Iraq launches historic oil and gas auction

(AUCTION, FIRMS, LARGEST, CONTRACTS, DEALS, WHICH)

By Missy Ryan
BAGHDAD (Reuters) - Iraq will auction off eight giant oil and gas fields on Tuesday in its first major tender since 2003, giving oil firms a foothold in a country that may hold some of the world`s largest untapped energy reserves.
Private jets flew representatives from leading global firms like Exxon Mobil (XOM.N) and Total (TOTF.PA) into Baghdad, a city still ringed by blast walls and gripped by violence, to place their bids for the 20-year development contracts.
The companies are wading into a morass of controversy surrounding the deals, which some Iraqi lawmakers condemn as illegal and which even some within the state-run oil industry have criticized for selling Iraq`s vast oil wealth short.
Over six years after Saddam Hussein`s ouster was supposed to unleash Iraq`s oil potential, the auction marks the first real center-stage moment for the Oil Ministry, under growing pressure to boost disappointing output around 2.4 million barrels a day.
Iraq has proven oil reserves of 115 billion barrels, the world`s third largest, but the true amount of black gold sitting beneath Iraq`s desolate deserts could be far greater.
The auction, delayed by a day by a sandstorm, will be broadcast live from a hotel in Baghdad`s fortified Green Zone in a process Iraqi oil officials insist will be fully transparent.
Firms from the countries that launched the 2003 invasion, which triggered years of chaos and bloodshed, will be neither favored nor disadvantaged, they say.
Six of Iraq`s largest oilfields, which are already producing, and two natural gas fields, which have barely been tapped, will be auctioned off one at a time over the course of the day, and the auction may stretch into Wednesday if necessary.
For oil firms, the allure may be more about getting a foothold in Iraq`s oil sector than about the amount of money they expect to make in these deals, which are fixed-fee service contracts rather than the production-sharing deals they prefer.
Winning firms must pay Iraq $2.6 billion in signature bonuses and cover Iraq`s 25-percent share of development costs, which it will pay back in oil.
It will take a great deal of money to reverse the decades of war, sanctions and neglect that have left Iraq`s oil sector rusting, out-of-date, and unable to leverage enviable resources.
Oil Minister Hussain al-Shahristani, a nuclear scientist, says the deals will bring Iraq $1.7 trillion over 20 years. He defended the contracts when he was summoned to parliament last week by skeptical lawmakers who insist the deals will be illegitimate unless they are sent to parliament for approval.
The contracts also came in for condemnation from minority Kurds, who have signed their own deals with foreign firms and who are warning they could make it difficult for companies to work around the disputed, oil-producing city of Kirkuk.
Parliament`s failure to pass new energy legislation due to disagreement between Kurds and Arabs, raises more questions for firms coming into Iraq, as do national elections scheduled for January that could bring upheaval to a fledgling democracy.
But oil majors appear willing to confront the risks, and ongoing violence, for a chance to work in a place with such large untapped reserves.  Continued...
Original article

Vilified symbol of greed Madoff to hear prison term

By Grant McCool
NEW YORK (Reuters) - Bernard Madoff, who became a symbol of greed in the financial crisis for masterminding Wall Street`s biggest investment fraud, faces the rest of his life in prison in one of the stiffest punishments for white-collar crime when he is sentenced on Monday.
The courtroom drama will unfold with the swindler hearing angry defrauded investors speak of their financial ruin. As he makes what could be his final appearance in public, Madoff, 71, will read a statement before a judge hands down a decision.
"Mr. Madoff has been very stone-faced throughout the whole process. He doesn`t seem to have a lot of remorse," said Anthony Sabino, professor of law and business at St. John`s University in New York. "To date, he has refused to implicate anyone else."
More than six months after Madoff`s arrest, U.S. prosecutors remain uncertain how much was involved -- such was the complexity of the financial web he wove around the world to operate his Ponzi scheme.
In a Ponzi scheme early investors are paid with money from new clients.
About 1,341 account holders lost about $13 billion in the classic "cash in, cash out" fraud, according to court papers. They also say $170 billion flowed through Madoff`s principal account over decades and last November, Madoff claimed accounts held nearly $65 billion, when in fact he had never traded any securities, investigators said.
Madoff, a former nonexecutive chairman of the Nasdaq stock market, pleaded guilty in March to 11 charges, including securities fraud, money laundering and perjury that carry a combined maximum sentence of 150 years. The only other person charged so far is his outside accountant.
LIFE TERM SOUGHT
"It is unlikely that he will come back out," Jayne Barnard, a law professor at the College of William & Mary in Williamsburg, Virginia, said, echoing the view of several legal experts on the likely sentence for an audacious scheme.
U.S. prosecutors argued in court papers on Friday that sentencing Judge Denny Chin should make sure Madoff spends the rest of his life in prison because of the "unique scope and duration" of his crimes.
"Madoff`s crimes were the product of a series of decisions made over the course of years, and it was within his power to stop his crimes at any point in time," the government said ahead of the 10 a.m. EDT proceeding in Manhattan federal court.
The arch thief and his wife of 45 years, Ruth Madoff, have been stripped of all their luxury homes and possessions. His wife is being allowed to keep $2.5 million in cash, according to an agreement with prosecutors.
Madoff`s lawyer Ira Lee Sorkin asked the judge to impose a sentence of less than life, suggesting a 12-year term or 15 to 20 years as sufficient.
Victims have sent more than 100 letters to the judge, most demanding the maximum punishment allowed. They describe entire savings lost for several generations of families, mortgages unpaid and elderly people unable to pay for medical coverage.
Madoff`s wife, two sons and his brother, who have all been the target of swindled investors` vitriol and suspicion, were not expected to attend the hearing. Since his arrest by the FBI in December, the gray-haired Madoff has made all of his court appearances alone, except for his lawyers.  Continued...
Original article

Oil rises above $70 on Nigeria attacks, econ hopes

By Jennifer Tan
SINGAPORE (Reuters) - Oil surged above $70 a barrel on Friday, extending a 2 percent gain the day before, after rebel attacks on Nigerian oil facilities disrupted supply and equity markets rallied on optimism the global recession was ebbing.
The release of the June consumer sentiment index by the Reuters/University of Michigan Surveys of Consumers later is expected to reflect a mildly improving outlook for the U.S. economy, auguring well for ailing world energy demand.
U.S. crude futures for August gained 36 cents to $70.59 a barrel by 11:33 p.m. EDT, off a morning high of $70.77 and after settling at $70.23 in the previous session. London Brent crude rose 28 cents to $70.06
Oil is on course for a 1.5 percent gain this week, buoyed by optimism over a potential economic recovery that has lifted prices from below $40 over the past three months.
"Worry over the geopolitical situation is a big factor right now, and that`s what`s giving the market traction," said Peter McGuire, managing director of Commodity Warrants Australia, referring to the situation in Iran.
"We had a correction earlier in the week, and the technicals still look a little bearish, but you can`t rule out the fundamentals, and you can`t rule out the geopolitical."
About 20 people have been killed in protests after Iran`s June 12 presidential election, the worst unrest since the 1979 Islamic revolution.
Investors are also keeping their eyes peeled on Nigeria, where President Umaru Yar`Adua on Thursday offered amnesty to gunmen in the Niger Delta who lay down their weapons by October 4, a bid to end unrest which has cost Africa`s top oil exporter billions of dollars in lost revenue.
The main militant group, the Movement for the Emancipation of the Niger Delta (MEND), sabotaged a Royal Dutch Shell (RDSa.L) oil pipeline on Thursday, the latest act in a month-old campaign which has shut in at least 133,000 barrels per day. The attack helped push oil to near $71 a barrel.
Fuelling oil`s rise, Exxon Mobil (XOM.N) said its huge Baytown refinery suffered an operational glitch that triggered flaring, sparking worries the largest U.S. oil refinery could tighten gasoline stockpiles during this summer`s peak demand driving season.
Firmer Asian stocks on the back of Wall Street`s rally also lent support to oil, with shares outside Japan .MIAPJ0000PUS climbing 1 percent and Japan`s Nikkei .N225 up 0.2 percent.
A further boost came from a fall in the dollar against most major currencies on Friday, extending losses the previous day, as investors shifted funds back into risky assets after the Federal Reserve this week appeared to confirm it would keep interest rates low for a while. <USD/>
The Reuters/University of Michigan final June consumer sentiment index, due at 1355 GMT, is expected to show a reading of 69.0 compared with 68.7 in the May report, a Reuters poll of economists showed.
(Editing by Ben Tan)
Original article

Jobs may spark move in Apple shares on Monday

By Clare Baldwin
SAN FRANCISCO (Reuters) - A surprise appearance by Apple Inc Chief Executive Steve Jobs at the company's annual developer conference could boost its stock on Monday, but his absence might trigger a bigger move in the other direction.
The Wall Street Journal kicked off speculation of an early return by the ailing Jobs, who had said he would be out until the end of June. Blogs and other media jumped on the report that the CEO could appear at Apple's Worldwide Developer Conference in San Francisco on Monday.
Jobs, 54, the quintessential man in black, founded Apple, rescued it from mediocrity in the late 1990s, launched the iPod and the iPhone and is seen as its heart and soul.
Canaccord Adams analyst Peter Misek sees a rally of 1 to 5 percent in Apple's stock if Jobs makes an appearance, but no downside if he doesn't.
Global Equities Research senior analyst Trip Chowdhry said Apple's stock will likely remain high if Jobs appears, but could sell off as much as 10 percent if he doesn't, a scenario he finds more likely.
But the company's strong performance while Jobs has been recuperating indicates he is no longer crucial to the company's success, Broadpoint AmTech analyst Brian Marshall said.
Stock in the Cupertino-based company closed at $144.67, about 85 percent ahead of January's 52-week low of $78.20. But it was up less than 1 percent on Friday after news that Jobs might return early.
"It's not just about Steve Jobs," Marshall said. Investors are "very comfortable" with Chief Operating Officer Tim Cook as Apple's next CEO, he added.
BMO Capital Markets analyst Keith Bachman said a Jobs cameo would strengthen Apple shares, but less than in the past.
"If he made a cameo appearance on Monday and the wind didn't blow right through him, the stock would go up," he said, but the size of the rally would depend on other factors such as announcements regarding Apple's iPhone.
Apple's stock is historically volatile during the company's June developer conference. It dropped about 7 percent over the course of the conference in 2008 and about 4 percent in 2007.
"If this had happened one or two years before, the stock would have (had) huge volatility. But I think investors are conditioned to the fact that Steve's health is a variable that needs to be dealt with on an ongoing basis," Bachman said.
Apple managers are trying to coordinate Jobs' return with a product launch or public event, the Journal reported, but cited sources that Jobs is "one real sick guy."
AllThingsD, a website dedicated to "news, analysis and opinion about the digital revolution," speculated that Jobs, who is known for ending presentations with "one more thing," might himself be the surprise at the Monday keynote.
Wired.com reported that such a Jobs' appearance would be "dramatic" and a "crowd pleaser," but Gawker cautioned that Apple might not want a sickly leader on stage. Continued...
Source: Reuters