I love a window seat on anything that moves, or flies. I like to see things moving past me, choose a few interesting ones, and think about them. When I was 11, I almost died of the inborn fascination. I had tried to jump on to my moving school bus to ensure that the particular window-seat, right behind the row reserved for girls got reserved for me. My leg had slipped and I was thrown next to a pair of huge worn out tires. Someone shrieked (it was a girl, I remember), and as a result, the bus happened to stop right in time. Next, I was whisked off to the Principal’s office, and what followed is too embarrassing to disclose.
So on a flight to Tehran, when I found someone else sitting on the seat my boarding card entitled me to, I was disturbed. One of the reasons I prefer flights at night is that it helps me see the glitter of streetlights when the plane makes a landing. The streetlights tell you a lot -- from whether a country has enough resources to keep them burning in the dead of night to whether the municipality has the discipline to replace fused bulbs. Anyway, this middle-aged woman, wearing a scarf, an overcoat and a pair of jeans kept quiet when I claimed my seat. “If you could you please let her sit there” an air-hostess’s request was seconded by a nodding glance by a lady sitting in the seat behind.
I relented. After all, sitting a seat away from the window, I could still see a section of the streetlights of Tehran when the plane would land.
Somehow, Emirates, which has forced me to see censored movies even on flights to London, Singapore and New Delhi had decided to leave them untouched on its packed flight to Tehran. And devoid of the Window seat, a copy of Economist packed away into luggage and with well rested eyes not wanting to sleep, I had one option –- select from a host of 18+ movies to choose from. I surfed and surfed, and trust me, the process was a nightmare with my co-passenger taking a particular interest in what I was watching. As if she understood my problem, she turned he head away after a while. I finally settled down on ‘Love and other impossible pursuits’. Having known the story, I did not expect any particularly hot scenes. But they did come much to my discomfort.
“She is Jewish, right?” I was asked by my co-passenger as a sans makeup Natalie Portman showed her acting skills.
“Yes she is,” I replied.
“Very beautiful,” she said.
No one in the world would deny that. I smiled.
“Good. Don’t worry. Just watch your movie,” she had sensed my apprehensions.
I did watch the movie -- even as I had the food.
“You like movies ahh?” she asked. The “ahh” a deep mix of Arabic and Persian, as she surfed channels to begin watching the movie herself.
I smiled.
Then, something unexpected happened. She gifted me the pack of sugar, milk and stirrer from her food pack.
“But why,” I smiled.
“Guess you like coffee a lot. This is for the second cup.”
I had asked for coffee as soon as I took my seat. It had been noticed.
“Well, I also like the window seat,” I replied.
“Sorry, I am not giving you that,” came the stern reply.
She asked me why do I have this childish fetish for a window seat, and I told her why.
When the announcement that the flight has begun descending into the airport came, I saw a hand waive in front of my screen.
“Should we exchange seats now?” the woman, almost the age of my mother asked.
I happily complied.
And my thought buds were active in no time.
The glitter of streetlights below gave me an impression that the municipality of Tehran indeed worked. But, a part of the city was probably under load shedding … that suggested fuel shortage. Or was the power plant capacity not enough to meet rising demand. Were more people moving from villages to cities thus turning the power demand-supply equations absurd?
“Ok, the plane has landed. Now go out and see Tehran,” came the familiar voice.
Sunday, October 2, 2011
Wednesday, July 21, 2010
Yemen is bearing the brunt of a deep Sunni-Shia schism, corruption and neighbour’s apathy
Yemen, the poorest Persian Gulf country from where the ancestors of Osama bin Laden migrated to Saudi Arabia holds every promise to be the epicenter of global terrorism. Two of the most daring attempts of suicide bombings in recent months were planned in this Gulf country.
There are some very evident reasons for why the country seems to resemble Pakistan in TV footages.
While Lebanon’s name repeatedly props up as an exporter of manpower in the Middle East, it’s practically Yemen where most people want to leave for greener pastures. That seems to be one of the many reasons why the Gulf Cooperation Council (GCC) has strong reservations in integrating Yemen into its fold. An apparent discriminatory immigration policy that aims to stem the flow the Yemenis into the Arabian peninsula has led to a surprisingly low number of Yemen nationals in nearby countries like Qatar and the UAE.
Pockets of extreme poverty and high levels of corruption in the country located next to some of the highest per-capita income grossing nations (with admirably low levels of corruption) is giving preachers with a variety of religious backgrounds and ambitions an opportunity to spread fangs. Besides Iraq, this is the only Arab country where both Sunni and Shia sects exist in good numbers to be able to wage separate conflicts.
About 52 percent of the country is Sunni, whereas 46 percent of it is Shia. While Shias dominate the northern parts of the country close to its border with Saudi Arabia, the Sunnis dominate the southern parts. Shias, mostly Zaidis, are allegedly being supported by Iran and the Al Qaeda has been able to spread roots among the Sunnis. A large contingent of extremists from the Gulf who fought against the Soviets in Afghanistan came from this country, and therefore Al Qaeda, whose origins lie in the same war has found it easy to build a network.
There are reasons why Yemenis are disgruntled and are finding a solace in waging jihad(s) on different fronts. The country was ranked 140 out of 182 nations by the United Nations Development Programme’s Human Development Index and 154th out of 180 on Transparency International’s Corruption Perception’s Index. All the countries of the Arabian Peninsula that Yemen is part of are ranked quite high on all these indexes. Surprising as it may seem, before the discovery of oil in the region Yemen was the most developed country in the region where people from Saudi Arabia and Qatar emigrated to work on farms.
The country now has active LNG projects and is trying to exploit its unattractive oil reserves. But it would need a focused involvement of a rational government to extricate it out of the misery it is in.
There are some very evident reasons for why the country seems to resemble Pakistan in TV footages.
While Lebanon’s name repeatedly props up as an exporter of manpower in the Middle East, it’s practically Yemen where most people want to leave for greener pastures. That seems to be one of the many reasons why the Gulf Cooperation Council (GCC) has strong reservations in integrating Yemen into its fold. An apparent discriminatory immigration policy that aims to stem the flow the Yemenis into the Arabian peninsula has led to a surprisingly low number of Yemen nationals in nearby countries like Qatar and the UAE.
Pockets of extreme poverty and high levels of corruption in the country located next to some of the highest per-capita income grossing nations (with admirably low levels of corruption) is giving preachers with a variety of religious backgrounds and ambitions an opportunity to spread fangs. Besides Iraq, this is the only Arab country where both Sunni and Shia sects exist in good numbers to be able to wage separate conflicts.
About 52 percent of the country is Sunni, whereas 46 percent of it is Shia. While Shias dominate the northern parts of the country close to its border with Saudi Arabia, the Sunnis dominate the southern parts. Shias, mostly Zaidis, are allegedly being supported by Iran and the Al Qaeda has been able to spread roots among the Sunnis. A large contingent of extremists from the Gulf who fought against the Soviets in Afghanistan came from this country, and therefore Al Qaeda, whose origins lie in the same war has found it easy to build a network.
There are reasons why Yemenis are disgruntled and are finding a solace in waging jihad(s) on different fronts. The country was ranked 140 out of 182 nations by the United Nations Development Programme’s Human Development Index and 154th out of 180 on Transparency International’s Corruption Perception’s Index. All the countries of the Arabian Peninsula that Yemen is part of are ranked quite high on all these indexes. Surprising as it may seem, before the discovery of oil in the region Yemen was the most developed country in the region where people from Saudi Arabia and Qatar emigrated to work on farms.
The country now has active LNG projects and is trying to exploit its unattractive oil reserves. But it would need a focused involvement of a rational government to extricate it out of the misery it is in.
Monday, April 19, 2010
Qataris avoid giving away citizenship; Why did they award it to Hussain?
I belong to the camp that considers artist M. F. Hussain’s relinquishing of his Indian citizenship a matter of shame for the Indians. Hussein’s self-imposed exile itself hurt. One of the most valued artists in the world, who should have been adored by India, was instead hounded out by the goons of some propaganda seekers.
As it turns out, the paintings that roused hatred were decades old. The trouble began when a newspaper published an article on them in the mid-nineties.
Qatar has just opened a new 430,000 square feet new museum – one of the largest in the world.
Getting a Qatari citizenship is a difficult task. It requires a mandatory stay of 25 years in the country, besides being a Muslim for one’s application to be considered. Several deserving applications of Iranians, Pakistanis, Iraqis and Palestinians have been rudely set aside by Qatari immigration authorities. How does it so happen that Hussain was so gladly invited to be come a Qatari?
Hussain is 95. And he has a lifetime worth of artwork to handover to someone. Has this been smartly sensed by Qatar? And is it the opportunity of hanging Hussain’s priceless masterpieces –apparently for free or for a good bargain price -- on Qatar museum walls that has led to the maestro being invited to become a Qatari citizen?
Tuesday, December 22, 2009
China outpaces India in Middle East and Africa
China is spreading its wings in the Middle East and Africa, leaving India, the other emerging economy from Asia, far behind.
There have been several interesting developments in the recent past that suggest that an energy hungry Middle Kingdom is striving consistently to be the dominant trader in the oil rich Gulf. In June this year, Cnooc Ltd., China’s third-largest oil company, signed a 25-year agreement with Qatar Petroleum to search for gas offshore in its first exploration venture in the Middle East.
The agreement includes drilling three wells in five years. Qatar also plans to discuss providing additional liquefied-natural gas to the Chinese company. Qatar, which has the world’s third-largest natural gas reserves, is also the world’s largest producer of liquefied natural gas, or LNG. It plans to nearly double its LNG production to 77 million tons annually by next year. Cnooc plans to invest $100 million to implement the exploration agreement. China will import the first consignment of LNG in October, and it will need 40 million to 60 million tons of LNG a year by 2020.
Geographically, India is the closest importer of LNG from Qatar. It has been importing LNG from the emirate for a much longer period and currently imports 7.5 million tonnes of the fuel annually. It plans to increase this by around five million tonnes annually. But then, India was not among serious competitors for gas exploration bids in Qatar.
This is just one of the examples of the Chinese presence in the region and that of India’s absence. Iraq will more than double crude oil supplies to China next year to over 300,000 barrels per day. Chinese imports from Iraq have already increased nearly three fold in 2009. This saw average daily imports of Iraqi crude to China rise at about 144,000 bpd, according to Chinese customs data.
What’s interesting is that China is still not incurring any cost in re-building Iraq. Still, it has managed to be the leading player in the state’s oil business. A partnership of British Petroleum (BP) and the China National Petroleum Corporation, or C.N.P.C., won the first contract awarded by the country after the overthrow of Saddam Hussein. The project, worth more than 15 billion U.S. dollars, is a milestone in Iraq's efforts to renew its struggling oil sector. According to the 20-year contract, BP holds a 38 per cent stake in the venture, while CNPC has a 37 per cent share. Iraq's State Oil Marketing Organisation controls the rest.
In another sign of China’s interest in Iraqi oil, Sinopec, China’s refining giant agreed to pay $7.22 billion to buy Addax Petroleum, a Swiss-Canadian company with operations in the Kurdistan region of Iraq and in West Africa.
The strong and growing presence of China in Africa tells an even more intriguing story. The Chinese now have a presence across the Dark continent. The country's presence in the form of construction companies, financial and humanitarian aid providers spreads from Angola and Ethiopia to Sierra Leone and Zimbabwe.
And the strategy that the Chinese companies have employed in Africa needs a detailed discussion. The Chinese have built stadiums in Africa at places they were not required. They have built a luxury hotel in Sierra Leone. They have prevented security council resolutions against Sudan and abstained from even the resolution that asked the International Court of Justice to investigate the Darfur violations. And Zimbabwe is all but owned by China. Angola, the newest member of OPEC and the country that has highest amount of upstream investments planned for the next five years among all OPEC members was offered a $ 2 bn soft loan by China to develop an oil block.
The efforts of India, which has similar concerns as China to ensure a regular flow of hydrocarbons do not compare. India has had presence in Sudan. It is now trying for a presence in Ghana. State owned Oil and Natural Gas Corp. Ltd (ONGC) and GAIL (India) Ltd are in talks with Ghana National Petroleum Corp. (GNPC) for acquiring stakes in hydrocarbon blocks in the African country.
These steps fizzle out in front of the massive Chinese strategy. Indians are not playing as hard as their Chinese counterparts to gain a greater access in Africa and may in few years time find it difficult to deal with simultaneous rise in oil prices and demand.
There have been several interesting developments in the recent past that suggest that an energy hungry Middle Kingdom is striving consistently to be the dominant trader in the oil rich Gulf. In June this year, Cnooc Ltd., China’s third-largest oil company, signed a 25-year agreement with Qatar Petroleum to search for gas offshore in its first exploration venture in the Middle East.
The agreement includes drilling three wells in five years. Qatar also plans to discuss providing additional liquefied-natural gas to the Chinese company. Qatar, which has the world’s third-largest natural gas reserves, is also the world’s largest producer of liquefied natural gas, or LNG. It plans to nearly double its LNG production to 77 million tons annually by next year. Cnooc plans to invest $100 million to implement the exploration agreement. China will import the first consignment of LNG in October, and it will need 40 million to 60 million tons of LNG a year by 2020.
Geographically, India is the closest importer of LNG from Qatar. It has been importing LNG from the emirate for a much longer period and currently imports 7.5 million tonnes of the fuel annually. It plans to increase this by around five million tonnes annually. But then, India was not among serious competitors for gas exploration bids in Qatar.
This is just one of the examples of the Chinese presence in the region and that of India’s absence. Iraq will more than double crude oil supplies to China next year to over 300,000 barrels per day. Chinese imports from Iraq have already increased nearly three fold in 2009. This saw average daily imports of Iraqi crude to China rise at about 144,000 bpd, according to Chinese customs data.
What’s interesting is that China is still not incurring any cost in re-building Iraq. Still, it has managed to be the leading player in the state’s oil business. A partnership of British Petroleum (BP) and the China National Petroleum Corporation, or C.N.P.C., won the first contract awarded by the country after the overthrow of Saddam Hussein. The project, worth more than 15 billion U.S. dollars, is a milestone in Iraq's efforts to renew its struggling oil sector. According to the 20-year contract, BP holds a 38 per cent stake in the venture, while CNPC has a 37 per cent share. Iraq's State Oil Marketing Organisation controls the rest.
In another sign of China’s interest in Iraqi oil, Sinopec, China’s refining giant agreed to pay $7.22 billion to buy Addax Petroleum, a Swiss-Canadian company with operations in the Kurdistan region of Iraq and in West Africa.
The strong and growing presence of China in Africa tells an even more intriguing story. The Chinese now have a presence across the Dark continent. The country's presence in the form of construction companies, financial and humanitarian aid providers spreads from Angola and Ethiopia to Sierra Leone and Zimbabwe.
And the strategy that the Chinese companies have employed in Africa needs a detailed discussion. The Chinese have built stadiums in Africa at places they were not required. They have built a luxury hotel in Sierra Leone. They have prevented security council resolutions against Sudan and abstained from even the resolution that asked the International Court of Justice to investigate the Darfur violations. And Zimbabwe is all but owned by China. Angola, the newest member of OPEC and the country that has highest amount of upstream investments planned for the next five years among all OPEC members was offered a $ 2 bn soft loan by China to develop an oil block.
The efforts of India, which has similar concerns as China to ensure a regular flow of hydrocarbons do not compare. India has had presence in Sudan. It is now trying for a presence in Ghana. State owned Oil and Natural Gas Corp. Ltd (ONGC) and GAIL (India) Ltd are in talks with Ghana National Petroleum Corp. (GNPC) for acquiring stakes in hydrocarbon blocks in the African country.
These steps fizzle out in front of the massive Chinese strategy. Indians are not playing as hard as their Chinese counterparts to gain a greater access in Africa and may in few years time find it difficult to deal with simultaneous rise in oil prices and demand.
Saturday, October 24, 2009
Accounting games may wreak havoc in January
As the Gulf economies sit down to take a stock of how have they tackled the impact of the global financial crisis, they find themselves basked under the stares of a suspecting media.
Though companies in the region have gradually come to accept the importance of maintaining transparency and gaining trust in the markets; large-scale lacunas remain. With ‘green-shoots’ of growth already out from the developed world, the Middle-East and more so the Gulf countries are yet ascertain as to how deep and muddy waters has the financial crisis thrown them into.
Come January 2010, some new set of skeletons may tumble out. Though the region is expected to record an all-round recovery along with the world, and rising oil prices are expected to provide it a strong support; large and cocky real estate companies in the region may relegate to a deeper suffering.
The buzz in the market is that large real estate companies have tried to use all possible loopholes in accounting principles to their advantage. While the figures suggesting the decay of companies like Lehman Brothers that triggered the crisis were at least correct in the West, here even the statistics remain blurred. The end result: a second wave of financial disarray may let loose in the region the next year exactly when the onset of a global recovery is predicted.
Up for debate are the balance sheets of several companies that declared their results in January 2009. The GCC countries do not have set accounting standards and follow a mix of accounting principles from all over the world. Audits made mandatory by the regulators overseeing listed companies in financial markets allegedly turn a blind eye to the high level financial games that several of these companies with 'bright' finance professionals play.
“The problem is that this kind of gain is really not sustainable. Property gains don’t go on forever (they have already declined substantially at places like Dubai), and the developers may soon feel the pain of a price fall as all revaluation losses also have to be booked in the income statement,” says Binod Shankar a Dubai based Chartered Financial Analyst (CFA).
What’s interesting is that such accounting tactics may force an additional expenditure for these companies. “There is always the danger that shareholders see the higher profits (mainly due to revaluation gains), think that all the profits are realised and hence ask for more dividend. None of the revaluation gain is in cash and the company may end up paying dividend out of capital,” Shankar adds.
Interestingly, none of this is illegal; the International Financial Reporting Standard (IFRS) explicitly allows this accounting treatment as per International Accounting Standard IAS 40. However, the problem is that none of the revaluation gain is realised.
Fair value i.e. the current market price of an asset that the IFRS insists is the authentic price to be recorded on balance sheets, income statements and cash flow statements. It is the price that a buyer is willing to pay to the seller under the prevalent market conditions. In the Middle East, fair value has become a joke. As explained above, even as the real estate prices have declined by as much as half their previous value at many of the places in the Arabian Gulf, companies have gone ahead and raised the prices of assets (on the account sheets) under their command by percentages that were prevalent during the time of the global economic boom. A good portion of the inventory has been shown as ‘available for sale’ -- an accounting loophole that allows companies to not record inventories and keep them off the balance sheets. A good amount of asset has also been securitized to escape scrutiny.
“There is another scary fact. A few companies went on to show those buildings that were still being built as a part of there assets the last year. This strengthened their balance sheet then. However, this year when those buildings have actually been completed they cannot show them as a part of their asset. It will be double whammy for them (the real estate companies) as many projects have been abandoned and no new assets are coming up this year,” a Dubai based analyst said.
The largest real estate companies, the ones who have particularly been noticed fiddling with their balance sheets cannot even be questioned in an open forum for the fact that they enjoy a tacit government backing.
Though companies in the region have gradually come to accept the importance of maintaining transparency and gaining trust in the markets; large-scale lacunas remain. With ‘green-shoots’ of growth already out from the developed world, the Middle-East and more so the Gulf countries are yet ascertain as to how deep and muddy waters has the financial crisis thrown them into.
Come January 2010, some new set of skeletons may tumble out. Though the region is expected to record an all-round recovery along with the world, and rising oil prices are expected to provide it a strong support; large and cocky real estate companies in the region may relegate to a deeper suffering.
The buzz in the market is that large real estate companies have tried to use all possible loopholes in accounting principles to their advantage. While the figures suggesting the decay of companies like Lehman Brothers that triggered the crisis were at least correct in the West, here even the statistics remain blurred. The end result: a second wave of financial disarray may let loose in the region the next year exactly when the onset of a global recovery is predicted.
Up for debate are the balance sheets of several companies that declared their results in January 2009. The GCC countries do not have set accounting standards and follow a mix of accounting principles from all over the world. Audits made mandatory by the regulators overseeing listed companies in financial markets allegedly turn a blind eye to the high level financial games that several of these companies with 'bright' finance professionals play.
“The problem is that this kind of gain is really not sustainable. Property gains don’t go on forever (they have already declined substantially at places like Dubai), and the developers may soon feel the pain of a price fall as all revaluation losses also have to be booked in the income statement,” says Binod Shankar a Dubai based Chartered Financial Analyst (CFA).
What’s interesting is that such accounting tactics may force an additional expenditure for these companies. “There is always the danger that shareholders see the higher profits (mainly due to revaluation gains), think that all the profits are realised and hence ask for more dividend. None of the revaluation gain is in cash and the company may end up paying dividend out of capital,” Shankar adds.
Interestingly, none of this is illegal; the International Financial Reporting Standard (IFRS) explicitly allows this accounting treatment as per International Accounting Standard IAS 40. However, the problem is that none of the revaluation gain is realised.
Fair value i.e. the current market price of an asset that the IFRS insists is the authentic price to be recorded on balance sheets, income statements and cash flow statements. It is the price that a buyer is willing to pay to the seller under the prevalent market conditions. In the Middle East, fair value has become a joke. As explained above, even as the real estate prices have declined by as much as half their previous value at many of the places in the Arabian Gulf, companies have gone ahead and raised the prices of assets (on the account sheets) under their command by percentages that were prevalent during the time of the global economic boom. A good portion of the inventory has been shown as ‘available for sale’ -- an accounting loophole that allows companies to not record inventories and keep them off the balance sheets. A good amount of asset has also been securitized to escape scrutiny.
“There is another scary fact. A few companies went on to show those buildings that were still being built as a part of there assets the last year. This strengthened their balance sheet then. However, this year when those buildings have actually been completed they cannot show them as a part of their asset. It will be double whammy for them (the real estate companies) as many projects have been abandoned and no new assets are coming up this year,” a Dubai based analyst said.
The largest real estate companies, the ones who have particularly been noticed fiddling with their balance sheets cannot even be questioned in an open forum for the fact that they enjoy a tacit government backing.
Saturday, October 3, 2009
Iraq needs to sell its oil
While it’s Iran that’s known for raising its voice for higher oil prices, it is the neighbouring Iraq that’s in desperate need for it.
A suffering Iraq needs oil to average above $ 70 a barrel to build up a dependable coffer unlike other countries with major oil reserves (Saudi Arabia could manage at $ 30 a barrel). And since Iraq National Oil Company is in doldrums, the war ravaged country desperately needs foreign companies explore and produce more oil to manage its growing population and extricate itself from war induced misery.
But then emulating a story common in most of the developing democratic nations with high amount of natural reserves, most of the oil reserves in the country are disputed and extraction is a pain. Furthermore, the country’s elected government remains defiant to Iraqi economy's needs and continues to nurse an ego of a prominent oil producer even though its daily produce remains a pittance.
Iraq offered two series of contracts to attract oil majors that have the potential to extract and sell oil. While the first round of bidding was an absolute failure, the other’s results are yet to emerge.
The consequence of the Iraqi stand has been a disaster. In the first round of awarding contracts that got over in June, British Petroleum and China’s National Petroleum Corporation (CNPC) were the only two companies that accepted all the conditions laid down by the Iraqi oil ministry and were awarded the contract of Rumaila oil field. The others just opted out of hundreds of oil and gas projects on platter. The fate of those projects remains in a limbo unless something miraculous happens in the second round.
In a bid to lower upfront payments in its second oil bidding round, hoping to recapture the interest of international energy companies that shunned the country's first attempt, the Iraqi oil ministry has now ameliorated the conditions for bidding for oil and gas fields. However, senior officials from International Oil Companies (IOCs) say that even the second offering comes laced with uncomfortable terms.
Baghdad now wants $ 1.2 bn in non-recoverable signature bonuses for the fields, replacing an unpopular first round demand for $ 2.6 bn in soft loans. Iraq's oil minister Hussain Al Sahristani recently said that he is confident of attracting more companies to Iraq as a result of the new terms.
If all goes well, Iraq could secure billion dollars deal before the parliamentary elections scheduled at the end of January the next year. The bidding contest is scheduled for early December. Contracts are due to be signed in two weeks after that and then have to be ratified by the cabinet.
Baghdad plans to boost the country's crude production capacity to 4.5 million barrels per day in the next three years from 2.4 million bpd now. Though a founding member of OPEC, the country is not restricted by OPEC production limitations.
The need for the country to be selling its oil are quite pressing. Even though Iraq would record a GDP growth of 7 percent in 2009, its budget and current account balance will swing deep into deficits of 10 percent and 17 percent of GDP in 2009, Turker Hamzaoglu an analyst with Bank of America Merrill Lynch says. Considering that oil is the only prominent produce from a country and whatever industries it had have been lost to years US induced turmoil, the country needs to sell its oil.
Iraq’s GDP in 2008 stood $ 103. 9 bn, an improvement over the previous years but a pittance as compared to several countries its size. This country with the third largest oil reserve in the world needs to gather more confidence and approach the energy buyers with logical terms. And it needs to do that soon.
A suffering Iraq needs oil to average above $ 70 a barrel to build up a dependable coffer unlike other countries with major oil reserves (Saudi Arabia could manage at $ 30 a barrel). And since Iraq National Oil Company is in doldrums, the war ravaged country desperately needs foreign companies explore and produce more oil to manage its growing population and extricate itself from war induced misery.
But then emulating a story common in most of the developing democratic nations with high amount of natural reserves, most of the oil reserves in the country are disputed and extraction is a pain. Furthermore, the country’s elected government remains defiant to Iraqi economy's needs and continues to nurse an ego of a prominent oil producer even though its daily produce remains a pittance.
Iraq offered two series of contracts to attract oil majors that have the potential to extract and sell oil. While the first round of bidding was an absolute failure, the other’s results are yet to emerge.
The consequence of the Iraqi stand has been a disaster. In the first round of awarding contracts that got over in June, British Petroleum and China’s National Petroleum Corporation (CNPC) were the only two companies that accepted all the conditions laid down by the Iraqi oil ministry and were awarded the contract of Rumaila oil field. The others just opted out of hundreds of oil and gas projects on platter. The fate of those projects remains in a limbo unless something miraculous happens in the second round.
In a bid to lower upfront payments in its second oil bidding round, hoping to recapture the interest of international energy companies that shunned the country's first attempt, the Iraqi oil ministry has now ameliorated the conditions for bidding for oil and gas fields. However, senior officials from International Oil Companies (IOCs) say that even the second offering comes laced with uncomfortable terms.
Baghdad now wants $ 1.2 bn in non-recoverable signature bonuses for the fields, replacing an unpopular first round demand for $ 2.6 bn in soft loans. Iraq's oil minister Hussain Al Sahristani recently said that he is confident of attracting more companies to Iraq as a result of the new terms.
If all goes well, Iraq could secure billion dollars deal before the parliamentary elections scheduled at the end of January the next year. The bidding contest is scheduled for early December. Contracts are due to be signed in two weeks after that and then have to be ratified by the cabinet.
Baghdad plans to boost the country's crude production capacity to 4.5 million barrels per day in the next three years from 2.4 million bpd now. Though a founding member of OPEC, the country is not restricted by OPEC production limitations.
The need for the country to be selling its oil are quite pressing. Even though Iraq would record a GDP growth of 7 percent in 2009, its budget and current account balance will swing deep into deficits of 10 percent and 17 percent of GDP in 2009, Turker Hamzaoglu an analyst with Bank of America Merrill Lynch says. Considering that oil is the only prominent produce from a country and whatever industries it had have been lost to years US induced turmoil, the country needs to sell its oil.
Iraq’s GDP in 2008 stood $ 103. 9 bn, an improvement over the previous years but a pittance as compared to several countries its size. This country with the third largest oil reserve in the world needs to gather more confidence and approach the energy buyers with logical terms. And it needs to do that soon.
Wednesday, September 23, 2009
Saudi bombing incident to usher a more bothersome airport frisking
Saudi bombing incident to usher a more bothersome airport frisking
Shashank Shekhar
If removing your shoes and the belt at security checkpoints bothered you, wait till the frisks become more intimate.
The attempt to murder Prince Mohamed bin Nayef in Saudi Arabia has left several questions unanswered besides opening a pandora box of security concerns. The incident showed that human bombs can evade airport frisking repeatedly and reach the most secured of establishments thus raising security questions which will sooner or later result into a tighter security at the airports especially in the Middle East.
The kingdom has been quiet on Abdullah al Asiri the Saudi bomber who “gave himself up”, and even the best known analysts on Middle East have not been able to sketch out the exact details of the incident.
Whatever information the world has about the incident has come from the Saudi press agencies. And several questions still remain unanswered. Theodore Karasik, the Director (Research) at Institute for Near East and Gulf Military Analysis (INEGMA) enumerated them down on being asked.
“How could Abdullah penetrate though so many layers of security? Was the device really hidden inside his body? Is Al Qaeda adopting drug smuggling techniques to deliver a bomb? How was it triggered?” Karasik asked almost in a breadth.
The second question among the ones enumerated is perhaps the most important considering that if the bomb could evade security checks because it was brought in inserted in a human body (as banned drugs are still sneeked in), it would make the entire security check procedure prevalent across the world a joke. “This incident may make travel even more miserable for people who were critical of being asked to remove their shoes during security checks,” Karasik said.
The incident was a brutal reminder of a similar incident in 1975 when King Faisal was killed by his own cousin during such a gathering.
Prince Nayef had been spearheading the efforts to win back Saudis who had strayed into extremist organisations particularly Al Qaeda. Nayef ensured individual attention to each of the returnee and had been recognised the world over for his job. Karasik says that this precisely was the reason for the Prince emerging as the target of the top Al Qaeda leadership. “They wanted to show that his programme for rehabilitation is a failure,” Karasik said. That the attacker had been flown in from Yemen also showed the deep roots that Al Qaeda has been able to establish in the war torn country.
The attack came after two important incidents. A fortnight earlier, on August 19, the Saudi authorities announced the arrest of 44 suspected militants with Al Qaeda ties following a year-long operation that also uncovered dozens of machine-guns and electronic circuits that could be used to trigger explosions.
In what was the country’s first trial for terrorists, in July a Saudi Court a Saudi court sentenced one militant to death and 329 to prison. Among other punishments, it also imposed fines and travel bans. Human rights groups have condemned the way the suspects were held for long periods without any serious charges leveled against them.
Shashank Shekhar
If removing your shoes and the belt at security checkpoints bothered you, wait till the frisks become more intimate.
The attempt to murder Prince Mohamed bin Nayef in Saudi Arabia has left several questions unanswered besides opening a pandora box of security concerns. The incident showed that human bombs can evade airport frisking repeatedly and reach the most secured of establishments thus raising security questions which will sooner or later result into a tighter security at the airports especially in the Middle East.
The kingdom has been quiet on Abdullah al Asiri the Saudi bomber who “gave himself up”, and even the best known analysts on Middle East have not been able to sketch out the exact details of the incident.
Whatever information the world has about the incident has come from the Saudi press agencies. And several questions still remain unanswered. Theodore Karasik, the Director (Research) at Institute for Near East and Gulf Military Analysis (INEGMA) enumerated them down on being asked.
“How could Abdullah penetrate though so many layers of security? Was the device really hidden inside his body? Is Al Qaeda adopting drug smuggling techniques to deliver a bomb? How was it triggered?” Karasik asked almost in a breadth.
The second question among the ones enumerated is perhaps the most important considering that if the bomb could evade security checks because it was brought in inserted in a human body (as banned drugs are still sneeked in), it would make the entire security check procedure prevalent across the world a joke. “This incident may make travel even more miserable for people who were critical of being asked to remove their shoes during security checks,” Karasik said.
The incident was a brutal reminder of a similar incident in 1975 when King Faisal was killed by his own cousin during such a gathering.
Prince Nayef had been spearheading the efforts to win back Saudis who had strayed into extremist organisations particularly Al Qaeda. Nayef ensured individual attention to each of the returnee and had been recognised the world over for his job. Karasik says that this precisely was the reason for the Prince emerging as the target of the top Al Qaeda leadership. “They wanted to show that his programme for rehabilitation is a failure,” Karasik said. That the attacker had been flown in from Yemen also showed the deep roots that Al Qaeda has been able to establish in the war torn country.
The attack came after two important incidents. A fortnight earlier, on August 19, the Saudi authorities announced the arrest of 44 suspected militants with Al Qaeda ties following a year-long operation that also uncovered dozens of machine-guns and electronic circuits that could be used to trigger explosions.
In what was the country’s first trial for terrorists, in July a Saudi Court a Saudi court sentenced one militant to death and 329 to prison. Among other punishments, it also imposed fines and travel bans. Human rights groups have condemned the way the suspects were held for long periods without any serious charges leveled against them.
Subscribe to:
Posts (Atom)