www.examiner.ie

THE US and Britain are on the verge of war with Iraq. The pretext for war is to prevent Iraq making “weapons of mass destruction” and to destroy any stocks of such weapons it already possesses.

However, many commentators allege that another US aim is to open Iraq's vast oil reserves for exploitation. What happens next in this crisis may determine what happens to Iraq's oil, where it goes and who makes the resulting profits.

Iraq has the second largest proven oil reserves of any nation at least 112 billion barrels, along with 220 billion barrels of probable and possible resources, and

large remaining unexplored areas. This is more than a tenth of the world's entire known oil reserve. Iraq's production costs are amongst the lowest in the world at approximately $1 per barrel, compared with $4 in the US and North Sea, and $2.5 in Saudi Arabia. Iraqi oil is also desirably low in sulphur.

Current production is low. Much of Iraq's infrastructure is wrecked and some oil reservoirs may have been damaged by over-pumping, water injection or flooding. Most pipelines and transfer facilities are also damaged. However, 417 new wells are planned. That's a lot of new business for someone. If Saddam's regime survives this crisis, these wells will be drilled by Russian, Chinese, Iraqi and Romanian companies. Some commentators suggest, for about £20bn in investment, production levels could be increased to two and a half to three billion barrels a year within five years. In the long run, the potential may be even greater, as 55 of Iraq's 70 proven fields remain undeveloped.

US Secretary of State Colin Powell has said that Iraq's oil will be held "in trust for the Iraqi people" in the event of any invasion. On who will get paid to take the oil out of the ground, and where it will go next, he has said nothing.

Although hampered by UN sanctions, Iraq has been busily signing contracts for the development of its oil resources. French and Russian companies have been particularly favoured. Major companies with deals in Iraq include TotalFinaElf, Russia's Lukoil, Zarubezneft and Mashinoimport, the China National Petroleum Company and Eni. This business would be threatened by the overthrow of Saddam's regime.

US oil companies do not hold development contracts in Iraq. Neither, with the exception of some potential small deals by Shell, do UK companies. As long ago as 1998, Chevron chief executive Kenneth Derr was enthusing about getting access to Iraq's reserves. Now, both France and Russia are worried that the Americans are talking to Iraqi dissident groups about scrapping existing contracts and providing preferential access for US companies. John Browne, the Chief Executive of BP-Amoco, recently expressed fears the US would carve up Iraqi oil resources once the war ends.

A recent Deutsche Bank report entitled Baghdad Bazaar: Big Oil in Iraq suggested a potential conflict of interest amongst the permanent members of the United Nations Security Council over the commercial implications of war in Iraq. A regime change in Iraq would benefit US and UK oil companies while a peaceful resolution would benefit oil companies based in Russia, France and China.

These issues are vital to US national interests, because the US economy remains an oil junkie in bad need of a fix. Industrialised countries consume almost 50 million barrels of oil each day, with the USA alone accounting for two-fifths of this.

The US Energy Information Administration forecasts world demand for oil will rise by between 37% and 90% by 2020, depending on the rate of economic growth. The US is forecast to need another two- to three-and-a-quarter billion barrels a year over the same period. US net oil imports more than doubled between 1985 and 2000 as US production fell and consumption rose. More than half the oil used in the US is now imported. By 2020, this dependence could rise to two-thirds. If the US were to get control of all or most of the product of Iraq's planned 417 new wells, total Iraqi production would be more than enough to meet the predicted increase in US consumption.

Two weeks after gaining power, President Bush asked Vice-President Dick Cheney to review US energy policy. Cheney is one of many administration officials, including the president, to have a background in the oil and gas industries. Others include National Security Adviser Condoleeza Rice and two cabinet secretaries. Not surprisingly, in May 2001, Cheney's report concluded that "energy security must be a priority of US trade and foreign policy".

The report set out a global strategy to enhance US national energy security, with detailed recommendations for almost every oil-producing region. The Middle East is forecast to supply between a half and two thirds of the world's oil by 2020. It will "remain vital to US interests" and "will be a primary focus of US international energy policy".

In 2001, Tony Blair ordered a review of energy policy. The review stated "the UK will be increasingly dependent on imported oil and gas", and "increased reliance on imports from Europe and elsewhere underlines the need to integrate our energy concerns into our foreign policy".

IN January this year, British Foreign Secretary Jack Straw outlined Britain's seven strategic priorities for foreign policy to senior staff from its embassies abroad. Bolstering "the security of British and global energy supplies" was number six on the list.

It would be simplistic to describe a new Gulf War as merely "a war about oil". There are many other domestic and international policy considerations involved, but oil and energy security is clearly a prime consideration in US foreign policy. Abject dependence on fossil fuels distorts US policy, prevents it from dealing rationally with countries from Venezuela to Saudi Arabia, and constitutes a major threat to global security and peace.

The need for the world in general and the US in particular to cut dependence on fossil fuels has never been greater. Not the least of the political errors of President Bush has been to review energy policy, and then, like an SUV driver with his eyes closed, put the pedal to the metal and head resolutely in completely the wrong direction. The consequences may be seen in a new war in the Gulf, and in the international conflict and turmoil that would surely follow.

ADIÓS, MONSEÑOR.

Alertas de Robert Alonso Robert Alonso

Ayer hice un alto en mis "alertas" para enterrar un pedazo de Cuba en mi corazón. Se nos fue mi monseñor, Eduardo Boza Masvidal. quien me acompañó desde niño en mis plegarias por un pronto retorno a mi casa en Cienfuegos, donde dejé los recuerdos de mi feliz infancia y la esperanza de un regreso que jamás sucedió.

Era Boza un hombre bueno, como bueno fue mi abuelo que ayer lo recibió en los cielos. Además de bueno fue valiente y por sobre todas las cosas: digno. Su cabeza solamente se inclinó ante Dios, el Todopoderoso. Sin otra arma que su cruz de lata, Monseñor Eduardo Boza Masvidal se le enfrentó a Castro desde los días en que todavía muchos cubanos gritaban "¡Viva Fidel!". Recibió maltratos físicos y la humillación de ser expulsado de la patria que lo vio nacer en un pedazo de esa tierra linda - por allá por 1915 - que lleva más de cuatro décadas llorando y clamando por libertad y verdadera justicia social.

Boza Masvidal, como le decíamos los cubanos quienes teníamos en él nuestro guía espiritual, llegó a Venezuela en 1961 con lo que llevaba puesto y uncuerpo lleno de hematomas producidas por las culatas de las armas checas de los enajenados comunistas que a punta de maltratos físicos lo montaron en el barco que lo traería a tierras de libertad. Intentaron destruir su cuerpo y no pudieron. menos su honor cubano y su valor de buen cristiano.

Con mis once años recién cumplidos, asistía con mi familia a la capilla del colegio San José de Tarbes de La Florida, donde cada domingo se congregaba el exilio cubano a la sombra de nuestro hoy desaparecido monseñor. Nunca pude entender los sermones que salían de su torcida boca pues su dicción era torpe. Se decía que Castro le había fracturado la quijada a palos y sus huesos se habían soldado sin la ayuda de ninguno de estos grandes traumatólogos cubanos de hoy - como el tristemente célebre Dr. Rodrigo "Quico" Álvarez Cambra -- quienes aseguran hacer crecer a enanos. Oíamos historias sobre Boza que pasarán a la mitología generada por nuestro drama como nación. Se comentaba que dormía en penitencia en el frío y duro suelo de la ciudad venezolana que lo adoptó, Los Teques.

Se nos fue un gran cubano, duro, valiente, digno. cristiano. Uno de los buenos. Uno que no dejó que lo doblegara el terror y prefirió la tortura y el martirio antes de claudicar y renegar de su fe. Murió bajo una nueva patria, arropado por su bandera con la estrella solitaria y sin amo. Libre como su corazón y como su alma inquebrantable, firme, recia y bondadosa.

Se nos fue mi monseñor y con él se nos fue a todos una etapa más de nuestras vidas en destierro. paz a sus restos.

Los Teques, 20 de marzo de 2003

Robert Alonso robertalonso2003@cantv.net

Visite la página del funeral de Monseñor Boza Masvidal: www.geocities.com

www.quicken.com By Dimitra DeFotis Wednesday, March 19, 2003 11:59 PM ET Printer-friendly version

ON THE VERGE of another Persian Gulf War, the United States has eked out unexpected support from Saudi Arabia.

When it was revealed that most of the September 11 hijackers held Saudi passports, the backlash was palpable: alternate oil alliances would be cultivated.

Fast forward 18 months: the Saudis have allowed the number of U.S. troops, mostly based at the Prince Sultan Air Base, to double in the past month. There are now roughly 7,500 coalition troops in the Kingdom of Saud.

And with Iraq's 1.8 million barrels of daily crude production dwindling as war looms, the Saudis have been surprisingly vocal about picking up the slack, and are now pumping roughly 9.5 million barrels a day.

So while some in the Organization of Petroleum Exporting Countries won't take action perceived as supporting the United States, the Saudis have quietly lent support to the U.S. mission. (The invasion could start within hours, possibly as early as 8 p.m. tonight.)

The Saudis reportedly have 50 million barrels of oil already in tankers, one way it can prevent a precipitous drop in oil prices. They want sustained oil prices near $25 per barrel to encourage consumption.

Prices near $25 should boost global economies by lowering energy costs for consumers and manufacturers, and help some exploration and integrated oil companies whose shares still reflect uncertainty about the impact of the war.

"The Saudi government and the U.S. government go back 60 years," says Michael Rothman, a senior energy market specialist at Merrill Lynch. "And while the relationship might be strained, there is mutual interdependence. The Saudis are the source of supply outside emergency stocks."

The Saudis could produce as much as 11 million barrels a day with more investment, says Tom Petrie, president of Petrie Parkman & Co. in Denver. Saudi Arabia has proven reserves of 262 billion barrels -- 25% of the world's proven reserves and Iraq places second with 113 billion, according to Fadel Gheit, an analyst at Fahnestock & Co.

Oil prices, closing below $30 Wednesday, have dropped 25% from recent highs near $40 as traders conclude U. S. military strength will prevent catastrophic destruction of oilfields and distribution facilities.

In 1991, after U.S.-led efforts were declared a success, oil prices dropped to near $20. OPEC can live with those prices, that's what the major oils budget for, and it provides a great operating environment for exploration and production companies, says John Kilduff, an energy trader at Fimat USA, a New York-based commodity brokerage.

Several energy analysts tell Barron's Online that the remaining war premium of as much as $5 per barrel will dissipate and that oil prices will fall to $28 near term and settle near $25. That's higher than the two-decade average of $20, but inventories are low partly because of disrupted Venezuelan production (see Weekday Trader, " Venezuela Crisis May Fuel Oil Firestorm," December 10, 2002).

Saudi Arabia is almost betting on a quick U.S. victory in Iraq by "pumping as much as it can get out of the ground, because in a week or two, prices could be much lower," says Gheit.

So, which energy companies does all of this help?

In the past year, while oil prices are still up more than 20%, shares in both refiners and energy equipment companies have fallen roughly 24%, according to Thomson Baseline. Integrated oil companies have not fared much better, losing 21%, and drillers are down 18%. Oil and gas exploration companies have held up best, declining 10%.

Roger Mortimer, lead manager of the AIM Global Energy Fund, expects to see oil near $25, but that some energy stocks price in $20 oil.

One is independent Canadian E&P Talisman Energy (TLM, news) . He thinks its shares may not reflect a positive: Talisman sold its business in Sudan last October because investors did not like the political volatility of projects there. Meanwhile, shares are "still extremely attractively valued vs. other companies with its size and scope."

Talisman's international exploration plan launched in 2002 is its most aggressive ever. It expects a roughly 10% annual gain in production in the next two years, according to Standard & Poor's.

The shares trade at a 38% discount to their median forward price-to-earnings multiple of 17.8 times, according to Baseline. And it is trading below its historical discount to its E&P peers.

The other stock Mortimer likes is BP (BP, news), whose diverse businesses buffer it from oil price volatility. That's because it can make up for higher crude prices with higher gasoline prices in the near term -- and can benefit long term from sustained prices near $25 that will spur more exploration projects.

Mortimer thinks earnings estimates will be ratcheted upward as crude prices stabilize, and in the meantime, investors get a dividend (see At A Glance).

"We like BP. You have company with a very strong balance sheet, low net debt, a tremendous amount of cash flow and has been buying back stock," Mortimer says.

Of course, prices would spike higher if Saddam attacks Saudi or Kuwaiti oil fields, and the idea of a quick war is absurd to many Middle East experts.

But for now, Saudi Arabia's massive oil reserves, ramped up production and cooperation with the U.S. should help stabilize volatile oil prices – and calm jittery investors.

news.independent.co.uk By Andrew Gumbel in Los Angeles 20 March 2003

The United States faced a diplomatic showdown yesterday with its old adversary Cuba, after Fidel Castro made clear his displeasure with the Bush administration's new envoy. Mr Castro ordered the arrests of dissidents who had made contact with James Cason and imposed strict travel restrictions on all American diplomats on the island.

A government spokesman said "several dozen people directly related to the conspiratorial activities of Mr Cason" would be put on trial.

Members of the US mission in Havana have been told they now have to seek prior approval before travelling outside the area immediately surrounding the capital. They previously had to notify the authorities of such trips but did not have to seek approval for them.

According to Cuban human rights activists, the arrests constitute one of the biggest recent crackdowns on dissidents. "This is the most intense wave of political repression of the last few years. The figure is high. We are talking of two or three dozen arrests," Elizardo Sanchez, a veteran activist, told Reuters. Government supporters argued that the arrests were a response to the blatant efforts by the Bush administration to foment dissent and plot Mr Castro's downfall.

President Bush has taken a noticeably harder line on Cuba than his predecessor, refusing to lift the US embargo and travel restrictions between the two countries. Some members of the president's Republican Party have lumped Cuba, along with newer left-wing governments in Brazil, Ecuador and Venezuela, into a "new axis of evil" to match Iraq, Iran and North Korea.

Mr Cason, who heads the US Interests Section, has become embroiled in awar of words with Mr Castro in recent weeks because of his contacts with leading dissidents. He has been accused of handing out money, a charge he denies, and hatching anti-government plots.

During a meeting with the opposition attended by international journalists last month, Mr Cason said: "The Cuban government is afraid: afraid of freedom of conscience, afraid of freedom of expression, afraid of human rights."

That meeting angered Mr Castro so much that he threatened to close the US mission. "Anyone can see that this is a shameless and a defiant provocation," Mr Castro said. The US State Department described such criticisms as "derogatory".

The US mission's contacts with dissidents were already a point of contention under Mr Cason's predecessor, Vicki Huddleston. But the relationship has caused more serious ructions since Mr Cason's arrival last September. A veteran of US foreign policy in Latin America ­ which has taken a notoriously hard line on any government that smacks of left-wing populism or resistance to US trade and military objectives ­ Mr Cason has prided himself on visiting every inch of the island over the past six months, clocking up more than 6,000 miles of travel.

According to reports in the US media, Mr Cason has not only broadened contact with dissidents. He has also organised the distribution of anti-Castro books and documents and handed out shortwave radios to enable Cubans to listen to anti-government broadcasts from Florida. He has also encouraged anti-government journalists and provided them with the hardware to transmit their reports abroad by e-mail.

There is no disagreement in the United States about the desirability of creating a more open society in Cuba. Last May, in an unprecedented, uncensored broadcast sanctioned by the Castro government, Jimmy Carter, the former US president, gave an address supporting an end to the economic embargo but urging greater civil liberties, including free speech, in Cuba.

Where the Bush administration differs from Mr Carter or Bill Clinton is in its rejection of all dialogue and its openly expressed desire to see Mr Castro's downfall. As in other parts of the world, it seems to prefer the politics of confrontation over negotiation and diplomacy.

The US Interests Section, which was opened by President Carter in 1977, occupies itself principally with migration and visa issues. It has processed more than 125,000 visa and refugee-status applications since 1994 under US-Cuba migration accords.

• A Cuban DC-3 airliner with 35 people aboard landed in Key West, Florida under US military escort in the early hours of this morning, the Federal Aviation Authority said.

www.sfgate.com FABIOLA SANCHEZ, Associated Press Writer Wednesday, March 19, 2003
(03-19) 13:17 PST CARACAS, Venezuela (AP) --

Hundreds of opponents of President Hugo Chavez rallied Wednesday to show support for a strike leader who dodged charges of treason and rebellion by winning asylum in Costa Rica.

Supporters of Carlos Ortega cheered and waved Venezuelan and Costa Rican flags in front of the Costa Rican embassy in Caracas.

The labor leader slipped into the embassy Friday after hiding from authorities for two weeks. He is waiting for the government to give him safe conduct to Costa Rica, which granted him asylum for "humanitarian reasons."

"I'm here to show him my solidarity," 78-year-old Maria Diaz said at the rally. "He fought against a dictatorship, and I am thanking him for that."

Ortega led a two-month strike designed to force Chavez's resignation or early elections. The strike fizzled last month without achieving its goal but crippled the world's No. 5 oil exporter and cost Venezuela $6 billion. Venezuela was one of the largest U.S. suppliers before the strike.

Opponents accuse Chavez of trampling on democratic institutions and alienating investment with leftist policies. The president says his foes want to oust a democratically elected leader and restore power to two corrupt political parties that ruled Venezuela for four decades.

Foes are pushing to hold a referendum that would end Chavez's rule next year. But the fractious opposition is struggling to recover from the failure of the strike.

The showing of hundreds of people at Wednesday's protest was disappointing for a movement that drew up to 1 million people to marches last year.

Strike leaders urged Chavez's opponents not to give up, saying the president was moving to crack down on adversaries.

"The word is street, street, street and more street. Not one step back!" said Horacio Medina, an executive fired from the state oil monopoly, Petroleos de Venezuela S.A., for leading the walkout.

Medina and six other former executives emerged from hiding Tuesday after a judge threw out warrants for their arrest on charges of interrupting and damaging the country's fuel supply. Prosecutors have said they will appeal that ruling.

Co-strike leader Carlos Fernandez, president of Venezuela's largest business association, is under house arrest pending trial for rebellion and instigation.

With Ortega gone, the opposition would lose one of Chavez's boldest foes and one of the few survivors of the political order the president has striven to dismantle.

Ortega, 56, dealt one of the first blows to Chavez by winning the presidency of Venezuela's largest labor union two years ago, frustrating Chavez's attempt to seize control of one of the opposition's only strongholds.

Oil production is recovering. The government says output is 3 million barrels a day -- almost what it was before the strike -- while fired executives put the figure at 2.4 million barrels.

But problems persist. The government said it would try Thursday to restart the main gasoline producing unit at the El Palito refinery, which has been down for a week because of a mechanical failure. Delays in restarting it could force Venezuela to continue importing gasoline to prevent shortages.