Thread: Archive Latest News - Think Tank - 01/01/08 - 14/04/08

Al Maliki back in Iraq after medical tests

Prime Minister Nuri Al Maliki returned to Baghdad from Moscow following medical tests. Al Maliki’s media advisor Yassin Majid announced on Sunday that Al Maliki has agreed with his doctors during his first visit for medical checkup in London to return back for further tests. Cabinet spokesman Ali Al Dabbagh affirmed earlier that Al Maliki is back in London for routine medical tests and there is no need for concern.

Head of Iraqi List Iyyad Allawi called all political parties in Iraq to work on rectifying the existing political process which seems to be reaching a deadlock.

Al Maliki back in Iraq after medical tests | Iraq News | Alsumaria Iraqi Satellite TV Network

Iraq crude oil reserves in Ceyhan Turkish port reach 1.5 million barrels

A naval source affirmed that Kirkuk crude oil reserves in Ceyhan Turkish port reached about 1.5 million oil barrels. The same source told Reuters that Iraq carries on pumping oil from its northern fields thru pipelines extending to Turkey with a rate of 480 thousand barrels per day.

Iraq crude oil reserves in Ceyhan Turkish port reach 1.5 million barrels | Economics News | Alsumaria Iraqi Satellite TV Network

Trade Minister: Private sector has a big role to play in the Iraqi economy to be

Trade Minister Falah Hassan Al Sudani disclosed a plan for stages that include reviving central markets in collaboration and cooperation with the private sector. In addition the plan includes involving the latter in importing and distributing ratio-card units according to the work sheet established by Labor Ministry which is extended for 3 years. Sudani added that the private sector has a big role to play in drawing the programs of Iraqi economy.

In another context, Construction and Housing Ministry suggested a new plan that aims to limit housing problems and that thru giving financial loans for public sector employees according to measures established by the Ministry. It is to be noted that General Director of Housing fund in the Ministry of Construction and Housing Ikram Abdul Aziz clarified that this project will be the first step towards enclosing the biggest number possible of employees in this projects.

Trade Minister: Private sector has a big role to play in the Iraqi economy to be | Economics News | Alsumaria Iraqi Satellite TV Network

Total and Aramco likely to build 400 000 bpd refinery in the kingdom

France's Total and Saudi Aramco are likely to go ahead with plans to build a 400,000 barrels per day (bpd) refinery in the kingdom despite escalating costs, said an industry source in Saudi Arabia. The same source added that Total and Aramco would take a final investment decision on the plant in May or June. The estimated cost of the new refinery and a similar plant Aramco is planning with U.S. firm ConocoPhillips, have risen above $10 billion from initial estimates of around $6 billion, Gulf industry sources involved in plans for both projects said.

Total and Aramco likely to build 400 000 bpd refinery in the kingdom | Economics News | Alsumaria Iraqi Satellite TV Network

Iraqi Minister of Industry Confirms Iraq Development Program as Official Hosts for Investment Summit in Dubai

Iraq's Minister of Industry & Minerals HE Fawzi Hariri has formally confirmed the appointment of the Iraq Development Program as official organisers of the Ministry's forthcoming Commercial Investment Summit in Dubai, to take place on 19-20 April 2008.

The summit marks the decision by the Ministry to embark on a process of commercialisation, as Minister Hariri looks to open up Iraq's state owned industries to the global market, allowing international companies the opportunity to be joint venture partners and enter into production sharing agreements. This process is seen as the first step towards privatisation of Iraq's largest non-oil sectors, building on the initial success enjoyed last year when a select number of tenders were submitted within the construction sector.

The sectors covered by the Ministry of Industry & Minerals include construction, engineering, petrochemicals, food and pharmaceuticals, industrial services and textiles. Over 40 of Iraq's most lucrative state owned enterprises will be attending the summit, as they look to enter into formal agreements with potential partners. Minister Hariri will lead of delegation of the director generals responsible for these sectors, as well as the individual directors responsible for the attending SOEs. For the full version of the letter please visit: http://www.iraqdevelopmentprogram.or...ter_Letter.pdf

The decision by the Minister to choose IDP as organisers of the summit vindicates the success of the unique format established over a number of high level governments summit," said John Glassey, Managing Director of the Iraq Development Program. "The format enables attending delegates not only to hear crucial information from the Ministry on its requirements and current initiatives, but also to engage in private negotiation with key decision makers, providing tangible return on their attendance."

Participation is essential for any organisation wishing to work within Iraq's industrial sectors, with letters of intent and memorandums of understanding to be signed over the two days. A full list of Iraq's state owned enterprises can be found at the ministry's website: Government of Iraq - Ministry of Industry and Minerals - Home

Iraqi Minister of Industry Confirms Iraq Development Program as Official Hosts for Investment Summit in Dubai

Etisalat prepares to enter Iraqi Market

Etisalat of the United Arab Emirates is close to striking a deal to form a joint venture with a mobile operator in the Kurdish region of Iraq, the Abu Dhabi-based company's chief executive says.

Mohammad al-Qemzi told the Financial Times that the former UAE telecoms monopoly was in talks with an existing operator to form a new mobile joint-venture based in the area.

"We are now looking at a joint venture with an existing licence holder," he said, without giving further details.

"We are now just waiting for final agreement to get the deal done."

Mr al-Qemzi said the UAE company was also holding talks with the Kurdish regional government over the deal.

Two of Iraq's three mobile operating licences are held by leading Gulf-based consortiums: Atheer, headed by Kuwait's Zain (formerly MTC), and AsiaCell, a joint venture between a Kurdish company and Kuwait's Wataniya, acquired last year by Qatar's Q-tel.

The third licence was bought by a second Kurdish company, Korek, AsiaCell's rival in the Kurdistan region.

Korek had negotiated to acquire the assets of the licence's former holder, Egypt's Orascom, but the deal fell apart and Orascom's network was sold to Zain in December.

The aftermath left Korek with a licence purchased for $1.25bn, but without nationwide infrastructure.

Hameed Akrawi, deputy chief executive of Korek, said he had been in discussions with several companies, including Etisalat.

"We are still continuing discussions with them but we have no final agreement," Mr Akrawi told the FT, declining further comment.

Iraq Development Program - Etisalat prepares to enter Iraqi market

Istanbul to host Energy Meeting

Iraqi, Turkish and US officials are scheduled to meet in Istanbul on Saturday for a meeting that will focus on energy issues amid frenzied diplomatic correspondence between Ankara, Baghdad and Washington.

While the United States will be represented by Matt Bryza, US deputy assistant secretary of state for European and Eurasian affairs, at the meeting, Turkey is likely to be represented by Murat Özçelik of the Foreign Ministry, the deputy of Turkey's special envoy for Iraq, US and Turkish officials have said.

Iraqi officials could not be reached for information on the issue. Officials will focus on ways of transporting Iraqi natural gas to the European market through Turkey.

The Saturday meeting is being arranged within the context of an expanded platform of Iraq's neighbors.

In November, Istanbul hosted a foreign ministerial level meeting of this platform consisting of Iraq's neighbors, permanent members of the UN Security Council and the G8 group of countries.

At the time the participants agreed to "reaffirm working groups" functions to provide essential input and recommendations for political-level meetings of neighbors to enable them to take concrete decisions and contribute to Iraq's ongoing process, as well as regional stability, and in this context, endorse the recommendations proposed by the three working groups already formed and decide to maintain as long as required these working groups on energy, security and refugees created at the first expanded neighbors conference held in Sharm el-Sheikh.

Iraq Development Program - Istanbul to host energy meeting

Iraq now Open for Business, says former Ambassador

Western companies risk losing out to emerging competitors if they delay investment in Iraq, according to the former Iraq ambassador to the UK.

Dr Salah Al-Shaikhly, who served in London for over three years, says that companies from Eastern Europe, the Middle East and the Far East are now looking to capitalise on the many investment opportunities found within Iraq and that the established order needs to move quickly to avoid being left behind.

The former ambassador, now a leading commentator on Iraq, added that the media has played a major role in slowing investment, pointing to dominant coverage of problem-laded Baghdad as opposed to areas of relative peace and stability, such as the northern Kurdistan region and the south west. Dr Al-Shaikhly commended the Kurdistan Regional Government (KRG) for its bravery in signing oil agreements with international operators and further criticised those "driven by political bias" for discouraging the progress made within the oil sector.

"Critics assume that commercial companies are always trying to take unfair advantage of Iraqis and that we do not have the kind of technicians who are able to assess a commercial package - all of which is quite untrue," Al-Shaikhly added.

He also praised those companies prepared to move quickly in aiding the regeneration of Iraq, through infrastructure projects and investment in areas such as real estate and tourism. Communications was described as a now fourishing sector, with the uptake in mobile phone subscriptions seen as a prime example of the progress made, while also noting that Internet access needed to improve significantly.

Dr Al-Shaikhly sounded a final note of caution by emphasising how businesses coming to Iraq needed to do their homework and should look to partner with established local Iraqi companies, while also being mindful of local rules and traditions.

Such focus on the tremendous investment opportunities available within Iraq comes following the news that Iraqi Minister of Industry Fawzi Hariri is looking to open up Iraq's largest non-oil industries to the global market. This process, described as the first step towards privatisation, will culminate in a large scale summit in Dubai on 19-20 April.

Iraq Development Program - Iraq now open for business, says former ambassador

Analysis: Iraq Oil Debate Review

Iraq's draft oil law is stalled in Parliament, the national government and Kurdistan Regional Government are moving forward with their own deals -- unconstitutional, the each says of the other -- and Iraq's oil production is stalled at just more than 2 million barrels per day.

Perhaps it's a good time to take a step back and recap the debate over Iraq's oil sector and its possibilities. To do so, United Press International has reviewed three recently published documents providing contrasting and varying insight. It's not exhaustive, but a good addition to an important discussion.

The first is "An Opinion Opposing the Existing Draft Iraqi Oil & Gas Law," by Fouad al-Amir, a 70-year-old Iraqi resident with "40 years in the Iraqi Ministry of Oil," according to an ex-Iraqi oil official.

"The importance of Iraq comes from its high oil reserves, and the very good possibility of increasing it," al-Amir wrote. He called it suspect that U.S. officials and Big Oil companies have had their eye on Iraq's oil since before the war, citing Vice President Cheney's energy task force documents, State Department study groups and an oil company-funded think tank calling for a certain type of contract.

Iraq's oil sector has been nationalized since the 1970s, though Saddam Hussein gradually displaced many technocrats with political allies, and oil production decreased.

A proposed oil law that receives heavy backing from Washington is being touted as a way to direct investment to the oil sector, through at least partial denationalization. The fear by opponents, such as al-Amir, is that through production-sharing contracts private companies will be allowed too much access and even control over Iraq's oil. PSCs, which the KRG has signed in frustration with Baghdad, give companies a guaranteed minimum cut of the oil, after recouping their costs, deals looked upon as favorable by Wall Street.

"The existing laws in Iraq allow all kind of oil development, except foreign sharing in Iraqi oil," al-Amir wrote. "There would be a need for (an) oil law later when safe and stable, political and social, matured conditions are prevailing. … It should be reorganized to emphasize central planning and decentralized application of the plans."

The Iraq National Accord, a political party led by former Iraq Prime Minister Iyad Allawi, who is angling to replace current Prime Minister Nouri al-Maliki's governing coalition, has issued a critique of the current process of the oil and gas law, as well as of the national Oil Ministry.

The INA calls for an immediate passage of the Revenue Sharing Law to "create trust on all sides." It's set to be included in a package of laws along with the oil law, the Ministry of Oil law and the Iraqi National Oil Co. law.

INA calls for the INOC to be re-established and given the task of operating currently producing fields "and double their current production," while international and Iraqi private oil companies should bring into production the discovered but not developed fields.

"The government's role should be regulation and oversight, while having capable companies Iraqi and international, investing and working in all areas of Iraq," the paper said.

And it repeated the claims of the KRG in its dispute with the national government. It said Baghdad made "unauthorized changes" to the draft oil law agreed to in February 2007. That law is now stuck in Iraq's Parliament. The KRG decided to move forward on its own, passing a regional oil law and signing dozens of contracts with international oil companies.

The INA said any contracts will increase oil production, thus revenues, and should be considered "positive." It said the Supreme Court of Iraq should determine which side is correct in the dispute, which is based on either sides interpretation of the 2005 Constitution, and criticized national Oil Minister Hussain al-Shahristani for, among other things, calling the KRG deals "illegal," blacklisting companies that signed with the KRG and cutting those firms from Iraq oil purchases.

While the timeline for finding agreement on the oil law is unknown, a new report from the Center for Global Energy Studies says there is much than can, and should, be done to enhance Iraq's hydrocarbons sector in the meantime.

"The fact that the nation is composed of different sects and races has contributed less to the problem than politics, the security vacuum post April 2003, and the very slow process of building up and equipping the national army and security forces. The conditions in Kurdistan have been safe enough for business. In the southern governorates of Basra and Missan, security conditions have been relatively satisfactory for field activity to continue," according to the Executive Summary of the report -- which is offered by the London-based consultancy for more than $26,000.

"Field activity in the short term can, however, go ahead in Anbar, Basra, Missan, South Thi Qar (Nasiriyah), parts of Wasit, in addition to Dohuk, Erbil and part of Sulaimaniya" provinces, the report added. Large-scale exploration is the biggest holdout until the government decides who controls the oil strategy.

Other issues include the flaring of 70 percent of gas produced during oil production, instead of utilizing it in power generation.

Plans in the early 1980s to boost production to 6 million bpd were cut short by successive wars, U.N. sanctions and Saddam's mismanagement of the sector. Security issues keep out contractors and political stalling keeps Iraqis from doing any major projects. Production increases will come after wells, pipelines and other infrastructure are fixed, upgraded and protected, the report said.

And although Iraq's export facilities have a 3.5 million bpd capacity, according to the report, increasing production to the 6 million bpd target -- or higher -- "would definitely require expansion of the production centers, trunk lines, main lines and export facilities."

The northern pipeline from Kirkuk to a Turkish port has only recently been regularly protected from insurgent attacks, and is now flowing at about 350,000 bpd -- less than a quarter of its capacity. Meanwhile exports from the southern ports are heading toward the 1.9 million bpd mark. Other pipelines have been bombed and remain out of operation.

The report predicts average daily production will reach 2.692 million bpd by 2010, with exports at 2.217 million bpd. Such oil sales would continue to bring in the tens of billions of dollars -- especially at today's oil prices -- which fund nearly the entire Iraqi federal budget.

Analysis: Iraq oil debate review - UPI.com

OIL FUTURES: Crude Oil Steady, Geopolitics Support

Crude oil futures hovered near unchanged Monday, supported by geopolitical concerns and no firm indication that the positive upwards momentum that pushed prices to record levels last week has waned.
Continued Turkish military activity in northern Iraq and strong words from Iran over a report on its nuclear activity helped bolster sentiment that crude could mount another assault above $100 a barrel in the coming week.

"An unsettling geopolitical climate is adding to the strong market sentiment, helping keep prices in the vicinity of their all-time highs," said analysts at Barclays Capital. At 1218 GMT, the front-month April Brent contract on London's ICE futures exchange was down 6 cents at $96.95 a barrel.

The front-month April light, sweet, crude contract on the New York Mercantile Exchange was trading 16 cents lower at $98.65 a barrel. The ICE's gasoil contract for March delivery was up $1.50 at $891.50 a metric ton, while Nymex gasoline for March delivery was down 50 points at 252.87 cents a gallon.

While they may have rattled the oil market's nerves, recent geopolitical developments are likely to have less implications for supply flows than they have for crude prices, analysts suggested Monday. Turkish troops continued to pursue Kurdish rebels inside northern Iraq over the weekend, having crossed the border Thursday last week.

"The Turkish incursion, while troubling, will be of limited duration, and does not seem to be putting any production at risk, since Iraqi pipelines going to the Turkish port of Ceyhan do not pass through the conflict area," said Edward Meir, analyst at MF Global in New York.

Meanwhile, Iranian leaders warned over the weekend of "firm reprisals" against any country calling for new sanctions against Tehran, after the International Atomic Energy Agency was unable Friday to confirm Iran's nuclear program was for peaceful means.

The headlines offered some initial support for prices Monday, but the opportunity for the standoff to restrict crude oil flows appears limited some suggested. "Any new round of sanctions will be watered down and useful only as a rhetoric purpose.

The noise on Iran will continue but it remains extremely unlikely that this will translate into any threat to oil supplies," said Olivier Jakob of Petromatrix. Nonetheless, the developments were likely luring further investment into the crude complex, said Nimit Khamar at Sucden Research.

"These geopolitical factors are leading to more speculators investing in oil, as they search for better returns and as a hedge against inflation, while equities and credit or money derivative products are suffering from persistent concerns over the state of the US economy."

While concerns of a U.S. economic slowdown, alongside impending lower second quarter seasonal demand, and rising U.S. inventories might argue for lower crude prices, investment flows into commodities and technical fund trading are seen to have bolstered crude values to record highs in the past week, in turn attracting further inflows. But any failure to confirm the upwards trend could quickly see such support weaken, some suggested, putting downward pressure on prices.

"This week, the bulls need to break to new highs to maintain the upward momentum. If they cannot, we could see heavy long liquidation on disappointment," said Peter Beutel of Cameron Hanover.

Just over a week away before it meets in Vienna, a Persian Gulf Organization of Petroleum Exporting Countries official over the weekend described the dilemma facing the organization ahead of its March 5 meeting to decide on output levels.

"It will be a very hard decision to make. We have been seeing increasingly higher stock levels in the U.S., an economic slowdown is present and we are approaching a lower-demand season; so all the fundamentals fall in favor of a cut," the official said.

But high oil prices "will tamper with OPEC's decision," they added, "I think what we'll see with OPEC is they'll make the right comments, but they'll roll over," said Jim Rintoul of TheOilTrader, suggesting the group was more likely to make informal cuts, rather than a formal announcement which risks spurring prices even higher.

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