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

International companies invited to build power stations in the country

The Ministry of Electricity invited specialized international companies to build power stations and participate in rehabilitating and developing the electricity sector in the whole country; the ministry also seeks to involve private investors to implement and construct private power stations.

An official source in the Ministry of Electricity said that the ministry has intensified its efforts to contact international companies specialized in electricity sector through approaching the States of these companies, urging them to work in Iraq, especially since the security situation in the whole country witnessed some improvement allowing them to work and build new power stations. The source pointed out that the broad powers granted to the Ministry by the Cabinet to contract with international companies for building stations will contribute to a greater flexibility to call for work in Iraq, noting that the ministry has prepared a plan not to deal with intermediate companies and internationally unknown. The source said the ministry also invited Iraqi, Arab and international investors to build private power stations through coordination with Chairman of the Investment Authority to approach investors in this regard.

He reported that the ministry will support the investors willing to implement such projects by all means to speed up its completion because this type of projects will boost the production of energy in the whole country. As for the rehabilitation of the electricity network lines which were sabotaged during the past weeks, the source announced that the technical and engineering cadres succeeded in rehabilitating most of these lines and thus increased reliability of the electrical system during these days.

http://www.iraqdirectory.com/DisplayNews.aspx?id=5676

Weak demand for loans attributed to economic recession

Officials at the Iraqi banking sector attributed the weak demand for loans for projects from Iraqi banks to the overall stagnation in economic activity, stressing the importance of the rapid turnover of funds in promoting financial dealings.

Executive Director of the Private Iraqi Banks Association, Abdul Aziz Hassoun, pointed out to the importance making lending procedures stricter, in line with the requirements of Regulation Guidelines issued by the Iraqi Central Bank and in light of the standards of Basel International agreement, without overlooking the need to activate investments through the banking sector.

Hassoun was speaking at a symposium organized by the Iraqi Federation of Chambers of Commerce, attended by officials from 28 Iraqi banks with capitals amounting to $900 million; the symposium tackled the work mechanism of banks and the credits they grant. He explained that many investors directed their money to investment and speculation, which led to a decline in the volume of bank deposits despite the marked increase in the number of banks since 2003. He pointed out that private banks are dealing with deposits which they attract from their clients, and this casts upon themselves the task of maintaining the funds of others.

He noted that the Iraqi Central Bank urges private banks to increase allocations and reserves to cover their losses as a result of bad loans. The Association urges banks to exist in the market in preparation for the increasing demand which will accompany the start of the reconstruction campaign. He said that bank loans are the financial arm that supplies the market with the operational power to the banking sector.

The symposium, which was attended by the two governmental banks of Al-Rasheed and Al-Rafidein, discussed a working paper presented by the Iraqi Federation of Chambers of Commerce to address the impact of raising bank interest on economic activity, in the light of the Central Bank's monetary policy and its repercussions on the economic activity in general.

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Analysis: Pentagon: Iraq oil laws stuck

A Pentagon report says four key oil-related laws in Iraq are "stalled" in political gridlock while gains in oil and power production could be lost.

The quarterly report to Congress, "Measuring Security and Stability in Iraq," released Tuesday, said the law commonly known as the oil law is the furthest along the political process -- it made it to Parliament but is stuck in the Energy Committee.

The law, which would set guidelines for investment in and governance of Iraq's oil sector, is part of a hydrocarbons package that includes laws governing revenue sharing, reconstituting the national oil company and reorganizing the Ministry of Oil. Those three are still being considered by the Shura Council, a judicial review body.

"All four components of the hydrocarbon law are stalled," the report said. The oil law is at the forefront of a fight over the extent of central control over the oil resources and whether Iraq's oil and gas should be open to foreign investment.

The Pentagon report cited disputes between the central government and Iraq's Kurdistan Regional Government over the latter's decision to pass its own oil law and sign dozens of exploration contracts with international oil firms.

"The KRG's unilateral oil deals with foreign companies, which Minister of Oil (Hussain al-) Shahristani declared illegal, reflect a core difference over the appropriate degree of KRG autonomy," the report added. And it cited Shahristani's moves to blacklist such foreign companies from future projects inside Iraq, as well as cutting oil supplies to two companies -- South Korea's SK Energy and Austria's OMV.

The KRG is also frustrated with Baghdad over its lax enforcement of a provision in the 2005 Constitution that would decide the fate of disputed territories in northern Iraq, just outside the KRG's territory. This includes the oil-rich and multiethnic but heavily Kurdish city of Kirkuk.

Abdul-Hadi al-Hasani, parliamentarian and deputy of the Energy Committee, told United Press International last month an ongoing review of Iraq's Constitution, aimed at ironing out some vague wording and varied interpretations, needs to take place first.

"This will make the way to pass the law of oil and gas," he said. "It will be very easy to be passed because we won't have any disagreements. Roadblocks now are not technical, they are political."

The Pentagon report cited progress of that review being stymied by arguments over the disputed territories and the oil law. All sides in this fight say the Constitution is on their side.

Iraq's oil, gas and electricity sectors have been hard hit by the current war, as well as wars of recent decades, mismanagement by Saddam Hussein and U.N. sanctions. This has damaged infrastructure, harmed oil wells and fields and power plants, prevented new technology from coming to Iraq and prevented modern training for Iraqi workers.

Nevertheless, workers brought oil and electricity production back online shortly after the 2003 invasion. Production last year cracked the 2 million barrel per day average and is now regularly above it. Exports have followed suit, a boon to Iraq in times of even higher oil prices.

Estimates of the short- and medium-term needs of the hydrocarbons and electricity sectors are on the higher side of tens of billions of dollars in order to meet the plans of the Iraqi government to serve Iraqi citizens and industry needs, but also export fuel and electricity.

The Defense Department report said without a new oil law Iraq will be unable to meet its 2010 goal of 3.4 million bpd. It also said refineries are running at below 50 percent capacity and require new equipment, security and electricity. In turn, or as a result, Iraq's power plants are unable to produce what Iraqis need, due to insecurity and a lack of fuel. Electricity production reached key peaks in 2007, but "the challenges eventually overwhelmed the system and electrical production fell in January 2008," the report said.

Iraq's Oil and Electricity ministries, however, have been criticized by Iraqi workers and civil society for not investing enough funds into Iraqi-led projects in the oil and power sectors, instead waiting for foreign companies.

The ministries have routinely spent only a fraction of their multibillion-dollar capital budget, though that percentage is increasing year-on-year. Security issues, new investment legislation, corruption or fears of allegations of graft, and a lack of administrative capacity to spend the funds have been blamed for that spending.

U.S. auditors are being asked by Congress to look into how much Iraq is spending on reconstruction.

Analysis: Pentagon: Iraq oil laws stuck - UPI.com

ISX opens with 5-million-share Contract

The Iraqi Stock Exchange (ISX) opened its session on Thursday with a 5-million-share contract at a value of 1.300 Iraqi dinar (1 US dollar = 1,221 Iraqi dinars) per share.

The contract was concluded by a foreign company, which bought the shares from the Babel Bank.

Another contract was concluded by an Iraqi company, which bought 500.000 shares from the Tharrar Agricultural company at a value of 0.650 Iraqi dinar.

The Iraqi Stock Exchange holds three sessions a week: Sunday, Tuesday and Thursday.

Iraq Development Program - ISX opens with 5-million-share contract

Maliki has US-Kurdish green light on Cabinet

Governmental amendments are at hand as several indicators point out to an anticipated rehabilitation of Prime Minister Nuri Al Maliki’s government that will preoccupy all political parties. In this context, Accordance Front declared the failure of attempts to agree with the government over conditions of its Ministers return to Cabinet. In an interview with Al Hayat Newspaper, MP Izz Din Al Dawla clarified that the front has sensed the government’s overlooking to Accordance Front participation after certain parties including Kurdistan Alliance showed unwillingness to reform the government favoring its rehabilitation. He added that the government believes it no longer needs the front’s support, accusing it of seeking to fill in vacant ministerial portfolios regardless of demands put on the table.

Consistently, reports say that Prime Minister Nuri Al Maliki has received a US-Kurdish green light to restore its government by selecting Sunni Ministers outside the Accordance Front. Coalition MP Sami Al Askari revealed to Al Hayat Newspaper that Al Maliki and President Jalal Talabani as well as head of Kurdistan Alliance Bloc agreed to overlook the standpoint of Accordance Front if it refuses to return to government and proceed with filling in vacant portfolios. Al Askari noted that the US backs this orientation, adding that Kurdish stand attached to Islamic Party leader Tarek Al Hashemi has been affected by the US view which says that parties other than the Islamic Party and Accordance Front represent the Arab Sunni street.

As for the Kurdish stand, MP Mohsin Saadun clarified that the front holds in three leanings, the first willing to return to government, the second calling to meet conditions of the front while the third rejects return to government in principal. Saadun noted that the front initiates contradictory views and new demands at every negotiation. He revealed about intensive negotiations to select ministers from outside parliamentarian blocs to be voted on inside the Parliament during the second legislative quarter.

Maliki has US-Kurdish green light on Cabinet | Iraq News | Alsumaria Iraqi Satellite TV Network

Rice: US must have begun Iraq reform earlier

As the fifth anniversary of the former regime topple in Iraq is looming, US President George W Bush announced that removing Saddam Hussein was the right decision to take in favor of freedom and democracy in the Middle East.

In his speech, President Bush considered that his foreign policy in Iraq was right and appropriate mainly regarding the topple of the former regime.

“The decision to remove Saddam Hussein was the right decision early in my presidency, it is the right decision at this point in my presidency and it will forever be the right decision”, Bush said.

However, Bush warned that security gains achieved so far in Iraq are fragile and could be lost if Americans don’t enjoy patience considering that US troop surge in Iraq has contributed to improving the security situation in the country.

For her part, US Secretary of State Condoleeza Rice acknowledged after almost five years on the start of the Iraq war that US-led efforts to rebuild the country should have begun much earlier. When asked whether Bush Administration had changed its mind on the controversial issue of helping other countries with "nation-building”, she replied before a committee in the Congress that we've learned that it is really important to be able to help others build their nations and security but it is still something that we need to do with civilians.

Rice: US must have begun Iraq reform earlier | Iraq News | Alsumaria Iraqi Satellite TV Network

UK asks Iraqis to return to safe enough Iraq

The United Kingdom considers Iraq safe enough for displaced living in its territories to return home including asylum seekers whose applications were rejected, The Guardian British Newspaper reported. It cited a document by British Interior Secretary as saying that the British Government will ask 1400 Iraqi asylum seekers to return home within three weeks, or else they would lose state support.

British Interior Secretary spokesman said that the government prefers concerned Iraqis to go back voluntarily, however, they might be forced to return if it is deemed necessary.

UK asks Iraqis to return to safe enough Iraq | Iraq News | Alsumaria Iraqi Satellite TV Network

Here we go again......

Debate ongoing over Kurdistan Oil Contracts

Debate is ongoing between Kurdistan regional government and Baghdad’s central government over the legitimacy of contracts signed between Kurdistan regional government and foreign companies, after a statement by Speaker Mahmoud Al Mashhadani from Arbil saying signed contracts are legal. To view the video report of this article, click on play movie.

Debate ongoing over Kurdistan oil contracts | Iraq News | Alsumaria Iraqi Satellite TV Network

Ministerial council approves study proposed by Baghdad Secretariat

The ministerial council approved the study proposed by Baghdad Secretariat to invest lands of Al Rashid Camp in establishing residential complexes that comprise trade compounds, medical and sports cities in addition to entertainment areas and green spaces. An informed source from Baghdad Secretariat said the latter proposed a study that includes four proposals to invest and benefit from Al Rashid Camp lands and use them for economic and development projects.

Ministerial council approves study proposed by Baghdad Secretariat | Economics News | Alsumaria Iraqi Satellite TV Network

Prices of US oil contracts are stable at 109 $ a barrel

Prices of US oil contracts are stable at 109 $ a barrel close to the record high reached earlier, while oil gas price has increased in the European market and the dollar has dropped.

On the other hand, the International Energy Agency will convene on March 17 a crisis meeting with experts of oil sector to discuss the rise of prices that have been up to records high since 10 days.

Prices of US oil contracts are stable at 109 $ a barrel | Economics News | Alsumaria Iraqi Satellite TV Network