RUSSIA: Dmitry Medvedev Makes His Case With Projects

With Dmitry Medvedev's virtually assured victory in the presidential election just three days away, President Vladimir Putin indicated on Thursday that his protege's efforts at solving some of the country's most pressing social problems had helped pave his way to the country's top job.

While Putin was trumpeting the success of the so-called national projects to improve conditions in health care, education, housing and agriculture, questions remained as to the real impact they had made on the lives of average Russians.

"The way it was in the Soviet Union, if you wanted to finish off someone's political career, you put him on social projects," Putin told the National Projects Council in the Kremlin's Alexander Hall.

Medvedev, in contrast, had, "succeeded in doing targeted, systematic work," he added.

Coverage of the projects has definitely kept Medvedev in public view. He had been competing for airtime with fellow First Deputy Prime Minister Sergei Ivanov until Putin endorsed him in December, after which Medvedev enjoyed pride of place in national television coverage.

Putin will likely drop in for the victory celebration at Medvedev's campaign headquarters Sunday, a presidential administration official said Thursday on condition of anonymity, as he was not authorized to comment. The move would be in stark contrast to the victory party at United Russia headquarters for the Dec. 2 State Duma elections, where Putin was a no-show even though his was the sole name on the party's national list.

Under a gilded dome decorated with imperial eagles whose two heads face in opposite directions, Putin and Medvedev, seated next to each other, often put their heads together for quiet exchanges over the presentation.

After Putin delivered the opening address, Medvedev got up to speak at a lectern. Like the ministers who followed, he reeled off statistics to show that the projects under his charge had changed Russians' lives for the better.

Medvedev said Russians had seen for themselves that the projects were not just "pre-election PR from the authorities" or "pure populism," as they had been viewed initially by the public.

"Still, people have seen changes, perhaps not so large, but real all the same," he told a gathering of ministers, governors and other officials. "I think this level of trust is an obligation and gives us a real opportunity to achieve more."

He was followed by a line of officials who took turns announcing mind-numbing lists of results in their areas of responsibility.

Gazprom CEO Alexei Miller, for example, said 13 million more Russians received gas to their homes as a result of the company's work since 2005, raising the level of homes being served to 62 percent from 54 percent.

Education and Science Minister Andrei Fursenko said all of the country's schools now had Internet access, while Health and Social Development Minister Tatyana Golikova said the country's health sector had benefited from reforms the likes of which had not been seen in 20 years, with total spending of 182 billion rubles, or $7.5 billion over the last two years.

"Significant work is behind these boring figures," Medvedev said. "This is our long-term policy."

While Medvedev was trumpeting the successes Thursday, not everyone was so convinced.

Dmitry Sorokin, first deputy director of the Economics Institute at the Russian Academy of Sciences, said "increased PR" had essentially become the main result of the two-year projects. Citing a study by the Academy's Center for Banking and Financial Research, he said the amount committed to addressing the problems was meager.

"I don't see real improvements," he said. "The country is undergoing a slow degradation."

Sorokin's boss, Ruslan Grinberg, who heads the Academy's Economics Institute, went even farther with his criticism, saying the system itself was the problem.

"It sometimes seems like democracy is a virtue in itself," he said by phone. "It is practical; it's useful. It provides the ability to correct mistakes."

Earlier this week, Grinberg and Sorokin were two of the authors of a report commissioned by a little-known think tank called the Center for the Development of Information Society.

Thursday's edition of Nezavisimaya Gazeta covered the report's contents, which focused on the lack of political opposition in the country and the need to change course.

"The only reasonable way to change the economic course is the existence of party opposition, which can attain power with different principles of economic policy," Grinberg was quoted as saying in a rare public statement of discontent with Kremlin policy from academic circles. "Without this, Russia is regularly pushed into crises like the 1998 default, which could have been avoided."

Grinberg said Thursday that he still had not decided whether he would vote Sunday.

"I like [Medvedev]," he said, "but this [election] doesn't make me very enthusiastic."

Drumming up enthusiasm did not seem like much of a problem for most of those on hand Thursday.

Kaliningrad Governor Georgy Boos said he would vote for Medvedev without a second thought, while Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, said he and most members of the country's biggest business lobby group would vote for Medvedev and the stability he represented.

Asked what the structure of power might look like in a Medvedev presidency, both Boos and Shokhin said they had no clear idea.

"Life's wise," Boos mused. "It will sort everything out."

Putin aide Igor Shuvalov added with a smile: "We are in for a very interesting time."


Source: The Moscow Times|By Anna Smolchenko

MIDDLE EAST: Iran, Qatar observe mutual interests in gas field

First Vice President Parviz Davoudi said on Thursday that Iran and Qatar will observe bilateral interests in extracting of the joint gas field.

Davoudi made the remark after seeing off Qatari Prime Minister Sheikh Hamad bin Jassem al-Thani, adding that the two countries have reached consensus to exchange information on the joint gas field in the Persian Gulf.

The two sides have agreed to implement the extraction operation in line with maintaining mutual interests and avoiding competitive and destructive attitudes, he added.

Pointing to the holding of two rounds of talks between Iranian and Qatari senior officials during the visit, he noted that a committee comprising of two representatives from each side will follow up on the negotiations in a 60-day period.

Agreements between the two countries will be on the agenda of the sixth session of joint Tehran-Doha Cooperation Commission, to be held in the capital of Qatar in 2008, he added.

He further referred to the cultural and religious commonalties between Iran and Qatar, saying that the two sides have enjoyed good relations.

He expressed hope that given the residing of a number of Iranian nationals in the Arab state, mutual ties will expand more than ever.

Turning to the visit President Mahmoud Ahmadinejad paid to Qatar to take part in the Summit of Leaders of the Persian Gulf Cooperation Council (PGCC), Davoudi noted that the visit was considered a turning point in upgrading relations between Iran and states of in the south of the Persian Gulf.

The first vice president also said that Qatari officials are keen on expanding ties with Iran in all fields.

Source: Islamic Republic News Agency

UNITED KINGDOM: British Petroleum hints at $7bn sale of alternative energy arm

BP is considering floating or selling all or part of its renewable power operations, which it believes are worth up to $7bn (£3.5bn) - a value not reflected in the oil group's share price.

In a strategy update to the City that will be seen by green critics as a further move back to petroleum, Tony Hayward, the chief executive, said he planned to review the position of BP Alternative Energy, the brainchild of his predecessor, John Browne.

"What we will be doing over the course of the year will be looking at ways of realising that value for shareholders because none of us believe that there is very much of that, if anything, in our share price today," he said.

"Taking stockmarket valuations for similar companies, we estimate it [renewable energy] is already worth between $5bn and $7bn," he said. BP would be investing $1.5bn in the operations this year, compared with more than $20bn being ploughed into oil and gas.

Despite moves into the carbon-heavy oil sands and this latest possible sell-off, BP insisted it was as committed as ever to renewables. It highlighted the acceleration of $8bn of spending originally earmarked for new technologies.

Sources close to the group said Hayward's drive to realise value from alternative energy was more likely to mean disposing of a stake in the business than an all-out sale. They said both options were "some time off".

Vivienne Cox, chief executive of an alternative energy operation recently downgraded from a full division to a business unit, estimated that the wind business could be worth as much as $3.9bn and solar $2.1bn. Other operations, such as biomass, clean coal and hydrogen, could bring the total value up to $7bn.

BP had assembled a land bank big enough to build 15 gigawatts of wind generation in the US, including Cedar Creek in Colorado, one of the biggest wind farms in the US. There is more capacity planned for Europe, India and China, while the company was aiming at raising solar sales to 800 megawatts by 2010.

The company gave details of progress since a fall in annual profits and a slump in the share price.

Fadel Gheit, an oil analyst with Oppenheimer, said he was impressed with the steady progress to rehabilitate BP. "It makes sense to spin off the alternative energy business at some stage rather than having it hidden inside a much larger group," he said.


Source: The Guardian|by Terry Macalister

WESTERN HEMISPHERE: ExxonMobil should settle Venezuela dispute


On February 7 an English court granted an injunction to US multinational oil company ExxonMobil freezing the assets of the Venezuelan oil firm PDVSA in England and Wales. The order covered assets to the value of $12bn. The Venezuelan government was given no notice of the case nor any opportunity to be represented at the hearing. This week PDVSA will appeal against the decision in the high court.

ExxonMobil's action was in response to the policy of the Venezuelan government to take back majority control of its own oil resources. Unlike other international oil companies - 30 out of 32 contracts have been renegotiated, with amicable agreements and compensation terms reached with the Venezuelan government - ExxonMobil refused the terms offered.

We believe the court ruling contravenes the right of Venezuela's democratically elected government to exercise sovereignty over its natural resources. The nationalisation of the state oil company has allowed Venezuela to tackle a range of social inequalities, by taking back the oil wealth and redistributing it to benefit the Venezuelan people.

We urge the amicable settlement of this dispute through arbitration under the auspices of the International Centre for the Settlement of Investment Disputes, a body of the World Bank, as sought by the Venezuelan government.

Diane Abbott M.P, Tony Benn, John Pilger, Bruce Kent, Prunella Scales, Caroline Lucas MEP, Gordon Hutchison, Secretary, Venezuela Information Centre (VIC), Brian Wilson, Chair, Scottish Venezuela Society, Ann Pettifor, Director, Advocacy International, Neil Lawson, Compass, Graeme Smith, General Secretary, STUC, Keith Sonnet, Deputy General Secretary, UNISON, Ken Loach, Colin Burgon M.P, Jon Cruddas M.P, Mike Hancock M.P, Adam Price M.P., Angus MacNeil M.P., Richard Harvey, David Hillman, Jon Trickett M.P, Jeremy Corbyn M.P, Victoria Brittain, Graham Goddard, Deputy General Secretary, UNITE Billy Hayes, General Secretary CWU, Rodney Bickerstaffe, Sue Branford, Chair, War on Want, Richard Gott, Doug Nicholls, National Secretary CYWU/UNITE, Derek Wall, Green Party, Cllr. Salma Yaqoob, Hazel Marsh, University of East Anglia, Andy Bain, President TSSA, Maggie Bowden, General Secretary, Liberation, Ruqayyah Collector, Black Students Officer, NUS, Marie Daley, UCU National Executive Committee, Michael Derham, Northumbria University, Bill Greenshields, Vice-President NUT, Chris Kitchen, General Secretary NUM, Matt Wrack, General Secretary FBU, Dr Mandy Turner, University of Bradford, Dr Kaveh Moussavi, University of Oxford, Paul Laverty, Gerry Doherty, General Secretary TSSA, Baljeet Ghale, President NUT (personal capacity), Joe Marino, General Secretary, BFAWU, Doreen Massey, Open University, Martin McIvor, Editor, Renewal, Gerry Morrissey, General Secreary, BECTU, Linda Newman, President UCU, Diana Raby, University of Liverpool, Mick Shaw, President, FBU

Source: The Guardian

OiL PRICES: It is hit $102 as dollar sinks against Euro


Oil prices broke through a new intraday high of $102 a barrel today as a slide in the U.S. dollar prompted investors to pump more money into energy futures as a hedge against inflation.

The dollar sank to a record low against the euro after the release of three disheartening U.S. economic reports Tuesday that show that the economy is slowing as prices for consumer goods rise. The dollar's decline prompted investors to seek a safe haven from turmoil in the financial markets and the threat of inflation.

"Crude has cracked through the $100-level again and that's driven by financial investors moving money into commodities markets," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

"The U.S. dollar weakened against the euro and the economic data also indicated that inflation in the U.S. rose in January, and commodities are generally considered a hedge against inflation," Shum said. "We are therefore seeing these strong prices that have really little to do with oil market fundamentals."

Light, sweet crude for April delivery spiked as high as $102.08 a barrel in electronic trading on the New York Mercantile Exchange before slipping back to $101.23, up 35 cents. The contract on Tuesday jumped $1.65 to settle at $100.88 a barrel, a record close.

In London, Brent crude added 33 cents to $99.80 a barrel on the ICE Futures exchange, below the intraday record of $100.30 a barrel set earlier in the session.

The U.S. Labor Department said wholesale inflation rose by 1 percent in January on soaring oil and food costs. And Standard & Poor's also reported that U.S. home prices fell 8.9 percent in the last three months of 2007 from a year earlier.

A report by the Conference Board, a business-backed research group, that its Consumer Confidence Index fell to the lowest since February 2003, far below what analysts had been expecting, indicated that consumers might continue to curb their spending in the coming months.

But traders in both the energy market and the U.S. stock market, which also advanced sharply, seemed largely unfazed. Oil has risen in recent days amid an increase in speculative buying, with some traders believing that global demand will be high enough to support higher crude prices even if the American economy is slowing.

In currency trading, the euro rose above $1.50 for the first time, reaching $1.5087 before falling back to $1.5040.

Analysts expect the U.S. Energy Department's Energy Information Administration to report later Wednesday that the nation's crude oil stocks rose last week by 2.4 million barrels, which would be the seventh straight week of gains.

Gasoline inventories are expected to rise by 400,000 barrels while supplies of distillates, which include heating oil and diesel, fell by 1.8 million barrels last week, according to a Dow Jones Newswires poll of analysts.

Also supporting prices were concerns about supply disruptions from unrest in Iraq, a major oil exporter. Turkish ground forces pushed their offensive against Kurdish rebels deeper into the north of Iraq, seizing seven guerrilla camps, officials said Tuesday.

In other Nymex trading Wednesday, heating oil futures rose 0.65 cent to $2.8215 a gallon (3.8 liters) while gasoline prices added 0.2 cent to $2.5525 a gallon.

Natural gas futures lost 2.6 cents to $9.18 per 1,000 cubic feet.


Source: Associated Press|By GILLIAN WONG

RUSSIA: Gazprom to Sell Shares in Coal Unit After Acquisition

OAO Gazprom, Russia's natural-gas exporter, plans to hold an initial public offering of its new coal and power unit after acquiring Siberian Coal Energy Co.

Gazprom will acquire 50 percent plus one share in the country's biggest coal producer by September, the Moscow-based companies said in a joint e-mailed statement today. State-run Gazprom will pay for the shares with its electricity assets.

The transaction will create the country's largest electricity producer, after the breakup of OAO Unified Energy System in June, and the biggest coal supplier to power stations. The Gazprom unit will have 30,500 megawatts of capacity in the 10 time zones between Finland and Russia's easternmost border with China. Deloitte & Touche LLP valued the new company at about $16 billion, Kommersant newspaper reported Nov. 28.

Gazprom, supplier of a quarter of Europe's gas, is moving into coal as the government seeks to reduce the country's reliance on gas for power generation. The government wants coal to account for 37 percent of power production by 2015, up from 27 percent last year, freeing up more gas for export.

``The IPO will happen in the near term,'' Siberian Coal spokesman Alexei Naumenko said by phone today, declining to elaborate.
Vladimir Rashevsky, chief executive officer of Siberian Coal, also known as SUEK, will manage the new company, according to today's statement. Gazprom will hold 5 of 11 board seats, SUEK will have four and two directors will be independent.


Source: Bloomberg|by Greg Walters and Yuriy Humber

PERSIAN GULF: Uzbekistan to be linked to Persian Gulf via Iran

 Uzbekistan to be linked to Persian Gulf via Iran  Uzbekistan will have access to the Persian Gulf through Iran, wrote Turkmen weekly `Zaman Turkmenistan' in its latest issue.

The weekly said that Uzbekistan's railways and roads will be linked to the Persian Gulf through the Uzbek Republic's Termez city and Afghanistan's Mazar-i-Sharif and Herat cities.

It said Uzbekistan's link to Persian Gulf will cut the distance and expedite cargo transportation between Iran and the Uzbek Republic. He said presently European and Asian states are linked to Uzbekistan through the Iran-Turkmenistan-Uzbekistan railway.


Source: Islamic Republic News Agency

IRAN: Orumiyeh combined cycle power plant inaugurated

Islamic Republic ranks first in the region in terms of power plant construction and 19th in the world, Iran's energy minister said here on Saturday.
Islamic Republic ranks first in the region in terms of power plant construction and 19th in the world, Iran's energy minister said here on Saturday.

Addressing a ceremony to inaugurate Orumiyeh combined cycle power plant, Parviz Fattah noted that with the launching of the new plant, each year over 5,000 megawatts will be added to the power plants' capacity nationwide. Referring to the implementation of the power plans in Orumiyeh, Ardebil, Kurdestan and Kermanshah provinces, he stated that the West Azarbaijan has joined the list of electricity exporters.

Fattah also termed estimating and acquiring credits for power plants as one of the steps taken by the energy ministry.

Orumiyeh combined cycle power plants was launched in 2005 at a cost of over two billion rials.


Source: Islamic Republic News Agency

OiL FUTURES: Does storing oil raise prices?


As oil prices skyrocket, some policymakers want to halt efforts to increase the nation's emergency oil reserve, but the administration says energy security depends on the stockpile's size.

The Department of Energy pulls approximately 70,000 barrels of oil off the market every day for the Strategic Petroleum Reserve, the world's largest oil stash, stored in massive underground salt caverns along the Gulf of Mexico's coastline.

To date, the SPR holds 698 million barrels of oil, but the DOE has been actively working to increase the reserve's size in order to meet the Bush administration goal, announced by the president last year, of doubling its contents to 1.5 billion barrels by 2027.

But with oil prices reaching records highs of $100 per barrel this year, some congressmen say the administration's actions are worsening the load on consumers and adding to market instability. Last week Sen. Byron Dorgan, D-N.D., introduced a bill calling on the Department of Energy to cease adding oil to the SPR for the rest of 2008, or until prices fall below $50 a barrel.

"We need to use a little common sense here," Dorgan said in a statement. "I believe maintaining the current reserve is important for our economy and national security but the time to stock up is not when prices are highest."

A pause in purchases for the SPR would stimulate the economy, Dorgan said, by moderating energy prices.

Administration officials disagree.
The total amount of oil going into the reserve each day represents such a small portion of the market that it couldn't possibly affect prices in any significant way, said Julie Ruggiero, a spokesperson for the DOE.

"The department is continuing to fill the SPR at a modest rate ¿¿ that equate(s) to less than one-tenth of 1 percent of daily world oil consumption," Ruggiero told United Press International.

But even a small percentage can have a big impact on prices, said Philip Verleger, president of PKVerleger LLC, an energy economics consulting firm. Verleger told senators at a December hearing the recent spike in oil prices cannot be pinned on traditional factors, such as international events.

"By deduction, then, the cause of the increase must lie elsewhere," he testified. "The one and only significant change was DOE's decision to begin filling the Strategic Petroleum Reserve."

Prior to August 2007, Verleger said, the DOE had not been actively adding to the SPR, and it was the specific mix of crude oil it began adding to the reserve last fall that caused the rise in prices.

Although there have been recent surpluses of sour crude oil, sweet crude accounts for a much smaller share of the market, and a significant portion of it is not available to consumers.

Of the oil going into the SPR this fall, sweet crude represented 33 percent -- or as much as 0.1 percent to 0.5 percent of the total sweet crude market, according to Verleger's calculations. He said he believes this could be responsible for up to 10 percent of the sweet crude price increase.

But administration officials say efforts to fill the reserve should not fluctuate with the market.

"The Strategic Petroleum Reserve is not a tool to be used to manipulate prices," said Scott Stanzel, a White House spokesperson. "When it has been used, say in the previous administration (to do so), it has had a very limited affect."

The SPR functions as an insurance policy for the nation, Stanzel told UPI, in the event of a natural disaster, a terrorist attack or some other disruption to supply. The increasing demand for oil, and tightening market, make the need to bolster the SPR even more imperative, he said.


U.S. daily imports of oil have risen dramatically since the SPR's inception in 1975, effectively decreasing the length of time the SPR can satisfy the country's energy needs every year.

"We have a net less protection from potential disruptions (to oil supply) than we did nearly 20 years ago," Stanzel told UPI.

Currently, the reserve holds a 56-day supply of oil imports. Under an agreement with other industrialized countries through the International Energy Agency, the United States is obligated to have the equivalent of 90 days worth of imports stored for emergencies. The president's plan to double the reserve would result in a stockpile of that size in the SPR, Energy Secretary Samuel Bodman testified in the Senate Energy Committee last week.

However, the IEA does not mandate the 90-day requirement be met be government entities alone. When industry stores are factored into the equation, the total reaches 118 days -- well above the IEA requirement, said Barry Piatt, communications director for Dorgan.

However, the IEA supports the administration's push to increase the SPR, said Jason Elliott of the IEA.

"The U.S. does not oblige industry to hold minimum levels of stocks, as many other IEA countries do, so while the U.S. is compliant with the IEA commitment, the IEA has encouraged the U.S. administration to expand the SPR cover in order to guarantee sustainable compliance," Elliott told UPI.

Adding to the SPR doesn't actually increase security, though, said Frank Verrastro, director of the Energy and National Security Program at the Center for Strategic & International Studies, a bipartisan think tank.

Currently, the SPR's drawdown rate, or the speed at which oil can be removed from the reserve, is only 4.5 million barrels per day. Since daily imports total close to 13 million barrels per day, the SPR alone couldn't actually substitute for gross daily imports if a supply disruption did occur.

"What volume of oil is in the reserve doesn't matter ... because you can't cover your full import rate," Verrastro told UPI, pointing to a greater need to increase the drawdown rate than to increase total volume.



Source: United Presse International|by Rosalie Westenskow

UNITED STATES: Energy policy is foreign policy


Energy policy is not only a county's priority to provide fuel and power to its citizens, it's also a vital, fluid component in foreign policy for the United States and its major partners and enemies.

Whether the dual policies are a power struggle over resources themselves or a way to punish or reward, the need for energy and the related economic and development consequences are ever present.

"Post-Cold War, there are common interests, even between the United States and Iran, certainly between the United States and other Gulf states," said James Placke, senior associate and Middle East expert at Cambridge Energy Research Associates. "Security interests are still a very important part of it; energy interests are still a very important part of it. Whether the United States gets most of its oil or only a small portion -- and it is a small portion -- from the Gulf region really doesn't matter. There's one oil market and in the supplies to the world market from the Gulf are absolutely critical, and that's what's important to the United States."

Placke, who spent three decades in top posts at the U.S. State Department and Foreign Service, was speaking at a panel at CERAWeek, the world's largest annual energy conference.

Placke pointed to U.S. attempts to keep the Soviet Union from oil and gas, while attempting to shore up as many dedicated supplies as possible. Now, the Bush administration's enemy No. 1 is Iran. And, couched in fears Tehran is attempting to build nuclear weapons capabilities, Washington is leading the charge for even more sanctions.

"In case of Iran, yes energy policy and foreign policy are two sides of same coin, but in a rather perverse way," Placke said. "That's a way of getting Iran to pay a price in the hope that there will be more of an accommodation to the requirements of the international community than there has up until this point."

The U.N. Security Council has approved two sets of sanctions -- nothing new is likely before next month's International Atomic Energy Agency report -- which have had limited impact, said Bijan Khajehpour, chairman of the Iran-based Atieh Bahar Consulting.

"What has had a severe impact on Iran is the unofficial U.S. sanctions" by pressing banks and international companies not to invest. "Right now Iran is very much irritated by U.S. sanctions and if those continue, the opportunity for improved relationship will not be there so easy."

Domestic politics are more focused on the economy than on international relations, Khajehpour said, with inflation, unemployment and gas shortage issues top of the society's agenda. This, however, is not the result of sanctions but internal economic approaches, he added.

Iran's neighbors have their own unique energy-foreign policy blend.

U.S. and Saudi Arabian relations are storied, the latter a former top supplier of oil to the United States and still the largest producer in the world, and Washington ensuring security ties. While its troops have left Saudi Arabia, U.S. forces are in Kuwait, Bahrain, Qatar, United Arab Emirates and Oman.

Now Saudi Arabia is questioning whether the downturn in the U.S. economy is negatively affecting its economy. Since the mid-1980s, its currency has been pegged and exchange rate fixed to the U.S. dollar, but a producer at today's oil prices would prefer interest rates going up, not down as in the United States, said Brad Bourland, head of research and chief economist at Saudi-based Jadwa Investment.

"Back in the 1970s this wasn't a political issue, it was very much, not much of an issue at all," he said. "Today because of the nature of the strained relationship -- 9/11, focus on Saudi Arabia and the United States, plus what's happening globally with Chinese delinking from the dollar, sovereign wealth funds investing in the West, capital flows -- all of this has made it a big issue. So now if Saudi Arabia were to do anything with its dollar relationship it will be seen as having very large political dimensions and a political message to it."


Source: United Presse International|by Ben Lando

CLIMATE CHANGE: Big Oil tackles climate change

Climate change was on the agenda at an influential oil industry meeting in Houston with repeated calls for a nationwide regime.

"We want to be at the table, want to be an active participant as the U.S. government addresses this issue and comes up with a regime," Red Cavaney, president and chief executive officer of the American Petroleum Institute, the industry's lobby group, told United Press International in an interview on the sidelines of the CERAWeek energy confab. "We have certain views as individual companies within the industry but we concluded that the best thing to do was go to the table without any preconditions."

The theme was one repeated several times by top industry officials who have in the past shied away from government regulation on emissions-related issues.

James Mulva, chairman and CEO of ConocoPhillips, called Tuesday for the industry to play an active role in forming legislation that regulates greenhouse gases, which are believed to cause climate change, or risk "the train ¿¿ leaving the station." He said without a coordinated U.S. policy, the industry was unlikely to be allowed to invest in major expansions because of concerns over carbon emissions.

"The U.S. needs a strong, consistent and mandatory national framework to manage carbon emissions," he said, "one that is unencumbered by diverging state and regional initiatives. Without this framework, rising public concern over climate change threatens our energy security by contributing to further access restrictions."

Similar calls for energy efficiency and a reduction in carbon emissions were made by Abdallah Jumah, president and CEO of Saudi Aramco, and Nobuo Tanaka, head of the Paris-based International Energy Agency, the energy arm of the Organization for Economic Cooperation and Development.

Linda Cook, executive director for gas and power for Shell, said she's looking for a government policy with "clarity and certainty," especially in programs like carbon taxes or a cap-and-trade system "that may impact the profitability of our investments."

She'd like alignment within the United States and globally, with "similar rules and level playing field around the world."

Cavaney acknowledged that the industry's embrace of the climate-change debate was slow in coming, and said the turning point came when Democrats took control of both houses of Congress and it became clear some sort of climate-change initiative was on the way.

"It's very clear the day for something having being exclusively voluntary -- it had passed," he said. "So the industry recognizes that if we're going to get something that's going to have the broadest possible participation it shouldn't disadvantage voluntary efforts, they should be part of it -- but it recognizes there should be some mandatory portion.

"(There) was the recognition that there was actually going to be a congressional effort under way. In the past, there wasn't sufficient critical mass intellectually, but when the Democrats took control of both houses of Congress and they made a strong commitment to moving this ¿¿ we wanted to be participant in that."

Cavaney warned, however, that it was important for any legislative effort to tackle emissions to include the world's emerging economies -- especially China and India, two countries whose emissions have been at the center of the argument in the United States against signing on to the Kyoto Protocol, which sets binding emissions-reduction targets on its signatories.

"I don't think you can get something through the U.S. Congress without some conditions -- maybe not binding -- but some commitment ¿¿ that we try to get the broadest participation possible," he said.

Costs of such participation are unlikely to be low, but within manageable limits. The IEA's Tanaka said at least $50 trillion would be needed to make a 50-percent reduction in emissions by 2050 -- or 1 percent of total gross domestic product from 2005-50. Other challenges include technical shortfalls, public perception and government involvement.

"It would essentially require a third industrial revolution, or an energy revolution, which would completely transform the way we produce and use energy and entail painful adjustment," Tanaka said.


Source: United Press International|by Krishnadev Calamur

PEAK OIL : Gas and oil reserves in Titan


Saturn's orange moon Titan has hundreds of times more liquid hydrocarbons than all the known oil and natural gas reserves on Earth, according to new Cassini data. The hydrocarbons rain from the sky, collecting in vast deposits that form lakes and dunes.

The new findings from the study led by Ralph Lorenz, Cassini radar team member from the Johns Hopkins University Applied Physics Laboratory, USA, are reported in the 29 January 2008 issue of the Geophysical Research Letters.

"Titan is just covered in carbon-bearing material-it's a giant factory of organic chemicals," said Lorenz. "This vast carbon inventory is an important window into the geology and climate history of Titan."

At a balmy minus 179degrees C , Titan is a far cry from Earth. Instead of water, liquid hydrocarbons in the form of methane and ethane are present on the moon's surface, and tholins probably make up its dunes. The term 'tholins' was coined by Carl Sagan in 1979 to describe the complex organic molecules at the heart of prebiotic chemistry.

Cassini has mapped about 20% of Titan's surface with radar. Several hundred lakes and seas have been observed, with each of several dozen estimated to contain more hydrocarbon liquid than Earth's oil and gas reserves. The dark dunes that run along the equator contain a volume of organics several hundred times larger than Earth's coal reserves.

Proven reserves of natural gas on Earth total 130 thousand million tons, enough to provide 300 times the amount of energy the entire United States uses annually for residential heating, cooling and lighting. Dozens of Titan's lakes individually have the equivalent of at least this much energy in the form of methane and ethane.

"This global estimate is based mostly on views of the lakes in the northern polar regions. We have assumed the south might be similar, but we really don't yet know how much liquid is there," said Lorenz. Cassini's radar has observed the south polar region only once, and only two small lakes were visible. Future observations of that area are planned during Cassini's proposed extended mission.

Scientists estimated Titan's lake depth by making some general assumptions based on lakes on Earth. They took the average area and depth of lakes on Earth, taking into account the nearby surroundings, like mountains. On Earth, the lake depth is often 10 times less than the height of nearby terrain.

"We also know that some lakes are more than 10 m or so deep because they appear literally pitch-black to the radar. If they were shallow we'd see the bottom, and we don't," said Lorenz.

The question of how much liquid is on the surface is an important one because methane is a strong greenhouse gas on Titan as well as on Earth, but there is much more of it on Titan. If all the observed liquid on Titan is methane, it would only last a few million years, because as methane escapes into Titan's atmosphere, it breaks down and escapes into space.

If the methane were to run out, Titan could become much colder. Scientists believe that methane might be supplied to the atmosphere by venting from the interior in cryovolcanic eruptions. If so, the amount of methane, and the temperature on Titan, may have fluctuated dramatically in Titan's past.

"We are carbon-based life, and understanding how far along the chain of complexity towards life that chemistry can go in an environment like Titan will be important in understanding the origins of life throughout the universe," added Lorenz.

Cassini's next radar flyby of Titan is on 22 February 2008, when the radar instrument will observe the landing site of ESA's Huygens probe.


Source: SPX

IEA: World oil market could be set for lengthy slowdown


The world oil market could be set for a lengthy slowdown, the International Energy Agency said on Wednesday, signalling a sharp shift in the climate that pushed the oil price to 100 dollars last month.

In light of weaker global economic prospects, the IEA cut its forecast for world demand for oil this year by 200,000 barrels per day. It said it expected world demand in 2008 to grow by 1.9 percent instead of 2.2 percent forecast last July.

"Just as the demand shock of 2004 shaped the oil market for the next three years, so too could the pending slowdown," the agency, which coordinates energy policies for the main industrialised consuming nations, commented in its monthly review of oil trends.

"One of the most indicative factors since we released the last (monthly) report was the negative news on the world economy, especially in the United States, yet the oil price remained unchanged," IEA chief analyst Lawrence Eagles told AFP.

The latest study, which noted that crude oil prices were little changed from mid-January at just over 90 dollars a barrel, said "an economic slowdown has the potential to change the landscape over the next few years: depending on how deep it is and how long it lasts."

But it also noted that projected robust economic momentum in China and the Middle East, two key centers for oil demand growth, stood in contrast to sluggish performances expected in the world's principal industrialised nations.

The IEA findings, according to Natexis bank analyst Moncef Kaabi, point to a "globally balanced oil market this year, apart from geopolitical tensions, but there will be no real price stability as long as Asian demand does not slow."

China's demand for oil is forecast to grow 5.8 percent this year to 7.9 million barrels a day after a 4.5 percent rise in 2007.

But the IEA cautioned that recent widespread power shortages and severe weather in China "have cast a shadow over the 2008 prognosis."



While power cuts could point to a surge in oil demand for energy generation, recent snowstorms have disrupted transportation during the Lunar New Year holiday and could therefore depress demand for transportation fuel. The IEA found that in January, world oil supply had risen by 745,000 barrels per day to 87.2 million barrels "on new output from Brazil and recovering non-OPEC output elsewhere."

Supplies from the Organization of Petroleum Exporting Countries had remained close to 32.0 million barrels per day on increased output from Angola, the United Arab Emirates, Saudi Arabia and Kuwait, while production had eased in Iraq, Nigeria and Qatar.

However, OPEC's real spare capacity had risen to 2.4 million barrels per day in January.

"We've got low stocks and relatively low spare capacity," Eeagles said.

"Spare capacity is due to grow this year," he continued, adding that much would depend "on whether it is made available by OPEC."

"Spare capacity belongs to OPEC. The non-OPEC producers are producing flat out."

Non-OPEC January output is estimated by the IEA to have come to 50.2 million barrels a day in January, an increase of O.7 percent from December when production from Mexico, the former Soviet Union and China was much lower than preliminary estimates.

Overall, according to the agency, non-OPEC total production -- apart from Ecuador -- for 2007 and 2008 is predicted to remain at 49.7 million barrels a day and 50.6 million barrels a day respectively.

The IEA said that industrial stocks of oil in the area covered by the Organisation for Economic Cooperation and Development had fallen by 39.5 million barrels in December. The agency warned that oil inventories remained low, "as does spare capacity."

Geopolitical issues in Nigeria, Venezuela, Iraq and Iran had helped push up prices. Despite the pressures now bearing down on demand, there was "clearly" a need to rebuild stocks, the IEA said.



Source: Agence France Pressee

VENEZUELA: Eases cut-off threat

VENEZUELA: Eases 'cut-off' threatOfficials at Venezuela's state-owned oil and gas giant PDVSA appeared Tuesday to back away from threats to "cut off" oil supplies to the United States amid a multibillion-dollar legal fight with ExxonMobil.

While PDVSA head Rafael Ramirez said Venezuela was still "ready" to cut off supplies if the lawsuit filed by ExxonMobil persisted, he did note that South America's top oil supplier and lone member of the Organization of Petroleum Exporting Countries did not want it to come to that.

Most analysts concluded that Venezuela's bluster over the ExxonMobil case and threat of cutting off supplies was more posturing than a real possibility. As the fourth-largest exporter to the United States, Venezuela can hardly afford to shut off supplies to the United States, even for a short while, said Patrick Esteruelas, a Latin America analyst for the New York-based think tank Eurasia Group.

"The Venezuelan government has become more and more dependent on oil, and oil exports to the U.S. in particular, making it highly unlikely that Venezuela will cut off oil supplies to the U.S. despite the latest threats," said Esteruelas, who noted that Venezuelan crude and refined product exports to the United States averaged 1.35 million bpd in 2007, close to two-thirds of Venezuela's total oil exports of 2 million bpd.

However, Venezuela has already decreased its exports to the United States in recent years, a result of production shortcomings, according to some PDVSA officials.

In July, Luis Vierma, exploration and production vice president at PDVSA, said Venezuelan oil faces a "significant operational emergency" if it does not increase the number of rigs operating in the country and that the state firm fell short of its 2007 goal of getting 191 rigs online in 2007 and producing some 3.3 million bpd.

Meanwhile, ExxonMobil scored a major victory in its ongoing dispute with Venezuela and PDVSA when it won a court injunction to freeze some $12 billion in PDVSA assets amid its ongoing dispute with Venezuela, which seized its project in the oil-rich Orinoco Belt during its nationalization of the oil sector last year.

Venezuelan officials initially denied the full $12 billion had been frozen by courts in The Netherlands, England and the United States, though they conceded that $300 million was frozen for a short time.

While most other foreign firms accepted the terms of the nationalization in which PDVSA assumed majority control of their projects, ExxonMobil refused, leading to the seizure of its stake in Orinoco.

Venezuelan officials including President Hugo Chavez, an ardent critic of the Bush administration, accused Washington of using ExxonMobil in a proxy war against his leftist administration.

"Clearly there is an intention to start an economic war with our country," said Ramirez.

The energy leader's remarks are reminiscent of the rhetoric Chavez regularly invokes when it comes to the United States. The Venezuelan president has accused the United States of meddling in Venezuelan internal affairs for years and attempting to foment his removal from office, including a failed coup attempt in 2002.

Bush officials repeatedly deny playing a role in the coup.

In response to the seizure, it appears Venezuelan lawyers will begin preparing their response to the injunction, a particular challenge considering the supposed disbursement of the PDVSA funds in question are in banks both in the United States and Europe.

"It's a real first-inning win for ExxonMobil," Joseph Profaizer, an attorney specializing in international disputes with the Washington-based firm of Paul Hastings, told United Press International.

Profaizer noted that ExxonMobil appears to have the law on its side considering international law generally prohibits the expropriation of property without compensation.

ExxonMobil officials claimed that the compensation Venezuela offered for its stake in Orinoco -- reportedly less than $6 billion -- was not adequate.

"For three different courts across the world to issues injunctions like this is a very significant event," added Profaizer.

Mark Albers, senior vice president for ExxonMobil, asked about the dispute Tuesday in Houston at the annual international energy conference CERAWeek, refused to enter the fray.

"Obviously (there are) a number of issues that the courts are going to need to decide so I'm not going to comment on those," Albers said. "I will say we do remain interested in getting into substantive discussions with the Venezuela government and with PDVSA around the fair market value for the assets that have been expropriated."


Source: United Press International|by Carmen Gentile

ASIA: Uzbekistan restores power to freezing Tajikistan, but Kyrgyzstan cuts it


Kyrgyzstan said Wednesday it was cutting electricity supplies to Central Asian neighbour Tajikistan, which is in the grips of an energy crisis amid its coldest weather for 40 years.

A mountainous ex-Soviet country of 7.2 million, Tajikistan is almost entirely dependent for its energy imports on Uzbekistan, which has also been feeling the strain of the cold snap. However Uzbekistan has restored power that was cut off on February 4, media reports said in Tashkent.

Authorities in Tajikistan were forced to drastically ration electricity supplies to Dushanbe last week as the cold weather paralysed the republic's Soviet-era power grid.

Winter temperatures that usually hover around zero degrees Celsius (32 degrees Fahrenheit) have plunged well below freezing, reaching minus 20 degrees Celsius (minus four degrees Fahrenheit) in some areas.

The cold has iced over a river feeding the lake that drives the Nurek hydroelectric power plant, which supplies 60 percent of the country's power. In the capital, residents have been rationed to 10 hours of electricity a day, water supplies are erratic and the urban heating system is off.


Outlying regions in the mountainous Central Asian country of 7.2 million people are receiving at most 90 minutes a day of electricity, down from a four-hour limit imposed since October.

Kyrgyzstan's Prime Minister Igor Chudinov told a cabinet meeting that Bishkek was stopping its daily supply of 11 million kilowatt hours because Dushanbe was refusing to "pay back" 55 million kwh per day once spring comes.

Supplies from Uzbekistan were restored on Monday and by Tuesday daily power supply reached two million kwh, government-linked web site press-uz.info reported, citing state energy company Uzbekenergo.

"The export volume will gradually increase," to reach four million kwh a day, an Uzbekenergo executive was quoted as saying. The company declined a request for confirmation.

Earlier this year Uzbek gas supplies to Tajikistan were temporarily cut by a third because of debts. While Uzbekistan exports energy, much of its rural population has been suffering gas and electricity shortages as it also feels the pinch of the cold weather.


Source: Agence France Pressee

INDUSTRY: Oil multinationals, Face Increased Political Risk From State Intervention

Oil multinationals, Face Increased Political Risk From State Intervention
Oil multinationals face increased political and economic risks as governments readdress the balance of power by taking more control over their domestic product, according to Aon's Political and Economic Risk Map 2008. The report found that countries such as Venezuela and Uzbekistan pose a high risk for companies with potential problems such as confiscation, sovereign non-payment and political interference.

These political risks could threaten global oil supplies and push record oil prices even further.

This is evidenced in the threat by Venezuela to cut off the US oil sales after one of the world's four largest oil companies won international court orders freezing up to $12bn in assets of state oil firm Petroleos de Venezuela (PDVSA). Also, the Chinese government diverted coal exports back to coastal towns during the New Year winter storms.

Governments with state-owned oil companies have benefited and learnt from the technology, expertise and training from the oil multinationals that originally invested in exploration and production. Now, along with the increasing price of oil and by accruing tax and royalties, these governments have asserted themselves to bring the domestic product into their control through varying degrees of nationalisation.

The drivers for state control vary from left wing politics, as evidenced in South American countries such as Venezuela, Ecuador and Bolivia, to capitalist economics.

As most of the world's oil reserves are today held by government-controlled oil companies -- approximately 90% compared to 30% in 1978 (Source: Hydrocarbon Highway) -- multinationals are now dealing with nations with elevated levels of political and economic risk to meet increasing global demand. For example:

Country Risk rating

  • Venezuela HIGH
  • Uzbekistan HIGH
  • Bolivia HIGH
  • Iran HIGH
  • Russia MEDIUM
  • Saudi Arabia MEDIUM

Simon Lazarus, executive director of Aon's Natural Resources and Construction Division commented: "A number of oil multinationals are facing serious challenges as governments take greater control over their resources. Not only are we seeing an increase in risk across a number of oil producing countries, but the supply situation could potentially worsen in some regions.



This is evidenced by the current "gas squeeze" in the European sector, as well as certain parts of Latin America where there is a serious lack of state investment to keep oil fields productive and to finance expansions into new areas."

Miles Johnstone, director of political risk at Aon Crisis Management, added: "This week alone we have seen Venezuela again threatening to cut off oil supplies to the US. This comes at a time when the main oil producing and refining region in Nigeria continues to suffer from high levels of political violence, kidnappings and general civil unrest, and tensions between the US/UN and Iran over its nuclear programme are ongoing.

These factors indicate potential for serious disruption to the operations of key oil producers as well as to established oil transportation routes which could well lead to further spikes in the price of oil.

"It is crucial for energy companies to understand the nature and extent of these kinds of political threats to their operations and to take appropriate action to mitigate these risks. One way of doing this is by reviewing and strengthening their concession contracts or production sharing agreements; another is through insurance cover, for example."


Source: SPX

EUROASIA: Ukraine Presses for 25-Yr Contract with Gazprom


Ukraine and Russia are negotiating the contract for 25 years to 30 years, Ukrainian Prime Minister Yulia Tymoshenko said, when commenting on Moscow gas talks of February 20 to 21.

We have talked over strategic agreements that should emerge between NAK Neftegaz and Gazprom or Gazprom subsidiaries for 25 years to 30 years without establishing any additional intermediaries, Tymoshenko said, specifying that the disappearance of intermediaries won’t result in any negative fluctuations in the gas prices in Ukraine.

According to Tymoshenko, the delegation of Neftegaz Ukrainy will soon proceed with the gas talks in Moscow. In a few days, Tymoshenko said, the delegation of NAK Neftegaz will go to Russia with draft contracts. Ukraine will be sticking to the line that gives it a feeling of energy safety, the prime minister specified.

Thanks to the involvement of Russia’s President Vladimir Putin and Ukraine’s President Viktor Yushchenko, Gazprom and Neftegaz Ukrainy sorted out another gas conflict February 12, 2008. That time, the clashes rooted in gas arrears of Ukraine - Neftegaz Ukrainy owed $1,450 million to Gazprom for consumed gas as of February 1, 2007.



Source: Kommersant

MEXICO: Una transformación inteligente de PEMEX

Fortalecer a PEMEX dándole autonomía financiera y haciéndolo más competitiva, son los ejes de la propuesta que el Ing. Cuauhtémoc Cárdenas Solórzano presentó en la Cámara de Diputados el jueves 21 de febrero, ante un auditorio repleto, con la presencia de los coordinadores de todos los grupos parlamentarios allí representados. El corazón de su propuesta radica en:

1. No estamos ante un problema de falta de dinero para hacer las cosas, sino de ausencia de una estrategia inteligente que apunte al desarrollo nacional. Hoy
PEMEX está estrangulada entre la confiscación de sus ingresos por Hacienda, el chantaje de su sindicato y la expoliación de los contratistas. Urge cambiar el tratamiento fiscal que se le da, sacarla del presupuesto de egresos de la federación, dotarla de autonomía de gestión y permitirle operar como una empresa pública que rinda cuentas a sus accionistas.

2.
PEMEX debe convertirse en una empresa de calidad mundial. Hace 30 años Petrobras de Brasil era mucho menor que PEMEX y hoy la ha rebasado en muchos ámbitos, permaneciendo como una empresa pública, bajo el control del Estado brasileño, pero con formas de gestión ágiles, un órgano de dirección abierto a consejeros de afuera del gobierno y con el desarrollo de tecnología propia.

3.
PEMEX puede concurrir a los mercados internacionales y adquirir la tecnología necesaria para la exploración y explotación de petróleo en aguas profundas, es decir, para localizar y desarrollar nuevas reservas de energéticos como las que presumiblemente se hallan en el seno marino del Golfo de México. No necesita contratos de riesgo ni asociarse con empresas extanjeras para compartir utilidades; paga el costo de los servicios a valor de mercado y ya.

Yo añadiría una más:

4. Hacer valer una política de competencia económica que evite prácticas monopólicas en las operaciones de
PEMEX y en su sindicato y estimule prácticas competitivas.

Todos estos cambios son impostergables, a riesgo, entonces sí, de quedarnos sin petróleo y sin ingresos. Pueden instrumentarse sin privatizar a
PEMEX y sin cambiarle una coma a la Constitución Política de los Estados Unidos Mexicanos. La propiedad de PEMEX no está a discusión, y las decisiones fundamentales de la política petrolera del país deben tomarse en función del interés público, no de intereses privados o del extranjero.

Cuauhtémoc Cárdenas no ensalza o condena de antemano a nadie, sino pone sobre la mesa una propuesta que invita al estudio, al diagnóstico y al debate inteligente.

Source: Milenio|by carlosherediaz@yahoo.com

NORWAY: Interoil Exploration & Production, posts $35M loss

Oslo-based Interoil Exploration & Production has posted a net loss before tax for 2007 of $35.2 million despite rising production and revenues that rose 68 percent to $69.4 million.

A small loss was registered for the final three months of the year, a quarter in which eight of nine wells drilled in Peru and Columbia became producers. Production was up 38 percent over the year.

In Angola, meanwhile, Angolan state champion Sonangol has invited InterOil onto the highly prolific onshore Cabinda North blocks. InterOil will pay a $33 million signing fee and social projects contribution ahead of securing a 21 percent stake.

A survey has started across 1,450 square kilometres of war-torn land, and a well is due by 2009.


Source: Scandoil

VENEZUELA: PDVSA, al borde de la quiebra

El pulso mantenido durante estas semanas entre la todopoderosa petrolera ExxonMobil y el mandatario venezolano Hugo Chávez, podría acabar en tragedia económica. La creciente tensión entre Caracas y la compañía ha puesto contra las cuerdas al Gobierno bolivariano que ve cómo su coloso, la estatal PDVSA, se tambalea.

Los problemas se acrecentaron tras las bravuconadas del mandatario que en su programa «Aló Presidente», amenazó con interrumpir la venta de crudo a Estados Unidos. ExxonMobil logró este mes que un tribunal congelara unos 12.000 millones de dólares de PDVSA. ExxonMobil reclama una indemnización por la nacionalización de yacimientos petrolíferos de la Faja del Orinoco.

Sin embargo, una eventual decisión del Gobierno de Venezuela de interrumpir la venta de petróleo a Estados Unidos significaría un suicidio económico, político y estratégico para el gobierno «rojillo».

Según Jorge Piñón, consultor internacional y ex presidente en México de Amoco Petróleo América Latina, los problemas residen en la imposibilidad de Venezuela de encontrar mercados que absorban la demanda estadounidense.

«El Gobierno venezolano puede salir a buscar otros mercados para sus exportaciones, posiblemente en China, pero deberá enfrentarse con el problema del flete y de la oposición de Arabia Saudita, que es el principal proveedor en el país comunista», adelantó a LA RAZÓN Piñón.

Las ventas de petróleo venezolano a Estados Unidos asicienden a 1.200.000 barriles diarios, y representan un 11% de las importaciones estadounidenses de crudo, cuyos principales proveedores son Canadá, Arabia Saudita y México, en ese orden, antes que Venezuela.

El mercado estadounidense representa casi el 70% de las exportaciones de Venezuela, y el Gobierno de Chávez recibe de Estados Unidos entre 70 y 80 millones de dólares diarios por la venta de petróleo, pagados como corresponde y sin demoras.

Para Horacio Medina, ex gerente de convenios operativos de PDVSA, que fue despedido de la industria después del paro petrolero de 2003, hay razones de negocio que dificultan la amenaza presidencial.

«No existe ningún mercado donde el crudo venezolano se cotice mejor que en EE UU: por razones de la metalurgia de las refinerías que han sido rediseñadas para recibir nuestro tipo de crudo (pesados y medios), y por la cercanía que tenemos desde el punto de vista geográfico», aseguró Medina.

Crisis y caída de la producción
Por otro lado, la disputa que mantiene el mandatario con ExxonMobil ha agravado la complicada situación financiera por la que atraviesa la estatal que, pese a los altos precios del crudo, resulta cada vez más deficitaria. En 2007, la deuda de la compañía creció de menos de 4.000 millones de dólares a más de 16.000. La incertidumbre que causa el litigio con ExxonMobil implicará una subida del coste de los préstamos.

La petrolera transfirió miles de millones de dólares a fondos controlados por Chávez, subsidió planes de educación y vivienda, y se encargó de distribuir alimentos ante la escasez que viven los venezolanos. Toda la maquinaria «chavista» funciona a través de PDVSA. Mientras tanto, la producción de barriles sigue en baja. Según datos del Banco Central de Venezuela, la producción física de petróleo cayó un 5,3% en 2007, debido principalmente a la falta de liquidez para acometer nuevas inversiones.

Los analistas señalan que la mala gestión de la estatal -cuando Chávez accedió al poder despidió a la mitad de la plantilla-, junto con la corrupción de sus funcionarios, constituyen las causas de su situación.

Elie Habalian, ex director de la OPEP, afirma que PDVSA «se caerá a pedazos en el momento en que los precios del petróleo caigan a niveles reales; y a menos que cambie, lo mismo ocurrirá con el gobierno de Chávez».

«La realidad es que esta aventura presidencial determinará que habrá que indemnizar a la ExxonMobil, en desmedro de PDVSA. Deberá tragarse sus discursos de ni una gota más de petróleo para el imperio. Chávez ha embarcado a todo un país rumbo a una tragedia de proporciones descomunales», afirma Habalian.



Source: La Razon

SPAIN: Fainé: "Aún es posible un operador energético nacional"

El presidente de La Caixa, Isidro Fainé, señala en una entrevista que publica Actualidad Económica que “habrá un momento en el que será posible realizar una gran operación nacional” en el sector energético.

En la entrevista, Fainé repasa también el sistema financiero español y sale al paso de los rumores y declaraciones sobre posibles problemas de solvencia de las entidades: “No conozco ninguna institución financiera española que esté en una situación difícil. No creo que nos enfrentemos a grandes problemas a corto plazo”.

Sobre los planes de La Caixa, el presidente resalta que “el objetivo que marca nuestro plan estratégico es tener una fuerte posición en banca privada y personal”, y pasar del diez al doce por ciento de cuota de mercado. La primera caja de ahorros acaba de comprar la división de banca privada de Morgan Stanley en España y ha anunciado la creación de un banco por Internet junto con el banco francés Boursorama, filial de Société Générale.

Source: Actualidad Economica

GEOPOLITIC: Argentina and Brasil, with a project for nuclear submarine


Brazil and Argentina have agreed to work together to build a nuclear submarine, laying the groundwork for a South American defence industry, Argentina's media has reported.

Brazilian Defence Minister Nelson Jobim and his Argentine counterpart, Nilda Garre, discussed plans last week to form a bi-national company to construct the submarine and could convene a South American Defence Council in Brazil in October, Jobim said.

South American militaries are fundamentally "deterrent" rather than "expansionist," he said minutes before leaving Argentina on Sunday.

"But that deterrence power can only be exercised if there is behind it a regional military industry that makes us independent of foreign supplies," the newspaper quoted Jobim as saying. A spokesman for Argentina's Defence Ministry had no comment on Sunday's report, and a spokesman for Brazil's Defence Ministry was unavailable.

The project to build Latin America's first nuclear submarine would combine Argentine experience crafting the sort of compact reactor that could power the vessel with Brazilian access to other necessary parts, including nuclear fuel, the reports said.

Jobim travelled to France in January to explore buying a Scorpene class diesel submarine that could be used as a model for the sub. Brazilian President Luiz Inacio Lula da Silva announced USD 540 million in new funding for Brazil's nuclear sub and uranium enrichment programs last year.

Silva and Argentine President Cristina Fernandez agreed in a meeting last week to cooperate in enriching uranium for nuclear power and to consider building a shared reactor.

Source: India Times

MIDDLE EAST: Iran bids for two Indian oil tenders

Iran bids for two Indian oil tenders  Managing director of the Iranian Offshore Engineering and Construction Company (IOECC) says it has participated in two Indian oil tenders.

Each of the two offshore oil tenders are worth $1.1 billion, Mehr News Agency quoted Masoud Soltanpour as saying.

Iran is competing with South Korea, Italy, France, and the United States, he said, adding that
Iranian Offshore Engineering and Construction Company had a good chance of securing the contracts.

Constructing an onshore rig costs around 9 million euros ($13.6 million),” he said, adding that for an offshore rig the costs would amount to around 150 million euros ($222.5 million).

He also noted the important role of banks in helping contractors engaged in oil and natural gas development projects, given the huge costs involved.

Source: PressTV

INDIA - RUSSIA: Ready to agree to cooperate in civil nuclear power

INDIA - RUSSIA: Ready to agree to cooperate in civil nuclear power
Cold War allies India and Russia Tuesday finalised plans for Moscow to build new nuclear power stations here and pledged to boost strategic ties by doubling trade to 10 billion dollars by 2010.

The two countries also decided to step up cooperation in defence, engineering and energy during talks between visiting Russian Prime Minister Victor Zubkov and his Indian host Manmohan Singh in New Delhi.

"We have finalised negotiations... on building additional nuclear power plants in India," Singh said.

Under the terms of the deal, Russia will build four additional reactors at Kudankulam in the southern Indian state of Tamil Nadu.

Moscow is already constructing two 1,000 megawatt light water nuclear power reactors at Kudankulam under the terms of an accord signed in June 1998. But installation of the new reactors will begin only after the 45-member Nuclear Suppliers Group, which controls global nuclear commerce, lifts a three-decade old embargo on atomic trade with India.

India is also negotiating a pact with the International Atomic Energy Agency -- another step towards New Delhi overcoming its status as a nuclear pariah.

Premier Singh said India and Russia had noted the "vast potential" for cooperation in hydrocarbons as he described defence ties as an "important pillar" of their strategic partnership.

Russia accounts for 70 percent of Indian military equipment but late deliveries and commercial disagreements have forced New Delhi to use other suppliers including Britain, France, Israel and the United States.

Singh said New Delhi and Moscow had "agreed to redouble our efforts to tap full potential of our two countries' economies," as Trade Minister Kamal Nath called for the inclusion of transport, services, investment and high technology in the trade basket.

Zubkov noted that "trade last year (2006-2007) grew by 30 percent, touching five billion dollars. If the speed remains the same, I am confident the 10 billion dollar mark will be achieved" by 2010.


Source: Agence France Pressee

TEXAS: OIL BOOM, Experts consider oil-driven ups and downs unlikely to be repeated

TEXAS: OIL BOOM, Experts consider oil-driven ups and downs unlikely to be repeated
That which was true for Isaac Newton also holds sway in the oil patch: What goes up, must come down.

Or does it?
A generation ago the price of oil was approaching $40 — about the price in today's dollars of the $100 milestone reached in early January and again last week — and the one nugget of certainty buried in the back of every mind was that it would not stay there. Sure enough, oil began to slide, dropping below $20 by the mid-1980s, and the Houston economy tumbled along with it into the gloom of lost oil jobs, bankruptcies, unemployment and foreclosure.

But what if today's peak oil prognosticators are right, and there will be no significant tapering of demand or growth in supply? And if that's true, what does it mean for a city whose fortunes have always been linked to a price graph and the whims of traders who traffic in black gold?

Perhaps less than conventional wisdom would suggest. Houston may never again fully feel the dizzying flush of boom or the agony of bust.

"This is a dramatically different place than when Houston was riding the oil boom in the 1970s," said Rice University sociologist Stephen Klineberg, who has been profiling and surveying Houston every year since 1982, just months before the oil business went into one of its periodic death spirals.

"Back then, Houston was a frolicking adolescent kid who couldn't not make money. Now the city has grown up."

Klineberg speaks of a cultural metamorphosis, an aging Anglo population, a decline of the oligarchs and a rise in cosmopolitan connectedness to the world.

Economists use a different vocabulary, but their metrics tell a similar story — one of expanding business sectors un- related to energy that have transformed the world's energy capital into a more financially sophisticated place. Economic diversification has paralleled the city's changing complexion, from large corporate and medical employers to the thousands of small businesses serving an immigrant population that was much smaller a generation ago.

It used to be said that Houston was "counter-cyclical." When things were going bad elsewhere (a state of affairs that often included high energy prices), Houston would thrive. Today, not so much.

Case in point: Even as oil climbed toward $100, job growth in the Houston area in December was just 2.4 percent higher than it was a year earlier, compared with a robust 4.8 percent growth rate in late 2006.

And the Houston Association of Realtors reported last week that single-family home sales in the area fell 12 percent in January compared with a year earlier, as credit tightened and consumers grew more skittish about possible recession.

Cushion, to a point
Being the epicenter for the world's oil and gas business helps cushion Houston from some economic blows, experts emphasize. But one can no longer assume a rising energy tide will float all boats.

"There are lots of things going on that are relatively insensitive to energy ... ," said Skip Kasdorf, head of economic research for the Greater Houston Partnership. "That also means we're more susceptible to what happens to the national economy."

This new fact of life has not exactly become common know- ledge. Something as predictable about Houston as bad weather and worse mosquitoes are the periodic dispatches from out-of-town journalists still trading on the stereotype that a spike in oil necessitates a binge in over-the-top consumption and growth.

Just last March the New York Times reported from Houston that "the good times are back," but failed to mention both a long period of muscling up by other sectors of the local economy as oil stayed under $20, as well as the more recent economic slowdown despite crude's record climb.

"In New York, their presumption is that Houston is bursting at the seams," said local economic guru Barton Smith, who heads the University of Houston's Institute for Regional Forecasting. "But we're not growing as fast as Phoenix or Atlanta, or even Dallas or Austin. People ask how that can be with $95-a-barrel oil. We're a different economy."

In 1982, more than 80 percent of the "base economy" of the Houston metropolitan area was energy-related, Klineberg said. Today it's about half.

Not only did energy provide many of the jobs, but those who served the industry often did not bother pursuing other customers. When oil sneezed, Houston caught a cold.

Huge job losses
And the ailment in the 1980s brought Houston the worst regional recession of any part of the country at any time since World War II, Klineberg said, with Houston losing more than 100,000 jobs in just over a year. The misfortunes of the energy industry were compounded by real estate woes spawned by overbuilding.

"We doubled the entire amount of office space from 1980 to 1984," Smith said. "That pain lasted for a decade. We have nothing near the type of excess supplies that we had in the 1980s. We had almost 250,000 vacant housing units in 1982. There was so much excess supply of housing, we could not have absorbed it even if we had not had a drop in oil prices. We don't have anything near that today."

Like so many local business executives at the time, Ray Hankamer found out the hard way about having a lot of what nobody wanted. His management company ran a string of hotels. He had just finished a project backed by a French company when oil went south.

Down he went with it. Occupancy rates plummeted from 78 percent to the low 40s, and so did any hope of profitability as new hotels opened and rooms were all but given away. Hankamer lost 13 of his 14 properties.

That was then.
"There is a whole lot more stability than there was in the 1980s," said Hankamer, whose commercial real estate brokerage specializes in hotel properties. "There is lot more discipline by lenders and builders and equity investors. People are real careful not to build something that is not fully needed."

The hotel industry learned a lesson, he said, as did the city's entire business culture. To rely on oil was to play Russian roulette with three loaded chambers. Houston not only had to change its way of doing business, it had to change what business it did.

And so was born the Houston Economic Development Council, established to broaden the economic base.

How well it succeeded, as well as the Greater Houston Partnership which absorbed it along with the Chamber of Commerce, is a matter for historians to debate.

There is no doubt that some active efforts, such as the expansion of the port facilities and the Texas Medical Center, had an effect. But so did the ongoing waves of immigration, much of it unanticipated.

A consistently affordable cost of living also has helped Houston keep growing despite oil's ups and downs.

Seeing prosperity
And so Houston goes on and on, adding more than 100,000 new souls every year.

Hankamer is among many who predict a long period of relative prosperity.

"Houston was a one-trick pony" in the 1980s, Hankamer said. "Today there are so many more things driving the economy that are not going to be seriously affected by an oil shock. Not that I think we are going to see one. China and India have such a huge energy demand, and we didn't have that demand back then."

Dan Pickering, president of Tudor Pickering, an investment and research firm, also sees little likelihood that the price of crude will plummet, though it may drift.

"I'm skeptical that $100 a barrel is sustainable ... but the industry doesn't need that," he said. "We are going to do just fine."

Source: Houston Chronicle|By MIKE TOLSON