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Caspian exemption from sanctions sought
by Staff Writers
London (UPI) Jan 24, 2012

Kuwait reaches deal with Total for China refinery: report
Kuwait City (AFP) Jan 24, 2012 - Kuwait Petroleum Corp. has reached a deal with France's Total to be a partner in a Kuwait-China refinery joint venture, the Kuwaiti oil minister was Tuesday quoted as saying.

Mohammad al-Baseeri said the deal was struck after Shell withdrew from talks in the $9 billion refinery and petrochemical complex, Al-Jarida newspaper reported.

KPC's international arm, Kuwait Petroleum International (KPI) and China's state-owned Sinpec signed an agreement more than two years ago to build the complex in southern Guangdong province.

KPI has been negotiating with international oil majors to sell 20 percent of its 50 percent stake, or 10 percent of the total project.

Baseeri said the project is expected to come on stream in 2014 or 2015, a delay from the initial startup of 2013.

The refinery is expected to process up to 300,000 barrels per day of mainly Kuwaiti crude oil when it comes online, with its capacity rising to 500,000 bpd two years later.

A petrochemical plant attached to the refinery is slated to produce one million tonnes of ethylene.


British officials and energy multinational BP say they have lobbied the U.S. government to exempt a major Caspian Sea gas field from new sanctions imposed on Iran.

Unnamed representatives of the British Foreign Office and BP confirmed to The Wall Street Journal Sunday that they sought to make sure punitive sanctions slapped by Washington and the European Union on Tehran over its nuclear program didn't include the Shah Deniz II gas fields in the Caspian Sea.

They've been successful in their efforts, persuading U.S. lawmakers that, even though Iran's state-owned oil company Naftiran has a 10 percent stake in the massive new gas field, its importance to Europe's energy security trumped those concerns, the newspaper said.

Citing "people familiar with the matter," the Journal reported lobbying by Britain, BP and the European Union last month succeeded in exempting Shah Deniz II from new Iranian sanctions.

The EU is counting on major new gas flows from the Caspian Sea to help wean the continent from dependence on Russian supplies and that argument won the day in the U.S. Congress, where new measures meant to isolate Iran and cut off its oil revenues are under consideration.

An unnamed British Foreign Office spokesman confirmed the lobbying, telling the Journal that London's policy "balances the desire to put pressure on Iran over its nuclear program and makes sure it does not have an adverse impact on European economies," asserting "it is not a contradiction" to exempt Shah Deniz II from harsh sanctions.

A BP representative confirmed the company had discussed Shah Deniz II as part of "routine engagement" with U.S. lawmakers.

BP, along with Naftiran, Norway's Statoil, the State Oil Co. of Azerbaijan, France's Total SA and Russia's Lukoil Holdings each are part of the consortium that controls the Caspian Sea fields.

The newspaper said BP, the EU and Britain lobbied to change a U.S. House of Representatives sanctions bill written by U.S. Rep. Ileana Ros Lehtinen, R-Fla., that would ban any company doing business with Iran from operating in the United States.

Under the current version, the sanctions won't apply to efforts "to bring gas from Azerbaijan to Europe and Turkey," or to achieve "energy security and independence from Russia."

The situation remains fluid and the status of Shah Deniz could change as events unfolded, analysts cautioned.

Azerbaijan and Iran in 2010 signed an agreement to deepen their relationship on energy and electricity matters and the two nations have long had close cultural connections. Some 30 million ethnic Azeris live in Iran.

Azeri President Ilham Aliyev has come out against Western sanctions on Tehran in the past but at least one opposition party in the country holds a different view.

Asim Mollazade, chairman of the opposition Democratic Reforms Party, told the Azerbaijan Press Agency last week Baku should back the sanctions on Iran.

"We have repeatedly seen unfriendly actions and hostile statements by Iranian representatives targeting our country," Mollazade said. "Given this, we should be close to our Western partners today."

One consequence of Baku siding with the West on isolating Iran could be an energy blockade of the Nakhchivan Autonomous Republic -- an ethnic Azeri enclave sandwiched between Iran and Armenia.

Should that happen, Mollazade said, Azerbaijan and Turkey would do everything possible to provide the region with gas and electricity.

The lawmaker said ethnic Azeris living in Iran were "victims of Iran's clerical and totalitarian system."

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Iran summons Danish envoy to protest EU oil embargo
Tehran (AFP) Jan 24, 2012 - Iran on Tuesday summoned the Danish envoy, whose nation currently holds the rotating presidency of the European Union, after the 27-nation bloc moved to impose an embargo on Iranian oil exports, media reported.

A statement carried by official media said the Iranian deputy foreign minister in charge of Europe and American affairs, Ali Asghar Khaji, expressed Tehran's "strong protest to this illogical decision" in his meeting with the diplomat.

"Iranian people have repeatedly proven that they will not give up their legitimate and legal rights under pressure and oppressive measures and will not do so in the future," Khaji reportedly told the envoy, Anders Christian Hougaard.

Khaji held the bloc "responsible for the repercussions of their unconsidered and crisis-making decision."

The European Union on Monday slapped an embargo on Iranian oil exports as the West ramped up pressure on Tehran over its controversial nuclear drive and urged it to return to the negotiating table.

The Islamic republic, which is already under four rounds of United Nations sanctions, vehemently denies its nuclear programme masks an atomic weapons drive as the West alleges, and insists it is for civilian purposes only.

The Danish government confirmed its ambassador in Tehran had been summoned to the Iranian foreign ministry.

"It was in his capacity as the representative of the Danish presidency of the EU, which currently represents the European Union in Tehran," Danish Foreign Minister Villy Soevndal was quoted as saying by the ministry's press office.

He said the summons was a reaction to the vote on Monday by the EU for its "severe and unprecedented stance against Iran, which relates to the Iranian oil industry as well as the Iranian financial sector."

"From the Danish side, we fully support the EU decision on this subject."

EU foreign ministers agreed on an immediate ban on oil imports and a phase-out of existing contracts up to July 1. They also froze the assets of Iran's central bank while ensuring legitimate trade under strict conditions.

The bloc imported some 600,000 barrels per day of Iranian oil in the first 10 months of last year, making it a key market alongside India and China, which has refused to bow to pressure from Washington to dry up Iran's oil revenues.

The new EU sanctions meanwhile would make it even more difficult for Iran to be paid in foreign currency for its oil exports, worth more than 100 billion dollars in 2011.



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