energy

A mansion fit for a PEP

FCA mansion-on-the-heath-3-small

Who lives in a house like this? The dining room at Kenwood Gate

The brilliant Organised Crime and Corruption Reporting Project has published a ‘through the keyhole’ report into the USD25m home owned by the family of Ilham Aliyev, the President of Azerbaijan and the former vice-president of the Azerbaijan’s State Owned Oil Company (SOCAR).

Delving into ownership registers, the OCCRP has unearthed that the house is in fact owned by an Isle of Man registered company called Beckforth Services Limited.

Beckforth Services Limited is owned by President Aliyev, his wife Mehriban and their daughter Leyla Aliyeva. Leyla is registered as owning all of the shares in Beckforth. All three list their address in Baku as 73 Neftchilar Avenue, Baku which is also the SOCAR registered office in the capital. Neft means oil, Neftchilar apparently means Oil Workers.

Aliyev reportedly earns a salary of around USD230,000 per annum. As an elected official, neither he nor his wife can run businesses, which seems fair enough. The report doesn’t mention whether they can own property or not.

The house on Hampstead Heath was acquired in 1998. This was seven years after the fall of the Soviet Union, which had governed Azerbaijan from Moscow for the previous seventy years. At the time President Aliyev was the VP at SOCAR; Azerbaijan’s oil and gas sector. This year, Aliyev spoke at the Caspian Oil and Gas Exhibition. The President’s ties to the sector are still strong – unsurprisingly as this has been responsible for the country’s high economic growth, according to the CIA World Factbook.

Watch this video for the full picture.

Readers could be forgiven for thinking that the high economic growth and booming Azeri prosperity symbolised by the emblematic Flame Towers, and the clutch of extremely high value goods outlets opened in Baku has been spread across the country.

FCA Italian ShoesThis  2012 report from the New York Times offers an insight into Baku’s luxury goods market, with Italian high-end designer goods topping the scale.  It makes an interesting observation which sheds light on how different countries record trade levels. ‘Between 2003 and 2009, Italy recorded exports to Azerbaijan of roughly $1.6bn ; during the same period, Azerbaijan recorded imports from Italy of $857m.’ If the figures are correct, some USD143m in imports went astray. That’s a lot of hand-stitched shoes.

 

Iran nuclear talks wrap up – Iran wants punishing UN, Western sanctions lifted

VIENNA: Iran and six world powers left themselves with a lot to do in a short amount of time after a difficult fifth round of nuclear talks ended yesterday, a month before the deadline for a deal. The aim is to secure a mammoth deal by July 20 to reduce the programme and ease fears the Islamic republic will get atomic weapons.

Iran denies wanting the bomb and wants punishing UN and Western sanctions lifted. The parties had “begun the drafting process” and would start the next round of talks on July 2, said a spokesman for EU foreign policy chief Catherine Ashton, who is chief negotiator for the six world powers.

“We have worked extremely hard all week to develop elements we can bring together when we meet for the next round in Vienna,” said the spokesman, Michael Mann. “We presented each other with a number of ideas on a range of issues, and we have begun the drafting process.” Officials on both sides said however that although the drafting process had begun, haggling over language concerning the thorniest problems was being put off until later.

“It has been another really tough round,” said a diplomat from one of the “P5+1″ six powers late Thursday. “That doesn’t surprise me or particularly dismay me since from the very beginning we have always known that if a deal was to be done, it was going to be very difficult,” the envoy said.

A second diplomat said earlier this week that Iran was refusing to budge on most issues.  “It is worrying that there is no evolution on the part of the Iranians on most subjects,” the diplomat told AFP on condition of anonymity, including “major” differences on the key issue of uranium enrichment. “The talks are being held in a serious and productive atmosphere, but progress in drafting the comprehensive agreement has been limited,” one Iranian diplomat told the IRNA news agency.

The trickiest issue is uranium enrichment-the process of making nuclear fuel for civilian purposes but also, when highly purified, for a nuclear weapon. Western countries want Iran to slash the number of centrifuge enrichment machines in order to make it harder for Iran to process enough material for a bomb in a short period of time. Other thorny issues include the duration of the mooted accord, the pace of any sanctions relief and a reactor being built at Arak that might give Iran weapons-grade plutonium.

Extension

The negotiations can be extended by up to six months beyond July 20, when an interim deal struck in November expires, but for now both sides were still aiming to get a deal by that date. US President Barack Obama is particularly keen to ensure the deadline is met. He faces midterm elections in the US in November and hopes to silence accusations that the talks are merely giving Iran time to inch closer to the bomb.

“We are absolutely focused on July 20 … We are not interesting in talking about a rollover,” the P5+1 diplomat said, adding it would be a “long time” until such an extension is even discussed. Mark Fitzpatrick, a former US State Department official now at the International Institute for Strategic Studies in London, said it was “not surprising” that difficult topics were being put off until later.

“If there is going to be a breakthrough on the key issues, it won’t come until the last moment,” Fitzpatrick told AFP. Mann said that political directors from the six countries would meet in Brussels on June 26. – AFP

Source: Kuwait Times

Russia inks oil deal with China; so those US sanctions are starting to pinch, eh?

Putin snubs Western sanctions in huge gas deal with China, reads the Reuters headline from Wednesday 21st May. Did anyone really expect Russia to stand around idle and allow the west to stem its growth? If this deal is anything to go by, we can expect Putin and the Russian government to sidestep trade restrictions deftly during the coming months. The US has voiced plans to impose trade or sectoral sanctions on Russia if it meddles with the Ukraine’s interim elections on May 25th. Russia has inked one significant long term deal with its ally on the UN Security Council, securing both nations’ energy and revenue for years to come.

Putin snubs Western sanctions in huge gas deal with China

SHANGHAI: China and Russia Wednesday signed a gas supply deal thought to be worth billions of dollars, securing a major source of cleaner fuel for the world’s top energy user and opening up a new market for Moscow as it risks losing European customers over the Ukraine crisis.

China's President Xi Jinping (2nd R) looks at Russia's President Vladimir Putin (2nd L) shaking hands with Gazprom CEO Alexei Miller (L) at an agreement signing ceremony in Shanghai on May 21, 2014. (AFP PHOTO / RIA-NOVOSTI / POOL ALEXEY DRUZHININ)

China’s President Xi Jinping (2nd R) looks at Russia’s President Vladimir Putin (2nd L) shaking hands with Gazprom CEO Alexei Miller (L) at an agreement signing ceremony in Shanghai on May 21, 2014. (AFP PHOTO / RIA-NOVOSTI / POOL ALEXEY DRUZHININ)

The long-awaited agreement is a political triumph for Russian President Vladimir Putin, who is courting partners in Asia as those in Europe and the United States seek to isolate him over Moscow’s annexation of the Crimean peninsula.

Commercially, much depends on the price and other terms of the contract, which has been more than a decade in the making. China had the upper hand as negotiations entered their final phase, aware of Putin’s faceoff with the West.

“This is the biggest contract in the history of the gas sector of the former USSR,” Putin said after the agreement was signed in Shanghai between state-controlled entities Gazprom and China National Petroleum Corp.

“Our Chinese friends are difficult, hard negotiators,” he said, noting that talks went on until 4 a.m.

“Through mutual compromise we managed to reach not only acceptable, but rather satisfactory, terms on this contract for both sides.”

Putin and his Chinese counterpart Xi Jinping applauded as they witnessed the deal being signed, just hours before the Russian leader was due to leave Shanghai at the end of a two-day visit.

The deal came ahead of a major economic summit in the northern Russian city of St. Petersburg, starting Thursday. Around a dozen chief executives and chairmen of major U.S. and European corporations have withdrawn from the forum over the Ukraine crisis.

Putin loyalist and senior parliamentarian Alexey Pushkov, who was included on a U.S. list of individuals sanctioned in the wake of the crisis in Ukraine, said the gas deal showed Russia could not be isolated.

“B. Obama should abandon the policy of isolating Russia: It will not work,” he tweeted, referring to U.S. President Barack Obama, who has pushed for greater Western punishment of Russia.

Gazprom CEO Alexey Miller declined to disclose the price at which the deal was struck, but sources at the companies involved said Gazprom refused to go below $350 per thousand cubic meters.

That compares to a price range of $350-$380 that most European utilities pay under discounted long-term contracts signed in the last two years. Putin said the formula was similar to the European price tied to the market value of oil and oil products.

Crucially for China, the implied price is below the Asian cost of importing liquefied natural gas, an alternative energy source that it is currently developing.

Another potential sticking point in talks was whether China would pay a lump sum up front to fund considerable infrastructure costs.

According to Putin, China will provide $20 billion for gas development and infrastructure, but Miller said the two sides were still in talks over any advance.

The gas will be transported along a new pipeline linking Siberian gas fields to China’s main consumption centers near its coast. Russia will begin delivering from 2018, building up gradually to 38 billion cubic meters a year, officials said.

Russia plans to invest $55 billion in exploration and pipeline construction up to China, and CNPC said it would build the Chinese section of the pipeline.

The contract does not necessarily mean that Russia is giving up on Europe. Last year, Gazprom supplied Western Europe and Turkey with over 160 bcm of gas, dwarfing intended deliveries to China. Meanwhile, European consumers could not easily switch from Russian gas, even if they wanted to.

Beyond supplying China with gas via a pipeline, the deal opens up an opportunity for Gazprom to become a bigger player in the booming Asian LNG market, a sector it has so far not been involved in on a major scale.

Gazprom is planning to build a new LNG plant on the Russian Pacific coast near Vladivostok, but has so far lacked the infrastructure to supply the facility with the amount of gas necessary to meet regional demand.

The new pipeline would change this, ideally positioning Gazprom’s Vladivostok terminal close to the leading LNG buyers of Japan and South Korea as well as the rising market on China’s eastern coast.

Gordon Kwan, head of Asian oil research at Nomura, said that although details of the agreement were sketchy, they were likely to have been favorable to China.

“Given the EU sanctions that could potentially hit Russia, I don’t think Gazprom is in a position to strike a very high price,” he said.

He added that CNPC would be driving a hard bargain in the wake of a corruption investigation that rocked the company last year, as Xi seeks to stamp out broader graft.

Shares in Gazprom rose by nearly 2 percent after the deal was announced, and were up 1.3 percent at 13:20 GMT.

 A version of this article appeared in the print edition of The Daily Star on May 22, 2014, on page 1.

Source: The Daily Star Lebanon

 

Sanctions: KSA sanctions on Netherlands begin

Saudi Arabia has begun imposing trade sanctions against companies based in the Netherlands in reaction to PVV-leader Geert Wilders’ anti-Islam stickers. The measures will be imposed by declaration of King Abdullah, nu.nl reports.

Wilders presenting his anti-Islam sticker c. NLTimes

Wilders presenting his anti-Islam sticker c. NLTimes

The sanctions have been announced by local sources on the basis of a message from the ministry of Foreign Affairs in the Saudi capital, Riyadh. The Saudi authorities themselves have not yet confirmed the sanctions. Minister Frans Timmermans of Foreign Affairs said Wednesday that they are now asking for clarity about that.

The threat of sanctions was sparked by Geert Wilders’ anti-Islam stickers, the design of which looks a lot like the Saudi Arabian flag, but replaces the Islamic creed with religious slander. One of those stickers was sent to the Saudi Embassy in The Hague.

Timmermans wants to ensure that the lucrative Dutch-Saudi trade relations remain safe. He doesn’t want Saudi Arabia to discount the entire country over the “pubescent behavior of a parliamentarian.” According to him, sanctions have been a possibility for some time, and there have been discussions to try and prevent those from happening. He previously said, “Wilders’ opinion, to willfully emotionally damage people by manipulating their flag, is in no way shared by the Dutch government.”

Timmermans will travel to Riyadh to once again clarify the Dutch position.

Wilders himself decries Saudi Arabia for dismissing democracy and the right to freedom of speech. In a reaction, he said that Saudi Arabia is a “barbaric country that cannot even spell the words ‘human rights.’”

Vice Prime Minister Lodewijk Asscher has called the sanctions an “insane threat.” According to the Dutch government, there are five sectors in Saudi Arabia that can be lucrative for Dutch companies: water management, the medical sector, construction and infrastructure, education and the energy sector.

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Ukraine: Russia sanctions’ fallout and Latvian measures

A few new stories this morning highlight different aspects of the Ukrainian crisis  how the threat of sanctions is being perceived.

Firstly, EU and US sanctions placed on Russia could have wider reaching consequences, one Kremlin aide told the press. If Russia is prohibited by law from using USD, the worlds reserve currency, it would be unable to payback loans made in USD and ultimately may have to use another settlement currency.

The threat of sanctions is being downplayed by Russia and language used even has echoes of the old

English: Vice President Richard M. Nixon and S...

English: Vice President Richard M. Nixon and Soviet Premier Nikita Khrushchev at the Kremlin. NARA. Special Media Archives Services Division (Still Pictures). RG306-RMN-1-21 (Photo credit: Wikipedia)

Cold War. Nikita Khrushchev is often misquoted as telling Western Ambassadors in 1956 “We will bury you“; his words “Мы вас закопаем” (My vas zakopayem) are better translated as we will dig you in, or even we will outlive you.

The Kremlin aide in this comment mentions Russia’s excellent “relations with our partners in the east and south” and is confident about Moscow’s ability to reduce economic dependence on the West to nothing, even profiting from the situation.

The effect of sanction of global financial markets could be further reaching than any previous similar measures, as discussed by the Midnight Breakfast blog. Ukrainian dependence on EU and US funding could be a great drain on both economies. EU dependence on Russian energy (Putin turned the gas off on Ukraine in January 2006, when temperatures in Kiev plummet below zero) would give Russia great bargaining power.

Meanwhile, the Latvian government has taken legal steps towards issuing asset freezes and travel bans against certain Ukrainian citizensLatvia is a Baltic Sea country and former Soviet State which is now pat of the EU and, since January 2014, trades in EUR.

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