Tag Archives: Oil

Netanyahu says Israel, India both face threat from radical Islam

Israeli Prime Minister Benjamin Netanyahu speaks as his Indian counterpart Narendra Modi looks on during a signing of agreements ceremony at Hyderabad House in New Delhi, India January 15, 2018.

By Sanjeev Miglani

NEW DELHI (Reuters) – Israeli Prime Minister Benjamin Netanyahu said on Tuesday he was discussing with India ways to strengthen security cooperation against the menace of from Islamist extremism that both democracies faced.

Netanyahu spoke while on a six-day tour of India, the first by an Israeli premier for 15 years, and is being feted by Indian counterpart Narendra Modi, whose Hindu nationalist party has long admired Israel for its tough posture against terrorism.

India, wary of upsetting Arab nations on which it was dependent for oil, and heeding the sentiments of its own large Muslim minority, kept a distance from Israel for decades. But under Modi, the two sides have embraced a closer relationship based on security and economics.

The right-wing Netanyahu told a security conference that India and Israel were two democracies with a natural affinity, but their open and liberal societies faced risks.

“Our way of life is being challenged, most notably, the quest for modernity, the quest for innovation (are) being challenged by radical Islam and its terrorist offshoots from a variety of corners,” he said.

Both Israel and India have long sought to counter militant Islamists – in Israel’s case, mainly from Gaza and Egypt’s Sinai region and, in India’s case, mainly from Pakistan. Away from the public eye, India and Israel have been cooperating against the threat through, in part, intelligence sharing, officials say.

“We’ve discussed in this visit how we can strengthen our two nations in the civilian areas, in security areas, in every area,” Netanyahu told the conference.

His trip to India comes just six months after Modi made the first trip by an Indian prime minister to Israel, during which he did not go to Ramallah, seat of the self-ruling Palestinian Authority and a customary stop for leaders visiting the region.

Netanyahu toured the Taj Mahal on Tuesday and will also visit Modi’s home state of Gujarat and India’s financial capital Mumbai.

He will join an 11-year-old Israeli boy, Moshe Holtzberg, whose parents were murdered by Pakistan-based militants in Mumbai in 2008, for a memorial event at the Indian financial hub’s Jewish center where the attack took place.

The boy, who lives with his grandparents in Israel, arrived on Tuesday as a guest of Modi.

(Additional reporting by Neha Dasgupta; editing by Mark Heinrich)

Russian tankers fueled North Korea via transfers at sea

A North Korean flag flies on a mast at the Permanent Mission of North Korea in Geneva October 2, 2014.

By Guy Faulconbridge, Jonathan Saul and Polina Nikolskaya

LONDON/MOSCOW (Reuters) – Russian tankers have supplied fuel to North Korea on at least three occasions in recent months by transferring cargoes at sea, according to two senior Western European security sources, providing an economic lifeline to the secretive Communist state.

The sales of oil or oil products from Russia, the world’s second biggest oil exporter and a veto-wielding member of the United Nations Security Council, breach U.N. sanctions, the security sources said.

The transfers in October and November indicate that smuggling from Russia to North Korea has evolved to loading cargoes at sea since Reuters reported in September that North Korean ships were sailing directly from Russia to their homeland.

“The Russian vessels made transfers at sea to the North Koreans,” the first security source, who spoke on condition of anonymity, told Reuters. The source said the transfers of oil or oil products took place on several occasions and were a breach of sanctions.

A second source, who independently confirmed the existence of the Russian ship-to-ship fuel trade with North Korea, said there was no evidence of Russian state involvement in the latest transfers.

“There is no evidence that this is backed by the Russian state but these Russian vessels are giving a lifeline to the North Koreans,” the second European security source said.

In comments carried by Russia’s RIA Novosti state news agency on Saturday, the Russian Foreign Ministry said the country was observing sanctions against North Korea.

The two security sources cited naval intelligence and satellite imagery of the vessels operating out of Russian Far Eastern ports on the Pacific but declined to disclose further details to Reuters, saying it was classified.

The Russian Customs Service declined to comment when asked on Wednesday if Russian ships had supplied fuel to North Korean vessels. The owner of one ship accused of smuggling oil to North Korea denied any such activity.

SATELLITE DATA

The U.S. State Department, in a statement, called on Russia and other U.N. members to “strictly implement” sanctions on North Korea and to work “more closely together to shut down U.N.-prohibited activities, including ship-to-ship transfers of refined petroleum and the transport of coal from North Korea”.

The latest report came as China, responding on Friday to criticism from U.S. President Donald Trump, denied it had illicitly shipped oil products to North Korea.

North Korea relies on imported fuel to keep its struggling economy functioning. It also requires oil for its intercontinental ballistic missile and nuclear program that the United States says threatens the peace in Asia.

“The vessels are smuggling Russian fuel from Russian Far Eastern ports to North Korea,” said the first security source, who spoke on condition of anonymity.

Reuters was unable to independently verify that the vessels had transferred fuel to North Korean vessels, whether the Russian state knew about the sales or how many Russian vessels were involved in the transfers. It was also unclear how much fuel may have been smuggled.

Ship satellite positioning data consulted by Reuters and available on Reuters Eikon shows unusual movements by some of the Russian vessels named by the security sources including switching off the transponders which give a precise location.

The security sources said the Russian-flagged tanker Vityaz was one vessel that had transferred fuel to North Korean vessels.

The Vityaz left the port of Slavyanka near Vladivostok in Russia on Oct. 15 with 1,600 tonnes of oil, according to Russian port control documents.

Documents submitted by the vessel’s agent to the Russian State Port Control authority showed its destination as a fishing fleet in the Japan Sea. Shipping data showed the vessel switched off its transponder for a few days as it sailed into open waters.

According to the European security sources, the Vityaz conducted a ship-to-ship transfer with the North Korean Flagged Sam Ma 2 tanker in open seas during October.

Reuters could not independently verify the transfer as ship tracking data showed that the Sam Ma 2 had turned off its transponder from the start of August.

The owner of the Russian vessel denied any contact with North Korean vessels but also said it was unaware that the vessel was fuelling fishing boats.

OIL PRODUCTS

Yaroslav Guk, deputy director of the tanker’s owner, Vladivostok-based Alisa Ltd, said the vessel had no contacts with North Korean vessels.

“Absolutely no, this is very dangerous,” Guk told Reuters by telephone. “It would be complete madness.”

When contacted a second time, Guk said the vessel did not have any contacts with North Korean ships and that he would not answer further questions.

An official at East Coast Ltd, the vessel’s transport agent, declined to comment.

Two other Russian flagged tankers made similar journeys between the middle of October and November, leaving from the ports of Slavyanka and Nakhodka into open seas where they switched off their transponders, shipping data showed.

In September, Reuters reported that at least eight North Korean ships that left Russia loaded with fuel this year headed for their homeland despite declaring other destinations, a ploy that U.S. officials say is often used to undermine sanctions.

A Russian shipping source with knowledge of Far Eastern marine practices said North Korean vessels had stopped loading fuel in Russia’s Far Eastern ports but that fuel is delivered at sea by tankers using ship-to-ship transfers, or even by fishing vessels.

China on Friday denied reports it had been illicitly selling oil products to North Korea in violation of U.N. sanctions, after U.S. President Donald Trump said he was unhappy that China had allowed oil to reach the isolated nation.

China’s denial came a day after it blocked a U.S. effort at the United Nations to blacklist six ships Washington believes had engaged in illicit trade with North Korea, a U.N. Security Council diplomat said.

According to documents seen by Reuters this month, the United States had proposed that the U.N. Security Council blacklist 10 ships for illicit trade with North Korea.

It accused the vessels of “conducting illegal ship-to-ship transfers of refined petroleum products to North Korean vessels or illegally transporting North Korean coal to other countries for exports.”

Three North Korean ships among the 10 were blacklisted, along with a Panama-registered vessel.

(Additional reporting by David Brunnstrom in Washington, and Gabrielle Tetrault-Farber in Moscow; Editing by Giles Elgood, Leslie Adler and Alison Williams)

South Korea seizes second ship suspected of providing oil to North Korea

The Lighthouse Winmore, a Hong Kong-flagged vessel suspected of transferring oil to North Korea in defiance of international sanctions, is seen in the sea off Yeosu, South Korea December 29, 2017.

By Yuna Park and Hyunjoo Jin

SEOUL (Reuters) – South Korean authorities have seized a Panama-flagged vessel suspected of transferring oil products to North Korea in violation of international sanctions, a customs official said on Sunday.

The seizure was the second to be revealed by South Korea within a few days, as the United Nations steps up efforts to squeeze essential oil supplies to the reclusive North following its nuclear or ballistic missile tests.

The ship, KOTI, was seized at Pyeongtaek-Dangjin port, the official told Reuters, without elaborating, due to the sensitivity of the issue. The port is on the west coast, south of Incheon.

A marine official also confirmed the seizure, which he said was done “recently”.

The KOTI’s estimated time of arrival at the port was Dec. 19, according to VesselFinder Ltd., a tracking service provider,

The ship can carry 5,100 tonnes of oil and has a crew mostly from China and Myanmar, Yonhap News Agency reported, adding that South Korea’s intelligence and customs officials are conducting a joint probe into the vessel.

A Foreign Ministry spokesman confirmed the probe, declining to provide details.

“The government has been in close consultations with related countries and ministries to thoroughly implement the sanctions by the U.N. Security Council,” the spokesman said.

PROPOSED BLACKLISTING

On Friday, South Korea said that in late November it seized the Hong Kong-flagged Lighthouse Winmore, which is suspected of transferring as much as 600 tons of oil to the North Korea-flagged Sam Jong 2.

The U.N. Security Council last month unanimously imposed new sanctions on North Korea for a recent intercontinental ballistic missile test, seeking to limit its access to refined petroleum products and crude oil.

The United States has also proposed that the United Nations Security Council blacklist 10 ships for transporting banned items from North Korea, according to documents seen by Reuters on Tuesday.

The Lighthouse Winmore is one of the 10 ships proposed to be blacklisted. The KOTI does not seem to be included on the list.

On Thursday, China blocked a U.S. effort at the United Nations to blacklist six foreign-flagged ships, a U.N. Security Council diplomat said.

China’s Foreign Ministry, responding to a question from Reuters on the blocking, said Beijing always fully and strictly implemented Security Council resolutions.

“At the same time, any measures taken by the Security Council must have a basis in conclusive and actual proof. China will continue to participate in the work of the relevant Security Council sanctions committee on this principle,” it said in a short statement, without elaborating.

China also denied reports it had been illicitly selling oil products to North Korea in defiance of U.N. sanctions, after U.S. President Donald Trump said he was unhappy that China had allowed oil to reach the isolated nation.

Russian tankers have supplied fuel to North Korea on at least three occasions in recent months by transferring cargoes at sea, breaching U.N. sanctions, sources told Reuters.

(Reporting by Yuna Park and Hyunjoo Jin; Additional reporting by Hyonhee Shin in SEOUL and Ben Blanchard in BEIJING; Editing by Kim Coghill and Richard Borsuk)

Trump says ‘disappointed’ China allowing oil into North Korea

U.S. President Donald Trump gives a thumbs-up to reporters as he boards Air Force One for travel to Palm Beach from Joint Base Andrews, Maryland, U.S., December 22, 2017

WASHINGTON (Reuters) – U.S. President Donald Trump on Thursday said he was “very disappointed that China is allowing oil to go into North Korea” and that such moves would prevent “a friendly solution” to the crisis over Pyongyang’s nuclear program.

“Caught RED HANDED – very disappointed that China is allowing oil to go into North Korea. There will never be a friendly solution to the North Korea problem if this continues to happen!” Trump wrote in a post on Twitter.

China earlier on Thursday said there had been no U.N. sanction-breaking oil sales by Chinese ships to North Korea after a South Korea newspaper said Chinese and North Korean vessels had been illicitly linking up at sea to get oil to North Korea.

(Reporting by Susan HeaveyEditing by Chizu Nomiyama)

Venezuela citizens scramble to survive as merchants demand dollars

Bolivar notes a seen hanging in a tree at a street in Maracaibo, Venezuela November 11, 2017.

By Eyanir Chinea and Maria Ramirez

CARACAS/CIUDAD GUAYANA, Venezuela (Reuters) – There was no way Jose Ramon Garcia, a food transporter in Venezuela, could afford new tires for his van at $350 each.

Whether he opted to pay in U.S. currency or in the devalued local bolivar currency at the equivalent black market price, Garcia would have had to save up for years.

Though used to expensive repairs, this one was too much and put him out of business. “Repairs cost an arm and a leg in Venezuela,” said the now-unemployed 42-year-old Garcia, who has a wife and two children to support in the southern city of Guayana.

“There’s no point keeping bolivars.”

For a decade and a half, strict exchange controls have severely limited access to dollars. A black market in hard currency has spread in response, and as once-sky-high oil revenue runs dry, Venezuela’s economy is in free-fall.

The practice adopted by gourmet and design stores in Caracas over the last couple of years to charge in dollars to a select group of expatriates or Venezuelans with access to greenbacks is fast spreading.

Food sellers, dental and medical clinics, and others are starting to charge in dollars or their black market equivalent – putting many basic goods and services out of reach for a large number of Venezuelans.

According to the opposition-led National Assembly, November’s rise in prices topped academics’ traditional benchmark for hyperinflation of more than 50 percent a month – and could end the year at 2,000 percent. The government has not published inflation data for more than a year.

“I can’t think in bolivars anymore, because you have to give a different price every hour,” said Yoselin Aguirre, 27, who makes and sells jewelry in the Paraguana peninsula and has recently pegged prices to the dollar. “To survive, you have to dollarize.”

The socialist government of the late president Hugo Chavez in 2003 brought in the strict controls in order to curb capital flight, as the wealthy sought to move money out of Venezuela after a coup attempt and major oil strike the previous year.

Oil revenue was initially able to bolster artificial exchange rates, though the black market grew and now is becoming unmanageable for the government.

TRIM THE TREE WITH BOLIVARS

President Nicolas Maduro has maintained his predecessor’s policies on capital controls. Yet, the spread between the strongest official rate, of some 10 bolivars per dollar, and the black market rate, of around 110,000 per dollar, is now huge.

While sellers see a shift to hard currency as necessary, buyers sometimes blame them for speculating.

Rafael Vetencourt, 55, a steel worker in Ciudad Guayana, needed a prostate operation priced at $250.

“We don’t earn in dollars. It’s abusive to charge in dollars!” said Vetencourt, who had to decimate his savings to pay for the surgery.

In just one year, Venezuela’s currency has weakened 97.5 per cent against the greenback, meaning $1,000 of local currency purchased then would be worth just $25 now.

Maduro blames black market rate-publishing websites such as DolarToday for inflating the numbers, part of an “economic war” he says is designed by the opposition and Washington to topple him.

On Venezuela’s borders with Brazil and Colombia, the prices of imported oil, eggs and wheat flour vary daily in line with the black market price for bolivars.

In an upscale Caracas market, cheese-filled arepas, the traditional breakfast made with corn flour, increased 65 percent in price in just two weeks, according to tracking by Reuters reporters. In the same period, a kilogram of ham jumped a whopping 171 percent.

The runaway prices have dampened Christmas celebrations, which this season were characterized by shortages of pine trees and toys, as well as meat, chicken and cornmeal for the preparation of typical dishes.

In one grim festive joke, a Christmas tree in Maracaibo, the country’s oil capital and second city, was decorated with virtually worthless low-denomination bolivar bills.

Most Venezuelans, earning just $5 a month at the black market rate, are nowhere near being able to save hard currency.

“How do I do it? I earn in bolivars and have no way to buy foreign currency,” said Cristina Centeno, a 31-year-old teacher who, like many, was seeking remote work online before Christmas in order to bring in some hard currency.

(Additional reporting by Andreina Aponte and Leon Wietfeld in Caracas, Mircely Guanipa in Maracay, Anggy Polanco in San Cristobal, Lenin Danieri in Maracaibo; Writing by Girish Gupta; Editing by Leslie Adler)

North Korea likely to pursue talks, South says in rosy New Year forecast

South Korean soldiers patrol along a barbed-wire fence near the militarized zone separating the two Koreas, in Paju, South Korea, December 21, 2017

By Haejin Choi

SEOUL (Reuters) – South Korea predicted on Tuesday that North Korea would look to open negotiations with the United States next year in an optimistic outlook for 2018, even as Seoul set up a specialized military team to confront nuclear threats from the North.

The U.N. Security Council unanimously imposed new, tougher sanctions on reclusive North Korea on Friday for its recent intercontinental ballistic missile test, a move the North branded an economic blockade and act of war.

“North Korea will seek negotiation with United States, while continuing to pursue its effort to be recognized as a de facto nuclear-possessing country,” South Korea’s Unification Ministry said in a report, without offering any reasons for its conclusion.

The Ministry of Defence said it would assign four units to operate under a new official overseeing North Korea policy, aimed to “deter and respond to North Korea’s nuclear and missile threat”.

Tensions have risen over North Korea’s nuclear and missile programs, which it pursues in defiance of years of U.N. Security Council resolutions, with bellicose rhetoric coming from both Pyongyang and the White House.

U.S. diplomats have made clear they are seeking a diplomatic solution but President Donald Trump has derided talks as useless and said Pyongyang must commit to giving up its nuclear weapons before any talks can begin.

In a statement carried by the official KCNA news agency, North Korea said the United States was terrified by its nuclear force and was getting “more and more frenzied in the moves to impose the harshest-ever sanctions and pressure on our country”.

China, the North’s lone major ally, and Russia both supported the latest U.N. sanctions, which seek to limit the North’s access to refined petroleum products and crude oil and its earnings from workers abroad, while on Monday Chinese Foreign Ministry spokeswoman Hua Chunying called for all countries to ease tension.

On Tuesday, Beijing released customs data indicating China exported no oil products to North Korea in November, apparently going over and beyond U.N. sanctions.

China, the main source of North Korea’s fuel, did not export any gasoline, jet fuel, diesel or fuel oil to its neighbor last month, data from the General Administration of Customs showed.

China also imported no iron ore, coal or lead from North Korea in November.

In its 2018 forecast, South Korea’s Unification Ministry said it believed the North would eventually find ways to blunt the effects of the sanctions.

“Countermeasures will be orchestrated to deal with the effects, including cuts in trade volume and foreign currency inflow, lack of supplies, and reduced production in each part of the economy,” the report said.

The latest round of sanctions was prompted by the Nov. 29 test of what North Korea said was an intercontinental ballistic missile that put the U.S. mainland within range of its nuclear weapons.

The Joongang Ilbo Daily newspaper, citing an unnamed South Korean government official, reported on Tuesday that North Korea could also be preparing to launch a satellite into space.

Experts have said such launches are likely aimed at further developing the North’s ballistic missile technology, and as such would be prohibited under U.N. resolutions.

The North Korean Rodong Sinmun newspaper said on Monday saying that “peaceful space development is a legitimate right of a sovereign state”.

North Korea regularly threatens to destroy South Korea, the United States and Japan, and says its weapons are necessary to counter U.S. aggression.

The United States stations 28,500 troops in the South, a legacy of the 1950-53 Korean War, and regularly carries out military exercises with the South, which the North sees as preparations for invasion.

(Additional reporting by Muyu Xu and Ryan Woo in Beijing; Writing by Josh Smith; Editing by Nick Macfie)

Tougher North Korea sanctions could hit home, analysts say ahead of U.N. vote

People look toward the north through a barbed-wire fence near the militarized zone separating the two Koreas, in Paju, South Korea, December 21, 2017.

By Hyonhee Shin and Heekyong Yang

SEOUL (Reuters) – Newly proposed sanctions on North Korea could have a significant effect on the isolated country’s already struggling economy, analysts said ahead of an expected U.N. Security Council vote on Friday, which will hinge on support from China and Russia.

Tensions have been rising over North Korea’s nuclear and missile programs, which it pursues in defiance of years of different U.N. Security Council resolutions, with bellicose rhetoric from the North and the White House.

But U.S. diplomats have made clear they are seeking a diplomatic solution and have proposed a number of new, tougher sanctions designed to ratchet up pressure on North Korean leader Kim Jong Un.

North Korea regularly threatens to destroy South Korea, the United States and Japan and says its weapons programs are necessary to counter U.S. aggression. The United States stations 28,500 troops in the South, a legacy of the 1950-53 Korean War.

On Friday, a spokesperson for North Korea’s foreign ministry called U.S. President Donald Trump’s recently released national security strategy the latest American policy seeking to “stifle our country and turn the entire Korean peninsula” into an outpost of American hegemony.

He said Trump was seeking “total subordination of the whole world”.

INCREASING PRESSURE

The draft U.N. resolution, seen by Reuters on Thursday, seeks to ban nearly 90 percent of refined petroleum product exports to North Korea by capping them at 500,000 barrels a year and demand the repatriation of North Koreans working abroad within 12 months.

It would also cap crude oil supplies to North Korea at 4 million barrels a year, as well as ban a number of North Korean exports such as machinery, lumber, and other products and resources.

“If they were enforced, the cap on oil would be devastating for North Korea’s haulage industry, for North Koreans who use generators at home or for productive activities, and for (state-owned enterprises) that do the same,” said Peter Ward, a columnist for NK News, a website that tracks North Korea.

The forced repatriation of foreign workers would also cut off vital sources of foreign currency and investment not only for the government but also for North Korea’s emerging market economy, he said.

“If such sanctions were enforced, they would thus impede and endanger North Korea’s economic development.”

Asked about the effects of sanctions before these latest proposals were announced, Michael Kirby, who led a U.N. inquiry into human rights abuses in North Korea, said cutting off fuel imports would be “a very serious step”.

“Cutting off oil, petroleum supplies would obviously have a very big impact on the ordinary population,” he said.

EYES ON CHINA, RUSSIA

China, which supplies most of North Korea’s oil, has backed successive rounds of U.N. sanctions but has resisted past U.S. calls to cut off supplies to its neighbor.

Asked about the proposed new resolution on North Korea, Chinese Foreign Ministry spokeswoman Hua Chunying called on all sides to exercise restraint and to “strictly implement the current relevant U.N. Security Council resolutions”.

While not directly addressing the new proposals, Hua said that China would maintain communications with all sides and supports measures to “quickly create the necessary conditions to peacefully resolve the Korean Peninsula nuclear issue through talks”.

Any move to curb exports of Chinese fuel to North Korea may have limited impact after China National Petroleum Corp suspended diesel and gasoline sales to its northern neighbor in June over concerns the state-owned company would not get paid.

Business has slowed steadily since then, with zero shipments of diesel, gasoline and other fuel from China in October. November data will be released on Monday.

Russia quietly boosted economic support for North Korea earlier this year, and last week Russian Deputy Foreign Minister Igor Morgulov said that Moscow was not ready to sign up to new sanctions that would strangle the country economically.

China and Russia on Thursday asked for more time to consider a U.S. proposal to blacklist 10 ships for transporting banned items from North Korea, diplomats said. It was unclear how much more time would be given.

Even if the proposed sanctions have an economic effect, it’s not clear whether that would push Pyongyang to negotiate or stop its weapons development, said Kim Sung-han, a former South Korean vice foreign minister.

“We have had numerous – sometimes so-called toughest – sanctions against North Korea over the past 25 years,” he said. “Almost none have worked effectively to halt the regime’s military and nuclear ambitions.”

OLYMPIC DREAMS

The additional sanctions would come as South Korean President Moon Jae-in seeks to ease tensions ahead of the 2018 Pyeongchang Winter Olympics in February. He has proposed delaying annual joint military drills with the United States, which North Korea sees as a preparation for invasion, until after the Games.

A foreign ministry spokesperson declined to comment until after the Security Council vote on the resolution on Friday, but an official at South Korea’s Unification Ministry said Seoul supported global efforts to rein in North Korea even as it tries to use the Olympics as a catalyst for peace negotiations.

“The North should have its own thinking about whether or not to participate in the Olympics (regardless of sanctions),” the Unification Ministry official told Reuters. “If it were to come, it would make a decision at the last minute. Until then we will continue to wait and see.”

Seoul has also sought to repair relations with China, which were damaged when Beijing complained over the deployment of an American anti-missile system in South Korea.

Officials at foreign ministries in both Seoul and Beijing have denied reports by travel agents that some Chinese tour groups are still begin blocked from traveling to South Korea.

“As far as I am aware, according to the information I have before me, these reports are not in accord with the facts,” Hua said on Friday.

While Trump and North Korean leader Kim have publicly derided negotiations as useless without major policy shifts by the other side, Seoul has continued a slightly softer approach, while still supporting international pressure.

“If we get to meet the North side, we are willing to have frank, active discussions on various issues that are of North Korea’s interest, without any preconditions,” South Korean Unification Minister Cho Myoung-gyon told reporters in Seoul.

“Next year, we would pursue our policy in a more proactive manner than this year, making use of various opportunities, including the Pyeongchang Olympics.”

(Additional reporting by Christian Shepherd in BEIJING; Writing by Josh Smith; Editing by Nick Macfie)

Nigeria to release $1 billion from excess oil account to fight Boko Haram

Nigeria to release $1 billion from excess oil account to fight Boko Haram

By Felix Onuah

ABUJA (Reuters) – Nigerian state governors on Thursday approved the release of $1 billion from the country’s excess oil account to the government to help fight the Boko Haram Islamist insurgency.

The account holds foreign reserves from excess earnings from sales of crude. It currently totals $2.3 billion, according to Nigeria’s accountant general.

“We are pleased with the federal government achievements in the insurgency war and in that vein state governors have approved that the sum of $1 billion be taken from the excess crude account by the federal government to fight the insurgency war to its conclusion,” said Godwin Obaseki, Edo state governor.

“The money will cover the whole array of needs which includes purchase of equipments, training for military personnel and logistics,” he told reporters after a meeting of Nigeria’s national economic council.

The release of such a large sum could raise concerns over corruption, endemic in Nigeria.

The next presidential and gubernatorial national elections are scheduled for February and March 2019. Historically, the run-up to elections has seen rampant graft and theft of public funds as politicians build war chests to contest the vote.

The insurgency in the northeast is in its ninth year. Deadly attacks on the military and civilians continue, and large areas are out of government control.

Officials have siphoned off funds meant for aid for 8.5 million people in the region.

In October, President Muhammadu Buhari sacked the country’s top civil servant, accused of having inflated the value of contracts for aid projects, part of a suspected kickback scheme.

The United Nations appealed to donors for $1.05 billion to fund humanitarian aid in the northeast in 2017, and says it will require another $1.1 billion in 2018.

Nigeria, which has Africa’s largest economy, has come under fire for devoting little of its own resources to humanitarian aid.

Military officials, speaking on condition of anonymity, have said troops are undersupplied and underpaid, with weapons, vehicles and other basic equipment often in disrepair or lacking. Some have alleged their own officers are skimming from already-meagre supplies.

The release of the funds is a further sign the Nigerian government and military may be abandoning their two-year narrative that Boko Haram has been all but defeated.

Nigeria’s long-term plan is now to corral civilians inside fortified garrison towns – effectively ceding the countryside to Boko Haram.

Earlier this month, Nigeria replaced the military commander of the campaign against Boko Haram after half a year in the post. Military sources told Reuters that came after a series of “embarrassing” attacks by the Islamists.

(Reporting by Felix Onuah; Writing by Paul Carsten; Editing by Andrew Roche)

Nebraska regulators approve Keystone XL pipeline route

A TransCanada Keystone Pipeline pump station operates outside Steele City, Nebraska March 10, 2014.

By Kevin O’Hanlon and Valerie Volcovici

LINCOLN, Nebraska/WASHINGTON (Reuters) – Nebraska regulators voted on Monday to approve a route for TransCanada Corp’s Keystone XL pipeline through the state, lifting the last big regulatory obstacle for the long-delayed project that U.S. President Donald Trump wants built.

The 3-2 decision by the Nebraska Public Service Commission helps clear the way for the pipeline linking Canada’s Alberta oil sands to refineries in the United States, but is likely to be challenged in court by opponents who say the project is an environmental risk.

The commission’s approval was not for TransCanada’s preferred route, but for a slightly longer alternative that could prove more difficult and costly to build. It was unclear whether the company will decide to pursue the project as it considers the commercial viability.

TransCanada did not immediately respond to a request for comment on the commission’s vote.

TransCanda stock rose as much as 2 percent to the session’s high of C$63.80 after the decision, while the broader Canada stock index was up 0.2 percent.

Trump, a Republican, has made Keystone XL’s success a plank in his effort to boost the U.S. energy industry. Environmentalists, meanwhile, have made the project a symbol of their broader fight against fossil fuels and global warming.

The proposed line has been a lightning rod of controversy since it was first advocated nearly a decade ago. The administration of former President Barack Obama, a Democrat, considered the project for years before rejecting it in 2015 on environmental grounds, under pressure from activist groups.

Trump swiftly reversed that decision after coming into office this year, handing TransCanada a federal permit for the pipeline in March and arguing the project will lower fuel prices, boost national security, and bring jobs.

Nationwide, Trump has said Keystone XL would create 28,000 jobs. But a 2014 State Department study predicted just 3,900 construction jobs and 35 permanent jobs.

Trump’s decision placed the pipeline’s fate into the hands of the obscure regulatory body in Nebraska, the only state that had yet to approve the pipeline’s route. Permits along Keystone XL’s proposed 1,179-miles (1,897-km) path have been approved in Canada, Montana and South Dakota.

Opposition to the line in Nebraska has been driven mainly by a group of around 90 landowners whose farms lie along the proposed route. They have said they are worried spills could pollute water critical for grazing cattle, and that tax revenue will be short-lived and jobs will be temporary.

A lawyer for the landowners, Dave Domina, said the commission’s decision was a partial victory, because it denied TransCanada its preferred route. But he added: “We will carefully evaluate the Order and meet with our clients.”

Billionaire environmental activist Tom Steyer denounced the commission’s decision. “We will not stop making our voices heard until this project is dead,” he said in a statement.

Just days ago, TransCanada’s existing Keystone system spilled 5,000 barrels in South Dakota and pipeline opponents said the spill highlighted the risks posed by the proposed XL expansion.

An aerial view shows the darkened ground of an oil spill which shut down the Keystone pipeline between Canada and the United States, located in an agricultural area near Amherst, South Dakota, U.S., in this photo provided November 18, 2017.

An aerial view shows the darkened ground of an oil spill which shut down the Keystone pipeline between Canada and the United States, located in an agricultural area near Amherst, South Dakota, U.S., in this photo provided November 18, 2017. Courtesy DroneBase/Handout via REUTERS

The project could be a boon for Canada, which has struggled to bring its vast oil reserves to market. But there are questions about demand for the pipeline after a surge in drilling activity in the United States.

 

(Reporting by Kevin O’Hanlon and Valerie Volcovici; additional reporting by Nia Williams and Ethan Lou in Calgary; Writing by Richard Valdmanis; editing by Grant McCool)

 

A house divided: How Saudi Crown Prince purged royal family rivals

Saudi Crown Prince Mohammed bin Salman looks on as he meets with French President Emmanuel Macron in Riyadh, Saudi Arabia, November 9, 2017. Saudi Press

By Samia Nakhoul, Angus McDowall and Stephen Kalin

BEIRUT/RIYADH (Reuters) – The first hint that something was amiss came in a letter.

On Saturday Nov. 4, guests at Riyadh’s Ritz Carlton were notified by the opulent hotel that: “Due to unforeseen booking by local authorities which requires an elevated level of security, we are unable to accommodate guests … until normal operations are restored.”

The purge was already under way. Within hours security forces had rounded up dozens of members of Saudi Arabia’s political and business elite, mostly in the capital and the coastal city of Jeddah. Among them were 11 princes as well as ministers and wealthy tycoons.

Some were invited to meetings where they were detained. Others were arrested at their homes and flown to Riyadh or driven to the Ritz Carlton, which has been turned into a temporary prison.

The detainees were allowed a single, brief phone call home, a person familiar with the arrests told Reuters.

“They don’t receive calls and are kept under tight security. No one can go in or out,” the insider said. “It is obvious that there was a lot of preparation for it.”

The purge was ordered by 32-year-old Crown Prince Mohammed bin Salman. Officially next in line to the throne to his father, King Salman, he is now in effect running the country which he has said he will transform into a modern state.

To do that – and in an attempt to shore up his own power – he has decided to go after the Saudi elite, including some members of the royal family, on accusations such as taking bribes and inflating the cost of business projects. Those arrested could not be reached for comment.

At stake is political stability in the world’s largest oil producer. The Crown Prince’s ability to rule unchallenged depends on whether the purge is successful.

The Crown Prince believes that unless the country changes, the economy will sink into a crisis that could fan unrest. That could threaten the royal family and weaken the country in its regional rivalry with Iran.

THE “CORRUPTION STICK”

Prince Mohammed decided to move on his family, the person familiar with events said, when he realized more relatives opposed him becoming king than he had thought.

“The signal was that anyone wavering in their support should watch out,” said the person familiar with the events. “The whole idea of the anti-corruption campaign was targeted toward the family. The rest is window dressing.”

King Salman said the purge was in response to “exploitation by some of the weak souls who have put their own interests above the public interest, in order to, illicitly, accrue money”. Insiders said the accusations were based on evidence gathered by the intelligence service.

Government backers have rejected suggestions that the campaign is really about eliminating political enemies. There was no immediate comment from the royal court on this story.

Among those now holed up at the Ritz Carlton hotel is Prince Miteb bin Abdullah, who is head of the powerful National Guard and Prince Mohammed’s cousin.

Miteb was in his farm house in Riyadh when he was called to a meeting with the Crown Prince. Such an invitation, even at night, would not be unusual for a senior official and would not have aroused suspicion.

“He went to the meeting and never came back,” said a second insider who has connections to some of those who were detained.

Others held include Prince Alwaleed bin Talal, who is chairman of international investment firm Kingdom Holding and a cousin of Prince Mohammed, and Prince Turki bin Abdullah, former governor of Riyadh province and a son of the late King Abdullah.

Some royal watchers said tensions were laid bare during family meetings over the summer. One insider said it was widely known to Prince Mohammed that some of the powerful royals, including Miteb, were resentful about his elevation.

Prince Mohammed, who is widely known in Saudi Arabia by his initials MbS, had said openly in interviews that he would investigate the kingdom’s endemic corruption and would not hesitate to go after top officials.

The vehicle was an anti-corruption committee created by King Salman, and announced on Nov. 4. The king put the Crown Prince in charge, adding another power to the many he has been given in the past three years.

Saudi authorities have questioned 208 people in the anti-corruption investigation and estimate at least $100 billion has been stolen through graft, the attorney-general said on Thursday. The head of the committee said investigators had been collecting evidence for three years.

By launching a war on corruption, the prince has combined a popular cause with the elimination of an obstacle to acceding to the throne.

“MbS used the corruption stick which can reach any one of them,” said Jamal Khashoggi, a former adviser to Prince Turki al-Faisal, intelligence chief from 1979 to 2001. “For the first time we Saudis see princes being tried for their corruption.”

But Khashoggi, who lives in the United States, said Prince Mohammed was being selective in his purge.

“I believe MbS is a nationalist who loves his country and wants it to be the strongest but his problem is that he wants to rule alone,” he said.

 

DE FACTO RULER

Prince Mohammed was appointed defense minister in 2015 when King Salman became monarch. In June, the King named him heir to the throne, pushing aside his older cousin Mohammed bin Nayef, a veteran head of the security apparatus. The royal family acquiesced and by September the Crown Prince had rounded up and jailed religious and intellectual opponents.

The latest detentions are intended to help him push through reforms that promise the greatest change since the reign of King Abdulaziz, founder of the current Saudi state in the 1930s.

That state has rested on an enduring accommodation between the royal family and the Wahhabist clerics who control the hardline version of Islam that originated in Saudi Arabia.

The ruling family promised to give Saudis comfortable lives and a share of the country’s oil wealth. In return, their subjects have offered political submission and promised to follow the country’s strict religious and social codes.

King Abdulaziz, who was also known as Ibn Saud, died in 1953. Since then, Saudi Arabia has been run by the king and below him there has been a group of princes, none of them strong enough to impose his will against the wishes of the others.

Decisions have mostly come through consensus. That arrangement has meant social and political change has been glacial although it has also kept the kingdom stable.

But in moves that position Prince Mohammed as the new Ibn Saud, the Crown Prince is tearing down pillars of rule that had been eroding under the weight of population growth and low oil prices.

Consensus has been replaced by what critics say is one-man rule, opposed by some princes although they would not risk saying so in public.

In the past few decades, every Saudi king had one or two of his brothers, sons or nephews by his side advising and sharing in governance. But Prince Mohammed has not appointed any of his brothers or other close family to top positions, instead relying on a team of advisers — mainly Saudis though some are U.S.- or British-trained.

King Salman, 82, still has the last word on everything. But he has delegated the running of the kingdom’s military, security, economic, foreign and social affairs to Prince Mohammed. There has been speculation for months, denied by court officials, that the king will soon abdicate the throne to MbS.

Even the Crown Prince’s age is remarkable. The last three kings have reached the throne aged 61, 80 and 79. Prince Mohammed is effectively in charge at 32.

 

NO GUARANTEE OF SUCCESS

Prince Mohammed says he offers a new social contract: A state that functions better than the rigid bureaucracy of the past, opportunities to have fun and an economy that will create jobs that can last, whatever happens in oil markets.

In September he announced that Saudi women will be given the right to drive. Just three weeks ago, during a conference for investors at the same Ritz Carlton that now houses the targets of his purge, he unveiled a plan for a $500-billion futuristic city where sexes could mingle and robots outnumber humans.

The prince has also drawn up a blueprint to wean Saudi Arabia off its dependence on oil and its subjects off state subsidies and government jobs. The public listing of national oil company Saudi Aramco, planned next year, is its centerpiece.

There are no guarantees the prince’s ambitions will succeed.

Even some admirers ask whether his reach exceeds his grasp. His top-down approach, brooking no opposition, could scare off investors wanting assurances about rule of law and security. Without huge investor support, he will struggle to meet the aspirations of Saudi youth.

War in Yemen, a dispute with the Gulf emirate of Qatar and growing tension with Iran is a concern to investors too.

It should help that Prince Mohammed, following the example of Ibn Saud, sees the importance of forging a special bond with the United States.

During a visit to Saudi Arabia in May, U.S. President Donald Trump urged Riyadh to lead an alliance against Iran and its attempt to cut a Shi’ite axis through Iraq, Syria and Lebanon.

Soon afterwards, Saudi Arabia and the United Arab Emirates blockaded Qatar, accusing its ruling Al Thani dynasty of supporting Iran and Islamist terrorism. Trump gave his backing. After the arrests of the past week, Trump tweeted support, saying those arrested had been “milking their country for years”.

One insider close to the royal family said the National Guard was unlikely to react strongly to Miteb’s removal. He said there had been no resistance to the ousting of Mohammed bin Nayef at the interior ministry and the National Guard would be no different.

 

(Additional reporting by Dasha Afanasieva, Editing by Timothy Heritage)