RUSSIA: UES Could Waive Dividends for 2006

Unified Energy Systems recommended waiving dividends for 2006 in favor of investments in the country's aging power grid and generators after profit slid last year, the utility said Friday.

More than 96 percent of UES's 745 billion rubles ($29 billion) in net income last year was not cash-based because it was generated from asset revaluations, the utility said.

The utility also said in a statement during a meeting of its board on Friday that it would sell the state's shares in some generating units together with new shares, in an effort to attract investors without overloading the market.

UES wants flexibility to offer stakes that are large enough to attract strategic investors, without selling too many new shares, the statement said.

Also Friday, UES said Czech power firm CEZ had expressed interest in becoming a strategic partner of power generation firm TGK-4. UES said CEZ was primarily interested in teaming up with TGK-4 in building up to 420 megawatts of new power generation facilities.

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TEXAS: Azerbaijani ambassador extends a friendly hand

By BRETT CLANTON

It was no accident that Yashar Aliyev, Azerbaijan's new ambassador to the U.S., began his first official visit to the United States on Friday with a stop in Houston.

His message to the energy capital of the world: The former Soviet state has vast oil and natural gas reserves, a new pipeline to transport them to the West and a strong desire to regain its status as a major regional energy hub.

"Who else could be such a good bridge between Europe and Asia?" Aliyev told the World Affairs Council of Houston during a luncheon address at the Magnolia Hotel.

Azerbaijan, which gained its independence in 1991 with the collapse of the Soviet Union, has struggled with the transition to a market economy and democratic government. But investment by U.S. oil companies has helped make the Eastern European nation one of the world's fastest-growing economies in recent years.

In a speech that was part history lesson and part sales pitch, Aliyev reminded the crowd that Azerbaijan — not the U.S. — drilled the first oil well in 1847, that its capital Baku at one point supplied half the world's oil needs and that American tourists are always welcome.

The best time to visit? "24/7, to say frankly," he said.

But he also criticized a 1992 U.S. provision that bans direct aid to Azerbaijan as "not wise." The provision, known as Section 907 of the Freedom Support Act, was created to deter hostilities between Azerbaijan and Armenia. The countries have had a long-standing conflict over land in Azerbaijan's Nagorno-Karabakh region.

He also acknowledged that the country needs to diversify its petroleum-based economy, a response to concerns that a huge influx of oil revenues in coming years could lead to inflation.

In early 2006, a consortium of Western oil companies began pumping 1 million barrels a day from a large offshore field, through a $4 billion pipeline it built from Baku to Turkey's Mediterranean port of Ceyhan. By 2010, revenue from this project will double the country's gross domestic product, according to the U.S. Central Intelligence Agency's World Factbook Web site.

The pipeline is a challenge to Russia, a major supplier of natural gas to Europe, which is trying to find other sources as Russia raises prices.

And such projects could help Azerbaijan re-establish itself on the world energy stage.

"Certainly, they have that potential," said Mustafa Erkan, a visiting scholar to the University of Texas' Center for Energy Economics, who attended the Friday luncheon.

"I think Azerbaijan's future will be as prominent as it has been in the past," said Chuck Tanner, who oversees operations in Azerbaijan for Devon Energy. The Tulsa, Okla.-based oil company has a 5.6 percent stake in Azeri Chirag Guneshli in the Caspian Sea, one of the world's largest oil fields.

For his part, Aliyev said he wants to keep close ties to Houston, which has had a sister city relationship with Baku since the 1970s.

To that end, he was scheduled to meet Friday with Mayor Bill White about the prospect of participating in Houston's International Fest and enrolling more Azeri students in Houston universities.



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INDIA - IRAN It asks to honour contract on LNG

India has asked Iranian President Mahoud Ahmadinejad to maintain his nation’s credibility by honouring the June 2005 contract to sell 5 million tonnes of LNG annually to New Delhi.

Tehran, sitting on world's second largest gas reserves, may get business from elsewhere but will lose its credibility if it falters on the two-year old deal to sell LNG for 25 years at 3.215 dollars per million British thermal unit (mBtu) was the message Petroleum Minister Murli Deora gave to the Iranian leader when he called on him in Tehran on Thursday.
"We had a very good 50-minute meeting with the Iranian President at the end of which Ahmadinejad instructed his oil minister to look at ways of early implementation of the LNG deal," a top official said.

New Delhi has maintained that it has a water-tight legal case if Iran goes back on the June 2005 signed agreement where in National Iranian Gas Export Co (NIGEC) committed to delivering gas in its liquefied form to Indian consortium of GAIL-IOC-BPCL from end-2009 but will prefer dialogue to resolve issue rather than going for arbitration.

Iran is seeking a higher price of 5.1 dollars per mBtu for the LNG as its Supreme Economic Council will not ratify the deal at the earlier agreed price. Petroleum Minister Murli Deora, who made an unscheduled stopover at Tehran on his way back from a week long trip to energy-rich Syria, Algeria and Egypt, followed his one-on-one with Ahmadinejad with meeting with the Islamic nation's Foreign Minister Manouchehr Mottaki to press for early implementation of the June 2005.

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