<a href=cowra.yourguide.com.au>Please Read Wednesday, 26 March 2003 Local petrol station operators are crossing their fingers that this week's drop in crude oil prices will filter through in the next two weeks. Cowra BP manager Matthew Porter said "he would very much like to see it happen" but could not promise that prices would fall under the magic $1 a litre mark. After rising more than 45 per cent since November, the price of oil eased to $US 33.80 a barrel earlier this week - after spending months in the high thirties. High seasonal demand in the United States and fewer imports from Venezuela, whose oil industry was crippled for months by a nationwide strike, had affected world supplies. The price fall this week appears to be based on hopes that the war between the United States and Iraq will have a limited and beneficial effect on the world's oil supply. However, prices are still volatile, with the biggest fear in the market that oil facilities in Middle Eastern countries such as Kuwait or Saudi Arabia, could be attacked. "As long as such as a price fall is sustained, it could see prices fall for us," Mr Porter said about the trickle down to local levels. Prices at BP Cowra are 108.9 cents per litre for unleaded, 111.9 cents per litre lead replacement, premium, 112.9 cents per litre and diesel 108.9 cents. Mr Porter said price drops do take time to filter through - between ten days to two weeks. Farmers in particular, he said, have been caught by the high prices. Good falls of rain have brought the need to start working the ground, requiring high amounts of fuel for farm machinery and equipment needs. He doesn't like paying the prices either. "I don't like it one little bit - we are backed into a corner," he said. He explained that prices at the bowsers are directly linked to what suppliers pay and that Cowra, despite the extra distance is extremely competitive, with prices comparable to regional centres such as Bathurst and Orange.

March 26, 2003 European Briefing by Carl Mortished

BRITAIN is not fighting a war for Iraqi oil, which is a great pity, because it would be a good thing if we did.

We should take the oil and give it to the Iraqi people. Take it from the bureaucrats, deny it to the multinationals and give it away. In so doing, we should end decades of stagnation and nationalisation and begin the process of ending the oil dependence of the nations of the Middle East.

The anti-war protesters, complete with their “Stop Esso” banners, have got it partly right but mostly wrong. They hate the idea of war for profit but, in the end, the issue is not whether profit is earned but by whom.

It is not just the young, gentle and liberal who worry about the link between war, profit and oil. Hands are wringing in the boardrooms of European oil companies. BP, Shell and TotalFinaElf are watching with anxiety as US marines open a path for Boots & Coots, the American oil firefighters. Will there be an open tender for oil concessions? Will ExxonMobil and ChevronTexaco win all the prizes? What about our share?

TotalFinaElf is in a bit of a flap. Over in Paris, the media-shy French company finds itself, again, in the front line. A workaday sort of company, Total once happily left the political limelight to its flamboyant and corrupt sister company, Elf. Since the clean-up at Elf and its subsequent merger with Total, the troubles have come thick and fast. First, there was the fouling of Brittany’s beaches by the oil tanker Erika, then a nasty explosion in a fertiliser plant in Toulouse that left 29 dead.

Today, Total finds itself a punching bag for every insecure American with a grudge against the French. Even the normally sedate Wall Street Journal has joined in, bashing the oily frogs. In an editorial entitled “A war for France’s oil”, the newspaper accused the French of undermining sanctions against Saddam in its pursuit of oil production contracts in Iraq.

The accusation is a little disingenuous because the so-called Total contracts — these cover two monster oilfields, Majnoon and Nahr Umar, believed to contain about 30 billion barrels — are today hardly worth a fig.

Total knows its interests are at risk, hence the anxiety and frequent protestations that the Americans must ensure fair play. Total signed nothing of merit. Had it done so it would have been in breach of UN sanctions. Were a future Iraqi government to deny Total, the French firm would have trouble claiming damages without admitting the existence of a deal that flouted the UN rule.

But the French will probably recover something for their pains. After all, Total was an investor in Iraq before anyone else. Its predecessor, Compagnie Française des Petroles, discovered oil at Kirkuk in 1927.

And even if the hawks in Washington scream for vengeance, the oilmen in Houston are more pragmatic. Total has knowledge, and for that ExxonMobil will be happy to deal.

Tease attracts the horsemen

THEY have interests in common. The four horsemen of the Apocalypse — ExxonMobil, BP, Shell and TotalFinaElf — are riding hard to the Middle East because they must if they are to survive.

The multinationals are struggling to raise their game. Of the four horsemen, only Total is raising its oil output significantly. ExxonMobil has stagnated for several years. The reason is simple; outside of the Middle East, the easily accessible oil is gone. The North Sea is in decline, as is Alaska. Oil companies are now forced to spend huge sums getting oil in dangerous locations, sometimes in water depths of several kilometres.

The Gulf is a tease. According to BP’s figures, the region accounts for 65 per cent of the world’s known reserves but only 29 per cent of global production. You may think that ExxonMobil is the world’s biggest oil company, but in terms of output, it is Saudi Aramco. State oil companies, includng Aramco, Iran’s NIOC, Pemex of Mexico and PdVSA of Venezuela are the true four horsemen while Exxon ranks only fifth, according to the Centre for Global Energy Studies.

It rankles. Ever since they were chucked out by Arab nationalists in the 1970s, the multinationals have been clamouring to get back in. Producing oil from Arabian desert sands is a lot cheaper than west of the Shetlands and a lot safer.

But the door remains shut apart from a few crumbs distributed by Iran in the form of buybacks, a sort of oil contracting, in which the foreign investor is paid a fixed return for production. Desperate for alternatives to Opec, Washington has lobbied Nigeria, hoping to lure the oil producer from the cartel, but to no avail.

It is highly unsatisfactory on all sides. Exxon, BP, Shell and Total are running out of growth opportunities, but the Gulf state producers have failed to deliver prosperity. The oil cash has been squandered and the Gulf countries, including Iraq, remain passive rent collectors, slaves to the volatile oil price, offering no future to their citizens.

Make the Iraqis shareowning Sids

THERE is an alternative. The privatisation of Russia’s oil industry seemed, then, an embarrassing shambles. The Government gave shares in oil producers to banks in exchange for loans and a small band of ruthless men became very rich indeed. But the Russian industry thrives today, output is growing and oil cash is starting to be recycled into other industries.

Russian companies, such as Lukoil, have their fingers in Iraq, but there are other parallels. The Iraq National Oil Company (INOC) is really three companies –– northern, southern and central units.

We should insist that there be no sweetheart deals with Exxon and that the Total “contracts” be shredded. Instead, each man, woman and child in Iraq should be given three pieces of paper representing a share in three Iraqi oil companies.

Rough calculations based on the discounted value of 30 years of future production, suggest the shares might be worth $15,000 (£9,500) to each Iraqi. That could be underwritten by the Government to ensure no exploitative Russian-style share robbery took place.

With just a shuffle of paper, each Iraqi Kurd, Sunni and Shia Arab would have the capital to set up a small business, an empowerment of untold proportions. Of course, there would be shenanigans and even Iraqi oil oligarchs. Some thug from Tikrit might one day even buy his way on to the board of the Royal Opera House. A small price to pay.

 carl.mortished@thetimes.co.uk 

The White House President George W. Bush today announced his intention to nominate five individuals and appoint 23 individuals to serve in his administration:

The President intends to nominate John F. Maisto of Pennsylvania, to be the Permanent Representative of the United States to the Organization of American States, with the rank of Ambassador. Ambassador Maisto currently serves on the National Security Council as Special Assistant to the President and Senior Director for Western Hemisphere Affairs. Prior to his appointment to the NSC, he served as the United States Ambassador to Venezuela and as Ambassador to Nicaragua. He also previously served as Deputy Assistant Secretary of State for Central American Affairs. Ambassador Maisto was recognized with the Superior Honor Award in 1998 and 1982, the Superior Group Award in 1988 and the Meritorious Honor Award in 1986. He received his bachelor's degree from Georgetown University's School of Foreign Service and his master's degree from the University of San Carlos, Guatemala.

The President intends to nominate John F. Bardelli of Connecticut, to be United States Marshal for the District of Connecticut, for a term of four years. Mr. Bardelli currently serves as a consultant for the Commission on Accreditation for Law Enforcement Agencies. In 2001, after a 35-year career with the Connecticut Department of Public Safety, Mr. Bardelli retired as Deputy Commissioner of Public Safety and Commanding Officer of State Police. He currently serves as an active member of the International Association of Chiefs of Police and as a lifetime member of the Connecticut Police Chiefs Association. Mr. Bardelli is a graduate of the University of New Haven, and received his law degree from the University of Connecticut.

The President intends to nominate Adam N. Torres of California, to be United States Marshal for the Central District of California, for a term of four years. Mr. Torres currently serves as Supervisory Special Agent for Criminal Investigations with the Internal Revenue Service. He is responsible for overseeing criminal investigations of sophisticated financial crimes and criminal organizations, including violations of internal revenue laws, Bank Secrecy Act and other related financial crimes. He is a member of both the Federal Law Enforcement Officers' Association and the National Latino Police Officers' Association. Mr. Torres is a graduate of California State University, San Bernardino.

The President intends to nominate Robert N. Davis of Florida, to be a Judge of the United States Court of Appeals for Veterans Claims, for a term prescribed by law. Mr. Davis currently serves as Professor of Law at Stetson University College of Law. His past teaching appointments include the University of Mississippi School of Law and Georgetown University Law Center. Earlier in his career he served as Special Assistant to the U. S. Attorney for the District of Columbia and as General Attorney for the U.S. Department of Education. Mr. Davis currently serves in the United States Navy Reserve Intelligence Program. He is a graduate of the University of Hartford and earned his law degree from the Georgetown University Law Center.

The President intends to nominate Marsha E. Barnes of Maryland, to be Ambassador Extraordinary and Plenipotentiary of the United States of America to the Republic of Suriname. Ms. Barnes currently serves as Assessor for the Board of Examiners at the Department of State. Her previous domestic assignments include Director of the Office of Caribbean Affairs and Deputy Executive Director of the Bureau of Consular Affairs. She has served overseas as Chief of the Consular Section in Bonn and as a visa officer in Moscow. Ms. Barnes graduated from Lake Forest College in Lake Forest, Illinois.

The President intends to appoint Gary Ray Mitchell of Kansas, to be the Federal Member of the Kansas-Nebraska Big Blue River Compact Administration (Kansas and Nebraska).

The President intends to appoint the following individuals to be Members of the Advisory Committee on the Arts, John F. Kennedy Center for the Performing Arts: Joan D. Austin of Oregon Kristen A. Avansino of Nevada Kathryn Burke of Wisconsin Robert J. Dellenback of Wyoming Mary Galvin of Illinois Janet H. Geary of Oregon Arthur J. Hackney of Alaska Diana Kelley of Kansas Arthur K. Langlie of Washington James V. Nepola of Iowa Sandy Peltyn of Nevada Evelyn J. Wiginton of Alabama

The President intends to appoint the following individuals to be Members of the United States Holocaust Memorial Council: For the remainder of a five-year term expiring 01/15/08: Debra Lerner Cohen of the District of Columbia Solomon M. Devinki of Missouri Donald Etra of California David M. Flaum of New York Eric F. Ross of New Jersey Richard Sambol of New Jersey Merryl H. Tisch of New York

The President intends to appoint the following individuals to be Members of the Commission for the Preservation of America's Heritage Abroad: The President intends to appoint Gary J. Lavine of New York (Speaker), for the remainder of a three-year term expiring August 2, 2005. The President intends to appoint Rachmiel Liberman of Massachusetts (Senate President Pro Tempore), for the remainder of a three-year term expiring July 13, 2005. The President intends to appoint Harriet Rotter of Michigan (Speaker), for the remainder of a three-year term expiring August 9, 2004.

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World oil prices fell back on signs of an uprising against President Saddam Hussein in Iraq's second largest city of Basra.

US light crude fell 69 cents to $US27.97 a barrel after a $1.75 jump on Monday.London Brent crude dropped $1.28 a barrel to $US24.81.

The British chief of staff at Central Command battle headquarters said on Tuesday early indications suggested an uprising might have started in Basra.

The reports reversed early gains made as Iraqi forces resisted a US-led military thrust toward Baghdad while tribal violence in Nigeria kept nearly 40% of the country's crude output shut.

Oil fell 25% last week as traders bet on a short war with little damage to Iraq's oil industry. Before the conflict, Iraq exported about 1.7 million barrels per day (bpd) to the 77 million bpd world market.

But confidence in a quick war waned after the weekend as US and British forces suffered casualties and saw slower progress.

Meanwhile, a series of bloody clashes in Nigeria forced closure of just over 800,000 bpd of the 2.2 million bpd produced by Western oil firms in the West African OPEC nation.

Ethnic groups in the oil-rich Niger Delta have said they were battling for a greater share of the country's oil wealth.

Nigeria is one of the top six oil exporters to the United States, where fuel supplies have been running at 27-year lows partly due to an oil workers' strike in Venezuela.

Nigeria, which averaged 560,000 bpd to US refiners last year, where its crude is valued for its high gasoline content, also exports to Europe and Asia.

"Nigerian crude is not the kind of stuff you want to be short of," said Paul Horsnell, oil analyst at JP Morgan. "It's very serious. It's not a little local disturbance."

OPEC said it could make up any shortfall in supply from Nigeria, its fifth largest producer.

The group has also pledged to make up for the disruption to Iraqi exports, but now has only the slimmest of spare capacity cushions.

Wednesday March 26, 5:29 AM

By Anthony Harrup Of DOW JONES NEWSWIRES

MEXICO CITY (Dow Jones)--High oil prices and crude export volumes not seen in more than four years gave Mexico a trade surplus in February, its first since mid-1997.

But not all was rosy in the trade numbers, which also pointed to a drag on investment and continued weakness in the economy.

The Finance Ministry reported Monday that the country registered a trade surplus of $65 million in February, aided by a 110% year-on-year jump in petroleum exports to $1.66 billion.

That included $1.47 billion from crude oil exports, slightly below the $1.55 billion earned in January, which had more days.

Oil prices soared in the lead-up to the war on Iraq, aided also by a strike earlier this year in Venezuela that reduced the South American country's output to a trickle.

As a result, Mexico earned nearly $28 a barrel for its mostly heavy crude in the first two month of the year, while ratching up export volume to 1.79 million barrels a day in January and 1.88 million b/d in February.

State oil monopoly Petroleos Mexicanos (E.PEM), or Pemex, has had its taps on full as Mexico takes advantage of the virtual suspension in the global supply agreements it helped to implement in April 1998, along with the Organization of Petroleum Exporting Countries and other independent producers.

February marked the first time since late 1998 that Pemex's exports exceeded 1.8 million b/d, and it was the highest monthly average since March of that year, when exports averaged 1.93 million b/d.

Cashing In On Commodities

Higher oil prices, though, could represent a double-edged sword for Mexico and some of its southern neighbors.

"Latin America usually does well during periods of global conflict," wrote Walter Molano of Connecticut-based BCP Securities in a a report Tuesday.

"Of course, higher commodity prices mean better export earnings for the region. There is one caveat. A very prolonged war, with serious disruptions in oil production could have an adverse impact on Latin America," Molano added.

Bank of Mexico Governor Guillermo Ortiz and Finance Minister Francisco Gil noted the flip side to higher oil prices when they gave a news conference last week at the start of the war.

Destruction of oilfields in the Middle East or other supply disruptions could push the price too high, choking economic recovery with a corresponding negative effect on the Mexican economy, Gil said.

In the meantime, the extra oil income will allow the federal government to keep states happy with additional budget transfers, without threatening the fiscal deficit target of 0.5% of GDP.

Silver Lining Has A Cloud

While notable because of the surplus, February's trade numbers weren't all good news. They suggested that economic activity remains weak, and that little has been gained from a depreciating peso, which at MXN10.94 to the dollar in February was 17% weaker than in the year-ago month.

The decline in exports from the export-focused maquiladora manufacturing sector points to continued weakness in the U.S. economy, said Mario Correa, an economist at Scotiabank Inverlat. The U.S. absorbed 89% of Mexico's $161 billion in exports last year.

At the same time, the 14.5% drop in capital goods imports suggests weak investment, or even a contraction, Correa added.

And with consumer imports up 11.5% in February, "I don't see any important effect of the exchange rate on trade," Correa added.

Mexico's external accounts remain in good shape, given that the current account deficit was a modest 2.2% of gross domestic product in 2002 and the government projects only a slight increase, to 2.8% of GDP, for this year.

Still, the message behind the recent trade numbers is one of weak investment and a sluggish U.S. economy, said Correa.

-By Anthony Harrup, Dow Jones Newswires; (5255) 5080-3450, anthony.harrup@dowjones.com