Arthur Moore, oil man

Arthur Moore pictured in 1910

On October 10, 1931 it was the Western Star’s solemn duty to report some sad news. The news had reached Roma from Longreach that Mr Arthur Moore, superintendent of Longreach’s Oil Bore had been killed in an explosion. Known as a careful man who rarely took a drink and who was intimate with the science of boring for oil, his death was a mystery.

From reading Moore’s log books, the coroner deduced he was making a third attempt to shoot the bore and had a consignment of caps newly arrived from Brisbane and a metre-long torpedo with six plugs of gelignite. The mixture exploded prematurely as he tried to place a battery cap. It was likely a faulty explosives timer concocted with a pocket watch brought an end to the life of one of Roma’s great but unheralded oil men.

Arthur Moore was an Englishman, born in Lime Regis, Dorset in 1876. How he spent his early years is not known but he arrived in Australia in 1910 thirsting for adventure in a new land. He entered into the service of the International Boring Company and was posted across Queensland boring artesian water for the state’s growing demands. Aged 40, he signed up in 1916 for the AIF and went off to Europe with the newly formed Australian Flying Corps.

After the war finished he stayed on in England to train in oil development. On his return he came to Queensland’s growing oil capital: Roma. Here he was placed in charge of the government oil bore on Hospital Hill in 1920 as the first non American to hold this position. It was Moore who released a big flow of oil at QG Number 4 well while removing casing and this was the first oil to be condensed in Roma.

It was here he met local woman Esther “Essie” Nind, the only daughter of two well-known Roma residents. Moore married Essie in 1921 aged 45 (she was 27) and they had one daughter. After visiting America, Moore was convinced there was oil in commercial quantities in Roma. “Prospecting in Queensland,” he said in 1923, “should be carried out on the same type of plant used for drilling artesian water.”

In 1924, the Western Star reported Moore was made manager of the newly formed Queensland Petroleum Limited who secured prospecting permits over Forest Vale and Mitchell Downs. Moore was hired to be superintendent for three years but the plan failed and Moore went to Texas to learn more about drilling. He later took charge of drilling operations in New Guinea. Roma’s booming oil business lured him back in 1928 to become manager of Roma Cornwall Dome oil operation until it went bust.

Moore went back to England where he was accepted into the Institute of Petroleum Technologists of London. He would also drill in New Zealand before heading to Longreach. He was remembered as one of the first non Americans to be feted in the field of drilling and someone who kept meticulous notes on all aspects of oil exploration.

Hadrian's Wallet: Scotland's independence referendum and oil

Depending on who’s talking, the prospect of an independent Scotland would see either the arrival of a new, modern and confident state or it will be fed into the Euro-blender to be destroyed forever. The idea of an independent Scotland is not new – it dates back to those unhappy with the original Act of Union in 1707. What is new is the proposed referendum in 2014 to give Scots a chance to vote on the matter.

The governing Scottish National Party put the cat among the constitutional pigeons with their announcement on 10 January they would hold a referendum in autumn 2014. The referendum will ask two questions. The first is whether there should be an extension of the powers and responsibilities of the Scottish Parliament, short of independence; while the second asks whether the Scottish Parliament should "also have its powers extended to enable independence to be achieved".

In many respects, the controversy over the referendum is a storm in a tea-cup. All the polls suggest that voters will turn down the proposal. YouGov’s polling from 1990 to 2009 show support for full independence hovering around the high 20s to low 30s percentiles. A clearer majority – though never more than 60 percent – are happier with more tax raising powers for the existing Scottish parliament created in 1999. The referendum that created that parliament two years earlier showed most Scots wanted power over their own taxes (currently they can vary the basic rate of personal income tax by a maximum of 3p in the pound). The issue with that was as First Minister Alex Salmond said in October 2010, “there is no point in being a pocket money parliamanet when the pocket money stops.”

The 2011 study of Scottish attitudes showed 70 percent of the population saw themselves as Scottish first compared to about 15 percent who thought they were British. The study also showed that support for increased devolution is also on the up but there was a lot of ambiguous findings on specifics that show there is much to play for. Specific questions on who should pay for what and by what amount narrowed opinion in a way that was rather different than the ungranulated question of whether you support nationalist or unionist.

Opinion is also divided as to whether Scotland would do better alone with its annual £6.5b North Sea oil wealth. According to Michael Moore, the secretary of state for Scotland, the year on year variations of oil prices in 2011 were better managed in a UK wide economy where Scotland could share in the risks as well as rewards. But Scottish finance secretary John Swinney disagreed saying Scotland contributed far more to the UK Exchequer than its share of population which underlined the strength of Scotland’s finances and the opportunities of independence. Scottish opinion polls consistently support the latter view with most Scots thinking those south of Hadrian’s Wall do better from the Union than they do.

Yet opinion polls are less clear on the economic benefits of independence. Most people think they would pay slightly more tax under an Edinburgh administration and there is no consensus on whether the nation would be better off financially. The debate reflects a strong and complex intertwining of English, Scottish and British traditions that make most Scots slightly ambivalent about their nationality.

Unlike the Irish Act of Union a century later, the English-Scottish Act of Union of 1702 was a genuine marriage of near-equals. Scottish kings had sat on the throne of England for over a hundred years (until ousted by the Glorious Revolution). Scotland was still the minor party in the marriage, and as in the case of Ireland, bribery was needed to get the Act passed in Edinburgh. Scotland was still reeling from the economic catastrophe of the Darien Scheme which hoped to set up a Scottish colony in Panama. But the Act of Union was good for Scotland; it gave its economy free trade with England and led directly to the Scottish Enlightenment of the mid 1700s. Thinkers like David Hume and Adam Smith had an immense effect not only on Scotland but on the newly United Kingdom and beyond.

Scots became a driving force in the new British Empire, despite the continued rebellions of the highlanders. The lowlands were transformed by the Industrial Revolution with linen, coal and steel and a massive financial centre. Glasgow became a powerhouse city based on shipbuilding and railways. Scottish cities paid a terrible price for their industrialisation in World War II with extrensive bombing by the Luftwaffe. The deindustrialisation of the post-war years was balanced by the discovery of oil in the North Sea in 1970. Though production has fallen in recent years, a 2010 report said there was still 25 billion barrels of oil in Scottish waters, though they are in harder to reach areas near the Shetlands.

The importance of oil in any border negotiation between England and Scotland cannot be underestimated. 85% of British oil is in Scottish waters. The nationalist site Oil of Scotland claims Westminster moved Scotland's marine boundaries in 1999 from Berwick-upon-Tweed to Carnoustie “illegally making 6000 miles of Scotland's waters English.” The website called the Scottish Adjacent Waters Boundaries Order 1999 an “unjust act secretly passed, without the consent of the Scottish People” that took 15% of oil and gas revenues out of the Scottish sector of the North Sea and £2.2 Billion out of the Scottish economy. “This lost revenue is more than the proposed £35 Billion Scottish budget cuts for the next 15 years,” the group said.

Pearl Harbor: Japan's oil blunder

In a sad admission of the passing of time, the Pearl Harbor survivors association used the 70th anniversary of the attack to announce they will disband at the end of the year. An estimated 8,000 people are still alive who survived the Japanese attack on Hawaii and some 2,700 of them are members of the association. But it has become too difficult to organise the annual national reunion in Honolulu. Association President William Muehleib cited the age and poor health of remaining members. "It was time. Some of the requirements became a burden," Muehleib said after this year’s ceremony at Pearl Harbor. (photo:Matt York/Associated Press)

The moment of silence at the ceremony was marked just before 8am when the first Japanese planes launched their attack. Tuesday, 7 December 1941 would become a day that would “live in infamy” as Roosevelt predicted when he responded to the attack. In two hours, 2,400 people would be killed, 1,200 wounded (a shocking discrepancy between the dead and wounded) 20 ships sunk and 164 planes destroyed. Yet the infamy FDR spoke about was not the death toll but the fact the Japanese had lied to him and attacked 30 minutes before they declared war.

The cause of Pearl Harbor, as so much of the 20th century’s conflict, was oil. Expansionist Japan was 80% reliant on US petroleum to fire its economy but knew the time would come when the alarmist Americans would turn off the tap. The US took a dim view of the 1931 Japanese invasion of Manchuria and the subsequent war with China. Modern China retains so much bitterness about that war it still refuses to call the area Manchuria because it might legitimise Japanese claims. Instead it just called “North East China”.

From their puppet base in Manchukuo, belligerent Japan declared all out war on China in 1937. Relations with the US deteriorated with the USS Panay Incident that year when the Japanese sunk an American ship in Nangking and then the Allison Incident where US consul to Nangking John Moore Allison was struck in the face by a Japanese soldier. Japan said sorry for both incidents claiming it did not see the American flags on the Panay. It did not offer an excuse for Allison but bowed to US demands for an apology.

Despite the provocation, economic self-interest ensured the US kept supplying oil to Japan until 1941. It wasn’t until July that year they finally placed an embargo as did Britain. Crucially so did Dutch two months later, breaking an existing treaty with Japan and ending the possible increase in the supply line of Javanese oil which supplied 15% of Japanese crude. The embargo put a critical constraint on the conduct of the long-running war in China. Japan was the sixth largest importer of oil in the world. If Japan wanted to resume bombing Chiang Kai-Shek's and Mao Zedong’s armies, it would have to grab oil for itself and the East Indies was the easiest target.

While Pearl Harbor was a shock, the Pacific war was no great surprise. A majority of Americans expected war with Japan especially over the Philippines which held many strategic American interests. But Japan had other ideas. It was well aware it could not cope with planned American expansion of the Navy. The 1940 Two-Ocean Navy Act (sponsored by two Democrats Carl Vinson of Georgia and David Walsh of Massachusetts) planned to expand the size of the US Navy by 70%. Japan could never match this so struck a blow early before the Vinson-Walsh ships came off the assembly line.

An attack on Pearl Harbor, the Japanese believed, would also neutralise the existing Pacific Fleet to give Japan free reign to take Jakarta. Then the Americans would sue for a peace profitable to Japan. That this was flawed thinking is obvious in retrospect as was their complete failure to work out how the US would respond. Yet as a plan it no woollier than the thinking that led to another oil war while the execution was just as striking.

The 1941 attack was led by submarines. Five midget submarines came within 20km of the coast and launched their charges at 1am. At least four of them were sunk. Then the planes struck. There were almost 200 of them in the first group. A second wave of 170 flew closely behind. They were picked up by newly established radar on the northern tip of Oahu but misdiagnosed as a returning US crew and its immense size was not passed on to headquarters. At 7.48am they arrived at Pearl Harbor. The immediate target of the first wave was the battleships.

Japan believed that by targeting the battleships they would remove the biggest status symbols from the Navy. While they succeeded, they badly misread the importance of the technology. The sinking of one battleship the USS Arizona caused half the death toll on the day. Ten torpedo bombers attacked the ship. After one bomb detonated in the Arizona’s ammunition magazine, she went up in a deafening explosion. 1,117 of the 1,400 crew were killed instantly and the fire took two days to put out.

The second wave had various targets including hangars, aircraft, carriers and cruisers. After 90 devastating minutes, half the planes on Oahu were destroyed. A planned third wave to knock out Pearl Harbor’s remaining infrastructure was called off which Admiral Chester Nimitz admitted could have postponed US operations for another year. But Japanese Admiral Chuichi Nagumo refused because of likely casualties and a need for night-time operations.

Despite this lapse, the Japanese did not rest on their success. Hong Kong was attacked a day later as were US territories Guam and Wake Island. The Philippines, a commonwealth of the US at the time, was also invaded on 8 December. The same day Japanese troops made an amphibious landing at Kota Bharu in north-eastern Malaya, and six points along the south-east Thailand, an invasion ended by an armistice which allowed Japan to use Thailand as a base to attack Malaya. Malaya had rubber and was the obvious dropping off point to access Dutch oil in soon-to-be Indonesia.

Only the US, Iran and Romania exported more oil than the East Indies in 1941 but the profits went to Amsterdam and Royal Dutch Shell not Jakarta. Borneo was another yet victim of the 8 December naval blitzkrieg threatening the oilfields of Kalimantan. The rest of the island archipelago quickly fell and would remain in Japanese hands until 1945 while the war was fought elsewhere. The three aircraft carriers that called Pearl Harbor home were out at sea during the attack and the elimination of its battleships gave the US no choice but to put the fate of the war in its carriers.

While the Europe First policy slowed down the Pacific Conflict it was almost over as soon as it began. A wrathful America armed with its new Navy and massive fighting capacity was never going to forgive Japan’s treachery. By July 1942, America sunk four of Japan’s own carriers at Midway. Japan used its fierce military pride, deadly code of honour, incessant pro-war propaganda and Indonesian oil to keep the insanity going for another three years.

Whither Bahrain?

Libya is not the only Arabic revolution where outside forces have intervened; there are also foreign troops on the streets of Bahrain. But unlike Libya, the foreigners in Bahrain have come in on the side of the discredited regime. Occupying forces from Saudi Arabia and the UAE are helping the monarchy put down a rebellion with only a few hypocritical murmurs from the West and no sign of any UN-sponsored intervention in the rebels’ favour. With martial law in place after almost two months of protests, Bahrain has today brushed off a Kuwaiti offer to mediate with the rebels saying it wasn’t necessary. The detested al-Khalifa regime is set on a path of destroying the opposition while hoping the rest of the world is too distracted by events in Libya to do anything about it. (photo:AFP)

The Sunni Al Khalifa tribe has ruled Bahrain for almost 200 years, a rule cemented by British overlords and trade-based wealth in the 1800s. The majority Shia did not share in the general prosperity and remained second class citizens despite the implicit and sometimes explicit support of Iran. The discovery of oil ensured British meddling would continue for much of the 20th century. The struggle for supremacy in Bahraini affairs by both Britain and Iran continued until the country gained full independence in 1971. A 1973 constitution promised free elections (though for men only) but this was thrown out two years later by the then-emir Salman al Khalifa.

In the 1990s opposition forces came together to demand reforms from the ageing emir and a return to the 1973 constitution. For six years the streets were plagued with riots which were met by suppression by the regime The intifada did not end until the death of Salman in March 1999. Hamad bin Isa Al-Khalifa succeeded his father and immediately promised to carry out political reforms. On 14 February 2001 a referendum to carry out the National Action Charter to return the country to constitutional rule was overwhelming supported by 98.4 percent of the voters. The 2000s saw important progress including the enfranchisement of women and parliamentary elections in 2006 and 2010. But key problems remain including discrimination against the Shia and the all pervasive power of the al Khalifa caste.

Problems of powersharing were thrown firmly into the spotlight after pro-democracy demonstrations in Tunisia and Egypt hit the headlines in January. In Bahrain opposition was mobilised to demonstrate on the 10th anniversary of the signing of the National Action Charter on 14 February. Pearl Square in the capital Manama became the epicentre of resistance with protesters calling for political reform and equalisation of the economic benefits of Bahrain’s oil-rich economy. The reaction from the alarmed administration was swift. On 17 February a pre-dawn tank raid on the square killed 5 and injured 230 others. Soldiers placed roadblocks and barbed wire around the centre of town and leaders banned public gatherings.

The effect was to harden resistance. Talk of reform was replaced by talk of overthrow of the al Khalifas. The funerals of the dead turned into shrines of martyrdom with talk of 100,000 on the streets – about one eighth of the country’s population. Unity of opposition forces was marred by sectarian clashes between Sunni and Shia. Meanwhile panicky leadership cadres made some concessions by sacking extremist ministers while still authorising a shoot to kill policy on the streets.

On 14 March, the Emir had enough and called for support from his Sunni allies. Led by Saudi Arabia they answered the call. A thousand Saudi troops and 500 UAE police officers crossed the bridge to Manama. The invaders were part of a deployment by the Gulf Co-operation Council, a six-nation regional grouping of Bahrain, Saudi Arabia, Kuwait, Oman, Qatar and UAE. The force immediately set about protecting the oil and gas plants and financial institutions. According to al Khalifa, the troops were there “to look at ways to help them to defuse the tension in Bahrain.” But no one in the country was under any illusion this was anything but an occupation force to crush the revolution.

There was the inevitable bleating from the West but no sign of action to back it up. Hillary Clinton said Bahrain and its GCC allies were "on the wrong track” but mentioned nothing about the 5th fleet that remains in its Bahrain base protecting US oil wealth in the greater region. The Khalifas may not be loved by their subjects but the White House know a Shia government in Manama would not be accommodating to 4,500 US military personnel in the city. The Americans have nailed their colours to the mast. The Fifth Fleet is not there to create disorder but to preserve it. When the regime does fall, as it inevitably will, the Americans can have no complaints when they are kicked out.

House of Saud on the verge of a nervous breakdown

Sooner or later the protests that have racked the Middle East and North Africa will finally affect the most undemocratic regime of them all, Saudi Arabia. Arguably that has already happened. Absolute monarch King Abdullah is now 86. Well aware of his own vulnerability, he gave away over $36 billion in benefits to lower and middle income Saudis last week. He also granted thousands of civil servants job security and said he would reshuffle the cabinet. Abdullah rushed back to the country after months of hospitalisation and recuperation in the US and Morocco to make these announcements. No one is under any illusion he wasn’t panicked into action by the wave of protests across the region that threatened to roll across his equally undemocratic border.

Abdullah’s bribery will likely keep the protesters at home for now and the illegality of political parties and public protest are a deterrent. Yet resistance to the power of the Sauds is growing slowly. The Saudiwoman blog says the country is “still on the train heading to revolution town.” The young are unhappy with large-scale unemployment and the conservative grip of the religious police, she said. Older generations are fed up with the corruption, nepotism and the disappearance of the middle class.

Activists are calling for protests on 11 and 20 March but may well be frustrated by police. They stymied two attempts to stage protests in Jeddah last month after they arrested 30 to 50 people. Saudi blogger Ahmed al-Omran said authorities were watching closely what people were saying on Facebook and Twitter. “They are anxious as they are surrounded with unrest and want to make sure we don't catch the bug,” al-Omran said.

Western leaders are also keen the Saudis don’t catch the bug. In 2007 then British foreign office minister Kim Howells infamously talked about Britain and Saudi Arabia’s “shared values”. Meanwhile in October 2010, the US Obama Administration kept the Carter Doctrine alive with the sale of $60.5 billion worth of arms to the KSA which was the biggest arms sale in American history. According to an Israeli study of the sale, the package was totally offensive in nature, with its attack planes, helicopters, and "bunker-buster" bombs, and designed to show the US would stand strongly by its allies. ‘US officials have also begun to refer to the "Persian Gulf" as the "Arabian Gulf," a hot-button issue for the Iranians,’ the study said.

The financial world is also less interested in the democratic desires of ordinary Saudis than they are in the fate of light sweet crude oil futures. Crude was trading at $97.25 a barrel in electronic trading on the New York Mercantile Exchange yesterday having spiked since the start of the year. This has more to do with Libya and issues in Oman and Bahrain but Saudi Arabia remains pivotal to production with the world’s largest reserves. Saudi Aramco have stepped up production since the Libyan revolution started but as the Financial Times points out, oil-dominated economies create few jobs, “especially if they support a bloated royal family that affects not to understand where a privy purse ends and a public budget begins”.

Abdullah’s successor in the agnatic seniority preferred by that 7000-strong royal family is his half-brother Crown Prince Sultan. Sultan, 82 or possibly 86 is just as old, just as unhealthy and just as corrupt as Abdullah. Behind them comes the conservative autocrat Prince Nayef who abhors the idea of reform. The monarchy survived the 20th century thanks to the black gold they controlled and their alliance with the Wahhabists that control religious affairs. The end of the carbon economy would have killed them anyway but with everyday Saudis unwilling to wait, the days of authority of both these ancient institutions are likely to be numbered.

BP's Tony Hayward likely to be oil spill's Top Kill

Perhaps the most relieved man in the world today is BP’s CEO Tony Hayward. Israel’s Mediterranean piracy has knocked his knackered Gulf of Mexico pipeline off the front page of the news. But Hayward’s relief, like all the attempts to fix the Deepwater Horizon rig since it exploded is likely to temporary and ultimately unsuccessful. The US Government and BP shareholders are both likely to demand Hayward's head on a pike for the worst American environmental disaster of all time.

The blowout of the Deepwater Horizon in a deadly methane explosion six weeks ago killed 11 people, injured 17 others and sank the rig that drilled the deepest oil well ever 9,100 metres below the surface. Thanks to the incredible pressure of the ocean floor, it is now spewing out up to 16 million litres a day for a total of almost 4.2 million barrels of oil since April 20. At the current price of $72 a barrel, it amounts to $290 million of oil in the ocean, not to mention the inestimable environment costs. (photo AP)

Hayward has blundered from one pathetic excuse to another as the damage bill rises. Today, BP still has no idea how to plug the leak. The series of exotically named and increasingly desperate rescue methods it tried have all failed. These included the “Top Hat”, the “Junk Shot” and the “Hot Tap” (which all provided wonderful fodder for Jon Stewart). The latest called the “top kill” failed on Saturday. In this method BP tried to pump large amounts of drilling mud into the blowout preventer faster than pressure of the rising oil and gas could push it back out. It didn’t work and other risky options are now being considered none of which have a great chance of success.

With all conventional and unconventional means proving fruitless, apparently serious organs such as Oil-Price.net are suggesting a subterranean nuclear explosion may be the only solution. They say the Russians have done it at least five times. In Uzbekistan in 1966, the Soviet Union put out a 120 meter tall flame which had been burning for three years fuelled by massive natural gas using a 30 kiloton atom bomb. The explosion sealed the well by displacing tonnes of rock over the spill.

While the nuclear option still sounds preposterous, it may be the only thing between the Gulf of Mexico and Armageddon. A few different perspectives show this is developing into one of the world’s most serious environmental catastrophes. Firstly, there is the view from space which looks as if a gigantic bird has shat on the Gulf. A vast whitened plume is headed straight for the Mississippi Delta and its fragile wetlands could easily be destroyed. Another useful tool is the Google maps app “in perspective” where you can centre the spill on any point in the globe to see just how wide a similar spill would look there. Centred on London the spill takes in all of East Anglia and the south coast across to Bristol.

Centring the explosion on London is particularly apposite as it contains the headquarters of BP. Founded 101 years ago as the Anglo-Persian Oil Company it became one of the largest companies in the world by seizing Iranian Oil for 70 years until it was thrown out by the Ayatollahs in 1979. Consistently named as one of the ten worst companies in the world it has suffered crisis after crisis with its Texas City Refinery explosion in 2005, Prudhoe Bay Alaskan oil spill in 2007 and its hook-up with Russian criminal billionaires in the TNK-BP joint venture.

But it survived them all unscathed. During the Bush era, BP seemed to stand for “Beyond Prosecution”. Deepwater Horizon promised more untold riches for the company. The Gulf rig was in the rich Tiber fields estimated to contain up to 6 billion barrels of oil. BP owns three fifths of Tiber and when it announced the discovery of oil last year, their share price rose 4.3 percent in the middle of the recession.

Now the share market has turned against the British monolith. Shares in the company fell 15 percent yesterday and the FTSE 100 fell by more than 100 points. But London cares only about its profits and is merely worried the crisis “won’t be solved until August” which is the month stockbrokers go on holidays. Nuclear explosion or no, the longer term prognosis for those must live with the consequences is poor. 400 bird species are at risk as are the already threatened loggerhead turtles. Sea birds, dolphins and other mammals could be affected if as is likely, the spill escapes into the Atlantic. The livelihood of poverty-stricken coastal Central Americans is threatened. Fishing and tourism across the region will also take the brunt. On the bright side, it may mean the US's unquestioning faith in the oil industry is starting to waver.

Americans are slowly awakening to the bitter truth that peak oil has already arrived and is swamping their Gulf.

Danger far from over in Shen Neng 1 Barrier Reef oil spill

A coal ship grounded on the Great Barrier Reef could spill more oil onto the reef if the vessel is refloated too soon. That is the concern of Maritime Safety Queensland who say a hydrostatic plug caused by the pressure of the ocean water is preventing oil escaping from the ship's engine room. This plug may give way if the breach in the tank is not repaired before refloating. “We need to assess the vessel's remaining strength before we consider any salvage options which may be available to us," MSQ general manager Captain Patrick Quirk said.

The 230m-long bulk coal carrier Shen Neng 1 ran aground at Douglas Shoal about 70km east of Great Keppel Island at 5.10pm Queensland time on Saturday. The ship had left the port of Gladstone bound for China with a crew of 23, 65,000 tonnes of coal and 975 tonnes of heavy fuel oil. The ship was off course about 120km east of Rockhampton and in a protected area, well outside the normal shipping channels. The 150 tonne fuel tank has been ruptured and heavy seas are driving the ship further into the fragile reef area.

Shen Neng 1 owners the Chinese COSCO Group is one of the largest shipping companies in the world with over 500 vessels. Queensland Premier Anna Bligh has threatened fines of $1 million for the company and a further $200,000 for the captain for straying into the off-limits area. The owners could also be liable for the multi-million dollar clean up, though as Queensland found out last year in the Pacific Adventurer case, there is an upper limit set by international maritime convention.

In the latest accident, the ship’s captain initially told MSQ no oil had been spilt. The impact, he said, had created one hole in the ship’s lower hull which was 40m away from the nearest oil storage area. The captain said he would try to refloat the ship after midnight. MSQ worked with the Australian Maritime Safety Authority and the Great Barrier Reef Marine Park Authority to coordinate the emergency response. AMSA airlifted surveyors aboard to assess the condition of the ship. Emergency surveillance aircraft inspected the scene at first light. A long-range helicopter came from Bundaberg to take specialist response personnel to the vessel.

At 2am Sunday, the oil advice to MSQ had changed. Now “there was an unknown amount of oil” in the water, though the media release did not say who provided this advice or how it squared with the captain’s earlier statement about the hole being 40m away from oil storage. The new knowledge kicked off a national oil spill response plan. MSQ asked the GBRMPA for permission to use aerial dispersants on the oil leak. Response crews were activated in Brisbane, Gladstone and Rockhampton. MSQ’s vessel Norfolk was dispatched from Heron Island to provide logistical support.

By daylight on Easter Sunday it was clear from the air there were oil patches in the waters south-east of the ship. MSQ said at 8.30am there was “no major loss of oil” so far. The carrier was aground on a shoal and would need salvage crews to get it off. A light aircraft from Rockhampton arrived at midmorning to spray chemical dispersant on the spilled oil. Early arrival was critical as dispersants are most effective in breaking up heavy oil when deployed within the first one to two days.

A second aircraft arrived midafternoon yesterday to spray what MSQ called “a ‘ribbon’ of oil measuring approximately three kilometres by 100 metres.” MSQ staff reported only seeing small volumes of oil in the water in the vicinity of the ship but its persistent nature meant it could take some time to break apart. Modelling showed oil could possibly wash up around the nearby Shoalwater Bay military area within the next two days, depending on weather.

The most recent MSQ update at 6am today reported salvors were aboard the Shen Neng 1 to begin the salvage process. The main engine room was breached, the main engine damaged and the rudder seriously damaged. With reported 2 metre swells in the area, the ship was still moving on the reef causing further damage. The long term consequences to the fragile reef are yet to be fully felt.

Trafigura: the ugly face of capitalism

The latest installment in Trafigura’s sordid attempts to gag British media occurs today when the high court issues its judgement on the libel action the company took out on the BBC. Trafigura is the notorious oil and commodities trading company which was responsible for 15 deaths and the injuries of thousands of West Africans after it dumped oil waste. Trafigura says it is the world's third-biggest private oil trader, and declared $440m profit last year. Its 200 traders are reported to receive annual bonuses of up to $1m each. But it is highly sensitive to criticism and sued BBC’s flagship current affairs show Newsnight for telling the truth that they were responsible for murder. The Guardian, itself a victim of several Trafigura legal actions, says the BBC case was one of a series of legal threats against the media in several countries brought by the company. (Photo: AFP/GETTY)

Their most reprehensible order came in October when Trafigura made an extraordinary attempt to stop the Guardian from reporting on parliament. The attempt backfired after it ignited a Twitter firestorm and its lawyers Carter-Ruck withdrew the injunction within 24 hours. On that occasion Trafigura were trying to stop publication of a report they commissioned about their dumping of toxic waste in the Ivory Coast. 12 people died and 31,000 people were injured as a result of their illegal dumping of a by-product of coker naptha in 2006.

After repeatedly denying liability, Trafigura eventually agreed to pay an out-of-court settlement more than $50m to almost 30,000 inhabitants of Ivory Coast’s largest city Abidjan. Nevertheless Trafigura engaged Carter-Ruck again to bring the libel action against the BBC on the basis that the company had been wrongly accused of causing deaths, not just sickness. This was despite official pronouncements by a UN investigator, and the Ivorian and British government which referred to deaths being caused directly by the dumping. Trafigura were able to get away with this because of the settlement it struck with another British law firm Leigh Day which led the class action acted on behalf of the Ivorians. The eventual compensation resulted in an agreed statement making no claims about deaths.

The original problem was a result of western greed and lax Third World safety standards. In 2005 Trafigura bought dirty oil contaminated with coker naptha from Mexico for next to nothing with the intention of cleaning it and selling it on for profit. The cleaning process involves pouring tonnes of caustic into the coker naptha but this generates dangerous and deadly waste such as hydrogen sulphide. The process is so dangerous, it is banned in most western countries.

But African countries are less strict. Trafigura chartered a ship and took it to Abidjan where they illegally fly-tipped at 15 locations around Abidjan. In the weeks that followed, tens of thousands of people reported a range of similar symptoms, including breathing problems, sickness and diarrhoea. In September 2009 BBC Newsnight revealed it had uncovered email evidence to show Trafigura bosses knew the waste dumped in Ivory Coast was hazardous. The BBC were backed up by a UN Report on the matter which found "strong prima facie evidence that the reported deaths and adverse health consequences are related to the dumping of the waste from the cargo ship".

The Minton Report which exposed the dumping and blamed Trafigura remains off-limits to British media due to a host of injunctions. According to Wikileaks which is keeping access open to the report, the illegal Ivorian dumping is “possibly most culpable mass contamination incident since Bhopal.”

Trafigura, meanwhile, released a disengenuous statement on 16 October aimed at dispelling “further misunderstandings” of what happened in Abidjan. They attempted to discredit the Minton Report (which they had commissioned) on the basis of its “hypothetical ideas”, the fact that no visits were made to Ivory Coast and its analysis was overtaken by field analysis by the Netherlands Forensic Institute. Though it doesn’t say whether the NFI analysis contradicted Minton, it is highly unlikely it did, given it was used as a basis to settle the class action.

None of that matters now except preventing the truth from being told. But here’s to Trafigura’s failure. Their dishonesty, greed, selfishness and contempt of public opinion deserve the widest possible audience and criminal action. They represent capitalism at its venial worst.

Timor Sea oil slick may now be lapping Indonesian shores

The West Timor Care Foundation has sent the Australian Greens a video claiming the 10-week Montara oil spill is now lapping the south shores of the island of Timor. The five minute video shows some oil slicks and dead fish in local fishing grounds (though when I entered the location coordinates shown in the video it oddly came up in Philippine waters). The government also doubts the slick has approached the Indonesian coastline and has announced no compensation measures as yet.

But while there is doubt over this video, there is little doubt that that Montara spill is a major catastrophic event happening most out of reach of Australian news cameras. From 21 August to 3 November a possible 140,000 barrels of light crude oil, gas and condensate leaked into the sea. Well owners PTTEP claimed the well leaked 400 barrels of oil a day but could never back up this estimate. The Australian government said the maximum flow could be as much as 2,000 barrels a day. After four unsuccessful attempts to fix it, it was eventually plugged when heavy mud was successfully injected into the underground leaking well. The spill was complicated by a major fire on the rig which was put out two days earlier.

But the vast amount of oil leaked into the sea continues to cause havoc. Both West and East Timor authorities have asked Australia to take urgent actions to stop the impact on their island. The governor of East Nusa Tenggara (Indonesian West Timor) said Australia must take “immediate measures” to halt the spill. Meanwhile East Timorese President Jose Ramos Horta says the slick is impacting local fishermen’s livelihood and has requested compensation from Australia.

The Montara wellhead on the West Atlas rig is in Australian waters 250km northwest of the Truscott air base in Western Australia's Kimberley region and another 250km from the south Timor coastline. The rig is owned by Thai based oil company PTT Exploration and Production Public Company (commonly known as PTTEP) and run by its Australian subsidiary PTTEP Australasia Company Limited (PTTEP AA).

The problem started when a concrete plug 2.6km below the ocean floor cracked open leaking sweet crude oil, gas and condensate into the Timor Sea. The cause is not yet been announced. However an unnamed industry insider told WAtoday.com PTTEP knows what caused the problem. The source was working for PTTEP near the West Atlas rig on the day the leak occurred. He said one of six wells they were drilling began to leak because the company took corners by not plugging the well securely because they did not expect oil flow.

The company then went into panic mode as their increasingly desperate efforts failed to plug the leak. After three failed attempts, they invited Texan well control company Boots & Coots to review their operation. Other local industry companies Woodside, Inpex, Vermillion, AGR Petroleum Services and Apache also became involved on a “without prejudice” basis (to avoid liability) as the reputation of the Australian oil drilling industry plummeted. The rig then caught fire on the fourth attempt and took three days to put out. The leak was eventually plugging by steering a drill through rock 2.6km below the seabed to a 25cm diameter pipe.

After the problem was fixed, Resource Minister Martin Ferguson announced an inquiry into the matter to be headed by former senior public servant David Borthwick. The terms of reference are to report on the causes, the adequacy of the regulatory regime in response, the performance of those carrying out the response, environmental impacts and PTTEP’s role. Borthwick will have six months to carry out his investigation. The Australian Marine Conservation Society said the oil slick will leave a legacy for decades and called on the government to impose heavy sanctions and penalties on those responsible.

Greens Senator Rachel Siewert is also concerned the consequential impacts to Indonesia and East Timor may be outside Borthwick’s terms of reference. Minister Ferguson claims the spill is over 200kms from the Indonesian coastline. But Siewart called on the government to investigate the Timorese reports of oil contamination to see if they are linked to the Montara rig. "Australians expect that we will do the right thing by our near neighbours,” she said. “The Prime Minister needs to promise that he will ensure the company takes responsibility for impacts outside of Australian waters.”

Belarus tiptoes towards the West

Belarusian president Alexander Lukashenko appeared to be making signals to the West when he said yesterday he would not immediately recognise the independence of South Ossetia and Abkhazia. The normally fiercely pro-Russian president also said he was in no rush to station weapons on Belarus’s western border in response to the US missile defence system to be based in Poland. Taken together the two statements reveal Lukashenko may be about cool relations with Moscow in order to do a deal with the US and the EU.

The EU is happy to encourage these signs that a tense relationship with the West may be on the mend. EU foreign policy head Javier Solana, noted that Belarus had taken the positive step of releasing a number of political prisoners. Solana talked about the EU “rewarding that behaviour”. Neighbour Poland has been at the forefront of the push for normalisation and wants Europe to remove sanctions it imposed on Belarus after a dubious presidential election in 2006 in which Lukashenko won with 82.6 percent of the vote.

While Lukashenko is showing no signs of loosening his iron-clad grip on Belarus’s polity, there are several indications he is about to come out from Russia’s warm embrace. Previously Lukashenko was at the forefront of calls to reunite Belarus with its large Russian neighbour, but now is backing away from that idea. On Monday he said recent events in the Caucasus meant Belarus’ joining the Russian Federation was unacceptable. “You know that there were such ideas in due time. Today many politicians acknowledge, though not out loud, that I was right,” he said. “This is absolutely not needed, either for Belarus or Russia. Otherwise, Russia will simply lose a reliable ally and a subject of international law.”

Belarus has relied on Russian gas to fuel its economy and annual imports 21 million metric tons of Russian crude. This is almost three times as much as it needs for its domestic economy. The surplus allows Belarus to refine the rest and sell the product at profit to the EU. However relations with Putin's regime have cooled since Russia ended subsidised oil and gas supplies last year. The new price, $100 per thousand cubic meters more than doubled the previous price of $46 and was exacerbated by a separate decision by Russia to impose a customs duty of $180 per metric ton on Russian oil. In response Lukashenko imposed a Belarussian transit fee on Russian oil bound for Europe.

Alexander Lukashenko has run Belarus on Soviet economic lines and was a dogged supporter of Russia, even proposing the two countries unite. He came to power in a landslide 1994 election. He deliberately played up to his pariah role in the west by cultivating relationships with the leaders of Iran and Cuba. Lukashenko is a dogmatic leader who harassed opposition voices and removed an awkward parliament in 1996. He rewrote the constitution four years later to favour himself by allowing presidents to serve three or more terms.

His authoritarian style was noted as far back as 1991 when he supported the coup against Mikhail Gorbachev as a then member of the Belarusian parliament. Since 2006, he has been in talks with Russia to form a “union state” But the happy relationship soured after Moscow demanded that Minsk pay market prices for its energy. The regime is now faced with crippling fuel bills and in need of new friends. Hence Lukashenko’s subtle overtures to the west. The US responded last week by suspending some economic sanctions against Belarusian companies. However other key sanctions remain, including the freezing of bank accounts of the state-controlled oil and chemical company, Belneftekhim. Lukashenko’s latest announcements may prove to be the key to defrosting the lucrative oil account in the west.

Unita disputes ruling MPLA landslide victory in Angolan election

The opposition Unita Party has claimed elections were rigged after Angola’s ruling party won a landslide victory claiming 80 per cent of the vote in Friday’s election. The poll was the first in 16 years. The right-wing Unita (National Union for the Total Independence of Angola), which fought a bitter civil war for 27 years, claimed just 10 percent with two-thirds of the vote counted. With final results expected later today, Unita has lodged a complaint with Angola's electoral commission over the running of the vote. "The final result might not fully reflect the will that was expressed by the people of Angola in the ballot," Isaias Samakuva, Unita's leader, said yesterday.

The ruling Popular Movement for the Liberation of Angola (MPLA) has claimed victory and called Unita “bad losers”. The MPLA has ruled Angola since independence from Portugal in 1975 and fought a civil war with Unita which was supported by the South African apartheid regime and also covertly by the US. Half a million people died in the 27 year war which ended when Unita’s leader Jonas Savimbi was killed by government soldiers in 2002. Within six weeks of his death, the two sides then agreed on a ceasefire and Unita became the official opposition party.

The 2008 election is the first poll since the failed 1992 poll sponsored by the ill-fated Portuguese sponsored Bicesse Accords. In that election, the MPLA won with 54 percent of the vote to Unita's 34 percent. Like this time, Unita disputed those results and resumed a civil war with immediate success. However, when they threatened to disrupt the supply from the oil-rich province of Cabinda, the Clinton administration withdrew their support in favour of the Luanda government. Unita have spent the last few years attempting to shore up their political support in advance of this year’s promised election.

Now many are wondering whether Unita’s failure will be a trigger for a return to war. The government has denied they have been up to any electoral shenanigans though have admitted the existence of “administrative glitches” in some areas, particularly in the capital, Luanda , home to nearly a quarter of the country's almost 8.3 million registered voters. Unita and three smaller rivals have called for the election to be annulled in the Luanda province. They claim a new poll is necessary because controls over the ballots were inadequate and many people were denied the opportunity to vote,

There are mixed reports from the 1,200 foreign election observers from 17 international organisations in the country. Monitors from the Southern African Development Community (SADC) said the vote had been "transparent and credible" among the eight million voters. However an EU observer who visited several polling stations said the voting in Luanda was a “disaster” caused by poor planning and inadequate infrastructure. Luisa Morgantini, chief of the EU observer mission, said problems included lack of polling officials, ballots and the ink used to mark voters' fingers and prevent multiple voting. "Voting was a disaster in Luanda following woeful organisation," she said. “The situation was better outside the capital, though there also were problems there.”

The vote took two days to complete. Candidates from 10 parties and four coalition groups contested 220 parliamentary seats. If the MPLA gets its expected two-thirds majority, it will be in a position to make sweeping changes to Angola’s constitution. The result will also shore up the position of long-standing President Jose Eduardo dos Santos who is up for re-election next year. Santos’s international position is solid thanks to the country’s rich oil interests. And Dos Santos is perfectly placed to take advantage of the boom. During the Soviet era, he graduated from Baku’s Oil Academy with a degree in Petroleum Engineering after studying six years on scholarship there.

Angola has recently joined OPEC and has replaced Saudi Arabia as China’s leading source of crude oil. But little of the proceeds have trickled down to Angola’s poor and the country's dilapidated infrastructure also affected its ability to hold an election. Millions of Angolans have moved to Luanda in recent years as they are unable to make a living in rural areas and civil war land mines remain an ever present danger. 22-year-old unemployed Pai Bando told AFP he would not vote for Unita, despite its promise of a fairer distribution of wealth, because he feels only the MPLA is strong enough to make changes. But he remained sceptical of the promise of all parties. "They (the elite) get all the money from the oil and the diamonds, they get everything and we get nothing," he said.

America and Iran: the lesson of Mohammad Mossadegh

Not for the first time, the White House has refused to clarify its position on a war with Iran. The latest stonewalling came this weekend after Israel threatened to strike Tehran's nuclear facilities. On Friday Israeli deputy prime minister Shaoul Mofaz claimed Israel has no choice but to strike Iran's nuclear sites as 'options are disappearing and sanctions have proven to be ineffective'. Later that day, White House spokesman Scott Stanzel refused to condemn Mofaz and instead accused Iran of pursuing a nuclear weapons program. He also evaded questions to clarify what Washington thought about Israel’s 'unavoidable' attack.

This is the latest development in a series of hawkish poses by the Bush Administration against Iran. The US worries that Iran has nuclear capability and appears to be supporting Israel in a pre-emptive strike. The strike could be timed to support Republican candidate John McCain in a bid to wedge Barack Obama. America does not appear to be interested in compromise at the moment. The Tehran Times claims the US has ignored the outcome of technical examinations that show Iran is co-operating with the International Atomic Energy Agency. The world waits for a confrontation that if it occurs, would leave Iraq looking like a minor sideshow.

This is far from the first time that Iran is at the centre of world attention. It was of massive interest to two of the three Allied Powers in World War II. By late 1943, it was clear Germany was not going to win the war and the thoughts of the Allies turned to the future. In December that year Stalin, Roosevelt and Churchill met on a sunny Tehran morning to discuss how to divvy up the post-Nazi world. Both Stalin and Churchill came in military uniform, Roosevelt chose a suit. They had just pledged to work together “in war and the peace that will follow”. After the photographers searched their faces for smiles while seated on the veranda, the three great men retire to a hall for a more private conversation.

Before they discussed weighty matters of empire, Roosevelt asked Churchill whatever became of the ruler of this country, Shah Reza, adding “if I’m pronouncing it correctly”. Churchill tells him he became a Nazi and denied Britain and Russia the use of oil and a supplies railway. Britain and Russia couldn’t stand for this and invaded Iran. Shah Reza was forced to abdicate in favour of his son Mohamed Reza Pahlavi. The father was removed to a comfortable life in Johannesburg where he died not long after the Tehran conference. The question showed up US ignorance of Iranian affairs.

Yet the choice of Tehran for this meeting of great minds was no accident. Not only had Britain and Russia invaded it in 1941, it had been zone of influence for both since a 1907 treaty shared the country’s spoils between them. The terms of both conquests allowed the natives to rule as long as they did not act against their powerful guests. An officially neutral Iran was of vital strategic importance to both. Roosevelt was happy to let the two fight it out over Iranian oil while the US maintained control of the biggest fields of all in Saudi Arabia.

But the turmoil of the Russian revolution left Iran almost entirely a Britsh colony. While Russia turned to its own problems, AIOC, the Anglo-Iranian Oil Company (then nationalised by Churchill, now corporatised as BP) was Britain main supplier of oil. First extracted out of a corrupt 19th century leader as a concession to drill in the wastelands near Abadan, AIOC quickly became one of the world’s leading producers in time to supply Britain in two world wars. The company enjoyed a lucrative monopoly on the production and sale of Iranian oil but its wealth was not fairly distributed. In 1947 it reported on an after tax profit of £40 million and gave the young Shah’s country just seven million. It had reneged on a 1933 deal with his hard-nosed father to provide the workers with better pay, more schools, roads, telephones and job advancement. The young Shah was a playboy and had little interests for his people’s problems. As long as he kept control of the military, it didn’t matter how well or badly his country was performing economically.

Mohammad Mossadegh was less sanguine. He knew the people chafed bitterly about the abject poverty they lived in to support Britain and their puppet leaders. By 1951 he personified the country’s anger at the AIOC. Born in 1882, he was a member of the country’s elite and a parliamentarian for 34 years, implacably opposed to foreign influence. In a wave of fervour, he was elected Prime Minister with a mandate to throw the company out of Iran, reclaim the country’s oil reserves and end the subjection of foreign power. Mossadegh was now in his seventies and in the manner of Proust, did much of his business in bed. But when he nationalised Anglo-Iranian, he became a national hero. Shortly after, Iran took control of the refinery.

The British were outraged. They declared Mossadegh a thief and demanded he be punished by the UN and the World Court. When neither organisation would support Britain, they imposed an embargo that devastated the Iranian economy. Mossadegh was unmoved and said he “would rather be fried in Persian oil than make the slightest concession”. But while Britain fumed, Mossadegh struck a chord elsewhere. He became a third world hero and delighted his admirers further when he ridiculed Britain at the World Court saying it was trying “to persuade world opinion that the lamb had devoured the wolf”.

Even Time made him their man of the year in 1951 saying he “put Scheherazade in the petroleum business and oiled the wheels of chaos”. They called him a “strange old wizard” in a region where, importantly, the US had no policy. Britain, of course did have a policy, and Labour Prime Minister Clement Attlee warned President Truman not to interfere with the dealings of “an ally.” The US complied but Attlee also knew that Truman would not support a British military invasion of Iran.

Events were to change dramatically when both Britain and the US turned to the right. In Autumn 1951 the old warhorse Churchill was running for re-election and denounced Attlee in several speeches for failing to confront Mossadegh firmly enough. Churchill said the Prime Minister had betrayed “solemn undertakings” not to abandon Abadan. He knew that the loss of Iranian oil meant the loss of empire and considered Mossadegh “an elderly lunatic bent on wrecking his country and handing it over to the Communists.” Britain’s position suddenly toughened when Churchill defeated Labour in that election.

Truman was also up for re-election in 1952 but decided not to contest. As in Britain, a Second World War hero won the election and Dwight Eisenhower was the new Republican President. The Cold War was Eisenhower’s biggest focus and Iran was one of the first challenges. Britain cleverly played up to the new regime in Washington claiming Iran was in crisis under Mossadegh and could easily fall to the Communist Party backed by Moscow. The new Cold Warriors were ready to step up to the challenge of removing Mossadegh.

Even before Eisenhower was inaugurated, his new team prepared to organise the coup. Eisenhower appointed wartime Chief-of-Staff and former CIA General Walter Bedell Smith as his undersecretary of state. Bedell would seamlessly link the campaign between the White House, State Department and the CIA. At the head of these two latter organisations lay a pair of remarkable brothers. John Foster Dulles was a world-class international lawyer now turned Secretary of State while Allen Dulles now ran the intelligence organisation. The brothers had long developed a special interest in Iran and Allen went to Tehran in 1949 on business where he met both the Shah and Mossadegh. Both Dulles brothers were ideological Cold War warriors determined to prevent Communism in Iran.

Eisenhower gave implicit approval for the action but presented a front of plausible deniability. Behind the scenes the two Dulles and Smith had full authority to proceed with Operation Ajax. They appointed a remarkably gifted secret agent with a fantastic name to bring the coup together. He was the grandly titled Kermit Roosevelt. Kermit was not related to FDR, but was a grandson of fellow president Theodore. He was the prototype of the gentleman spy. Independently wealthy, he was a history professor at Harvard until he joined the newly established Office of Strategic Services (OSS) in WW2. His work in the OSS remains shrouded in mystery but he stayed on in peacetime when it was rebadged as the CIA.

When given charge of the Mossadegh plan, Roosevelt quickly liaised with his British counterparts in the Secret Intelligence Service (MI6). Iranian tribal leaders on the British payroll softened things up when they launched a short-lived uprising. Roosevelt moved to Tehran where he prepared to gather a rebellion force. He met with anti-Mossadegh politicians and persuaded the Shah to sign the “firman” (a document of doubtful legality sacking the Prime Minister). Mid-August 1953 found Roosevelt and his local agents ready to strike. He paid newspapers and religious leaders to scream for Mossadegh’s head. He organised protests and riots and turned the streets into battlegrounds.

But at the last minute Operation Ajax seemed as if foiled. On 15 August 1953 an officer arrived at Mossadegh’s house to present the “firman”. But he arrived minutes too late, too many people had found about the coup and the Prime Minister was tipped off in advance. The Shah fled the country in disgrace while units loyal to Mossadegh surged through Tehran. Incredibly Roosevelt did not quit and three days later he organised a second attempt. Once again he launched a massive mob in the capital. Crucially Mossadegh did not call out the police to stop them. Armed units loyal to the Shah launched a gunbattle against Mossadegh’s supporters. The following morning Tehran Radio announced “the Government of Mossadegh has been defeated!”

Mossadegh was now under arrest. The Shah flew home from Italy in stunned triumph. The New York Times wrote that "the sudden reversal was nothing more than a mutiny by the lower ranks against pro-Mossadegh officers”. Roosevelt was understandably delighted. Barely a day earlier he had been ordered home by his own superiors, now he would be returning in triumph. Mossadegh was given a three year prison sentence. He served it until 1956 and was confined to home in Ahmad Abad until his death, aged 85 in 1967.

The Anglo-Iranian Oil Company tried to return to their old monopoly position after his overthrow. But the US had invested too much in the coup to let that happen. An international consortium was organised to assume control of the oil. AOIC held 40 percent, five American companies held 40 percent and the remainder split between Royal Dutch Shell and Compagnie Francaise de Petroles. The consortium agreed to split the profits fifty-fifty with the Shah but never allowed Iranians to examine the books.

Although the Shah had forbidden his countrymen ever to speak of Mossadegh new enemies emerged within. By the late 1970s the Shah had crushed all legitimate political parties and a new religious force filled the void. When he was forced to flee the country in 1979 as a reviled tyrant, the first government to replace him were determined to invoke Mossadegh’s legacy. Mossadegh had dispatched the new Prime Minister Mehdi Bazargan to Abadan after the British fled in 1951. Another Mossadegh admirer Abolhassan Bani-Sadr was elected president. But behind the scenes Ayatollah Khomeini was consolidating his power. Before long he was arresting all his enemies. Mossadegh had been defeated again, this time in death.

The Mossadegh coup had profound impacts on America. Overnight the CIA became a central part of foreign policy apparatus. While Kermit Roosevelt went home in quiet retirement, the Dulles brothers used the new template to overthrow other rulers. President Jacobo Arbenz was overthrown a year later in Guatemala. Later they would fail to kill Castro but were more successful with Allende in Chile. The incident also changed how Iranians viewed the US. Before 1953, Britain was the rapacious and greedy enemy. Now the US was the sinister party, manipulating quietly in the background. The 1979 embassy hostage was a direct result of Carter’s decision to allow the Shah into the country. But the reason the crisis last 14 months was the fact that the royalist regime was re-installed in the first place by the US back in 1953.

With their devotion to radical Islam, Iran’s revolutionary leaders have become heroes to fanatics in many countries. They inspired the Taliban to take control of neighbouring Afghanistan. Their strength so worried Saddam Hussein he fought a ten-year war with them which led to a disastrous quarter century for Iraq. It is not too strong a view to say that the CIA’s overthrow of Mohammed Mossadegh has led to the US being involved in two concurrent wars in the region. Mossadegh would be outraged if he could see the state of his country today, but he might afford a smile at the way the coup has bitten the hand that fed it.

Nigeria's oil issues causing worldwide ripples

An oil workers’ strike in Nigeria could push record oil prices up another five dollars a barrel by the end of the week. President of Massachusetts-based Strategic Energy & Economic Research Michael Lynch made the prediction to Bloomberg after crude oil rose to a record $119.93 a barrel overnight. A strike at Exxon Mobil’s Nigerian workers and a series of pipeline bombings has seen that country’s output by 50 percent in recent days. “As long as there are disruptions of high-quality crude supplies, prices are going to move higher," said Lynch. “If the Nigerian strike isn't settled, we could easily see oil rise to $125 by the end of the week.”

However, AllAfrica.com reported today that there were “strong indications” the strike could be called off today. Acting Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Alhaji Abubakar Lawal Yar'Adua has stepped into the dispute. Yar’Adua called to the workers’ patriotism in the world’s eighth largest oil producing country. He told the strikers that the industrial action was not in the interest of the nation and asked them to resolve the issues through dialogue.

That dialogue is continuing with the oil company, Exxon Mobil. Company spokesman Adeyemi Fakayejo said representatives met workers yesterday. He said negotiations were aimed at ending the walkout by white-collar workers seeking better pay and benefits. Fakayejo would not speculate on how much oil production Exxon Mobil (Nigeria’s second largest operator) had lost in the strike however analysts have estimated they have shut nearly all of its Nigerian oil production, totalling around 770,000 barrels per day.

Even if the strike is resolved, Nigeria may not easily get back to its full capacity of pumping crude. The country is significantly down on its 2006 capacity of 2.5 million barrels a day due to a series of pipeline bombings that show no signs of easing up. Niger delta rebels said their 24 April attack had shut down 350,000 barrels per day of production by Royal Dutch Shell while a previous bombing raid had hit 169,000 bpd of Shell's Nigerian output.

The rebels’ activity has turned the Niger Delta into a high risk area for Western oil companies and their staff. Kidnapping is common and workers are ferried from their electric-fenced compounds in convoys of minibuses protected by armed paramilitary escorts. Expatriates are living as virtual wealthy prisoners too afraid to leave their compounds with restaurants and bars off-limits. A western contractor in the Delta’s main city Port Harcourt said things were going from very bad to very much worse. “When we're not at work, we're on lockdown,” he said.

The harassing of contractors and the string of pipeline attacks are the work of MEND - the Movement for the Emancipation of the Niger Delta. MEND are the largest of several local opposition groups that have protested since the 1960s against the deliberate exploitation of the delta region by corrupt central governments with no concern for sustainable environmental management. Their ultimate goal is to expel foreign oil companies and non-indigenous people from the region and they have operated with seeming impunity from the Nigerian army since 2006 when they declared “total war” on all foreign oil interests.

Their latest campaign has forced Nigeria’s largest operator Shell to shut down a total of half a million barrels of oil a day. In a statement they released to the Nigerian press yesterday, MEND claimed Shell was concealing the true extent of the problem on the orders of the government “to avoid panic and embarrassment.” Analysts believe MEND’s campaign is aimed at stepping up pressure on the government to end the secret treason trial of the movement’s leader, Henry Okah.

Okah was arrested last year for trying to illegally buy weapons in Angola. He was also accused of trying to engineer a coup in Equatorial Guinea. Despite an Angolan court throwing out his charges after five months imprisonment, it is believed Okah was secretly extradited to Nigeria in February this year. MEND then called on the Nigerian Bar Association and the International Community to intervene and compel the government to release him. When this call was ignored, MEND stepped up the pressure with its ominously titled Operation Cyclone aimed at crippling Nigerian oil exports. While Nigeria is in the eye of this cyclone, the outlook remains stormy for oil prices in the rest of the world.

OPEC looks to increase oil production

OPEC (Organisation for Petroleum Exporting Countries) announced plans yesterday to boost oil production by 5 million barrels a day by 2012. OPEC General-Secretary Abdalla Salem el-Badri said its member states will spend $160 billion in four years to increase production capacity from the current level of 32.3 million barrels a day. With oil currently at an all-time high of a $118 a barrel, el-Badri would not speculate if the increased production would bring down the price. "This conference has nothing to do with oil prices,” he said. “This conference is only a platform for producers and consumers to talk about many issues.”

The conference he was referring to is the International Energy Forum which finished up in Rome yesterday. Speaking on the final day, el-Badri said oil prices were decided by the market not by OPEC whose members produce 40 per cent of the world's oil. He blamed the weak US dollar and the actions of speculators for soaring oil prices. The price has risen by $57 in the last 12 months. Last night, the New York price closed at a record-high of $119.37 blamed on “a tumbling dollar, unrest in Nigeria and OPEC's reluctance to increase output”.

According to Turkish analyst Metin Gezin, OPEC is well within its right not to increase supply in the short term. He says OPEC members are trying to maximise the net present value of their reserves. If the market expects the price to rise, then there is an incentive to hold off on production increases until they get the best price. The chief economist of the International Energy Agency believes that oil prices will remain high for the foreseeable future due to rapid increases in demand from the huge developing economies of India and China.

But there may be a larger problem. Russian oil production is waning while its domestic demand is outstripping supply. Similarly Indonesia, Mexico and Iran are all either already at, or close to, being net importers of oil. OPEC itself has admitted that the prospect of Peak Oil may not be very far away. In 2006 Dr Shokri Ghanem of Libya’s National Oil Corporation said it could happen as soon as 2010. “It could take place sometime within the next decade or so,” he said, “Which in fact means that there is not much time left for a world economy to be driven largely by oil.”

What such a future would mean to OPEC members is anyone’s guess. By 2010 it will be a middle-aged organisation celebrating its 50th birthday. OPEC was created at the 1960 Baghdad Conference with the objective of co-ordinating petroleum policies among oil producing nations, keep a stable price and supply, and act as a wedge against the power of the major oil companies. It started with five founding members Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Eight other countries have since joined. They are Qatar (1961), Indonesia (1962), Libya (1962), United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973 although its membership was suspended between 1992 and 2007) and Angola (2007). Gabon joined in 1975 but left again in 1994. OPEC’s initial headquarters were in Geneva but since 1965 has been housed in Vienna.

In its initial decade of existence, the big oil companies ignored OPEC. The organisation did not gain worldwide prominence until the 1973 Oil Crisis. By then US oil production was on the wane while its energy demands increased. The October 1973 crisis was engineered by OPEC as a protest against the Yom Kippur war between Israel and its Arab neighbours. OPEC decided they would no longer ship oil to the West in protest at the US and its allies support of Israel. The producers raised the price of oil by 17 percent and cut production by 25 percent. By 1974 the price of oil had quadrupled from $3 to $12 a barrel. While the crisis had eased by then, the West was now acutely aware of the power of the new oil cartel.

However, the influence of OPEC diminished greatly since those heady days in the early 1970s. New oilfields were discovered in the North Sea, Mexico and Russia which undermined its muscle. As a result OPEC changed its stance to ensure market stability through its price range mechanism. But OPEC’s position is changing again as non-OPEC output declines. Some analysts see parallels between today’s problems and what happened in the 1970s. Now like then a mixture of a poor US economy, high inflation, supply problems a long and costly war threatens to return control of the oil industry to OPEC. El-Badri’s $160 billion announcement will look very cheap indeed if that happens.

Armenia state of emergency after disputed election

The Armenian government has imposed a 20-day state of emergency after police killed eight demonstrators protesting against a disputed election result.
Outgoing President Robert Kocharian has banned public rallies and imposed a communications blackout of internet, satellite and non-state TV in the capital Yerevan. The confrontations over allegations of electoral fraud have led to death, injury and property damage.

The violence erupted on the weekend between government forces and opposition activists. Police fired shots and used clubs and tear gas to disperse thousands of demonstrators. They also broke up a camp site where hundreds of protesters had stayed for more than a week. As well as the eight dead (seven civilians and one police officer), over a hundred people were injured in the clashes. Kocharian has since deployed hundreds of troops to enforce the state of emergency.

The violence is in response to the disputed presidential election on 19 February. President Kocharian's handpicked successor, Serzh Sargsyan defeated Levon Ter-Petrosian in the election. Western observers declared the poll “relatively fair” however Sargsyan had the benefit of massive state TV coverage. Official results gave Sargsyan 53 per cent of the vote while Ter-Petrosian received 21.5 per cent. Ter-Petrosian's supporters said the election was marred by ballot stuffing and intimidation. Armenia's deputy prosecutor-general came out in support of Ter-Petrosian and encouraged his supporters to continue protesting. Ter-Petrosian was subsequently placed under house arrest. After 11 days of peaceful protests, the demonstrations became violent on Saturday.

Yesterday, the Organization on Security and Cooperation in Europe (OSCE) sent a special envoy to Armenia to try to resolve the political crisis. Finnish Foreign Minister Ilkka Kanerva, whose country currently holds the OSCE'S rotating chairmanship, said he sent his special envoy to bring both sides to the negotiating table. Heikki Talvitie, a veteran diplomat with long experience in the region, will hold separate talks with Kocharian, Sargsyan and opposition leaders. "The OSCE considers dialogue central to stability, and stability is vital in the South Caucasus,” said Kanerva. “Everything should be done to avoid further casualties and any further escalation of tension.”

Levon Ter-Petrosian led Armenia for most of the 1990s. He was elected president in 1991 with four policy planks: the development of a market economy; democratisation; a realistic foreign policy unburdened by Russia or the Armenian genocide; and the resolution of the Nagorno-Karabakh conflict. Ter-Petrosian was portrayed in the west as an introverted intellectual, a democrat, and a moderate. He was re-elected in 1996 but hardliners forced Ter-Petrosian to resign the presidency two years later due to his dovish stance on the Nagorno-Karabakh conflict. Kocharian replaced him as president.

Kocharian and Sargsyan are both natives of the disputed enclave of Nagorno-Karabakh, a region over which Armenia and neighbouring Azerbaijan fought a war in the 1990s. Peace talks have stalled over Kocharian’s refusal to return Azerbaijani regions captured during the 1991-94 conflict. At the time Turkey froze diplomatic relations with Armenia in solidarity with Turkic-speaking and Muslim Azerbaijan. Complicated by the Armenian massacres of World War I (which Turkey refuses to acknowledge), the countries have not yet restored relations.

While there is close economic cooperation in the region between Turkey, Azerbaijan and Georgia, Armenia prefers to deal with Iran and Russia. Armenia borders Iran and lies on a transit route from the energy-rich Caspian Sea region. Armenia currently relies on Russian pipelines for natural gas but intends to diversify its supplies by purchasing gas from Iran. Construction finally began in early 2005 on the Iranian portion of the pipeline. The 140km natural gas pipeline is financed by Iranian Bank of Export and Development at a cost of $30 million.