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Tue 4 Sep 2007 12:00 AM

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Situations vacant

It has been a bad few weeks for oil ministers, with the replacement of ministers in both oil-rich Kuwait and Iran.

It has been a bad few weeks for oil ministers. Both Kuwait and Iran, two extremely oil rich countries, have moved their ministers on.

If nothing else, this proves that it is not enough just to have the reserves, they must be put to good use.
Kuwait has had ongoing delays with Project Kuwait, a plan to develop the country's northern oil fields. Former oil minister Ali Al-Jarrah Al-Sabah had taken some heat for the delays, but when he rang his relative and former oil minister Ali Al-Khalifa Al-Sabah - who was investigated by prosecutors over the alleged embezzlement of US $130 million at Kuwait Oil Tanker - for a bit of oil advice, he landed himself in trouble.

The National Action bloc, which has eight deputies in the 50-seat Kuwaiti parliament, started baying for his blood and it soon followed. Temporary measures are now in place and the world is still waiting for Project Kuwait.

The equally former Iranian oil minister, Kazem Vaziri Hamaneh, has also overseen development difficulties. A lack of pace in reform and a lack of support for his plans saw Hamaneh moved to a new job, away from the oil ministry. He has been accused of being weak on negotiation, taking low prices for Iran's gas, such as with the Crescent Petroleum deal.

Iran seems to be treating this as a deal on the rocks, claiming price as the reason. On the Crescent side, claims are that Iranian infrastructure delays are the root cause and the price debate a sideshow, designed to shift the blame. However, while this is the Crescent standpoint, no executives at the company are willing to go on the record saying so, raising still more doubts about what is actually going on. In the meantime the emirate of Sharjah is starting to look elsewhere for the gas it needs.

Iran's apparent inability to complete infrastructure is behind a few of its current energy woes and it is looking for partners to help sort some of them out. Plenty of deals are on the table, especially pipeline related ones, but nothing firm is happening.

When appointed, the permanent ministerial replacements in Kuwait and Iran will have to improve the performance of their oil economies, before they can consider their jobs safe.

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