Menas Associates

Friday, 23 August 2013

Iran to export gas to Iraq

Iran and Iraq have signed a high-profile agreement according to which Iran will supply 25 mcm/day of natural gas to the Al-Baghdad, Al-Mansouriyah, and Sadr power plants in Iraq.

The deal was signed by Petroleum Minister Rostam Qasemi and his Iraqi counterpart, Abdul Kareem Luaibi, in Baghdad. Iran will earn $3.7 billion a year from the deal.

In related news, the United States has announced that it is concerned about a $14.8 billion gas deal between Iran and Iraq and has asked Baghdad to explain it. The US State Department said that it plans to inform Baghdad about the implications with respect to sanctions.

In response, Mussab al-Mudaris, a spokesperson for the Iraqi Ministry of Electricity, emphasised that the natural gas supplies from Iran would help to ease electricity shortages by feeding two power plants in a Baghdad suburb.

For more news and expert analysis about Iran, please see Iran Strategic Focus.

Thursday, 22 August 2013

Caspian: Azeri Light strengthens on Mediterranean disruption

It seems that Azerbaijan is benefiting from the disruption in other oil producers, notably Libya, as well as the uncertainty caused by the situation in Egypt. Throughout August, protests and labour unrest shut down Libya's two key oil terminals, disrupting exports and helping to strengthen the differential on Azeri Light. On 1 August the price of Azeri Light hit Dated Brent plus $3.95/barrel, the highest since May 2012. Later in August BP attempted to sell a 600,000 barrel cargo at Dated Brent plus $4.75/barrel and found no buyers, however.

Azerbaijan's reputation for political stability has been one of its biggest strengths, and with turbulence in other key producers unlikely to end any time soon, the price of Azeri Light is likely to remain high. The government, however, is reportedly taking no chances: according to government sources, it is basing the state budget for 2014 on a price for Azeri Light of under $100/barrel (possibly $90) to serve as a buffer against price volatility. For the past two years the Economy Ministry has based the budget on oil at $100/barrel.

In other trading news, there were four loadings of Azeri Light, each of 600,000 barrels, scheduled at Georgia's port of Supsa in August, with five expected in September. Loadings of Azeri Light at Ceyhan were reportedly down this month, by 5,785 b/d compared to July. And ONGC Videsh sold its first cargo of Azeri-Chirag- Guneshli oil since taking over Hess's stake in the project. It sold a cargo of 600,000 barrels for loading at the end of August to Statoil for Dated Brent plus $2.70–3/barrel.

For more news and expert analysis about the Caspian region, please see Caspian Focus.

Egypt: Militancy in Sinai

For Israel the growing instability and the increased activity by militant jihadists in the Sinai on its border poses a serious security problem. On 19 August, armed gunmen stopped a bus transporting police near Rafah in northern Sinai, ordered them off the bus, and shot 25 dead. It was the worst single incident in the recent Sinai conflict and underlined what the security forces face there.

The presence of jihadi groups in the Sinai peninsula has increased since the upheaval of 2011. They can survive untraced within the vast desert wastes. Some even tried to establish an al-Qa'ida offshoot. Some are from other parts of Egypt and are attracted by the ability to operate beyond the control of the security forces. Others are local, drawn from the tribes of Sinai, who have no loyalty to the central state, and little reason given their treatment at the hands of callous and ignorant government officials.

The election of an Islamist president did not stop the confrontation of jihadis with the state. Until the bus killings, the single bloodiest incident has been the killing of 16 border troops under the Morsi administration. He cracked down, and the Muslim Brotherhood called on the government to "confront this serious challenge to the Egyptian sovereignty" and "protect Sinai from all armed groups". But the army felt that Morsi was not being tough enough.

It is unclear if the latest incident was part of the jihadists continuing confrontation with the state or was provoked by the army's crackdown on the Brotherhood in the Nile Valley.

For more news and expert analysis about Egypt, please see Egypt Politics & Security.

Libyans fear armed confrontation

The situation remains tense throughout most of Libya, especially in Tripoli, as uncertainty, fear and widespread rumours of a possible coup and armed confrontation abound. Quite who might attempt a coup and which groups might be involved in armed confrontation is not at all clear, as the country totters on the brink of chaos.

A 20 August report in the London-based Guardian spoke of “growing fears of an Egypt-style standoff between the ruling Muslim Brotherhood and opposition forces, with rebels blockading key oil ports and the capital”.

The Brotherhood's Justice and Construction Party, which only won 10% of the vote and 17 of the 80 party list seats in the July 2012 election, might arguably now see itself as the main political power in the GNC, following last month's on-off decision of the largest coalition party, the National Forces Alliance, which won 48% of the vote and 39 of the seats last year, to boycott GNC sessions, at least temporarily.

But the real question at the moment is who, if anyone, can really claim to be governing the country, or to be the main political or military force in the land. With the government's authority crumbling, one diplomat in Tripoli was quoted this week as saying that “Congress has basically collapsed.”

In the present state of chaos, the word “opposition”, rather like “government”, conjures up all sorts of possibilities, some still vaguely real, others more fanciful, although the beleaguered government of Prime Minister Zidan is still nominally in charge. In fact, some analysts might argue that the mere fact that he is still the country's prime minister suggests that he might be in a slightly stronger position than he was a week or so ago, especially if Tripoli does not fall to “opposition forces” and if he is able to overcome the armed protesters who have been holding the country's oil terminals and production to ransom.

For more news and expert analysis about Libya, please see Libya Focusand Libya Politics & Security.

Wednesday, 21 August 2013

Algeria: No change in top public jobs

The usual round of personnel changes among senior judges, walis (provincial governors), and ambassadors did not take place this summer. There is, of course, a regular rotation within the ranks of senior officialdom, but when these changes happen during a parliamentary recess, they are often politically motivated.

The health of President Abdelaziz Bouteflika, who signs the decrees, is certainly a factor, but observers also argue that the regime is unwilling to go ahead with any shuffle because it fears that a new administration could escape its control during this highly volatile period.

Additionally, political analysts believe that influential – and older – figures within the regime are blocking a proposed policy of forced retirement from public administration at the age of 60. With a huge demographic youth bulge failing to push its way into the system and many institutions dominated by much older officials, this idea is superficially attractive.

It is nevertheless unlikely that any radical reforms along these lines will be implemented soon. The 65-year-old rime minister, Abdelmalek Sellal , is said to have ordered the drafting of several alternative recommendations to avoid further paralysis at state institutions due to age.

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

Ghana: Supreme Court conducts cross-examination of leading NDC and NPP counsel

Although the previously stated Supreme Court date of electoral judgement (29 August) is still expected to be met, the Court has subsequently cross-examined the leading counsel for both the NDC (Tsatsu Tsikata) and NPP (Philip Addison), as well as President Mahama's counsel (Tony Lithur) and counsel for the beleaguered Electoral Commission (James Quashi-Idun). This round of cross-examination was scheduled by the Court upon receipt of final written submissions from the respective electoral case parties, as described in the last issue of Ghana Politics & Security.

As may be expected, the Court reports indicate that all parties have maintained their final positions presented in their respective final submissions, with no major surprises or indications (as yet) of further delays. Indeed, the major Court event of the week appears to be the contempt judgement noted above for the NPP's general secretary which has no bearing on the major matter at hand.

The Court's conduct will, of course, come under further scrutiny once the result is announced, although the commendation of the Court last week by Ghana's "anti-corruption" organisation the Bureau for Internal Affairs, headed by Mohammed Frimpong, for the respective Justices' "estimable character" adds another voice to those who believe that the Court - despite the extensive length of proceedings in comparison with similar electoral cases elsewhere, including Kenya - has so far demonstrated competence and fairness in its proceedings.

Monday, 19 August 2013

Cameroon: Opposition adopts populist rhetoric

Opposition adopts populist rhetoric but it will take more than this to reduce Bouterse's current popularity.

An example of the opposition's MPs populist criticism was the letter they wrote to President Bouterse about the issue of crime. They want Desi Bouterse to outline his crime prevention programme to parliament. They asked whether - besides more investments in the police and their equipment, infrastructure and training - their policies for sustainable unemployment and poverty should be included. They cite the president's previous promises but the latest crime statistics indicate a downward trend, with Suriname's record significantly better than many other countries in the region.

Also, in response to a dramatic accident in which two school-children drowned during a school trip at a resort near the Suriname River, the opposition's Shaleindra Girjasing MP attacked the government by posing questions like: "Why was it only closed down after the accident and not beforehand? Therefore: who should be held responsible? What measures have been taken to prevent this in the future in view of the holiday that is coming up?"

It was not, however, mentioned by Girjasing that it is this government which is currently in the process of introducing life-guard requirements and nets in the water to avoid drowning. The previous administration, of which Girjasing's VHP party was a member, had no significant contribution to the safety of dozens of Suriname's resorts.

It will require sturdier weapons for the opposition to overthrow Desi's popularity and win the hearts of a changing electorate in two years' time.