Thread: Iraq/Dinar News. 09/05 to 01/14/07

Originally Posted by adm

DayDream, whose idea was it to remove the barricades in Sadr City that the US had early this month? I'm not going to mention any names, but does the last name starts with a "M."


Al

Originally Posted by DayDream

Iraq Tells U.S. to Quit Checkpoints - washingtonpost.com

Cheers!
DayDream

The order by Prime Minister Nouri al-Maliki to lift the week-old blockade of Sadr City was one of the most overt expressions of self-determination by Iraqi leaders in the 3 1/2 -year-old U.S. occupation. It followed two weeks of increasingly pointed exchanges between Iraqi and U.S. officials, as well as a video conference between Maliki and President Bush on Saturday.

Maliki's decision exposed the growing divergence between the U.S. and Iraqi administrations on some of the most critical issues facing the country, especially the burgeoning strength of Shiite militias. The militias are allied with the Shiite religious parties that form Maliki's coalition government, and they are accused by Sunni Arab Iraqis and by Americans of kidnapping and killing countless Sunnis in the soaring violence between Iraq's Shiite majority and Sunni minority.

Sadr City is the base of the country's most feared militia, the Mahdi Army, which answers to Shiite cleric Moqtada al-Sadr. Sadr's strongly anti-American bloc is the largest in the Shiite governing coalition and was instrumental in making Maliki prime minister five months ago.

At midday Tuesday, Maliki issued an order giving a 5 p.m. deadline for removal of the U.S. checkpoints. A senior U.S. Embassy official said later that Maliki told U.S. Ambassador Zalmay Khalilzad and Gen. George W. Casey Jr., the top U.S. commander in Iraq, in a meeting Tuesday that the checkpoints should be lifted.

A U.S. military spokesman, Lt. Col. Jonathan Withington, said American soldiers removed the checkpoints at the order of their commanders. "We take military orders," Withington said.

This article is a little old but I just found it and thought it interesting. Really shows the Kurdish mindset in regards to the Sunnis and Shiites.

In Kurdistan, Iraq seems a Million miles awayIn Kurdistan, Iraq seems a Million miles away

By Borzou DaragahiBy Borzou Daragahi

The autonomous region is an oasis of safety in comparison to other, violence-stricken areas.The autonomous region is an oasis of safety in comparison to other, violence-stricken areas.

Sulaimaniyah, Kurdistan-Iraq , -- The night is young.Sulaimaniyah, Kurdistan-Iraq, -- The night is young. The women are pretty. The women are pretty. Danyar Farok, wearing a sparkly gray shirt and skin-tight acid-washed jeans, and a buddy are strutting along this Kurdish city's main drag. Danyar Farok. wearing a gray shirt and sparkly skin-tight acid-washed jeans, and a buddy are strutting along this Kurdish city's main drag.

Maybe they will wind up at one of the outdoor bars in the riverside Sarchinar district.Maybe they will wind up at one of the outdoor bars in the Sarchinar riverside district. Or maybe they will sit at a teahouse shooting the breeze.Or maybe they will sit at a teahouse shooting the breeze.

Faruk, a 25-year-old high school computer teacher, complains that he and his girlfriend, Medea, can't put together enough money to live together.Faruk, a 25-year-old high school computer teacher, complains that he and his girlfriend, Medea, earth put together enough money to live together. His artist pal Shakwan Siddik, a 23-year-old with black hair down to his shoulders and sunglasses dangling from an open-collar shirt, is searching for a sunny studio to do his oil paintings. His artist are still needed Shakwan Siddik. a 23-year-old with black hair down to his shoulders and sunglasses dangling from an open-collar shirt, is searching for a sunny studio to do his oil paintings.

As for the kidnappings, car bombings, drive-by killings and economic misery unfolding in the rest of Iraq, Farok is blunt.
"I don't care," he says "The Arabs never cried for us when we were suffering. I'm going to a teahouse with my friend to have some fun. "

Although much of Iraq is engulfed in insurgent, sectarian, political and tribal violence, the Switzerland-sized Kurdish autonomous region in the north of the country, established after the 1991 Persian Gulf War, is an oasis of safety and tranquillity where young and old concern themselves with mundane matters of life such as work, dating and home furnishings.

The growing sense that the Kurdish region is turning away from the rest of the nation was driven home over the weekend, when Kurdistan regional President Massoud Barzani banned the Iraqi flag from being flown atop official buildings. To many in Kurdistan, the banner symbolizes years of oppression and slaughter under Saddam Hussein.

Iraqi Prime Minister Nouri Maliki criticized the decision Sunday. "Until this moment we still have the current Iraqi flag and it should be raised over every point in Iraq, " he said during an interview with an Arab satellite television program.

"Not only the Kurds were slaughtered under this flag, but many Iraqis were slain under this flag. Iraq was slain under this flag, " he said

Whichever flag prevails will fly in a prosperous area.Whichever prevails flag will fly in a prosperous area. The Kurdish region has thrived even as Iraqis elsewhere have taken their money and skills with them, fleeing cities such as Baghdad, Basra and Mosul.

A real estate boom has transformed cities such as Sulaymaniya and Irbil into noisy construction zones. The once-desolate road around Sulaymaniya is being filled from scratch with apartment towers and commercial buildings on a scale seen in oil-rich Persian Gulf kingdoms.

Towns and villages in the mountainous Kurdish countryside are seeing modest housing booms as Kurdish expatriates and Iraqi Arabs fleeing the violence flood into the region.

In Sulaymaniya, an opera house is being built. New hotels abound. New international airports in Sulaymaniya and Irbil offer direct flights to cities such as Dubai, United Arab Emirates; Istanbul, Turkey; Amman, Jordan; and Tehran. Visitors to Kurdistan can now bypass Baghdad altogether.

At Sulaymaniya's airport, wireless Internet access lets travelers check their e-mail. U.S. The world. service members, accustomed to glares and roadside bombs in the rest of Iraq, wander in amazement through the terminal almost unnoticed, ordering snacks at the cafeteria as if they were on a layover in Cleveland.

"We've tried for 15 years to have some sense of normalcy here, " said Diari Tarek, a 37-year-old architect shopping for windows and doors for a house he is building for his family "After 15 years, we finally found it."

Kurds, the world's largest ethnic group without a nation, have a language and culture distinct from Iraq's 80% Arab majority. Successive Sunni Arab governments in Baghdad brutally repressed the Kurds, whose region is home to much of Iraq's water and energy resources.

Hussein's forces destroyed hundreds of Kurdish villages and allegedly used chemical weapons during the 1988 Anfal campaign, now the subject of a genocide trial in Baghdad.

Since Hussein's ouster in 2003, the Kurdish region has not been immune to violence. Several times, insurgents have slipped past soldiers guarding the internal frontier along the three Kurdish provinces and attacked government buildings. An undercurrent of fear persists.

"The same explosions and bombings might come up north tomorrow, blow me up with my business, " says Issa Hamad Abdul Rahman, who said he grosses $1, 500 a month selling imported chewing gum to passersby in Sulaymaniya's main market. "Terrorism spares no one."

Some Kurds, especially those with ties to the rest of Iraq — perhaps from having studied in Baghdad or owning property elsewhere — worry about the violence.

Tarek, the architect, and his schoolteacher wife, Nasiq, own property in eastern Baghdad.

"It's very sad what is happening in the rest of Iraq, " she said "I see the rest of Iraqis as our children, brothers and sisters."

By and large, though, Kurdistan feels distinctly different from the rest of the nation. The regional government announced over the weekend that it would no longer fly the red, white and black flag of Iraq, opting for the sun-splashed red, white and green banner that has been a symbol of Kurdish independence for 60 years.

Being here means forgetting the hard-set rules that govern the rest of Iraq.

Westerners can walk out of hotels and catch taxis without fearing for their lives. Restaurants and kebab stands can stay open late. Young men can blast their car stereos.Brightly lighted liquor stores can sell low-grade bottles of whiskey and wine. Young men and women can — and do — kiss in parks.

"I change the channel every time there is news about bombing and killing on television, " said Lana Tofiq, an 18-year-old whose skimpy purple T-shirt would draw stares, recriminations and possibly worse in the rest of Iraq "As long as Sulaymaniya is nice and quiet, why should I worry about other places? "

Her boyfriend, Rebwar Jamal, an 18-year-old working at a bakery, also could not care less what happened in the rest of Iraq.

"We were being killed and repressed for decades by Arabs, and not one of them ever said anything on our behalf, " he said "Why should I care about Shiites and Sunnis who kill each other?"

Jamal said his biggest worry in life was being so busy that he would not be able to see his girlfriend enough.

"When I get a chance, I go out with her to the park, " he said, his hair glistening with gel. "But I can not see her every day. I spend hours calling her on the cellphone and sending her text messages. I send her about 20 text messages a day. "

Cheers!
DayDream

My intentions for today, were to buy a couple million more dinars. After the horrific events yesterday, I am feeling I may have some additional time to feed my stash. I feel like the recent bombings/followed by a lot of monetary relief to the effected families may have stalled the progress...so to speak. Any suggestions/ thoughts??

Originally Posted by DayDream

Shiites burn Sunnis alive, torch buildings near Iraqi army post

Updated 11/24/2006 10:57 AM ET

BAGHDAD (AP) — Revenge-seeking Shiite militiamen grabbed six Sunnis as they left Friday worship services, doused them with kerosene and burned them alive near an Iraqi army post. The soldiers did not intervene, police Capt. Jamil Hussein said.

The savage revenge attack for Thursday's slaughter of 215 people in the Shiite Sadr City slum occurred as members of the Mahdi Army militia burned four mosques and several homes while killing 12 other Sunni residents in the once-mixed Hurriyah neighborhood, Hussein said.

Gunmen loyal to radical anti-American Shiite cleric Muqtada al-Sadr began taking over the neighborhood this summer and a majority of its Sunni residents already had fled.

The militiamen attacked and burned the Ahbab al-Mustafa, Nidaa Allah, al-Muhaimin and al-Qaqaqa mosques in the rampage that did not end until American forces arrived, Hussein said.

The gunmen attack with rocket-propelled grenades, heavy machine guns and automatic rifles. Residents said militiamen prevented them from entering burned structures to take away the bodies of victims.

The Shiite-dominated police and Iraqi military in the area stood by, both residents and Hussein said.

Later Friday, militiamen raided al-Samarraie Sunni mosque in the el-Amel district and killed two guards, police 1st. Lt. Maitham Abdul-Razaq said. Two other Sunni mosques in west Baghad also were attacked, police said.

Cheers!
DayDream

Oh, for fack-sweet sake! Don't they realize that, in fighting to rid their country of "outsiders" (while inviting mercenaries in to "help") they are killing off their OWN! If they think "outsiders" are running their country now, who is gonna be left standing to run their country after they slaughter each other - whatever opportunistic vultures are circling now, watching this whole thing play out!!!

Can't all these "big guns" coming in for high-level meetings encourage these people to settle their differences through discussion? Oh, that's right - there is a different mentality - vengence, etc. Okay, then! How's about we supply them with PAINT BALL GUNS! (environmentally friendly paint, of course!) Just like teen-agers with raging hormones, they could get it all out of their system with little need for damage control.

Hope you all had thankful Turkey Days - here's to clearer heads prevailing in the weeks to come and a reval very soon!

Bless our troops and bring 'em home safe!

Interesting,

Still no word from my Kurd's on 10K being released as of Friday. Sure is strange how they can announce something and then a month later still have no valid reason for delay. Makes you wonder if anyone in gov. knows what they are doing sometimes.

Good luck to all, Mike

If this has already been posted, I apologize.


Summit outlines strategies for microfinance industry in Iraq

--------------------------------------------------------------------------------

24 November 2006 (PortAl Iraq)
The Iraq National Microfinance Summit organized by the U.S. Agency for International Development (USAID)-funded IZDIHAR project Nov. 14 to 15 in Erbil attracted more than 100 participants to a discussion of the role of microfinance in economic development and job creation in Iraq.

The audience included Iraqi and international microfinance practitioners, private sector partners, government officials, international financial institutions and USAID representatives.

"The Summit for the first time brings together all the stakeholders to take stock of the industry as it exists today," IZDIHAR Chief of Party Baljit Vohra said at the Summit. "Microfinance, as defined in Iraq, creates employment and self-employment opportunities. We look forward to the deliberations of this summit helping to outline a strategy for this sector that will lay the foundation for a thriving microfinance industry in Iraq."

"Given the unique environment in which microfinance institutions operate in Iraq, there are no real precedents to draw on for guidance. This Summit assisted donors in formulating practical programs with realistic expectations for microfinance in Iraq," USAID's Greg Howell said.

Nasiriyah : Associated Press correspondent arrest

(Voice of Iraq) - 11-24-2006
This issue was sent to a friend

Nasiriyah News Network / Fadel Khagani :

The Iraqi police in the city of Nasiriyah this morning today, Friday, the arrest of correspondent and the Associated Press during coverage of a demonstration organized by a group of people (not more than fifty individuals) calling for the resignation of the city's governor, The eyewitnesses were present at the place of the incident, said that the reporter during its coverage of the demonstration is a telephone call to a mobile phone and the transfer figures and perceptions of the demonstration contrary to reality, which irritated a number of policemen and attacked him and beat him and arrest him after the confiscation of imaging equipment, while the number of police personnel that the correspondent tried to provoke them and the glorification of terrorists to hearing them, prompting them to arrest him.

It is noteworthy that during this demonstration, the police also confiscated Alcamra contacted the private News Network Nasiriyah for more than three hours. It was returned later.

Originally Posted by MOM2TWO

My intentions for today, were to buy a couple million more dinars. After the horrific events yesterday, I am feeling I may have some additional time to feed my stash. I feel like the recent bombings/followed by a lot of monetary relief to the effected families may have stalled the progress...so to speak. Any suggestions/ thoughts??

Monetary relief???? Wel they still have not passed out the 10,000 dinars they promised over a month ago....go for it.

Shiites killing Sunnis; Sunni reprisals against Shiites. Think for a minute or two and you'll know what is behind it all.

Iraq is a country with much to desire; oil, water, agricultural possibilities, Muslim religious icons, etc. Shiites outnumber all other facets of the population. I think the number has been stated at 60%+ of the country is Shiite. What other country in the region is a Shiite theocracy? Iran is.

Iran backs the influential Shiite leaders in Iraq. In the early days they supported the older and potentially "wiser" al Sistani. When al Sistani didn't have the stomach for outright slaughter and potential genocide of non-Shiites, they threw their backing behind al Sadr. Do not forget that Iran has been having skirmishes with the Kurds in the North for years now. The Kurds are too small a block of the population to dictate any policies. That's why their wishes to accelerate a reval and the passing of necessary legislation has been stymied.

The Iranian-backed Shiites are simply waiting for their day to be in complete theocratic control of Iraq. They will become the puppets of the government of Iran so that Iran can siphon off the benefits of Iraq's resources. Once the U.S. is removed from the equation, the Shiites will have nothing standing in their way. Maliki and any other potentially "moderate" Shiites will simply be either brushed aside or outright murdered by those they purportedly represent.

A peaceful, non-theorcratic country right next door to Iran can not be allowed to happen as far as Iran is concerned. They already have a "restless" population that is tired of the theocratic rule being imposed on them. Many remember the financial and personal freedoms they had in the past and want those days to return. A free and properous society right next door could ignite Iran's populace to possibly act and depose their iron-fisted and repressive government. The leaders of Iran and other theocracies in the region know this all too well.

The muslim world since the dark ages only knows one kind of rule; the man with the biggest tally-wacker and sharpest sword rules. The democratic process is as foreign to them as sense-less violence and religious persecution is to us. As bad as "staying the course" sounds to most, it is the only way to insure Iraq doesn't return to the dark days of totalitarianism.

Just my .02...

Everwiser

Long...but interesting and factual:

By Tariq Shafiq

Oil Industry Implications Of Iraq’s Constitutional Articles 108, 109 & 111 Governing Oil & Gas Assets: A Call to Reconsider

The following article was written for MEES by Tariq Shafiq, Founding Executive Director, Iraq National Oil Company (INOC), Director, Petrolog & Associates, and Chair, Fertile Crescent Oil Development Co (based in Baghdad).

1.1. Constitutional Articles Governing Oil and Gas Assets

Article 108*1 states that “oil and gas are the property of the nation (people) of all the Regions and Governorates”.

Article109* states:

1st “The Federal government development will administer (manage) the production of oil and gas fields in cooperation (consultation) with the governments of the producing Regions or Governorates, ” “provided that the revenues will be distributed in a manner compatible with the demographical distribution all over the country.”

2nd “The Federal government and the governments of the producing Regions and Governorates in cooperation (in consultation or together) will draw up the necessary strategic policies to develop oil and gas assets (wealth) to achieve the greatest benefit to the Iraqi people, based on the most modern market technology and encouraging investments.”

Articles 108 and 109 fall under the exclusive powers of the Federal Government, hence the choice of words in the translation is affected accordingly, as in the possible use of ‘consultation’ rather than ‘cooperation’ or ‘jointly’.

Article 111* states that, “All that is not written in the exclusive powers of the Federal government falls under the authority of the Regions and all that is not written in the exclusive powers of the Federal authority is in the authority of the of the Regions and Governorates. In case of disputes on matters that fall under powers common (shared) between the Federal government and the governments of the Regions and Governorates the priority will be given to the latter.

1.1. The above articles 108*, 109*, and 111*, have been changed to 111, 112 and 115 respectively.

2.2. Technical Facts

There are in Iraq some 530 structural anomalies. Some 115 have been drilled to-date. Of these, 80 fields have today proven oil reserves of some 115 bn barrels. The 415 unexplored structural anomalies are estimated to have in excess of 215bn barrels.

Present production is 2 mn b/d, of which the export is 1.5 mn b/d. Historical production high was 3.5mn b/d in 1979 and production prior to March 2003 war was 2.8mn b/d.

Finding and development cost per barrel of oil is estimated at $1, which is equivalent to around $ 5, 000 per 1 b/d production rate (365 barrels per year) and operating production cost is $1.0-1.5/B.

Present proven reserves can support a production rate of 10mn b/d which can be maintained for over 8 years before it starts its decline.

Building Iraq’s current production rate to a peak of 10mn b/d and maintaining the plateau for eight years would require annual depletion rate of 4% at the beginning, rising to 5.3% when it would be allowed to decline in order to maintain the sound depletion rate of 4-5%. Theoretically, if it is allowed to decline, the oil production rate would have reached 6.4mn b/d by the end of 25th year of production when the country’s reserves would have declined to around 40bn barrels, from the present 115bn barrels at the start of the build-up of production capacity which is still a few times of the North Sea or Caspian reserves.

The 10mn b/d plateau could be raised to 12+mn b/d, with the addition of new reserves to maintain the sound depletion rate of 4-5%. However, it would take Iraq over a decade or even two to reach a production rate of 10mn b/d.

Contrary to the generally held concept that exploration activities are required at all times at least to replenish the reserves which have been produced, Iraq’s case is unfortunately and sadly unique. Iraq’s production rate has never been commensurate with its proven reserves over the past decades throughout the Iraq Petroleum Company (IPC) concessionary era or the nationalized era that followed since the 1970s.

The IPC parents had obligations elsewhere in the Middle East to develop, hence they limited production in each country to a low 1% annual depletion rate. And, they considered other countries safer to invest in than Iraq, which pursued radical policies after the issuing of Law 80 in 1961 which enforced unilateral relinquishment of the unexplored areas and undeveloped discoveries. INOC, since then, adopted inherited practices including low production depletion rate. Having to rebuild production capacity from where they started repeatedly, because of the numerous Gulf wars, while oil reserves continued to accumulate, resulted in hugely disproportionate reserves to production ratio.

Iraq today has, on a global basis, the highest proven reserves or total oil resource reserves to production ratio (a measure of life expectancy) of 157 years and 452 years respectively (when adding the potential to the proven reserve). At a production rate of 5mn b/d it would still take 62 years and 180 years respectively. Couldn’t Iraq then hold on unnecessary long-term exploration production-sharing agreement (PSA) contracts for a few years or at least until stability prevails and big powers’ pressure subsided? In the meantime, the industry can concentrate its capital investment and limited human resources on production capacity growth to bring in the necessary revenue.

Major producers outside the Middle East keep reserves-to-production ratios at a fraction of Iraq’s: UK at 6, Norway 8, Denmark 9, US 11 and Russia at 21 years, according to the statistics at the beginning of 2005. Russia’s production rate was 9.4mn b/d with oil reserves of 72bn barrels which corresponds to an annual depletion rate of 5%.

This does not mean, however, no exploration activities should be carried out to enhance the understanding of the geological knowledge and enrich the oil and gas prospectivity. Such exploration activity would be part of the comprehensive and unified planning for exploitation and development of the whole country. But, it would be limited to a scale far smaller than the uncoordinated competing numerous exploration ventures by IOCs in the various regions and governorates which are expected under the present constitutional articles. In fact Kurdistan had already started and a few other Governorates are at the beginning of the road, following suit.

3.3. Planning Oilfields Development

Planning oilfields development for production capacity growth is carried out on a composite master plan which examines the capacities of the discovered and producing fields (including each and every producing formation within each field) from technical and economic feasibility points of view. In the meantime, it takes into consideration Iraq’s economic development plans and needs. The choice of the plan for execution must ensure :

Optimal use of proven reserves which are housed in numerous and different locations throughout the rich governorates and regions.

Optimal oil fields development cost plus cost of any additional or replaced major pipeline carriers and export terminal capacities.

Catering for future additional potential reserves as and when needed.

Securing investment capital and the managerial capability of the national effort (be it the ministry and/or INOC) and deciding on the role and number of the complimentary international oil companies (IOCs).

Such comprehensive and integrated planning could not be realized in the absence of a centralized, coordinated and unified oil policy mechanism and the whole country's data base. It is best accomplished by the central authority, Ministry of Oil (MoO) or a High Energy Commission working jointly with the MoO and in consultation with a think tank and qualified non-governmental organizations (NGOs) from the various regions and governorates, chosen, though, on merits.

4.4. Management Of Oilfield Exploration/Development In The Light Of The Present Constitutional Articles

Without a central unified policy there will be disharmony and competition between INOC (operating on production and marketing its export oil to provide the state's income) and the Regions and Governorates (operating on exploration for unneeded additional reserves), and among the various Regions and Governorates, with disharmony and envy between the haves and nots. This would lead to an unhealthy oil industry, causing instability and damaging consequences contributing to the fragmentation of the country.

Instability would discourage the serious major IOCs with knowledge, capital and markets from engaging in Iraq's oil industry development. Iraq would then find itself accepting the speculators and minor independents with more promises than they can deliver.

Lack of experienced oil personnel of managerial quality at the regional level and absence of unified Ministry of Oil model contractual terms and agreements are likely to lead to inferior oil and gas agreements with the more knowledgeable IOCs, which is, in itself, a failure as it does not satisfy the constitutional requirement of "ensuring highest benefits to the nation." Worse yet is the likelihood that accountability and transparency might prove difficult to expect from the embryonic Regional governments and Governorates lacking institutions and traditions.

Furthermore, contracts enacted under such conditions of unfair terms due to gross disparity between the parties would be consider nul and void under the legislative system (International Institute for the Unification of Private Law) principles of international commercial contracts which establish contée ract law principles.

Highest benefit from produced oil could only come from a national oil operation where direct investment of $1 per developed barrel brings in a return of over $55 in today’s market, which is unlikely to fall below $35-40 to the end of the decade and beyond. It is illogical to leave such a highly profitable business solely to the IOCs.

The interpretation of the constitutional paragraph, "latest technology of the market principles and investment promotion", taken out of its context of "ensuring the greatest benefit to the nation", a wholesale of Iraq's future oil riches is expected to go to IOCs sole operations, effectively denationalizing Iraq's oil and gas assets. This would take Iraq back to the concessionary era with all its drawbacks, including serious infringement of Iraq’s sovereignty for its near total financial dependence then on IOCs.

While IOCs can achieve many positive mutual benefits, including among others fast track and sound development, unchecked production of competing IOCs leads to excessive production causing price deterioration and market instability. This is neither in Iraq’s interest as a major producer, nor in compliance with Iraq’s obligation towards OPEC.

As a long-term consequence of the application of Articles 109 and 111, the oil and gas rich Regions and Governorates would lead to their exclusive future control over nearly two thirds of Iraq's oil. And, as the oil reserves from the producing fields decline, and new reserves of the Regions and the Governorates build-up, the latter would have increasingly greater economic power than the Federal government.

5.5. A Balanced Oil Policy

Reinstating INOC, which has proven success in the past (it built production capacity to over 3.5 mn b/d from 1.5 mn b/d in a few years and added oil reserves at the rate of 6 + bn barrels per year during the 70's). As long as Iraq’s economy remains dependent on oil income, it is absolutely necessary to establish a national state-owned oil industry, which should be given the administrative and financial independence to command a pivotal role in the development of the country’s oil industry. It would ensure orderly exploration and developments (E&D) operations, decisions based on technical and commercial priorities, and optimum flow of income to the treasury.

Large investment capital for future oil and gas development should not give credence to substituting national operation by IOCs. To build a production capacity of one barrel per day (365 barrels per year) costs around $5, 000. 000. The oil industry elsewhere was built by the IOCs through loans to the extent of 80-90% of the required investment capital. A borrowed capital of $5, 000 to build a rate of a barrel of oil per day could be paid in less than 100 days of production in today’s market price. A bridge loan under such circumstances would be fairly easily obtained. And, the case would not be far different under a market of $35-40/B under such price eventuality. And, Thus, while capital investment for fast track oil development coming from IOCs has credence, its benefit should not be exaggerated.

Partnership between the national oil industry (INOC) and IOCs is the best balanced policy option for expediting the building of Iraq's oil industry to dimensions commensurate with its huge resource base. This is preferable to the disadvantages of sole operations of IOCs, regardless of contractual form. Partnership with INOC is also the preferred route of the major oil companies. It provides transfer of technology and management, eases capital investment requirement and ensures orderly development and marketing oil export. However, there is no universal contractual form, being PSA or any other. Different situations demands suitable contractual forms under different market and competitive circumstances, be it a PSA or buyback, other service type contracts or tax and royalty contractual forms.


Today, Iraq's oil industry limitations inhibiting fast track oilfield capacity development (clearly, apart from the lack of security, instability and absence of a government in full control of the country), are caused by insufficient oil experienced management personnel and the lack of up-to-date art technology. An active INOC working jointly with IOCs on oil field development provides a solution to technology and management limitations and a balanced approach between total state oil monopoly and a free market controlled by IOCs.

Growing dependence on IOCs, in a diminishing or absent role for INOC, deprives the state from economic independence and puts it at serious risk during circumstances when the IOCs ’obligations toward its shareholders or nationality might have to override Iraq's national interest.

Upstream oil exploration and development is capital intensive. It would be wasteful to use it as a means of creating employment in the Regions and Governorates. Oil and gas are the assets of all the people. It should remain the best tool in the hands of the state for generating capital to the nation as a whole. However, many of its technical and commercial arms such as drilling, seismic/gravity/magnetic surveying, well-bore examination by various tools and testing operations could be privatized to create investment opportunities and employment for the Regions and Governorates. Likewise, many phases of the downstream operations could be privatized, such as distribution and even refining. However, proper planning along a reasonable time scale and preservation of labor rights should be upheld.

Additionally, "local content" (obligations on IOCs to carve some of the industry's functions to nationals to lessen total dependence and provide wealth and employment for the locals) ought to be adopted and enforced as obligatory contractual policy. "Local content" accounts to 51% in Iran and Russia and 70% in Norway. It has been accepted elsewhere and there is no reason not to adopt it in Iraq. However, like everything new, it should be built gradually in accordance to rules and regulations to avoid abuse.

Internal power politics exhibiting itself in appointments based on sectarian and ethnic divisions. not on merit, and the politicization of oil policy and management are bound to obstruct the development of an efficient, transparent and accountable Iraq oil industry. A corrected course of action and the appointment of well-qualified oil Conventions are badly needed to rectify much of the wrong doings of the present trend.

The constitution, that is the articles governing oil and gas, has been dictated by the heads of the ruling political parties, and changes to the draft prepared by the parliamentary drafting committee were made in isolation from the managerial, technical and economic realities of the oil business. A corrected course of action to modify the present constitutional articles governing management and strategic policy making is badly needed in order to create the right conditions for an efficient, growing, transparent and accountable oil industry that does justice to Iraq's present huge proven and potential reserves. In turn, this would truly create the conducive conditions to help realize the overriding article 108 that “oil and gas are the property of the nation (people) of all the Regions and Governorates”.

6.6. Corrective Measures

The application of articles 109 and 111 as illustrated and stated above, would lead to serious damaging consequences and can not achieve the equitable distribution of wealth and benefits among the entire nation demanded by article 108. It would not ensure the highest benefit to the nation unless corrective measures are taken which should include, among others :

Separating the two factors of (A) management of the oil industry from (B) revenue distribution, by breaking the linkage between the two provided in Article 109.Charged the two factors of (A) management of the oil industry from (B) revenue distribution, by breaking the linkage between the two provided in Article 109. The former factor, (A), ought to be re-examined and so worded in such a way as to create and optimize an Iraqi oil industry that would bring in the greatest return commensurate with its natural richness, and which could put it on par with the world leader, Saudi Arabia. Treatment of the latter factor, (B), ought to be based on equity, fairness and the needs of each of the Governorates and Regions in the context of the economic and social development of the country and the nation, rather than on ethnic or sectarian basis or on the temptation of the Regions and Governorates to control the underground mineral resources under their surface. These mineral resources are not owned by their surface attract. Article 108 resolves this issue. Corrective measures ought to be considered to avoid the inevitable and seriously damaging consequences. The wording should also be carefully chosen to clear up the confusion of the present imprecise text. Criteria should include:

Application of a unified oil plan and policy free from uncalled for contradictory competing plans between the Federal government and the governments of the Regions and Governorates, and among the Regions and Governorates.

Adoption of a hydrocarbon law which sets out the foundation for a national oil company as the principle operator in the country under sound health and safety rules and technical and commercial codes of practice to explore and develop oil and gas in all the Regions and Governorates, with transparency, accountability and efficiency.

INOC working independently and jointly with IOCs on internationally accepted and balanced contractual modes with “local content” that ensure greatest benefit to the nation, encourage private enterprise and permit an assured reward to IOCs, governed by clear rules and regulations, under a secure and stable social and political environment.

A radical solution to truly satisfy the objective of article 108 and set Iraq’s oil and gas industry on a correct path, therefore, requires the inclusion in article 109 of “exploration operation” to unfold and develop Iraq’s huge oil and gas resource potential, in addition to the management of production operations.

Article 109 should then read as follows: “The Federal government shall manage the oil and gas production of the discovered and producing fields as well as the exploration and production operations necessary to unfold the potential oil and gas resource.” This implies eliminating articles 111, which allocate future exploration to the governments of the Regions and Governorates and give them the right to overrule the Federal government in case of differences or disputes.

It is neither correct nor practical for a part (any part of the nation) to rule the whole nation. Consultation and/or representation in policy making and management should provide the logical solution. (Until they come to terms on this, I don't see the HCL law being passed. This is the BIG HOLD UP!)

Making the national oil company (INOC) a parent company with operating oil companies in the Regions (the nucleus for this in fact already exists; the North and South Oil Companies) whose directors could become members of the board of INOC, provides an effective role for the Regions and Governorates in the whole country’s oil and gas operations jointly with the Federal government.

In order to have efficient development of the oil industry “ensuring highest benefit to the nation” it is necessary that a reference be made in the constitution to legislate a hydrocarbon law which endorses, among others, the allocation of the upstream and down operations and related commercial aspects, to a national oil company (INOC), while the Ministry of Oil and a Higher Energy Commission focus on strategic plans, policy and overall regulatory supervision.

Oil policy by the Ministry of Oil should be made in consultation with the Regions and Governorates through a consultative body from among relevant NGOs and oil technocrats having representation from the Regions and Governorates. The policy should then be reviewed for approval by the cabinet, which, after all, represents the will of the elected members of Parliament from all the regions.

Negotiated oil and gas agreements with IOCs, oil and gas related strategic projects with other countries and between the regions and governorates, in order to become valid, should have the approval of Parliament in order to ensure that their terms and conditions satisfy the hydrocarbon law, constitutional criteria of article 108, and satisfy acceptance by the representatives of all the Regions, Governorates and the nation as a whole.

Leaving the constitutional terms unchanged, the Regions and Governorates ’likely course would be to go down the route of indiscriminate PSAs and second rate oil companies and the damaging consequences enumerated above. This would also be regarded by critics as inviting privatization of the nation’s very livelihood through the back door; a policy known to be absolutely unacceptable by the nation.

Cheers!
DayDream