Iranian president to tour Latin America

Mahmoud Ahmadinejad heads to Caracas looking to expand ties and lessen impact of sanctions

Saeed Kamali Dehghan, Tom Phillips in Rio de Janeiro and Virginia Lopez in Caracas

The Iranian president, Mahmoud Ahmadinejad, is due to touch down in Venezuela on Sunday on the first leg of a Latin American tour aimed at lifting his regime out of international isolation and bolstering its sanctions-hit economy.

Ahmadinejad, who is facing growing economic discontent at home and pressure from the west over Iran’s disputed nuclear programme, will also visit Nicaragua, Cuba, Ecuador and possibly Guatemala in a search for new and improved economic partnerships to reduce the impact of sanctions. The five-day Latin America visit is scheduled to start in the Venezuelan capital, Caracas, with meetings with president Hugo Chávez, a long-time ally.

Ahmadinejad is then expected to travel to Managua for the swearing-in of the Nicaraguan president, Daniel Ortega, before travelling to Cuba and Ecuador. Reports suggest he may also visit Guatemala.

The president’s entourage is expected to include the energy minister, Majid Namjoo, who has said the tour is aimed at promoting commercial ties with Latin American countries. Analysts view Ahmadinejad’s excursion as a reaction to growing economic difficulties at home and political isolation abroad.

Michael Shifter, president of the Washington-based thinktank Inter-American Dialogue, said Iran had economic and geopolitical agendas in Latin America.

“Iran has real economic difficulties and is isolated, so the trip makes sense in that context,” he said. “Latin America, in contrast, is in pretty good economic shape and is increasingly active in global, diplomatic affairs.”

Maria Teresa Romero, professor of international studies at the Universidad Central de Venezuela, said the trip was also intended as a warning signal to Washington.

“That Iran’s president has chosen to visit the region – and only the more staunch political opponents to the US – at a moment when tensions between the US and Iran are escalating is a challenge, a threat, from the Iranian government to the US that sends a clear message: ‘We can go to your backyard when we want to,'” she said.

Iran is grappling with a range of domestic and international problems.Its currency, the rial, has plunged to a record low in recent weeks, causing mayhem at the Iranian stock market and prompting fears over the future effects of the sanctions on the economy.

High unemployment, political power struggles and fears of unrest before the parliamentary elections in March have made the domestic political atmosphere increasingly tense.

At an international level, Iran has resorted to sabre-rattling and threatening countries involved in a campaign to bring sanctions against its central bank and impose a ban on the import of its oil.

Iran raised the stakes, warningthe west it might close the strait of Hormuz, a strategically important passageway in the Gulf through which one fifth of the world’s oil is transported, should greater sanctions on its oil be imposed.

Latin America has become an increasing priority for Ahmadinejad since his election in 2005. New embassies have opened in six countries, while state-run Press TV has also been beefing up its presence in the region, with correspondents in Caracas and more recently Sao Paulo.

On the eve of Ahmadinejad’s visit, one Press TV report said: “The promotion of all-out co-operation with Latin American countries is among the top priorities of the Islamic republic’s foreign policy.”

But Shifter said Iran’s president should not hope for big advances during his tour. Ahmadinejad will not visit Brazil, the regional economic powerhouse, as he did during his previous visit in 2009 – an indication that relations have cooled since Dilma Rousseff took over as president.

“Iran should probably keep its expectations in check. If Iran’s goal is to extend its influence, Latin America does not offer a hospitable environment. It is telling that the larger, more significant countries are not part of Ahmadinejad’s itinerary. These countries may want greater independence from Washington, and may be flexing their muscles a bit on the global stage, but they are not keen to be aligned strategically with Tehran,” he said.

Romero said that in the case of Hugo Chávez, who faces a tricky presidential election in October, the visit could even backfire.

“This is an electoral year in both the US and Venezuela, and I would be surprised if the Republicans don’t use this kind of event to exert more pressure on the Obama administration. I think sanctions against Iran are likely to strengthen, but I also think they could be extended to Venezuela.”

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US, Israel to “challenge” Iran

Garibov Konstantin

The United States and Israel are due to hold the Austere Challenge-12 military exercise in the Middle East to train troops in interacting in antimissile and antiaircraft defences, and also to boost coordination of action by Israeli and US Army servicemen.

The war games will prove the largest-scale ones in the two countries’ military cooperation history. Thousands of US and Israeli Army servicemen, dozens of ships and deck-based aircraft are due to take part.

The two countries held the war games of similar scale three years ago. In autumn 2009, more than a thousand US Army servicemen helped the Israelis to service antiaircraft batteries, and drilled joint action of the two countries’ troops to deal with a likely military conflict in the region. Tehran took the war games as an unprecedented pressure that was brought to bear on the Islamic Republic.

The Pentagon now claims that the military exercise was planned long ago and should by no means be seen as a response to Iran’s Wilayat-90 military exercise, which drew to a close in the Strait of Hormuz on January 4th . But according to reports late last month, the US-Israeli military exercise was originally due in spring this year. Experts claim that it is Tehran’s successful testing of two Iran-made Gader anti-ship cruise missiles that prompted the US and Israel to reconsider the time of their military exercise and hold it at an early date. Gader missiles are capable of hitting targets at a distance of 200 kilometres. Besides, the Pentagon Chief Leon Panetta pledged to go to any lengths to prevent Iran from developing nuclear weapons.

Adding fuel to the fire in the region, as it were, is the raging political crisis in Syria, as well as Iran’s recent threat to block the Strait of Hormuz, which is unacceptable to the United States. In the event of a US-Israeli military conflict with Iran, fighting may spread to the entire region, an expert with the Russian Academy of Sciences’ Institute for Oriental Studies Liudmila Koulagina says, and elaborates.

“The Middle East nations, Liudmila Koulagina says, are clearly opposed to any fighting in the region on the understanding that even an airstrike on Iran will inevitably provoke Iran’s retaliatory strikes on a number of neighbouring countries. Fighting would inevitably sweep the entire region. Now, this is the worst-case scenario for the Middle East, since it is a major oil region and a home to US closest allies, such as Saudi Arabia. Any fighting in the Middle East would prove a great error.”

Meanwhile Tehran has said that it will soon hold yet another military exercise, namely one in the Strait of Hormuz and the Persian Gulf in February. The exercise will be titled the way it has been in the past seven years, Great Prophet, but the Iranian military warns there’ll be some changes made, without bothering to specify. Now, if Austere Challenge-12 happens to coincide with Great Prophet, which is not at all impossible, the Middle East will for the first time ever become the scene of two biggest simultaneous war games.

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Exxon Settles Lawsuit Over Gulf Offshore Oil Lease Against U.S.

By Allen Johnson Jr. and Mark Chediak – Jan 6, 2012 11:01 PM CT

Exxon Mobil Corp. (XOM), the largest publicly traded oil company, settled its lawsuit against U.S. Interior Secretary Kenneth Salazar over the government’s decision to cancel offshore leases that may yield “billions of barrels of oil.”

The accord “will allow ExxonMobil to develop this very large, but technically challenging, resource as quickly as possible using a phased approach,” Patrick McGinn, a spokesman for Irving, Texas-based Exxon, said in an e-mail yesterday.

Exxon sued Aug. 12 over a ruling by the department that canceled Gulf of Mexico leases for the so-called Julia Unit. The company and the government entered into settlement agreement on Dec. 30, according to a filing yesterday in U.S. District Court in Lake Charles, Louisiana.

Exxon said in its complaint that it sought a suspension for its Julia leases in 2008 because of drilling complexity. It cited federal regulations that allow oil oil producers to suspend production in their fields, partly “to facilitate proper development of a lease.”

The Interior Department denied the request in 2009, stating that the company“had not demonstrated a commitment to production” according to court papers. Unsuccessful appeals followed.

Suspension of Production

As part of the settlement, the Interior Department granted a suspension of production for the leases from Dec. 13, 2008, to Oct. 31, 2013. The department will grant a second suspension until Aug. 31, 2014, if Exxon and Statoil ASA (STL), a partner in Exxon’s Julia fields, remains in compliance with the terms of the agreement and takes certain steps toward production, according to court documents.

Exxon and Statoil agreed to pay a yearly fee on the original leases of $650 per acre until 87.5 million barrels of oil are produced from the fields. The first fee will be owed for 2011, according to court documents. The minimum royalty rate for the leases was increased to $11 per acre and the yearly rental rate increased to $16 an acre.

“The Julia project will play an important role in meeting America’s energy demand,” McGinn said in the e-mail. “The initial phase of the project is expected to produce more than 175 million barrels of oil through six production wells.”

Melissa Schwartz, a spokeswoman for the Interior Department, said in an e-mailed statement that the proposed settlement affirms the regulatory process, “provides incentives for timely and thorough development of the leases, and secures a fair return on those resources to the U.S. Treasury.”

The case is Exxon Mobil Corp. v. Kenneth Salazar, 11- CV-1474, U.S. District Court, Western District of Louisiana (Lake Charles).

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