Thread: Archive News - Iraqi Dinar Think Tank - 06/05/09 - 04/09/09

Iraq oil minister insists energy strategy is on track

Iraq's oil minister Hussein al-Shahristani on Tuesday defended his strategy for tapping the country's vast energy reserves, insisting that output must increase before new fields can be explored.

Iraq is due to announce which of 31 foreign and state-owned bidders have won deals to operate six major oil fields and two gas fields, for which the government will pay fees rather than share profits, on June 29 and 30.

Shahristani, accused by MPs of mismanagement resulting in 10 billion dollars in lost revenue for a federal budget that is projected to go into deficit, insisted his policy is on track.

"We have started to develop the oil producing fields because it is faster and Iraq is in extreme need to increase its production," said Shahristani."The undiscovered fields need time for drilling.

"If we keep working on our existing fields without digging anew and putting in more effort, production will decrease," he added.

Shahristani did, however, say that unexplored fields will be opened up to bidders in the future.

He also hit back at criticism from Iraq's autonomous Kurdish region, which earlier on Tuesday said Baghdad's policy was "unconstitutional and against the economic interests of the Iraqi people."

The oil ministry and Kurdistan are at loggerheads over how foreign companies working to exploit the nation's vast oil and gas reserves should be paid.

Iraq's decision to award service contracts differs from Kurdistan, where numerous profit-sharing deals have been struck.

"The regional government of Kurdistan has made clear progress in increasing Iraq's oil exports and oil revenues in a short time," it said in a statement.

"This progress has been made by focusing on exploration and not on existing fields, in line with the best practices of international markets, and in accordance with the principles of the Constitution of Iraq.

"The regional government regrets that it cannot say the same thing on the procedures taken by the Federal Ministry of Oil of Iraq," the statement added.

Article 109 of Iraq's constitution says that oil and gas resources must be developed "in a way that achieves the highest benefit to the Iraqi people," in a way "consistent with market principles and that best encourages investment."

Shahristani's critics have accused him of taking an ultra-nationalist approach, possibly deterring investment, by insisting that oil wealth -- meaning profits -- cannot be shared with foreign companies.

The service agreement shortlist was first announced by Baghdad in June 2008 and includes global energy giants Exxon Mobil, Royal Dutch Shell, Chevron and Sinopec, as well as large Iraqi state-owned operators.

The oil ministry has since repeatedly delayed announcing the bid winners.
Iraq has the world's third largest proven reserves of oil after Saudi Arabia and Iran, but development of the conflict-ravaged country's fields has been very slow.

http://www.zawya.com/Story.cfm/sidAN...s%20on%20track

Kurdistan b.rands Iraq oil contracts 'unconstitutional'

Iraq's autonomous Kurdish region hit out at Baghdad on Tuesday, describing oil and gas contracts due to be awarded by the federal government at the end of this month as "unconstitutional".

Iraq is due to announce which of 31 foreign and state-owned bidders have won deals to operate six major oil fields and two gas fields, for which the government will pay fees rather than share profits, on June 29 and 30.

The Iraqi oil ministry and Kurdistan, however, are at loggerheads over how international companies involved in the tapping of the nation's vast energy reserves should be paid.

Iraq's decision to award service contracts differs from Kurdistan, where numerous profit-sharing deals have been struck.

A statement issued by the Kurdish government said Baghdad's policy was "unconstitutional and against the economic interests of the Iraqi people."
"The regional government of Kurdistan has made clear progress in increasing Iraq's oil exports and oil revenues in a short time," it said.

"This progress has been made by focusing on exploration and not on existing fields, in line with the best practices of international markets, and in accordance with the principles of the Constitution of Iraq.

"The regional government regrets that it cannot say the same thing on the procedures taken the Federal Ministry of Oil of Iraq," the statement added.

Article 109 of Iraq's constitution says that oil and gas resources must be developed "in a way that achieves the highest benefit to the Iraqi people," in a way "consistent with market principles and that best encourages investment."

Iraq's Oil Minister Hussein al-Shahristani has been accused of taking an ultra-nationalist approach, possibly deterring investment, by insisting that oil wealth -- meaning profits -- cannot be shared with foreign companies.

He has also come under criticism from MPs who accuse him of mismanagement resulting in 10 billion dollars in lost revenue for a federal budget that is projected to go into deficit.

The service agreement shortlist was first announced by Baghdad in June 2008 and includes global energy giants Exxon Mobil, Royal Dutch Shell, Chevron and Sinopec, as well as large Iraqi state-owned operators.

The oil ministry has since repeatedly delayed announcing the bid winners.
Although Iraq has the world's third largest proven reserves of oil after Saudi Arabia and Iran, development of the conflict-ravaged country's fields has been very slow.

http://www.zawya.com/Story.cfm/sidAN...stitutional%27

One of the gates of the solution

The developing world is experiencing an increase in the number of countries that have become more open to investment, both national and foreign, is no longer the issue of allowing foreign capital to enter the problem, because the attention of those responsible for taking investment focus is on the way to attract foreign investments to the country concerned. With the investment law number (13) for the year 2006 it is incumbent on the bodies of investment and here I mean the National Authority for Investment and concerned ministries and provinces as they have the powers of investment given the Act, be aware of the importance of this law.

It is important to attracting direct investment, which is in multiple forms, including:

Shares of financial companies in the host countries and license agreements with national companies, joint ventures and majority stakes in companies and subsidiary companies to the investor in the host country. The main advantages of this investment is the capital of a large and long-time horizon and a higher return on capital in addition to investing companies, the direct investment can also play an indirect investments through «portfolio» in the stock market.

Direct investment needs to be an important criteria must be available in the environment where the investor, the most important of the appropriateness of the local market for investment, market size and purchasing power and growth of the economy, predictability and availability of local skilled manpower and of access to markets and competition with domestic products, and the risks of currency and exchange rates and the extent of test, and the possibility of re-exports of capital for companies, investors, and the availability of the physical protection of the rights and intellectual property, trademarks, patents as well as the trade policy of the country, and the cost of exports and imports, in addition to government regulation of climate-friendly regulatory environment for economic and tax rates, incentives and political stability, security and economic policy on inflation and stagnation, and the general price level, sound management of the economy and the characteristics of corporate governance in local and national levels. The survey showed the world conducted by McKinsey in 2002 to the views of investors on corporate governance when making investment decision that is their interest in the banking system by 30%, public finance and the environment by 31%, and the bankruptcy system by 32%, and the fight against corruption, financial and administrative by 32%, and the rights of intellectual property and material 6% and 37% of market liquidity, the International Accounting Standards 42%, and the organization of the market and infrastructure 43%, and the equality of shareholders 47%, and the disclosure of accounting data 71%.

The countries that are working to establish a sound working environment, clean and predictable, which is successful in attracting investment, investors are always looking for countries with an economic environment of predictable and strong legal system and low levels of corruption and effective mechanisms of corporate governance, and institutions take account of the foundations of sound business and property rights. In addition to the above, the financial crisis (Global Finacial Crisis) has hit the global banking system, which impact on the movement of world trade and the decline in global production and movement of capital, and necessarily influenced the movement of investment such as the global financial and economic turmoil, how the case in Iraq, which did not clear his Economic yet?

What theorists of the first economy and the financial measures is to identify a clear economic policy, including seminars and the national economy of the entire industry, agriculture and tourism as well as oil and economic activity out of the single-supplier and the development of other resources, according to non-oil economy and the development of mechanisms to reduce the overall inflation rate of unemployment and reduce the development of national economic links as much as possible, and the creation of banks for lending to productive projects, and supporting security and stability and political reform, the elimination of corruption, and the revitalization of the effectiveness of the National Authority for investment through its relationship with the ministries and provinces, and the development of the national banking to keep pace with the economic future of privacy resulting from foreign investment and market development securities to work at the regional level is the minimum possible in the use of modern technology and actively linked with the regional stock markets and global assessment of the least receptive to contribute to the movement of stocks and bonds, and the revision of the Companies Act, which failed in the mixed development projects and set priorities for economic reform of the economic and financial crisis and to meet the The global financial community to reduce spending in the state, and the issuance of the salaries of senior officers of the law of the State and their allocations, to support public investment and direct investment towards the development of this infrastructure.

http://209.85.227.132/translate_c?hl...wkYjS5U-qsrz7A

We are in a critical economic
Academic experts:

Dr. Muhammad Salman attribute lecturer in the Faculty of Management and Economics at the University of Anbar, the causes of the global financial crisis to the cases of corruption and bogus financial investment of the international monetary system, noting that Iraq will have to reduce the budget, the lower the price of oil, or deficit financing as long as it has no alternative resources.

In relation to the financial policy adopted by the major countries, Dr. Salman says: we must start from the appointment of the economic system from which the financial crisis started to tell that the capitalist system based on economic liberalism or free market economy centered on the rejection of state intervention in the economic exclusion and to consider absolute good and absolute evil interference in the capitalist principle of the famous «laissez-faire is», is responsible for the disaster first, and adds: This is absolute freedom was a major cause of the financial crisis has been further deterioration and lack of control over the banking performance with corruption in the management of monetary institutions associated with them in Europe, Asia and the rest of the world.

It is pointed out that the crisis created by the investment banks that operate outside the control of the U.S. Reserve (U.S. central bank) and the cause of excessive lending to people who wish to build housing units and low interest rates can be increased, allowing the door to low-income loans and guarantees is the residential units, thereby which has increased the offer price has fallen significantly, according to the law of supply and demand, pointing out that the housing units had been the guarantor of the loans more than doubling of prices in real times, through the so-called «Alnoriv», and this means the borrower that the bank issued the first bills to the value of these units and sold them to other monetary institutions The lower interest rate, and this in turn sold to banks, other banks and so on for ten sessions, and this represents a placebo is not associated with a real financial assets, and when the collapse occurred withdrew its aftermath on the different financial institutions within and outside of the U.S. economy.

Salman said: This is the starting point for the start of the first spark of the financial crisis, and important to know here that the capital which produced the free-market system started to change since 1971 (when gold broke away from the dollar) of capital to the productivity of capital depends on the kind of speculation and exchange traffic without a job in productive activity, thus transforming the economy to the real economy depends on the eyes of a group of bonds and securities to ensure it is not a cash balance of real banks, as evidenced by the presence of 600 trillion dollars out of central banks, while the part under the control of the banks was only $ 150 trillion, which means an imbalance in the global financial system led by the United States as a result of separation between the accumulation of financial assets and real assets in addition to the acts of manipulation and fraud, adopted by the financial institutions through the expansion of credit to borrowers is much higher than the true size of the liquidity of financial assets owned by those institutions.

Dr. Salman denies Iraq to be immune to the global financial crisis, stressing that Iraq will have to reduce the budget, the lower the price of a barrel of oil and Qadry or disability as long as funding does not have another resource other, Iraq is a single-country rental aspect of the resource that is dependent on oil in the financing of the general budget of the State, the shrinking demand for oil due to the financial crisis means a contraction in the resources of Iraq and the contraction in the rate of growth also, and thus is not immune to the effects of the crisis, but on the contrary, the dependence on oil as a single failure in the economy with the commodity sectors Other contributors to gross domestic product, making it vulnerable to any problem in my fate, especially the financial crisis did not have another resource that can be effectively offset the shortfall in resources due to falling oil prices globally, especially as he does not have any role in determining the sale price of oil Mentuge as a global commodity controlled by the world oil market, to reduce the budget, we find that the lower the price of oil. The question required an answer is: to what extent Iraq will reduce the budget if oil prices continued to decline? What if the price ten dollars? The answer reflects the magnitude of the crisis that put Iraq in a very critical economic.

On the possibility of bringing the ideal fiscal policy can be designed or proposed to be adopted by Iraq's economy is strong and well illustrates Salman: There is not a successful economic policy, however, that policy, which creates a resource other than the oil through the expansion of investment and increase the size of the investment budget with a reduction in consumer spending in the budget Assembly of the State, is required to activate any non-oil commodity sectors (agriculture, industry and trade) and increased investment in these sectors.

http://209.85.227.132/translate_c?hl...c7_owwNkcxhwiw

UPDATE 2-Iraq oil min defends oil deals before parliament

Iraqi Oil Minister Hussain al-Shahristani defended to sceptical lawmakers on Tuesday plans to award the first major energy contracts since the 2003 U.S. invasion, saying Iraq stood to earn almost $2 trillion on them.

said complaints from companies showed Iraq had hammered out a tough deal with regard to the eight oil and gas contracts due to be auctioned off on June 29-30, and rebuffed demands from lawmakers that they be approved by parliament.

The minister will return to parliament on Thursday, deputy parliament speaker Khalid al-Attiya said, giving lawmakers another opportunity to air criticism.

After the session, the minister said there was no chance the announcement of contract winners would be delayed or cancelled: 'The opening of the offers will take place on schedule.'

Ali Hussain Balou, head of parliament's oil and gas committee and a member of a Kurdish minority that has long assailed Shahristani's management of the oil sector, pledged before the minister's appearance to 'totally reject' the contracts unless they were approved by parliament.

'We will not allow the Oil Ministry to move ahead, ignoring parliament and signing contracts in the first bidding round, since they are illegal and unconstitutional,' he said.

Lawmakers, in a session lasting several hours, asked the minister why he had chosen service contracts, which give foreign firms no share of production but pay them a fee.

Shahristani, who said the contracts would bring Iraq $1.7 trillion over 20 years, insisted over and over the deals were the best way to inject new life into Iraq's ailing oil sector.

It is unclear whether parliament has the power to stop the Oil Ministry's plan to conclude the bidding process, which will be Iraq's first auction of prized oil resources to leading energy firms since the fall of Saddam Hussein.

Senior E.xecutives of the state-run oil sector have criticised the Oil Ministry for offering oilfields already in production rather than undeveloped fields, and for setting out terms they say will deprive Iraq of its due rewards.

'Is Iraq ready to take a gamble with these changes?' Shahristani asked.


ARABS AGAINST KURDS

Iraq's oil reserves, the world's third largest, offer hope for a country struggling to rebuild after more than six years of bloodshed and destruction triggered by the invasion.

But the tussle for control over the oil wealth has also pitted Arabs against Kurds and prevented the passage through parliament of modern hydrocarbon legislation.

The session underscored the fierce debate over how best to boost oil production of 2.3 million to 2.4 million barrels per day, below where it stood before the invasion.

The 32 firms competing for the deals include Exxon Mobil, Royal Dutch Shell and Total.
They will have to pay Iraq $2.6 billion in signature bonuses and also have to carry Iraq's 25-percent share of the development costs, which Baghdad will pay back over time in oil.

The semi-autonomous Kurdish authorities in the north have struck their own parallel energy deals with private firms but the Oil Ministry has rejected those as illegal.

Kurdish officials have warned in return that they might reject any contract the Oil Ministry issued to a private firm to develop the Kirkuk oilfields, a major oil-producing region that Kurds claim as their ancestral capital.

'If (Shahristani) dares to sign these contracts, he must assume responsibility for the consequences,' Balou said.


http://www.forbes.com/feeds/afx/2009...fx6576898.html

Update.......

Missan Oil Company signs contract to dig 20 oilfields in Amara

The Missan Oil Company signed a $224.4 million contract to drill 20 wells in Iraq’s southern Bazargan field with U.S. oilfield services company Weatherford, the director of the company’s information department said on Tuesday.

“We signed today (June 23) a contract to dig 20 wells in Bazargan field in east of Amara,” Ali Abbas Sadeq al-Tarfi told Aswat al-Iraq news agency.
“Signing the contract was made in the attendance of head of the Missan provincial council, a number of local council members and representatives of the U.S. company,” he explained.

“Ali Maareg signed the contract from the Iraqi side and Wallied Khaled Hatem from Weatherford company in Iraq,” he added.

Ali Maareg had said the project could boost production there by up to 30,000 barrels per day (bpd). The field currently produces around 100,000 bpd.

http://en.aswataliraq.info/?p=115095

CBI sells $124m on Wednesday

Demand for the dollar went up in the Central Bank of Iraq’s (CBI) auction on Wednesday, reaching $124.980 compared to $114.550 million in the previous session.

“The demand hit $3 million in cash, covered by the bank at an exchange rate of 1,183 Iraqi dinars, and $121.980 million in foreign transfers outside the country, covered at an exchange rate of 1,173 Iraqi dinars per dollar,” according to a CBI news bulletin received by Aswat al-Iraq news agency.

None of the 15 banks that participated in today’s session offered to sell dollars.

http://en.aswataliraq.info/?p=115120

US Army in back seat as Iraqi forces take over

US Army Lieutenant Dan Wagner arrived in Iraq six months ago knowing his country was no longer calling the shots when it came to security, but he is resigned to further massive changes within days.

"It's tough to take a standback role," says the 24-year-old Westpointer, as his soldiers patrol behind a group of Iraqi troops conducting a search and census operation in Al-Naherwa, a district in western Mosul.

"I want to be doing stuff and so do my men, but this is the way it's gonna be," adds the fresh-faced platoon leader from the 3rd Batallion 8th Cavalry regiment, part of the 3,500-strong US force based around Mosul.

American troops will no longer be allowed in Iraqi cities and major towns after June 30, under the terms of a landmark security accord signed between Baghdad and Washington last year.

Iraq's security forces have "been in the lead" since January 1, say US officers, in a stock line repeated regularly at media briefings in Baghdad.
The mantra is trotted out slightly less regularly in Mosul, however, a city where civilians, soldiers and policemen are still dying.

"VBIED (vehicle-borne improvised explosive device)," Wagner speaks into his radio, the second a loud blast marked the sound of a car bomb exploding only kilometres (miles) away, in a reminder that Iraq remains far from peaceful.

From July 1, Iraq's army and police will take sole responsibility on the streets, in a key test of the fledgling forces' abilities more than six years after the US-led invasion that ousted dictator Saddam Hussein.

Across run-down Naherwa's litter-ridden streets, an Iraqi man raises a hand and invites the lieutenant across to ask when the neighbourhood's water shortage, a common problem across much of Iraq, will be tackled.

"The squeaky wheel gets the grease," replies Wagner, all the time keeping a close eye on an already bustling area made more busy by hundreds of children playing on the streets now that schools have closed for summer holidays.

Iraqi youths have recently thrown grenades at US forces in Mosul, and although Wagner's men are happy to play with smiling children, their commander eventually asks an Iraqi colleague to call an end to the fun.

A reply of "Inshallah" ("God willing") and friendly nod indicates the man has heard Wagner's reasoning but is not entirely convinced with the explanation that Naherwa will have to wait its turn for the taps to more than trickle.

The clock, though, is ticking urgently on the mission of US soldiers here.
Wagner and his contemporaries remain stoic about their role in Mosul, to which Al-Qaeda insurgents fled after being driven out of Baghdad and rebel hotspots such as Fallujah.

Across town on a similar mission with an Iraqi police unit, Lieutenant Joe Brown, from the same regiment as Wagner, explains that the US is trying to achieve an "enduring effect" after massive clearance operations last year.

"We have seen a drop-off in attacks and we put that down to the clearing operations," he says. "But we have tried very hard to build on that."

Speaking to a young Iraqi officer via an interpreter, Brown says such patrols are key to a sustained peace, a hopeful aim underscored by the shooting death of an 18-year-old man in a nearby street that same morning.

"Today we don't have a target but these patrols disrupt the enemy. They don't know why we are here and that is why it is important to be visible."
But Brown, a 30-year-old former airman who transferred to the army just two years ago, admits that the June 30 withdrawal presents issues for American soldiers, as well as increased responsibilities for Iraqis.

"On the one hand the guys (US) like not having to do all the heavy lifting," he says. "But our unit is going to be here for another six months and the last thing I want is for us to be stuck in camp all that time."

http://www.zawya.com/Story.cfm/sidAN...%20take%20over

Kurdistan Region Parliament voted in favor of draft constitution

The Parliament of Kurdistan Region in Wednesday’s session voted in majority, on the Region’s draft constitution which is scheduled for referendum by the people of Kurdistan on July 25, 2009.

Speaker of the Kurdistan Region Parliament Mr. Adnan Mufti headed the session which was devoted for voting on Kurdistan Region Draft Constitution.

After reading the Constitution’s articles by the committee of writing the constitution in Kurdish and Arabic languages, Mufti presented it for voting, 96 members of 110 total numbers of the Parliament voted in favor of the draft constitution.

http://pukmedia.com/english/index.ph...11793&Itemid=1

Iraqi, Egyptian Parliaments sign cooperation agreement

The Iraqi Parliamentary delegation headed by Dr. Iyad al-Samarai on late Tuesday, June 23, in Cairo signed a joint cooperation agreement with the Egyptian People’s Assembly included many aspects that enhance the parliamentary process between both countries.

Dr. al-Samarai said that the agreement is going to be a prelude for mutual visits of the specialist committees in both countries Parliaments in order to benefit from the Egyptian experience, coordinate cooperation and try to unify legislations.

For his part, Head of Egyptian People’s Assembly Dr. Ahmed Fathi Sorror expressed his delight to sign the joint cooperation agreement with the Iraqis which aims to take benefit from both sides experiences.

http://pukmedia.com/english/index.ph...11791&Itemid=1