Shriya Saran Kajal Agarwal Anushka Shetty Tamanna Ileana Aishwarya Rai Katrina Kaif

Monday, October 13, 2008

Iran in focus

With huge reserves Iran desperately needs foreign investment to turn potential into profit.

Oil has been the dominant industry in Iran since the 1920s. The nation still holds massive oil and natural gas reserves, which should, provided the country's international relations improve, ensure that energy remains the country's core industry for many years to come.

Oil

According to most independent analysis, Iran has proven oil reserves of around 136 billion barrels, with 40 production sites - 27 of which are onshore and 13 offshore. In 2006 Iran produced 3.8 million bbl/d of crude oil, equal to 5% of world production and found mainly in the southwestern Khuzestan region near the Iraqi border. The crude oil generally has medium sulphur content and is in the 28o - 35o API range.
Despite best efforts, Iran has not yet been able to reach the 6 million bbl/d produced in 1974. The oil fields are in desperate need of structural upgrades, with an estimated 400,000 - 500,000 bbl/d lost due to reservoir damage and decreases in oil deposits.
The government has set a target of 5.8 million bbl/d by 2015, which, according to Global Insight, will need around $25-35 billion of foreign investment - something hampered by Iran's current political relations.
The state owned National Iranian Oil Company (NIOC) is responsible for all oil and gas production and exploration within Iran. The National Iranian South Oil Company (NISOC), a subsidiary of NIOC, controls 80% of local oil production in the regions of Khuzestan, Bushehr, Fars and Kohkiluyeh va Boyer Ahamd.
Although private ownership of any upstream function is prohibited under the Iranian constitution, buy-back contracts have been allowed, enabling IOCs to engage in production and exploration if done through an Iranian affiliate.
Iran's oil consumption was around 1.6 billion bbl/d in 2006, and oil remains heavily subsidized by the government, increasing domestic demand but creating budget deficits. In 2005 the IMF estimated energy subsidies account for 12% of Iran's GDP, the highest rate in the world according to an IEA study.

Shipping
IEA (International Energy Agency) statistics put Iran's net crude oil exports averaged 2.5 million bbl/d in 2006, primarily to Japan, China, India and other OECD nations, with export revenues at around $54 billion.Iran holds the largest fleet of oil tankers in the Middle East. The National Iranian Tanker Company (NITC) has 29 ships in operation, including Very Large Crude Carriers (VLCCs).
Kharg Island, the country's largest terminal, has a holding capacity of 16 million barrels of oil and a loading capacity of 200,000 bbl/d.
The Strait of Hormuz, found off the south coast of the country, is only 34 miles wide at its narrowest point yet 17 million barrels - roughly two-fifths of all seaborne traded oil - travels through the Strait every day.
Iran has a total refinery capacity of around 1.5 billion bbl/d with nine operational refineries run by National Iranian Oil Refining and Distribution Company (NIORDC), a subsidiary of NIOC.
There are plans to increase the capacity by a further 985,000 bbl/d by 2012 with expansions and upgrades to existing refineries, as well as new sites at Bushehr, Abadan and Bandar Abbas, however, much of this expansion is reliant on foreign capital investment, which is not forthcoming.

Gas

With an estimated 974 trillion cubic feet in proven natural gas reserves - the second largest in the world behind Russia, Iran is looking at stepping up production in the coming years.
Existing supplies are found mainly in the South and North Pars fields, Tabnak and Kangan-Nan, although approximately 62% of reserves are at non-associated fields as yet undeveloped.
Consumption and production of gas has grown rapidly over the last 20 years, mainly for Iran's domestic consumption and re-injection into mature oilfields.
In 2005, according to the US Energy Information Administration (EIA), 65% of natural gas was marketed for production, 18% was used in EOR gas re-injection and 17% was lost due to flaring and reduction of wet natural gas from hydrocarbon extractions. Natural gas, like oil, remains heavily subsidized by the government.

The state-owned NIGC (National Iranian Gas Company) controls all natural gas upstream activity. Due to buy-back regulations and US sanctions, BP and Sipetrol have divested from Iran.

However, Total, Eni and Shell are the largest remaining foreign investors. Iran has looked increasingly to Eastern firms for investment in upstream activities under buy-back regulations; firms such as Indian Oil Corporation, China Petroleum and Chemical Corporation and Sinopec. They would have to hand over operational fields to NIOC, and in return receive payments from production to cover their investments.

Future projects

The most significant upstream project undertaken by the Iranian government is the South Pars field. Found 65 miles off the coast of Iran, it has an estimated 450 Tcf of natural gas reserves - 47% of the nation's total. The government has installed a 25-phase development scheme spanning the next 20 years; with each phase expecting to yield 1 Bcf/d.

Iran is hoping that the first 16 phases will have been completed by 2010. Phase 12 of the scheme is a $500 million contract for LNG, which will be controlled by PAGC (Pars Oil and Gas Company). Most of the South Pars scheme will be natural gas consumption, the rest being either exported to South Asia or Europe, for LNG production, or GTL projects.

There has been an agreement made between Iran, IOCs associated with the South Pars project and SKS, a private Malaysian firm, to develop the non-associated Golshan and Ferdas fields for LNG exports, with and investment thought to be in the region of $16 billion.

An early proposal has also been made to build the 2,050 mile Nabucco pipeline from Iran and the Caspian states through Turkey and into Austria and other EU nations.

Construction would start in 2009 at a cost of $6.8 billion, and it would have a delivery capacity of 300 Mcf/d. More controversially, a proposal to build a $7.4 billion Iran-Pakistan-India (IPI) pipeline has been made, extending the existing IGAT-7 pipeline to a total of 1,724 miles in length and a capacity of 5.4 Bcf/d, due to be completed by 2011.

In March 2007 Swiss company Elektrizats-Gesselshaft Laufenburg signed MoUs for a 25-year gas deal with NIGC worth $42 billion, the first time in recent history a European energy company will sign a firm contract with Iran. It would see 5.5 billion cubic meters of gas delivered into Europe along the proposed Nabucco pipeline.
Joachim Conrad, member of EGL's Executive Management and Head of EGL's Gas Division, said of the deal: "Natural gas from Iran is necessary to the opening of a fourth gas transportation corridor to Europe.
This corridor will ensure diversification and security of supply on the continent as Europe needs to tap into new gas sources in the immediate future, and EGL today made an important contribution to reaching this goal."
However, whether the project will be given the green light is debatable given the increasingly tough stance taken by the EU against Iran.ProblemsPolitical relations are putting strain on what should be a blossoming energy industry for Iran. The country desperately needs to find solutions to the problems they are beginning to face if they are to meet their energy targets.

The US and the UN have imposed sanctions making movement of goods, technology and money increasingly difficult - although, it is interesting to note that US sanctions are not actually enforced by the US president.

Samuel Ciszuk, Middle East energy analyst for Global Insight, said: "Just the threat of an over night enforcement of this law has been very successful in deterring companies from committing to large scale investment, especially as many or most of these projects are mid to long-term, which makes it very dangerous to commit funds to Iranian investments."

"Unilateral US and implied UN sanctions against the financial industry in Iran have cut off most of the Iranian banks and banking systems from the international money flows, which are hurting all operations in the country - including all imports and transport of technology, goods and material into the country," Ciszuk adds.

It is a challenging dilemma for the western majors considering Iranian opportunities, which often leads to companies stalling on the projects.

"They continue to keep there foot in the door and continue to hold their contracts, while actually doing as little as possible and stalling on decisions. This has been a tactic quite successfully deployed for well over a year or two years now by most companies," he says.

There has been talk of Iran seeking investment from Chinese, Russian and Indian IOCs as an alternative, and even looking at smaller western companies who usually would be outbid by the western majors.

However, their relative lack of experience and technical expertise makes them less attractive, especially in terms of LNG developments. Ciszuk explained that even recruiting outside the western majors would not be a viable alternative.

"During the last year we have had several instances of companies, especially Chinese, signing up for quite large projects in both gas and oil. But when they actually signed up they started applying the same strategy as the western companies - stalling on time and not committing," he said. The reason: The same US and UN sanctions which are forcing western IOCs to stall on projects.

"Even some of the smaller western companies - companies that usually wouldn't be able to pick up such projects because they are totally out of their league - are picking up these contracts and then just stalling their commitments like the majors," says Cizsuk.

There are also major issues concerning the infrastructure and technology of existing oil and gas plants, as well as a so called "brain-drain" of skilled engineers. International isolation is making it very hard for Iran to attract the necessary investment and technology.

Iran is really suffering from a technology fall-behind, with a lot of their infrastructure not being upgraded since the 1970s. There is also a considerable brain-drain, with high calibre people finding that opportunities are better outside the country, due to a global shortage of oil engineers which is pushing up salaries.

Much hope for the nation's energy industry, according to Ciszuk, will be pinned on the presidential elections of both the US and Iran.

"I think, from an IOC point of view, everyone is waiting for two things to happen right now. They are first waiting to see what US policies will be under the next US president and to be able to assess any long-term US attitude to Iran. And then I also think everybody is also waiting in Iran - what is going to happen after the Iranian presidential elections in summer 2009 and which faction will come to power."

After recent news of Shell and Repsol-YPF pulling out of phase 13 of the South Pars project, doubt remains over all Iran's future projects.The nuclear debate and poor political relations, government skepticism of foreign investment, buy-back contracts and high risk projects burden Iran's oil and gas industry.

"It all adds up to make the Iranian business climate un-ideal to say the least," observes Ciszuk.

Look, even UAE is considering NeWater

UAE considers controversial water technology

The UAE is closely studying the controversial water reclamation technology used by Singapore to become self-sufficient in water, it has emerged.

Rashid Ahmad Bin Fahd, minister of environment and water, told UAE daily Gulf News the emiratescould learn from Singapore’s experience and enhance existing applications to ensure sufficient water supply.

Fahd, who is attending the Singapore International Water Week, did not confirm whether the UAE was considering the same technology employed by Singapore, the newspaper said.

He said the UAE will still rely heavily on desalination technology, which produces the majority of the country’s water.

“Singapore is really at the forefront in many areas when it comes to environmental issues. Its water conservation measures and (water recycling) technology are some of the areas that we want to look closely,” he told the newspaper.

Singapore has been using high-grade reclaimed water called NeWater, which is produced from treated waste water that is purified further using advanced membrane technologies.

NeWater is said to be ultra-clean and even safe to drink, as it has passed more than 30,000 scientific tests and surpassed World Health Organisation requirements.

Although it’s safe for drinking, majority of the “reclaimed” water is used by commercial and industrial firms and only about 2%, which is mixed with the city’s raw reservoir water, is used “indirectly” by households, according to Yap Kheng Guan, director of 3P Network Department of the Public Utilities Board (PUB).

Singapore has three NeWater factories, with a fourth currently being built under a public-private partnership agreement.

Currently, the PUB blends 23,000 cubic metres of neWater with the reservoirs’ raw water, which is then treated and supplied as drinking water.

Singapore plans to increase the amount to 46,000 cubic metres by 2011.

Najib denies involvement in conspiracy in Malaysiakini

Read reactions from Dubai here

Beh Lih Yi Jun 30, 08 1:14pm
Deputy Prime Minister Najib Abdul Azak today strongly dismissed claims that he was involved in a conspiracy to ruin PKR leader Anwar Ibrahim's political career.
He said that he was not involved in the police report lodged by Anwar's aide Mohd Saiful Bukhari Azlan in which he claimed to be sodomised by Anwar."I'm not involved in this case," the deputy prime minister told reporters in Parliament.
When questioned on the existence of a photo of his special officer with Saiful, Najib said it was taken when the 23-year-old came to his office to seek a government scholarship to pursue his studies.
The photo (shows Saiful (in blue shirt) with Najib's special officer Khairil Anas Yusof. According to Najib, the photo was taken three months ago.
He repeatedly stressed at the press conference that he was not involved in any political conspiracy.
The deputy prime minister said that it was now up to the police to investigate the report lodged by Saiful to see if the alleged sodomy did take place.
Saiful dropped a bombshell on Saturday by lodging a police report stating that he was sodomised by Anwar.Anwar said that this was a fabricated charge and left to seek protection at the Turkish embassy after claiming that his life was in danger.
He also filed a defamation suit against Saiful this morning to clear his name.

Government's assures safety
Najib today said that Anwar was never harassed, even when he was busy campaigning against the government as an opposition leader.
"This is not a political persecution. Let the police investigate the matter," he added.
Najib also said that the government can assure Anwar of his personal safety.
Meanwhile, three other Umno ministers also denied that they were part of any conspiracy.
Photographs of Saiful with Shahrir Abdul Samad, Mustapha Mohamad and Azalina Othman Said appeared in the Internet yesterday, fuelling speculations of Saiful's involvement with Umno figures to topple Anwar.
The three ministers also said that they did not know Saiful personally.Commenting on this, Najib said that Saiful, being a student leader, could have taken photographs with many politicians.

The re-branding of Malaysia....Liwat-gate To The Fore

I wrote about International Conference on Meeting of Minds: Developing the Malaysia Master Brand, here.
It was officiated by Najib who said in his opening speech: “To effectively position Malaysia in this globalised arena, we must be characterised by a unified core of competence and unique selling proposition that fits all levels of economy and society.”
Yesterday, along the way to and from work, the highlights of sodomy report againts Anwar were all over the air. Most radio channels that I tuned to had mentioned about this breaking news and later on the updates.

The repeats of "Malaysia Opposition leader, Anwar Ibrahim bla bla bla" were indeed irritating to the ears when summer is already here reaching 50 degree celcius temperature and lot of Arab tourists flocking our shores for vacation.

Yes, any news is good news in marketing especially to promote new brands to the world. However, in this current situation, I was too embarrassed even driving alone with thousands other drivers rushing to reach their destinations.

In the office, some colleagues sought my opinion on this issue. Some expatriate friends called to know what was going on. I was again, dumbfounded while trying to analyse those reports as well as entries from other blogs and news sites.

My first reaction was, well, not again. Not again, not this kind of publicity and news splashing all over the world. This is not a laughing matter or mattress that can potray justifiably our civilisation.

One guy hangs Anwar's photo up in his room and he is not even a Malaysian or Muslim. Of course he never believes this accusation after 1998 fiasco that rocked the nation. He just asked, who was that moron how much was he getting paid to be sodomised?

One prominent businessman (not Malaysian) talked on the phone for more than one hour to let me know how stupid and low this damning charge could be to the nation. He was furious to hear the news and could not believe that the same strategy is now being used when the world has changed so much since ten years ago.

"Do these stupid perpetrators know what they are doing?"

I assume within my limited knowledge in politics, the stakes are already high for most politicians for their own survivals. Therefore, whatever price to pay by the nation is nothing compared to their own survivals. Life is marvellous in corridors of power. At this stake, the nation images and foreigners' esp investors' perceptions are not important at all.

The real victim is the people as this is a knee-jerk diversion from the real issues on the ground. Whoever behind this scam has been successful for now to make majority forget about petrol hike, inflation, security matters, altantuya murder, corruptions, wastage and other flip-flop decisons.

It could be another blessing as well and we see the next actions by those implicated and involved on both sides.

By the way, is this 'Sodomy' the master branding that Najib had in mind during the conference?

I would like to share this article from Malaysiakini.

Liwat-gate: Who's behind this?
Ong Kian Ming & Oon Yeoh Jun 30, 08 11:29am
In a previous podcast, we've said that it was unlikely that the authorities would sit idly by and let PKR de facto leader Anwar Ibrahim scheme his way into forming the next government.

We speculated that the government might possibly declare an emergency or call for a fresh election. Recently, there has been intense speculation that Umno has been trying to entice PAS to cooperate with it on the basis of Malay unity. And there is always fear that violence might break out if Anwar tries to take over the government. But never in our wildest imagination did we envision that someone would recycle that old allegation of sodomy.

Reports surfaced over the weekend that a personal aide of Anwar had made a police report alleging that the PKR leader had sodomized him in a condo in Kuala Lumpur. This was followed by an immediate press conference where Anwar denied the accusation. To add drama to the whole situation, he later took refuge at the Turkish Embassy because of fear for his personal safety.

The notion that a 61-year old with a bad back can forcibly sodomise a strapping 23-year old is laughable. This is simply not the kind of thing that anyone, not even Anwar's harshest critic, is going to believe. Instead, people are going to conclude that it's a desperate, politically-motivated conspiracy.

That this desperate move will backfire is already a foregone conclusion. The big question is who is behind this latest move to try to impugn Anwar's character with a tactic dating back to 1998?

We had a look at all the messages and phone calls we received over the weekend from various people to try to identify some trends.

One thing that most people concur is that Prime Minister Abdullah Ahmad Badawi is not behind it. He had the same 'deer caught in the headlights' reaction when asked about the latest developments, just like when Sapp and Yong Teck Lee announced that they no longer had confidence in him.

Furthermore, nothing in his style or demeanor gives us any indication that he has the kind of mean streak that would allow him to agree to this kind of ruthless and dirty tactic. He is no Dr Mahathir Mohamad.

One could not discount, however, the possibility that someone close to Abdullah may have been behind this, in a misguided attempt to help him. But this seems unlikely as any sensible politician would foresee the negative reaction and the public sympathy that would emerge from the repeat of the sodomy allegation.

The issue of who benefits and who loses from all this will be dealt with in tomorrow's podcast but clearly one of the big losers from this is Abdullah. Political pundits, observers and insiders might immediately conclude that he has nothing to do with it but the mass public will naturally conclude it's an attempt by the government to smear Anwar. And who is the head of the government?

Two camps

So, the natural question is who would have the motive to instigate something like this, knowing full well that such a move would hurt Abdullah? Two camps come to mind.

The first is the natural and obvious one. Who was the one responsible for branding Anwar a sodomite way back in 1998? It's not inconceivable that Mahathir, who still publicly states that he believes that Anwar is a sodomite, somehow had a hand in all this or at the very least encouraged it.

Perhaps he thought this is one way to kill two birds with one stone – discredit Anwar by taint of allegation and hurt Abdullah at the same time.

Of course, any serious political watcher would know that such a move would only serve to generate public sympathy for Anwar but when you are blinded by hatred for your enemies, sometimes you do desperate things.

The second person who would benefit from this would be Deputy Prime Minister Najib Razak. To be fair, nothing in Najib's character or demeanor suggests that he has the kind of Machiavellian streak that Mahathir possess in copious quantities.

Perhaps someone in his camp, angry at the notion that perhaps Abdullah or his son-in-law, Khairy Jamaluddin, is holding some incriminating documents on the Altantuya case – as alleged by Raja Petra Kamarudin – dreamt up this strategy to undermine Abdullah and give Najib a boost.

If this was the case, the person responsible certainly did not realise that there exists a photo of the alleged victim with the DPM's aide outside the Najib’s office – a photo that has already been widely circulated on the Internet!

While Abdullah may not have had anything to do with this, it is well within his power – and not to mention, politically advantageous – for him to nip this whole issue in the bud. Kill off the story before it becomes the kind of fiasco that it threatens to be.

Just as Mahathir had used the full force of the state machinery to play up the story, Abdullah could use that same machinery to make it go away. But knowing Abdullah, he would probably stand aside and 'let the police continue their investigation', to the detriment of himself and ultimately his government.

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