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

Iraq oil law up in Sept., official says

Published: Aug. 16, 2007

WASHINGTON, Aug. 16 (UPI) -- A top official in the Iraqi Embassy in Washington expects the oil law to top Parliament’s agenda when lawmakers return to session at the start of next month.

Ghaleb El-Anbaki, third secretary and head of the Iraqi Embassy’s political affairs department, told UPI the oil debate is “a sensitive issue,” one related to history and entwined with the country’s future.

“This will come up on the first item on the agenda of the next session of Parliament,” he said, adding the Kurdistan Regional Government and Iraq’s central government have compromises on “technical” issues, such as sharing power.

There has been no announcement on any deal, however, as Parliament is on recess this month. The oil law has been negotiated for more than a year but is stuck on issues such as the extent of federalism in controlling the exploration, development and production of the third-largest reserves in the world. Also unresolved is the extent foreign and private companies will be allowed into the sector.

Anbaki said the issue over sharing oil revenues, which will be dealt with under a separate revenue-sharing law, has been “politicized” and is holding up the law’s passage.

“This is a problem,” he said.

The holdup over the oil law is based on the 2005 constitution, the interpretation of which many factions disagree on. A committee is looking at amending the constitution, possibly even the language dealing with oil, but has not made any movement.

Anbaki said that is the question: whether to move forward on the oil law or wait until any proposed changes to the constitution are decided first.

Anbaki supports moving forward with the oil law, saying it will lead to much needed reconciliation.

“Let us work for the best of a formula,” he said. “It’s a law. It’s not a divine law. To leave this as it is not good.”

United Press International - International Security - Energy - Briefing

Iraqi Embassy protest over union busting

Published: Aug. 16, 2007 at 4:33 PM

WASHINGTON, Aug. 16 (UPI) -- U.S. labor leaders rallying outside the Iraqi Embassy in Washington pressed the prime minister to uphold workers' rights as oil workers are targeted in Basra.

Iraq's Oil Ministry has called the oil unions illegal and barred its departments and companies from any dealings with them.

Dozens rallied in front of the embassy Thursday as a letter from AFL-CIO President John Sweeney to Prime Minister Nouri al-Maliki was presented to the embassy, demanding the government recognize the rights of workers.

"It is crucial that workers in Iraq have these basic rights recognized," said AFL-CIO International Department Director Barbara Shailor. The unions have demanded improved working conditions for months, as well as a voice in negotiations over an oil law they fear, if passed, would give foreign and private companies too much access to Iraq's oil.

With the third-largest oil reserves in the world and oil exports that fund nearly all the federal budget, Iraqis view their oil sector with pride.

But Iraq's government hasn't changed a Saddam Hussein-era law banning public sector workers from organizing.

"It's actually decades of tyranny that we're fighting against," said Shawna Bader-Blau, senior program officer for the Middle East at the Solidarity Center.

The constitution calls for a labor law, which has not been debated in Parliament yet. Meanwhile, the Bush administration is pushing the government to approve an oil law, among other legislation.

"That should be our benchmark, to bring international human rights and labor rights to Iraqi workers," said Denise Lombard of USLAW. She said Iraqi workers protested in the oil capital of Basra Thursday as well.

The oil unions went on strike in June. The government sent the security forces to surround them and issued arrest warrants for its leaders. No one was arrested, but the warrants still stand. Government and union officials negotiated an agreement, which may expire soon if no action is taken.

The Iraqi ambassador is in Iraq, and no one at the embassy was authorized to make a statement.

When asked about the oil minister's anti-union stance during an interview Tuesday, Ghaleb El-Anbaki, a top political officer at the embassy, said, “Till now, the democratic institutions are not fully fledged and functioning properly. Some of them are still in the process of trial and error.”

United Press International - International Security - Energy - Briefing

I have made this thread by Hardwood, a STICKY. The deleted thread although accidentally erased, is beyond recovery!!! Our sophisticated OSW Mike must have applied "laser" surgery to it...

That SPAM culprit was identified... and can expect his(her) extinction from our Forum pretty soon!!!

YB.

Arab investor buys shares with $1.6 m in ISX
Voices Of Iraq - [8/16/2007]

An Arab investor bought a large number of Kurdistan Bank's shares with $2 billion dinars (approximately $1.6 miilion), achieving high percentage of trading in Iraq's Stock Exchange (ISX) during Tuesday's session.

The largest number of traded shares and biggest trading was the Kurdistan Bank's shares as an Arab investor implemented a contract exceeded 900 million shares at cost of $2 billion dinars.
The number of traded shares increased in Iraq's Stock Exchange to reach 6.1 billions shares costing 6.3 billion dinars ($ 5 m) through implementing 312 contracts.
For today the numbers of traded shares were (1.659) b/shares and trading volume (3.675) b/ID, the price Index was about 40.775 point.
Index for Bank sector was (38.115), Index for Investment sector was (107.749), Index for Services Sector was (78.705), index for industrial sector was (11.891) index for hotels sector was (15.451).
The numbers of traded Companies were 29 and still 19 companies are off trading floor because of their General Assembly meeting which decided to increase their capital.

http://www.iraqdirectory.com/DisplayNews.aspx?id=4338

Iraqi growth 'unexpectedly slow'
BBC - [8/15/2007]

The Iraqi economy has not been growing as fast as expected, according to the International Monetary Fund (IMF).
It blames an expected expansion in oil production that failed to materialise.

The IMF praised the work of the Central Bank of Iraq (CBI) in bringing consumer price inflation down to 46% in June from 65% at the end of 2006.

The CBI has allowed the Iraqi dinar to appreciate by 15% and has raised its key interest rate twice so it currently stands at 20%.

"De****e an unsettled political situation, capacity constraints, and the deterioration in security in 2006, progress has been made in implementing structural reforms, although much remains to be done," the report says.

It calls for a new legislative framework for the oil sector to help encourage foreign investment and bring about the growth in oil production that the IMF had been expecting in 2006.

http://www.iraqdirectory.com/DisplayNews.aspx?id=4334

Total and Chevron agree to work together in Iraq
Times Online - [8/9/2007]

Two of the world’s biggest oil companies have signed an agreement to work together on projects in Iraq in the first clear sign that Western energy companies are preparing to enter the country.

Reports yesterday revealed that Total had teamed up with Chevron and that they were putting together plans for Majnoon, the fourth-biggest oilfield in Iraq, with estimated potential reserves of 12 billion barrels.

Elf, now part of Total, negotiated a contract to run Majnoon with Saddam Hussein in the late 1990s. Both Total and Chevron refused to comment, but industry sources said that the two companies had met Iraqi officials to discuss a services agreement to develop the field.

While less lucrative than a pro-duction-sharing agreement, where companies discover and sell on the oil, experts said that it would give them a vital foothold for other deals.

Iraq holds an estimated 110 billion barrels of oil, with more than half still to be developed, offering huge opportunities to Western companies desperate for new reserves. So far, companies such as Total, BP, Shell and Exxon have limited themselves to helping the Iraqi Oil Ministry to train junior staff and pull together data recorded under Saddam.

BP, however, is understood to have been asked to look into the potential of Kirkuk in the north. Shell is thought to have studied Rumaila, the country’s biggest oilfield.

Muhammad-Ali Zainy, a former oil official in the Iraqi Government, said: “Iraq is the last remaining frontier that offers so much potential. International oil companies will be in Iraq, but in what form it is difficult to tell.” Iraq is expected to ratify a petroleum law that would allow deals with Western companies to take place next month. However, experts believe that it could take years for companies to feel confident in sending contractors to the unstable country.

The Irish-owned Petrel Resources is one of four minnows operating in Iraq under a contract to develop the Subba and Luhais field. Dave Horgan, managing director, said: “The big companies will be chomping at the bit to sign a deal. They will then hope they can delay any work for two or three years until the security scares die down.”

http://www.iraqdirectory.com/DisplayNews.aspx?id=4280

UN Chief to call meeting on Iraq future

Friday, August 17, 2007 08:30 GMT

UN Secretary General Ban Ki Moon intends to call a meeting on the future of Iraq as well as a session of the Quartet members on the Israeli-Palestinian conflict, a UN official said.

Regarding Iraq, UN Secretary General spoke to Prime Minister Nuri Al Maliki who plans to attend the US assembly session about the conference. The meeting will tackle the International Compact for Iraq, a UN sponsored initiative to provide reconstruction aid in return for democratic reforms and a future UN role in the country, said the UN official speaking on condition of anonymity.
It is to be mentioned that the meetings have been scheduled for September 22 and 23, two days before the 62nd session of the General Assembly during which presidents, prime and foreign ministers take the floor.
Alsumaria Iraqi Satellite TV Network | Iraq News | UN Chief to call meeting on Iraq future

Iraq quartet committee brought to light

Friday, August 17, 2007 07:06 GMT

The quartet committee has emerged including Kurdistan’s Patriotic Union and Kurdistan’s Democratic Party as well as Daawa Party and Iraqi Islamic Supreme Council. Heads and representatives of political blocs participating in the committee held a news conference to announce the committee and display its program and content. Iraqi President Jalal Talabani said the committee has been set up in order to control Iraq’s future, confirming that doors are open to all political blocs. Talabani reiterated his attachment to the national unity government and its president Nuri Al Maliki, hoping to reach a consensus with the Accordance Front.

For his part, Prime Minister Nuri Al Maliki called the Accordance Front to return to the government and said that the committee is open for all parties who would like to pursue the political process, refusing to hinder the committee which has been created to break the ice but is not made to replace existing political blocs.
In his turn, Vice President Adel Abdul Mehdi affirmed that the committee has been put in place to unify the political process.
Alsumaria Iraqi Satellite TV Network | Iraq News | Iraq quartet committee brought to light

Iraqi PM to visit Syria next week – oil minister

Baghdad - Voices of Iraq
Thursday , 16 /08 /2007 Time 5:10:30

Baghdad, Aug 16, (VOI)- Iraqi oil minister Hussein al-Shahrestani said on Thursday that Prime Minister Nouri al-Maliki will head to Syria next week, leading a security and economic delegation to discuss a number of issues, including supplying Syria with Iraqi oil.

“Talks with the Syrian side will concentrate on discussing the security and oil files and activating former agreements in the security and economic fields, as well as the Syrian desire to import crude oil from Iraq,” the oil minister told the independent news agency Voices of Iraq (VOI).
“The talks also will address fixing the oil pipeline between Iraq and Syria, which needs maintenance and protection,” he noted.
The minister added no further details.

Aswat Aliraq

IMF report on Iraq stresses importance of reconstruction, security, oil investment

Author: Moussa Ahmad
Source: BI-ME and agencies
Published: 17 August 2007

IRAQ. For the first time in 25 years, the International Monetary Fund (IMF) has issued an economic assessment on Iraq, advising the government to increase the pace of reconstruction and investment, mainly in the oil sector.

"Directors commended the Iraqi authorities for keeping their economic programme on track by strengthening economic policies and making progress in structural reforms, de****e an unsettled political situation and a very difficult security environment," said the IMF in a statement on Thursday summarising its Executive Board assessment on Iraq's economic performance.

Iraq has taken steps to strengthen its economy but there will be no real progress until the country's dire security situation has improved, the IMF said.

Announcing the completion of the fifth review of Iraq's US$727 million standby arrangement, which Baghdad wants as a precaution and not because it badly needs the money, the IMF said the country faced some serious economic challenges.

"The expansion of oil production is lagging, and that inflation, while on a downward path, remains high, reflecting in large part continued shortages, notably of fuel products," added the statement. After a decline in oil production in 2005, economic growth was estimated at nearly 6% in 2006, while maintaining an average annual crude oil production of two million barrels per day since 2004.

The IMF urged the Iraqi authorities to "strengthen the protection of oil installations" and welcomed Baghdad's decision to raise the fuel price to the regional level to avoid direct subsidies on fuel products.

Inflation in Iraq is at 46% in June 2007, the Central Bank of Iraq (CBI) allowed the exchange rate of the Iraqi Dinar to appreciate by 15% and the CBI's gross domestic reserves increased to US$ 18.7 billion by end of last year.

The Executive Board praised the Iraqi government's fiscal policy in 2007, calling on the CBI to "stand ready to accelerate the pace of appreciation and tighten monetary conditions further if inflation deviates from its downward path and dollarisation is not reduced as expected."

"Key to fighting inflation would be to continue restraining public spending pressures and stepping up efforts to reduce shortages, especially by actively supporting private sector fuel imports," added the statement.

"A turnaround hinges critically on an improvement in the security situation," it said.

The United States has rushed 30,000 extra troops to reinforce a clampdown aimed at stemming sectarian violence, which has pushed Iraq to the brink of all-out civil war.

US President George Bush has said he hopes the surge of military force will curb the bloodshed while efforts aimed at kick-starting the economy cut crippling unemployment, which has pushed many young men into the anti-US insurgency.

The IMF said it welcomed steps taken by the Iraqi government to bolster the economy and cited increases in official fuel prices as a step in the right direction.

The hikes have lifted the official price of gasoline from pre-2003 invasion level of around 3 US cents a litre to around 32 cents a litre, meaning money previously spent on subsidies can go toward more pressing public projects.

However, the IMF was definitely worried by a lack of progress in revamping the country's crucial energy industry.

"Measures to speed up reconstruction and increase investment, especially in the oil sector, are needed," it said.

Iraq sits on the third largest oil reserves in the world and depends on oil sales for almost all its foreign currency earnings. These funds will be vital for rebuilding its infrastructure and public services, which have been badly run down by years of international sanctions and war.

But foreign investment to modernise the industry has been held up while Iraqi politicians have failed to finalise a new oil law to determine the structure of oil industry institutions and the international tendering process. A separate law to determine how revenues will be shared between the Shi'ite and Sunni Arabs, and the Kurds, has been approved by the cabinet and the Kurdish Regional Government but is still locked in parliament.

"Unlocking Iraq's oil wealth requires advancing the enactment of a new legislative framework for the hydrocarbon sector, in view of the large investments needed to increase oil production," the IMF said.

The IMF said it had approved an extension of the standby arrangement by three months to 28 December.

It waived certain performance criteria under the deal, including an interim audit of the Central Bank of Iraq's 2006 financial statement, a census of all public service employees, and improvements to the budget classification and accounts.

However, IMF officials said the central bank audit and budget classification changes had since been adopted by the Iraqi authorities, albeit a few weeks after deadline, and took this as an encouraging sign of progress.

The IMF also said the central bank ought to continue its tight monetary and exchange rate policy to curb inflation and de-dollarise Iraq's economy.

Monthly inflation rose 6% in June after a spike in black market fuel prices and recorded a 46% year-on-year gain, after a 38% increase the previous month.

But core inflation, excluding fuel, edged down slightly to a 19% yearly pace from 21% in May, and a 32% level at the end of 2006.

The Iraqi central bank has raised interest rates and the Iraqi Dinar has strengthened sharply against the US Dollar, in a deliberate effort to squeeze inflation and improve confidence in the domestic currency.

This was relaunched at some cost after the fall of Saddam Hussein, and officials want to stem the widespread use of dollars and coax people back to dinars.

This consultation, taking over two years to culminate, advised the Iraqi government to "streamline the tax system with a view to expanding the tax base and improving incentives for economic activity", improve public transparency and accountability, and restructure the banking system.

Business Intelligence Middle East - bi-me.com - IMF report on Iraq stresses importance of reconstruction, security, oil investment - News, analysis, reports