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Russia Resumes Europe Oil Supplies
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Belarus workers open the discharge valve of the "Gomel" oil-pumping station, part of the "Druzhba" pipeline in Bobovichi, some 330 km southeast of Minsk.
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MOSCOW, Jan. 12--Oil flowed again through the main pipeline from Russia to Europe on Thursday after Moscow and Belarus agreed to settle a dispute that has hurt Russia’s reputation as an energy supplier.
Russia restarted pumping through the Druzhba (friendship) pipeline across Belarus early on Thursday, the deputy chief executive of Russian oil pipeline monopoly Transneft, Sergei Grigoryev, said.
Oil “is going through in the direction of our customers,“ Grigoryev told AFP. “We will even try to increase supplies to make up for losses.“
Supplies to several EU countries were halted on Monday when Russia refused to pay a new transit tax imposed by neighboring Belarus.
The interruption sparked sharp criticism of Moscow’s handling of the crisis by German Chancellor Angela Merkel. Germany holds the EU presidency and chairmanship of the G8 (Group of Eight) leading economies.
Russia insisted that before resuming supplies, its ex-Soviet neighbor must first pump to Europe about 80,000 tons of crude oil it had taken from Russia and stored in lieu of transit tax payments.
Polish pipeline company PERN said that oil deliveries to EU members Poland and Germany had been resumed at the Polish-Belarussian border late on Wednesday.
German Foreign Minister Frank-Walter Steinmeier welcomed the resolution but said Germany now wanted talks with Russia “to put our future energy ties on a reliable long-term foundation“.
The head of the International Energy Agency, Claude Mandil, joined the criticism, urging Russia to recognize that the shut-down was a “grave“ incident and that it should draw “clear“ lessons.
Rene van der Linden, chairman of the Parliamentary Assembly of the Council of Europe, also said during a visit to Moscow that the row had raised “great concern“ in Europe and “raised a question over Russia’s reputation.“
The resolution came after a telephone conversation between Russian President Vladimir Putin and his Belarussian President Alexander Lukashenko and was to be finalised by Friday.
The office of Belarussian Prime Minister Sergei Sidorsky said that Minsk had accepted Moscow’s main demand--that Belarus cancel the new 45-dollar-per-tonne tax on oil transit through Druzhba, the main export pipeline to Europe.
The pipeline accounts for about a third of Russian oil exports and for about 12.5 percent of total EU oil consumption.
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ASEAN Leaders Call
For Free Trade Zone
aCEBU, Philippines, Jan. 12--Southeast Asian summit leaders have agreed to write a charter to create a bloc similar to the European Union and establish a free trade zone by 2015, according to a draft of their final statement obtained by The Associated Press on Friday.
The statement, to be issued after the summit concludes Sunday, also includes an agreement on counterterrorism and the protection of migrant workers--both major issues in the region. It vows to create an “ASEAN Economic Community“ with a free flow of goods, services, investment and capital by 2015.
“The future looks brighter for the region,“ Philippine President Gloria Macapagal Arroyo said in a statement Friday. Implementing the goals will be difficult, however.
The 10 countries in the Association of Southeast Asian Nations have long voiced support for a joint charter, but the process of writing one remains in its initial stages.
Officials here say they see the declaration as a starting point for the charter, but have refused to speculate on when it might actually be completed.
One sticking point has been the proposal to allow member states to sanction others. This is seen as a means to influence the military junta ruling Myanmar, which has long lagged behind the rest of the region in its dismal human rights record.
According the draft, the leaders agreed to share information and training to counter terrorism and cross-border crimes.
The other main points of the final document were the expansion of free and fair trade; a switch from fossil fuels to biofuels to enhance energy security; and the reduction of poverty to narrow the development gap.
On international issues, the Philippines offered to host the next round of the so-called “six-party“ talks on the denuclearization of North Korea. No place or date for the talks has been decided.
The summit brings together the 10-member Association of Southeast Asian Nations and their dialogue partners--Australia, China, Japan, India, South Korea and New Zealand.
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OPEC Members Urged
To Comply With Cuts
LONDON, Jan. 12--OPEC’s president said crude oil’s plunge to $53 a barrel is “unacceptable“ and urged members to comply with pledged production cuts, according to Bllomberg.
“It’s very difficult to have 100 percent compliance, but we need to make the cuts that we have agreed,“ Mohamed al- Hamli, who is also the oil minister of the United Arab Emirates, said in a phone interview from Abu Dhabi.
The Organization of Petroleum Exporting Countries, the producer of 40 percent of the world’s oil, decided in the fourth quarter to cut output by 1.7 million barrels a day by Feb. 1. Al-Hamli said consultations among ministers about falling prices are “ongoing“ after OPEC only met two-thirds of the reduction it committed to last month.
OPEC members are reining in supplies for the first time in almost three years after crude prices plunged 32 percent from a record of $78.40 a barrel on July 14 to $52.94 today. Crude oil on the New York Mercantile Exchange recovered after al-Hamli’s comments, and was trading at $53.90 at 9:51 a.m. in New York.
“OPEC probably will need to cut more,“ said Jean-Bernard Guyon, director general of Global Gestion France in a phone interview from Paris today. “I would say another 500,000 barrel-a-day cut on top of the February cut, depending on the weather and the reaction in the market in February.“ The weather in the U.S. and Europe remains key, he said.
The 10 OPEC members that adhere to output quotas pumped 385,000 barrels a day more oil than their agreed target last month, according to Bloomberg data. Nigeria and Venezuela were the biggest violators, exceeding their targets by a total of 220,000 barrels.
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Doha Talks Continue
France Rejects Further EU Compromises
GENEVA, Jan. 12--The top US trade official is to hold talks Friday with WTO head Pascal Lamy aimed at galvanizing stalled global trade negotiations after France bluntly warned it would reject further compromises by the European Union, according to AFP.
US Trade Representative Susan Schwab will confer with Lamy following a meeting earlier this week with European Union Trade Commissioner Peter Mandelson.
Discussions will continue at a ministerial meeting on January 27 on the sidelines of the World Economic Forum in the Swiss ski resort of Davos.
Mandelson expressed optimism that a deal was reachable following his latest talks with Schwab, saying: “There is fresh hope for the Doha Round and we now have to build on that work.“
The Doha Round, launched in the Qatari capital, Doha, in November 2001, is aimed at reducing tariffs, subsidies and other barriers to global commerce in order to boost development in the world’s poorest countries. Mandelson’s optimism and indeed his ability to speak on behalf of all 27 members of the European Union appeared to be thrown into doubt after France said it rejected any more compromises by Brussels on the key sticking point of agricultural tariffs.
French Foreign Minister Philippe Douste-Blazy and junior European Affairs Minister Catherine Colonna said after meeting Mandelson in Paris on Thursday that the EU’s last proposals made in October 2005 amounted to a “red line“.
Those proposals, envisaging a 39-percent cut in farm tariffs, had exhausted the EU’s margin for negotiation and France would “firmly“ oppose any further concessions, they said in a statement.
Two other French officials, Prime Minister Dominique de Villepin and Trade Minister Christine Lagarde later reinforced the French argument.
Villepin insisted there was “no new element“ that would justify a change in the EU position, while Lagarde declared that “it is not for Europe to make any movement whatsoever.“
Mandelson has proposed a further cut in EU tariffs to around 50 percent in exchange for an agreement by Washington to reduce its farm subsidies by around $8.0 billion (6.0 billion euros) to $15 billion from a current ceiling of $23 billion. Such a compromise was rejected by Schwab last June.
Agricultural subsidies and market access are key sticking points in the Doha round of trade talks, which have foundered badly since their launch.
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Bolivia Will Revoke Mining Concessions With No Investments
MANAGUA, Nicaragua, Jan. 12--Bolivian President Evo Morales on Thursday clarified his intent to “nationalize“ his country’s mines, saying that only mining concessions that have received no or very little investment will return to the hands of the state, AFP reported.
Speaking in Nicaragua after attending President Daniel Ortega’s inauguration, Morales said a working group would give a report on Saturday detailing which concessions would be affected. “We need investment, not bosses or owners,“ he said.
He said the government would also target companies whose paperwork is not in order. “There are companies that don’t meet requirements, that don’t pay taxes,“ he said.
Bolivian mines are already owned by the state but the government has granted mining concessions to private Bolivian cooperatives and foreign mining companies.
Morales has used the term “nationalization“ to refer to his goal of garnering a greater share of mineral export revenues for the government. He has not given details on how any new government action would affect mining concessions, but last week Bolivian Mining Minister Guillermo Dalence proposed a sharp hike in taxes on mining revenues.
Morales announced his plans to “nationalize“ the mines last year but in November appeared to back off the move, saying his government could not afford it.
Morales hopes ultimately to see the state benefit more from mineral exports, which have increased dramatically this year. Bolivia shipped some US$485 million (374 Million euros) of mostly zinc, silver, gold and tin during the first half of 2006--on pace to easily top 2005’s total mineral exports of US$536 million (412 million euros).
A crash in world tin prices during the 1980s prompted the Bolivian state mining company Comibol to lay off tens of thousands of workers. But more recently, rising demand, particularly from China, has helped to drive up Bolivian metals prices and encourage foreign investment.
Investment by international companies in Bolivia’s mines more than tripled between 2003 and 2005, jumping from about US$20 million (15.4 million euros) to US$66 million (50 million euros), according to Bolivia’s Mining Ministry.
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Rising China Population Harmful
BEIJING, Jan. 12--China’s population will peak at 1.5 billion people in 2033, posing huge challenges to social stability, the economy, the environment and resource allocation, a new government report said.
Besides handling an increase of 200 million more people from the current population of 1.3 billion, China must manage huge numbers of migrant workers, a widening gender imbalance and an ageing population, AFP cited the report as saying.
“Our work on population and family planning is huge and will not come easy,“ said the Strategic Research Report on National Population Development, issued late Thursday by the State Population and Family Planning Commission.
“We are presently witnessing a trend in a rebound in the low birth rate which means we need to create a new work plan, new mechanisms and methods to maintain a low birth rate.“
China’s working population of people between the ages of 15 and 64 will increase from 860 million in 2000 to 1.01 billion in 2016, posing a huge challenge for the government to provide jobs, education and social services, the report said.
In the next 20 years, up to 300 million Chinese will also leave rural areas and descend on towns and cities to live and work, it said.
Although the population--already the world’s biggest--is expected to peak in 2033 and start to decline slightly, other pressures will linger, it warned.
China’s population aged over 60 will jump from the current 143 million to 430 million by 2040, meaning the country will need to step up efforts to build a social security and retirement system.
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Indonesia Second Top Coal Exporter
JAKARTA, Indonesia, Jan. 12--Indonesia has quietly become the world’s second-largest exporter of coal used to generate electricity and could potentially challenge Australia for the top spot this year, AP quoted analysts and industry officials as saying.
But growing domestic demand for energy in Indonesia and stagnating foreign investment have cast doubt on the country’s ability to take advantage of expanding demand for coal in its export markets, they say.
Draft laws that could give foreign investors more control over their local ventures are key to whether Indonesian growth can keep pace with that of other big exporters, such as Colombia, experts say.
“Indonesia has come from nowhere to challenge Australia as the world’s largest exporter of thermal coal,“ Citibank said in a recent report.
Thermal coal is used mainly in power stations to produce high pressure steam, which then drives turbines to generate electricity.
Indonesian coal is exported around the globe, including to the European Union, the U.S., Japan, India and China, which itself is a major coal producer but imports coal to feed domestic industries.
Indonesia’s coal production has risen 20-fold since 1990 to an estimated 167 million tons in 2006--73 percent of which is exported, Citibank said. Between January and
October last year, coal exports totaled around $5.1 billion (3.9 billion euros) about 32 percent higher than a year earlier.
In that period, its overall exports rose 15 percent to $58.5 billion (45.3 billion euros).
Coal has long been an unfashionable energy source because it is a highly polluting fuel and a major contributor to greenhouse gasses. But improved technology for coal-fired power plants has significantly reduced carbon dioxide output.
And global demand for electricity, driven in part by economic growth in developing countries such as India, are underpinning a strong outlook for global coal demand and pricing, said Professor George Haley, director of the Center for International Industry Competitiveness, based at Connecticut’s University of New Haven.
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Indian Output
NEW DELHI--India’s industrial production rose 14.4 percent in November compared to the same month a year ago, the government said Friday, suggesting that the slowdown seen in October was temporary.
Rising Dollar
TOKYO--The dollar rose above 120 yen to a 13-month high versus the yen in Asia Friday amid optimism about US consumption data, helping the economy achieve a soft landing.
Q4 Profit
SEOUL--Samsung Electronics Co. said Friday that fourth quarter profit fell 8 percent amid price declines for key products including flash memory chips and liquid crystal displays.
Car Sales
SHANGHAI--German luxury carmaker BMW said on Friday it sold 51.3 percent more cars in mainland China in 2006 compared with a year earlier. Total sales came to 36,357 cars, up from 24,025 in 2005, it said in a statement. Sales of BMW brands rose 49.6 percent to 35,300 units, with Minis up 145.8 percent to 1,057 units.
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