Monthly Archives: April 2012

Catalonia’s Immigrants Face Lonely Road Ahead

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Sitting across the table from Xavier Alonso Calderón, Catalonia’s Head of the Immigration and Labour Relations, it was hard not to feel for everyone within a hundred paces of his office. In one of many sweeping cuts to government spending since coming into office late last year, the Partido Popular-led government had targeted Spain’s immigration and integration fund to nearly nothing. Established under the Zapatero government in 2005, the fund had set aside up to 200 million euros to be distributed to Spain’s autonomous communities to help fund programs aimed at reporting, educating and integrating the country’s foreign born population – a group that had exploded over the past decade, accounting for over 16 percent of the 44 million national population.

In immigrant-heavy communities like Catalonia, the funds had paid for Calderón’s department and their efforts to draft a new, sweeping Law of Reception, outlining the responsibilities of officials at every level of the foreign-born communities and establishing a reporting system that would be used for all those applying for permanent residence. While the reports would be non-binding on the national level, they would help normalize education and outreach efforts and get the community more involved in the integration process.

Nearly two years on since our first conversation, the law had been passed and over 26,000 reports had been filed since the program was put into place in June of last year, all completed by Calderón’s team of 26. This week, Calderón faced a decidedly different set of circumstances. With the national fund reduced to next to nothing, the department would be cut in half, leaving a baker’s dozen to do what is being asked of more and more across Spain these days – do more with less.

While this is hardly a novel concept in light of Spain’s current budget woes, it does signal a new and rather absolute approach to the country’s foreign-born population – if you want to stay, its not going to be easy.

It’s hardly a new concept that in times of economic woe, a country’s foreign-born populations stand to suffer, but Spain and especially immigrant-heavy communities like Catalonia may provide exceptional cases. Beginning in the mid-1990s, Spain’s immigrant population began to grow on the back the country’s real estate boom, attracting mostly low-skilled workers to Spain. Those arriving found steady supply of vacancies left behind by a near simultaneous spike young Spaniards seeking college degrees. The population continued to grow throughout the 90s and naughts, peaking in early 2007. Tied as it was the country’s economic expansion, the influx of foreign-born workers and their families ebbed a bit as the economy slowed from 2008 on. The numbers from several countries, especially Morocco and Latin America began to fade as revere migration took hold and economic development grew in other places. However, a mix of momentum and the global nature of the economic crisis kept people coming. While the flow from countries like Argentina may have leveled or decreased, the economy in places like Pakistan have not proven to be enough of a pull to make much of a dent in Catalonia’s nearly 40,000 residents that hail from there.

Readily accepted and welcome for much of the period of Spain’s growth, these groups increasingly became political fodder during recent elections, with local and national parties making cautious forays into immigrant-targeted rhetoric during campaigns. One conservative candidate in Catalan elections showed up in an immigrant-heavy suburb of Barcelona with citizenship contracts shortly before regional elections. While Spain’s foreign-born population has so far escaped the kind of direct attacks by political figures in Italy, the Netherlands, Greece and France, the election season and dour economic outlook has left them on the defensive as they look to the next few months.

This feeling was compounded by the PP’s reduction of the national fund, a move that will likely result in far-fewer opportunities for education and integration among Catalonia’s foreign-born communities. Calderón stopped short of suggesting that the reduction of the national fund, or even the total cut in medical care available to “irregulars” last week, were motivated by anything more than budget constraints, but he did allow that the ideology of the current leadership both on the community and national level made it clear that funding would not likely come back soon. In practice, this reduction is going to mean fewer workers to implement Catalonia’s integration law and less overall support for those in search of the requirements needed to qualify for residency.

Still, Calderón remained upbeat despite the coming months. “We just have to be more efficient,” he said, adding that there were still options for offsetting some of the lost fund from EU funds. Echoing the sentiment of more and more state workers now faced with a sudden absence of funding and support across Spain, Calderón looked at the challenges ahead and simply said, “We have to do it, we have no choice.”


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Southern European Energy Looks for Footing in New Economic Environment

As governments across Southern Europe struggle to adjust to a new and limited political reality, many state energy policies are reflecting a more conservative planning approach. While most attention has been paid to how these new policies stand to affect renewable sectors in Spain, Italy and Greece, state strategies to conventional energy resources will also be influenced by fiscal limitations and new political leadership.

At the heart of most energy policy decisions from Madrid to Athens is the effort for new governments to reign in spending and reduce budget deficits to meet goals laid out in conjunction with stakeholders on the European and international market level. This environment has increased uncertainty among foreign investors, a sharp reduction in the amount of government funding available for any new energy endeavors and an almost across the board increase in energy prices for consumers.

In the case of Spain, a precarious energy landscape and daunting 27 billion euro sector budget deficit has been met with a pledge by industry minister José Manuel Soria that the financial burden will be shared across the industry. While that pledge has so far only affected renewable and coal subsidies and an increase of consumer prices of 7 percent for electricity and 5 percent for gas, there is worry that it could soon spread to more traditional efforts. Heavily dependent on foreign resources, Spain has seen new domestic exploration projects in the form of shale efforts in the north and offshore drilling near the Canary Islands.  

Similarly dependent on foreign resources, Italy and its technocrat government led by Mario Monti has pledged a wide-array of cuts to existing traditional and unconventional energy endeavors, though they have so far not seen a spike in consumer prices thanks to a steady decline in demand brought on by economic pressures. Having faced a steady decline in available energy resources as a result of both foreign challenges (Iran, Libya) and those closer to home (offshore bans, the failure of nuclear resurgence), Italy has signaled a focus to shift support towards less traditional energy support as opposed to revisiting conventional options. Last week saw the Monti government introduce the idea of a carbon tax aimed at providing funding for sustained support for green energy options.

In Athens, the government’s aim of debt reduction has spurred a move away from state-backed energy endeavors with a host of privatization efforts planned for this summer. After signaling a willingness to seek investment for a sprawling 20 billion euro solar farm project, the appointed Greek government announced an effort to sell off state holdings in Hellanic Petroleum and the state natural gas firm DEPA. The move comes as many in the region have expressed strong interest in further investment in natural gas discoveries in the Eastern Mediterranean.

In all cases, such privatization efforts come at the very real risk of losing out on significant future revenues in favor of short-term fiscal relief.

David Parker, Emeritus Professor of Privatization and Regulation at the Cranfield School of Management told Reuters, “We are certainly going to have a risk that the government sells off industries without really thinking about the long-term implications.”

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Repsol’s Year Just Keeps Getting Worse

Despite winning approval from Spain’s government to pursue offshore exploration efforts near the Canary Islands, Repsol appear to have few allies in the company’s efforts to kick-start domestic production.

Since receiving the support of the government of Maraino Rajoy on March 16 to restart offshore efforts 70 km off the coast of the islands of Lanzarote and Fuerteventura, Repsol have faced a steady stream of legal challenges and protest movements from across Spain. Spain’s Socialist opposition party has joined residents of the islands to oppose the project on the grounds that it could threaten the archipelago’s most important source of revenue – tourism.

Originally initiated in 2001, the Repsol effort – a consortium with Australia’s Woodside Petroleum Ltd. and RWE AG of Germany – has been stalled as a result of an earlier court ruling. Now equipped with the encouragement of Rajoy and Spain’s new Minster of Industry, José Manuel Soria López, the effort will move forward, but not without its challengers.

Since mid-March, protest movements have grown both in the Canary Islands and on the Spanish Peninsula aimed at reversing the decision. These efforts come

despite claims by Soria that the project could help ease the country’s energy needs to the tune of 10 percent of Spain’s oil overall demand with an estimated 140,000 bpd.

Soria’s support for the exploration effort and reference of the impact a successful discovery could have on the country’s energy needs comes as the new minister struggles to deal with a daunting financial deficit. Facing a 24 billion euro energy deficit, accrued over the last few years thanks to poor subsidy planning and domestic energy prices that did not reflect new pressures, Soria has been charged with reducing this amount through any means necessary, insisting that the weight of it must be shared throughout the country.

Further complicating the issue is the proximity of the project to the maritime border with Morocco, whose government has also launched exploration efforts in the area. As the border is not officially set, the two countries could see conflicting claims to possible discoveries.

Similar fears led to the delay of another Repsol project off the coast of Cuba earlier this year, requiring lengthy inspections and environmental reviews by U.S. political leaders amid fears that a potential spill could harm local coastlines.

For now, Repsol appear intent on moving forward despite the opposition, thanks mostly to the support of Rajoy’s Partido Popular and will work towards the next step by completing a necessary environmental impact study.

Image: PressTV


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Egyptian Energy Sees Some Return to Stability but Challenges Remain

In the months since the collapse of the long-standing government of Hosni Mubarak, Egypt has struggled to stabilize their energy sector amid widespread shortages and a seemingly endless series of attacks on vital transport lines. Despite the uncertainty these setbacks have provided, Egypt’s oil and gas industries have seen some progress, making a needed return to stability an achievable, if still difficult goal.

Egypt’s energy sector began experiencing delays almost as soon as public protests forced military attention away from the Sinai Peninsula and towards volatile city centers. The military exit allowed rebel groups in the region to mount a series of attacks on natural gas pipelines serving customers in Israel and Jordan, halting exports and much needed revenue for the Egyptian government. The natural gas sector received another setback as allegations emerged detailing below-market deals for Israeli and Jordanian customers in exchange for payments to Mubarak officials. Both counties have begun exploring import alternatives as rising tension and repeated shutdowns have made Egyptian natural gas unsustainable.

Making matters more difficult, Egypt has experienced two massive fuel shortages brought on by panicked purchasing amid reports that the government will soon slash fuel subsidies to help deal with a mounting budget deficit.  Currently, about two-thirds of Egypt’s total subsidies go towards fuel costs – an amount that is expected to increase 40 percent this year to reach $16 billion, according to the Council on Foreign Relations.


However, despite the steady stream of bad news, many oil and gas actors in the country are making strides towards sustaining and even expanding operations in Egypt’s new political and economic environment.

According to Market Watch, Houston-based Apache announced a 3 percent increase in production in Egypt’s Western Desert, reaching 203,000 barrels of oil and 880 million cubic feet of gas per day thanks to the development of seven new leases in the Faghur Basin.

Last week, Ukrainian Minister of Energy and Coal Industry Yuriy Boiko announced the country’s intention to boost production efforts in Egypt with the signing of two concession agreements for the development and operation of oil and gas fields in the Wadi El Mahareeth and South Wadi El Mahareeth oil blocks in the Eastern Desert in Egypt, according to a government release.

Meanwhile, the PetroSinai joint venture, which operates on behalf of the Egyptian Petroleum Company and MENA, announced the successful re-entry in the Lagia 6 oil field. The move is a part of a proposed development plan that will include up to 55 wells aimed at developing the Lagia Development Lease. Australia’s Beach also recently announced their intention to expand their Egyptian footprint with the development of oil finds in the country.

Challenges Remain

However, further progress in Egypt, especially among larger energy investors, could be hampered by an ongoing struggle over hydrocarbon E&P authority, which is currently under the control of the country’s military. According to Lebanon’s Daily Star, a holdover system from the Mubarak government places the final authority over exploration and production efforts in hands of generals and “military permits” that dictate when, where and how projects move forward.

The existing system was at the center of a meeting held late last month between the country’s oil ministry and representatives of companies active or interested in Egyptian projects, including BP and Enap Sipetrol.

“Egypt is investor friendly, but army restrictions make the lives of people harder,” said Marwan al-Ashaal of Enap Sipetrol, according to The Daily Star.

The meeting saw company representatives call for an overhaul of what they saw as dated production sharing agreements in order to spur needed investment and foreign partnerships.

Revising such dated systems related to the country’s energy sector could be vital to ensuring public support, but will also require a demonstration of shared benefits to the general public, not just select government officials, remarked a UN official close to energy development in Egypt last week.

In an effort to cope with the loss of revenue from severed ties with Jordan and Israel, the Egyptian government has pushed for greater trade cooperation with Sudan. Originally built on an export agreement signed in October of last year, this effort now requires Egyptian officials to take on a diplomatic role in hopes of calming tensions between Sudan and South Sudan over the disputed Heglig oilfield.

As for the capital’s struggle to deal with the now 14 attacks on natural gas pipelines in the Sinai, the government has announced a series of military efforts, stepping up their presence in the region to combat rebel groups and even collaborating with Israeli troops to address rocket attacks across the two countries’ border. The dual effort is especially difficult, as public sentiment has turned against stronger ties with Israel due to the natural gas controversy and the rise of political leaders strongly opposed to diplomatic ties of any kind between the two countries.

Despite these efforts, this week saw another attack on an oil facility in the town of El-Arish, resulting in the death of two policemen and injuring a third, according to the Associated Press.

Image: CNN Money

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Mali’s Uncertainty Spurs Concerns Across Central Africa

While not directly connected to Mediterranean affairs, the situation in Mali could have far-reaching effects in North Africa.

Continued uncertainty about the actions of both government and separatist forces in Mali have stoked fears that the country’s recent instability could spread throughout the region and threaten the efforts of several energy actors to get back on track.

Last week saw the Tuareg population’s National Movement for the Liberation of Azawad (NMLA) continue their campaign towards the creation of an independent nation in the north of Mali with public declaration following a series of military victories against scattered government forces.

“We, the people of the Azawad [desert region] proclaim the irrevocable independence of the state of the Azawad starting from this day, Friday 6 April 2012,” the NMLA said in a statement posted on their Web site.

Led by the Tuareg rebel group, the National Movement for the Liberation of Azawad, the uprising is a part of a long-standing conflict between the local population and the central government. However, the campaign has recently experienced resurgence as heavily armed fighters have returned home after fighting alongside the Gadaffi government. Since the fall of the Gadaffi government, a wave of weapons and explosives has made its way to Mali, Niger and Burkina Faso in the hands of fighters once loyal to the Libyan colonel. Further, the Tuareg group is a part of a larger population that is spread across Southern Algeria, Libya and Northern Niger.

The move comes as the country’s new government continues to try to put a positive spin on a military coup led by mid-level officers in an apparent response to what was seen as insufficient support for troops fighting the NMLA. Instead of consolidating support behind the troops, the coup, led by Captain Amadou Sanogo, resulted in panic and disorganization allowing the NMLA to capture more ground. The move also resulted in strict series of sanctions from neighboring countries worried about the spread of instability in the region and recognition of such military action. The sanctions, which included the closure of border and halting of trade, spurred Sanogo to announce that he would ensure a return to constitutional rule with plans to transfer authority to parliamentary leader Diouncounda Traore who would then be given 40 days to organize public elections.

The NMLA’s declaration of independence has raised concerns in the region for a number of reasons, including worries among energy actors in central and West Africa. Late last year, the region included in the declaration had been the focus of a series of agreements to finally initiate an exploration program aimed at studying the territory’s oil potential. The effort had included Algeria’s state-backed Sonatrach announce that they would begin operations in the country’s Taoudeni Basin.

Further, concerns have arisen about the potential for the movement to spread or inspire similar movements across the territory currently occupied by the Tuareg population. While the central African region does not currently host many oil or gas endeavors, continued instability could place further restrictions on existing projects, including the already delays Trans-Saharan Pipeline linking Nigeria with the North African coastline and eventually, Europe. The pipeline was intended to link Nigerian natural gas reserves to North Africa, but worries about possible attacks on the project and theft have put the project on hold until concerns can be dealt with. Despite the potential to link the Africa’s largest natural gas reserves with Europe, the pipeline project has fallen on tough times as the EU economic slowdown has decreased demand and created an insufficient market environment for the proposed $13 billion transmission project.  First proposed in 2009 with a joint agreement between the governments of Nigeria, Niger and Algeria, the pipeline faced obstacles from the very beginning.

The potential for such an uprising to spread or create an unrecognized and unstable territory in central Africa has inspired efforts on the part of the African Union and cautious statements of opposition from the US and Europe in hopes of calming the situation before further violence can occur. On its way to restoring production and output to pre-war levels, Libya is already facing budget and personnel shortfalls and an autonomy movement of its own, making the prospect of further instability a greater threat to the country’s energy sector recovery.

For its part, Algeria has seen the kidnapping of seven diplomats in the town of Gao, according to an Al Jazeera report. Reflecting the chaotic nature of the current situation, the kidnappings themselves were publicly opposed by the NMLA leadership, at the same time that the group’s independence declaration was condemned by Ansar Dine, an Islamic organization also operating against government forces in the region.

The collapse of order in what was viewed as one of West Africa’s most stable countries has raised concerns about the region’s ability to weather the political and economic transitions that have occurred over the last year and a half.

Disputes should not be resolved by arms. It’s a bad sign for other countries which are in the process of consolidating their democracies,” Nadia Nata, political governance officer at the Open Society Initiative for West Africa (OSIWA) told Reuters.

Image: Reuters Alert-Net

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Leaked Italian Energy Plan Adds Stress to Country’s Outlook

A leaked draft of a new energy plan for Italy has left some wondering what direction the country’s new government will take just months after the last energy plan was released. Following up on a fourth Conto Energia, implemented in late spring of last year, the draft has been circulating online over the last month, spurring speculation about the plans of the country’s new government when it comes to energy issues amid a steady decline in domestic demand.

Much of the recent focus on the leaked draft has centered on the government’s likely reduction in solar subsidies, joining Spain and Germany with cuts to feed in tariffs and an overall decrease in the budget set aside for installation projects. However, reports of the new plan and its focus on shifting financial support away from some sectors has spooked investors and developers in the region. Government and industry officials have remained largely silent on the issue, suggesting it could be an incomplete draft produced by an industry group.

However the new plan turns out, the country now faces an increasingly restrictive energy environment thanks to nearly two years of set-backs and obstacles, both at home and abroad. Following a halt in imports from Libya last year, Italy faced the scrapping of plans to reintroduce nuclear energy after two decades, restrictive offshore regulations and new restrictions on crude from Iran as a result of European Union-backed sanctions. Coupled with the spending cut efforts on the part of the new Mario Monti government, including raising gas taxes to the highest in Europe, Italy’s energy landscape has become fraught with uncertainty.

Possibly signaling a component of a revised government approach, the country’s minister of economic development Corrado Passera said earlier this month that Italy should work towards using all its underused oil and gas fields to address the country’s domestic energy costs.

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