Gulf States Stuck Between 800 Lb. Saudi Gorilla and King Kong

"The question is not only about trust among Gulf s

“The question is not only about trust among Gulf states but also trust in the Americans,” said Mustafa Alani, a Middle East defence analyst
 

Gulf States Struggle to Agree on Missile Shield 

– OnIslam.net.

(Reuters) – Distrust among Sunni Gulf Arab states has scuppered the installation of a joint missile shield which Washington has long urged as the best means of defence against any strike by Iran.

The oil-exporting states have spent billions on U.S.-built anti-missile platforms but have fallen short of building a unified umbrella and an early warning system, despite their expressed intention to do so.

Analysts say that although they belong to the same political and military alliance, the six Gulf Cooperation Council (GCC) members remain uneasy about sharing data. Nor can they decide on the location of a central command and are struggling to find ways to work together in case of an emergency.

“The question is not only about trust among Gulf states but also trust in the Americans,” said Mustafa Alani, a Middle East defence analyst. “The central command is going to be controlled by a powerful state (Saudi Arabia) and the Americans and the small states will be sandwiched between the two.”

U.S. officials say the missile shield is part of a global plan that includes deployment of sea and land-based systems in Europe, the Middle East and Asia to counter the threat of ballistic missiles from states like Iran and North Korea.

Analysts say that although they belong to the same political and military alliance, the six Gulf Cooperation Council (GCC) members remain uneasy about sharing data

Iran is at odds with its Gulf Arab neighbours and the West over its nuclear programme. The United States and its allies say Iran is seeking nuclear weapons capability under the cover of a civil programme, which Tehran denies.

The Islamic state has threatened to target U.S. interests in the Gulf, including military bases, and to block oil tanker lanes in the Strait of Hormuz if it is attacked.

Thorny Issue

U.S. officials have been talking for years to the GCC members – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – about building the shield but have done so with more urgency in recent months.

The site of the central command room is a thorny issue because the Gulf states have a long history of disaccord. In 2009, the UAE pulled out of a planned GCC monetary union after Saudi Arabia was voted as the host of a common central bank. Saudi Arabia also hosts the GCC headquarters.

“We have to have a location,” Lt Gen David Goldfein, the U.S. Air Force commander for southwest Asia, told a security conference in Abu Dhabi

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The GCC states have spent billions on U.S.-built anti-missile platforms but have fallen short of building a unified umbrella and an early warning system

The UAE and Saudi Arabia are likely to vie for hosting the headquarters. Heavyweight Saudi Arabia is also home to the Peninsula Shield, a GCC force set up in 1986 to defend Gulf countries against any potential threat.

It has been called upon three times since its foundation – in the 1990-91 Gulf War, during the U.S.-led invasion of Iraq in 2003 and in March 2011 when Saudi Arabia and the UAE sent 1,500 soldiers to Bahrain during anti-government Shi’ite protests.

Theodore Karasik, a Dubai-based security analyst, said the UAE would be the favoured host because “this is where the push for integration has started from.”

Experts suggest the best short-term solution is for Gulf states to acquire compatible systems that can be, as one official said, “plugged” together in case of emergencies.

But U.S. officials say a “plug and play” approach is too risky, suggesting that it is no alternative to a central command which allows for a much faster decision-making process.

 

In this case, commanders would be sitting in one room controlling the entire network rather than having to coordinate between six different commands.

Goldfein said that despite each country’s individual defence plans and bilateral defence arrangements with the United States, a multilateral security approach was still needed.

 

Wary of Information Sharing

Smaller countries are concerned that states who would contribute more to the system such as Saudi Arabia and the UAE would have more control over it

Analysts say the Gulf states are not only wary of sharing information among themselves but also with the United States because the oil exporters fear direct U.S. involvement in the shield could mean that it would link its systems to GCC radars without sharing back data collected by its own assets.

GCC Secretary-General Abdullatif al-Zayani was among those at the Abu Dhabi conference who questioned the bloc’s dependence on foreign allies, mainly the United States.

“What are the defence capabilities that the GCC needs to become less dependent on their allies?” he asked.

Alani said another obstacle to regional cooperation was related to finances and sovereignty.

“Many countries either don’t have the money or don’t want to relinquish national control,” he said.

Smaller countries are concerned that states who would contribute more to the system such as Saudi Arabia and the UAE would have more control over it.

Despite a closing of ranks during the 1990-91 crisis over Iraq’s invasion of Kuwait, Gulf states belonging to the Saudi-dominated GCC have tended to guard their sovereignty jealously. Long-running border disputes have slowed security coordination.

“The GCC is overall a fractious organisation. They weren’t able to agree on a common currency and it’s rare they have real consensus among themselves,” Robert Jordan, the U.S. ambassador to Riyadh from 2001-03, told Reuters.

“The Saudis are viewed by the others as the 800lb gorilla in the region and are perceived to throw their weight about.”

Any pan-Gulf defence shield would have to be supervised by the Americans, which makes some countries, especially Saudi Arabia, have seconds thoughts about taking part, a Gulf-based diplomat said.

“The Americans want the system for their own reasons and defence assessment, but yet they want the Gulf to pay for it and host it,” he said.

The missile defence buildup in the Gulf began under former U.S. President George W. Bush and accelerated under President Barack Obama, whose administration introduced tougher sanctions against Iran.

A shared early warning system could be integrated with U.S. Navy cruisers and destroyers equipped with the Aegis ballistic missile defence system in offshore waters.

The Gulf states have individually acquired some advanced defence systems, including the latest versions of the Patriot Air and Missile Defence System. UAE has spent billions in recent years to protect its cities and oil installations against missile attacks.

The latest deal was signed in December with Lockheed Martin Corp for a $3.6 billion Theater High Altitude Area Defence (THAAD) – the only system designed to destroy short- and intermediate-range ballistic missiles both inside and outside the Earth’s atmosphere.

A company official told Reuters he expected other Gulf states to buy the THAAD as a result of tensions with Iran.

Besides Lockheed Martin, the biggest U.S. missile defence contractors include Boeing Co, Raytheon Co and Northrop Grumman Corp. Even without a central command system, much of the Gulf would be covered within a few years with the deployment of new systems in the region.

Freedom From Gazprom Tempts Ukraine as Exxon Hunts Shale – Bloomberg

Freedom From Gazprom Tempts Ukraine as Exxon Hunts Shale

Vincent Mundy/Bloomberg

Employees of Vikoil Ltd, a geophysical oil and gas prospecting service company, lay seismology equipment to locate the presence of shale gas deposits in the Lugansk region of Ukraine.

Freedom From Gazprom Tempts Ukraine as Exxon Hunts Shale

– Bloomberg.

Recent setbacks in shale-gas exploration in neighboring Poland have also raised questions about the region’s potential. The Polish government said last month shale-gas reserves may be lower than previously estimated and drilling a well costs almost three times as much as in the U.S.

Still, Ukraine’s gas reserves are “enormous” and the government has made considerable progress in improving the investor climate, 

By Ladka Bauerova

For the first time in more than two centuries, Ukraine sees its way to independence from Moscow.

That path tracks through a patch of sealed Soviet-era natural gas wells that are ready to be tapped once again and fields of shale rocks that the U.S. Geological Survey estimates will hold enough gas to fire the eastern European nation for 100 years or more. Royal Dutch Shell Plc (RDSA)Exxon Mobil Corp. (XOM), and Chevron Corp. (CVX) — three of the world’s four largestoil companies — bid last week for Ukrainian exploration rights.

“Ukraine is low-hanging fruit,” said Bertrand des Pallieres, chief executive officer of Cadogan Petroleum Plc (CAD), a London-based oil explorer with interests in 14 Ukrainian fields. “Ukraine has well-known basins that have been totally undermanaged and underinvested,” he said. “There is a consensus in the industry that its potential is great.”

The same technology that unlocked natural gas from shale rocks and made the U.S. the world’s largest natural gas producer is being rolled out across eastern Europe, home to the continent’s most promising prospects. If drilling succeeds, Ukraine will be able to lessen its reliance on Russian export monopoly OAO Gazprom (GAZP) for its natural gas supply, ending the economy’s vulnerability to decisions taken in the Kremlin.

The country, part of the Russian empire from the 18th century and then a Soviet republic until 1991, also has thousands of conventional natural gas wells, many of which were sealed and abandoned in the 1970s when the Soviet state decided to move production to Siberia.

Auction Rights

Ukraine plans to auction the rights to as much as 70 percent of production at the Oleska field in the western part of the country and the Yuzivska field in the east by May 23. The areas contain both shale and conventional gas deposits, and the bidders, which also included Eni SpA (ENI) and TNK-BP, each paid between $1.3 million and $1.9 million to apply for the license, according to the government. The state also plans to sell two licenses for gas exploration in the Black Sea and another one inland in the coming weeks.

“Thanks to all the historical activity there is a lot of available data, as opposed to wildcat exploration,” des Pallieres said in a telephone interview.

The country has the potential to triple its domestic production to 60 billion cubic meters a year by 2030 with the help of international oil companies, he said. That would bring it up to the level last seen in the 1960s, when it supplied one third of the Soviet Union’s gas needs, and end its dependence onRussia.

Gazprom’s Grip

Ukraine is eager to loosen Gazprom’s grip on its economy. NAK Naftogaz Ukrainy, the state monopoly, bought 45 billion cubic meters of natural gas from Russia last year, paying $13.9 billion, or 8.4 percent of Ukraine’s gross domestic product, Deputy Finance Minister Anatilyi Myarkovskyi said on March 16. The country wants to cut the price to $250 per 1,000 cubic meters from the $416 it paid in the first quarter to trim the budget deficit, which reached 4.3 percent of GDP in 2011.

Russia has so far refused to lower the price unless Ukraine surrenders control over its pipelines, which have carried as much as 80 percent of gas moving from Siberia westwards to the European Union. Gazprom has twice in the past six years cut natural gas deliveries to Ukraine on New Year’s Day because of pricing disputes. In a further setback, Russia began rerouting some supplies to Europe through the Nord Stream pipeline in the Baltic Sea and another across Belarus.

Coming Decade

To triple its domestic production to Soviet-era levels, Ukraine needs to invest as much as $10 billion a year in the coming decade, des Pallieres has estimated. That will not be possible without the participation of foreign companies because Naftogaz is so cash-starved it can barely maintain the current production levels, said Vitaliy Radchenko, an energy researcher at CMS Cameron McKenna in Kiev.

“The state companies are almost bankrupt because the state limits how much they can get for the gas they produce,” he said. “The private producers won’t be subject to such severe price limitations.”

Naftogaz reported a loss of 20.6 billion hryvnia ($2.6 billion) last year, the Finance Ministry said. President Viktor Yanukovych is unlikely to raise household gas prices before the end of the year as his party faces parliamentary elections in October.

Red Tape

Up to now most foreign investors have been cautious in embracing Ukraine. The country’s unstable political climate, excessive red tape and high corruption levels have kept foreign business away, Radchenko said.

Recent setbacks in shale-gas exploration in neighboring Poland have also raised questions about the region’s potential. The Polish government said last month shale-gas reserves may be lower than previously estimated and drilling a well costs almost three times as much as in the U.S.

Still, Ukraine’s gas reserves are “enormous” and the government has made considerable progress in improving the investor climate, said Ulrich Benterbusch, the director of Global Energy Dialogue at the International Energy Agency who is drawing a list of energy policy recommendations for the Ukrainian government.

“For years key policy makers in Ukraine were betting on the fact that somehow they would get the cheap Russian gas,” he said. “Now it’s clear that this is over, so that puts a lot of pressure on the system to change. There is money to be earned and gas to be found, and not just in small quantities.”

To contact the reporter on this story: Ladka Bauerova in Prague at lbauerova@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

China demands apology as activist leaves US embassy

China demands apology as activist leaves US embassy

| DAWN.COM.

A member from the pro-democracy Civic Party displays a photograph of blind Chinese activist Chen Guangcheng to passersby during a campaign collecting signatures in support of him in Hong Kong May 2, 2012. —Reuters Photo

BEIJING: Chinese activist Chen Guangcheng has left the US embassy to seek medical care and join his family, officials said Wednesday, as Beijing demanded a US apology on the eve of key talks between the two powers.

Chen, who riled Chinese authorities by exposing forced abortions and sterilisations under the “one-child” policy, fled house arrest on April 22 and sought refuge in the US embassy where he demanded assurances on his freedom.

Hours after Secretary of State Hillary Clinton arrived in China for long-planned meetings, the United States broke nearly a week of silence over his case and said that the dissident has been taken for treatment in Beijing.

“Chen Guangcheng has arrived at a medical facility in Beijing where he will receive medical treatment and be reunited with his family,” a senior US official said on condition of anonymity.

The US official did not immediately provide more details on Chen, such as whether he would be allowed to return home or head to the United States. The 40-year-old self-taught lawyer, who has been blind since childhood, has voiced hope for staying in China.

Wednesday’s nearly simultaneous announcements from the two countries may not have ended the row, with China demanding an apology for what it called interference in its affairs.

“China is very unhappy over this. The US action is an interference in China’s internal affairs and China cannot accept it,” Chinese foreign ministry spokesman Liu Weimin said, as quoted by the state Xinhua news agency.

“China demands that the US apologise and thoroughly investigate this incident, deal with the people who are responsible and ensure these types of incidents do not occur again,” he said.

His flight came despite round-the-clock surveillance around his home in eastern Shandong province, where he has alleged that he and his family suffered severe beatings after he ended a four-year jail term in 2010.

In a video recorded after his daring escape and released online, he appealed to China’s Premier Wen Jiabao to punish several local officials he said had made his family’s life a misery.

Chen’s case threatened to overshadow the annual meeting between leaders of the world’s two largest economies on key issues ranging from North Korea’s rocket launch to Syria.

Clinton has in the past repeatedly criticised China’s treatment of the 40-year-old legal campaigner.

Before the Chen case, Washington had hoped to showcase small signs of progress in relations with China at the Strategic and Economic Dialogue, which also includes US Treasury Secretary Timothy Geithner.

Largely in response to inflationary pressure, China has let its yuan appreciate. Currency levels have long been a source of friction, with US lawmakers charging that Beijing keeps the value of the yuan artificially low to flood the world with cheap exports.

On other sore points, China has in recent weeks reduced imports of oil from Iran, spoken out — albeit cautiously — against a rocket launch by North Korea, and supported a peace plan for Syria after joining Russia in vetoing two UN resolutions.

South Sudan said China, a major oil importer, would lend the new nation $8 billion despite Beijing’s longstanding ties to Khartoum. The US pointman on Sudan, Princeton Lyman, is joining Clinton to seek China’s help in ending recent fighting.