<a href=www.jihadunspun.com>JIHAD UNSPUN Jun 08, 2003

The US conquest and occupation of Iraq has given the Americans control of one of the world’s major oil producers, one that many believe has untapped reserves that could rival Saudi Arabia’s and Russia’s. US control could also weaken the grip of the Organization of Petroleum Exporting Countries (OPEC) on world markets and, in particular, Saudi Arabia, the cartel’s dominant member.

So as the Americans help restore Iraq’s oil industry, badly run down by two wars and 13 years of United Nations sanctions, the key question is whether the country will remain in OPEC now that it has resumed oil exports, albeit at a modest level, after the UN Security Council unshackled it from sanctions imposed in 1990.

The Americans have long sought to weaken OPEC, which has been feeling growing pressure from non-cartel producers, particularly Russia, which is vying with Saudi Arabia for dominance of the world oil market. It has also been grappling with what many of its members see as an alarming excess in global oil supplies. This struggle for influence over the oil market should also be seen as part of a wider battle for political leadership in the Gulf. Former Iraqi Oil Minister Fadhil Chalabi, a cousin of Ahmed Chalabi, the Pentagon-backed leader of the main exile group, the Iraqi National Congress (INC), believes his country could double its proven reserves of 113 billion barrels through widespread exploration and become a “super-giant producer” like Saudi Arabia, putting 10 million barrels on the market every day. That is clearly a scenario in which Iraq is outside OPEC.

Iraq has a geographic advantage that cuts the cost of reaching Western markets ú pipelines that link it to Turkey’s Mediterranean coast. (There are other pipelines to the Red Sea, which the Saudis helped build during the 1980-88 Iran-Iraq war, but Riyadh is unlikely to allow Baghdad to use them if it breaks with OPEC.) With that kind of output, with low production costs attracting consumer states away from higher-cost regions like the North Sea, an Iraqi oil industry managed by US-based companies would have the capacity “to bring OPEC to its knees,” according to Chalabi.

There are divisions within OPEC itself, particularly over the cartel’s quota system, designed to keep prices at or above $25 a barrel. Algeria, Nigeria and some of the other members are demanding larger shares of OPEC’s production total, which would have to be at Saudi Arabia’s expense. Iraq’s de facto oil minister, Thamir Ghadhban, said on May 26 that “we really don’t have any problem with OPEC” and that the question of withdrawing from the cartel was not currently on the agenda of the US-appointed administration running Iraq. US Energy Secretary Spencer Abraham said whether Iraq stays in OPEC is entirely up to the Iraqis. “We will support their decision, not impose a decision,” he declared on April 28.

But Philip J. Carroll, the US executive chosen by the Pentagon to advise Iraq’s post-war Oil Ministry, has suggested that Iraq might be best served by disregarding OPEC quotas, the strongest indication so far that the Americans might push whatever government emerges in Iraq into breaking ranks with the cartel. It also underlines the repeated allegation that one of the imperatives that drove the Americans into invading Iraq in the first place was to control its oil resources, the better to lessen its reliance on Saudi Arabia.

As it is, the return of Iraq ú which has operated outside OPEC since the 1990 invasion of Kuwait ú as a major exporter under a new government would cause considerable uncertainty. Iraq has the second-largest proven oil reserves in the world after Saudi Arabia, and its return to the market unconstrained by the cartel could further erode OPEC’s already limited ability to set prices. It might even trigger a price war that would weaken the Saudis and other cartel members. That would, of course, delight the Americans (and other consumers), who have been hoping to break OPEC’s grip on pricing for many years. Carroll, formerly Royal Dutch/Shell’s chief in the US, insists that he is not the instrument of an Iraqi oil policy that would sabotage OPEC. But as he told The Washington Post in mid-May: “In the final analysis, Iraq’s role in OPEC or in any other international organization is something that has to be left to the Iraqi government.” Already, officials in the Oil Ministry ú now supervised by US forces ú are actively considering pulling Iraq out of OPEC and exporting as much oil as possible, as soon as possible, to maximize revenue once the oil fields have returned to full capacity.

Earlier this year, US-backed Iraqi exiles, including Ahmed Chalabi, whom the Pentagon wants to see in key government posts drew up a policy document which recommended that Baghdad renounce OPEC’s production restrictions, and noted that it may have to withdraw from the cartel if it sought to impose unacceptable ceilings.

Before the 1990 invasion of Kuwait, Iraq was producing more than 3 million barrels per day (bpd). With the imposition of UN sanctions in 1990, it was excluded from OPEC’s production quotas. Under the UN’s “oil-for-food” agreement it was allowed to produce all that its increasingly dilapidated oil industry could manage and before the US invasion was producing around 2 million bpd. Output ground to a standstill because of the conflict but is expected to resume on a limited scale in the next few weeks.

Iraqi oil officials estimate the country will be able to export around 750,000 bpd by late June, with expectations that this can be boosted quite rapidly to 1.5 million bpd, half of which would be for domestic consumption. Production is expected to hit the pre-1990 OPEC quota level of 3 million bpd within 18 months and 3.5 million bpd six months after that. Then, by opening up fields that have gone untapped because of the sanctions, it is anticipated that production could reach as high as 6 million bpd in five or six years ú almost as much as Saudi Arabia’s output level.

That would amount to nearly one-quarter of OPEC’s current targeted production of 24.5 million bpd and would mean that other OPEC members would have to give up a lot of output ú and revenue ú to accommodate Iraq. With increased output pushing prices down, OPEC would be in trouble. The Saudis, as the cartel’s largest producer with nearly one-third of its output, would be under intense pressure to lower their output.

As it is, OPEC’s share of the world oil market has dropped from a peak of around 90 percent in the 1970s to around 39 percent now. This is because since the OPEC-induced oil shocks of the 1970s and the recession they caused, the US and other industrialized states have sought to obtain more oil from non-OPEC producers. Current US and European efforts to open up giant new fields in West Africa, the Caspian Basin, Siberia and elsewhere will further undermine OPEC’s clout.

OPEC is scheduled to meet in Qatar on June 11 to consider a new cut in production ú currently running at 25.4 million bpd ú to accommodate Iraq’s return to the market and avoid a possible price collapse.

Before the US invasion, former Venezuelan Oil Minister Humberto Calderon opined: “After the war there will be a substantial increase in Iraqi oil production and I wouldn’t be surprised is schemes emerged to weaken, if not destroy, OPEC.”

The US-British declaration that they are the occupying powers and will continue to run Iraq underlines their control of the country’s oil industry. The coalition’s failure to produce even a transitional government by now means that it will remain in charge for a lot longer than expected ú up to a year, according to US Defense Secretary Donald Rumsfeld. Even proposals for an Iraqi government have been downgraded to the level of an “Iraqi authority” with lesser, though still undefined powers.

The Bush administration ú which Victor Poleo, professor of graduate studies in oil economics at Central University in Caracas, Venezuela, calls “an oil directorate” because of its strong links to the oil industry ú has already made clear that the lion’s share of the fat contracts worth an estimated $30 billion-$100 billion will go to US firms. That includes refurbishing and exploiting the oil fields. Russia, France and China, which had supported Baghdad in the UN Security Council in 1991-2003, are unlikely to be allowed to implement the major oil contracts they signed with Saddam Hussein’s regime, which means urgently needed investment from that quarter will not be forthcoming. The Americans are expected to urge the Iraqis to privatize what had been a state-owned industry that enriched Saddam and his henchmen on a vast scale.

Privatization is anathema to most of OPEC, particularly the Saudis, but if Iraq goes that route, opening up to large amounts of outside investment, it would put the other producers under pressure to do the same since they are increasingly in need of investment to upgrade and expand their oil industries, in most cases their primary revenue-earner. Such a move would also weaken OPEC’s influence.

Carroll has said that Iraq might best be served by exporting as much oil as it can and ignoring the quotas set by OPEC, giving the strongest indication so far that a future Iraqi government might quit the cartel that Baghdad helped found in 1960.

He told The Los Angeles Times on May 16: “Historically, Iraq has had, let’s say, an irregular participation in OPEC quota systems. They have from time to time, because of compelling national interest, elected to opt out of the quota system and pursue their own path. They may elect to do that same thing. To me, it’s a very important national question.”

Leading figures in OPEC, and elsewhere in the oil industry, do not believe the Iraqis themselves will quit the cartel, but could do so with US prodding. Saudi Oil Minister Ali al-Naimi declared in late May that he saw no reason why OPEC could not cope with Iraq’s resumption of exports and said it would be “folly’ to leave the market to determine oil prices.

Maintaining oil prices, and revenues, would be a key priority for any Iraqi government, he noted. “Iraq, like other producing states, be they in or out of OPEC, is keen to realize a fair and stable income from its petroleum resources,” he said, “and more particularly for the reconstruction and rebuilding of its production capacity.”

Fadhil Chalabi says he prefers staying within OPEC, but he also stressed that “Iraq is going to need a lot of money in the next five years ú up to $300 billion … Iraq must maximize revenue from its oil ú with or without OPEC.”

By Joseph Contreras NEWSWEEK INTERNATIONAL

June 16 issue — For a sense of the new forces stirring inside Mexico today, consider the Legion of Christ. The once obscure religious order, founded 62 years ago in the basement of a Mexico City town house, ranks as the world’s fastest-growing branch of Roman Catholicism. It attracts more recruits to the church’s aging priesthood than any other Catholic congregation on the planet, per capita. The legion’s ultra-orthodox doctrine mirrors that of Pope John Paul II, and its influence reaches into the highest echelons of Mexico’s business and political elites.         THE LEADER OF this order—the octogenarian priest Marcial Maciel, based in Rome—hasn’t lived in his native land for more than a half century. Maciel was just 20 years old, not yet ordained, when he established the legion in 1941 as a Catholic army of soldiers in soutanes, battling to “establish the kingdom of Christ throughout the world.” In practice, that has translated into the courtship of Latin leaders across the hemisphere—and the order has succeeded beyond his wildest dreams. No other religious figure wields more influence in Mexico than Maciel—not the ranking Catholic prelate, Cardinal Primate Norberto Rivera Carrera, nor any of his 110 bishops. Close friends and associates include Lorenzo and Roberto Servitje, the head of Mexico’s multinational food giant Bimbo, and the country’s First Lady, Marta Sahagun de Fox.         The Legion of Christ is no ordinary religious order. Instead of running neighborhood parishes, its followers concentrate on missionary work and educating children of the faithful, the list of whom read like a Who’s Who of the Mexican private sector. The legion owns an impressive network of 10 universities and 154 mostly upmarket private schools—prompting some wags in the Mexico City press corps to dub the order the Millionaires of Christ. Its conservative teachings and strict discipline have struck a chord with millions of Latin American parents—and not just affluent ones. The legion also runs 17 Mano Amiga (Spanish for “friendly hand”) schools dedicated to the education of indigent kids—nearly 11,000 in total, scattered across Mexico, Colombia, Chile, Argentina, El Salvador and Venezuela.         There is a darker, even somewhat medieval side to the Legion of Christ. Former members of the order say that young seminarians to this day are required to practice self-flagellation as a way of atoning for their sins; many wear an uncomfortable device around their thighs to discourage so-called impure thoughts. Legion officials have reportedly hired private detectives to snoop on some of their own priests. In a 1997 investigative report in a U.S newspaper, nine ex-legionnaires accused Maciel himself of sexual abuse, a charge he has indignantly denied. That same article revealed the Vatican had absolved Maciel of similar charges in an investigation in the 1950s.         None of this has dimmed the legion’s influence. If anything, it looks set to grow under the country’s center-right president, Vicente Fox. The former Coca-Cola executive’s triumph in the 2000 election toppled the Institutional Revolutionary Party—and seemed to threaten many of the overtly anticlerical laws and policies adopted by the party during its 71-year reign. In Fox, the country’s first openly devout Catholic president in nearly 100 years, many conser—vative Mexicans see their best hope yet for restoring the church to its rightful place of social authority.         Fox is by no means in thrall to the Catholic establishment. Only two weeks ago the government announced that five unnamed clerics could face steep fines for allegedly telling Catholics how to vote in next month’s congressional elections. Still, even as many of his political reforms have stalled in Congress, the Mexican president has pushed through measures that please the church. Two years ago he abolished a longstanding ban on clerical visits to prisons and public hospitals—a measure enacted by the PRI with a view toward separating church and state. His administration has also slashed the annual budget of the Health Ministry’s highly successful Planned Parenthood program, and a number of openly right-wing Catholics have been named to key government posts. Among them is Labor Minister Carlos Abascal, a prominent businessman who has criticized school syllabi as too liberal. The Interior Ministry official in charge of religious affairs, meanwhile, favors a constitutional amendment allowing religious “associations” to acquire radio and television stations. “The [Catholic] right wing is thriving,” says Edgar Gonzalez Ruiz, a Mexican academic and author.         Many political analysts see in this the hidden hand of the First Lady, whose association with the legion goes back nearly 20 years. Sahagun first came to national prominence as the press secretary in Fox’s presidential campaign. But in his home state of Guanajuato, where Fox previously served as governor, the divorced mother of three had another identity. In the mid-1980s, when Sahagun was still married to her first husband and living in the city of Celaya, she was appointed treasurer of the local branch of the legion’s lay movement. Perhaps that’s no surprise; her father comes from the same small town in Michoacan state where Marcial Maciel was born.         Vatican sources say that Maciel is working to bolster those ties. The priest was instrumental in organizing separate papal audiences for Fox and Sahagun during their visit to Rome in October 2001. He is also, according to Mexican press reports, lobbying the Holy See to annul their previous marriages, paving the way for a religious wedding in the not too distant future. At least two of Fox’s children, from a previous marriage, have studied at legion schools. Newsweek International June 23rd Issue •  International Editions Front •  Atlantic and Asia Pacific Cover Story: Al Qaeda in America •  Latin America Cover Story: Can He Do the Job? •  World View: How to Make Friends in Iraq •  Letter From America: Land of the Free, Home of the Brave? •  International Periscope & Perspectives •  International Mail Call •  The Last Word: Michael O'Leary         In a rare interview with NEWSWEEK, Maciel’s deputy Luis Garza Medina denied reports that the legion is actively seeking an annulment of the First Couple’s earlier marriages. (Fox and Sahagun were married in a civil ceremony two years ago.) The 45-year-old priest, a younger brother of the Monterrey industrialist Dionisio Garza Medina, also dismissed talk that the order exerts any undue influence over the president through his wife. “Fox had a relationship with us when he was governor, and there have been gestures of appreciation,” he says. “But he is a president for all Mexicans, and no favoritism has been shown toward us.” Father Luis also notes that the legion does not adopt public-policy positions of its own. The Conference of Mexican Catholic Bishops is the proper channel for that, he argues, and he bristles at suggestions that the order cultivates relations with the rich more than the poor. “We make no such distinctions,” he says. “For us, everyone is in need of hearing the Gospel of Christ.”         Perhaps. But while some Catholic orders such as the Jesuits have distinguished themselves by helping the poor, the legion under Marcial Maciel has demonstrated a marked talent for cultivating the more privileged constituencies of Roman Catholicism at the same time. And in a country with the second largest Catholic flock worldwide, that ensures the Legion will continue to exert influence far beyond its numbers for many years to come.

theindependent.com Published Sunday, June 8, 2003 Last modified at 1:01 a.m. on Sunday, June 8, 2003 By Gretchen Fowler gfowler@theindependent.com

ST. PAUL -- Retired St. Paul doctor Maurice Mathews returned from his first humanitarian mission overseas with a bundle of photos and stories to last a lifetime.

Mathews left for Sucre, Bolivia May 13.

He was gone for two weeks and spent 10 days volunteering his services with Rotaplast International, a nonprofit organization established in 1992.

According to www.rotaplast.org, the mission of Rotaplast International is to provide free reconstructive surgery and treatment for underprivileged children worldwide, to provide education, and to advance research in the prevention of cleft lip and palate.

While in Bolivia, Mathews' job was to sterilize equipment used in a series of surgical procedures to correct deformities in underprivileged children and adults.

The hospital where the procedures took place was a teaching hospital, so when medical students weren't available, Mathews scrubbed in.

The majority of the procedures done were to fix cleft lips and palates in children.

However, because of age restrictions and the medical conditions of some patients, not all children were able to be helped during the trip.

"Some of the little ones, it would just break your heart to see them (have to wait another year)," Mathews said.

Going through the pictures from his trip, Mathews showed the photograph of an older man who had gone all his life with a cleft lip. In the next photo, he stood smiling beside the man whose appearance had been drastically improved.

Mathews also assisted in procedures that involved working on patients' arms and ears. While he doesn't have experience in plastic surgery, Mathews said he performed numerous surgical procedures during his 38-year career in St. Paul. He retired in 1998.

The plastic surgeons Mathews worked with in Bolivia came from the United States, Bolivia and Guatemala. Rotaplast groups have completed missions in Chile, Argentina, Venezuela, Bolivia, Peru, Guatemala, Ecuador, Vietnam and the Philippines.

Mathews said part of the missions is to conduct research and perform case studies to help doctors learn more about the high occurrence of cleft lip and cleft palate in certain countries. That way, he said, more can be done to prevent similar cases in the future.

Mathews spends most of his time working on his tree farm northeast of St. Paul but said he felt volunteering his time to this cause would be a good thing to do.

"I've been a life student of both Albert Schweitzer and Mother Teresa. I wanted to have the experience, even if it was only for a week or two, doing what they did their whole life," Mathews said, " -- helping the poorest of the poor."

Equipment for such missions is purchased with donations made to Rotary International. Rotaplast International was founded by a Rotary Club president and is an ongoing project of the Rotary Club. Mathews became a charter member of the St. Paul Rotary Club 19 years ago and has been a member ever since.

For more information on Rotaplast, log on to www.rotaplast.org.

InsideToronto.ca TAMARA SHEPHARD Jun. 8, 2003

Four peregrine falcon chicks recently hatched atop a tower of The Clarica Centre are the last to be banded locally as part of a five-year program to track the endangered birds' migratory patterns.

The Ontario population of the birds -- presently fewer than 100 -- is considered in recovery, reflecting a "steady, but small" increase since the program's inception in 1998, according to The Canadian Peregrine Foundation.

In Etobicoke alone, the initial pair of peregrines produced 23 offspring, four of which are reported to have nested in other provinces and propagated. The Etobicoke-based banding takes place Monday at 1 p.m.

Falcon population recovery has encouraged provincial officials to consider de-listing the bird to a threatened species in its next survey year, 2004-2005.

But foundation officials' charge the move is premature, especially given several suspected and probable cases of West Nile Virus detected last year in dead peregrines. The foundation is lobbying to continue the banding and accompanying satellite monitoring program beyond its initial five-year mandate.

"We'd like nothing better than to have the (Anatum) species of peregrines removed from the endangered species list. But we want to ensure it's a biological decision, not a political one," said Mark Nash, foundation founder and executive director.

While peregrine falcon recovery is occurring, Nash said many threats remain: the birds' own natural mortality (90 per cent die in their first year of life); encroachment and destruction of habitat by hikers, photographers, lumber, timber and mining operations, as well as urban sprawl.

However, West Nile threatens to decimate the Ontario population, 40 per cent of which are concentrated north of Lake Superior, Nash said.

Guarding against that possibility, last year the foundation partnered with Dr. Bruce Hunter, an avian specialist with the Ontario Veterinary College at the University of Guelph in a West Nile research program.

Hunter obtains blood samples from peregrines at a number of foundation hacks and urban nest sites across southern Ontario to determine if the fledglings have blood antibodies against the deadly virus. He also inoculates the birds against the virus, using a serum first introduced for use in horses.

Preliminary program findings indicate the serum appears to have no adverse effects on the falcons, Nash said.

Meanwhile, the foundation's satellite telemetry peregrine falcon tracking program indicates birds' migration to central and south America, as well as Mexico with many also nesting in the northern United States. In its fourth year, the charitable foundation has funded the five-year PhD research program to the tune of $500,000.

"The great news is that through tracking of Ontario birds, we've seen their migration to Colombia, Venezuela and Argentina in the birds' first year of life. Some returned to Ontario the following spring," Nash said.

"The not-great news is the vast majority of countries in Central America, Mexico and South America still have widespread use of DDT. The peregrine falcon could have been found on every continent, except Antarctica, prior to the use of DDT."

The Canadian Peregrine Foundation, Ontario Ministry of Natural Resources and the University of Guelph launched the banding program in 1998 to assist Canadian and American researchers and biologists in tracking the birds' movement.

Introduced as a pilot project in 1999, the satellite tracking/banding followed four juvenile falcons from the foundation's Richmond Hill hack site. Three of the four migrated to Colombia in their first year, returning to Ontario that spring, Nash said.

Other foundation hack sites are found in Hamilton, Kitchener and Brockville. Hack releases involve the deposit of fledgling peregrines in large boxes placed atop buildings or cliffs. Chicks are fed until their release at 40 days, and up to 120 days after to supplement their diet located in the wild.

Urban breeding sites are also located in downtown Toronto at King and Victoria streets, St. Lawrence Cement and the Mississauga Executive Centre in Mississauga, Hamilton and Ottawa. Video cameras capture the nest activity at the Etobicoke, Toronto and Hamilton sites.

Later this year, the foundation is expanding its mandate to include protection of bald eagles and barn owls and will be renamed North American Birds of Prey Foundation.

"The peregrine falcon is the only bird where positive human intervention is responsible for literally saving the bird from extinction," Nash said.

Taipei Times-REUTERS Sunday, Jun 08, 2003,Page 10

Oil prices hit 11-week highs above US$31 a barrel on Friday as OPEC producers Saudi Arabia and Venez-uela sought assurances that non-member Mexico would follow the cartel in any move to tighten supply.

Renewed signs that looting and sabotage will disrupt the resumption of Iraq's oil exports further bolstered prices, which have gained 20 percent in the last month.

US crude futures jumped US$0.46 to US$31.20 a barrel, hitting its highest price since March 19. In London, benchmark Brent crude was US$0.36 higher at US$27.80 a barrel.

Saudi Oil Minister Ali al-Naimi and his Venezuelan counterpart Rafael Ramirez met in Madrid with Mexico's Energy Minister Ernesto Martens ahead of next week's OPEC conference on third-quarter production policy.

"We are coming here before the OPEC meeting to discuss the world oil market. We are also in contact with Russia and Norway and I think we will get good results," Ramirez said.

Saudi Arabia and Venezuela want to lay the groundwork for contributions from non-OPEC producers should the return of Iraq push prices down later this year, officials at the talks said.

"That's the key, because it indicates non-OPEC producers may be willing to cooperate, if nothing else by giving lip service to jawbone the prices higher," said a New York trader.

With oil prices near the top end of OPEC's US$22 to US$28 a barrel band, some ministers have said they see no need for OPEC to cut production limits when it meets next Wednesday in Qatar.

Iraq announced on Thursday it would this month resume oil exports, which have been halted since mid-March. But a full recovery of its pre-war exports -- some 4 percent of globally traded oil -- appears distant.

Baghdad's top US adviser on oil said on Friday that well-organized saboteurs are targeting Iraqi oil facilities in a campaign designed to hamper efforts to revive crude exports as the country recovers from war.

"It is very difficult for me to identify who they are and what their motives are. I can only say their techniques appear to be very professional and aim at causing harm to significant and important installations," Phillip Carroll told reporters in an interview.

Oil markets have now more than reversed losses following US government data on Wednesday showing an unexpected rise in crude and gasoline supplies.