Iraq signs gas deal with Shell, Mitsubishi

BAGHDAD (AP) ? Iraq on Sunday signed a multibillion-dollar deal with Royal Dutch Shell PLC and Japan's Mitsubishi Corp. to tap natural gas in the south, one of the biggest agreements by the OPEC member to develop an energy sector battered by years of neglect and war.

The $17 billion deal forms a joint venture to gather, process and market gas from three oil fields in the oil-rich province of Basra. That gas, pumped in conjunction with crude oil, is currently burned off ? or flared ? due to lack of infrastructure.

The 25-year joint venture is called Basra Gas Company. Iraq will hold a 51 percent stake, to Royal Dutch Shell's 44 percent and Mitsubishi's 5 percent shares. The gas will be used mainly for domestic energy needs, but there is also an option for exports.

Iraq's Oil Minister, Abdul-Karim Elaibi hailed the signing as "historic turn in Iraq's oil industry."

Shell CEO Peter Voser told reporters that Iraq is now a "...substantial part of Royal Dutch Shell's portfolio in the Middle East."

For Iraq, the deal is a key part of its strategy to alleviate power generation woes. Despite billions of dollars spent since the 1990s to rebuild Iraq's dilapidated electrical grid, Iraqis still suffer through chronic power outages that have led to sometimes violent protests.

The deal is Shell's third in Iraq since the 2003 U.S.-led invasion, and it will bolster the company's presence in a country which sits atop 143.1 billion barrels of crude oil and 126.7 trillion cubic feet of gas reserves.

A memorandum of understanding on the Shell gas deal was signed in September 2008, but the venture has been bogged down ever since. Some lawmakers argued that the deal should have been approved by parliament and officials in Basra wanted more benefits for their province.

Iraq burns off almost half of the 1.5 billion cubic feet per day of gas that it produces. The deal will help the country capture more than 700 million cubic feet per day of gas from three fields.

They are the 17.8 billion-barrel Rumaila field being developed by a BP-CNPC consortium, the 4.1 billion barrel Zubair field, handled by an Eni-led consortium and partners Occidental Petroleum Corp. and KOGAS, as well as the 8.6 billion barrel West Qurna Stage 1, which is being developed by ExxonMobil-Shell consortium.

ExxonMobil has recently been embroiled in controversy after it became known that the company had signed a contract with the Kurdish regional government ? and not the Oil Ministry in Baghdad ? to develop oil fields in northern Iraq.

The Kurdistan Regional Government has clashed with Baghdad over who has the right to sign deals with international oil companies to develop Iraq's vast energy resources.

The Kurds, who control three provinces in northern Iraq, want to be able to sign contracts with international oil companies to develop their own fields, while Baghdad maintains it has final authority.

On Sunday the oil minister said the ministry sent letters to ExxonMobil asking for an explanation of the reports that they signed these deals, but has not yet heard a response. He declined to comment on what penalties the Texas-based company might face.

Associated Press

Source: http://hosted2.ap.org/apdefault/f70471f764144b2fab526d39972d37b3/Article_2011-11-27-ML-Iraq-Gas-Deal/id-3b1da84a986f4892901e8597b7f4434b

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In climate talks West would redefine rich and poor (AP)

JOHANNESBURG ? As delegates gather in South Africa to plot the next big push against climate change, Western governments are saying it's time to move beyond traditional distinctions between industrial and developing countries and get China and other growing economies to accept legally binding curbs on greenhouse gases.

It will be a central theme for the 25,000 national officials, lobbyists, scientists and advocates gathering under U.N. auspices in the coastal city of Durban on Nov. 28. Their two weeks of negotiations will end with a meeting of government ministers from more than 100 countries.

The immediate focus is the Kyoto Protocol, the 1997 agreement requiring 37 industrialized countries to slash carbon emissions to 5 percent below 1990 levels by 2012. Each country has a binding target and faces penalties for falling short. The U.S., then and now the world's largest polluter per capita, refused to join Kyoto because it imposed no obligations on countries like China, which has since surpassed the U.S. in overall emissions.

Now, with the Kyoto pact's expiry date looming, poor countries want the signatories to accept further reductions in a second commitment period up to at least 2017.

"The Kyoto Protocol is a cornerstone of the climate change regime," and a second commitment period "is the central priority for Durban," says Jorge Arguello of Argentina, the chairman of the developing countries' negotiating bloc known as G77 plus China.

But with growing consensus, wealthy countries are saying they cannot give further pledges unless all others ? or at least the major developing countries ? accept commitments themselves that are equally binding.

The European Union is bringing a proposal to Durban calling for a timetable for everyone to make these commitments by 2015.

Separately, Norway and Australia set out a six-page proposal for all governments to adopt a phased process of scaling down emissions.

Japan, Canada and Russia, three key countries in the Kyoto deal, announced last year they will not sign up to a second commitment period. Russia has submitted a proposal calling for a review and periodic amendments to the criteria for being judged rich or poor under Kyoto's legal prescriptions.

"We need to discuss whether we can continue to divide the world in the traditional thinking of the North and the South, where the North has to commit to a binding form whereas the South will only have to commit in a voluntary form," Connie Hedegaard, the European commissioner on climate policies, told reporters this month.

It's an old debate that has been intensifying with the rapid growth of economies like those of China, India and some in Latin America and the wealth as well as high carbon emissions they generate.

The division of the globe into two unequal parts was embedded in the first climate convention adopted in 1992. At that time China was struggling to liberalize its economy, India was just opening its borders to international commerce, South Africa was breaking out of the apartheid era, and Brazil ? the host of the Earth Summit where the convention was adopted ? was an economic shambles with inflation topping 1,100 percent that year.

Everyone agrees that the few wealthy nations have the primary responsibility for reducing carbon emissions, since it was their industries that pumped carbon dioxide into the atmosphere for 200 years. Climate scientists say the accumulation of CO2 traps the Earth's heat, is already changing some weather patterns and agricultural conditions, and is heightening risks of devastating sea level rise.

The industrial countries ? the U.S. chief among them ? have long questioned whether those definitions of rich and poor, drawn up 20 years ago, should still apply. That was one reason why the U.S. backed out of the Kyoto Protocol.

The European Union also dismisses the poor countries' argument that, "you created the problem, now you fix it."

The EU is responsible for just 11 percent of global emissions, says the EU's Hedegaard, and it can't solve global warming without the help of those emitting the other 89 percent.

Despite their swelling national bank accounts, China, India, South Africa and others say they are still battling poverty and that tens of millions of their people lack electricity or running water.

To accept legal equality with wealthy countries would jeopardize their status as developing societies ? even though few countries are doing more than China to rein in the growth of their emissions.

It is a world leader in producing wind and solar energy and has closed thousands of outdated and heavily polluting power plants, replacing many with cleaner-burning coal plants. Its fuel efficiency standard already surpasses the 35 miles per gallon (14.7 kilometers per liter) for passenger cars that the U.S. government hopes to reach in 2016.

And so the stalemate continues leading up to Durban.

"The North-South divide over historical responsibility still has more weight than the forward-looking approach of respective capabilities," says Christiana Figueres, executive secretary of the U.N. Framework Convention on Climate Change.

Jennifer Morgan, climate analyst at the Washington, D.C.-based World Resources Institute, says serious discussions are going on behind the scenes over the European timetable plan, although it was not clear this week if an agreement was possible in Durban.

Other experts agree that China privately is showing more flexibility than in public.

If no deal can be concluded, Figueres said last month, a patchwork of interim arrangements may be needed to keep negotiations alive.

"What arrangements? We don't know yet. According to what rules? We don't know yet. Interim for how long? We don't know yet," she said.

Source: http://us.rd.yahoo.com/dailynews/rss/africa/*http%3A//news.yahoo.com/s/ap/20111125/ap_on_bi_ge/af_climate_change_rich_v_poor

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