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

Iranian power station in Najaf

Iranian Minister of Energy Barweze Fatah on Monday set the cornerstone for establishing a power station north of Najaf city. The design capacity of this gas-oil fuel power station, that will be executed within two years with a total capacity of 125 million Euros, is 320 Megawatt shared between the two holy provinces of Najaf and Karbalaa.

Fatah, who arrived to Najaf yesterday evening accompanied by the Iraqi Minister of Electricity Kareem Waheed said in a press conference, "Iranian President Mahmoud Ahmadinejad was supposed to put this cornerstone, but his very cramped schedule in Baghdad prevented him from doing so," adding "this project renders the good relations between Iraq and Iran."

From his side, Waheed announced in the press conference that (Abadan / Iran) – (Al-Hartha / Iraq) power-line is now in service; in addition to work having started on a new power station in Sadr city in Baghdad, asserting "These projects are funded by Iraq, but will be executed by Iranian companies."

Najaf, capital city of Najaf province, is 180 km southwest of Baghdad – capital city of Iraq.

Iranian power station in Najaf | Iraq Updates

Iraqi National Accord shares KRG's position on revenue sharing and oil contracts

The Iraqi National Accord, a political party lead by Iraq's former prime minister Mr Ayad Allawi, has issued the following position paper on Iraq's oil law.

1) The federal oil law and revenue sharing law

We should not confuse the two laws: the Revenue Sharing Law is a political agreement and will ensure that all Iraq's oil and other revenues go into one account to be shared fairly among all its citizens, according to population and in accordance with the Constitution. In our opinion this should be passed first, to create trust on all sides and ensure fairness.

The Oil Investment Law (Oil & Gas Law) is a matter of how best to manage the Iraqi oil resources to maximize revenues for all its people.

A draft was agreed by all sides in February last year, but unauthorized changes by Ministry officials in Baghdad led to disputes and it has been stuck - Parliament has yet to receive an agreed draft to review and vote on.

The INOC (national oil company) is needed to operate the existing fields and double their current production, which is a major task.

Private companies (both Iraqi and international) should focus on the undeveloped fields to add their production to Iraq's total, under the oversight and regulation of the Government, and on the best competitive terms to give maximum revenues to the people of Iraq (less than 5% profit rate is possible for many of these discovered fields in the South of Iraq).

There must be clear separation of roles in the law, between the Ministry (whether Federal or Regional) as regulator, and the companies (whether INOC or private companies) as the regulated operators, as per best international practice and World Bank Guidelines.

The national oil company (INOC) should have no role in awarding contracts. It must behave as a professional company without special treatment or advantage. Also its Chairman, Board of Directors and Managing Director should not be politicians or Ministry officials, and it should be accountable to the Government through the Ministry of Finance.

2) Oil policy

Iraq's production today is 2 million barrels per day - less than in 1975 when the industry was nationalized. It should be at 10 million barrels per day, but the State has mismanaged the oil sector and misused the oil revenues. We must not repeat the mistakes of the past.

The Constitution calls for maximum investment, and we cannot expect that the Government can do everything itself as it did during the old socialist mentality of the 1970s - the Government's role should be regulation and oversight, while having capable Iraqi and international companies to invest and work in all areas of Iraq.

This will boost production more quickly, providing higher revenues for Iraq and also more and higher-paying jobs for Iraqis.

Many of the countries in the region have private companies investing in their oil sector under proper investment contracts: UAE, Qatar, Egypt, Syria, Algeria and Libya. This has brought great benefit and boosted production and revenues.

The only countries with declining production and failed policies have been Iran and Kuwait, who have both followed state-strangled approaches for political reasons and with disastrous results: Iran insists on the national oil company doing everything and its production has fallen from 6 million barrels in 1979 to less than 4 million today. Kuwait with the same socialist approach has had production fall from 2.8 million barrels to 2.3 million barrels.

Unfortunately, the current officials in the Iraqi Oil Ministry are advocating the same failed state-dominated policies and contract systems of Iran and Kuwait, instead of pro-investment successful policies of other countries in the region and internationally.

We should also give preference to Iraqi private-sector companies and encourage them to invest in all sectors of the energy industry, as is normal in all developed economies. They will also be cheaper and give better terms to the Government than foreign companies, who are scared of the security and political situation and will charge more, and will not be accepted by the Iraqi people due to their history of colonialisation and political interference in the Middle East.

3) KRG contracts

No matter who signs the contracts, the oil revenues will all be shared by all the citizens of Iraq as per the constitution.

Therefore all investment in Iraq today to boost production and revenues is positive.

The authorities of the regional and federal governments on oil and other matters are defined by Iraq's constitution, which is the highest law of the country. Any disputes are legal matters which can ultimately be decided by the Supreme Court.

Public arguments, disputes and accusations between officials at the regional and federal level are wrong and damage Iraq's credibility and reputation. A federal minister cannot decide and announce on his own what is "legal or "illegal" to suit his own ends.

4) Ministry incomp****ce

The Oil Minister is not an oil man but a scientist and maybe a good one.
The Ministry now is open to politicization and morale is bad.

Many top officials have left the Ministry in despair.

No progress to speak of, only empty statements and future plans with ever slipping dates.

The Ministry failed to sign a single contract with anyone - the only 'achievement' is an MOU with Iran to build an oil pipeline to send Iraq's oil to Iranian refineries.

Fuel smuggling and corruption still rife.

Bad management is causing loss for Iraq as an example, Iraq is currently flaring $7 billion a year worth of gas at least, while there is no fuel for power generation.

While pr****ding to want "transparency", the Ministry wants to discuss with the large oil majors (Shell, Total, BP). These companies are very capable but also bureaucratic and conservative, whereas what Iraq really needs is fairer competition, maximizing Iraq's interests with companies willing to work on the ground today (similar to what is happening in Kurdistan).

"Black-listing", punishing and threatening of oil companies investing in Kurdistan is not only illegal, but has harmed Iraq's reputation and access to investment and oil markets: the Iraqi Oil Minister has suspended MOUs signed by his predecessor which were adding value to Iraq for free, and has killed the relationships with important customers like Korea and Austria/ Eastern Europe, because their companies signed contracts with the KRG (even Saddam never stopped exporting oil to the US).

The Ministry of Oil has been calling these companies "small and unimportant", which is nonsense (OMV is the biggest company in Central Europe, Dana Gas is the biggest private energy company in Middle East, and Reliance is the biggest energy company in India).

Iraqi National Accord

Records Made to be Broken: Oil at New Record on Dollar's Fall

The surging price of oil reached another milestone Monday, jumping to an inflation adjusted record high of $103.95.

The weaker dollar that has propelled oil and other commodities prices higher sent light, sweet crude for April delivery past $103.76 a barrel on the New York Mercantile Exchange. That's the level many analysts consider to be the true record high for oil, after its $38 barrel price from 1980 is translated into ?? 2008 dollars.

The price later traded up $1.81 at $103.65, fluctuating with the normal ebb and flow of trading.

Oil's most recent run into record territory has been driven by the greenback's slump against other world currencies. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is falling.

Gold, copper and wheat are among the other commodities that have rallied in recent weeks as the dollar has fallen.

"It's coming down to another commodity price rally," said Phil Flynn, an analyst at Alaron Trading Corp., in Chicago.

The dollar has been weighed down by concerns about the U.S. economy and the Federal Reserve's interest rate-cutting campaign. Lower interest rates tend to weaken the dollar, which fell Monday to a new low of $1.5275 against the euro.

The struggling dollar has prompted a wave of speculative buying by oil investors seeking a safe haven from the ongoing volatility of the stock market. Such speculation can become self-perpetuating, driving prices higher and attracting even more speculators.

Many analysts believe oil prices aren't justified by crude's underlying supply and demand fundamentals. While supply disruptions in Nigeria and the prospect of a supply cutoffs from Iraq and Venezuela helped boost oil prices last year, domestic oil inventories are now rising even as a number of forecasters are cutting their demand growth predictions due to the slowing economy.

Prices were also supported Monday by tensions between Venezuela and Colombia over Colombia's killing of a top rebel leader in Ecuador; reports that Ukraine's president threatened a "gas war" with Moscow after Russia cut gas supplies over a financial dispute; and reports of a U.S. airstrike on a Somali town held by Islamic extremists.

Investors are keeping an eye on OPEC, which meets Wednesday to consider production levels. Most expect the Organization of Petroleum Exporting Countries to hold output steady.

"Unless there's a surprise ... I think it's a non-factor at this time," said Linda Rafield, senior oil analyst at Platts, the energy research arm of McGraw-Hill Cos., of OPEC's impact on trading Monday.

As for where oil goes from here, analyst estimates vary widely, with some predicting an eventual decline to the $65 or $70 range as supplies continue to grow and demand falls, and others seeing oil rising as high as $120 as investment capital continues to flow into oil markets from overseas.

For its part, the Energy Department's Energy Information Administration's latest prediction is that oil will average $86 a barrel in 2008, up 19 percent from 2007, when oil averaged $72 a barrel.

Surging oil prices are boosting prices at the pump. The average price of a gallon of gas stood at $3.165 Monday, according to AAA and the Oil Price Information Service. That's down 0.1 cent overnight, but up nearly 70 cents from a year ago. The Energy Department expects gas prices to peak near $3.40 this spring, well above May's record of $3.227, but some analysts predict prices could rise to nearly $4 a gallon.

Diesel prices, used to transport the vast majority of the nation's goods, are also surging. Diesel prices hit another new record of $3.674 a gallon Monday.

Other energy futures also rallied Monday. In other Nymex trading, April heating oil futures jumped 6.1 cents to $2.8679 a gallon, and April gasoline futures rose 5.22 cents to $2.7221 a gallon. April natural gas futures gained 20.6 cents to $9.572 per 1,000 cubic feet.

In London, Brent crude futures rose $1.75 to $101.85 a barrel on the ICE Futures exchange.

Records Made to be Broken: Oil at New Record on Dollar's Fall | Iraq Updates

PM announces 90% increase to provinces funds

Prime minister announced an increase at funds allocated to provinces through the current budget, reaches to 90% comparing with last years as vice president revealed that a draft of provinces councils' election law has been prepared to be representing to parliament.

Prime minister assures during his opening of the national conference of the strategy of provinces development, that central government will work to bring international expertise to provinces in order to help them in their development plans.

PM announces 90% increase to provinces funds | Iraq Updates

KRG Discusses Oil Contracts

Mr. Nichervan Barzani chaired yesterday, a KRG meeting to discuss the oil contracts that the KRG signed with foreign oil companies. Mr. Omer Fatah, the Deputy of KRG PM also attended the meeting.

The meeting discussed the constitutional aspects of the Oil-Gas Law in Kurdistan Region which coincides with the constitution of Federal Iraq. They also discussed the obstacles that hinder these contracts.

The KRG Minister of Natural Resources explained in detail the bases of signing these contracts by the designated committee in the KNA. He clarified the articles of Kurdistan Region Oil-Gas Law regarding contracting and digging out oil, he also mentioned the names of all oil companies that the KRG Signed contracts with. At the end of the meeting a number of ministers expressed their view concerning this issue.

PUKmedia :: English - KRG Discusses Oil Contracts

US Ambassador to Iraq Visits President Talabani

Today the US Ambassador Ryan Croker in Baghdad visited the Iraqi President, Jalal Talabani, in Baghdad. During the meeting the latest political developments and challenges on the ground in Iraq were discussed.

The need for pushing the political process forward and activating the ways of dealing with pending issues among the political sides were reiterated.

PUKmedia :: English - US Ambassador to Iraq Visits President Talabani

Demand on dollar up in daily auction

Demand on the dollar was up in the session of this week's Iraqi Central Bank auction on Tuesday, registering a total demand of $127.250 million compared to $74.930 million during Monday's session.

"The demand hit $10.250 million in cash, the highest in a month, and $117 million in money transfers outside the country, all covered by the bank at a rate of 1,210 Iraqi dinars per dollar, stable for the 19th session in a row," according to the central bank's daily bulletin received by Aswat al-Iraq – Voices of Iraq – (VOI).

Speaking to VOI, Ali al-Yasseri, a trader, said that the demand saw a rise due to the end of exceptional circumstances pertaining to the Shiite Arbaeen pilgrimage and the landmark visit by Iranian President Mahmoud Ahmadinejad to Iraq on Sunday and Monday.

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

Aswat Aliraq

ISX index rises by 1.8%

Baghdad, Mar 4, (VOI) - The Iraqi Stock Exchange (ISX) index was up by 1.8% on Tuesday compared to the previous session, closing at 37.375 points.
Traded shares in Tuesday's session exceeded 525 million at a total value of 1.038 billion Iraqi dinars (1 U.S. dollar =1,223 Iraqi dinars) by implementing 311 contracts.

Non-Iraqi investors participated with over 118 million shares, totaling more than 238 million Iraqi dinars by implementing 47 contracts in the banking and industrial sectors.

According to the daily analysis of the capital market, the banking sector's index, in which 13 companies traded, closed at 38.52 points; while the industrial sector, in which 12 companies traded, ended at 11.237 points.

The statement concluded that 36 companies were traded in Tuesday's session out of 94 companies registered in Iraq's stock exchange, of which 13 indexes went up, 4 dropped, and 19 maintained their previous price.

Aswat Aliraq

Assault on Christians is assault on all Iraqis – PM

Iraqi Prime Minister Nouri al-Maliki said on Tuesday that any assault on Christians represents assault on all Iraqis.

Maliki "said in a message sent to Cardinal Emmanuel II that Christians in Iraq make a main component in the Iraqi social fabric and an indivisible part of Iraq's civilization that any assault on Christians is practically an assault on all Iraqis," according to a release by the premier's office as received by Aswat al-Iraq – Voices of Iraq – (VOI).

"Maliki expressed grief over the kidnapping of a Chaldean clergyman in Mosul, Archbishop Faraj Rahou, after the sinful assault that claimed the lives of three of his escorts," the release read.

Maliki, according to the statement, told Cardinal Emmanuel that he was "following up with interest the developments of this incident," and that he gave instructions "to the interior ministry and security agencies in Ninewa to work harder to secure the release of the Mosul archbishop as quickly as possible."

Christian and Shiite Muslim clerics had called for releasing the Chaldean Catholic Archbishop Rahou, who was kidnapped in Mosul on Friday.

Paul al-Rayan, the Bishop of Duhuk and al-Imadiya, called on the abductors to release Archbishop Rahou, who was kidnapped during the ceremonies to mourn his three killed guards.

Rayan lauded the kidnapped cleric as a "symbol for religious and social tolerance," and described his church in Mosul as a place "open for both Muslims and Christians." Meanwhile, Shiite cleric Qassem al-Taie condemned in a statement the clergyman abduction and appealed to the government to "tackle this issue and to speed up efforts to secure the release of the kidnapped" clergyman.


Earlier, the spokesman for the Ninewa operations command told VOI that gunmen on Friday kidnapped a Chaldean Catholic archbishop and killed three of his guards in Mosul.

The Chaldean Christians, (also known as Chaldean Assyrians, Chaldo-Assyrians, Assyro-Chaldeans, and sometimes, Keldani in neo-Aramaic), are adherents of the Chaldean Catholic Church and form a subset of the Assyrian people.

When the Chaldean Catholic Church was established, its first patriarch was proclaimed patriarch of "Mosul and Athur" (Nineveh and Assyria) on Feb. 20, 1553 by Pope Julius III.

Many Chaldean Catholics no longer consider themselves to be Assyrians. This is due in part to the Church identity promoted by the Chaldean Catholic Church.

However, many priests in the Chaldean Church, such as Mar Raphael I Bedawid, advocate the Assyrian ethnicity.

They have been settling primarily in Iraq and Turkey, for the most part speaking the Chaldean neo-Aramaic language. A formerly Nestorian denomination, they were reunited with the Roman Catholic Church in 1553.

The Christians of Iraq number about 636,000 in 2005, representing 2% of the population of the country. They numbered over 1 million in 1980. It is one of the oldest Christian communities of the Middle East.

Aswat Aliraq

Baghdad sees unprecedented quiet during Ahmadinejad’s visit

Sunday was perhaps Iraqi capital’s quietest day since the country plunged into violence shortly after the U.S. invasion in 2003.

No car bomb explosions, shelling or kidnapping were reported and analysts attributed the calm to the landmark visit by Iran’s President Mahmoud Ahmadinejad.

Daily bombings, explosions and kidnapping have become part of life in Baghdad.

But the calm that descended on the restive capital on Sunday and Monday night was unprecedented, analysts said.

Many attributed the quiet to government’s decision to cordon off large parts of Baghdad and ban traffic in many districts and over several bridges.

But an Iraqi intelligence source said groups fighting U.S. troops and those responsible for the ongoing violence had put a temporary halt to their activities.

This shows, he said, how influential Iran has become in Iraq and the role it plays in assisting and arming these groups.

Azzaman in English