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

Oil and Gas Law expected to solve Oil contracts polemic

As controversy is ongoing regarding oil contracts and the legitimacy thereof. Some MPs deem that this problem is solved since there are agreements between the Central government and Kurdistan region government. While other MPs believe that the ratification of Oil and Gas law would contribute to solving the problem concerning these contracts.

Oil and Gas Law expected to solve Oil contracts polemic | Economics News | Alsumaria Iraqi Satellite TV Network

Godvig Capital to double Iraq-listed stock holdings

Alternative investment firm Godvig Capital plans to double its Iraqi-listed equity holdings in 2008, betting on rising foreign investment and oil-industry restoration despite the continuing violence.

The company, which manages assets of about $100 million (50 million pounds), told Reuters it would raise the share of Baghdad-listed stocks in its Iraq-focussed Babylon Fund to 80 percent, up from 40 percent.

"Even if all-out war breaks out, it will be for the short term. (And) whoever gets to decide the future of the country is not interested in nationalising the private sector," Godvig founder and fund manager Bjorn Englund said in a phone interview from the southern Swedish city of Lund.

"There is not one militia that has a nationalist or a socialist agenda," he said, adding that the chances of a full U.S. troop withdrawal were low.

The fund, which Englund says is the only open-ended one focused on Iraq, has grown to about $20 million in assets under management from $6.7 million since its launch in 2006.

About a quarter of its assets are in Iraqi Treasury bills and bonds and 20 percent is in companies with the bulk of their business in Iraq but listed elsewhere in Middle East, including Kuwait-listed Iraq Holding Co. KSCC.

The fund is also invested in Western oil-exploration firms focused on Iraq, which has the world's third biggest proven oil reserves, such as Canadian-listed Westernzagros Resources and London-listed Petrel Resources.

"We've seen broad-based growth from oil-related companies and Iraqi stocks as well as returns from high-yield bonds. We've also seen slight appreciation in (Iraqi) dinar," Englund said.

The fund's net asset value stood at nearly $1,200 at the end of March, up from around $1,000 just after its inception.

MORE LIQUIDITY

Englund was upbeat on prospects for Iraqi banks, which comprise about 75 percent of stock market capitalisation, saying they were poised to benefit from the country's reconstruction after the 2003 U.S. invasion.

"The banks have the best earnings visbility. Otherwise, few companies give out numbers so I look at the management and ownership structure and use secondary information to build a picture of earnings, " he said.

As the oil sector which accounts for some 60 percent of gross domestic product remains largely in state hands, a more diverse range of listed firms would help strengthen the market, said Englund, noting that Iraq's three mobile phone operators were expected to list in the coming months.

Liquidity on the Iraqi bourse, which trades about two hours a day three days a week, remains poor with market capitalisation of $1.9 billion.

Neighbouring Iran, which labours under U.S. sanctions, has a market capitalisation of about $52 billion.

But Iraqi market's liquidity was gradually growing, Englund said, helped by the entry of regional investors such as Arab Bank MENA Fund LP65038295 run by the Al Arabi Investment Group.

Stock exchange traders, who now scribble orders on a white board, are also set to move to electronic trading later this year, which would give market volumes a further boost.

Influential emerging markets fund manager Mark Mobius said this month that he was in talks for private equity investments in Iraq but said he would stay clear of the stock market because of poor liquidity.

"We see high net worth individuals and institutions from Jordan, Lebanon and Dubai coming in. But we're also seeing early interest from Western institutions," said Englund, who visits Iraq at least once every quarter.

The fund's investors are mainly European with a minimum investment of $100,000 although Godvig is in talks with larger institutional investors.

"There is big diference between the perception and the reality of Iraqi life. We think that perception will get better as the reality is better known. The Iraqis are waiting for Westerners to get in."

Godvig Capital to double Iraq-listed stock holdings | News | Funds | Reuters

Contractors of new investment budget contracts are exempted of construction tax

Ministry of Planning and Development Cooperation announced on Sunday exempting contractors who are hired to implement new contracts for projects included in the investment budget from the reconstruction tax of Iraq for 2008.

A statement by the ministry said that the Government Contracts Department confirmed the exemption of all the contractors who are hired to implement new contracts for projects included in the investment budget or development program for regions and provinces in 2008 only from the reconstruction of Iraq tax and the fee according to instructions issued by the Minister of Finance.

A source in the ministry explained that this exemption was based on Article (21) of the investment budget law, to facilitate the work of contractors and expedite the implementation of projects enlisted in the investment budget or in the development program of regions and provinces through the involvement of a greater number of contractors to accomplish the reconstruction of Iraq as soon as possible and promote the Iraqi economy.

Contractors of new investment budget contracts are exempted of construction tax | Iraq Updates

Nine French companies participate in Rebuild Iraq Exhibition in Amman

Nine important French companies are participating at the 5th edition of Rebuild Iraq Exhibition taking place in Amman from May 5 to 8.

The companies will display their products and know-how in the fields of construction, infrastructure, materials and equipments, energy, environment and water treatment, electricity, telecommunications and satellite technologies, health and medical equipments, agriculture and irrigation.

According to Violette Ghébali, UBIFRANCE project manager, the “Rebuild Iraq project is an excellent opportunity for French companies to present their expertise and skills, to develop a distribution network and to meet up with new clients interested in their field of specialization”.

Iraq is a key objective to investment prospects due to its economic growth of 6% in 2007 and $35 to 40bn of imports which makes it the fourth market after Saudi Arabia, Iran and the United Arab Emirates.

The French companies participating at the exhibition are:

Adler: Specialized in the engineering for turnkey plants and lines for building materials as concrete, gypsum, insulation, windows and doors.

Airwell France SAS: One of the world’s leading manufacturers and distributors of room and central air conditioning systems.

Cahors International: Offers comprehensive and innovative solutions for the distribution of energy and fluids, as well as service-oriented solutions for customers *********.

Degremont: Considered to be a world leader in water treatment.
Eutelsat: World leader dealing with telecommunications via satellite including broadcast and broadband services, telecoms as well as mobile and maritime communications.

Matiere S.A.S: Experts in road bridges, culverts and underpasses structures for both traffic and hydraulic applications.

Marais: French group specialized in civil works equipments.

Somaro: Specialized in safety products, road markings, lighting and traffic control equipment and safety fit-out.

Tecofi: Industrial valves and fittings. Fields of activities: water, sewage water, oil & gas, food, chemicals and industrial fields.

Nine French companies participate in Rebuild Iraq Exhibition in Amman | Iraq Updates

Iraq in Advanced Talks on Sixth Oil Deal: Sources

Iraq is in advanced talks for an oil service contract with a consortium of Vitol, Anadarko and Dome to boost output by 100,000 barrels per day at its Luhais oilfield, industry sources said on Wednesday.

The contract is the sixth in a batch of short-term oil service contracts worth around $500 million each that Iraq wants to sign with international oil companies in June.

Baghdad aims to increase oil output by around 600,000 bpd with the deals, boosting by over a quarter Iraq's current output of around 2.25 million bpd.

"A final round of meetings is expected to be held with the consortium, and all of the companies negotiating these contracts, at the end of this month," said an industry source. "All companies involved are finalizing paperwork to initial the agreements in early June."

The consortium of European oil trader Vitol, U.S. independent oil and gas company Anadarko and Dubai-based Dome has already taken part in two rounds of talks with Iraqi officials in Jordan's capital of Amman for the contract. The Luhais oilfield is in southern Iraq and pumps around 50,000 bpd.

Iraqi Oil Minister Hussain al-Shahristani said last month he wanted the oil service deals the country was negotiating with international oil giants to be signed in June, or Baghdad may drop the deals.

BP, Royal Dutch Shell and Exxon Mobil were negotiating a deal each. Shell is negotiating another deal with BHP Billiton, while Chevron and Total together are working on a fifth deal.

The service contracts form part of stopgap measures to boost oil production in the absence of a vital oil law. Legislation to set the terms and extent of foreign investment in the country has been stalled in parliament for more than a year.

Iraq in Advanced Talks on Sixth Oil Deal: Sources | Iraq Updates

Kirkuk’s Reconstruction Conference Starts Today

Under the supervision of Iraqi Deputy PM Dr. Barham Salih and in the presence of a number of ministers, Iraqi government officials, MPs and Kirkuk sects’ representatives of all factions, Kirkuk’s 2nd reconstruction conference started its works today.

The conference aims at finding the best ways to improve services and carrying out constructional works in the province.

PUKmedia :: English - Home

VP al-Hashimi Meets Ambassador Crocker

Iraq VP Tariq al-Hashimi met yesterday at his office in Baghdad the American Ambassador Ryan Crocker.

They discussed the results of al-Hashimi’s visit to Turkey, bilateral relations and the situation at the joint borders, returning the Accordance Front to the government, security situation in Iraq’s provinces, neighboring countries interference and the Iraqi-American agreement dossier.

Ambassador Crocker reiterated his country’s invitation to VP al-Hashimi to visit U.S., where they agreed on fixing a suitable timetable for the visit.

PUKmedia :: English - Home

$8 Billion worth of investments in Kurdistan

The Kurdistan Regional Government (KRG) has licensed foreign investment projects worth $8 billion under the two-year-old investment law, the chairman of the region's investment authority said.

"The licenses were given under Investment Law No. 4 of the year 2006, which came into effect on July 30 of the same year. The law provides facilities and tax exemptions for investors and encourages them to bring in skilled labor force," Hirsh Muharram told Aswat al-Iraq - Voices of Iraq - (VOI).

"Nearly 15 percent of the investment licenses were granted to foreign companies, and 25 percent to joint investments and 60 percent to local companies," Muharram explained.

European contribution to reconstruction efforts far outweighed that of the U.S. and British forces, the official noted, adding that the regional investment authority is responsible for all investment projects in Kurdistan, except for oil investments, which is the direct responsibility of the supreme oil authority.

Kurdistan's Investment Authority, which was established under the Investment Law, has branches in all provinces and is directly accountable to the prime minister, Muharram noted.

Aswat Aliraq

President Talabani asserts importance of boosting ties with Turkey

Iraq’s President Jalal Talabani received on Thursday a delegation of Kurdish lawmakers in the Turkish Parliament, a presidential statement said.

“The president received at his residence in the city of Sulaimaniya a high-profile delegation of Kurdish lawmakers in the Turkish Parliament led by the head of the Democratic Society Party Ahmed Turk,” read the statement received by Aswat al-Iraq – Voices of Iraq – (VOI).

“The meeting dwelt on the latest developments in the two countries and the importance to boost bilateral relations as well as supporting democracy and human rights,” it added.

The meeting was attended by senior Iraqi Kurdish officials.

Aswat Aliraq

Deputy PM calls on government to enact reconstruction campaign allocations

Iraqi Prime Minister on Wednesday called on the Parliament to enact a law providing the required allocations to implement the national campaign for reconstruction.

Speaking at the parliament’s session dedicated to “finding the ways to activate reconstruction project in uncovential means,” Barham Saleh said “the Parliament must provide the required allocations to implement the project of the national campaign for reconstruction in a law and to be endorsed in the shortest time.”

“The Parliament must find the mechanism to maintain the relation between the parliament and the campaign supervising committee,” he added.

The violence-devastated Iraq has earned more revenue from rises in oil prices in global markets.

Making use of a downtrend in violence across Iraqi cities, Iraqi government looks for ways to invest the rising earnings in reconstructing the destroyed and decayed infrastructures of the country.

Aswat Aliraq