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

Iraq oil makes it to Jordan refinery

The first batch of discounted Iraqi oil in four years has overcome the security impasse and reached a Jordanian refinery.

A spokesman for Jordan's Energy Ministry, Maher al-Shawabkeh, told the Jordan News Agency eight tanker trucks with 10,000 barrels of oil have been unloaded at the Zarqa Oil Refinery.

The oil from the Kirkuk oil fields was supposed to be $18 less than market price, according to a deal signed a year ago. Earlier this month Iraq knocked another $4 off the price.

The deal was to provide at least 10 percent and then growing to 30 percent of Jordan's estimated 100,000 barrels per day needs. Officials from both sides allude to eventually supplying all 100,000 barrels.

But the security on the road from Kirkuk to the Jordanian border, where Jordan is to take possession of the oil and thus security of it, has been too dangerous to transport.

Over the past week officials in Iraq have assured Amman the oil is on its way and the first shipment has arrived.

http://www.iraqdirectory.com/DisplayNews.aspx?id=4643

Heritage Oil awarded production sharing contract in Kurdistan Region of Iraq

CALGARY, Oct. 2 /CNW/ - Heritage Oil Corporation (TSX: HOC) ("Heritage" or "the Company") today is pleased to announce that it has executed a Production Sharing Contract with the Kurdistan Regional Government (KRG) over Miran Block in the south-west of the Kurdistan Region of Iraq and that Heritage will be operating as a 50/50 partner with the KRG to create a 20,000 barrel per day oil refinery in the vicinity of the licence area.

Under the terms of the agreement, Heritage Energy Middle East Limited, a wholly owned subsidiary of Heritage, will serve as operator. Heritage will join the existing and increasing presence of international oil exploration, development and production companies operating in the Kurdistan Region of Iraq.

The licence area is 1,015 square kilometres and encompasses the very large Miran structure. This structure, as expressed at surface, constitutes an area of approximately 500 square kilometres and appears to have three separate culminations. Reservoir potential exists at numerous zones that management estimate could contain in excess of 1 billion barrels of oil. Recent drilling results have demonstrated the enormous potential of this region.

In addition, Heritage has also entered into a strategic agreement with the KRG to establish a 50/50 joint venture company which shall build, own and operate an oil refinery in the vicinity of the licence. The refinery, which should have a capacity of 20,000 barrels of oil per day, is scheduled to be operational to design specification within approximately two years. Heritage is especially pleased to be part of this extremely exciting and profitable project that will create value added petroleum products for the region and all of Iraq.

Heritage will commence geological work immediately, having established its local office in Erbil in 2005, and aims to commence a high-impact exploration drilling program in 2008. Heritage has assembled a highly experienced technical team with considerable experience of the regional geology.

The total contractual financial commitment for the Miran Licence is estimated to be less than US$40 million distributed over the first five year term, which can be extended for a further two years thereafter. The exploration licence will be automatically converted into a development licence on a commercial discovery.

Mr. Tony Buckingham, CEO, stated:

"We are delighted to be among the first international companies to be awarded a licence in the Kurdistan Region subsequent to the approval of the Oil and Gas Law in August 2007. We consider this licence to be one of the most prospective blocks in this until now under-explored region, with billion barrel oil potential. This licence can become a world-class asset which would generate significant additional shareholder value for Heritage. Our long-term commitment to the oil industry and further economic development in the Kurdistan Region is demonstrated further by our winning the right to build and operate a refinery in the vicinity of the Miran licence in a joint venture with the Kurdistan Regional Government."

1. Notes to Editors: Heritage is an international oil and gas corporation with a diversified portfolio of properties, including a producing property in the Sultanate of Oman, a development property in Russia and exploration projects in the Republic of Uganda, the Democratic Republic of Congo and the Kurdistan Region of Iraq.

2. Heritage's management team has a proven track-record of finding new large oil discoveries, including the new hydrocarbon system in Lake Albert, Uganda and the M'Boundi field in the Republic of Congo

3. A location map of the Miran licence is available on Heritage's website at www.heritageoilcorp.com

If you would prefer to receive press releases via email contact Kelly Cody ([email protected]) and specify "Heritage press releases" in the subject line.

FORWARD-LOOKING STATEMENTS:

Except for statements of historical fact, all statements in this news release - including, without limitation, statements regarding production estimates and future plans and objectives of Heritage - are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks relating to estimates of reserves and recoveries; production and operating cost assumptions; development risks and costs; the risk of commodity price fluctuations; political and regulatory risks; and other risks and uncertainties as disclosed under the heading "Risk Factors" in its AIF and elsewhere in Heritage documents filed from time-to-time with the Toronto Stock Exchange and other regulatory authorities. Further, any forward-looking statement is made only as of a certain date and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or reflect the occurrence of nanticipated events, except as may be required by applicable securities laws. New factors emerge from time to time, and it is not possible for management of the Company to predict all of these factors and to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statement.

CNW Group

Iraq's KRG signs four more oil deals

Iraq's Kurdistan Regional Government has announced four more controversial oil deals, de****e Baghdad's condemnation, and says more are on the way.

The KRG said in a statement that an initial $500 million will go toward upstream exploration projects now the deals have been signed.

"The projects will spearhead international investment for the whole of Iraq," KRG Natural Resources Minister Ashti Hawrami said in the statement.

Companies involved in two of the production-sharing contracts have been announced: a subsidiary of the Canadian firm Heritage Oil and Gas and a subsidiary of the French firm Perenco S.A. The other two deals will be detailed soon, the statement said.

The KRG also announced contracts to build two new oil refineries with 20,000 barrels per day capacity each, sorely needed in Iraq, which suffers from extensive fuels shortages.

The KRG controls three relatively violence-free and semiautonomous provinces in Iraq's north. Very little of Iraq's 115 billion barrels of proven reserves are in the KRG area, but the country as a whole is under-explored and it is expected that the KRG has much potential.

A federal oil law governing the Iraq oil sector is stuck in Parliament. The KRG in August passed its own regional oil law. The KRG already signed a number of various contracts for its oil sector. Most recently was a deal with Hunt Oil, the Dallas-based firm, which the Iraq Ministry of Oil called "illegal."

The KRG issued a stinging rebuke, calling for the minister to work toward passing the federal law or resign.

The KRG says it is not finished signing contracts to explore its region. Critics of both the KRG move and production-sharing contracts in general say Iraq will be deprived of maximum return on the oil.

Hawrami points to a federal revenue-sharing law -- which has yet to be agreed to -- to ensure oil funds are collected and distributed fairly.

The KRG hasn't published the actual language of the specific contracts it has signed, but in the statement released Tuesday it said the PSCs "will provide an estimated aggregate return/profit of over 85 percent to Iraq and around 15 percent to the contractors."

Iraq's KRG signs four more oil deals : World

Demand for dollar, exchange rate stable in daily auction

Demand for the dollar was almost stable in the Iraqi Central Bank’s auction on Monday, reaching $85.985 million compared with $84.850 million on Sunday.

In its daily statement the bank said it had covered all bids, including $4.395 million in cash and $81.590 in foreign transfers, at an exchange rate of 1,234 dinars per dollar, unchanged for the tenth session in a row.
None of the 18 banks that participated in Monday's session offered to sell dollars.

In statements to the independent news agency Voices of Iraq (VOI), Ali al-Yasseri, a trader, attributed the stable demand for the dollar in Monday's session to the stable exchange rate for the tenth session running.

The exchange rate in the local market is lower than that offered in today's auction, encouraging traders to make bids in foreign transfers more than to buy in cash.

The Iraqi Central Bank runs a daily auction from Sunday to Thursday.

Demand for dollar, exchange rate stable in daily auction | Iraq Updates

Oil denies signing contracts with Total, Chevron

The Oil Ministry denied what was said recently in mass media about signing any contract with any global, Arabic or local company about investments in Iraqi oil fields, authorized source in the Ministry said.
He added that the news about signing contracts with Total and Chevron companies to invest Mijnon field are baseless.

The source mentioned that the Ministry since 2003 dealing with the global companies through signing memorandums of understanding and this process nonbinding to the Ministry and these memorandums include providing studies and holding training courses for the Ministry's employees.

Oil denies signing contracts with Total, Chevron | Iraq Updates

Kurdistan to produce 200,000 bpd

Over more than two years, foreign countries have discovered oil in Kurdistan region. Really these companies not discovered giant fields like the well-known Baba Gurgur fields near Kirkuk, but oil companies and Kurdish people were very happy of that.

Iraq has 115 billion barrels of the reserve oil, but it has been though that its real oil wealth is higher than this.

Kurdistan and Kirkook region, rich of oil, are among the main regions towards those interesting in oil because of the reserve of these both regions.

Kurdistan to produce 200,000 bpd | Iraq Updates

Iraq makes Jordan delivery

Iraq has made its first delivery of oil to Jordan after a four year gap due to the US led invasion of Iraq in 2003, reported the AFP.

Eight Iraqi tankers have so far crossed the border into Jordan, while a further 166 are on their way from Kirkuk. It is hoped Iraq will eventually provide around 100,000 barrels per day at preferential prices, thought to be $18 below market rates.

Iraq makes Jordan delivery | Iraq Updates

Iraqi Vice President Describes his Talks with Vice President alShara as Deep , Brotherly and Very Cordial

Iraqi Vice President , Adel Abdul-Mehdi has described his meeting with Vice President , Farouk alShara as deep, brotherly and very cordial, stressing the mutual desire of both countries for cooperation on all levels.

In a statement to reporters following his talks with Vice President , Farouk alShara yesterday evening, he added that both sides have the desire to implement all agreements and commitments which were earlier reached by the two countries.

In reply to a question with regard to the US. Congress voting to partitioning Iraq, Abdul-Mehdi stressed that Iraq will remain unified for thousands of years, adding that there will never be a foreign decision that affects Iraq except the decisions which are taken by the Iraqi people.

Iraqi Vice President Describes his Talks with Vice President alShara as Deep , Brotherly and Very Cordial | Iraq Updates

EU Parliament President meets speaker of Iraqi Assembly

The President of the European Parliament (EP) Hans-Gert Poettering met with the speaker of the Iraqi Assembly Mahmoud al-Mashhdani Monday evening and discussed the current situation in Iraq.

"The EP is of course in favor of the integrity of the Iraqi nation and we are supporting all efforts for ethnical and religious reconciliation," said Poettering in press statements.

"We know that security is the basis of everything," said the EP President, adding that he heard with great pleasure that the security situation in Iraq was improving.

On his part, al-Mashhdani said they discussed many issues, among them the reconciliation process, the fate of the Iraqi refugees and support of the EP to the reconstruction process in Iraq.

Al-Mashhdani expressed the wish of creating a delegation of the Iraqi parliament associated with the European Parliament.

The EP President stressed the fact that the Iraqi nation should be able to control all its economic resources in its own good and to develop the country.

Members of the Iraqi Assembly will hold a discussion with the Foreign Affairs Committee of the European Parliament on Tuesday.

EU Parliament President meets speaker of Iraqi Assembly | Iraq Updates

Bureaucratic ‘surge’ boosts local government

The mayor of Hammam al-Alil would like his US guests to take note of his desk, a cheap piece of work with cracked panelling, which the mayor clearly thinks symbolises the lack of support his municipality receives from the government of Ninewah province in the nearby city of Mosul.

“I wish you could speak to the governor about the furniture we have. It is pathetic,” he tells the six-strong US diplomatic delegation that has come to visit him in this threadbare Tigris River town. “The governorate does not even grant us [so much as] a pen.”

Here in Iraq’s dusty Sunni Arab hinterland, teams of US diplomats, soldiers, aid experts and Iraqi-US ­advisers are rumbling about country roads in convoys of armoured Humvees to listen to the concerns and grievances of Iraq’s much neglected local governments.

They are part of an inter-agency effort known as the Provincial Reconstruction Teams, or PRTs, and represent a philosophy of development that differs from the early post-invasion years – rather than spend billions to build infrastructure, it aims to increase Iraq’s capacity to spend its own money.

US officials here also distance themselves from the reconstruction efforts under the US-led occupation authorities in the first year after the invasion. “This is not 2004,” one official says. “We are not here to do things for the Iraqis but provide that bridge as they take on these challenges themselves.”

The original $21bn (€14.7bn, £10.3bn) allocated to Iraq between 2003 and 2004 for the capital-heavy reconstruction effort is now mostly spent, but US officials say that the personnel and expertise-heavy PRT model is about to come into its own.

“The PRT model throughout Iraq is about to begin its surge, or at least the next phase of its surge,” says Commander Jerome Sebastyn, the Ninewah deputy team leader.

The PRT’s proponents say that increasing the effectiveness of local government will help Iraq’s economy grow, creating jobs, as well as building up the legitimacy of local authorities that will encourage the populace to co-operate with officials against insurgents.

In a country where decision-making was once monopolised by central government, their work can involve explaining the intricacies of accounting to local officials unused to having their own budget but also to lobbying provincial authorities for projects.

One such project that the PRT pushed through the Baghdad bureaucracy at the behest of Ninewah officials is the establishment of a local police academy. Officials here say that the only other academy in the country is located in the Shia slums of east Baghdad.

The PRT hopes that the creation of the new academy, along with its own police training effort, will help teach officers investigative techniques – nearly half of the security cases that came before the courts in the first half of this year ended in acquittal, often because untrained policemen or soldiers mishandled the evidence.

In Hammam al-Alil, the mayor is concerned with more local issues – such as corruption. He says that local sewer board officials who answer to the central government never bother coming into work, although they still collect their salaries. The PRT officials promise to look into this.

“There is a lot of money here in Iraq,” Rodney Hunter, a state department political officer, tells the mayor. “The issue is corruption and administrative problems but also the ability of information to travel from the central government down to the district and sub-district levels. That is where we can help. We can be a conduit of information.”

While the PRT push may seem to be coming relatively late in the war, the team’s proponents emphasise that it will be here for the “duration” – until the US effort to stabilise Iraq is complete.

In Ninewah alone, the PRTs should increase their numbers from 63 to more than 100 by the end of the year. Nationwide, the number of teams has jumped from 10 to 25 this year, Ryan Crocker, US ambassador to Iraq, told Congress in mid-September.

This expansion may seem a challenge for the State Department, which has traditionally had a hard time convincing personnel to go to Iraq, but officials in Ninewah say the PRT approach has attracted development spe******ts who might have been sceptical of earlier Iraq efforts.

“The presentation of our military strategy and our diplomatic strategy under the new leadership provide a more realistic and credible explanation of the development challenges here,” says David Himelfarb, the team’s USAid representative. “It makes development experts more attracted to work here, that while the constraints are enormous, there is a good chance of being ­successful.”

Bureaucratic ‘surge’ boosts local government | Iraq Updates