow of a nuclear holocaust," Bush told a gathering of U.S. war veterans. "Iran's actions threaten the security of nations everywhere. And that is why the United States is rallying friends and allies around the world to isolate the regime, to impose economic sanctions. We will confront this danger before it is too late."

Publicly, Bush has refused to take military action off the table if Iran does not comply with UN Security Council resolutions demanding that it suspend its uranium enrichment programs.

Led by the United States, the Western powers are seeking to pass a third round of even tougher Security Council sanctions against Iran. However, at a meeting today in New York, the five permanent members of the Security Council plus Germany agreed to delay a vote on tougher sanctions until late November at the earliest.

That outcome is a setback to U.S. and French efforts, yet their cooperation still signals a key break from the recent past.

Unlike during the Iraq war run-up, when France voiced fierce opposition to toppling Saddam Hussein, this time Paris is backing up Bush with tough talk of its own.

French Foreign Minister Bernard Kouchner weighed in with perhaps even stronger words than his boss, stating on September 16 that the world should brace for war with Iran if negotiations to end its nuclear program fail. Although he later tempered his comments, Kouchner and Sarkozy's rhetoric starkly contrasts with that of former French President Jacques Chirac, whose vocal opposition to war with Iraq dealt a blow to U.S.-France relations.

So what’s motivated France to talk tough now? Jean-Pierre Darnis, a political analyst at the University of Nice and Rome's Institute of Foreign Affairs, says the new French leader is partly motivated by a genuine desire to repair relations with Washington. Darnis adds that France clearly wants to avoid war with Iran, but sees its threat as a necessary prod to change Tehran’s behavior.

"Sarkozy said: 'I don't like the word war. I don't want to use the word war,' after Kouchner [used the word]," Darnis says. "But nevertheless, he is very open to a large panel of actions against Iran."

On September 25 at the UN General Assembly in New York, Sarkozy reiterated that an Iranian nuclear bomb would be an "unacceptable risk to stability in the region and in the world." He was echoed by German Chancellor Angela Merkel, who said, “If Iran were to acquire the nuclear bomb, the consequences would be disastrous."

Robert Whitman, who studies European foreign policy at London’s Chatham House think tank, says the tough talk from Paris, and to a lesser extent Berlin, is partly aimed at permanent UN Security Council members China and Russia to persuade them to drop their opposition to new Iran sanctions since the alternative -- namely, war -- should appear so much worse to them.

New France

But Whitman adds that Sarkozy’s rhetoric should also be taken at face value -- that is, it reflects genuine French concern over the danger of Iran’s nuclear program:

"I think that’s partly why the French have been using the language why they have, because they think the Iran case is a very serious test of the credibility of the international nonproliferation regime for nuclear weapons," Whitman says. "And I think that their analysis is that it will have grave consequences for nuclear proliferation in the Middle East if Iran is not stopped. And the French do believe that they are being a responsible international citizen by bearing down on the Iranians."

But what about the Iranians? Are they, too, somehow served by all the war talk?

Speaking on September 25 at the UN, Iranian President Mahmud Ahmadinejad vowed Tehran would continue to defy any UN resolutions on Iran’s nuclear program. He said the nuclear question was "closed" as a political issue and that Iran would pursue the monitoring of its nuclear program "through its appropriate legal path," the International Atomic Energy Agency (IAEA), the UN's nuclear watchdog.

British analyst Whitman says the media circus that accompanied Ahmadinejad’s trip to the United States, along with the hard-line rhetoric against him, may actually be helping him in his domestic political battles back home. "Certainly, in terms of external criticism of the regime, and particularly criticism in the U.S., this will obviously assist him in terms of his struggle against moderates in Tehran," Whitman says.

Others have noted that every time the Iranian crisis escalates, the price of oil increases, further filling petroleum-rich Tehran's coffers.

The war drums have also been beating in the right-wing U.S. media, particularly among those "neoconservative" pundits who pushed successfully for the Iraq invasion and now reportedly seek to topple the clerical regime in Iran. Reports say their pro-Iran war views may be shared at least in part by Vice President Dick Cheney and others in the Bush administration.

According to the U.S. magazine "Newsweek," in its October 1 edition, David Wurmser, a former adviser to Cheney on the Middle East, was considering a plan to press Israel to strike Iranian nuclear targets in a move that could bring the United States into a war with Tehran. Wurmser, in remarks today to the "New York Sun" daily, categorically denied those allegations.

But in a clear signal of the mood in Washington, this week the U.S. House of Representatives approved a bill that would tighten sanctions on Iran. The bill, which passed by a vote of 397 to 16, also calls on the U.S. government to list Iran's Revolutionary Guard Corps as a foreign terrorist group. The bill calls for sanctions against foreign companies that have U.S. subsidiaries who invest in Iran's energy sector.

A day later, the U.S. Senate passed a similar nonbinding resolution on Iran. Critics such as Democratic Senator Jim Webb of Virginia said the motion "could be read as a tantamount to a declaration of war on Iran."

But if the martial rhetoric serves the interests of "hawks" in Washington, some say it also aides "hawks" in the Middle East opposed to Iran’s ascendance in the region.

Independent author Robert Baer, who spent two decades in the Muslim world as a case officer for the Central Intelligence Agency, predicted in a recent article for the website of the U.S. magazine "Time" that there would be a military strike against Iran "within six months."

Military Caution

Last week, U.S. Admiral Fallon told Al-Jazeera television that he believed there would not be war with Iran, and called the war talk unhelpful. Similiarly, General John Abizaid, Fallon's predecessor as chief U.S. commander in the Middle East, said this month that while every effort should be made to stop Iran's apparent march toward nuclear weapons, the world could live with and deter a nuclear-armed Iran.

Baer, for his part, contends that part of the Bush administration, led by Cheney, wants to strike Iran for a number of reasons including the nuclear threat, Shi’ite Iran’s growing influence in Iraq and the region, its ties to terrorism, and its alleged threat to Sunni regimes friendly to Washington, such as Saudi Arabia.

The Saudis "are saying basically, if you want to keep your 10 million barrels or 9 million barrels [of oil] a day flowing freely in international markets, and keeping the price relatively low on oil, you better come to our protection," Baer recently said. "You better do something about Iran. And they’re telling us, or what they’re telling me, is that you have to decapitate the Iranian regime."

Today's UN talks in New York effectively gave the green light for IAEA chief Muhammad el-Baradei to carry on in his efforts to try and clear up doubts about Iran's past nuclear activities. El-Baradei recently gave Iran three months to clear its record in a move criticized by Washington as a tactic to stall sanctions and evade the key issue of halting enrichment.

Reports say the Western powers are considering their own economic and political sanctions against Iran, should efforts to pass a new resolution in the Security Council prove fruitless.

Where the Iran story ultimately goes is anyone’s guess. But as September 2007 draws to a close, some have recalled a famous remark by former White House chief of staff Andrew Card.

About Washington’s Iraq media blitz in September 2002, a half-year before the U.S.-led invasion of Iraq, Card said, "From a marketing point of view, you don’t introduce new products in August."

Source: radio free Europe

On translating Ahmadinejad

By Fawaz Turki,

Published: September 28, 2007, 23:14

Two cultures collided in New York early this week. Happily, the collision was not of the violent kind that we associate with bloodletting. But it was nasty nevertheless, involving as it did a nightmare of untranslatability between two disparate views of the world, two value systems, two historical experiences and two semantic fashions of perception.

On a three-day visit to the United States to address the United Nations General Assembly, Iranian President Mahmoud Ahmadinejad was invited to deliver a speech at Columbia University. That made him a guest speaker, and thus he was entitled to be treated with respect by his academic hosts.

Introducing him at the podium, however, the university's president, Lee Bollinger, deemed it necessary to identify the Iranian leader as a man who lacked "intellectual courage", had a "fanatical mind-set" and was "astonishingly undereducated". Turning towards Ahmadinejad, Bollinger hollered theatrically: "Mr President, you exhibit all the signs of a petty and cruel dictator". And on and on. And that was just for starters.

Bollinger, who did not appear quite "overeducated" himself, clearly did not seem to understand the sacrosanct place that a guest, whether invited to one's campus or one's home, occupied in Middle Eastern society.

Seeming visibly shaken and chastising his host for lambasting him before he uttered a single word, Ahmadinijad still soldiered on, delivering his speech and later answering questions from the audience. He did not disappoint the predominantly hostile attendees who had come to the lecture hall predisposed to laugh him off the stage.

"Our people are the freest people in the world," he said. On the issue of women's rights, he claimed that "the freest women in the world are women in Iran". Addressing himself to a question about the press, he asserted, none too convincingly, that "in our country freedom is flowing at its highest level". Then came this: "In Iran, we don't have homosexuals as you do in your country". To the audience that was a howler. And so it went.

Currency of rational exchange

What is going on here? What is going on here is the question of two cultures that meet at an academic venue, to exchange ideas, only to discover that their respective experience of each other (each others' language habit and assumed social reference) has set them apart.

The language world of Middle Easterners is different from that of North Americans. Language, of course, is more than a mere currency of rational exchange among people, for it stands in vital, close-knit reciprocity with culture, felt reality and consciousness. The ornamental irrelevancies and elided references that we insinuate into our speech act in the Middle East, our capacity to use the same word to mean different things (to psycho-linguists known as "polysemy") will totally escape people in the Euro-American world but be recognised instantly by a Middle Easterner as signals of mutual understanding.

When Ahmadinejad, for example, claimed that there were no homosexuals in Iran, he did not expect his audience to take him literally. He may be "undereducated", and he may not have taken the trouble to read half a dozen decent books about what makes American society tick, but he is not insane. The remark's ferocious innocence came across to his audience as simply duplicitous. Then, passing equally misunderstood, came that strain of ultimatum, that separatist stance, that masculine use of the third person plural, in his references to "we in Iran".

Different cultures define the objective world around them differently, though they may seem to use the same vocabulary. During the heyday of the Soviet Union, as a case in point, Communist leaders employed the same idiom as their counterparts in the West to refer to, say, "freedom", "progress" and "human rights", but the terms in both locales had fiercely disparate meanings.

Try to search for the right words to explain to someone in a country that has known, or been allowed, only a "mobilising press" (whose sole role in society is to mobilise support for the government) the victory scored by the American media to win the right to publish the Pentagon Papers in 1971 against the strenuous objections of the White House. Conversely, try to explain to an English-speaking person how absurd, how improbable, the character of Lady Macbeth, committed to killing Duncan "under my battlements", appears to an Arab being introduced to Shakespear's play. Duncan, he will exclaim, is her guest. Who harms a guest? Unimaginable!

Different cultures speak differently indeed, at times even in body language incomprehensible to non-native speakers. To Yasser Arafat, packing a .45 at his hip while addressing the UN General Assembly in November 1974 was, as it were, a normal fashion statement for him as it was for several other political leaders in his part of the world. For New Yorkers, and other Americans, however, it was gross, unbecoming and scandalous. A Korean who smiles at a stranger means to insult him. A Japanese fan beating before a speaker's face in ceremonious motion will convey impatience. And the rest of it.

Ahmadinejad did not appear to understand American culture one bit. Neither did Americans appear to understand Ahmadinejad one bit. They talked at not to each other. It was as if Iranians and Americans heard each other for the first time and discovered, with sickening conviction, that they shared no common language, that their previous encounter, before 1979, had been hollow, leaving the heart of meaning in both cultures untouched. All the pity.

Source: Gulf News

Kingdom, Gulf States Condemn US Senate Plan to Divide Iraq

P.K. Abdul Ghafour

JEDDAH, 29 September 2007 — Saudi Arabia and other members of the Gulf Cooperation Council (GCC) have strongly condemned a US Senate non-binding resolution to divide Iraq on ethnic and religious lines, saying the move would complicate matters further in the war-torn country.

The Bosnia-style plan, which was touted as a way out of the sectarian strife, which has risen steadily since the 2003 US-led invasion, “would add new complications to the already difficult situation in Iraq,” GCC Secretary-General Abdul Rahman Al-Attiyah said in a statement.

“Instead of calling for division, the causes that led to the current situation should be addressed. These include the (US-led) occupation, the sectarian and ethnic quota system, absence of law and security and the paralyzed administration,” the GCC chief said.

Apart from Saudi Arabia, the GCC groups Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.

Attiyah warned that the non-binding proposal to divide Iraq, which was passed by the US Senate on Wednesday, would also have a “dangerous consequences” on regional and international stability.

Saudi Arabia, which is an ardent advocate of Iraq’s unity, independence and territorial integrity, has reiterated its rejection of the move to divide the country.

In a press conference on the sidelines of the UN General Assembly in New York, Foreign Minister Prince Saud Al-Faisal cautioned the international community against dividing Iraq on sectarian and ethnic lines.

Prince Saud emphasized the Kingdom’s support for Iraq’s national unity, security and stability as well as territorial integrity. He said Saudi Arabia would soon send its ambassador to Iraq after taking steps to ensure the security of its embassy and diplomats.

The division plan, which is opposed by President George W. Bush’s administration, would provide for decentralizing Iraq in a federal system as permitted by Iraq’s constitution to stop the country from becoming a failed state.

It proposes to separate Iraq into Kurdish, Shiite and Sunni entities, with a federal government in Baghdad in charge of border security and oil revenues.

Yemen also rejected the US Senate plan calling it an “unprecedented flagrant interference” in the internal affairs of states, according to a Foreign Ministry statement carried by Saba news agency.

Iraqi Vice President Adel Abdul Mahdi has opposed the US plan and said it was up to the Iraqis to decide the future of their country. “Iraq has been united for thousands of years and it has the ability to preserve its unity and integrity,” he said.

Source: Arab News

Arabic Press - Nuclear related 290907

Israel would be trying to set up an agreement with the United States like the one that was signed with India, and is now trying to build a new 1500 Mw nuclear reactor in the south of the country.

Source: al seyassah

oil related 280907

Bahrain ‘keen’ on JVs with Qatar in oil and gas

Published: Friday, 28 September, 2007

MANAMA: Qatar and Bahrain share a strong desire to launch joint ventures in oil and gas sectors, Bahraini Minister for Oil and Gas Affairs Dr Abdul Hussein Mirza has said.

Bahrain welcomes Qatari business initiatives and supports the idea of launching joint ventures regardless of whether they would be based in Bahrain or in Qatar, the minister, who is also chairman of Bahrain’s National Oil and Gas Corporation, added.

He told the Manama-based Al-Ayam newspaper after his meeting with the Chief Executive Officer of Qatar Petroleum International Nasser al-Jaidah, that the Qatari side has expressed the desire to explore potential avenues for future joint ventures, through a closer co-operation between QP International and Bahrain Oil and Gas Holding Company.

“Bahrain has welcomed the endeavours of Qatari brethren and hailed the idea of having joint ventures”, Dr Abdul Hussein said in his press remarks to the Arabic daily. For his part, al-Jaidah said that the meeting was meant to explore the prospects for QP International to invest in oil and gas sectors and to beef up joint ventures in this field.

However, the statement issued at the end of their meeting said that the two sides have agreed to smoothen the geological and geophysical information-sharing and step up mutual co-operation between QP International and the newly-founded Oil and Gas Holding Company in Bahrain. - QNA

Source: Gulf Times

Official calls Kurd oil deal at odds with Baghdad

By Alissa J. Rubin and Andrew E. Kramer

Thursday, September 27, 2007

BAGHDAD: A senior State Department official in Baghdad acknowledged Thursday that the first American oil contract in Iraq, that of the Hunt Oil Company of Dallas with the Kurdistan Regional Government, was at cross purposes with the stated United States foreign policy of strengthening the country's central government.

"We believe these contracts have needlessly elevated tensions between the KRG and the national government of Iraq," the official said, referring to the Kurdistan Regional Government. The official was not authorized to speak for attribution on the oil contract.

The tensions between Kurdistan and the central government go well beyond the oil law. Already a semiautonomous region for more than 15 years, Kurdistan in many respects functions as independent state and wants as much latitude as possible to run its region. Recently, the Kurdistan government has pushed to extend its borders to include nearby areas that have sizable Kurdish populations.

Hunt Oil, a closely held company, signed a production-sharing agreement with the Kurdistan Regional Government this month. The company's chief executive and president, Ray Hunt, is a close political ally of President George W. Bush and serves on the Foreign Intelligence Advisory Board.

Hunt Oil and the Kurds signed the contract after the Kurdish government passed a regional oil law in August. But it is unclear how the regional law will interact with a national oil law under discussion in the Iraqi Parliament.

Under draft versions of the national law, the central government would have a say in whether individual oil contracts are legal. The Iraqi national oil law is one of the 18 benchmarks established by the Bush administration to evaluate the Iraqi government's progress.

The senior official said the State Department had advised Hunt Oil, before the signing, that contracts with the Kurdistan Regional Government might contravene Iraqi law once national oil legislation was passed by the Iraqi Parliament. "We think they are legally uncertain," the official said of Hunt's contracts with the Kurdistan government.

Iraq's oil minister, Hussain al-Shahristani, has said the Hunt Oil contract is not valid, though there is a provision for reviewing and possibly approving it in the proposed oil law. The intent of that law is to pool oil revenue to distribute it equitably to the Sunni, Shiite and Kurdish areas of Iraq.

The embassy official said at least four other American and international oil companies had consulted with the State Department about energy investment in Iraq, and all received the same advice.

Kurdistan faced trouble from neighboring countries on Thursday because of the activities of Kurdish separatists who are using the region as a redoubt from which to launch attacks on Iran and Turkey. Kurdish officials said that Iran shelled two areas along the region's eastern border on Wednesday evening. Ten Iranian artillery shells struck Rayan, a small village about 15 miles from the Iranian border, destroying four houses and killing villagers' animals. Twelve Iranian shells also hit the Qandil Mountains close to the border, said Jaza Hussein Ahmed, the mayor of nearby Qalat. There were no casualties reported.

Iraqi Kurdish officials bristled Thursday at word that the Iraqi central government would sign an agreement with Turkey on Friday that Kurds fear might pave the way for Turkish soldiers to cross into Iraq to pursue Turkish Kurdish separatists who take refuge in Iraqi Kurdistan.

Turkey has long been in an armed conflict with the PKK (Kurdistan Workers' Party), which launches hit-and-run attacks on Turkey from camps in the northern Iraqi mountains. They are fighting for autonomy for Turkey's predominantly Kurdish southeast.

American forces said Thursday that they were investigating the deaths of nine civilians in a village about 60 miles southwest of Baghdad. The bodies — five women and four children — were found after a raid in Babahani village by American forces on Tuesday, according to a news release.

"Coalition Forces conducted operations in the area using ground and air assets prior to the discovery of the bodies," the release said.

According to Iraqi military sources, the American raid began around 11 p.m. when a bomb was dropped on one of the houses in which the women and children apparently were staying. Shortly afterward, a second house was struck, killing two men and wounding two others, according to an officer from the Iraqi Army's Eighth Division, First Brigade. Soldiers then entered a mosque and detained the imam, Mohammed Hassan al-Janabi, the officer said, and the operation was over by 1 a.m.

Recent intelligence reports suggested that staying in one of the houses was a local leader of Al Qaeda in Mesopotamia, a homegrown Sunni Arab extremist group whose leadership is foreign, according to Western intelligence sources.

Nine bodies were also found in Baghdad on Thursday, according to an Interior Ministry official.

Source: IHT

Sunni Shia relations 280907

'Not a photo-op'

Egypt's UN representative tells Dina Ezzat about the importance of the US-sponsored Middle East peace conference resulting in something concrete and the repercussions if it does not.

Egypt's permanent representative to the UN Maged Abdel-Fattah is convinced that meetings conducted on the sidelines of the UN General Assembly by Arab and international players concerned will decide, to a great extent, the fate of the conference proposed by the US in the autumn on the settlement of the Palestinian-Israeli problem. "If these meetings in New York fail to produce a clear outline for the proposed conference, then it will be very worrying," Abdel-Fattah said during a telephone interview prior to the launch of this week's meetings.

Speaking to Al-Ahram Weekly from his office in New York, Abdel-Fattah said Egyptian concerns over the proceedings and outcome of the autumn meeting were clear and had been voiced at the highest level when President Hosni Mubarak warned that failure of the proposed meeting to produce concrete results in terms of Palestinian-Israeli negotiations on final status issues would harm the image of all -- host and participants alike.

In New York, a long list of meetings is designed to address the proposed summit on Palestinian-Israeli negotiations as well as the overall future of the Arab-Israeli struggle. The most crucial of these was a ministerial meeting convened on Sunday afternoon, bringing together the members of the international Quartet on the Middle East, along with it new envoy Tony Blair, and members of the Arab Peace Initiative, a composition of the Arab League secretary-general and 12 Arab foreign ministers, Egypt's included.

At the end of the meeting one obvious ambiguity over the autumn gathering was made clear, at least partially. The list of participants, according to press statements made by US Secretary of State Condoleezza Rice following the Quartet meeting, would include Syria, in its capacity as a member of the Arab Peace Initiative. However, it remains to be seen whether Damascus would head an invitation that the Sunday meeting decided would be strictly designed to address the Palestinian track. It is also unclear if the Saudis and other members of the Arab Peace Initiative ministerial committee would deem it appropriate to take part in a meeting alongside Israel's foreign minister in view of the failure of the Quartet meeting to formulate any potential outcome of the fall summit.

Abdel-Fattah insisted there was clear understanding by all Arab parties concerned that there would be no free normalisation. However, speaking to the Weekly, he said the next round of meetings, including a set of bilateral ministerial gatherings, should help clarify the picture.

When US President George Bush proposed the Middle East conference, Abdel-Fattah said, Egypt was enthusiastic. However, he added, from day one Cairo warned against the consequences of an inconclusive result. Today, Cairo's worst fear is that the Washington meeting does not materialise in the right format necessary for a productive diplomatic gathering. Still, he said, Egypt will continue to push to secure the kind of positive outcome that it deems necessary for the credibility of the diplomatic effort invested.

According to the Egyptian diplomat, Cairo is not at all arguing the need for a final settlement to be blue-printed in the Washington meeting but it certainly wants a coherent mechanism to be set up for the negotiations over final status issues.

"We cannot afford to walk into a meeting that will be merely an opportunity for some photos to be taken, and we will not settle for just any outcome," Abdel-Fattah said.

Moreover, he said that whatever results are produced from the Washington meeting must be compatible with the terms of reference of relevant UN resolutions and with the text and spirit of the Arab Peace Initiative.

Egypt seems keen to use the next UN General Assembly meeting to engage wider but more effective international management of the Middle East peace process, notwithstanding the role of the US. "But we want to encourage the Quartet as a whole to be more active. With former British prime minister Tony Blair being the envoy of the Quartet there has to be a more positive engagement."

These demands will be further stressed by Cairo during a meeting President Mubarak is scheduled to convene with Rice during a planned visit to Cairo next month.

Abdel-Fattah said this year's General Assembly which opened on Tuesday would be coupled with many sideline meetings addressing a wide range of other pressing Middle East issues. The potential for peace in Darfur is of major concern. On Saturday, several Arab foreign ministers and international players met in New York to discuss the need for a collective push for future negotiations scheduled to be initiated on 27 October between the Sudanese government and Darfur rebels. The message from the meeting was that it was time for all Sudanese parties concerned to get down to serious negotiations and end stalling. According to Abdel-Fattah, it is the balanced approach that the international community needs to adopt between the views of the Khartoum government and that of the Darfur rebels that could lead to a prompt settlement of the crisis in western Sudan. As such, the warning from the meeting about the intentions of some rebel leaders to absent themselves from the 27 October meeting was perceived by Egypt as not being conducive to serious talks.

The need for the conflicting Lebanese political forces to reach a consensual agreement on a potential presidential candidate to step into office on 15 November and the developments in Iraq will be highly visible in the works of this year's international congregation.

Yesterday evening, New York time, Egyptian Foreign Minister Ahmed Abul-Gheit was scheduled to meet his Saudi and French counterparts, Saud Al-Faisal and Bernard Kouchner and Arab League Secretary-General Amr Moussa to discuss the next steps in Lebanon following the failure of previous attempts by Moussa and Kouchner to short-list presidential candidates that could fit the demands, and indeed concerns, of both the Lebanese majority and the opposition.

Abdel-Fattah was not expecting a particularly new initiative, as such, to come out of the New York meetings on Lebanon. Nor was he overly concerned about rumours in certain diplomatic quarters that Terje Larsen, the UN envoy in charge of monitoring the implementation of UN Security Council Resolution 1559 that demands prompt Lebanese presidential elections, would pursue a new UN Security Council resolution to force the selection of a semi-consensual president should the Lebanese protagonists fail to reach a consensus.

Abdel-Fattah said the key outcome of the discussions scheduled to take place in New York over Lebanon is what he qualified as a positive momentum that would encourage all players on the Lebanese political scene, whether Lebanese or other regional and international players, to move forward towards a reconciliation that would spare the country from further decline and more hazardous security threats.

Abdel-Fattah said that despite little hope for any immediate progress in the situation in Iraq, the New York meetings were still crucial in the sense that they allowed for a due check and balance exercise on the part of all concerned players.

One issue Abdel-Fattah expects will draw much attention is the Middle East nuclear file. For close to three decades the General Assembly has been adopting two resolutions annually on the issue: one calls for the establishment of a nuclear free zone across the Middle East and the second warns against the hazards of nuclear proliferation in the region. Traditionally both resolutions demand that Israel ends its exemption from the otherwise complete Middle East membership of the Nuclear Non-Proliferation Treaty (NPT). But like many General Assembly resolutions, these two do not have much bite.

"Obviously in view of the developments related to the Iranian nuclear file and the statements that were made [earlier in the year] by the Israeli prime minister over his country's nuclear capacity the debate over these resolutions will be intense," Abdel-Fattah predicted. He expected that the texts of both resolutions that have not been subject to much amendment recently should be altered in view of the recent developments. "Negotiations on the text of the resolutions are yet to start but we need to be clear and firm in our rejection of any proliferation of nuclear weapons by any country in the region," Abdel-Fattah said. He added that Egypt along with other Third World countries would also demand the fair transfer of peaceful nuclear technology and the peaceful settlement of the Iranian nuclear row.

Also in relation to the security and stability in the region, Abdel-Fattah said, is the issue of climate change. He argued that while climate change might not have been traditionally perceived as a security threat, this was now changing. "We know that the developing countries who are not the main culprits of climate change are most likely to carry the brunt of the negative impact of that change," Abdel-Fattah insisted. He said that Egypt and other developing countries want the developed countries to shoulder their responsibilities in this respect both in terms of taking measures to reduce the destructive impact of their industries on world climate and by transferring to the developing countries the technology required to handle the results of climate change. On Monday, a special meeting on climate change was called for by UN Secretary-General Ban Ki-Moon.

Along with these issues, several developing countries are planning to stress the need for the UN to accord more attention to socio-economic concerns. The combat against terrorism, the concept of human rights and the best way to promote them, the standards of women's rights and the need to address the growing concerns over disturbing rates of worldwide unemployment will all be on the agenda next Tuesday in New York

Given that this General Assembly is the first for Ban, Abdel-Fattah said he was confident that the new chief of the international organisation would work on addressing traditional global security threats and to accord adequate attention to new threats. "This, we hope, will be done with an eye on augmenting the influence and role of the UN in addressing any of these threats," Abdel-Fattah stated.

Moreover, he argued that there was now a growing role "again" for Third World countries in underlining these issues. As the next chair of the Non Aligned Movement, Egypt, he said, would be coordinating a series of meetings to ensure that the perspective of the developing countries would be adequately reflected in all concerned texts and programmes of action adopted by the UN.

Source: Al Ahram weekly

Israel won't halt fence work to get Saudis to int'l conference

Herb Keinon ,

Sep. 28, 2007

Israel has no intention of stopping work on the security barrier to lure Saudi Arabia to the US-sponsored conference on the Middle East later this year, senior diplomatic sources said Thursday night in response to comments made by the Saudi foreign minister in New York.

"Israel has its own security needs that we have to address," the official said. At the same time, the official characterized Prince Saud al-Faisal's comments, which included some upbeat remarks about the upcoming Mideast meeting, as "interesting," and added that Israel always listened to what the Saudis have to say.

The New York Times reported Thursday that Faisal said Israel should stop work on the security barrier and stop settlement activity as good-will gestures to assure Arab states and show it was serious about comprehensive peace talks.

Up until now, Israel has rejected Saudi conditions on participation in the talks. Jerusalem feels, however, that Saudi participation is critical in garnering Arab support to Israeli-PA negotiations.

Faisal stopped short, however, of making these "good-will gestures" conditions for Saudi participation, and also sounded an optimistic note about the meeting.

"It is not Saudi Arabia that puts conditions, or Saudi Arabia that is going to negotiate," he told reporters Wednesday on the sidelines of the UN General Assembly. "Its presence there, or non-presence, is not the most significant issue." Regarding the planned conference, he said, "We have been shown a canvas with some brushstrokes that have nice colors in them ... but we don't yet know if it is a portrait or a landscape that we are looking at."

Based on the discussions with US officials, "there is a sense there is something new happening and this is encouraging" if it turns out to be true, he said.

Faisal said that discussions indicated that "the intent is to look at the final-status issue - the important issues, and not the peripheral issues.

This is encouraging. This is what we have always asked for." He said that the onus lay on the Israelis to show their commitment to a comprehensive settlement and that they were willing to take confidence-building measures such as freezing settlement building.

"It will be curious for (Palestinian) President Abbas and the prime minister of Israel to be talking about peace and the return of Palestinian land while Israel continues to build more settlements," he said. "At least, a moratorium on the building of settlements will be a good signal to show serious intent."

While the US hopes that Saudi participation will put the kingdom

on a path to recognizing Israel, Faisal said this possibility was already outlined in the Arab peace initiative, which offers peace in exchange for a full Israeli withdrawal to the 1967 lines, including in Jerusalem and on the Golan Heights.

"Recognition comes, but comes after peace, not before peace," Faisal said.

The Prime Minister's Office had no formal response to the Saudi foreign minister's comments, waiting to see the full transcript, and context, of his remarks.

In a related development, Foreign Minister Tzipi Livni met Wednesday with Tunisian Foreign Minister Abdelwaheb Abdullah, and was expected to meet Thursday evening with her Moroccan counterpart. Israel would like to see both countries, considered part of the "moderate" Arab coalition, participate in November's planned conference.

Both meetings took place on the sidelines of the UN General Assembly meeting, which Livni is attending.

According to Livni's spokesman, the Foreign Minister briefed her Tunisian counterpart on the status of the current talks with the PA and spoke of the importance of the moderate Arab countries taking part in the process.

The meeting, the first with a Tunisian official at this level in a number of years, took place even though Israel and Tunisia have no formal diplomatic relations.

Livni also met on Wednesday with Turkish Prime Minister Recep Tayyip Erdogan. Despite the importance of Israel's relationship with Turkey, and the tension caused because Israeli fuel tanks were found on the Turkish side of the Turkish-Syrian border following Israel's alleged attack in Syria, the Foreign Ministry was mum on the content of that meeting.

The Turkish press, however, reported that the current Israeli-Syrian tensions, as well as the diplomatic process with the Palestinians, dominated the talks. There was no word, however, on whether the Anti-Defamation League's recent decision to characterize the massacre of Armenians in World War I as tantamount to genocide, a move that could impact adversely on Turkish-Israeli ties, was raised.

Livni held a breakfast meeting Wednesday with representatives of some 20 African states, and also met with Republican presidential hopeful Rudy Giuliani for talks that focused on the Iranian nuclear program and the situation inside the PA.

According to Livni's office, Giuliani said that were he still mayor of New York, he would not have given Iranian President Mahmoud Ahmadinejad "free access and the platform" he received this week in the city.

Source: Jerusalem Post

Arabic Press - Nuclear related 280907

Prince Saud al-Faisal, the Saudi Foreign Minister, worried about the confrontation between Iran and the West because of the nuclear file, and called on Israel to launch an initiative to build confidence, before the peace conference in Washington, for exemple stopping building settlements and the separation wall.

In statements to reporters on the sidelines of the United Nations General Assembly in New York, Prince Saud Al-Faisal said «We are now reaching the step of rhetoric on both sides, and the Iranian statements are also accelerating towards confrontation».. He called for a diplomatic solution to the crisis, expressing his hope to resolve all issues through negotiations. The Saudi Foreign Minister said that his country asked Iran «Why tend towards confrontation, and he asked Iran to satisfy the demands of the IAEA». He continued adding : «I think that Iran knows the position of Arab countries on interfering in Iraq and Lebanon, and this is welcome, and the Arab States will act to protect their interests».

Source: Asharq Al Awsat

oil related 270907

Oil prices rebound before US energy report

LONDON (AFP) — World oil prices advanced on Wednesday as traders anticipated falling crude inventories in the upcoming weekly snapshot of US energy reserves.

New York's main futures contract, light sweet crude for delivery in November, added 58 cents to 80.11 dollars per barrel.

The price of Brent North Sea crude for November delivery gained 28 cents to 77.90 dollars per barrel in London trade.

Last week, prices hit all-time peaks on concerns over tight American energy supplies and fears of stormy weather in the rig-heavy US Gulf of Mexico.

Prices have since tumbled on profit-taking after the record-breaking rally which saw New York crude hit 84.10 dollars and Brent strike 79.94 dollars per barrel.

"We fell steeply yesterday (Tuesday) and now we (are) consolidating ... the prospect of (US) stats is underpinning the market for now," said Base Commodities trader Christopher Bellew.

Later Wednesday, at 1430 GMT, traders will absorb the US Department of Energy's (DoE) weekly snapshot on American energy stockpiles.

Market expectations are that the DoE will reveal that US crude oil inventories fell by 2.15 million barrels in the week ending September 21.

Analysts' consensus forecasts are for US gasoline or petrol reserves to have dipped by 350,000 barrels. Distillates, which include heating fuel and diesel, are predicted to have gained 1.1 million barrels.

"Market participants are still worried about tight US fuel supplies and forecasts for the ever increasing global energy demand, which is likely to once again outpace supply next year," said Sucden analyst Andrey Kryuchenkov.

Last week's report showed US crude inventories had plunged by 3.8 million barrels in the week ended September 14. That marked the 10th consecutive weekly drop and the decline was almost double market expectations.

Oil prices have also found support from the sliding US currency.

The dollar fell to a new all-time low of 1.4162 against the euro on Wednesday on growing concerns over the United States economy, analysts said.

"The broad weakness in the greenback continues to support oil prices, with most dollar-denominated commodities benefiting from a weaker dollar, as they become relatively cheaper for foreign investors," Kryuchenkov added.

"Moreover, it seems that market participants are turning their attention back to geopolitical developments, with a continuous stand off between Iran and the West over its nuclear ambitions."

Key crude producer Iran is the second-biggest member of the OPEC oil cartel after kingpin Saudi Arabia.

Iranian President Mahmoud Ahmedinejad wrapped up his visit to the United States Wednesday after using his platform at the United Nations to downplay Tehran's nuclear ambitions and attack Washington.

Iran has come under two waves of international sanctions for its nuclear program, which Ahmadinejad insists is only for energy production. He has repeatedly insisted the Islamic republic has no need of nuclear weapons.

Source: AFP

The Iraq oil grab that went awry

By Dilip Hiro

Here is the sentence in The Age of Turbulence, the 531-page memoir of former Federal Reserve chief Alan Greenspan, that caused so much turbulence in Washington last week: "I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil." Honest and accurate, it had the resonance of Bill Clinton's election campaign mantra, "It's the economy, stupid." But, finding himself the target of a White House attack - an administration spokesman labeled his comment "Georgetown cocktail party analysis" - Greenspan backtracked under cover of verbose elaboration. None of this, however, made an iota of difference to the facts on the ground.

Here is a prosecutor's brief for the position that "the Iraq war is largely about oil".

The primary evidence indicating that the administration of US President George W Bush coveted Iraqi oil from the start comes from two diverse but impeccably reliable sources: Paul O'Neill, the treasury secretary (2001-03) under President Bush; and Falah al-Jibury, a well-connected Iraqi-American oil consultant, who had acted as president Ronald Reagan's "back channel" to Iraqi president Saddam Hussein during the Iraq-Iran War of 1980-88. The secondary evidence is from material that can be found in such publications as the New York Times and the Wall Street Journal.

According to O'Neill's memoirs, The Price of Loyalty: George W Bush, the White House and the Education of Paul O'Neill, written by journalist Ron Suskind and published in 2004, the top item on the agenda of the National Security Council's first meeting after Bush entered the Oval Office was Iraq. That was January 30, 2001, more than seven months before the September 11 attacks. The next NSC meeting, on February 1, was devoted exclusively to Iraq.

Advocating "going after Saddam" during the January 30 meeting, defense secretary Donald Rumsfeld said, according to O'Neill, "Imagine what the region would look like without Saddam and with a regime that's aligned with US interests. It would change everything in the region and beyond. It would demonstrate what US policy is all about." He then discussed post-Saddam Iraq - the Kurds in the north, the oilfields, and the reconstruction of the country's economy.

Among the relevant documents later sent to NSC members, including O'Neill, was one prepared by the Defense Intelligence Agency (DIA). It had already mapped Iraq's oilfields and exploration areas, and listed US corporations likely to be interested in participating in Iraq's petroleum industry.

Another DIA document in the package, titled "Foreign Suitors for Iraqi Oilfield Contracts", listed companies from 30 countries - France, Germany, Russia and Britain, among others - their specialties and bidding histories. The attached maps pinpointed "super-giant oilfield", "other oilfield" and "earmarked for production sharing" and divided the basically undeveloped but oil-rich southwest of Iraq into nine blocks, indicating promising areas for future exploration.

According to high-flying oil insider Falah al-Jibury, the US administration began making plans for Iraq's oil industry "within weeks" of Bush taking office in January 2001. In an interview with the British Broadcasting Corp's Newsnight program, which aired on March 17, 2005, he referred to his participation in secret meetings in California, Washington and the Middle East, where, among other things, he interviewed possible successors to Saddam.

By January 2003, a plan for Iraqi oil crafted by the State Department and oil majors emerged under the guidance of Amy Myers Jaffe of the James A Baker III Institute for Public Policy at Rice University in Houston. It recommended maintaining the state-owned Iraq National Oil Co, whose origins dated to 1961 - but open it up to foreign investment after an initial period in which US-approved Iraqi managers would supervise the rehabilitation of the war-damaged oil infrastructure. The existence of this group would come to light in a report by the Wall Street Journal on March 3, 2003.

Unknown to the architects of this scheme, according to the same BBC Newsnight report, the Pentagon's planners, apparently influenced by powerful neo-conservatives in and out of the administration, had devised their own super-secret plan. It involved the sale of all Iraqi oilfields to private companies with a view to increasing output well above the quota set by the Organization of the Petroleum Exporting Countries for Iraq to weaken, and then destroy, OPEC.

Secondary evidence

On October 11, 2002, the New York Times reported that the Pentagon already had plans to occupy and control Iraq's oilfields. The next day The Economist described how Americans in the know had dubbed the waterway demarcating the southern borders of Iraq and Iran "Klondike on the Shatt al-Arab", while Ahmad Chalabi, head of the US-funded Iraqi National Congress and a neo-con favorite, had already delivered this message: "American companies will have a big shot at Iraqi oil - if he gets to run the show."

On October 30, Oil and Gas International revealed that the Bush administration wanted a working group of 12-20 people to (a) recommend ways to rehabilitate the Iraqi oil industry "to increase oil exports to partially pay for a possible US military occupation government", (b) consider Iraq's continued membership of OPEC, and (c) consider whether to honor contracts Saddam Hussein had granted to non-US oil companies.

By late October 2002, columnist Maureen Dowd of the New York Times would later reveal, Halliburton, the energy-services company previously headed by US Vice President Dick Cheney, had prepared a confidential 500-page document on how to handle Iraq's oil industry after an invasion and occupation of that country. This was, commented Dowd, "a plan [Halliburton] wrote several months before the invasion of Iraq, and before it got a no-bid contract to implement the plan (and overbill the US)". She also pointed out that a Times request for a copy of the plan evinced a distinct lack of response from the Pentagon.

In public, of course, the Bush administration built its case for an invasion of Iraq without referring to that country's oil or the fact that it had the third-largest reserves of petroleum in the world. But what happened out of sight was another matter. At a secret NSC briefing for the president on February 24, 2003, titled "Planning for the Iraqi Petroleum Infrastructure", a State Department economist, Pamela Quanrud, told Bush that it would cost US$7 billion to $8 billion to rebuild the oil infrastructure if Saddam decided to blow up his country's oil wells, according to Washington Post reporter Bob Woodward in his 2004 book Plan of Attack (pp 322-323). Quanrud was evidently a member of the State Department group chaired by Amy Myers Jaffe.

When the Anglo-American troops invaded on March 20, 2003, they expected to see oil wells ablaze. Saddam proved them wrong. Being a staunch nationalist, he evidently did not want to go down in history as the man who damaged Iraq's most precious natural resource.

On entering Baghdad on April 9, US troops stood by as looters burned and ransacked public buildings, including government ministries - except for the Oil Ministry, which they guarded diligently. Within the next few days, at a secret meeting in London, the Pentagon's scheme of the sale of all Iraqi oilfields got a go-ahead in principle.

The Bush administration's assertions that oil was not a prime reason for invading Iraq did not fool Iraqis, though. A July 2003 poll of Baghdad residents - who represented a quarter of the Iraqi national population - by the London Spectator showed that while 23% believed the reason for the Anglo-American war on Iraq was "to liberate us from dictatorship", twice as many responded, "to get oil" (Cited in Dilip Hiro, Secrets and Lies: Operation 'Iraqi Freedom' and After, p 398).

As Iraq's principal occupier, the Bush White House made no secret of its plans to dismantle that country's strong public sector quickly. When the first US proconsul, retired General Jay Garner, focused on holding local elections rather than privatizing the country's economic structure, he was promptly sacked.

Hurdles to oil privatization impassable

Garner's successor, L Paul Bremer III, found himself dealing with Philip Carroll - former chief executive officer of the US operations of (Anglo-Dutch) Royal Dutch Shell in Houston - appointed by Washington as the Iraqi oil industry's supreme boss. Carroll decided not to tinker with the industry's ownership and told Bremer so. "There was to be no privatization of Iraqi oil resources or facilities while I was involved," Carroll said in an interview with the BBC's Newsnight program on March 17, 2005.

This was, however, but a partial explanation for why Bremer excluded the oil industry when issuing Order 39 in September 2003 privatizing nearly 200 Iraqi public-sector companies and opening them up to 100% foreign ownership. The Bush White House had also realized by then that denationalizing the oil industry would be a blatant violation of the Geneva Conventions, which bar an occupying power from altering the fundamental structure of the occupied territory's economy.

There was, as well, the vexatious problem of sorting out the 30 major oil-development contracts Saddam's regime had signed with companies based in Canada, China, France, India, Italy, Russia, Spain and Vietnam. The key unresolved issue was whether these firms had signed contracts with the government of Saddam Hussein, which no longer existed, or with the Republic of Iraq, which remained intact.

Perhaps more important was the stand taken by Grand Ayatollah Ali Sistani, the senior Shi'ite cleric in the country and a figure whom the occupying Americans were keen not to alienate. He made no secret of his disapproval of the wholesale privatization of Iraq's major companies. As for the minerals - oil being the most precious - Sistani declared that they belonged to the "community", meaning the state. As a religious decree issued by a grand ayatollah, his statement carried immense weight.

Even more effective was the violent reaction of the industry's employees to the rumors of privatization. In his Newsnight interview Jibury said, "We saw an increase in the bombing of oil facilities and pipelines built on the premise that privatization is coming."

In the immediate aftermath of the invasion, much equipment was looted from pipelines, pumping stations, and other oil facilities. By August 2003, four months after US troops entered Baghdad, oil output had only inched up to 1.2 million barrels per day (mbpd), about two-fifths of the pre-invasion level. The forecasts (or dreams) of American planners that oil production would jump to 6mbpd by 2010 and easily fund the occupation and reconstruction of the country were now seen for what they were - part of the hype disseminated privately by American neo-cons to sell the idea of invading Iraq to the public.

With the insurgency taking off, attacks on oil pipelines and pumping stations averaged two a week during the second half of 2003. The pipeline connecting a major northern oilfield near Kirkuk - with an export capacity of 550,000-700,000 barrels per day - to the Turkish port of Ceyhan became inoperative. Soon, the only oil being exported was from fields in the less disturbed, predominately Shi'ite south of Iraq.

In September 2003, President Bush approached Congress for $2.1 billion to safeguard and rehabilitate Iraq's oil facilities. The resulting Task Force Shield project undertook to protect 340 key installations and 6,400 kilometers of oil pipeline. It was not until the spring of 2004 that output again reached the prewar average of 2.5mbpd - and that did not hold. Soon enough, production fell again. Iraqi refineries were, by now, producing only two-fifths of the 24 million liters of gasoline needed by the country daily, and so there were often days-long lines at fueling stations.

Addressing the 26th Oil and Money conference in London on September 21, 2005, Issam Chalabi, who had been an Iraqi oil minister in the late 1980s, referred to the crippling lack of security and the lack of clear laws to manage the industry, and doubted whether Iraq could return to the 1979 peak of 3.5mbpd before 2009, if then.

Meanwhile, the Iraqi government found itself dependent on oil revenues for 90% of its income, a record at a time when corruption in its ministries had become rampant. On January 30, 2005, Stuart W Bowen, the special inspector general appointed by the US occupation authority, reported that almost $9 billion in Iraqi oil revenue, disbursed to the ministries, had gone missing. A subsequent US congressional inspection team reported in May 2006 that Task Force Shield had failed to meet its goals because of "lack of clear management structure and poor accountability", and added that there were "indications of potential fraud" that were being reviewed by the inspector general.

The endorsement of the new Iraqi constitution by referendum in October 2005 finally killed the prospect of full-scale oil privatization. Article 109 of that document stated clearly that hydrocarbons were "national Iraqi property". That is, oil and gas would remain in the public sector.

In March 2006, three years after the Anglo-American invasion of Iraq, the country's petroleum exports were 30-40% below pre-invasion levels.

Bush pushes for flawed law

In February 2007, in line with the constitution, the draft hydrocarbon law the Iraqi government presented to Parliament kept oil and gas in the state sector. It also stipulated re-creating a single Iraqi National Oil Co that would be charged with doling out oil income to the provinces on a per capita basis. The Bush administration latched on to that provision to hype the 43-article Iraqi bill as a key to reconciliation between Sunnis and Shi'ites - since the Sunni areas of Iraq lack hydrocarbons - and so included it (as did Congress) in its list of "benchmarks" the Iraqi government had to meet.

Overlooked by Washington was the way that particular article, after mentioning revenue-sharing, stated that a separate Federal Revenue Law would be necessary to settle the matter of distribution - the first draft of which was only published four months later in June.

Far more than revenue sharing and reconciliation, though, what really interested the Bush White House were the mouthwatering incentives for foreign firms to invest in Iraq's hydrocarbon industry contained in the draft law. They promised to provide ample opportunities to America's oil majors to reap handsome profits in an oil-rich Iraq whose vast western desert had yet to be explored fully for hydrocarbons. So Bush pressured the Iraqi government to get the necessary law passed before Parliament's vacation in August - to no avail.

The Bush administration's failure to achieve its short-term objectives does not detract from the overarching fact - established by the copious evidence marshaled in this article - that gaining privileged access to Iraqi oil for US companies was a primary objective of the Pentagon's invasion of Iraq.

Dilip Hiro is the author of Secrets and Lies: Operation 'Iraqi Freedom' and After, as well as, most recently, Blood of the Earth: The Battle for the World's Vanishing Oil Resources, both published by Nation Books. (Copyright 2007 Dilip Hiro.)

Source: Asia Times