Thread: Archive Latest News - Think Tank - 15/04/08 - 26/08/08

Sharp drop in demand for dollar at daily Auction

Demand for the dollar was sharply down in the Iraqi Central Bank's auction on Sunday, registering at $ 38.130 million compared to $77.270 million on Thursday.

"The demand hit $8.920 million in cash and $29.210 million in money transfers outside the country, all covered by the bank at an exchange rate of 1,202 Iraqi dinars per dollar, unchanged for the fifth session in a row,” according to the central bank's daily bulletin which was received by Aswat al-Iraq- Voices of Iraq- (VOI).

The 11 banks that participated in the auction offered to sell 350,000 dollars, which the bank bought all at a rate of 1,200 dinars per dollar.
Speaking to VOI, Ali al-Yasseri, a trader, attributed the lower demand for the dollar to the small number of the banks that participated in today’s session and to the small size of the remittances. Al-Yasseri expected a hike in the demand for the dollar at tomorrow’s auction with the possibility that the Central Bank will lower the dollar exchange rate against the dinar at a rate of one tick.

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

Aswat Aliraq

Kurdistan investment forum held in Duhuk

A forum tackling investment activities and the economic capability of Kurdistan opened in Duhuk, and will be held over two days.
“The forum aimed at enlarging the scope of investment and to study its success factors,” Khalil Ghazi, the Dean of Administration and Management Faculty, told Aswat al-Iraq - Voices of Iraq - (VOI).

“The forum will consider recommendations tackling the mechanisms of investment and modernizing the development sector in Kurdistan and its infrastructures,” he added.

The dean pointed out his faculty coordinated the forum with the directorate of investment in Kurdistan and Kurdistan's Center for Economic Development. It was attended by representatives from Duhuk Chambe of Commerce and U.S. representatives.

Duhuk Faculty of Administration and Management was established in 1995 with four financial and business departments.

Aswat Aliraq

Maliki, VP tackle security, political developments

Iraqi Prime Minister Nouri al-Maliki met with Vice President Tareq al-Hashimi on Sunday to discuss the country's political process and patching up the government based on a "national political agenda," according to a presidential statement.

"The meeting dealt with recent developments in the security and political spheres in Iraq. The prime minister and the vice president also to resume the meetings over the next few days to finalize talks about the return of the (Sunni) Iraqi Accordance Front ministers to the government," read the statement received by Aswat al-Iraq – Voices of Iraq – (VOI).

The meeting coincides with negotiations going on between the government and the IAF to convince the latter to re-join the government, which it quit in August 2007, followed by another withdrawal by former Iraqi premier Iyad Allawi's Iraqi National List (INL), which has five ministerial portfolios.

The IAF is the third largest bloc in the Iraqi parliament with 44 out of a total 275 seats, after the Shiite Unified Iraqi Coalition (UIC), which has 83 seats, and the Kurdistan Coalition (KC), which has 55 seats.

The IAF represents the Sunni Muslims in the Shiite-led government and had five cabinet portfolios.

Aswat Aliraq

Sabic may spend $5bn in Iraq as competition for gas heats up

DUBAI: Saudi Basic Industries Corp, the world’s largest petrochemical firm by market value, may invest $5bn in war-torn Iraq as competition for energy at home forces it to search for cheap gas in riskier Mideast locations.

The Riyadh-based company, known as Sabic, is in talks with Iraq’s government “to build a new factory to produce polyethylene and polyvinyl chloride,” Faris Taha Abdul Hameed, Iraq’s chemical industry director, told Zawya Dow Jones on the sidelines of a conference in Dubai this week.

Sabic joins companies like Royal Dutch Shell, Dow Chemical Co and Total as the latest to flirt with a major investment in Iraq amid ongoing political uncertainty and violence in the country.

For their part Sabic officials are quick to pour cold water on the Iraq project talks.

“This has been twisted politically,” chief financial officer Mutlaq al-Morished, told Zawya Dow Jones in a phone interview on Thursday. Al-Morished declined to comment further on the status of talks.

But war-torn Iraq is not the only high-risk market that Sabic is turning to in search for ethane-rich gas, the vital ingredient for making petrochemicals that are eventually processed into plastics.

The company plans to invest in Algeria, holder of the world’s sixth-largest gas reserves. Last year it lost out to French oil-giant Total in a bid for a $3bn petrochemical complex at Arzew.

Rising gas consumption in Saudi Arabia is putting Sabic increasingly under pressure to invest outside the kingdom, which is home to the world’s fourth-largest natural gas stocks.

But as it ventures further afield in search of gas Sabic risks losing the home field advantage that has propelled it to the top of the class of international petrochemical makers.

Between 2005 and 2030, Saudi gas consumption is forecast to rise at least threefold to 14.5bn cu ft a day, partly driven by rising petrochemical requirements.

Further pressure on gas supplies comes from other industrial projects such as aluminum smelters and annual population growth rates above 2.2%, which makes it harder for Sabic to secure resources for expansion.

“Gas demand in the Gulf is increasing for petrochemical and industrial uses, especially as the regional economy booms,” said Roger Green, a principle at Nexant Chem Systems in London. “Industrial growth puts pressure on energy supplies which increases gas demand.”

Iraq plans to lure companies like Sabic with access to each vast and cheap natural resources in return for investment as it struggles to rebuild its shattered economy.

Abdul Hameed said the Sabic plant, which may cost up to $5bn, could have capacity to produce 1mn tons a year of petrochemicals.

“The factory will take up to five years to build and Sabic is still taking its decision,” he added.

Last year, Iraq’s industry and minerals minister Fawzi Al Hariri said the government was seeking investors for a possible $1bn upgrade of a petrochemical plant in Basra and the possible construction of a new $2bn facility in the country’s northern or central regions.

Talks were held with Shell and Dow Chemical, Al Hariri said at the time.

Other plans to rebuild Iraq’s dilapidated hydrocarbons sector involve rehabilitation of an existing phosphate plant by a consortium of companies from the UAE, India, Singapore and Syria in the west of the country, Abdul Hameed said.

“As a major petrochemical company, Sabic would look at any opportunity in the Middle East and elsewhere. Every company is looking for attractive feedstock and Iraq has significant hydrocarbon reserves. Companies may be positioning themselves for quieter times ahead in Iraq,” said Nexant’s Green. – Zawya Dow Jones

Gulf Times – Qatar’s top-selling English daily newspaper - Finance & Business

Progress in Finland-Based Iraq Reconciliation Talks

The organisers of the second in a series of reconciliation talks among Iraq's different ethnic groups report slow but steady progress. All parties, including Sunni, Shiia and Kurds have agreed to continue their peace-building efforts - this time in the heart of the conflict, Baghdad.

The five-year long Iraq war has heightened tensions among the different ethnic groups - the conflict has also made itself felt in ongoing unrest across the country.

The discussions in Finland aim to smooth over the rifts exposed by the war. The face-to-face talks have been piloted by the Crisis Management Initiative of former Finnish President Martti Ahtisaari. Ahtisaari also acted as the UN's Special Envoy for Kosovo and played a role in other peace building efforts in areas such as Aceh and Northern Ireland.

Last weekend's seminar was the second in a series of closed-door events, which gathered representatives of the Sunni and Shiite Musilim groups in addition to Kurds, who were not represented in the pervious meeting.

The groups are trying to resolve their political differences through discussion, and are hoping to draw on the lessons learned in reconciliation processes in Northern Ireland and South Africa to create a framework for human rights and justice in Iraq.

There've been no startling breakthroughs, but organisers say there has been some progress - all sides have agreed to continue the peacebuilding discussions on the basis of commonly agreed principles. Their next encounter will take place in three months time in Baghdad.

YLE

YLE News

Iraq may have 350 bln barrels of oil - Deputy PM

Iraq may have oil reserves of 350 billion barrels, Deputy Prime Minister Barham Salih said on Monday, a massive figure that is triple the country's proven reserves and which even exceeds the oil in Saudi Arabia.

Salih said he had seen estimates from "reputable sources, reputable companies" that put Iraq's reserves at up to 350 billion barrels. He declined to name the sources.

Iraq's current proven reserves are 115 billion barrels; already the world's third largest. The country produces around 2.3 million barrels of oil per day (bpd).

"The real tragedy of this country is that Iraq is home to possibly the world's largest oil reserves. Some estimates put it at 350 billion barrels," Salih, a key player in attempts to finalise a draft national oil law, told Reuters in an interview.

"Extraction costs are very minimal compared to anywhere else in the world and we are still at 2 million barrels a day of exports. It's ridiculous."

Saudi Arabia has about 264 billion barrels of oil, according to statistics compiled by BP. Iran is next with around 137 billion barrels then Iraq with 115 billion.

Iraq, whose primary source of revenue comes from oil, needs huge amounts of investment to boost oil output but also to rebuild the country after years of sanctions and war.

Delays in approving the oil law to govern the industry have held back investment -- the current draft being negotiated for example was first agreed by the cabinet in February 2007.

Salih said it was hard to say when the draft might get to parliament, but added there was fresh momentum following recent talks, including discussions with the government in the largely autonomous region of Kurdistan in northern Iraq.

"What I have witnessed over the past three weeks is renewed commitment from the senior leadership to bring this issue to closure, but I do not underestimate the challenges," he said.

Salih said talks with officials from the Kurdistan Regional Government (KRG) including Nechirvan Barzani, its prime minister, had been positive.

Some Iraqi officials say contracts signed by the KRG with foreign firms are to blame for holding up the draft oil law. Iraq's oil ministry says the deals are illegal.

But Salih said issues of contracting could be resolved.

He said the KRG had committed to a "transparent" contract process and given its commitment that all revenue from contracts signed in Kurdistan would be retained by the central treasury.

"SUPER MONOPOLY"

Asked if the KRG was talking only about future contracts, Salih said it included existing deals with foreign companies.

Salih said he believed the biggest obstacle to the draft oil law was deciding the role of the state in the management of the oil sector including who had ultimate control of reserves

He said there were some efforts to make a restructured Iraqi National Oil Company the "super monopoly" of the industry.

"The real dilemma is whether we want to go back to a situation where a state monopoly will manage the oil sector, or rather mismanage it, as it has over the decades," he said.

"We do not want to cut down on bureaucracy (the oil ministry) to create a super bureaucracy elsewhere. This is a fundamental problem we have. It's nothing to do with the KRG."

Oil majors BP, Chevron, Exxon Mobil, Royal Dutch Shell and Total have been positioning themselves for years in the hope of eventually gaining access to Iraq's abundant reserves.

Iraq is negotiating deals with those companies for two-year oil service contracts at some of the biggest fields that aim to boost the country's oil output by 500,000 bpd.

Salih expressed frustration Iraq was producing so little oil compared to its reserves.

"We are still talking about technical service agreements with majors at a time when oil prices are at record levels and the world needs (our oil). To me that is obscene," he said.

"We need to recognise that even existing plans of say 5-6 years from now to reach 6 million barrels a day are totally outdated. These plans were from 1989 at a time when estimates of Iraqi reserves were like 110 or 120 billion barrels."
Source: Reuters

PUKmedia :: English - Home

KRG Welcomes Talks with Turkey

The Kurdistan Regional Government (KRG) welcomed the Turkish Foreign Minister’s remarks today that Turkey is ready to hold talks.

Foreign Minister Ali Babacan made the remarks at a press conference today in Ankara. The KRG, which has called for dialogue for some time, has reacted positively to Turkey’s decision. The National Security Council (MKC) has also expressed its willingness recently to have talks with the Kurdistan Region's administration.

Mr Falah Mustafa Bakir, the KRG's Head of Foreign Relations, said, "We are pleased to hear that Turkey wishes for cooperation and dialogue. We have pledged the same in return. What we have in common with Turkey is much greater than our differences. We want to use dialogue to resolve concerns regarding the stability of the border, and we do not believe there is a military solution in the long term to this problem. Such talks in the near future will help to develop relations between the KRG as part of Iraq, and Turkey as an important neighbour. We will do this in the spirit of friendship."

The KRG believes that air strikes on its border with Turkey cannot solve the PKK problem, and has been ready to help find a peaceful solution. Turkey is the Kurdistan Region’s biggest economic partner, and the KRG believes that talks will provide an opportunity to discuss many areas of mutual interest that will benefit both sides.

PUKmedia :: English - Home

Soars in demand for dollar

Demand for the dollar was soared in the Iraqi Central Bank's auction on Monday, registering at $132.700 million compared to $38.130 million on Sunday.

"The demand hit $5.250 million in cash and $127.450 million in money transfers outside the country, all covered by the bank at an exchange rate of 1,202 Iraqi dinars per dollar, the same for the fifth consecutive session," according to the central bank's daily bulletin which was received by Aswat al-Iraq - Voices of Iraq - (VOI).

The 14 banks that participated in the auction offered to sell 17.500 million dollars, which the bank bought all at a rate of 1200 dinars per dollar.

Speaking to VOI, Ali al-Yasseri, a trader, said that banks expected the change in exchange rate in today’s session which led to the increase in remittances and bids in the session, raising the overall demand for the dollar.

Aswat Aliraq

Demand for dollar down in daily auction

Demand for the dollar was down in the Iraqi Central Bank's auction on Tuesday, registering at $81.895 million compared to $132.700 million on Monday.

"The demand hit $4.545 million in cash and $77.350 million in money transfers outside the country, all covered by the bank at a stable rate of 1,202 Iraqi dinars per dollar, unchanged for the seventh session running," according to the central bank's daily bulletin received by Aswat al-Iraq - Voices of Iraq - (VOI).

The 15 banks that participated in the auction offered to sell 6.250 million dollars, which the bank bought at a rate of 1200 dinars per dollar.

Speaking to VOI, Ali al-Yasseri, a trader, said that the remittances kept the overall demand at a relative average during today’s session.

The Iraqi Central Bank runs a daily auction on Sunday through Thursday.

Aswat Aliraq

ISX increases by 0.5 percent

Iraq's Stock Exchange (ISX) index increased by 0.5 percent to settle at 37.3 points at the closing of Tuesday's session.

Shares of 39 companies were traded during today's session, where more than 454 million shares were transacted at a value of over 717 million dinars (1 U.S. $ equals 1,222 Iraqi dinars) achieved through the implementation of 220 contracts.

The banking sector achieved the highest circulation in terms of the number of shares traded, as well as in terms of trading volume.

Non-Iraqi investors participated in today's session through the implementation of 21 contracts in the banking and industrial sectors. The traded shares reached 25 millions, valued at 41 million dinars.

The statement concluded that 39 companies were traded in Tuesday's session out of 94 companies registered in Iraq's stock exchange, of which 8 indexes went up, 7 dropped, and 24 maintained their previous price.

Aswat Aliraq