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

Not quite a done deal - but almost there

Analysis: Iraq oil law a deal -- spokesman

Iraq's central and Kurdish region governments have reached a deal on an oil law, including a method for weighing the validity of the oil deals the Kurds have signed with foreign firms, the top government spokesman told United Press International.

Ali al-Dabbagh said an agreement has also been made on the classification and funding for the Kurds' security forces, the Peshmerga, which will become a battalion within the Iraqi Ministry of Defense. And he said the sides agreed to allow the U.N. process for determining the future of oil-rich Kirkuk and other disputed territories to play out.

"There is an understanding between the central government and the regional government for the oil law," Dabbagh said in a telephone interview from Brussels, where Iraqi Prime Minister Nouri al-Maliki is meeting with EU officials. Maliki's governing coalition has seen defections and opposition growing over the past year. Dabbagh said political parties have recently pledged support, and meetings in Baghdad with top Kurdistan Regional Government officials have led to "a new atmosphere."

The oil law and oil deals have been a source of contention in Iraq's political and civil society. Opponents of the KRG deals are led by National Oil Minister Hussain al-Shahristani. The oil law has seen many versions and incarnations, each with steadfast supporters and opponents.

This has led to fits and starts in moving forward a law establishing the post-Saddam Hussein rules for governance of Iraq's oil and gas sector -- including four versions stalled in the Parliament's Energy Committee -- that will decide the flashpoint issues of central or decentralized control over the oil strategy and to what extent foreign oil companies will be allowed a role in the nationalized oil sector.

Dabbagh said the agreement is on the version of the oil law approved by key KRG and central government leaders in February 2007. But the deal was foiled by an Oil Ministry decision to classify Iraq's discovered oil fields and exploration blocks, detailing authority for development between the central government and producing provinces and regions in a manner with which the Kurds disagreed.

It was further altered by the Shoura Council, a legislative review body, which led to increased tension and multiple versions.

Meanwhile the Kurds made unilateral moves in the prospective oil sector in their three-province region. The KRG is further in its political, economic and security evolution than the rest of Iraq because of the no-fly zone following the 1991 Gulf War. Since 2004 the KRG has signed more than 20 deals to explore for and develop oil and gas. Most were signed last year, as was a regional oil law, prompting Shahristani to increase his critique to outright condemnation. He called the deals illegal and has so far made good on a threat to blacklist any firms that sign Kurd oil deals from gaining contracts for the rest of Iraq.

None of the companies made the short list, announced Monday, of those allowed to submit bids in an upcoming round of oil and gas field tenders.

The February 2007 oil law draft establishes a federal oil and gas council that would serve as a policymaking body. Dabbagh said the council would decide national versus local control over oil and gas fields and exploration blocks, as well as the legitimacy of the KRG oil deals.

"This is going to be reviewed and is going to be checked whether they are workable with the new law or not," he said. "If not they should be amended in order to have them matching with the new regulation of the oil law."

He said a revenue-sharing law and legislation reconstituting the national oil company and reorganizing the Oil Ministry will "be passed simultaneously (with the oil law) and as a sort of compromise package."

There are still issues to iron out before an agreement is finalized, he said.

Kirkuk, the oil-rich area just outside the official KRG territory, is among land whose proper governance is disputed. The Kurds maintain it's historically theirs and say wrongs perpetrated by Saddam, such as forced removal and district redrawing, should be reversed. Arabs and Turkomen, among others, dispute the Kurds' claim. The 2005 constitution called for a referendum allowing the voters in the disputed territories to decide their future by the end of last year. Political and technical hurdles still have not been cleared. The United Nations in December brokered a six-month extension but will likely need more time. It's to announce a plan next month.

"Nothing has been agreed yet," Dabbagh said amid reports this issue was part of the Kurd-central government parley over the oil law.

The Council of Ministers must approve the law before it is passed to Parliament for final consideration, which is sure to include heightened debate and deliberation since there's not one view on either the decentralization or privatization issues. Many favor continuation of a central government-guided oil strategy with oil flow under Iraqi control.

The Peshmerga, the security force largely kept to the KRG area, will be funded based on "a certain principal," Dabbagh said. There had been a row over whether the KRG should fund the force from the revenue redistributed to it from the central government or from another source also from Baghdad. "It's going to be a support from the budget directly. ... There will be a certain battalion and division created in Kurdistan, it will be under the order of the Ministry of Defense."

Analysis: Iraq oil law a deal -- spokesman - UPI.com

Accordance Front returns to Govt

Accordance Front presented yesterday list of its new candidates to fill vacuum cabinets that withdrew from it previously.

The front accepted to return to the cabinet and gave PM Noori Maliki the candidates names after direct negotiations between the PM and Vice President Tareq Hashemi, the Govt.'s spokesman Ali Dabbagh said

ÌÑíÏÉ ÇáÕÈÇÍ - Accordance Front returns to Govt

Decreases Inflation Standard Past March

last February, as reflected by the general standard number for the consumer prices within ration of % 1.1.

Planning minister Ali Baban said that the inflation report which performed by the static's central body for March 2008 according to the basic data depended on the selling standard in optional markets in Baghdad and the provinces showed decreasing in the inflation standard, according to the standard number for the clothes, shoes, fuels, lights, matters and various services. On his part, he showed that some matters recorded increasing in the prices such as nutrition, smokes, gases drinks, furniture, transporting, medical services and the rents which forming % of the families spent 87.7.

ÌÑíÏÉ ÇáÕÈÇÍ - Decreases Inflation Standard Past March

Iraq Oil Deal Could Ignite Investment

An agreement on a draft oil law for Iraq may finally have been reached Wednesday, which could bring major oil firms like Royal Dutch Shell and BP one step closer to investing in the war-torn and fractured republic.

Iraqi government spokesman Ali al-Dabbagh told United Press International on Wednesday that a new understanding had been reached between the central government of Iraq and the regional government of Kurdistan, after a year of bitter division over the future of the country's oil industry.

"There is an understanding between the central government and the regional government for the oil law," al-Dabbagh was quoted as saying. Although the law has not been officially approved by the Iraqi parliament, the announcement is a clear sign that a significant number of lawmakers are backing the legislation.

The agreement reportedly means Iraq will once again have a national oil company, along with a federal policymaking body for oil and gas to decide who controls the country's oil fields and exploration blocks. It will also create a legal framework for foreign investment, which so far has deterred major oil companies from wading into Iraq.

"The implications of a passed oil law allowing foreign investment would naturally be huge for Iraq, the region and the oil industry," said Samuel Ciszuk, an analyst with Global Insight, "unlocking a new chapter for Iraq, allowing it to develop and modernize its oil and gas production rapidly."

The downside is there does not seem to be an agreement on the disputed oil-rich city of Kirkuk, which the Kurds claim belongs to them. Currently, 97% of Iraq's proven reserves of 112 billion barrels lie outside Kurdish territory, including Kirkuk.

Al-Dabbagh said it had been agreed to allow the U.N. process for determining the status of Kirkuk and other disputed areas to play out.

A spokesperson for Royal Dutch Shell refused to comment on the news, but reiterated the company's interest in investing in Iraq. Industry insiders say companies like Shell are training workers to prepare for an eventual move into the country, which can only happen once an oil law is agreed upon and security improves.

The Kurdish regional government and the central government in Baghdad have been at loggerheads over the past year, after last-minute amendments to the draft law in February 2007 pushed the Kurds to withdraw their support and pass their own regional law six months later.

Now it seems that the Kurds' unilateral decision to press ahead and award production-sharing agreements to small oil companies like DNO and Addax Petroleum has not prevented reconciliation with Baghdad. It might mean, however, that they are restricted to Kurdish exploration, as the Iraqi oil minister has declared the agreements illegal.

Shares in Norway's DNO, a medium-sized oil company with assets in Kurdistan, closed up 16.3%, to 10.15 Norwegian kronor ($2.05), on Wednesday. Press reports had claimed throughout the day that an oil deal was close, though the Iraqi oil ministry reportedly denied it.

Iraq Oil Deal Could Ignite Investment - Forbes.com

Shares in Baghdad Stock Exchange rose to $1.8 billion

Executive Director of the Iraqi market for securities, Taha Ahmed Abdul Salam, confirmed yesterday that the value of shares listed on the market rose, by the end of 2007, to 2129 billion dinars (1.8 billion dollars) from 1949 billion at the end of 2006. He also confirmed that the bourse is seeking to overcome obstacles, especially security, pointing out that the number of shares traded rose in 2007 to 158 billion shares from 58 billion in 2006, an increase of 172 percent, while the total trading volume was 434 billion dinars in 2007, compared with 147 billion in 2006, an increase of 195 percent. He believed that the entry of non-Iraqi investors to the bourse "was not up to the ambition for many reasons, and the most important one was the security issue that hinder the growth of foreign investment in the country." Since August 2007, 70 billion shares valued at 17 billion dinars were circulated by non-Iraqi investors, and the stock price index ended up with 34.59 points in 2007 after being 25.28 points at the end of 2006.

He explained that promoting the adequacy of circulation needs to be improved by providing data and information about the situation of companies to give real value of the shares and the reduction of attempts by some speculators fabricating inappropriate prices to the conditions of the companies. He confirmed working to update the established circulation mechanisms and creating new financial instruments to attract investment and invest funds of individuals and institutions, by accepting the inclusion of companies which meet the requirements for listing on the market and encouraging citizens to trade those companies' shares.

http://www.iraqdirectory.com/DisplayNews.aspx?id=5909

Demand for dollar down at daily Auction

Demand for the dollar was down in the Iraqi Central Bank's auction on Thursday, registering at $93.045 million compared to $123.650 million on Wednesday.

"The demand hit $10.195 million in cash and $82.850 million in money transfers outside the country, all covered by the bank at a stable rate of 1,204 Iraqi dinars per dollar," according to the central bank's daily bulletin and received by Aswat al-Iraq - Voices of Iraq - (VOI).
None of the 17 banks that participated in the auction offered to sell dollars.

Speaking to VOI, Ali al-Yasseri, a trader, said that there were no offers to sell dollars today, the first since three weeks, which is an indicator of change, and the demand relatively decreased, because in fact it still at high levels.

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

Aswat Aliraq

Iraq asks NATO to extend its training mission

Brussels - Iraqi Prime Minister Nuri al-Maliki on Thursday asked NATO to extend its training mission of Iraq's security forces to the country's infantry. "NATO-trained police forces have proved effective and strong" in the fight against terrorism, al-Maliki said after a meeting in Brussels with NATO Secretary General Jaap de Hoop Scheffer.

"And some of these (anti-terrorism) activities could be taken up by our infantry," the premier added.

NATO played no role in the US-led invasion of Iraq. But in June 2004, the alliance's heads of state and government agreed to help train the country's security forces in order to help it provide for its own security.

Since then, NATO says it has trained about 7,000 policemen and a total of 1,105 military officers and civilian leaders.

The alliance has also provided Iraq with some 113 million euros (179 million dollars) worth of military equipment, including helmets and 77 Hungarian tanks.

And NATO leaders meeting in Bucharest earlier this month agreed to extend the training mission until the end of 2009 and to build a more structured relationship with the country.

Addressing reporters alongside al-Maliki, de Hoop Scheffer said the alliance would now study the Iraqi request and the other proposals that had been put forward by the Iraqi government.

"This is the start of a new era in the relationship between Iraq and NATO," he said.

"NATO is interested in a stable and secure Iraq" and will "continue and expand the training mission," the secretary general said.

"This is not a case of NATO replacing the forces of the coalition, it is about developing cooperation," he added.

NATO is expected to send a delegation to Iraq, but de Hoop Scheffer did not specify when this would take place.

Iraq asks NATO to extend its training mission : Europe World

BP says no final decision yet on Iraq investment

LONDON (Thomson Financial) - Peter Sutherland, chairman of BP Plc, said the UK oil group has not yet taken a final decision on whether to invest in war-torn Iraq.

BP is hoping to provide a 'range of assistance' to Iraq's oil industry, he told shareholders at the company's AGM in London.

'But we haven't taken a final decision on our investment strategy in Iraq,' he said, replying to a query from an investor that BP is currently discussing with the Iraqi authorities the final details of a contract to develop Rumaila, one of the country's largest oil field.

BP has 'no one on the ground' in Iraq, Sutherland said.

'We won't exploit the (country's) weakness for short term gains,' he stressed in response to criticisms from activist groups that western oil companies like BP and Royal Dutch Shell Plc had been lobbying for control of Iraqi oil.

BP, Shell, Exxon Mobil Corp and Chevron Corp were among the 35 foreign oil companies that have qualified to bid for future contracts to develop Iraq's largest oil fields.

Sutherland, who is retiring, said the search for his successor is 'progressing well'.

'We are hopeful that we will be able to make an announcement well in advance of the next AGM,' he said.

BP says no final decision yet on Iraq investment - Forbes.com

Morning SV, just thinking about the current situation in country. I have long held that we must have a HCL in place and Security (by Iraqi's) before any real improvement in the value of the IQD. Seems that both of these are fast becoming a reality. Any thoughts? Over the past year or two, my hopes of any RV have become somewhat jaded. But lately, the Old Warrior Spirit has renewed itself. I think the latest bombings are a last gasp to make headlines. JMO.. The Iraqi Army has done a pretty good job lately and I think this has a lot to do with the positive feelings coming out of Iraq.

Hope you have a Great weekend. Warrior

Interesting,

Anyone catch 60 minutes this past Sunday on Iraqi government? All I can say is WOW, corruption is 100 times worse than anyone thought, billions and billions of dollars missing from every ministry, it seems to be a race to rip off as much as possible and see who ends up with the most. Sad situation for sure, and the only person who was complaining was chased out of country by Maliki. Guess they are no different than all the other gov. leaders in the world.

Good luck to all, Mike