US energy envoy Pascual to step down

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US Special Envoy for International Energy Affairs Carlos Pascual announced Friday he will step down in July, U.S. officials told the Back Channel.

The departure plans come as oil proces have spiked amid the new security crisis in Iraq, as al Qaeda-linked the Islamic State of Iraq and Syria (ISIS) overtook the city of Mosul.

Pascual, a former US envoy to Mexico and Ukraine, stood up the new energy affairs bureau three years ago, but was never confirmed. He is expected to head next to Columbia University.

Pascual’s deputy Amos Hochstein is considered a possible nominee to succeed him.

US Deputy NSA Blinken's unannounced visit to UAE to discuss Egypt


US Deputy National Security Advisor Antony Blinken traveled to the United Arab Emirates earlier this week for consultations with Emirati, Iraqi and other Gulf country officials on Egypt, the White House told Al-Monitor.

Blinken in the UAE met with “counterparts from the UAE and neighboring countries to discuss recent developments in the region,” National Security Council spokesperson Caitlin Hayden told Al-Monitor in response to a query Wednesday. “I don't have any further details for you on those discussions.”

Blinken was accompanied on the trip by Deputy Assistant Secretary of State for Iraq and Iran  Brett McGurk and Deputy Assistant Secretary of State for Energy Amos Hochstein.

Among the issues discussed in the meeting were UAE and Gulf assistance to Egypt in the wake of the ouster of Mohammed Morsi.

Egypt’s Central Bank said Thursday that  it had received $3 billion in aid pledged by the UAE in the wake of Morsi’s ouster, Reuters reported.

“The UAE said last week that it would provide Egypt with $1 billion as a grant and a $2 billion loan in the form of an interest-free central bank deposit,” Reuters wrote.In addition, “Saudi Arabia pledged $5 billion and Kuwait, $4 billion.”

A significant portion of the pledged aid from the Gulf states is in the form of oil, petrol and diesel, rather than cash, a western diplomat, speaking not for attribution, told Al-Monitor. Continue reading

Buzz on Obama 2.0 Middle East team

Turkey's President Gul attends a meeting with U.S. Congressmen and U.S. ambassador to Turkey Wilson in Ankara

With President Obama expected to name more cabinet picks next week, including Chuck Hagel for Secretary of Defense, speculation has begun to turn to who will fill out senior and middle ranks of his second term Middle East team.

Among the questions affecting the transition shuffle is whether acting Assistant Secretary of State for Near East Affairs Elizabeth Jones will be formally nominated for the post under Secretary of State-nominee John Kerry, or, as seen as more likely, whether someone new will be tapped.

Jones, a career foreign service officer, is, like Kerry, the child of US Foreign Service parents, who spent much of her childhood abroad. A former Ambassador to Kazakhstan, Principal Deputy Assistant Secretary of State for the Near East, and Assistant Secretary of State for European Affairs (2001-2005), Jones came out of retirement in the private sector (APCO Worldwide) to assist in the Near East bureau in 2011. She assumed the Acting Assistant Secretary job for the bureau after Jeff Feltman retired to take the number three job at the United Nations last May, but has not been formally nominated for the job.

Department sources said that some State rank and file officers are troubled that the Benghazi investigation resulted in the impending departure of Jones’ deputy, Raymond Maxwell. A career foreign service officer tapped as the DAS for Libya and the  Maghreb in 2011, Maxwell had been scheduled to retire this past September. He stayed on however after the Sept. 11 attacks that killed Ambassador Chris Stevens and three other US personnel to try to get the Maghreb shop, devastated about the loss of their friend and colleague, through. The perception among some in the rank and file is that Jones let Maxwell take the fall, while escaping blame herself, in part because of her long professional relationship with Tom Pickering, the veteran diplomat who chaired the Benghazi Accountability Review Board investigation, department sources who declined to speak for attribution said. Jones and Maxwell did not immediately return requests for comment. A former official subsequently told the Back Channel that Jones is definitely planning to leave.

If Jones moves on, among those rumored to be under consideration to helm the Near East bureau, officials said, is Puneet Talwar, who has served as the Obama administration National Security Council Senior Director for Persian Gulf Affairs. Talwar, the former top Iran and Iraq advisor on the Senate Foreign Relations Committee staff under then SFRC chairman Joe Biden, is also said to be under consideration to become national security advisor to  Vice President Biden. (Current Biden national security advisor Antony Blinken is expected to get a promotion in the new term: among the posts he is discussed for, Deputy Secretary of State, Deputy National Security Advisor, or US Ambassador to the UN, if Susan Rice is named National Security Advisor.) Continue reading

Official: US proposed map to Israel and Lebanon to advance maritime gas exploration

The United States has presented Lebanon and Israel with a map proposing how they might bypass their border disputes in order to advance exploration for natural gas buried under their territorial waters, a senior State Department official publicly revealed for the first time last week.

“The ideas we have presented for boundaries were addressed by the highest standards of cartography and science–not politics,” Deputy Assistant Secretary of State for Energy Diplomacy Amos Hochstein told an Aspen Institute meeting on Eastern Mediterranean energy issues last week (November 29). “We believe they are the right boundaries.”

“This is not a matter of changing the borders. Let’s not confuse those,” Hochstein cautioned. However, he continued, “addressing these boundaries would remove at least one area of potential conflict between [Eastern Mediterranean] countries and give confidence to investors.”

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Obama 2.0: Who’s leaving, staying, moving

With UN ambassador Susan Rice set to meet Republican Senators John McCain, Lindsey Graham and Kelly Ayotte on Tuesday, pieces seem to be falling in place for her nomination to become Secretary of State to proceed.

Administration officials offered The Back Chanel more tips on moves afoot in the Obama administration foreign policy team.

In the certain to go camp:

Assistant Secretary of State for Asia and Pacific Affairs Kurt Campbell is leaving, official told the Back Channel, to chair the board of the Center for New American Security (CNAS), the think tank he co-founded with Michele Flournoy, and do Asia consulting. (His spouse Lael Brainard, Under Secretary of Treasury for International Affairs, may leave the administration too, an official said. White House chief of staff Jack Lew is expected to succeed Tim Geithner as Treasury Secretary.)

NSC Middle East senior advisor Steve Simon is due to leave shortly to become head of a think tank, officials told the Back Channel.

AfPak envoy Marc Grossman will leave, officials said. It is unclear who will succeed him.

In the likely to move camp:

Deputy Secretary of State William Burns may be nominated to succeed Rice as US ambassador to the UN, officials said.

Deputy Secretary of State Tom Nides is being mulled for a White House job, possibly White House chief of staff, which can put his knowledge of budgets to work, as well as his relationship with Congress and Wall Street.

NSC economics senior advisor Michael Froman is likely to move, possibly to become US Trade Rep. Continue reading

Why John Kerry may have to cool his heels on Secretary of State

Conventional wisdom has rapidly taken hold in the wake of President Obama’s reelection victory that Senate Foreign Relations Committee Chairman John Kerry (D-Mass.) is first in line of candidates to succeed Hillary Clinton as US Secretary of State.

But Obama administration officials tell the Back Channel that there are several reasons Kerry may have to cool his heels a while–having nothing to do with Kerry not being held in high esteem by the White House. Among them:

1) Secretary Clinton, who met with Obama and Vice President Biden at the White House Friday, feels an obligation to see the Benghazi investigation through and not leave any taint from that investigation to be faced by her successor. This could have her staying on til February or March, one administration source, who requested anonymity, told Al-Monitor Friday.

2) Senate Majority Leader Harry Reid (D-Nev.) has told the White House that he will be “furious” if he loses Kerry from the Senate, to leave the Massachusetts Democratic Senate seat vulnerable in a special election race against Republican Scott Brown, who has millions of dollars in the bank left over from his unsuccessful Senate run against Democrat Elizabeth Warren. The White House may feel especially obliged to listen to Reid, because he is a key reason the Democrats held onto their Senate majority, and because “they have to keep Reid happy as a clam” on the fiscal cliff negotiations, the official said. (Massachusetts Governor Deval Patrick and his wife are due to have a ‘social’ dinner with President and Michelle Obama at the White House Friday night. But while some thought Patrick might be in position to run against Brown if a Kerry nomination leaves the Senate seat open, other sources say Patrick has his eye on the AG job.)

3) While there are important constituencies in and out of his administration pushing for Kerry, including reportedly Vice President Biden, Kerry’s predecessor as chair of the Senate Foreign Relations panel, “Obama loves” Susan Rice, his US Ambassador to the United Nations, the official noted. If Clinton stays on through the Benghazi investigation, that may blunt and defuse Congressional Republican wrath (and political opportunism) over the administration’s handling of the Benghazi attacks that has heretofore targeted Rice, among others, and that has raised concerns about whether a Rice confirmation hearing would become a huge, ugly partisan food fight. (There are also reports of CIA Director David Petraeus being at the White House Friday, and murmurs that some Hill Republicans believe the CIA has not been forthcoming about the CIA role in Benghazi. Update: Petraeus offered his resignation, citing an affair, which Obama accepted Friday. The affair, with his biographer Paula Broadwell, was uncovered by an FBI investigation, apparently of emails sent by Broadwell to a female friend of Petraeus‘ whom Broadwell perceived as a romantic rival.)

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Exxon may pull out of southern Iraq

Exxon Mobil intends to pull out of southern Iraq, in favor of moving forward with its Kurdish oil contracts, an energy expert source told Al-Monitor Wednesday on condition of anonymity. The oil giant’s contracts with Iraq’s Kurdish entity have been a source of ongoing legal dispute with the Iraqi central government in Baghdad.

Exxon Mobil informed the State Department this week of its intent to pull out of southern Iraq, Reuters subsequently confirmed Thursday, citing an unnamed American official.

Exxon had sought unsuccessfully to renegotiate the terms of its contract with Baghdad central government authorities, but Iraqi leaders had not been willing to set such a precedent, the western energy expert source said.

Baghdad will be even less inclined to do so if Exxon moves forward with its Kurdish Regional Government oil exploration contracts, Iraq expert Denise Natali said.

Exxon has signed contracts to start drilling in Kurdish Iraq by the end of the year, Ben Lando, of the Iraq Oil Report, reported Thursday. “The company ‘will start moving dirt in December,'” one official told Lando.

The oil giant may be gambling, however, that it can “leverage Baghdad through the KRG,” Natali told Al-Monitor Thursday. Unlike smaller oil companies, “it has lots of time.”

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Iran, EU deputy nuclear negotiators to meet July 24

The deputy nuclear negotiators for Iran and the six-nation P5+1 negotiating group will meet in Istanbul on July 24th, a European Union spokesman said Monday.

Deputy EU foreign policy chief Helga Schmid will meet with her Iranian counterpart Ali Bagheri in Turkey to try to find a way to bridge significant gaps in the two sides’ positions.

“The objective for the meeting of Schmid and Bagheri is to look further at how existing gaps in positions could be narrowed and how the process could be moved forward,” Michael Mann, an EU spokesman, said in an emailed statement sent to Al-Monitor Monday.

The meeting plans come a week after nuclear experts from the seven nations met in Istanbul for over 15 hours last week to discuss the technical details of a P5+1 confidence building proposal. That proposal, first presented to Iran in Baghdad in May, asks Iran to halt its 20% enrichment activities, ship out its 20% stockpile, and decommission the highly fortified Fordo enrichment facility, built into a mountain near Qom, in exchange for fuel and safety upgrades for Tehran’s medical and civilian eactors and spare parts for its civilian aircraft.

Negotiations between senior diplomats from the P5+1 and Iran stalled in Moscow last month over wide gaps between the two sides’ positions. Iran had expressed willingness to discuss halting its 20% enrichment activities, but sough recognition in turn for its right to enrich to 3.5%, while raising objections to the two other international demands. Iran has since made public the proposal (.pdf) it made to the P5+1 in Moscow. Continue reading

Iran’s economy minister tells Al-Monitor: “Our goals are clear”

Shamseddin Hosseini, Iran’s economy minister and representative to the World Bank, is one of the only senior Iranian officials to regularly visit Washington, which of course has not had diplomatic relations with the Islamic Republic for over thirty years.

In a wide-ranging interview with me for Al-Monitor, Hosseini, 44, said that Iran is looking to make progress at the upcoming nuclear talks, but sought to portray Iran as not overly eager or anxious about the recently renewed diplomatic process.

“If the question is, ‘during these talk and dialogue, based on our positions, will we still seek progress,’ of course, the answer is yes,” Hosseini told me in an interview at Iran’s mission to the United Nations in New York Friday.

“Our goals are clear,” he continued. “They are safekeeping of the goals of the Iranian people. We will be steadfast in the future.”

On sanctions, Hosseini warned that new sanctions targeting Iran’s oil exports could hurt the economies of those imposing the sanctions. “Can one grow without using energy?” he asked. “For that very reason, you see, pressures have reached a point that those who bring that pressure to bear complain about the pain.”

Read the full piece here: