Russia announces delivery of nuclear fuel to Iran

By Borzou Daragahi and Megan K. Stack, Los Angeles Times Staff Writers
8:47 PM PST, December 17, 2007

TEHRAN, Iran -- After years of delay, Russia announced Monday that it had delivered its first shipment of nuclear fuel to a reactor in southern Iran, a move Washington had long sought to delay to pressure Tehran not to pursue its own enrichment program.

Delivery of the nuclear fuel rods will ensure that the $1 billion power plant being built by Russia's state-owned Atomstroyexport Corp. in the southern port city of Bushehr will be up and running by next year, Gholam-Reza Aghazadeh, chief of Iran's Atomic Energy Agency, told state television.

He cast Russia's decision as evidence that Iran had convinced other countries that it was only pursuing nuclear power for peaceful purposes.

The United States and its allies suspect Iran of trying to produce fuel for a nuclear weapon, and the U.N. Security Council has twice imposed sanctions on the country because of its enrichment program. A new U.S. intelligence report released two weeks ago said Iran had frozen its weapons program in 2003.

But President Bush says Iran remains a threat because it continues to enrich uranium. At lower levels of enrichment, the fuel can be used to generate electricity; at higher levels it can be used to make a bomb. The Bush administration had pressed Russia to withhold further assistance to the Bushehr project, hoping that would signal international concern about Tehran's enrichment efforts.

U.S. officials said Monday that Russia's decision showed that Iran did not need to pursue its own program.

At an appearance in northern Virginia, President Bush said that "if the Russians are willing to do that -- which I support -- then the Iranians do not need to learn how to enrich. If the Iranians accept that uranium for a civilian nuclear power plant, then there's no need for them to learn how to enrich."

Secretary of State Condoleezza Rice said following a meeting with French President Nicolas Sarkozy in Paris that Iran should rely on nuclear fuel supplies from another country rather than producing its own.

Analysts said that U.S. officials appeared to be putting the best spin on a decision they had opposed. Robert Einhorn, a former top weapons proliferation official in the Clinton and Bush administrations, said Bush's comments were an attempt to "make lemonade out of this lemon."

Aghazadeh, chief of Iran's Atomic Energy Agency, said on state television that Iran would continue its enrichment activities at a facility in the central city of Natanz to provide fuel for another 360-megawatt reactor it plans to build in the southwestern town of Darkhoein (or Darkhovin) near the Iraqi border. Iran insists it wants nuclear technology to generate electricity in the event its oil reserves expire.

The U.S. and Israel suspect that the uranium enrichment facility in Natanz, a heavy water reactor in Arak and other nuclear facilities are building blocks for an eventual weapons program. For those activities, Washington hawks have suggested Iran could face U.S. military action.

No one suspects Iran of harboring a secret bomb factory at Bushehr. But some scientists say spent fuel from a light-water reactor could be used to create fissile material for a bomb.

Moscow's Foreign Ministry insists it won't allow the fuel to be diverted. "All fuel that will be delivered will be under control and guarantees of the International Atomic Energy Agency for the whole time it stays on Iranian territory," it said in a statement Monday.

"All our processed fuel is to be returned, gram by gram," said Sergei Karganov, chairman of the Council on Defense and Foreign Policy in Moscow. "It was actually kind of a political lever more than an actual concern that our fuel could be used for weapons," he said. "It can't be used for weapons under any circumstances. This is a fact of life."

Delivery of 80 tons of uranium fuel to Bushehr will take up to two months, said Irina Yesipova, an Atomstroyexport spokeswoman.

Russia has always insisted it delayed supplying the fuel rods for the Bushehr plant because of financial disputes with Iranian counterparts. But many analysts have said that Russia was concerned about the direction of Iran's nuclear program, which could pose a far greater threat to Eastern Europe than North America.

Bush administration officials also say they don't want Iran to gain advanced nuclear expertise. They mistrust Iran's government, pointing to Iran's 15-year clandestine program, which was exposed by a dissident group earlier this decade.

The U.S., along with France and the United Kingdom, had been steadily pushing for a third round of sanctions when the U.S. National Intelligence Estimate released this month concluded that Iran had halted its nuclear weapons program.

China and Russia, which wield veto power on the council, have balked at new sanctions. But with the release of the NIE reducing the threat of a U.S. attack on Iran, the two countries are closing a number of financial deals with Iran that they had put on hold.

"For us, the old information we got was that they didn't have a military program," said Karganov. "Now it has been confirmed by the U.S. intelligence. Thank God, because it has ended speculation that the Americans are preparing a massive attack."

Beijing signed a $2 billion energy deal with Tehran. Russia will sell Iran 130 Russian-made Tupolev passenger planes over the next 10 years, to upgrade Iran's aging fleet of Boeing and Airbus jets, according to Russia's Interfax news agency.

Russia's Industry and Energy Ministry said in a statement Monday that Lukoil Overseas will be resuming operations at an Iranian oil field that had been halted because of U.S. sanctions.

Russia's EuroChem Mineral Chemical Company was holding talks about building a factory with Iran's National Petrochemical Company in Moscow on Monday, according to Interfax.

Russian Defense Minister Mikhail Dmitriev and a high-ranking military delegation are scheduled to arrive in Tehran Wednesday to meet with Iranian counterparts.

And though the Bush administration has urged Russian President Vladimir V. Putin to curtail its multibillion-dollar nuclear trade with Tehran, Russia delivered the fuel to the Bushehr plant, which is being built by Russian scientists and engineers who live with their families in the Persian Gulf port city.

President Mahmoud Ahmadinejad, in a televised interview Sunday, said Iran had reaped a harvest from the U.S. intelligence estimate, which undercut the possibility of U.S. airstrikes to halt or slow Iran's nuclear program.

"The nuclear issue, after a period of escalation reached a climax but now is in its anti-climax and de-escalation state," said Ahmadinejad, who departed for Saudi Arabia on Monday as the first Iranian president to receive a prestigious invitation to attend the pilgrimage to Mecca.

"I think the NIE report was a U-turn in the U.S. This U-turn is the result of internal disputes in the U.S. administration -- which I do not want to elaborate more on now -- and the steadfastness of the Iranian nation," he said.

Times staff writer Daragahi reported from Tehran and Stack from Moscow. Times staff writer James Gerstenzang in Washington, Paul Richter in Washington and special correspondents Ramin Mostaghim in Tehran and Sergei I. Loiko in Moscow contributed to this report.

Misreading the Iran Report

Why Spying and Policymaking Don't Mix

www.washingtonpost.com

By Henry A. Kissinger

Thursday, December 13, 2007; Page A35

The extraordinary spectacle of the president's national security adviser obliged to defend the president's Iran policy against a National Intelligence Estimate (NIE) raises two core issues: How are we now to judge the nuclear threat posed by Iran? How are we to judge the intelligence community's relationship with the White House and the rest of the government?

The "Key Judgments" released by the intelligence community last week begin with a dramatic assertion: "We judge with high confidence that in fall 2003, Tehran halted its nuclear weapons program." This sentence was widely interpreted as a challenge to the Bush administration policy of mobilizing international pressure against alleged Iranian nuclear programs. It was, in fact, qualified by a footnote whose complex phraseology obfuscated that the suspension really applied to only one aspect of the Iranian nuclear weapons program (and not even the most significant one): the construction of warheads. That qualification was not restated in the rest of the document, which continued to refer to the "halt of the weapons program" repeatedly and without qualification.

The reality is that the concern about Iranian nuclear weapons has had three components: the production of fissile material, the development of missiles and the building of warheads. Heretofore, production of fissile material has been treated as by far the greatest danger, and the pace of Iranian production of fissile material has accelerated since 2006. So has the development of missiles of increasing range. What appears to have been suspended is the engineering aimed at the production of warheads.

The NIE holds that Iran may be able to produce enough highly enriched uranium for a nuclear weapon by the end of 2009 and, with increasing confidence, more warheads by the period 2010 to 2015. That is virtually the same timeline as was suggested in the 2005 National Intelligence Estimate. The new estimate does not assess how long it would take to build a warhead, though it treats the availability of fissile material as the principal limiting factor. If there is a significant gap between these two processes, it would be important to be told what it is. Nor are we told how close to developing a warhead Tehran was when it suspended its program or how confident the intelligence community is in its ability to learn when work on warheads has resumed. On the latter point, the new estimate expresses only "moderate" confidence that the suspension has not been lifted already.

It is therefore doubtful that the evidence supports the dramatic language of the summary and, even less so, the broad conclusions drawn in much of the public commentary. For the past three years, the international debate has concentrated on the Iranian effort to enrich uranium by centrifuges, some 3,000 of which are now in operation. The administration has asserted that this represents a decisive step toward Iranian acquisition of nuclear weapons and has urged a policy of maximum pressure. Every permanent member of the U.N. Security Council has supported the request that Iran suspend its uranium enrichment program; the various countries differ on the urgency with which their recommendations should be pressed and in their willingness to impose penalties.

The NIE then highlights, without altering, the underlying issue: At what point would the nations that have described an Iranian military nuclear program as "unacceptable" agree to act on that conviction? Do they wait until Iran starts producing nuclear warheads? Does our intelligence assume that we will know this threshold? Is there then enough time for meaningful countermeasures? What happens to the growing stock of fissile material that, according to the estimate, will have been accumulated? Do we run the risk of finding ourselves with an adversary that, in the end, agrees to stop further production of fissile material but insists on retaining the existing stockpile as a potential threat?

By stating a conclusion in such categorical terms -- considered excessive even by the International Atomic Energy Agency -- the Key Judgments blur the line between estimates and conjecture. For example, the document says: "We judge with high confidence that the halt . . . was directed primarily in response to increasing international scrutiny and pressure resulting from exposure of Iran's previously undeclared nuclear work." It extrapolates from that judgment that Iran "is less determined to develop nuclear weapons than we have been judging since 2005" and that it "may be more vulnerable to influence on the issue than we judged previously."

It is to be hoped that the full estimate provides more comprehensive evidence for these conclusions. A more plausible alternative explanation would assign greater significance to the regional context and American actions. When Iran halted its weapons program and suspended efforts at enriching uranium in February 2003, America had already occupied Afghanistan and was on the verge of invading Iraq, both of which border Iran. The United States justified its Iraq policy by the need to remove weapons of mass destruction from the region. By the fall of 2003, when Iran voluntarily joined the Additional Protocol for Nuclear Non-Proliferation, Saddam Hussein had just been overthrown. Is it unreasonable to assume that the ayatollahs concluded that restraint had become imperative? By the fall of 2005, the American effort in Iraq showed signs of bogging down; the prospects for extending the enterprise into Iran were diminishing. Iranian leaders could have felt free to return to their policy of building up a military nuclear capability -- perhaps reinforced by the desire to create a deterrent to American regional aspirations. They might also have concluded, because the secret effort had leaked, that it would be too dangerous to undertake another covert program. Hence the emphasis on renewing the enrichment program in the guise of a civilian energy program. In short, if my analysis is correct, we could be witnessing not a halt of the Iranian weapons program -- as the NIE asserts -- but a subtle, ultimately more dangerous, version of it that will phase in the warhead when fissile material production has matured.

The NIE does not so much reject this theory; it does not even examine it. It concludes that "Tehran's decisions are guided by a cost-benefit approach rather than a rush to a weapon." But a cost-benefit analysis does not exclude a rush to weapons on a systematic basis. It depends on the criteria by which costs and benefits are determined. Similarly, in pursuing the cost-benefit rationale, the estimate concludes that a combination of international scrutiny along with security guarantees might "prompt Tehran to extend the current halt to its nuclear weapons program." That is a policy, not an intelligence, judgment.

A coherent strategy toward Iran is not a partisan issue, for it will have to be implemented well after the present administration has left office. I have long argued that America owes it to itself to explore fully the possibility of normalizing relations with Iran. We do not need to tranquilize ourselves to the danger in order to pursue a more peaceful world. What is required is a specific vision linking assurances for Iran's security and respect for its identity with an Iranian foreign policy compatible with the existing order in the Middle East. But it must also generate an analysis of the strategy to be pursued should Iran, in the end, choose ideology over reconciliation.

The intelligence community has a major role in helping to design such a vision. But it must recognize that the more it ventures into policy conjecture, the less authoritative its judgments become. There was some merit in the way President Richard Nixon conducted National Security Council discussions at the beginning of his first term. He invited the CIA director to brief on the capabilities and intentions of the countries under discussion but required him to leave the room during policy deliberations. Because so many decisions require an intelligence input, this procedure proved unworkable.

I have often defended the dedicated members of the intelligence community. This is why I am extremely concerned about the tendency of the intelligence community to turn itself into a kind of check on, instead of a part of, the executive branch. When intelligence personnel expect their work to become the subject of public debate, they are tempted into the roles of surrogate policymakers and advocates. Thus the deputy director for intelligence estimates explained the release of the NIE as follows: Publication was chosen because the estimate conflicted with public statements by top U.S. officials about Iran, and "we felt it was important to release this information to ensure that an accurate presentation is available." That may explain releasing the facts but not the sources and methods that have been flooding the media. The paradoxical result of the trend toward public advocacy is to draw intelligence personnel more deeply than ever into the public maelstrom.

The executive branch and the intelligence community have gone through a rough period. The White House has been accused of politicizing intelligence; the intelligence community has been charged with promoting institutional policy biases. The Key Judgments document accelerates that controversy, dismaying friends and confusing adversaries.

Intelligence personnel need to return to their traditional anonymity. Policymakers and Congress should once again assume responsibility for their judgments without involving intelligence in their public justifications. To define the proper balance between the user and producer of intelligence is a task that cannot be accomplished at the end of an administration. It is, however, one of the most urgent challenges a newly elected president will face.

Iran, China finalise two billion dollar oil contract

December 9, 2007

TEHRAN (AFP) — Iran and China's Sinopec on Sunday signed a two billion dollar contract to develop a major Iranian oil field, a crucial deal for the Iranian energy industry at a time of mounting international pressure.

The Iranian oil ministry and Sinopec inked the deal to pump oil from the Yadavaran onshore field in southwestern Iran, which was first agreed back in late 2004, at a ceremony in Tehran, an AFP correspondent reported.

"The initial estimation of cost of the project is about 2.0 billion dollars and the final cost of the project will be decided after the offering of the tenders," said Iranian Oil Minister Gholam Hossein Nozari.

The field will be producing 185,000 barrels of oil a day within the next seven years, he added.

The signing came at a time when the United States has been pressuring European and Asian firms, including oil majors, to cut their business ties with Iran to exert pressure on the Islamic republic in the nuclear crisis.

"The signing shows that there is no lack of investment in Iran and we are solidifying our economic relations with China more," said Nozari.

"The second message is that if other countries are willing to invest in the big oil and gas fields of Iran they should not lose the opportunity," he added, in an apparent warning to any dithering Western firms.

The deal is one of the biggest foreign energy contracts ever signed by Iran, which holds the world's second-largest oil and gas reserves and is seeking development of its oil fields.

The contract was signed in Tehran by Zhou Baixiu, the head of Sinopec's international arm, and Iranian Deputy Oil Minister for international affairs Hossein Noghrehkar Shirazi.

The talks to finalise the contract had been long held up by disagreements on the terms of the Yadavaran deal, most notably involving the rate of return proposed by Sinopec.

Sinopec had originally asked for a 15 percent rate of return from its investment but Nozari said this had been finalised at 14.98 percent.

However he added that the period of reimbursement for Sinopec had been decreased from eight years in the initial agreement to four in the final contract.

"The development will be carried out in two phases," added Nozari.

"The first phase to produce 85,000 barrels per day will be carried out in four years and the second phase to produce another 100,000 bpd will be carried out in another 36 months."

"So in total, the field will produce 185,000 barrels a day."

The National Iranian Oil Company's (NIOC) director for exploration Mahmoud Mohades had earlier put the Yadavaran field's reserves at 18.3 billion barrels, estimating recoverable oil at 3.2 billion barrels.

The 2004 initial agreement also envisaged China's purchase of an annual 10 million tons of Iranian liquefied natural gas (LNG) for 25 years, beginning in 2009.

But Zhou indicated that this was not in the final contract and would be discussed at a later date.

"China is willing to buy LNG from Iran and we hope to talk about the LNG project later."

Sinopec is the sole main partner and investor in the field, although it will be employing sub-contractors, more than half of whom must be Iranian.

Iran and China have significant economic ties and Beijing is the second largest importer of Iranian goods after Japan.

China is a veto-wielding permanent member of the UN Security Council and has until now been reluctant to support fully a US-led drive to impose a third set of UN sanctions against Tehran over its nuclear programme.