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

Pumping oil to Ceyhan Turkish port resumed

A naval source said that Iraq resumed pumping oil towards Ceyhan Turkish port after a halt because of a technical problem. He pointed out that the quantity of oil in reservoirs is about 750 thousands barrels. On the other hand, naval sources affirmed that Iraq crude oil exports increased by 140 thousand barrels per day in last January in comparison with December 2007 and thus it reached the highest level since 2003.

On the other hand, sources affirmed today that Royal Dutch Shell Company and Leading Spanish oil company Repsol YPF registered their names in order to compete on contracts to make use of oil reserves in Iraq. In fact submitting bids period was prolonged until the end of the current month. The bids are for projects to sign contracts that aim to develop Iraq oil infrastructure.

Pumping oil to Ceyhan Turkish port resumed | Economics News | Alsumaria Iraqi Satellite TV Network

Iraq Company to participate in International Cairo Fair

The State’s Company for Iraqi exhibitions, a firm related to the Trade Ministry, announced its willingness to participate in International Cairo Fair due between March 18 and 28 2008. The Company proposed on the Industry Ministry to send displays that are to show in the Iraqi wing in International Cairo fair.

Iraq Company to participate in International Cairo Fair | Economics News | Alsumaria Iraqi Satellite TV Network

Iraqi businessmen import loans

High profit tariffs imposed by state-owned and private banks have led Iraqi businessmen to import loans from other countries.

Loans are considered the trump of economic growth in any developed country. Fewer terms to get a loan render the intention of a government to ultimately boost the economy of a polity.

Due to the high profit tariffs, Iraqi businessmen abandoned the bureaucratic, parsimonious and out of fashion banks in Iraq, and they diverted to other funding-houses in different countries, such as the United Arab Emirates (UAE).

Dubai became the best place for Iraqi businessmen to get loans and join investment partnerships. Banks in Dubai offer loans with profit margins of (3-4) % on commercial investments, and (6-8) % on industrial funding.

On the other hand, some Iraqi businessmen are not credible and reliable; they didn't repay their debts to the Iraqi banks. It wasn't a fortuitous opportunity for some Iraqi accidental businessmen that they got loans from the Iraqi government, and then they fled the country. They deliberately planned for this; however, the financial policy in Iraq should have the criterion that distinguishes between an ***** and an egg.

In Iraq, there are around 700 businessmen and 36 thousand private companies that seek to subdue the current process of getting loans and to have suitable mechanisms in that concern that revive the economy of Iraq.

Jaafar Al-Hamdani, head of the League of the Iraqi Commercial Chambers, explained to Aswat al-Iraq – Voices of Iraq – (VOI) "Bureaucracy of the Central Bank of Iraq and other Iraqi banks, in addition to the high profit tariffs that might reach 23%, are the most crucial obstacles that face Iraqi investors nowadays."

Iraqi capitalists have huge funds, but like their counterparts elsewhere, they always look for a safe place for their investments. These days, Iraqi investments in the Stocks Market of Amman (capital of Jordan) reached 3 billion U.S. dollar, according to al-Hamdani.

He added "Iraq needs to corroborate the Investment Law. Iraqis should be able to invest in their own country before encouraging foreign investors to do so."

"We are unable to invest, because profit tariffs on loans, within four years, can approach 100% of the total amount invested in a project, while the cycle of investment might require a longer period to fructify," said al-Hamdani and argued "This is a problem that we recognized in the partnership contracts with foreign investors. Those investors have privileges over Iraqi businessmen."

Head of the League of Iraqi Banks, Fuad Al-Husseini, perceives "Iraqi businessmen are blamed, because they don't know from which Iraqi bank they can get the desired loan, while Iraqi banks are also blamed, because they are unable to identify the trustworthy client that deserves to get a loan."

Iraqi businessmen, as Al-Husseini described them, "are not organized." They don't know how much money they want for their projects, and they have no elaborate plans of how to pay back these debts. Al-Husseini asserted "Most of the Iraqi investors that got loans from Iraqi banks, after 2003, purchased real-estates in neighboring countries, and now, they are unable to repay these debts," and he proceeded "This is a problem, because Iraqi banks are not stratifying Iraqi businessmen as reliable customers anymore."

Al-Rafidain Bank, the first bank in Iraq (state owned), agrees with part of this portrait.

Hanaa Abdul-Baqi, a representative of that bank, told VOI "We know that the loan that we offer is a drop in a sea, but the profit margin is less than other loans of other banks. It's only 6%."

Sister-bank of Al-Rafidain in Iraq, Al-Rasheed Bank (state owned), has a different vision.

Intisar Ali, a representative of Al-Rasheed Bank clarified to VOI, referring to Iraqi businessmen, "They all blame the banks, while they should blame the Central Bank of Iraq, because it issued an order that all loans should be in Iraqi dinar, not U.S. dollars. Iraqi investors didn't like that idea."

Both Al-Rafidain and al-Rasheed Banks operate under the supervision of the Central Bank of Iraq that has a strategy that sacrifices an aim for the sake of another. In order to preserve the stability of the Iraqi dinar with respect to the U.S. dollar in the domestic level, the Central Bank of Iraq adopts a shrinkage in funding, specifically investments.

The profit margin identified by the Central Bank of Iraq is a guide-light for private banks in Iraq regarding their profit tariffs and investments.

Because of these two reasons, in addition to the disturbed security situation, and the difficulties in prosecuting Iraqi businessmen, that live out of Iraq, in case that they decline to repay the loans that they got, private banks in Iraq currently reject to make loans, as they prefer guaranteed investments via the Central Bank of Iraq.

In order to solve the problem of pending loans so as to help Iraqi banks to get their funds back, and in an attempt to re-activate the investing process in Iraq, the League of Iraqi Banks suggested to the Iraqi Ministry of Finance to cover these loans, but this ministry made no serious steps in that direction.

Iraqi businessmen import loans | Iraq Updates

United Nations transfer millions of dollars to Iraq

United Nations transferred $161 million from the "oil-for-food" program, which imposed by the international organization aimed at securing the sale of Iraqi oil for food supplies in the era of the late President Saddam Hussein but it was suspended, to Iraq to be within the budget of the development program, as announced on Monday by the Secretary General of the United Nations, Ban Ki-moon.

The Secretary-General of the United Nations said that the organization will keep on transferring the funds to the Development Fund in Iraq while it continues to terminate the program which was dominated by corruption.

He said that there are 210 credit transfers unpaid since the end of 2007 valued at more than $656 million, urging Iraqi ministries to liquidate their accounts before the end of March next, so that the working groups of the two parties could hold their meetings; however, the organization will reserve $187 million in addition to the balance of $225 million in the accounts of the program, pending resolution of all unsolved issues in this regard.

It is noteworthy that the Independent Inquiry Committee of the United Nations, headed by the American former chairman of the Federal Reserve Paul Volcker, accused in October 27, 2005, over 2200 companies from 40 countries of conspiring with the former Iraqi regime and reaped approximately $1.8 billion illegally from the program.

United Nations transfer millions of dollars to Iraq | Iraq Updates

Gulfsands to develop Khurbet East oil discovery

Gulfsands Petroleum plc ,the oil and gas production, exploration and development company with activities in the U.S.A., Syria and Iraq is pleased to announce that the Company has received approval from the Syrian Ministry of Oil and Mineral Resources and the Syrian Petroleum Company ('SPC') for commercial development of the Khurbet East Field.
Development of the Cretaceous Massive Reservoir ('Massive Reservoir') within the Field will commence immediately.

The Khurbet East Oil Field is within Block 26 in North East Syria. Gulfsands is the operator, on behalf of the Block 26 Contractor group ('Contractor'), and owns a 50% working interest in Block 26 subject to the terms of the Contract for the Exploration and Development and Production of Petroleum for Block 26 (the 'Contract'). A map and details of the Khurbet East Oil Field are available on the Company's website: www.gulfsands.net.

The Company has also received the first Reserves report for the Massive Reservoir in the Khurbet East Field which estimates gross life-of-field Proved and Probable ('2P') Reserves of the Massive Reservoir as 66 million barrels of oil and gross life-of-field Proved, Probable and Possible ('3P') Reserves as 143 million barrels of oil. Gulfsands' share of net attributable reserves is explained below in the section of this announcement headed 'Khurbet East Reserves'.

Reserves estimates for the Butmah Formation and the Kurrachine Dolomite reservoirs discovered in the KHE-1 well will be made once further drilling and appraisal work has been completed.

The Reserves report was prepared by independent consultants, RPS Energy Ltd. ('RPS') of London. The standard used by RPS in preparing its Reserves report was the SPE/WPC/AAPG/SPEE Petroleum Resources Management System (SPE-PRMS).

The Khurbet East Oil Field was discovered in the second quarter of 2007 with the KHE-1 well. Two appraisal wells, KHE-2 and KHE-3 have since been drilled in the Field. The KHE-3 well flowed oil to surface on drill-stem test at an average stabilized rate of 3,420 barrels of oil per day ('bopd').

Initial Development Plan

Gulfsands and its partners intend to commence Field development immediately and establish early production from the shallow Massive Reservoir as soon as an Early Production Facility ('EPF') can be installed at the site, and prior to any further appraisal of the Triassic discoveries within the Khurbet East Field.

The Company expects that an EPF capable of producing some 10,000 bopd can be operational by the fourth quarter of 2008 and will be followed by the Full Field Development ('FFD') facility installation in 2009. Production through the EPF will provide valuable information about reservoir performance that will be integrated into the design of the FFD facilities as well as generate cash flow. Engineering and construction of the EPF is scheduled to commence this quarter with drilling of the first development well expected to commence shortly.

Initial modeling of the Massive Reservoir shows that horizontal wells should provide the most efficient production method in the Field. Utilizing horizontal wells, the Company expects that the FFD facility will be designed to produce some 30,000-40,000 bopd.

As a consequence of the substantial SPC infrastructure already available in close proximity to the Khurbet East Field and the excellent working relationship the Company enjoys with SPC which has extended to invaluable assistance with the development of the EPF, the estimated costs for the EPF, which includes the drilling of three wells and construction of facilities, are not expected to exceed $10m, or a net $5m to Gulfsands. The Company further anticipates that the FFD costs, including all future development wells within the Massive Reservoir, can be met from the substantial cash flows expected to be generated by early production from the Field.

Khurbet East Reserves

Gulfsands commissioned RPS in London to provide an independent Proved, Probable and Possible Reserves report of the Massive Reservoir in the Khurbet East Field as of 31 December 2007. RPS estimated gross life-of-field 2P Reserves of the Massive Reservoir as 66 million barrels of oil with gross life-of-field 3P Reserves totaling 143 million barrels of oil (see note 1 below). These Reserves are subject to the terms of the Contract in which Gulfsands owns a 50% working interest.

The net barrels recoverable and attributable to the Contractor and to Gulfsands (as to its 50% share) have been calculated by reference to the terms of the Contract which call for a royalty to be paid to the Government of the Syrian Arab Republic and an after tax profit share of the oil produced, to be provided to Gulfsands. The Contractor is also entitled to recover its costs through a cost recovery pooling of revenues from production. The fiscal terms of the Contract are referred to in the Company's corporate presentation which is available on the Company's website.

The Contractor's net attributable (after royalties, taxes and government share) 2P Reserves are estimated at 22.5 million barrels of oil. The Contractor's 3P Reserves have been estimated as 44.8 million barrels of oil. Therefore, Gulfsands net attributable (after royalties, taxes and government share) 2P Reserves have been estimated as 11.3 million barrels of oil and net attributable (after royalties, taxes and government share) 3P Reserves have been estimated as 22.4 million barrels of oil.

The RPS Reserves report related only to the Reserves estimates for the Massive Reservoir and a full Reserve report will be carried out on both the Triassic Butmah and Triassic Kurrachine Dolomite Formations upon appraisal of these formations which is expected to commence in the second half of 2008 following first production from the Massive Reservoir. Until the appraisal of the Triassic reservoirs is completed and a development plan prepared, these formations have been classified as containing Contingent Resources. Additionally, the Reserves estimate for the Massive Reservoir will be updated annually or more frequently if appropriate.

Gulfsands' CEO, John Dorrier, said: 'We are very pleased to have received rapid approval for commercial development of the Khurbet East Field from the Syrian Government. With the active cooperation and support of the Oil Ministry and SPC, the Company and its partners will proceed immediately with development activities and seek to achieve early production from the Field by the fourth quarter of 2008. We are also very pleased to confirm a substantial reserves estimate for the Khurbet East Field at this early stage of Field appraisal following the excellent results obtained in the first three wells in the Field.'

Gulfsands to develop Khurbet East oil discovery | Iraq Updates

Update.......

Iraqi Kurdistan says to continue to deal with oil firms
KRG will continue to sign contracts with foreign companies despite threats form Baghdad.

The Kurdistan regional government said on Tuesday it will continue to sign contracts with oil companies despite threats from Baghdad to cut exports due to a dispute over their legality.

Top energy official Ashti Hawrami said the Kurdistan regional government "has not stopped" negotiating with foreign oil companies on exploration deals.

The Kurdistan Regional Government (KRG) has received an expert independent legal opinion that confirms the KRG's constitutional authority to manage the Kurdistan Region's oil and gas resources.

Professor James R. Crawford concluded, "The Kurdistan Region Oil and Gas Law is consistent with the Constitution of Iraq".

The Iraqi federal government said it has halted oil supplies to Austria's OMV AG and South Korea's SK Energy in response to what it says are illegal oil exploration deals.

Iraqi Kurdistan says to continue to deal with oil firms | Iraq Updates

Deal to slash Iraq's debt to Russia to be signed Feb. 11

An agreement to write off most of Iraq's debt to Russia will be signed in Moscow on February 11, the Iraqi Embassy said on Thursday.

The agreement is a follow-up to a decision by the Russian government to clear 80% of Baghdad's Soviet-era debt in line with accords reached through the Paris Club of creditor nations.

"During a visit by Iraqi Foreign Minister Hoshyar Zebari to Russia on February 11, a memorandum on developing trade, economic, scientific and technical cooperation between Russia and Iraq will be signed alongside a bilateral financial agreement to write off the debt in line with Paris Club accords," the embassy said in a news release.

A Russian Finance Ministry source confirmed the plans, saying the total debt was estimated at $13 billion following recalculations.

"The sum was initially lower, but it was later reassessed considering the peculiarities of the original agreements, which include a currency clause," the source said.

The Finance Ministry earlier said the debt was some $10 billion.

The Iraqi government expected the intergovernmental deal to be signed before the end of 2007. Some media said the delay was due to Iraq's cancelation of a 1997 contract with Russian oil company LUKoil on the West Qurna-2 oil field, one of Iraq's richest. But both countries' authorities dismissed the allegations.

Hoshyar Zebari said last September that his country could offer Russian oil and gas companies considerable advantages to operate in Iraq, but ruled out that this could be linked to the debt settlement issue.

Deal to slash Iraq's debt to Russia to be signed Feb. 11 | Iraq Updates

President Talabani emphasizes on importance of promoting Bilateral Ties between Iraq and Russia

Today the Iraqi President, Mr. Jalal Talabani met with the Russian Ambassador to Iraq, Vladimir Chamov and other officials of the Russian Embassy in Bagdad.

President Talabani emphasized on the importance of promoting bilateral ties between Iraq and Russia in all aspects, indicating that Iraq wishes to promote relations between both countries.

On return, the Russian ambassador said that relations between Iraq and Russia will witness another stage after the expected visit by the Iraqi FM, Hoshiyar Zebari to Russia in which the joint committee of both Iraq and Russian governments will sign an important treaty in which Russia will make an agreement with Iraq on narrowing its debt estimated at $10 billion to $13 billion.

PUKmedia :: English - President Talabani emphasizes on importance of promoting Bilateral Ties between Iraq and Russia

MP urges 4% of oil proceeds earmarked to aid displaced Iraqis

An Iraqi legislator called on the government on Friday to allocate 4 percent of the country's oil revenues to help the displaced Iraqis.

"The government has promised to cash 150,000 Iraqi dinars (roughly $125) monthly for Iraqis displaced due to violence in the country for a period of six months but so far this has happened only for one month," Abdul-Khaliq Zankana, the chairman of the Iraqi parliament's committee on displaced people, told Aswat al-Iraq – Voices of Iraq – (VOI).

Zankana referred to the suffering of many displaced Iraqi families in and outside th country as their own homes were seized by armed groups.

"The prime minister has promised to have these homes returned back to their owners and the gunmen who seized those dwellings expelled but his decision has not been effectuated," he said.

According to the figures provided by the UN High Commissioner for Refugees (UNHCR), the number of Iraqi refugees in neighboring countries until late July 2007 reached 1.400 million in Syria, 750,000 in Jordan, 200,000 in the Gulf countries, 100,000 in Egypt, 54,000 in Iran, 40,000 in Lebanon and 10,000 in Turkey.

The UNHCR estimates the number of Iraqis who returned home during October 2007 – the first month in the academic year – at 45,000.

Aswat Aliraq

5 points in constitution still bones of contention – MP

Five points regarding the powers of the president of the republic, provinces, personal status, article 140 and Iraqi nationality are still subject to controversy and resemble a stumbling block for the parliament's constitutional amendments committee, an Iraqi legislator said on Friday.

"When we started discharging our duty at the committee, there were differences over 60 points; some technical, some had to do with drafting and others were subject of disagreement. The committee has resolved most of them and only five points are left," Fouad Maasoum, vice chairman of the Iraqi parliament's constitutional amendments committee, told Aswat al-Iraq – Voices of Iraq – (VOI).

"One of the five points had to do with the powers of the president of the republic and another on the definition of an Iraqi citizen," said Maasoum, a member of parliament from the Kurdistan Coalition (KC), the second largest bloc with 55 out of a total 275 seats.

"Differences have not been settled yet over article 41 on personal status and other things that have to do with religions and doctrines," he said.

Maasoum pointed out that article 140 of the constitution on the city of Kirkuk and disputed areas was yet another bone of contention.

"The parliament has to receive the amendments as one package to approve all of them or reject all of them, not to debate it item by item," he said.

An Iraqi parliament session on Wednesday had witnessed controversy and harsh criticism against the constitutional amendments committee after it asked for having its work extended until the end of the next legislative term, its third extension.

Maasoum said he believed that the parliament would grant the committee the required extension of its activities until next June.

Aswat Aliraq