Iraq and Iran cuddle up in OPEC, but for how long? - Reuters UK
VIENNA |
VIENNA (Reuters) - Historic rivals Iraq and Iran are growing closer on OPEC policy, providing a counterweight to the Gulf Arab countries led by Saudi Arabia that have long dominated the cartel.
But cordial relations could grow strained later this year when Iraq vaults past Iran to become OPEC's second biggest producer after Saudi Arabia.
A bold oil expansion programme has already pushed Baghdad to 3 million barrels per day (bpd) - a level last pumped before Iraq invaded Kuwait in 1990 - and just a touch below Iran, where output has sunk to 20-year lows because of Western sanctions.
Size matters in the Organization of the Petroleum Exporting Countries, where high production and reserves mean influence. Baghdad and Tehran sparred over OPEC quotas during the 1980s, while they fought each other in an eight-year war.
But relations have warmed since the overthrow of Saddam Hussein and the Shi'ite-ruled neighbours are now firmly aligned as OPEC price hawks in the same camp as Venezuela and Algeria.
That pits them against the Gulf Arab price moderates in OPEC - Saudi Arabia, Kuwait and the United Arab Emirates.
"This is a sign of the times," said Raad Alkadiri of Washington consultancy PFC Energy of Iran and Iraq. "There's been cooperation between them on oil matters for years, although they haven't been lined up together in OPEC,"
A mutual need for oil above $110 a barrel to balance their budgets is expected to prompt Iran and Iraq to call for Saudi Arabia, pumping its highest in decades, to cut back when producers meet in Vienna on Thursday.
Oil has fallen $30 since March to below $100 as oil stocks build and the economy wobbles. That falls short of the $100-$120 range that Iraqi Oil Minister and current OPEC President Abdul Kareem Luaibi says is reasonable.
"In terms of politics, it makes total sense. Everything Iraq does is driven by its internal crisis and it needs Iran's support. If Tehran asks for Baghdad's help, Iraq will deliver," said Alkadiri.
As internal foes test his survival skills, Iraqi Prime Minister Nuri al-Maliki's OPEC policy instructions to his oil minister are being driven by domestic politics.
And with its ally Syria on the brink of civil war and under Western sanctions for its nuclear programme, Iran wants to avoid instability in Iraq and is using its influence to thwart efforts to unseat Maliki.
So when Iran's Oil Minister Rostam Qasemi visited Maliki in Baghdad last week, Maliki ordered the oil ministry to adopt a unified position with Iran on OPEC production levels, say Iraqi oil sources.
That will mean Iraqi support for Iran at OPEC this week in calling for Saudi Arabia to rein in output to support prices.
IRAN, IRAQ WANT SAUDI TO CUT
Its output stymied by Western sanctions, Iran says lofty production from Saudi Arabia and its Gulf Arab allies Kuwait and the United Arab Emirates has caused prices to fall.
Tehran will be a leading voice among those calling on OPEC to cut supply back to the 30 million barrels per day ceiling agreed in December, well below current output of 31.6 million. Saudi Arabia accounts for 10 million bpd of that.
Iraq agrees that supply is too high. There is scope for the pair to build an alliance to compete with Gulf Arab producers long-accustomed to getting their way in OPEC. Iran and Iraq combined with others in OPEC a year ago when the Gulf Arabs failed to get backing to raise output.
Venezuela and Algeria, also traditional price hawks, will support calls for Saudi to cut back at this week's OPEC meeting.
But cooperation between Iraq and Iran has it limits. Rivalry is already evident in the race for OPEC's secretary-general post, where both - along with Saudi Arabia and Ecuador - are fielding contenders.
More of a threat, though, is Iraq's growing production. In April, Iraq exported more crude than in any month since it invaded Kuwait in 1990 - helping to offset the loss of supply from Iran because of sanctions.
Iraqi oil growth started in earnest in 2010, after Baghdad secured a series of service contracts with companies such as BP, Exxon Mobil, Eni and Royal Dutch Shell.
Since then production, held back by decades of wars and sanctions, has risen 600,000 bpd to 3 million bpd. Exports to world markets are now running at 2.4 to 2.5 million bpd - easily overtaking Iran's sales of around 1.6 million bpd.
By the end of the year, production too should be outpacing Iran's, down this year from 3.5 million to 3.1 million bpd, threatening to erode Tehran's role as an oil power.
"It will be an historic development that will cause friction," said Mehdi Varzi, a former official of the National Iranian Oil Co.
"Volume matters in OPEC and Iran's star will be on the decline unless measures are taken to reverse the decline in Iranian oil production," said Varzi, who now runs an energy consultancy in the UK.
IRAQ 4 MBPD BY 2014?
Iraq's oil expansion, still in its infancy, has elicited varying degrees of scorn and concern from neighbouring OPEC giants.
Western and Iraqi geologists say Iraq has enough oil in the ground to produce to its target of 12 million bpd, but infrastructure bottlenecks, red tape and a lumbering bureaucracy make that impossible by a contractual deadline of 2017.
Production of 6 million bpd - enough to put Iraq a long way ahead of all but Saudi Arabia in OPEC - could be reached by the end of the decade, some say.
"It's one issue that Saudi Arabia and Iran can agree on: Iraq's production should never get too high," says a former Iraqi oil official.
As if to prove that point - following the success of its licensing rounds, Iraq raised its estimated oil reserves to 143.1 billion barrels. A week later, Iran trumped it with a new figure of 150.31 billion barrels.
At some stage, Iraq will need to negotiate a sizable OPEC quota to reflect its potential, although Luaibi said it was not a subject for discussion yet. "Now the parameters have all changed," he said.
The quota debate will draw in Iran, which before the 1990-1991 Gulf War had parity with Iraq. Some OPEC veterans see the issue coming to a head when Iraqi output hits about 4 million bpd, on a par with Iran's theoretical full capacity.
That point could be reached in 2014 if all goes to plan. Iraqi oil officials say exports will gradually rise by up to 200,000 bpd during the second half of this year taking production to 3.2 million bpd.
Iraq's oil minister says shipments next year will rise to 2.9 million bpd - boosting production including oil used domestically to 3.4 million bpd.
Some cast doubt on whether Iraq will be able to sustain the pace given the obstacles ahead.
"Iraq and the international oil companies have done an amazing job, but Baghdad's ingenuity has its limits. It's a mug's game in the short term to bet against rising production, but a sustainable rise will be challenged by events," said Alkadiri.
But those involved in the oilfield mega-projects have faith in the qualified success of Iraq's oil development.
"The Iraqis are masters of squeezing everything out of what they have," said a senior Western oil executive.
(editing by Richard Mably)
Stone Roses Amsterdam gig ends in confusion - BBC News
Stone Roses fans were left confused after the reformed band failed to play an encore at a gig in Amsterdam on Tuesday, amid reports drummer Reni had left the venue.
Singer Ian Brown appeared on stage alone at the Heineken Music Hall, to tell the crowd the gig was over.
Fans had expected to hear I Am The Resurrection, which the reformed band closed a show with in Spain on Friday.
Brown reportedly said: "I'm not joking, the drummer's gone home."
Many of the fans present then booed the 49-year-old frontman's announcement, according to BBC journalist Peter Shuttleworth, who was at the concert.
"Ian just said something like 'Come on, get all your negative vibes out on me. I can take it'," he said.
However, Shuttleworth claims the jeers were "short-lived" and fans were "more bemused than disappointed".
He added: "People were just looking at each other thinking 'what's going on?'"
He also disputed reports that Reni - real name Alan Wren - had stormed off stage, saying that he and guitarist John Squire had hugged as they left.
The band seemed to have expressed plans to play an encore, telling fans: "If you want us to come back, we're going up four storeys, so you have to cheer loud".
'Not happy'The Stone Roses kicked off their first tour in 16 years in Barcelona last weekend. They have a summer of dates planned, including three homecoming shows in Manchester's Heaton Park at the end of June.
Fans have dismissed speculation that the gig in Holland signals problems for the rest of the tour, calling the show "quality" and the crowd "enthusiastic".
Several reports quote an insider who suggested there had been a problem with the drum kit, but this has not been confirmed.
Paul Roberts was at the gig and emailed BBC 6 Music: "At one point I saw Reni waving his arms wildly at the stage mixer, obviously not happy with something."
Another, Matt Morris, claimed Brown's announcement "was followed by a volley of beer thrown at the stage and booing".
Remaining dates on the Stone Roses tour are expected to go ahead as planned, with the band due on stage in Sweden on Thursday.
RSS chief expresses displeasure at ousting Sanjay Joshi from BJP - Hindustan Times
A senior sangh pracharak, who preferred anonymity, claimed that the recent editorial in BJP mouthpiece ‘Kamal Sandesh’ that no leader should consider oneself bigger than the party was in fact, Bhagwat’s opinion, which he is believed to have echoed before his close lieutenants. That Modi had his way on Joshi’s exit was also considered as the former’s sheer display of arrogance, driven by a clash of egos by the Sangh Parivar.
According to him, the Sangh preferred to keep mum on the whole "drama" in view of the ensuing Gujarat elections and a smooth passage for Nitin Gadkari’s re-election as party president.
Moreover, the Sangh Parivar did not want a message to be sent across that Gadkari’s re-election to the BJP top post by amending the norms in the national executive did not have a powerful leader like Modi’s approval, who also considered a face of ‘Hinduvtava’ and his ever-growing clout in the party.
Joshi, first sent to the BJP by the RSS in 1988 to use his organizational skills in building the party in Gujarat, had to leave in 2005 over a sleaze CD. After taking over as BJP president, Gadkari rehabilitated Joshi -- his childhood friend -- in view of his organizational ability and entrusted him the job of Bihar and UP elections. Joshi was also included in the national executive, which did not go down well with Modi. Joshi’s friend-turned-foe Modi refused to campaign in the UP elections for the party and unofficially boycotted the national executive. Moreover, of late, the Gujarat chief minister was not even taking Gadkari’s phone calls.
When Gadkari rang up Modi on May 23, just before the national executive at Mumbai and requested him to attend, the Gujarat chief minister laid down the condition of Joshi’s axe from the executive.
Gadkari, a darling of Bhagwat, tried to use his good offices in RSS for intervention, but in vain. The BJP president did not dare to take risk when the senior party leader Lal Krishna Advani blogged questioning his leadership and other senior party leaders including Sushma Swaraj and Arun Jetlay were hostile. He narrated the entire things before Joshi who "sacrificed" himself for his friend to pave way for Modi attending the Mumbai meet.
But as pro-Joshi posters appeared in Delhi and some places in Gujarat, Modi made a telephone call to Gadkari, asking the latter to either relieve him from his chief minister’s post or Joshi from the party. Faced with this ultimatum, Gadkari made yet another crafty move by making Joshi to resign as BJP’s election in-charge of UP.
However, the RSS headquarters claimed that Joshi would be honourably re-inducted in the organization after Gadkari’s re-election the December Gujarat elections are over this year. It was said that he would be given an important task of Madhya Pradesh and Chhattisgarh elections to be held in October next year, the pracharak claimed.
Given a belief held by section of RSS cadres, it seems that the RSS would not tolerate Modi’s arrogance for a long. The RSS, which is literally directing the BJP affairs, may take on Modi after the Gujarat polls and Gadkari’s re-election by end of this year.
The senior RSS leader and former Buddhik Pramukh of the saffron organization, MG Vaidya, said that the party is bigger than any individual. “The Modi-Joshi tussle is not good for the party,” he pointed out.
Meanwhile, neither Gadkari nor Bhagwat was available for comments. Joshi who was here to attend a meeting of RSS said that he was still in the BJP. "I have only relinquished the national executive and UP in-charge. I am still a primary member of the party," he said.
Talking to Hindustan Times, he also dismissed the rumours that he would be given the job of Vanvasi Kalyan Ashram by the RSS. Joshi met Vaidya during his Nagpur visit and had a long discussion.
0 Responses to "Iraq and Iran cuddle up in OPEC, but for how long? - Reuters UK"
Post a Comment