Thread: Archive Latest News - Dinar Think Tank - 27/08/08 - 15/01/09

Royal Dutch Shell is first oil company to plan a joint venture in Basra staffed with expats

Royal Dutch Shell is to become the first big Western oil company to move large numbers of expatriate staff into Iraq to oversee its gas joint venture, The Times has learnt.

In recent weeks the Anglo-Dutch oil giant has been sounding out security companies, suppliers and logistics companies in Iraq about how to support an expatriate operation of as many as 200 people in Basra, where it has signed a preliminary deal worth up to $4 billion (£2.5 billion) to process and market natural gas.

Shell had been expected to operate in Iraq, at least initially, with a skeleton staff of foreigners supplementing local employees. However, its plan to consider a much larger force of expatriates, including both its own employees and foreign contractors, represents the first time that a big Western company has considered such a large commitment of resources to Iraq since the 2003 war.

A Shell spokesman said that it would not send personnel to Iraq until it was safe to do so and there were no immediate plans because the contract had not yet been finalised. The company said: “Over time we will increase our presence in the country but for security reasons detailed plans will remain confidential.”

However, experts said that the security environment in Basra was sufficiently stable to support such a move. Andreas Carleton-Smith, director of Control Risks Group, which advises oil companies on the security threats in Iraq, said: “People are very experienced now with dealing with the level of threat in that area. While not easy, people can gear up and deal with it . . . I think security is one of the least difficult of the issues they will have to deal with.” He said that regulatory problems and potential contractual disputes with the Iraqi Government or suppliers could present more serious obstacles than just security.

Michael Corke, an energy consultant with Purvin & Gertz, said in Dubai: “This kind of project is very much the kind of thing they would have to do with a hands-on approach – with their own people on the ground.”
Shell, which is struggling to rebuild its comparatively thin reserves portfolio, has been among the keenest of the international oil companies to enter Iraq, which has the world’s third-largest reserves after Saudi Arabia and Iran as well as vast, mostly untapped, reserves of natural gas.

It signed a landmark deal with Baghdad in September to extract the 700 million cu ft of gas a day that is flared during oil production from 19,000 sq km of land in the Basra region – enough to meet all of Iraq’s power generation needs. Initially, most of the gas is likely to be used for domestic electricity production, although it could later be used for exports to other Gulf states. Shell has said that, ultimately, a liquefied natural gas plant could be built in Basra that would allow for exports of gas farther afield, including Britain.

Shell has been using external contractors to conduct surveys required for the project. Assuming that the deal is finalised, Shell is looking at enlisting external expertise to operate and repair ageing production facilities and to install new equipment.

The Iraqi Cabinet approved the deal, which gives the state-owned South Gas Company 51 per cent and Shell 49 per cent of the venture.
Other Western oil giants, including Total, BP and ExxonMobil, are in talks with the Iraqi Government about other oil and gas projects, although continued delays over the passage of an oil law that would set out the legal framework for the industry have held up progress.

http://business.timesonline.co.uk/to...cle5093308.ece

Iraq Wants Shell to Engage 3rd Party in Gas Deal

A preliminary agreement between Royal Dutch Shell PLC and the Iraqi Oil Ministry calls on the oil major to bring in another international company to help develop the vast gas reserves in southern Iraq, according to a copy of the contract seen by Dow Jones Newswires.

The Heads of Agreement, signed Sept. 22 in Baghdad, which also shows the deal is much bigger then previously announced and may lead to earlier exports of liquified natural gas from Iraq, has triggered a chorus of dissent from Iraqi politicians and oil industry figures.

The final deal, to be known as the South Gas Development Agreement, "will be only finalized upon the introduction of a new partner," stated the HoA.

According to the Middle East Economic Survey newsletter, Chevron Corp. is believed to be seeking this role. Shell declined to comment on this, and Chevron couldn't immediately be reached for comment.

The HoA, which forbids Iraq from negotiating with anyone else on developing gas in the south for at least a year while terms are finalized, calls for the creation of a 25-year extendable 49%-51% joint venture company between Shell and the state-run South Gas Company.

The HoA also stated the joint venture would cover the governorate of Basra and "any other areas as may be agreed between the parties," contradicting a Shell statement after the signing which said it would cover only Basra.

When the agreement was signed, Iraqi oil officials said the joint venture was meant to utilize only the 800 million cubic feet of gas flared every day in southern Iraq as a byproduct of oil production. However, the HoA stipulates development of non-associated fields in Basra.

"The parties acknowledge that access to non-associated gas is essential," the HoA says.

Basra and surrounding areas contain more than 70% of Iraq's proven gas reserves of more than 3 trillion cubic meters, the world's tenth largest. That reserve can be doubled, or even tripled, if it is fully explored.

Possibility Of Early LNG Exports

Oil ministry officials have several times affirmed the aim of the Shell deal is to meet local needs first and then to export the extra gas, but the HoA calls for Shell to study the "feasibility of an early LNG exports."

Shell insisted part of the produced gas must be exported.

"Joint analysis with the Ministry of Oil shows that the volume of associated gas cannot be utilized fully by current or proposed domestic use," said Shell spokeswoman Kirsten Smart.

Iraq is in dire needs of gas to operate power stations which are currently generating only half of the country's electricity needs. Iraq's Electricity Minister Kareem Waheed said last week Iraq needs to construct at least 6,000 megawatts of capacity over the next two years to meet growing local consumption estimated at 11,000 megawatts a year.

International oil companies have been jockeying for years to establish a presence in Iraq, which has some of the world's largest oil and gas reserves, and help rebuild an industry battered by years of international sanctions and war.

RIGZONE - Iraq Wants Shell to Engage 3rd Party in Gas Deal

Iraq's Regulatory Vacuum
Until early 2008, Iraq's telecoms sector seemed to have everything going for it: a population of 28 million people hungry for the latest communication technology, improved security, and a healthy stable of public and private telecom operators competing to offer m.o.b.ile, fixed voice and data services.

And overseeing it all, an independent regulator, CMC.

Of course, there have been problems, such private operators' annoyance back in 2006 when the government announced that it had procured one of the country's four m.o.b.ile licences.

The regulator's judgment was also sometimes called into question, most notably for its decision to auction new ****** licences rather than hold a beauty contest, as it had previously indicated it would, a couple of years ago.

These were relatively small problems in a telecom market that was remarkably liberal compared with most of its neighbours.

Indeed, with five m.o.b.ile operators and two private fixed-wireless operators, the fact that the state was also running a ****** and fixed-line operation was not viewed as a big problem.

The forces of a competitive market, backed up by an independent regulator, made the situation more palatable to Iraq's private operators.

But all that changed just a few months into 2008, when the head of Iraq's regulator, Dr Siyamend Othman, completed his term in office. The position has been left vacant since.

The situation has understandably rankled Iraq's private operators, who used October's Iraq Telecoms conference in London to vent spleen.

The operators are concerned that several important decisions made by the regulator, such as allowing operators to lay fibre-optic cable and run their own international gateways, will now be overturned by the government's Ministry of Communications.

Some of the operators were influenced to invest in Iraq because they thought these operations were part of the deal.

The situation has led some of the operators to question whether the government is simply trying to wrestle more control of the telecom sector, perhaps in a bid to help its own state-run operations.

However, telecom specialists working for the state-run operations say that the lack of a regulator is also causing problems for themselves, as well as the private operators.

Whatever the reason behind the ailing CMC, it is clear that the relationship between a vibrant telecom sector and economic and social prosperity is too great to allow Iraq's communications industry to slip.

http://www.arabianbusiness.com/53739...ulatory-vacuum

Shell's Upstream Chief Offers His Take on Iraq's Landmark Bid Round

Despite its disappointment that Iraqi oil fields it had been studying were opened to international bidding, Royal Dutch Shell says it welcomes the transparent process Iraq has chosen for its first landmark bid round. But the Anglo-Dutch supermajor's upstream chief, Malcolm Brinded, says he needs to see contract terms before assessing whether the service deals have "long-term robustness" in the absence of a nationwide hydrocarbon law.

"It is in some ways disappointing but the important thing is we got some good insights into the fields we studied. At the same time I really understand the importance of a transparent process in Iraq," Brinded told International Oil Daily in an interview in Abu Dhabi this week.

Shell has been involved in the Kirkuk and Missan oil fields for several years, offering remote technical help on producing reservoirs, equipment procurement and staff training. During talks earlier this year on short-term technical support contracts (TSC), Shell and other major firms pushed for guarantees that the short-term deals would automatically lead to long-term contracts, before the oil ministry scrapped the TSCs.

The almost three dozen international firms prequalified to bid for the eight oil and gas fields now on offer won't know until next year the precise terms of the fee-based contracts. Baghdad expects to finalize the model contract one month before bids are due, and wants to award and sign the contracts by June, before gaining cabinet endorsement.
Analysts doubt it will be possible to award the multibillion-dollar contracts without legislative approval.

In response, Brinded said issues concerning the contracts' legality and long-term stability are "always difficult in any country and it's no more difficult in Iraq than any other country.

"You just have to have a feeling that their contract has certain elements: That it meets the law of the land, that it has the support of those who have been involved in negotiating it and through the authorities in general, and that it has elements of long-term robustness. It's no good if you sign contracts that you think in the end are not going to be in the interest of the country. It's tremendously important that it's seen in the interest of the country and in the interest of the investor."

Such considerations may apply in countries with a degree of political stability, analysts say, but the fact Iraq is still a country in transition may require more than the traditional guarantees. Brinded is unfazed. "That's why it's important that they think carefully about the structure of their contracts," he said. "You can never guarantee, you always hope that if the contract is well structured and clearly has benefits for both the country and the investor that it will be honored. All countries want to show to the world that they do honor contracts because in the long-term their ability to attract inward investment depends on their reputation for honoring contracts."

While some majors privately insist that a contract not backed by law is not worth the paper on which it's written, the Shell upstream chief is less adamant.

"I think we will assess the situation at the time, but I think obviously it would be good if it was backed by the hydrocarbon law. Essentially, it's the contract structure … a contract structure that looks robust for the long term and a transparent process. Those are very important ingredients, and countries generally recognize the importance of the sanctity of contracts, so the fact that it's a transparent process is a big plus."

The June award deadline is highly ambitious and chances are it will slip. This is due to the still-fragile security situation, lack of consensus on the legal procedure for oil field awards, and legislative elections due in late 2009 that mean politicians will be less prepared to push for controversial deals for fear of upsetting their election chances.

Brinded said it is hard to say whether the June deadline is feasible, not least because "there are a lot of steps to take place and in a very volatile world, not just the situation in Iraq. The whole global economic situation is so volatile that I think it may take longer."

Since signing a heads of agreement for its south gas utilization project in September, Shell has had staff on the ground in southern Iraq surveying gas facilities, as stipulated in its preliminary agreement. The move is considered bold for an international oil firm, particularly one of the majors, which generally avoid sending staff to Iraq. "The numbers of people that we have on the ground and what their roles are will need to be always carefully assessed," Brinded said.

The advantages of the current set-up are that work on the project, which will involve gathering, processing and marketing currently flared gas, is done in close partnership with South Gas Co. -- which has significant operating capabilities on the ground -- and Shell is not involved in the upstream, he said.

"Oil will be a different situation but at the same time one needs to look closely at what the partnership arrangements are [then] and what the structure will be."

The bidding rules announced by Iraq last month have made some companies rethink whether to bid solo or in consortiums. "I'm not going to anticipate our decision," Brinded said. "We need to think carefully now that we see the rules published. It changes the landscape. I won't say in what direction, [but] it changes the landscape either way because of the number of situations in which you can be operating. It makes it much more complicated.

http://www.energyintel.com/DocumentD...ment_id=244178

Focus on the facts of Iraq's dialogue conference - U.S.

D. Adel Abdul-Mahdi called for opening the windows of the investment companies of the World. He pointed out the need for Iraq to change his economic policies by giving local government departments and bigger roles that enable them to fulfill reconstruction process and reform of the state and rid it of what he called Baltrhl career and financial and administrative corruption.
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D held. In his speech, Abdul-Mahdi, policies pursued by successive governments responsible for the erosion of the role of the private sector to activate the economic process, and noted that the oil sector now accounts for about 70 percent of the gross national product and imports of oil under the overall world oil prices today constitute about 94 percent of the state budget , Then we need to rebalance the economy through the reform in this equation, only the return of private sector activity was disrupted this role because of incorrect policies pursued by successive governments, particularly the last one.

To count Deputy U.S. Treasury Secretary Robert Kimmitt signature of the agreement between Baghdad and Washington as a catalyst in attracting foreign investors to Iraq, said the Iraqi government has sent positive signals to investors about the possibility of conflict resolution, and investors are closely monitoring the political negotiations in Iraq, including the Security Agreement With the United States and hope that it will be a signing of the Convention as soon as possible, praising the performance of the Iraqi economy, which he achieved great strides in many areas, the most prominent stability of the currency and inflation rates, as well as the investment law passed.

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With U.S. Ambassador Ryan Crocker in Baghdad to the existence of important achievements made in economic cooperation between Iraq and the United States, but he stressed that there is a need for further steps in this area, and hoped that dialogue should be frank and open about what we should do to develop and invest In Iraq, I urge you to take advantage of the presence of representatives of companies and the U.S. Chamber of Commerce, the World Bank and listen to their experience in global markets. This dialogue within the framework of the government search for investors in different sectors, it is hoped to hold mid-year 2009 extended conference between the Iraqi and American sides to deepen the issues Economic ties as well as investment programs in the long run.

On a related matter, the governor of the Central Bank of Iraq d. Shabibi the effects of slowing global growth and the sharp decline in oil prices which threaten to plunge Iraq into recession more than concerns about higher inflation in the economy. Shabibi said that the growth of the Iraqi economy is slowing already because of the sharp decline in oil prices tumbled to less than half the highest level on record of 147.27 dollars per barrel recorded in July. Shabibi said, speaking on the sidelines of the Iraqi dialogue - the U.S. in Baghdad Central Bank will take into account the slower growth in determining interest rates.

He said the belief that there was stagnated and a slowdown in global demand for oil in Iraq is affecting too much. There will be a decline in economic activity. "This will probably ease monetary policy in the medium term and, of course, we will have to change the monetary policy accordingly to support the real economy. inflation remains an important source of primary concern to us is to combat the recession. The officials also sought to expand non-oil economy of Iraq, which is expected to grow by 3.5 percent this year. Shabibi said the central bank would consider further cuts in interest rates after an expected reduction in the coming days, adding that further cuts might not be necessary because liquidity is adequate.

He went on: Despite the fact that higher interest rates, the lending even more when rates of 16 percent, we do not have a credit at the local level, the question only related to low oil revenues and how that would affect the real economy.

A Finance Minister Baqir Jabr Solagh on fiscal budget cut for 2009 of 80 billion dollars to 67 billion dollars, Zubaidi said that Iraq allocated Moisnath ratio exceeding 25 percent of investment, where will the investment funds in 2009 to 15 billion dollars, and explained that fell from Moisntna 80 billion dollars to 67 billion dollars after our discussions difficult and very difficult with the International Monetary Fund, we are at a critical time, these two months are the last two months to cut 30 billion dollars of Iraq's debt by the Paris Club, I submit the budget before the month and a half to the Council of Ministers examined In the cabinet and was in the process of voting occurred collapse in oil prices.

Solagh pointed out that Iraq had not been affected by the global economic crisis hit about 95% of the world that Iraq was left unscathed from the crisis affected not only in one area, a drop in oil prices which impact negatively on the size of the budget, we did not include us, not collapse In the credit sector in the real sector because of our conservative banks.

Dr. Ali Ghalib Baban, planning minister said in a speech at the dialogue Iraq - U.S.: We in the Ministry of Planning keen to cut the budget does not include the investment, because any reduction would be significant damage to the economic situation that is already weak investment and the deterioration of the productive sectors, so we In the event of complete reduction of the general budget of the State include the operational budget and stressed d.

Baban that budget cuts should not come at the expense of citizens, and we are also keen to not add additional suffering to the citizen whether in the area of salaries or allowances, and I think there are aspects that could save money and there are also significant reserves of there in 2007 where Be spending most of the additional supplementary budget approved by the end of last year.

And the possibility of subjecting Iraq to the repercussions of the global crisis, especially in the banking sector, Dr. Papin: he did not think that the banking sector is in danger, because the development of this sector in Iraq suffers extraordinary work a lot of underdevelopment, in addition to the practices of banking is very conservative, so it is unlikely To catch any damage from the global crisis that originated in isolation from the world market, he said. Baban, the survival of Iraq under the Section VII of the Charter of the United Nations, would lead to obstructing the development of financial and banking sectors.

http://66.102.9.104/translate_c?hl=e...e5Xh0DpNkQ-uGg

Extensive discussions to respond to an offer Washington. 100 words change the wording of the draft agreement on the withdrawal of U.S. troops

Open more week of intense talks that could resolve the marathon negotiations rejected the security agreement or acceptance. The list of meetings held by political leaders after the receipt of the U.S. response to government demands to a meeting of the Council of Ministers may be exceptional, and one of the ****utive Board "3 +1", and III of the largest parliamentary bloc "Alliance", in addition to bilateral and trilateral talks among the heads of the governing bodies and leaders of parliamentary blocs, according to informed sources revealed.

A source close to the government for "morning": that the U.S. side agreed to amendments to the Convention to change the name of the "withdrawal of U.S. forces," and re-drafting the terms of sentences and withdrawal to the satisfaction of the Iraqi government refused the demand on the immunity "jurisdiction", as agreed Iraq to oversee mail, but without full inspections. The government spokesman Ali Dabbagh said on Saturday, received Washington's response to amendments of Baghdad, adding that the U.S. side agreed on a number of demand. The source, who spoke on condition of anonymity, said Changing the wording of English into Arabic and some observations of the Government of more than 100 words, was approved by the U.S. administration, confirmed reports that he returned the end of the negotiations as inaccurate information, because the contacts between the two sides, "the Iraqi and American" list were not disrupted. The President Jalal Talabani and Ambassador Ryan Crocker and the U.S. negotiation delegation, an important meeting yesterday, which studied the Government's amendments and Washington. Observers believe that the American response to the Government's amendments like the settlement or sharing demands, Marjaheen agreement to resolve the situation in the coming days., "Said party leader MP Ali al-Adeeb, call: The United Alliance bloc had not seen so far on the U.S. response and that it "bloc" take the appropriate decision when discussing the reply. The writer said in a telephone conversation with the "morning", said the Cabinet had convened a special meeting tomorrow, Sunday, to discuss the response U.S. administration or postpone the decision until Tuesday, indicating that the intensive meetings between political leaders will be held at the ****utive Board level, or between political forces. Meanwhile, National Security Adviser Mowaffaq al-Rubaie said the U.S. response to the amendments Iraqi carrying a White House could not line extension For troops to stay beyond the year 2011.

The final version of the agreement included a clause which states that U.S. troops withdraw from Iraq by the end of 2011, "unless asked to extend its presence in the country," but the government requested in the recent amendments to lift the words "unless asked to extend its presence in the country."

http://translate.google.co.uk/transl...hl=en&ie=UTF-8

Obama is trying to study situation in Iraq (the Group of the policies) which deals with Iraq in a foreign policy of Obama
Obama form two separate lay the foundations for his candidature and respect one another policy. The Group of policy analysis and briefings on national security and held by Bush and his aides

And started to establish priorities consistent with the agenda of Obama and urgent needs.

It is likely that the team is dealing with the situation in Iraq, the top foreign policy of Obama, followed by Iran and Pakistan and then Afghanistan

By next week, will be policy team had completed the order of these priorities, while group nominations will be completed the formation of management

After that, Obama held his first news conference since his election, he emphasized his determination to resolve issues of the country's economic vigor and flexibility, in order not to hold the middle consequences of this dilemma that needs to be efforts, also focused on the unity of America in the face of difficulties, and to continue to cooperate with partners And allies in Europe and the world, and the fight against terrorism in Afghanistan and Pakistan, seeking to examine the situation in Iraq to facilitate the transfer of security responsibility to the Iraqis, respectively.

For the Ministry of Defense, there are calls by the community on matters of national security and even within the Democratic Party calls for the minister to remain in office, Robert Gates, even for a transitional period in order to oversee the transfer of power to the Iraqis the military, the Department of withdrawals from Iraq, increasing the number of troops in Afghanistan, a Gates issues proved its ability to deal with them, and there are other candidates for the job, including Richard Danzig one of the Obama adviser for security affairs, in addition to former official in the Ministry of Defense Lawrence Corp.

Candidates for the post include National Security Adviser Obama Adviser for Foreign Affairs Susan Rice (not related between them and Condoleezza Rice), a former official in the Clinton administration, or James Steinberg, a former official at the National Security Council during the Clinton era.

It is highly possible that Obama appointed by former President Bill Clinton's special envoy to resolve the dispute over the Indian and Pakistani Kashmir, because Obama is convinced, according to sources close to him to solve the Kashmir issue will contain many challenges.

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Experts: Delete zeroes from the currency needed for stability NOT AVAILABLE

experts agreed that the economy in the deletion of the draft long-term zeroes, which purports to implement the central bank needs economic stability "not available" in Iraq, refused Economic Adviser to the Prime Minister that the project would cost the state significant amounts "without real results."

The economic researcher Abdul Karim Hilfi that "the central bank's decision to delete the three zeroes in the long run, not the new economic landscape has preceded us to several countries, and especially those Germany."

The Al Hilfi (Voices of Iraq) that the Iraqi situation "do not have the objective conditions of the deleted" because Iraq "suffers from structural economic problems of inflation rates and a strong addition to high rates of unemployment, how will be deleted zeroes of the dinar, which already does not exist?".

He pointed out that "Iraq is unable to proceed with this resolution, both short term or long-alike" explanation saying, "It is possible to delete zeroes when the strong production and service Jlth addition to the absence of structural imbalances or inflation and unemployment rates are less than 10 % "He said, adding that the resolution" can not be implemented only after a long time, if carried out in one or two years would be a negative influence because the economy is in recession now. "

The Central Bank of Iraq announced late last month of October on a long-term for the deletion of three zeros from the Iraqi dinar in order to improve the situation of the Iraqi currency.

In turn, drew a researcher and academic Hilal Ta `that" the draft was the deletion of zeroes draft proposed by the Iraqi Finance Minister Bayan Jabr "and" could be applied and considered as a medium or long term, and could not be applied until after the stability of the economic situation and improve the Iraqi dinar exchange rate. "

The Ta `l (Voices of Iraq) that the project" the most important of several requirements that need a stable economy in some respects and needs substantial financial resources as well as to support the Iraqi dinar foreign balances "and" it could be applied during the last period, but for the impact of the global financial crisis Iraq's economy. "

For his part, objected Adviser to the Prime Minister Abdel Hussein Al-Anbuge delete zeroes on the draft of the Iraqi dinar, and said to (Voices of Iraq) "To leave the project now is not the first to occupy the whole state to lift the zeroes from the currency at this stage."

"We do not agree, starting with this policy in favor of changing the form of currency, quality or deletion of the three zeroes" for the fact that "solutions cash is always symbolic and solutions are not true, the Iraqi economy and the real problems should heed the State address."

An example of "structural imbalances, to stop the wheel of the productive sectors such as agriculture, basic industry, in addition to a semi-destroyed infrastructure," and expressed his belief that the things mentioned by the "supposed to take priority."

He said Al-Anbuge "If the operation was intended to tackle inflation is to simply delete Aielj zeros from the currency, because that means I'm a citizen I was carrying cash and paper group purchased a dinars and by commodity, and when I deleted the zeroes the same good, I'll cash the same paper."

He stressed that Al-Anbuge situation "would not differ for the Iraqi citizen," and it "will not only exist for only cost huge amounts of money to cancel the previous currency and re-printed a new currency" and therefore "has no positive results on inflation."

He expressed the belief that "the results are only psychological, some negative for individuals who believe that they have a large amount of cash out of delusion, but after it becomes a fortune after deletion of a few zeroes have a concern because he thought it was a poor, or the results of psychological positive[/color] individuals because they buy goods Siatkaddon Cheaper. "

Securities in Iraq, in turn, would be affected by the deletion of the zeroes of the Iraqi dinar as a member of the Federation of Iraqi mediators said Mohammed Ismail, who told (Voices of Iraq) that "in case the deletion of zeroes currency capital companies reduced rates zeroes."

He stated that "For example, if the capital of three billion company will be three million dinars, in which case we will be in front of the stage where the market closed for a certain period for the issuance of certificates of new shares to bondholders, with the number of shares unchanged."

Ismail pointed out that "the process of removing the zeroes economic process difficult and complex needs accurate figures and statistics of all economic activities like Iraq possesses no."

http://74.125.93.104/translate_c?hl=...Qy3eNaNdtHvbsg

UPDATE 1-Iraq lawmaker says Shell deal lacks transparency

The head of Iraq's parliamentary Oil and Gas Committee said on Saturday he was concerned about a lack of transparency in a flare gas contract which the government has signed with oil major Royal Dutch Shell.

Shell is finalising details of the multi-billion-dollar plan, a joint venture with Iraq's state-run Southern Gas Company, before a final agreement is signed. An initial deal was signed in September.

Shell says the deal gives the joint venture a monopoly over all of the natural gas collected as a by-product of oil production in Iraq's rich southern oil fields in Basra.

Some Iraqi politicians have expressed alarm that such a deal could be signed without any tendering process.

'There hasn't been much transparency in this agreement,' Ali Hussain Balou, head of the Oil and Gas Committee, told Reuters. 'Shell signed this agreement with the ministry ... They did not give a chance to another company. We want to know why.'

A ministry spokesman said the deal had been done by the book. 'According to Iraqi law, ministries have the right to form companies and joint ventures. The Oil Ministry acted according to this law in forming a venture with Shell,' spokesman Asim Jihad said.

Gas produced as a by-product of oil extraction is currently flared off in Iraq since no facilities exist to capture it.

'Shell will buy this flaring gas at international prices,' Jihad said. 'This framework (agreement) allows Iraq to invest in this gas after decades of simply wasting it.'

Iraq wants to use most of the gas to generate electricity to ease chronic power shortages, then export surpluses.

'It would be better to have competition,' Balou said, adding that parliament should have scrutinised the deal.

Iraq, which has the world's third largest proven oil reserves, has said it wants to focus on development of its southern gas fields and could become a major supplier to Europe.

UPDATE 1-Iraq lawmaker says Shell deal lacks transparency - Forbes.com

Presidential Council ratified the Law of provincial elections

Presided over by His Excellency President Jalal Talabani on Saturday 8-11-2008, at the Peace Palace in Baghdad, a meeting of the Presidency attended by Vice President Dr. Adel Abdel Mahdi and Tariq al-Hashemi Professor, and there was extensive discussion on the subject of provincial elections.

The head of the Office of the Presidency of the Republic Naseer al-Ani told a news briefing after the meeting: After a thorough examination with the Vatican ambassador and with the Christian minorities and representatives of other minorities, and to stabilize the right of minorities seats in the parliament in the future, the Presidency Council to ratify the decision, which was voted on by The House of Representatives.

And at the same time would make ratification of a bill to ensure future rights and, most importantly reached after all these consultations is that the right of minorities to install their seats is in place.

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