Julio Godoy PARIS, Jun 9 (<a href=www.ipsnews.net>IPSNews) - Prosecution has demanded heavy jail sentences for former bosses of the oil giant Elf Aquitaine over their dealings in Africa. Prosecutor Catherine Pignon asked a Paris court to sentence André Tarallo, formerly the company's top manager for Africa affairs, to eight years imprisonment and to impose a fine of 5.8 million dollars. This is the first move by the prosecution against the top bosses of the company. Tarallo, 76, who came to be known as Elf Aquitaine's 'Monsieur Africa', managed the company's business in Africa for 20 years from the late seventies. The prosecution demand came following lengthy investigations begun in 1994 into suspect dealings of the former state oil company between 1989 and 1993 both in France and abroad. ”Your culpability demands exemplary punishment,” Pignon told 37 accused. Pignon called several deals by Elf executives ”systematic opportunism”, and said its ”illegal embezzlement (of the company's funds) were not casual affairs.” Prosecution sought a similar sentence against Alfred Sirven, former director- general of Elf, and a five-year sentence with a fine of 400,000 dollars against Loik Le Floch Prigent, the former CEO (chief executive officer). ”These three people (Le Floch Prigent, Sirven, and Tarallo) took care that the corruption system worked smoothly,” Pignon told the court last week. The prosecution has accused the three executives of embezzlement of 350 million dollars of the company's funds for personal enrichment or to pay for illegal commissions to politicians. Tarallo stands accused of stealing at least 50 million dollars, and of misusing his position in handling the company's African affairs. Elf Aquitaine was founded in 1965 by Gen Charles de Gaulle as a state- owned company. The company was privatised in 1999 following reports of rampant corruption. It was taken over by another French giant, TotalFina. Experts and former executives say French secret services controlled Elf Aquitaine from the start, and took on the task of creating conditions to the advantage of Elf in oil-rich former colonies. ”The secret services' control over Elf Aquitaine led to coups d'état in several African countries, especially in Gabon and Congo Brazzaville,” Francois-Xavier Verschave, author of several books on French African policy told IPS. Loik Le Floch Prigent has presented the defence that bribery and influence peddling are a part of oil operations all over the world. ”The whole oil system functions in an opaque way,” Le Floch Prigent said during the hearings. ”The obscure affairs at Elf didn't begin with my presidency, nor did they end when I left.” He also claimed that all French heads of state since 1965 knew that Elf Aquitaine paid illegal commissions to guarantee easy access to oil sources. French investigators had until recently avoided looking into Elf's African affairs. This policy changed early last year. Prosecution found that Tarallo maintained several bank accounts with names such as Tomato, Salad, Langouste, Colette, or Centuri in tax havens around the world, including Panama, Switzerland and Liechtenstein. Colette is the name of his wife, and Centuri is his native village. Tarallo claimed during the hearing that he managed these accounts on behalf of African heads of state. He particularly named Omar Bongo, President of Gabon. Asked by judge Michel Desplan why he had named accounts after his wife and his village and not after Bongo, Tarallo said he gave these names in order to recall them more easily. Bongo, who rules the former French African colony since a coup d'état in 1967, denied any benefits from Tarallo's accounts. Bongo told the weekly Jeune Afrique that Tarallo had used him as ”an umbrella to protect himself.” Bongo said that Tarallo had tried to use the umbrella too long, and by now ”it has got holes.” He added: ”Tarallo is soaked now.” Tarallo's lawyers reject the prosecution's case against him. ”He is simply innocent,” his lawyer Guillaume Le Foyer de Costil said after the hearings last week. Lawyers defending Le Flock Prigent and Sirven have also called the prosecution case against their clients ”unjustified”. The prosecution has sought lower prison sentences and fines for the other accused over their dealings in Venezuela, Spain, Germany, and in several Eastern European, Central Asian and African countries.

Reuters, 06.09.03, 9:02 AM ET  By Dominique Magada LONDON, June 9 (Reuters) - Oil prices dropped on Monday but remained around their highest level since mid-March, ahead of a meeting on Wednesday of the Organisation of the Petroleum Exporting Countries. Brent crude fell 36 cents to $27.42 a barrel while U.S. light crude was down 33 cents at $30.95 a barrel. OPEC ministers will meet in Doha, Qatar, to decide whether to keep their oil production quotas at the current level of 25.4 million barrels per day (bpd) or cut them to prevent a potential price slide from the return of Iraqi oil to the market. With oil prices at the top end of the group's $22-$28 preferred price range, some ministers have said there appears to be no need for an immediate cut from the current limit. "We expect a status quo from the OPEC meeting," said Peter Gignoux, head of the London Energy Desk at Citigroup. The cartel is said to be preparing the ground for possible restraints later this year by putting early pressure on its rivals to prevent them winning market share. Iraq announced last week it would resume oil exports in June, tendering this week 10 million barrels held in storage. However, a full recovery of its pre-war exports -- some four percent of globally traded oil -- appears distant due to sabotage to oil facilities. "We're looking first at the 10 million barrels that have to be sold, it's real oil coming onto the market," said Citigroup's Gignoux. "We'll look at production levels in the North and the South once that oil is sold." Monday's slight price decline was attributed to crude oil selling by funds, although such action was limited to small volumes, traders said. "Ahead of Wednesday's OPEC meeting prices are likely to remain steady at recent highs," said Barclays Capital Research in London in their daily report. OPEC this week is also set to press independent exporters to back its next supply cut. OPEC President Abdullah al-Attiyah said on Sunday major non-aligned producers Mexico, Russia and Norway would be called on to help the group defend its $25 a barrel price target. OPEC member Venezuela was confident non-OPEC Mexico would cooperate with any decision the cartel takes on oil supply and expressed confidence the group could support prices, the country's oil minister, Rafael Ramirez, said on Monday. Ramirez also said on Monday he saw the fundamentals in the international oil markets in balance, and added that OPEC could call for an extraordinary gathering before the next one scheduled in September.

Reuters, 06.09.03, 8:55 AM ET By Tom Ashby DOHA, June 9 (Reuters) - OPEC gathered in the tiny Gulf state of Qatar on Monday amid signs the cartel will stay its hand on cutting output in an effort to refill depleted oil inventories in the West. Stocks have stayed low after two months of zero exports from Iraq, the world's seventh largest exporter before the U.S.-led invasion, despite big output hikes from other members of the 11-member cartel. "When there was perhaps some overproduction, the low stock levels captured some of the oil. Now we have to see how low those stocks are," OPEC Secretary-General Alvaro Silva told reporters here ahead of Wednesday's meeting. With prices at the top end of OPEC's $22-$28 per barrel target range, Indonesia and Venezuela have said there is no need for any cut now from its 25.4 million barrel a day ceiling. Silva said OPEC's previous meeting in April, which raised quotas to cover for Iraq's export halt, had kept prices steady, with OPEC's latest basket price at $26.77 per barrel. "We are going to see what measures should be taken; if we should keep things as they are, if we should make an adjustment, a cut. I can't yet say which," he told Reuters. RIVAL EXPORTERS The Middle East-dominated cartel, which controls half of world exports, will most likely use the Doha meeting to prepare the ground for a possible cut later this year when Iraqi output is expected to rise. "With prices where they are I don't think OPEC will do anything," said Nauman Barakat, a broker at Fimat International Banque. "They will probably call another meeting once Iraq comes back and rope in non-OPEC to do its bit," he added. OPEC has invited rival exporters including Mexico and Russia to Qatar, hoping to maintain a fragile partnership that has kept OPEC's basket near $25 per barrel for four years -- a boom price compared to the previous decade. Recovering from the war, Baghdad is preparing to resume international sales in about a week's time. Shipments are expected to rise sharply over the next few months, but still well below pre-war levels. In April, OPEC ministers said they were ready to cut up to two million barrels per day (bpd) to make room for Baghdad. However, prices have remained higher than some expected, while stocks in consuming countries such as the United States have failed to recover fully from historically low levels. Data from the OPEC secretariat now shows that the world market can absorb some 1.3 million bpd above forecast demand during the third quarter to replenish stocks, an OPEC source said, asking not to be named. "That means there is more than enough room for Iraq at current quota levels," he told Reuters, predicting Iraqi supply at 1.5 million bpd in the third quarter. OPEC powers Saudi Arabia and Venezuela met with Mexico in Madrid on Friday to discuss the return of Iraq. Venezuela's Oil Minister Rafael Ramirez visits Norway on Monday. Venezuela said there was adequate oil supply to meet demand, and non-OPEC countries including Mexico, Russia and Norway were willing to coordinate output policy.

Mon June 9, 2003 07:59 AM ET By Tom Ashby

DOHA, Qatar (<a href=asia.reuters.com>Reuters) - OPEC gathered in the tiny Gulf state of Qatar Monday amid signs the cartel will stay its hand on cutting output in an effort to refill depleted oil inventories in the West.

Stocks have stayed low after two months of zero exports from Iraq, the world's seventh largest exporter before the U.S.-led invasion, despite big output hikes from other members of the 11-member cartel.

"When there was perhaps some overproduction, the low stock levels captured some of the oil. Now we have to see how low those stocks are," OPEC Secretary-General Alvaro Silva told reporters here ahead of Wednesday's meeting.

With prices at the top end of OPEC's $22-$28 per barrel target range, Indonesia and Venezuela have said there is no need for any cut now from its 25.4 million barrel a day ceiling.

Silva said OPEC's previous meeting in April, which raised quotas to cover for Iraq's export halt, had kept prices steady, with OPEC's latest basket price at $26.77 per barrel.

"We are going to see what measures should be taken; if we should keep things as they are, if we should make an adjustment, a cut. I can't yet say which," he told Reuters.

RIVAL EXPORTERS

The Middle East-dominated cartel, which controls half of world exports, will most likely use the Doha meeting to prepare the ground for a possible cut later this year when Iraqi output is expected to rise.

"With prices where they are I don't think OPEC will do anything," said Nauman Barakat, a broker at Fimat International Banque. "They will probably call another meeting once Iraq comes back and rope in non-OPEC to do its bit," he added.

OPEC has invited rival exporters including Mexico and Russia to Qatar, hoping to maintain a fragile partnership that has kept OPEC's basket near $25 per barrel for four years -- a boom price compared to the previous decade.

Recovering from the war, Baghdad is preparing to resume international sales in about a week's time. Shipments are expected to rise sharply over the next few months, but still well below pre-war levels.

In April, OPEC ministers said they were ready to cut up to two million barrels per day (bpd) to make room for Baghdad.

However, prices have remained higher than some expected, while stocks in consuming countries such as the United States have failed to recover fully from historically low levels.

Data from the OPEC secretariat now shows that the world market can absorb some 1.3 million bpd above forecast demand during the third quarter to replenish stocks, an OPEC source said, asking not to be named.

"That means there is more than enough room for Iraq at current quota levels," he told Reuters, predicting Iraqi supply at 1.5 million bpd in the third quarter.

OPEC powers Saudi Arabia and Venezuela met with Mexico in Madrid Friday to discuss the return of Iraq. Venezuela's Oil Minister Rafael Ramirez visits Norway Monday.

Venezuela said there was adequate oil supply to meet demand, and non-OPEC countries including Mexico, Russia and Norway were willing to coordinate output policy.

Times Online June 09, 2003 By Carl Mortished, International Business Editor

THE Opec oil producer cartel is unlikely to agree a production cut at its meeting in Doha this week despite rising anxiety over the imminent resumption of Iraqi oil exports.

Qatar’s Oil Minister said yesterday that there was no immediate plan to reduce the flow of crude. “We won’t just cut for the sake of cutting,” he said. However, he indicated that potential Iraqi output would be on the agenda at Wednesday’s Opec meeting.

The Opec leaders are taking comfort from a buoyant oil price which rose above $31 in New York on Friday. The oil ministers of Saudi Arabia and Venezuela met with their non-Opec Mexican counterpart in Madrid last week in the hope of garnering support for cutbacks when Iraq returns to the market. Rafael Ramirez, the Venezuelan oil minister, said: “We are also in contact with Russia and Norway and I think we will get good results.”

The Opec leaders’ plans are being confounded by the continuing high price of oil despite fundamental weaknesses in the market. Leo Drollas, of the Centre for Global Energy Studies, said: “It is a tale of two halves. The western hemisphere is tight while the east is getting weaker.”

The US is still short of petrol and crude stocks have still not fully recovered from the shortages caused by the Venezuelan oil strike last winter. In Asia the picture is quite different, with refiners in Singapore cutting their output in response to weak demand.

Iraq hopes to begin normal crude exports by the end of the month but a substantial contribution to global production is probably months away.