Thread: Archive Latest News - Think Tank - 16/08/07 - 03/11/07

White House cryptic on Blackwater's future in Iraq

The White House on Wednesday declined to answer Iraqi Prime Minister Nuri al-Maliki's call to replace the private security firm Blackwater after a deadly shootout in Baghdad.

Press secretary Dana Perino noted that US Secretary of State Condoleezza Rice had "expressed the deepest regret for the loss of innocent life" while insisting that the US State Department's employees require protection in Iraq.

"We are in a very dangerous situation over there, and civilians who are working for either the State Department or other agencies need protection," said Perino. "This is one of the companies that provides protection."

"And the secretary said that she wants a full, open and transparency investigation into what happened," she said. "Until that is settled, I think we'll decline to comment on any other action."

Maliki's call came as US and Iraqi officials were locked in talks trying to defuse the crisis sparked when Blackwater guards escorting US embassy officials opened fire in a Baghdad neighborhood, killing 10 people and wounding 13.

"This company should be punished. We are not going to allow it to kill Iraqis in cold blood. We have frozen all its activities and a joint panel has been formed to investigate the incident," the prime minister said.

"For their own interests, the Americans should hire a new company to protect their people so they can move freely."

The US embassy in Baghdad has barred its officials from travelling by land outside Baghdad's fortified Green Zone amid fears of attacks after Sunday's shooting.

White House cryptic on Blackwater's future in Iraq - Yahoo! News

Completed: 198 Projects for 81 billion ID

The Ministry of Construction and Housing published a report on completed projects and the most important obstacles facing work planned in the ministry investment budget and those for developing regions and governorates.

Minister of Construction and Housing, Bayan Dizah Yi, identified the volume of Ministry completed work at 198 projects (81 billion ID) as of the first of June. These were: 18 projects for roads and bridges at the cost of 7 billion ID, 79 projects for public buildings costing 14.5 billion ID and 101 projects for school buildings at 59.5 billion ID. She indicated the Housing Fund granted 8000 loans for 2007 totaling 47.5 billion ID, to complete 4,100 housing units by April 29th.

She stated the Ministry will initiate 589 projects worth 2,756 billion ID as follows: 349 projects (2,402 billion ID) under the 2007 investment budget, with an annual allocation of 422 billion ID, 170 projects at 191 billion ID for other employers, and eight projects for 123 billion ID under the first two American grants.

She noted that there are further projects under the $135,000,000 World Bank loan -- $92,000,000 on central projects and $43,000,000 for the Kurdistan region. There are also $30,000,000 in projects under the Japanese loan including the establishment of three bridges in the province of Muthanna under the financial agreement in Cabinet awaiting ratification by Parliament.

The report of the Ministry of Construction and Housing also detailed on-going projects like roads and bridges in Kirkuk, Basrah, Thi Qar, Diyala, Salahuddin, Wasit, Baghdad, Muthanna, Karbala, Babel, Diwaniyah and Al-Anbar. The completion rate was 100% as of the first of June, including maintaining and paving external and internal roads as well as maintaining dams and bridges and building new roads.

Projects for public buildings with 100% completion rates in several provinces were under companies Al-Farouq, Fao, Saad, Al-Mansour, Al-Mu'Tasim, the National Center for Engineering Consultants, Al-Salam, and the National Center for construction. These included building 102 schools in various provinces by ministry companies.

The report concluded with work that is still going on in some designated projects: 12 residential complexes costing 304 billion ID, 176 projects for roads and bridges for 831 billion ID, 179 projects at 338 billion ID for public buildings and 170 school building projects for 107 billion ID.

The report pointed out that the completion rates varied depending on the security situation and other circumstances, affirming the ministry's intention to complete all by the end of the year.

http://www.iraqdirectory.com/DisplayNews.aspx?id=4559

Oil breaks 80 dollar/barrel barrier

Crude oil prices recorded a new record on Wednesday exceeding $80 per barrel at the forward contracts in New York Stock Exchange dealings.

Dealers attributed this rise to the significant decline in American crude reserves, and fears a new tropical storm might hit the Gulf of Mexico, where there is a large number of production facilities in offshore fields.

The price per barrel of light October delivery crude was $79.93 at the close, up $1.68; the same crude had closed Wednesday at $80.18, breaking the record set at the beginning of August when prices hit $77.68.

American Reserve…
The sudden rise in prices came after the announcement of the American Ministry of Energy that the United States crude oil reserves fell about 7.1 million barrels last week, more than expected.

Tim Evans, the financial analyst in City Group, said that "this huge decline in the reserve was surprising to the Energy Agency." But other analysts attributed the rise in prices to the continued rise in demand and fears of a decline in supply.

OPEC Announcement
The Organization of Petroleum Exporting Countries OPEC announced earlier that it will increase production by 500 thousand barrels a day, but some analysts pointed out that the increase is merely symbolic and warned that prices may continue to rise even if supply increases.

The Twelve members of the OPEC were reluctant at the beginning to increase production, de****e warnings from the International Energy Agency that the market needs more supply. However, pressure from influential members such as Saudi Arabia, which fear negative impact of rising prices on global demand, overcame the opposition of other members.

The step was expected to reduce prices and thus risk to the financial markets of America and the world.

But there are also fears that the market would be flooded with oil supplies if a weak American economy led to reduced energy demand.

OPEC members, who produce more than the third of the world oil supply, exceed their August production ceiling by about 900,000 bbl/day.

http://www.iraqdirectory.com/DisplayNews.aspx?id=4560

Australia: Iraq wants to resume wheat trade

A spokesman of the Australian foundation A.W.P for wheat trade said on Thursday that Iraq is negotiating to resume buying wheat from this foundation that monopoly the Australian wheat export, after the cessation of transactions between the two sides last year.

Iraq suspended transactions with the foundation in February 2006 after the start of a judicial inquiry in the Australian scandal concerning the payment of bribes worth $ 222 million by the foundation to the Iraqi government in the era of former President Saddam Hussein to ensure the conclusion of deals.

Peter McBride, spokesman of the foundation, said on Thursday, "We had preliminary discussions with the Iraqis. We are happy to contact the Iraqi grain board to consider the chances of resuming exports of wheat in future."

Reports quoted the Iraqi Trade Minister, Abdul Al-Falah Al-Sudani, saying in Baghdad on Tuesday that Iraq had begun talks with the Australian foundation on the purchase of large quantities of hard wheat. But he did not specify the quantity which Iraq wants to purchase.

However, the Australian wheat is limited after drought reduced crop size of the country for 2006 -2,007 by 60% to less than ten million tons.

McBride said this week that the last production of Australian wheat harvest has been sold or earmarked for sale or has been shipped or its prices are set. He added about the possibility of resuming exports to Iraq, "It is all about the future."

Australian exports from the last crop were distributed according to the quota system on older buyers, and they are likely to be lower than the demand for this season, also because of shrinking crop for 2007-2008 due to a new wave of drought.

Last year, Iraq bought most of its wheat imports from the United States. Before the eruption of the bribery scandal, Australia used to export to Iraq up to 2.5 million tons annually. Iraq imports each year more than three million tons of wheat.

Last December a new group named "Wheat Australia" got a special authorization from the Australian government for the export of 300 thousand tons of wheat to Iraq but it could not negotiate for sales again.

http://www.iraqdirectory.com/DisplayNews.aspx?id=4561

Production of the Norwegian D.N.O increases from an Iraqi oil field

The Norwegian independent oil company (D.N.O) said on Thursday that its share of production from a field in the Kurdish area in northern Iraq increased to 6871 barrels per day in August from 5810 barrels in July.

The company said in a statement that the increase in production from the field Tawki in Iraq rose the total production of ( D.N.O) to 20340 barrels per day in August from 19654 barrels per day in July.

(D.N.O) production comes from fields opposite to Norway, as well as in Yemen and Iraq .

The company, which has a share of 55% in the field Tawki, said that the well 5A in Tawki achieved a cumulative rate of pumping up to 9000 barrels per day from three tests while the well Tawke 8 achieved a pumping rate of 20500 barrels per day from five tests.

http://www.iraqdirectory.com/DisplayNews.aspx?id=4562

US, Iraq agree on joint commission on Blackwater shooting

US, Iraq agree on joint commission on Blackwater shooting

WASHINGTON (Thomson Financial) - Iraq and the United States agreed toestablish a joint commission to examine security of US-government civilians inIraq following a deadly shooting involving private security firm Blackwater,State Department spokesman Tom Casey said today.

US, Iraq agree on joint commission on Blackwater shooting

Interview: Top Iraq oilman Thamir Ghadhban
Thamir Ghadhban has served in several political and technical capacities in Iraq's oil sector. He's been oil minister twice since 2003, has sat as a politician crafting Iraq's constitution and is now Prime Minister Nouri al-Maliki's top energy adviser.

He sat down with UPI on the sidelines of the Iraq Oil, Gas, Petrochemical and Electricity Summit organized by the Iraq Development Program in Dubai earlier this month to talk about issues facing his country's energy sector.

Earlier in the conference, he presented a long-term plan to turn Iraq from an oil and gas giant in need of energy sources to a total energy exporter. Saddam Hussein's rule handicapped today's Iraq energy sector, which needs tens of billions of dollars in investment, repairs and security for its pipelines, and an actual infrastructure to put the natural gas to use instead of burning it off.

But how to do that is tricky. A controversial hydrocarbons law, which Ghadhban helped craft, is stuck in Parliament. At issue is the extent of federal control over the oil sector and how much it will be opened up to private/foreign investment. And at a technical level, whether Iraq's current reserves should be exploited further first or more exploration is needed.

He also speaks about the fight between the current oil minister and the oil unions, as well as the need for transparency to keep the oil sector away from allegations of corruption.

UPI: There are a lot of long-term plans. Once the infrastructure and investment are in place for that it would mean Iraq could meet all of its own oil, electricity, natural gas, fuel needs and export and make money of that. Do I understand that correct?

Ghadhban: It is very clear. What I presented is really a scenario. It is not yet a solid plan. I expect that the Ministry of Oil shall present soon a plan after enactment of the (oil) law and according to the law it's the federal oil and gas council which has the power to issue a plan, adopt it, and it would be a comprehensive plan for the whole country. The country is in need of energy, all sources of energy such as oil, gas, oil products. And it has the resources, we have the reserves. It's only a matter of reorganizing ourselves, implementing plans and also, of course, implement the projects.

Such as we have shown, such as the stopping of flaring of the gas, collection of gas, separation, processing, providing LPG and providing the right gas for power generation. There is no doubt that Iraq has the potential to become an exporter of gas, of course as well as it is already an exporter of oil but it will be at a much higher level.

Q: What is the timeframe, if everything goes as hopeful as you are talking about?

A: Currently Iraq is exporting more than one and a half million barrels per day. It actually achieved 1.7 million barrels per day in July. So with more active implementation of small projects, we don't need really huge projects now, with modest investment just to complete already drilled wells, there will be a very positive and remarkable impact on production and export capabilities. And this will all lead in a short period of time to the expansion of production capacity as well as export capacity.

The other point is that, of course, we have been working on it, not much success but we will have success in the coming months, is to secure the pipelines, the export pipelines from Kirkuk all the way to Turkey, and once this is achieved there will be a positive impact, no doubt about that, on the export capability of some at least 300,000 barrels per day extra.


Q: How important is it to concentrate on the natural gas? Two-thirds of the natural gas that Iraq produces is burned off.

A: It is very, very important. First of all power generation is in dire need for gas. Why are now a number of power stations either are operating at lower capacity or not operating at all? And now the Ministry of Electricity is really in the business of importing the gas oil. Also the Ministry of Oil was and is still importing the fuel for power generation. That's one. The second point, doing so and providing natural gas for power generation, we would free crude oil being burned now for power generation, we would free it for export and this is about 100,000 barrels per day and this is of course income to the country. It is only right that we should really utilize, maximize utilization of gas into power generation. Also in addition to that by the way is that even industrial projects, industrial plants are operating under its lower capacity like the petrochemical and fertilizer in Basra, they are not having enough feed and they depend on natural gas.


Q: So, once these power plants are operating on the natural gas, not only does that allow Iraq to export more but you have more electricity feeding the oil sector?

A: Exactly, definitely. In addition, to provide more power supply to the citizens and shorten power cuts.


Q: Going to the pipelines, what is the chance that the Syria pipeline is going to be put back in operation and what are the conditions for that to happen?

A: There are no conditions except to secure the pipeline itself. It is not only that we have also to take measures. Â… We are actually, Iraq was taking measures to regain the pumping capacity from the south northward and the connections at the Haditha, K3 area, so we will have capability of also exporting oil from the south northward. Right now the capacity in the Kirkuk area from the northern oil fields is in the range of 700,000 barrels per day so it is not really large enough to satisfy our needs through Turkey. So if we want to also go through Syria we have to make available more oil from the south northward. But Iraq is really looking forward and has always been to strengthen its relations, economic relations, with Syria and have also an additional access to the Mediterranean through the oil pipelines. Previously a capacity of 200-250,000 barrels per day was available before the war and there were measures to be taken, were planned, with the replacement of a small segment of pipeline with a new one, the capacity could be enhanced to about 300,000 barrels per day, so this is viable.


Q: What about the talk of a pipeline to Iran. If I understand it correctly it will be a pipeline that sends crude to Iran, Iran refines it and sends refined product back to Iraq in a separate pipeline?

A: This is the idea. It has been talked about. The Ministry of Oil signed an agreement with Iran. I don't know much about it but as you said, the idea is to send crude oil to Abadan, refine it and send the product back and there's a settlement.


Q: But both countries need refined products so one, why wouldn't Iraq invest the money in a refinery and refine it yourself and Iraq could use it or why wouldn't Iran just keep the fuel?

A: Actually, I cannot elaborate on that.


Q: There have been some concerns of the oil law that would have undue exploration and you said no, that the exploration is necessary. Can you elaborate on this disagreement among experts?

A: There are some people whom I respect, at least one of them, based on proven oil reserves and production targets and taking the market in consideration and also national interest, they are concerned that Iraq might embark on an extensive exploration program and this may not provide the best contractual terms to the country. And they recommend that we slow down or perhaps postpone exploration for the future. I am of the opinion that any future policy in terms of exploration as well as development should be based on a sound basis and of course the first priority is to take the national interest in consideration and one of this is that from a planning point of view it will not be a wholesale as some fear or it will not be a random and haphazard, it will be done in a constructive manner and we have to have the following objectives to be met. One, is that we want to replace production by additional exploration from finding and proving. Number two, this probable reserve, the figure of 214 billion barrels, we have to work hard to convert parts of it into proven reserves and therefore there has to be exploration by Iraqi efforts in addition to that by IOCS.


Q: Is this extra, on top of the 115 billion barrels proven Â…

A: Of course, it is a separate category. We have to work on this and convert it from the probable category in the classification to the proven. And this is done only by actual hard work of exploration, i.e., seismic work and drilling and testing and assessment. And therefore there should be a target for how much to be achieved. I give a figure based on previous studies and plans, a figure of around 30 percent to be achieved in coming years until 2015.


Q: Speaking of something less friendly is the interaction between the oil minister and the oil unions. Obviously there are a lot of politics involved. Can you explain the sense from your point of view what's going on with that dispute?

A: I'm not really, directly involved in this matter, OK. I worked in Basra for 16 years and I know those people. I know most of them if not all of them, they are sincere people, they are dedicated, they work hard and they contributed and they mean well. Of course there is no law right now making it legal to form, to organize labor organizations or societies. But in the constitution it preserves this right. I am of the opinion that we should hear there grievances and their opinion. When I was in charge I met them. Even when I was chief executive officer of the ministry during 2003 after the fall of the regime they sent people they came to Baghdad and I talked with them, I listened to them and so on and I'm of this opinion, of course the minister has the right to take whatever he thinks right about the decisions, no doubt about that, but also I think it is wise of labor organization not to go into political issues. I believe they should concentrate on their social issues, their rights to improve the conditions of the workers in Basra. But also if they have an opinion regarding the oil law it should be based on the oil law, it should not be based on rumors and so on. I remember seeing a video by (Iraqi Federation of Oil Unions President) Hassan Jumaa and I found him a very serious person, sincere and he was polite. He expressed his opinion. I didn't see a problem with that really.


Q: You are saying that their analysis of the oil law is wrong, is that what you are saying?

A: I didn't say that, I don't mean that. We actually heard and read and saw people talking about the law and without knowing what the law is about. It's not their domain, it's not their profession. People talking about PSAs and people converting it from a comprehensive law into whether we have a PSA or not. And there will be a rip off of the Iraq oil wealth. This is completely nonsense. Or that 70 percent of the profit will go to the foreign company, again this is completely nonsense. The law as it is, although we have differences and the differences are basically on the power of the authorities, whether it should be a centralized form of law or whether it is a sharing between the regional governments and the federal government. These are the main actual differences here. And of course we had lots of differences while we were debating the law. And we arrived at the consensus and of course still many of us are not happy at what we arrived at but this is now the prevailing conditions in Iraq and the prevailing wisdom in Iraq and after all no law is really gospel truth. It is subject to amendments in the future and what I drive to is I really advise that labor unions work and concentrate on its priorities as normally the priorities of such societies is to improve and fight for their member rights, but they have the right to express an opinion, especially on laws affecting their life.


Q: There's a United States government report coming out that looks at the corruption and the Commission on Public Integrity in Iraq. Supposedly it's going to outline a number of issues in a number of ministries, including the Oil Ministry, detailing corruption inside the Oil Ministry. What are your thoughts on what needs to be done to make the oil sector more transparent, to make sure the fears that people have of returning to the Saddam type of corruption?

A: If anybody, say an objective and thorough analyst, looked at the law, at the draft law, you'll find that we put so much precautions and we wrote articles to achieve what you have said. As an example, all awards of contracts will have to be done through competitive, transparent rounds. All contracts, after signatures, have to be published within two months. And therefore nothing will be hidden under a table. And also there is an article about anti-corruption laws, everybody has to abide by it and anyone, Iraqi and non-Iraqi, if proven that he has indulged in corruptive matters and so on he will be subject to taken to court. And I really believe, of course there is an article about transparency, well written and well documented, and it is up to the standard now in the world. So I believe we have taken enough measures, legally, in order to ensure such objectives to make the awards of contracts and the practice to be transparent and without corruption. Of course it is then up to the practice and implementation. And now in Iraq in each ministry there is an office, the inspector general, and also the whole country there is this commission on integrity, plus we have the auditing agency in Iraq, and I believe Iraq has been subjected to lots of harsh treatment regarding this point, because many other countries do not publish what now we are publishing or data that is now available in all sectors in the country. I think we are moving forward and Parliament is also moving forward on this matter.

http://www.earthtimes.org/articles/show/110535.html

Iraq reduces price of crude oil exports to Jordan

Iraq will further reduce bill of crude oil exported to Jordan in line with a memorandum of understanding between Baghdad and Amman, a government spokesman said Wednesday.

Ali Al-Dabbagh said in a statement the Iraqi government, in a meeting yesterday, decided to slash USD four out of each crude oil barrel exported to Jordan.

Iraq is expected to export 10,000 barrels in preferential prices in the next few days.

The MoU, signed in August last year, guarantees around 10 percent of Jordan's daily oil needs.

http://www.kuna.net.kw/NewsAgenciesP...42&Language=en

Where's the Corruption?
The Federation of American Scientists has published a “sensitive but unclassified” draft report by the U.S. Embassy in Baghdad on corruption in the Iraqi government.

It is a working draft.

http://www.fas.org/irp/eprint/anticorruption.pdf

LUKoil to Get Advantage in Iraq Field

LUKoil will have an advantage in a new tender for the West Qurna-2 field in Iraq, Iraqi Foreign Minister Hoshyar Zebari said, Interfax reported Wednesday.

LUKoil's investments and work at the field will be taken into consideration should the oil producer bid, Zebari said, Interfax reported.

The minister invited LUKoil chief executive Vagit Alekperov to Iraq, Interfax said.

LUKoil has been lobbying Iraq to recognize the West Qurna-2 contract that it signed with former dictator Saddam Hussein's government. LUKoil wants to develop the field with shareholder ConocoPhillips.

LUKoil's 1997 contract to drill at West Qurna-2, which has an estimated reserve capacity of 4 billion barrels, has been hamstrung under the new authorities in Iraq.

The Iraqi parliament is expected to pass a new law that will review previous oil contracts and open the way to a wave of tenders to tap Iraq's enormous oil wealth.

http://www.moscowtimes.ru/stories/2007/09/20/047.html

OR

Iraqi foreign minister noncommittal about Russian access to oil fields

MOSCOW_Iraq's foreign minister said Wednesday he was interested in Russian companies rebuilding power plants in Iraq, but gave no commitments regarding the Russian bid to tap the country's giant West Qurna oil field.

Hoyshan Zebari said after meeting with his Russian counterpart, Sergey Lavrov, that an intergovernmental commission was to meet soon to discuss specifics of Russian companies' activities in Iraq, including prospects of Russian oil giant OAO Lukoil's exploring the West Qurna.

Lavrov said that Lukoil hopes to tap West Qurna as part of a consortium with ConocoPhillips. The U.S. oil giant holds a 20-percent stake in Lukoil, and analysts have said it could help the Russian company return to developing the oil field.

"The Iraqi market is open for competition of companies from all countries, and we have no special attitude for or against Russian companies," Zebari told reporters after the talks.

Russia, which developed close ties with Iraq under Saddam Hussein's regime and strongly opposed the U.S.-led war, has remained largely aloof from the U.S.-backed Iraqi government.

Lukoil's 1997 contract to drill at the West Qurna field, which has an estimated reserve capacity of 4 billion barrels, has been hamstrung under the new authorities in Iraq.

The Iraqi parliament is expected to pass a new law that will review previous oil contracts and open the way to a wave of tenders to tap Iraq's enormous oil wealth.

Zebari said the Iraqi government encourages participation of Russian companies in rebuilding and maintaining Russian-built power plants in Iraq.

Lavrov said Russian companies were concerned about instability in Iraq, and that Moscow expected the Iraqi authorities to help provide security.

"I'm convinced that the Iraqi government's efforts to advance the national reconciliation and improve the security situation would help create more favorable conditions for broad trade and economic cooperation," Lavrov said.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

http://www.tmcnet.com/usubmit/2007/09/19/2949724.htm