Monthly Archive for October, 2009
Iran’s Oil and Energy Information Network has a story (Persian) on two energy deals that Turkish Prime Minister Erdogan concluded on his recent visit to Tehran. Under the headline “Conditions for Transfer of Iranian Gas to Europe have been Met,” the piece quotes Ahmadinejad’s Vice President Mohammadreza Rahimi praising “brotherly” relations with Turkey and the signing of trade initiatives that would eventually total $30B.
Rahimi mentions two specific initiatives, one to cooperate towards developing an additional 6,000 MW of power generation capacity in the two countries. Second is an an agreement for Iran to supply gas to Europe via Turkey (presumably through the planned Nabucco pipeline) and also to act as a transhipment route for Turkmen gas en route to Europe.
Using Iranian gas to fill Nabucco has been discussed before, but this marks a step closer towards making it a reality. The deal, and Erdogan’s high profile visit to Tehran, are no doubt ruffling feathers in DC, but there has been little official reaction to the visit so far. This seems like another example of the “’sleeping with your friends’ enemies” argument that Bryan Early advances here. In sum, friends of a sanctioning state are in fact more likely to flout sanctions and trade restrictions because of security afforded by the alliance with the sanctioning state. Turkey’s alliance with the U.S. by virtue of NATO membership means that the U.S. is likely to be less able to compel it to adopt its Iran-isolating agenda.
-WW
Last week, Iran’s Revolutionary Guard-affiliated Tabnak website ran a commentary (Persian) on Iran’s recent arrest of five Kuwaiti fishermen (along with one Qatari and an Egyptian) who had strayed into Iranian territorial waters. Press accounts state that the fishermen were taken to Abadan for questioning and shortly released. The reports differ, however, on exactly where the stop took place – and understandable ambiguity given the myriad maritime boundary disputes in the region.
The Tabnak piece goes on to connect this incident to a long-running Iranian dispute with Kuwait over a gas field known to Iranians as Arash and Arabs as al-Durra. The piece (a translated snip follows) gives a good sense of an Iranian nationalist point of view in which the Islamic Republic’s territory throughout the Gulf is under Arab assault. This incident and similar ones, like the 2007 arrest of British sailors in the Gulf, show how the combination of undemarcated borders and the not altogether historically unjustified Iran-under-assault worldview can be dangerous indeed. In the absence of a firm settlement, these disputes look set to heat up in coming years as demand for Gulf oil and gas grows.
- WW
Under the pretext of Iran’s rightful arrest of Kuwaiti citizens who had illegally entered Iranian maritime territory, Kuwait and its state media have recently asserted their ownership over large parts of Iranian territory in the northern Persian Gulf.
This comes at a time when the Kuwaitis, by highlighting part of our ambassador’s interview with a Kuwaiti newspaper, have [falsely] claimed that Iran was prepared to enter negotiations over the three islands [disputed with the UAE]. Unfortunately, Iran has responded to Kuwait’s aggressive claims with an inexplicable silence.
In light of this report, and based on existing agreements and the [1963] IMINOCO maritime boundary, the Iranian continental shelf in the northern Persian Gulf is Iranian property, just like the Arash gas field [marked in this map as Dorra]. The point that Iranian media have overlooked, is that because of Arab propaganda against Iran’s eternal ownership of the three islands, now Iranian gas fields like Arash and Soroush oil field, both located within Iran’s maritime exploration and production limits, are now subject to territorial claims from Arab sheikhdoms like Kuwait!
It is interesting that, by changing the name of the gas field to al-Durra, Kuwait has claimed its ownership over Iranian maritime territory, and it justifies its claim using the fanciful boundary that the anti-Iranian and anti-Persian Gulf British company Shell has drawn for them, with the Arash field lying just inside Kuwaiti territory.
More background on the Arash/ Durra field follows from the EIA:
Another large non-associated offshore natural gas field, Dorra (Durra), is located offshore near Khafji oil field in the Saudi-Kuwaiti Neutral Zone. Dorra development has been controversial since the late 1960s, however, because 70 percent is also claimed by Iran (called Arash). In addition, the maritime border between Kuwait and Iran remains un-demarcated. Saudi Arabia reached an agreement with Kuwait in July 2000 to share Dorra output equally, although the Kuwaitis are reportedly trying to purchase the Saudi share. According to Saudi Aramco, the field is estimated to contain non-associated gas reserves of between 35 and 60 Tcf of natural gas, and is under seismic study. The Kuwaiti Ministry of Oil has reported that the goal is to produce initially 600 MMcf/d from Dorra. Kuwait and Iran have intermittently discussed jointly developing the field, although production plans remain undisclosed.
Apologies for the lack of posting in recent weeks – was in the middle of relocating to Washington and juggling other projects. We are also in the process of re-launching the blog, so stay tuned for the new URL. Here are a few links as we get back into the swing of things:
-WW
1. Flynt and Hillary Mann Leverett have launched The Race for Iran, a new blog on Iran’s geopolitics. Also be sure to read their recent monograph on Iran-China relations.
2. Fereidun Fesharaki’s excellent talk at CSIS on world energy markets, with emphasis on Iran and China. A key takeaway is that China’s investments in Iran’s upstream oil and gas production are running at a loss, which underlines the Leveretts’ point that Chinese interest in Iran is more about building a long term strategic relationship than filling immediate energy needs.
3. I came across the following story about cargoes of Indian basmati rice, originally destined for Iran, that are now flooding the Emirati rice market. A timely reminder of how closely the region’s economies are interlinked:
“Boats filled with basmati have been lying idle in Dubai and at Sharjah Cornice. Iran used to be a good market for UAE re-exporters and the fall in demand there will definitely hurt the UAE market.”
He said prices of many premium basmati rice varieties have fallen by 30 per cent to 40 per cent.
An official at Dubai Municipality’s Food Safety Department told Emirates Business: “The Iranian Government’s decision to ban Indian and Pakistani basmati is an erratic decision based on wrong interpretation of a speech by an Indian minister appealing to farmers to stop cultivating basmati in some areas. The Iranian buyers panicked and stopped importing Indian basmati. The rice coming to the UAE is regularly checked at the port of entry for food safety.”
