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

Iraq says ready to discuss new oil deal with Jordan

Iraq is ready to discuss with Jordan a new oil agreement that might include increasing its fuel supply to the Kingdom, Iraqi Minister of Commerce Abdul Falah Sudani announced on Wednesday.

Sudani told the Jordan News Agency, Petra, yesterday that Iraq is ready to provide the Kingdom with oil through Um Qasr port in southern Iraq, or Jihan port in southern Turkey.

He added that the Iraqi oil ministry and the Jordanian government have to take some administrative procedures in order to transport the oil to the Kingdom through these ports, especially since the memo signed between the two countries in 2006 stipulates transporting the oil overland.

The Iraqi official stressed that his country is ready to reach a new agreement with Jordan in this regard, noting that there are no obstacles except for some security concerns, Petra reported.

Sudani added that Iraq is also willing to increase the volume of oil supplied to Jordan, which, under the 2006 memo, ranged between 10-30 per cent of its daily requirements of 100,000 barrels.

In a meeting with Minister of Industry and Trade Amer Hadidi yesterday, the two sides discussed providing the Kingdom with part of its oil needs under the memo, the implementation of which has been hampered by the prevailing security situation in Iraq.

The two countries signed the agreement in 2006 during a visit by former prime minister Marouf Bakhit to Baghdad.

Iraq offered the essential commodity at a preferential rate of $18 per barrel below market price.

Jordan Times

BP says no final decision yet on Iraq investment

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

Iraq Oil List disappoints Turks

The fact that Turkey’s national oil company was not among 35 companies approved over the weekend by Iraq’s Oil Ministry to bid for soon-to-be announced tenders to develop oil and gas fields led to disappointment is Ankara, particularly at a time when Turkey planned to strengthen relations with its neighbor through further energy cooperation.

But officials stress that the ministry’s Sunday announcement by no means spells the exclusion of the Turkish Petroleum Corporation (TPAO) from doing business in Iraq, which aims to nearly double oil production to 4 million barrels a day in the coming years with the help of international companies.

Baghdad pre-qualified 35 of 120 American, European and Asian companies that submitted documents between Jan. 9 and Feb. 18 to participate in the licensing round. It is planning to soon open at least six major oil and natural gas fields for exploration and production in the first bidding for licenses since the US-led invasion in 2003. Turkish Petroleum International Company Ltd. (TPIC), established in 1988 as a TPAO subsidiary to operate in all branches of the oil industry, was not among those 35 companies although it was one of the 120 companies that submitted documents.

Both the Turkish energy and foreign ministries have been in contact with Iraqi officials concerning the issue, Turkish Energy Minister Hilmi Güler said yesterday. Speaking to reporters following an energy workshop held in Ankara, Güler noted that no agreement had yet been signed between Ankara and Baghdad concerning the exploration and production of oil and natural gas. However there is a mutual statement of will by the two sides, he added.

“This is a list that is not binding. I suppose that we will include Turkey there in the new arrangement. We need to hold talks with Iraq,” Güler was quoted as saying by the Anatolia news agency, as he stressed that TPAO was one of few companies with a good knowledge of Iraq’s geological particularities, in an apparent reference to the fact that TPAO has been researching hydrocarbon exploration and production opportunities in Iraq since 1994.

Güler said he hoped Iraq would like to take advantage of TPAO’s situation.

The minister’s statement on the issue was not a volunteered one -- it came in response to a question by reporters whose curiosities were fueled by front-page coverage of the issue in yesterday’s edition of Sabah daily, under the headline “Oil exploration shock in Iraq.”

Nevertheless, a senior Turkish diplomat sounded hopeful and confident concerning upcoming bid rounds to be announced by Iraq. “This is an ongoing process and it doesn’t mean at all that the TPIC has been entirely excluded from this process,” the same diplomat, speaking on customary condition of anonymity, told Today’s Zaman on Thursday.

A day before, speaking in an interview held in Brussels, Iraq’s Oil Minister Hussain al-Shahristani said that there would be other bid rounds next year. “And more companies will be qualified as we go along,” Shahristani added.

The Turkish diplomat admitted a certain level of disappointment in the capital due to the TPIC’s absence on the list announced by Iraq as the TPIC was part of the country’s national company. Yet one should also look to the huge sizes and financial capacities of those 35 companies that made the cut and make a rational assessment when comparing the TPIC with them, he also implied.

Exxon Mobil, the world’s largest oil company, and Europe’s two biggest, Royal Dutch Shell and BP, were among the 35 as were ConocoPhillips, Chevron and Total. Others included Russia’s Gazprom, the world’s largest natural-gas producer, and Lukoil, the Russian oil producer with the most overseas assets. Mitsubishi and Inpex Holding of Japan and China’s Sinochem were also accepted.

“There will be other rounds the scale of which will probably be more appropriate for the TPIC,” the diplomat said. “The necessary procedure is being followed and all studies are on track.”

Veteran energy analyst Necdet Pamir, speaking with the NTV news channel, concurred. “TPAO is a medium-sized company,” Pamir, a member of the World Energy Council’s Turkish National Committee administrative board, told NTV. “The issue of Turkey’s interest in energy cooperation is not something new. But unfortunately the media is acting as if the TPAO had never been in Iraq until recently, although the company has been involved in Iraq since 1994,” Pamir added, arguing that the real reason behind disappointment stemming from the latest list was the creation of high expectations that were unrealistic to begin with.

Iraqi President Jalal Talabani paid a landmark visit to Turkey in March. Accompanied by Cabinet ministers including those in charge of energy, Talabani said his country sought strategic partnership with Turkey in all aspects.

The Iraqi Oil Ministry has excluded companies that have signed deals with the semi-autonomous Kurdish administration in Iraq’s north from the list. Kurdish authorities have signed contracts, mostly production-sharing agreements, with around 20 international companies to develop oil and gas fields in their region. These deals have angered the federal Oil Ministry in Baghdad, which has declared them illegal and said foreign companies who signed these contracts would be blacklisted.

Political disagreement over Iraq’s debt

Turkish officials, meanwhile, did not rule out the idea that the TPIC’s absence on the list might have stemmed from a disagreement between Ankara and Baghdad over Iraq’s outstanding debt to Turkey for earlier fuel imports.

In January 2007, Turkey had temporarily stopped exporting refined oil products to Iraq due to political disagreements both over the autonomous Kurdish region in Iraq’s north and the huge debt for earlier fuel imports by Turkish companies, reportedly exceeding $1 billion. A few months later, Turkey restarted exportation following an agreement on a payment plan with Iraq. Yet the Iraqi side has not stuck to its agreement, officials said, noting Turkey was continuing to pressure Iraq’s state-run oil company SOMO for immediate payment.

TODAY'S ZAMAN

Iraq needs more than $300 billion to restore its infrastructure

Mohamed Ziyadat, board chairman of the Fifth International Exhibition of Rebuilding Iraq which began its work in Amman last Wednesday, confirmed that Iraqi, Jordanian and Arab businessmen are discussing trading contracts on the sidelines of the exhibition. He said that the "exhibition is a great opportunity for companies wishing to work in Iraq, especially after the adoption of the 2008 budget allocated for the reconstruction of Iraq, and which amounted to some $48 billion." Ziyadat explained that a "delegation from the secretariat of Baghdad participated in the exhibition to discuss the possibility of concluding contracts after allocating $one billion and 800 million to it."

Jordanian Minister of Industry and Trade, Amir Al-Hadidi, hoped that Jordanian companies will be able to conclude deals enabling them to take advantage of the investment opportunities there and the supply of Jordanian goods and services to the Iraqi market," while chairman of the Iraqi Importers and Exporters Federation, Thabit Al-Baldawi, asked for the support of economic and investment projects
which contribute to the reconstruction of Iraq. He added that Iraq has the potentials to administrate investments successfully due to its natural and human resources.

The fifth session of the international exhibition which lasts 4 days opened with the participation of some 400 Arab and foreign companies, according to the organizers. The exhibition attended by 20 countries, 412 foreign and Arab companies operating in the areas of construction, oil and gas, energy, IT security and protection. Among the States participating in the exhibition are: the United States, China, Russia, Germany, Italy, the Netherlands, Saudi Arabia and Jordan.

Although five years have passed after the fall of Baghdad, the process of reconstructing Iraq is still facing obstacles. Experts say that Iraq needs more than $300 billion to reconstruct the infrastructure destroyed by war and neglect for years.

Iraq needs more than $300 billion to restore its infrastructure

America's oil imports from Iraq record the second highest monthly level since war

The American Energy Information Administration said on Tuesday that shipments of Iraqi crude oil to the United States in February recorded the second highest monthly level since the invasion of Iraq in spring 2003.

The average of the United States' imports of Iraqi oil in February hit 780 thousand barrels per day, %44 up or 237 thousand barrels per day from January, based on preliminary data provided by the importing companies to the Energy Information Administration.

These are the highest imports of Iraqi oil since the United States import to 800 thousand barrels a day in August 2004, which was the largest monthly average since the US-led war on Iraq that began in March 2003.

The five largest exporters of oil to the American market last year were respectively: Canada, Mexico, Saudi Arabia, Nigeria and Venezuela.

http://www.iraqdirectory.com/DisplayNews.aspx?id=5925

Opening the Fifth International Exhibition for Rebuilding Iraq amid an official Iraqi absence

The Fifth International Exhibition for Rebuilding Iraq opened in the Jordanian capital of Amman on Monday with the participation of more than 450 Arab and foreign companies amid the absence of Iraqi government representatives.

The opening ceremony was attended by the Jordanian Minister of Industry and Trade, Amir Al-Hadidi, who expressed his hope in the success of the exhibition, saying he expects that there will be considerable room for all companies to participate and contribute in the reconstruction of Iraq. He added that Jordan has and will continue to participate in the reconstruction of Iraq due to the close relationship between it and the Government and the Iraqi people.

In reply to a question on the impact of the absence of the Iraqi government, Al-Hadidi said that the private sector has a significant impact in the current economy of Iraq, pointing out that he did not know the reason for the absence of Iraqi ministers in concern in this exhibition. The security turmoil in Iraq have been the main obstacle facing investment in the country.

http://www.iraqdirectory.com/DisplayNews.aspx?id=5926

Private Banks are allowed to open credits for building contracts

Iraqi government decided to end the monopoly of the governmental "Iraqi Commercial Bank" for the opening of credits concerning building and reconstruction contracts, and assign it to the private sector.

Adviser to the Iraqi Prime Minister, Kamal Al-Basri, explained that the aim of this step is to facilitate the procedures for foreign investment applications, and the work of the Iraqi investors, as it will allow foreign companies and capitals to enter Iraq, and expected this year to be much better than the previous ones in the area of investment. He added that the ratios of achievements in provinces hit %74 of the value of investments, denying the American officials statements which claimed that Iraq had benefited from only %7 of investments in 2007; a claim which distorted the reality of investment.

Credits were usually opened to the government institutions in the " Iraqi Commercial Bank" only, established after 2003, but now has moved from the ceiling of one million to two million dollars distributed to Iraqi private banks (25 banks), which make the total increase from $200 million in 2007 to $500 million.

The board chairman of Ashour International Bank, Wadee Nouri Al-Handhal, confirmed that banks will benefit from the decision of increasing the amounts allocated to them for the opening of credits, particularly since they have increased their capital and they have foreign assets and accounts to ensure the flow of work.

http://www.iraqdirectory.com/DisplayNews.aspx?id=5928

Building occupied by Sadr office in Basra evacuated

The building occupied by Shiite leader Muqtada al-Sadr's office in the southern Iraq city of Basra will be evacuated on Saturday afternoon hours after Iraq and British forces besieged the site and requested evacuation in 48 hours, a Sadrist source revealed.

"Evacuation of the building occupied by the Sadr office for five years is currently underway and would be handed over today afternoon," Harith al-Adhari, the official in charge of Sadr's Basra office, told Aswat al-Iraq – Voices of Iraq – (VOI).

"The evacuation is being conducted upon orders from Sayyed (Master) Muqtada al-Sadr to respond to the government's decision to clear the buildings owned by the state and hand it over to official institutions," Adhari explained.

Adhari had said on Friday that Iraq forces, backed by British troops, prevented the Sadrists from performing the Friday prayers and groups of these forces besieged the office and asked for evacuating it in 48 hours.
An official security source from the Basra police said the government decision does not include Sadr's office only but all the buildings used by parties, political organizations or individuals.

Armed confrontations have flared up late last month in Basra, Iraq's second largest city and oil hub, between government forces and Sadr's Mahdi Army militias. The clashes coincided with angry upheavals in several southern provinces, where Sadr supporters spread.

The clashes broke out hours after Iraqi Prime Minister Nouri al-Maliki declared a plan codenamed Saulat al-Forsan (Knights' Assault), which he said targeted the elimination of armed groups in Basra, 590 km south of the Iraqi capital Baghdad.

Aswat Aliraq

PM Nechirvan Barzani’s statement on talks with Baghdad

Baghdad, Iraq (KRG.org) – Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani issued the following statement on his recent meetings with Iraqi federal government officials in Baghdad.

He said, “Our meetings in Baghdad were marked by a positive feeling of cooperation and progress. The overall purpose of this most recent round of bilateral meetings between the KRG and the Federal Government in Baghdad was to discuss the mechanism of relations between our two bodies as partners in the governance of Iraq, the advancement of our political process and other various issues regarding the future of Iraq.”

During the meetings a wide range of topics were discussed. Amongst these were:

1. The national hydrocarbon law.

2. The status of the Peshmerga, the constitutionally mandated guard force of the Kurdistan Region.

3. Article 140 of the Constitution, regarding the status of the disputed territories.

Regarding the hydrocarbon (oil and gas) law, both sides agreed on the following principles: all ongoing negotiations will be within the framework of the constitution; the KRG and Baghdad have agreed they will start with the previously negotiated, February 2007 draft hydrocarbon as the basis of the new draft law to be submitted to parliament. Once agreement has been reached, the laws concerning oil and gas, revenue sharing, the Iraqi National Oil Company, and the restructuring of the Oil Ministry will be submitted as one package.

Concerning the Peshmerga, it has been decided that a commission from the Federal Government in Baghdad will visit the Kurdistan Region in the near future to discuss practical steps going forward.

On the issue of Article 140, which concerns the disputed areas in Iraq, work is continuing within the framework established by the United Nations. As a first step towards resolution of this issue, the UN is expected to present its proposal to the relevant authorities in the Federal Government and the KRG in the near future.

The series of talks served to advance cooperation and coordination between the two governing bodies, ensure the success of the federal system in Iraq, and the implementation of constitutional commitments to ensure the country's legal process.

Besides the evident goodwill between both parties, the talks demonstrated good progress towards resolving the issues under discussion. Both sides are clearly committed to the success of the federal system in Iraq. These talks succeeded in furthering the achievement of national reconciliation in Iraq in order to enhance the lives of all Iraqis.

While circumstances in Iraq are such that this process is not a quick one and the issues under discussion are complicated and will take time to solve, the talks made significant progress and underscore the commitment of both the KRG and the Federal Government to finding and implementing long term and mutually agreeable solutions.

The success of these most recent talks strengthens the federal system in Iraq and will ensure a prosperous future for the Kurdistan Region and all Iraq.

Kurdistan Regional Government (KRG)

Interesting,

Now that old coins have been all pulled out of circulation, you have to wonder what coins will be introduced to replace them? With impending 1 Dinar Paper Note, you have to logically figure the new coins will be smaller denominations, right? Logics has seemed to be missing in Iraq for centuries, so who knows, but I would bet the new coins will be .01, .05 .10 and .25, sound familiar? One thing is certain, it would make no sense to have a 1 Dinar paper note at current rates. Could this be happening finally, we shall see, and that 1200 level mentioned long ago may be inside trigger point. lol

Good luck to all, Mike