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Energy producers - Oct 13

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Iraqi government fuels 'war for oil' theories by putting reserves up for biggest ever sale

Terry Macalister and Nicholas Watt, Guardian
The biggest ever sale of oil assets will take place today, when the Iraqi government puts 40bn barrels of recoverable reserves up for offer in London.

BP, Shell and ExxonMobil are all expected to attend a meeting at the Park Lane Hotel in Mayfair with the Iraqi oil minister, Hussein al-Shahristani.

Access is being given to eight fields, representing about 40% of the Middle Eastern nation's reserves, at a time when the country remains under occupation by US and British forces.

Two smaller agreements have already been signed with Shell and the China National Petroleum Corporation, but today's sale will ignite arguments over whether the overthrow of Saddam Hussein was a "war for oil" that is now to be consummated by western multinationals seizing control of strategic Iraqi reserves.

... Heinrich Matthee, a senior Middle East analyst at the specialist risk consultant Control Risks Group, also believes there are many pitfalls for those considering whether to make an offer.

"Currently it is unclear which party in Iraq is authorised to award a contract and at the same time to deliver its side of the bargain," he said. "Any contract with an independent oil company will be subjected to opposition and possible revision after pressure by resource nationalists."

Oil companies will find their reputations at risk from the actions of their Iraqi counterparties, such as joint venture partners, suppliers and agents. They will also have to contend with oil smuggling and the possibility that the ruling alliance could collapse, Matthee said.

He said that if the conspiracy theory that western oil companies egged on US and British governments to invade Iraq were true, the plan could backfire on them and benefit rivals in Asia instead.
(13 October 2008)



Venezuela to survive crisis despite oil fall

Brian Ellsworth, Reuters
Venezuelan President Hugo Chavez will likely emerge unscathed from the current global financial contagion even if tumbling crude prices force the oil-dependent OPEC nation to scale back spending in the coming months.

The crisis, which the socialist Chavez gleefully calls the end of capitalism, has helped push crude oil to an 8-month low after it hit a record near $150 per barrel and sparked dire predictions by Chavez adversaries of an economic meltdown.

But analysts say billions of dollars in cash reserves and widely available financing by political allies will let Chavez ride out a sustained oil price fall of even several years.
(8 October 2008)



Abu Dhabi: 'We need slaves to build monuments'

Ghaith Abdul-Ahad, The Guardian
It is already home to the world's glitziest buildings, man-made islands and mega-malls - now Dubai plans to build the tallest tower. But behind the dizzying construction boom is an army of migrant labourers lured into a life of squalor and exploitation.
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... All of these men are part of a huge scam that is helping the construction boom in the Gulf. Like hundreds of thousands of migrant workers, they each paid more than £1,000 to employment agents in India and Pakistan. They were promised double the wages they are actually getting, plus plane tickets to visit their families once a year, but none of the men in the room had actually read their contract. Only two of them knew how to read.

"They lied to us," a worker with a long beard says. "They told us lies to bring us here. Some of us sold their land; others took big loans to come and work here."

Once they arrive in the United Arab Emirates, migrant workers are treated little better than cattle, with no access to healthcare and many other basic rights. The company that sponsors them holds on to their passports - and often a month or two of their wages to make sure that they keep working. And for this some will earn just 400 dirhams (£62) a month.

A group of construction engineers told me, with no apparent shame, that if a worker becomes too ill to work he will be sent home after a few days. "They are the cheapest commodity here. Steel, concrete, everything is up, but workers are the same."

As they eat, the men talk more about their lives. "My shift is eight hours and two overtime, but in reality we work 18 hours," one says. "The supervisors treat us like animals. I don't know if the owners [of the company] know."

"There is no war, and the police treat us well," another chips in, "but the salary is not good."
(8 October 2008)
Related slide show at The Guardian: Inside Dubai's labour camps.

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