Home' Greymouth Star : November 19th 2015 Contents Greymouth Star
4 - Thursday, November 19, 2015
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uLetters to the editor
1703 - Death of the Man in the Iron Mask,
a prisoner in the Bastille prison in Paris.
1863 - US President Abraham Lincoln
delivers the Gettysburg Address.
1899 - Khalifa of Sudan is killed by Sir
1941 - HMAS Sydney engages
the German raider Kormoran in a
fierce battle in the Indian Ocean.
The Sydney sails off and is never
seen again, with 645 presumed
1949 - Prince Rainier is sworn in
as 30th ruling Prince of Monaco.
1969 - First reports emerge that US troops
shot Vietnamese civilians in My Lai village in
1977 - Egypt’s President Anwar Sadat
arrives in Israel on his first peace mission to
that nation and receives warm welcome.
1988 - Christina Onassis, daughter of Greek
tycoon Aristotle Onassis, dies aged 37 in
2010 - Twenty nine miners are trapped
underground at the Pike Rive coalmine
following an explosion.
uWest Coast yesteryear
uToday in history
Robert Devereux, third Earl of Essex (1566-
1601); Charles I of Britain (1600-1649);
Ferdinand de Lesseps, French builder of Suez
Canal (1805-1894); James Garfield,
20th US president (1831-1881);
Indira Gandhi, Indian prime
minister (1917-1984); Margaret
Whitlam, wife of former Australian
prime minister (1919-2012); Larry
King, US tv talk-show host (1933-);
Ted Turner, US media mogul
(1938-); Calvin Klein, US clothing designer
(1942-); Meg Ryan, US actress
(1961-); Jodie Foster, US actress (1962-).
“ It is always brave to say what everyone
thinks. ” — George Duhamel, French author
“ But they that wait upon the Lord shall
renew their strength . . .” —(Isaiah 40:31).
To achieve any
traversing the new
Haast highway the
traveller now would probably have to ride
a camel backwards on the round trip. With
the route hardly open a fortnight it has been
covered by people on foot, by groups of
youngsters, by the very old, by vintage cars,
by almost every make of motorised vehicle
available in the country and even by over two-
score of motorcycles all on the one day.
Heading the cyclists (at least in years) is
70-year-old Christchurch man Mr Edgar
Williams, who is completing his round trip
this week. He started in Christchurch and after
sleeping at nights beside his trusty cycle at the
roadside, he arrived at Hokitika on Monday. He
rides an ordinary roadster cycle and carries half
a hundredweight on his carrier — including his
cooking utensils for his roadside meals.
The Greymouth Youth Hostel Association is
the first group of its kind to make the 700-mile
While the volume of tourists staying in
Greymouth hotels should increase and bring
appreciative smiles from West Coast mine hosts
— in one way at least the new Haast highway is
a mixed blessing. The ‘twicers’ are disappearing.
The twicers are those tourists who formerly
stopped in Greymouth hotels, went to the
glaciers for a day and returned to stay the
following night again at the same Greymouth
hostelry. Now they are discovering that the
Haast route is open when they get to the
glaciers, and on realising they can get right
through they telephone to cancel their bookings
for a second night.
uFood for thought
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raq’s semi-autonomous region of
Kurdistan has for the first time
detailed its secretive oil exports
operations and said it plans to sell
more, whether Baghdad likes it or
not, as it needs money to sur vive
and fight Islamic State.
The region’s minister for natural
resources, Ashti Hawrami, said that to
avoid detection oil was often funnelled
through Israel, transferred directly
between ships off the coast of Malta, and
decoy ships used to make it harder for
Baghdad to track.
Kurdistan says it had been forced to
bypass Baghdad and begin exporting
oil directly because the latter refused
to respect budgets in 2014 and 2015.
The current and former Iraqi central
governments have both said the Kurds
have failed to respect deals to transfer
agreed volumes of oil to Baghdad.
Kurdistan is entitled to 17% of Iraqi’s
overall budget, and argued it needed stable
revenues to pay its bills, support over a
million of refugees fleeing the war in
Syria and Iraq finance its Peshmerga army
fighting against Islamist militants.
Kurdistan is exporting over 500,000
barrels per day of oil — or every seventh
barrel of OPEC’s second largest exporter
— a nd believes that Baghdad has now
accepted, at least in part, direct Kurdish
exports going to as many as 10 countries.
“Effectively, we have been financially
discriminated against for a long time.
By early 2014, when we did not receive
the budget, we decided we need to start
thinking about independent oil sales,”
With new pipelines completed, the
Kurdistan Regional Government still
needed to find buyers for its oil, effectively
one large tanker every two days.
Most customers were scared of touching
it with Baghdad threatening to sue any
buyer. Large oil companies — including
Exxon Mobil and BP — have billions
of dollars worth of joint projects with
“The scale was huge. And it was a totally
new game for us. Buyers wanted the KRG
to lease its own crude cargo ships. We
knew nothing about the shipping or sea
transportation industry,” said Hawrami.
The KRG engaged a veteran oil trader,
Murtaza Lakhani, who worked for
Glencore in Iraq in the 2000s, to assist
“He knew exactly who would and
who wouldn’t deal with us. He opened
the doors to us and identified willing
shipping companies to work with us,” said
Hawrami says it is premature to disclose
the names of traders, shippers and buyers
of Kurdish oil. Lakhani also declined to
comment on the names of buyers and
Iraq has filed a lawsuit against Greek
shipping company Marine Management
Ser vices for its role in Kurdish exports.
Market sources have said several trading
houses including Trafigura and Vitol have
dealt with Kurdish oil. Both Trafigura and
Vitol declined to comment on their role in
Some buyers took tankers to Ashkelon,
Israel, where it was loaded into storage
facilities to be resold later to buyers in
Europe. Kurdish oil was also sold offshore
Malta via ship-to-ship transfers helping
disguise the final buyers and thus protect
them from threats from Iraqi state firm
It was a high stakes game. A ship would
dock off Malta waiting for another to
arrive to take a cargo to a final destination.
Sometimes two ships would be sent —
one sailing off empty and another full
— to complicate cargo tracking.
“Everyone suddenly became a ship
tracking expert. So we had to raise our
game too ... But one thing was proven
correct — when oil is out, it flows,” said
The region plans to increase exports to as
much as 1 million barrels and wants also
to become a significant gas exporter, which
would put it firmly on the global energy
Disputes over budget have been at the
centre of developments of the past two
“ We simply cannot afford returning
to the old arrangements with Baghdad
and widening the financial gap again,”
“ We would accept a real budget
that Baghdad can commit to without
conditions, but we don’t want to be part of
a theoretical budget which isn’t worth the
paper it is written on,” he added.
Hawrami says the 2014 Iraqi State
budget required Kurdistan to export
400,000 bpd of oil — which was simply
technically non-feasible at the time due to
a lack of export routes and pipelines.
Kurdistan received $500m in state
budget allocations in January 2014
instead of $1.0b-$1.2b foreseen by the
state budget and then from February
budget transfers were cut further and then
stopped by March 2014.
“Baghdad demanded oil we didn’t have.
Our delegation led by prime minister
Necher van Barzani went to Baghdad to
try to find out what was going on. But
they were not interested in hearing our
arguments and continued with their
decision to cut our budget,” he said.
“So we had to get our act together and
speed up the completion of pipelines.
By May 2014 the basic infrastructure
was completed and we were ready for
By the time the new pipeline from
Kurdistan to the Turkish Mediterranean
coast, replacing the old Saddam-era link,
was ready, the region was effectively broke.
It had limited cash, it was falling behind
with salary payments to state employees
including the army — just when Islamic
State seized large parts of central Iraq and
of Kurdistan itself.
The region was hundreds of millions
of dollars in arrears to companies such
as Genel and DNO, which have been
developing fields in Kurdistan.
Gradually, buyers and traders started
using their own ships for Kurdish oil but
Baghdad filed a court case in the United
States threatening to sue anyone who
A cargo was stuck in the United States
for several months before sailing back to
Europe and being resold there. Since then
no Kurdistan oil has crossed the Atlantic.
Another cargo was stranded in Morocco.
Somo also sent warnings to all major
clients in Europe and Asia.
“ Looking back, the whole of 2014 was a
huge success as we only had two ships in
difficulty — one in the United States and
one in Morocco ... We managed to finish
the year (2014) with only one month of
salaries behind,” said Hawrami.
“That was a pretty extraordinary
achievement as we had ISIS attacking our
soil, over a million of Syrian refugees and
displaced Iraqis. All of that burden came
and we hadn’t seen a cent from Baghdad”.
Independent oil sales in 2014 allowed
Kurdistan to borrow about $3b including
from Turkey and trading houses.
“ We had a remarkable change in
relations with Turkey. It has been very
strategic and they have been incredibly
supportive,” Hawrami said.
Hopes of better ties emerged at the end
of last year after a new government led
by Haider al-Abadi came to power in
Baghdad instead of Nouri al-Maliki.
“ It was a new atmosphere. We hoped
it would allow us to put our differences
behind us,” said Hawrami.
In December 2014, Baghdad and Erbil
signed a deal under which Kurdistan
would transfer some average 550,000
bpd to Iraqi State oil firm Somo over the
course of 2015 while receiving 17% of
Iraqi budget or over $1.1b a month.
The deal began to unravel almost
immediately. Baghdad said Erbil was not
transferring the agreed volumes and sent
only $200m in January instead of $1.1b.
Between January and by June it transferred
around $2b in total to Erbil — less than
40% of what the Kurds had expected.
“ In February 2015, we went again to
Baghdad only to discover that they have
thrown their budget out of the window
and were simply working with cash in
hand. We told them that our state salaries
constitute some $750m — half of this to
security and Peshmerga — so how could
we live on just a third of our budget?”
“But they told us — cash in hand is
all we have because of the collapse in
oil prices and inability to fill the deficit
in the budget. By March, we came to a
conclusion that we had no option but to
start independent oil sales again”.
Baghdad is firm in asserting it is abiding
by the constitution.
“The party that did not abide by the
text of the agreement is the regional
government and not the federal
government,” said Saad al Hadithi,
spokesman for Prime Minister Haider
“ We had hoped the agreement that
was made a year ago was the beginning
of a new stage of co-operation and
co-ordination, but unfortunately what
happened is that the regional government
did not export the agreed upon amount to
Somo,” Hadithi said.
Hawrami says as of November 2015
the number of countries taking Kurdish
barrels has risen to around 10, declining to
name them. Reuters has reported Kurdish
oil making it to countries such as Israel
Independent sales have been allowing
the KRG to generate some $800m-$850m
a month from July to enable it to pay
salaries and ongoing costs to oil companies
However, the crash in oil prices since
2014 meant the gap in finances was much
more difficult to close.
As of November, the country is still three
months behind with salary payments but
Hawrami says he is hoping to close the
gap by pushing production up in 2016
while also looking to sell some assets and
infrastructure to raise liquidity.
As of today, the KRG still owes $3b to
its 2014 lenders but Hawrami says he
hopes it could be paid back or at least
significantly reduced over the course of
Another task would be a meaningful cut
of state spending such as fuel subsidies in
2016 and an attempt to increase non oil
revenues. Hawrami says he is seeing early
signs that Baghdad is gradually removing
its opposition to independent oil sales.
Somo is still threatening to sue buyers of
Kurdistan oil, but appears compliant with
Erbil’s handling of the Kirkuk oilfield,
which is not under the authority of the
KRG, but whose exports of 150,000 bpd
have been handled for months by the
Kurds via Turkish ports.
“ If you ask any Kurd, they will always
tell you that their main dream is
independence,” Hawrami said. “ But at the
government level, the main policy focus
has been economic independence. We are
aspiring to solve our own problems and we
have enough resources to do it. ”
A rig drills into Kurdistan’s rich Taq Taq field.
Kurdish oil bypasses Iraq
It was called “the Eight Nation
Alliance” and it had but one purpose:
to punish the Chinese people. In 1899,
the Shandong peasantry had resolved
to drive all “foreign devils” out of their
country, rising in their thousands under
the leadership of a secret society known
as the Brotherhood of Righteous and
Harmonious Fists. The British, with
characteristic disdain, referred to these
patriots as “Boxers”, and dubbed their
uprising the “Boxer Rebellion”.
By 1900 the Boxers were close to
achieving their goal. They had shamed the
Empress Dowager, Cixi, into supporting
their movement and with the assistance
of the Chinese army had the “foreign
devils” bottled up in Beijing’s diplomatic
Punishing the barbarians
It was the unthinkable prospect of
these legations being overrun, and their
terrified inhabitants slaughtered, that
persuaded the world’s leading imperialists
— Great Britain, France, Russia,
Germany, the United States, Austria-
Hungary, Italy and Japan — to announce
the formation of a joint force to lift the
siege and restore the status quo ante.
The German Kaiser, Wilhelm II, felt
obliged to mark the departure of his own
nation’s contingent with a speech. If you
ever wondered why, in both world wars,
the German’s were referred to as “ The
Hun” — wonder no more:
“Should you encounter the enemy,”
the Kaiser said, “he will be defeated! No
quarter will be given! Prisoners will not
be taken! Whoever falls into your hands
is forfeited. Just as a thousand years ago
the Huns under their King Attila made a
name for themselves, one that even today
makes them seem mighty in history
and legend, may the name German be
affirmed by you in such a way in China
that no Chinese will ever again dare to
look cross-eyed at a German.”
Needless to say, the Eight Nation
Alliance — whose forces numbered in
excess of 45,000 soldiers and marines —
made short work of the poorly-armed
and inadequately-led Chinese forces.
Beijing was sacked and the Forbidden
City ransacked of its treasures.
Never again would the imperial powers
of Europe and Japan go to war alongside
— as opposed to against — one another.
Just 15 years after the subjugation of
China, the members of the Eight Nation
Alliance were tearing themselves to
pieces in World War One.
Of course, had you been reading the
newspapers of the period, the foreign
intervention in China would have seemed
entirely reasonable. In an era when the
Christian churches of the west were
filled-to-bursting every Sunday, the
stories of Christian missionary families
being beheaded, burned alive, raped and
even crucified by the brutal Boxer mobs,
left Europeans feeling stunned and
These were not civilised people to
be reasoned with. Indeed, the suicidal
tactics of the Boxer “rebels” — many
of them armed only with swords and
spears — charging headlong into the
murderous fire of the allies’ Maxim guns
(an early type of machine-gun) struck
the “reasonable men” of 1900 as the very
antithesis of civilisation. In their ears, the
bombastic racism of Kaiser Wilhelm did
not sound nearly so shocking as it does in
Perhaps the leaders of the world’s great
powers should pause to contemplate the
difference 115 years can make to way
people interpret the behaviour of their
forebears. In the minds of Presidents
Hollande and Putin, the case for bringing
together another Eight Nation Alliance
to crush the barbaric Islamic State no
doubt seems as strong as the arguments
for punishing the murderous Boxers and
their treacherous Empress Dowager, Cixi.
That the egregious behaviour of
the imperial powers made such an
uprising inevitable would have been
dismissed by the political leaders of
1900 as an outrageous slur. The British
Government ’s open support for the 19th
century opium trade, and its callous
indifference to the enormous suffering
it inflicted on the Chinese people, went
largely unremarked. With the benefit of
115 years hindsight, however, Britain’s
culpability is as obvious as it is detestable.
How shall our own generation of
political and military leaders appear
from the perspective of 115 years in
the future? Given the west ’s numerous
interventions in Middle Eastern affairs
since World War Two, will the atrocities
committed by Islamic State strike our
great grandchildren as any more worthy
of historical condemnation than the
atrocities of the Boxers?
As China is today, so may the Islamic
world be in 2130. What will its judgment
Chris Trotter is a left-wing
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