The Weekly Wrap: Nov. 25, 2011

A question of power in Saudi Arabia: The al-Saud family of Riyadh has two principal tasks — securing its rule, and guaranteeing the smooth, long-term flow of oil income. When these dual objectives come in conflict — such as they have in the Arab Spring — the former takes precedence. So it is that, with King Abdullah having allocated a whopping $129 billion in social spending over five years in order to pre-empt restiveness within his population, he has cancelled plans for a $100 billion buildup of the Kingdom’s oil production capacity. Saudi Arabia can currently produce about 12.5 million barrels of oil a day, and it had plans to increase capacity to 15 million barrels a day by 2020. In the Financial Times, Aramco CEO Khalid al-Falih said the expansion is no longer necessary because of increased supplies announced elsewhere. The new Saudi plans could exacerbate a projected significant tightening of global supplies in the coming years. But Barclays Capital’s Amrita Sen, quoted in the FT, suggested that the rationale is the family’s core agenda: "The current focus of Saudi is on domestic social spending on the back of [the] Arab Spring."

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Back to PR school for Big Oil: After BP’s 2010 debacle in the Gulf of Mexico — the gigantic Macondo oil spill, which cost the CEO his job and a halving of the company’s share price — the oil industry conducted a pre-emptive global house-cleaning of its offshore operations, right? According to Brazil, the answer is no. Brazil has suspended Chevron from offshore drilling after an oil spill 230 miles northwest of the state of Rio de Janeiro. The Brazilian accusations sound uncomfortably familiar — that Chevron claimed to be prepared for any mishap at its Frade oil field, but wasn’t, and reacted defensively when the leak of an eventual 2,400 barrels became known. Specifically, the Brazilians say Chevron provided an excerpted version of a 24-hour underwater video clip of the spill, rather than the unexpurgated film, and that necessary emergency equipment was not on standby but had to be flown in. All in all, this amounts to "negligence," the government said. In a statement on its website, Chevron said it will continue producing oil at Frade, but is suspending further drilling. It said it had reduced the volume of oil floating on the surface to a single barrel of crude, and denied it was unprepared for a spill. "Please understand that during those first days it was very confusing, very difficult to manage the flow of information," Chevron executive George Buck said in a public apology. Given the ultra-nationalistic politics of Brazil — estimated to have 50 billion barrels of oil offshore — it would be an extraordinary blunder if company officials did edit the rig video before handing it over.

Saber-rattling domestic politics on the oil patch: We are witness to some of the more extravagant variety of political discourse this election season. In the U.S., Republican presidential candidate Newt Gingrich vowed to employ a fuel-led strategy to topple Iran’s senior leadership within a year should he win election next year; and in Moscow, President Dmitry Medvedev, aiming at a convincing victory in parliamentary elections next month, put Russia’s nuclear missiles on higher alert and said he would target a planned U.S.-built anti-missile system in Europe. Leaving aside Gingrich’s rhetorical excesses, one Russian official said Medvedev’s remarks do not suggest a cooling of improved U.S.-Russian relations known as "reset." Medvedev said he is simply seeking written assurances that the missile system is not aimed at Russia. But U.S. hawks fell into the campaign spirit, such as Fox News commentator Charles Krauthammer, who accused the Obama administration of "appeasement."

A farcical tale of one Pakistani’s ambition: In the late 1980s, Husain Haqqani was simultaneously a correspondent for the then-obligatory Far Eastern Economic Review and, less well-known at the time, a political operative for a Pakistan Army-backed businessman named Nawaz Sharif.  In 1990, the Army helped to oust Prime Minister Benazir Bhutto, and install Sharif in her place, with Haqqani as his chief spokesman. Over the subsequent years, Haqqani earned a reputation as a master of the sharp-clawed, under-handed politics that characterizes Pakistan, at turns serving Sharif, Bhutto and, it seemed, the Army and its intelligence unit, known by the acronym ISI — after the collapse of yet another of the successive governments in which he worked, for instance, he apologized to my roommate for having assigned an ISI tail to our Islamabad house. After 9/11, Haqqani refashioned himself into a democrat in the United States, writing a well-received book and portraying himself as a life-long opponent of the military dominance of his native land. Boston University provided Haqqani an academic perch, and a favorable shift in politics at home resulted in his appointment as ambassador to the U.S. This week, it all ended in tears after a friend of Haqqani’s released a letter and messages suggesting that he had not abandoned his old bag of tricks, and he was forced to resign.

The letter, addressed to Admiral Mike Mullen, requests U.S. military intervention to replace Pakistan’s natural security apparatus with a U.S.-friendly team (my FP colleague Josh Rogin, who has led reporting on the story, obtained the letter). Though the letter is unsigned, its discloser, a Pakistani-American businessman named Mansoor Ijaz, says Haqqani is the author. For those of us who know Haqqani from his formative years, the letter appears either to have been written by Haqqani himself or a skilled imitator. The letter does not identify the U.S.-friendly Pakistanis who would take over in Islamabad, but one can guess one of their names.

Some Americans are upset. At Bloomberg, writer Jeffrey Goldberg laments an "absurd [ISI] campaign" that brought low "a pro-democracy activist and a critic of the army’s meddling in Pakistan’s civilian affairs." Sen. John Kerry will miss Haqqani’s "wisdom and insights," writes Laura Rozen at Yahoo. For his part, Haqqani declares grandly, "I am a Pakistani, I will die a Pakistani." Those seeking introduction to a real Pakistani democrat might pay a visit to Sherry Rehman, the country’s new U.S. ambassador.