Thread: Archive News - Iraqi Dinar Think Tank - 08/09/09 - 09/01/10

Iraq’s SOMO announces changes in Basra crude oil prices

Iraq State Oil Marketing Organization (SOMO) said that Iraq raised the official selling price of Basra light crude oil for US sharers in January by $1.55 i.e. $3.15 less that west texas crude oil.

To that Iraq also raised Basra crude oil price for next month for Asian sharers by 15 cent per barrel to become equivalent to the prices of Oman and Dubai. On the other hand, Iraq lowered the same prices 80 cents less than the price of Brent crude oil for Europeans.

http://www.alsumaria.tv/en/Economics...il-prices.html

Press Release No. 09/460
December 15, 2009

Iraq Begins Participation in the IMF’s General Data Dissemination System

The Republic of Iraq began participating today in the International Monetary Fund’s (IMF’s) General Data Dissemination System (GDDS), marking a major step forward in the development of its statistical system. Comprehensive information on Iraq’s statistical production and dissemination practices now appears on the IMF’s Dissemination Standards Bulletin Board (http://dsbb.imf.org/Applications/web/gdds/gddscountrylist/).

“Iraq is committed to use the IMF’s General Data Dissemination System as a general framework to continue developing the national statistical system consistent with best international practices,” Dr. Sinan Al-Shabibi, Governor of the Central Bank of Iraq, said. “The participation of Iraq in the GDDS will also lead to the production and dissemination of more reliable and timely statistics.”

Ms. Adelheid Burgi-Schmelz, Director of the IMF’s Statistics Department, welcomed Iraq’s participation in the GDDS. “Iraq’s participation in the GDDS is a major milestone in the country’s statistical development,” she said. “I am confident that Iraq will benefit from using the GDDS as a framework for further development of its statistical system.”

The GDDS was established by the IMF in 1997. It provides a framework to help countries to develop their statistical systems to produce comprehensive and accurate statistics for policymaking and analysis. With the addition of Iraq, 97 countries currently participate in the GDDS.

http://www.imf.org/external/np/sec/pr/2009/pr09460.htm

Iraqi court could hear challenge to oil deals
An Iraqi court is scheduled to hear later this month a challenge to landmark oil contracts the Iraqi government has inked with leading global energy firms, a senior member of parliament said on Tuesday.

Ali Hussain Balou, head of parliament's oil and gas committee, said that Iraq's federal court would hear the case put forward by Shatha Moussawi, an independent Shi'ite lawmaker, on Dec. 22.

Balou, a minority Kurd and a sharp critic of the contracts, said that the lawsuit named Prime Minister Nuri al-Maliki and Oil Minister Hussain al-Shahristani and challenged the impact of a spate of deals Iraq is pursuing with foreign firms.

The ministry declared successful a major Dec. 11-12 auction of oil contracts, its second this year, when some of the world's biggest oil firms snapped up seven deals to develop Iraqi oilfields.

Shahristani says the ten major deals in the works could eventually increase Iraq's oil output to 12 million barrels a day, putting it close behind top global producer Saudi Arabia.

But the deals are controversial in Iraq, where control over the country's sole money-making resource has deep-seated ethnic, political and regional implications.

Neither Moussawi nor the Oil Ministry were immediately available for comment.

"I consider this a bold and courageous step ... We in the oil and gas committee, along with some members of parliament, still think these contracts lack legality and legitimacy without ratification of the oil and gas legislation," Balou said.

New laws governing Iraq's oil industry, including how contracts are to be negotiated, have been stalled for years by a dispute between the Arab-led government in Baghdad and the largely autonomous northern Kurdistan region.

Balou said the oil and gas committee had asked the national Shura Council, a top legal authority, for an opinion on the legality of contracts in the absence of new oil legislation.

The Oil Ministry contends that existing laws give it the authority to broker deals without submitting them to parliament.

Many others in parliament support the deals, which could transform Iraq's aging oil sector and provide the country with an influx of cash needed to rebuild and create economic growth.

http://business.maktoob.com/20090000...ls/Article.htm

CBI dollar sales down by 51% on Wednesday

The Central Bank of Iraq’s (CBI) dollar sales went down by 51% to $107.463 million in its daily auction on Wednesday, compared to $208.515 million during the previous session.

“The demand hit $5.970 million in cash, covered at exchange rate of 1,170 Iraqi dinars per dollar, and $101.493 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 16 banks that participated in today’s session offered to sell dollars.

http://en.aswataliraq.info/?p=123598

Tayseer al-Mashhadani: the need to speed up the adoption of the Investment Law, as amended, to eliminate unemployment

confirmed member of the work and services to facilitate al-Mashhadani, "the need to quickly pass the investment law amended to bring large numbers of Arab companies and foreign investment for the elimination of unemployment."

And al-Mashhadani said in a press statement that "the business of these companies helps run a large number of graduates and those who did find jobs to help them support their families, which in turn reduces the level of poverty for many families."

She noted, "there was no effective treatment for the low level of unemployment and low poverty across the provinces of Iraq, except the provinces of Kurdistan and the right solutions at the low unemployment and low level of poverty for families is the rehabilitation of state institutions to make them productive and productive, as evidenced most of them disguised unemployment and encourage the private sector."

She al-Mashhadani, "It's increasing unemployment and poverty is the existence of large numbers of widows after an absence of a breadwinner, and so subsidies provided by the network benefits, and few, forcing many of the widows, to search for jobs in the time when the country stops for many of its institutions, productivity, whether governmental or private sector."

The statistics issued by international organizations pointed out that the unemployment rate estimated at 50% and the proportion of the population in Iraq under the poverty line is 60% while the said Central Bureau of Statistics that the percentage decline in poverty 23%.

http://www.ipairaq.com/index.php?nam...itics&id=18781

Minister of Planning: The steps are continuing to encourage the entry of foreign companies to invest in Iraq

Minister of Planning and Development Cooperation, Ali Baban, "The steps the Government to encourage the entry of foreign investment companies to work in Iraq continues, especially after the recent amendment of the law, setting the investment climate for investors in a more flexible".

He Baban told the independent press (Iba) on Wednesday that "many countries have shown a readiness during periods in the past for activating economic cooperation with Iraq and a number of them is a key partner to support reconstruction efforts in Iraq."

He noted, "The challenges facing the national economy needs to provide the appropriate ground to create an investment environment that opens new horizons for the entry of firms investing preceded by the identification of needs and diagnose problems that hampered the strategic projects calling for the concerned ministries lining up efforts to complete plans for a giant."

He stressed on the doors "that the creation of a stable security environment and infrastructure, aims to gain the most prominent conditions to encourage investment and support the private sector, stressing that the difficult security conditions jeopardize the government's efforts to attract companies and capital to work in different sectors needed by the country."

It should be noted that there is apprehension of those involved in economic affairs to lead the recent bombings in Baghdad in the reduction of investment opportunities in Iraq.

http://www.ipairaq.com/index.php?nam...onomy&id=18779

Gulf petro-powers to launch currency in latest threat to dollar hegemony

The Arab states of the Gulf region have agreed to launch a single currency mod.elled on the euro, hoping to blaze a trail towards a pan-Arab monetary union swelling to the ancient borders of the Ummayad Caliphate.

“The Gulf monetary union pact has come into effect,” said Kuwait’s finance minister, Mustafa al-Shamali, speaking at a Gulf Co-operation Council (GCC) summit in Kuwait.

The move will give the hyper-rich club of oil exporters a petro-currency of their own, greatly increasing their influence in the global exchange and capital markets and potentially displacing the US dollar as the pricing currency for oil contracts. Between them they amount to regional superpower with a GDP of $1.2 trillion (£739bn), some 40pc of the world’s proven oil reserves, and financial clout equal to that of China.

Saudi Arabia, Kuwait, Bahrain, and Qatar are to launch the first phase next year, creating a Gulf Monetary Council that will evolve quickly into a full-fledged central bank.

The Emirates are staying out for now – irked that the bank will be located in Riyadh at the insistence of Saudi King Abdullah rather than in Abu Dhabi. They are expected join later, along with Oman.

The Gulf states remain divided over the wisdom of anchoring their economies to the US dollar. The Gulf currency – dubbed “Gulfo” – is likely to track a global exchange basket and may ultimately float as a regional reserve currency in its own right. “The US dollar has failed. We need to delink,” said Nahed Taher, chief E.xecutive of Bahrain’s Gulf One Investment Bank.

The project is inspired by Europe’s monetary union, seen as a huge success in the Arab world. But there are concerns that the region is trying to run before it can walk.

Europe took 40 years to reach the point where it felt ready to launch a currency. It began with the creation of the Iron & Steel Community in the 1950s, moving by steps towards a single market enforced by powerful Commission and European Court. The EMU timetable was fixed at the Masstricht in 1991 but it took another 11 for euro notes and coins to reach the streets.

Khalid Bin Ahmad Al Kalifa, Bahrain’s foreign minister, told the FIKR Arab Thought summit in Kuwait that the project would not work unless the Gulf countries first break down basic barriers to trade and capital flows.

At the moment, trucks sit paralysed at border posts for days awaiting entry clearance. Labour mobility between states is almost zero.
“The single currency should come last. We need to coordinate our economic policies and build up common infrastructure as a first step,” he said.

Mohammed El-Enein, chair of the energy and industry committee in Egypt’s parliament, said Europe’s example could help the Arab world achieve its half-century dream of a unified currency, but the task requires discipline. “We need exactly the same institutions as the EU has created. We need a commission, a court, and a bank,” he said.

The last currency to trade in souks from Marakesh, to Baghdad and Mecca, was the Ottomon Piaster, known as the “kurush”. It suffered chronic inflation as the silver coinage was debased.

There is a logic to an Arab currency. The region speaks one language, has the unifying creed of “Umma Wahida” or One Nation from the Koran, and has not torn itself apart in savage wars – ever – in quite the way that Europe has in living memory.

Yet hurdles are formidable even for the tight-knit group of Gulf states. While the eurozone is a club of rough equals – with Germany, France, Italy, and Spain each holding two votes on the ECB council – the Gulf currency will be dominated by Saudi Arabia. The risk is that other countries will feel like s.atellites. Monetary policy will inevitably be set for Riyadh’s needs.

Hans Redeker, currency chief at BNP Paraibas, said the Gulf states may have romanticised Europe’s achievement and need to move with great care to avoid making the same errors.

“The Greek crisis has exposed the weak foundations on which the euro is built. The gap in competitiveness between core Europe and the periphery has grown wider and wider. The obvious mistake was to launch EMU without a central fiscal authority and political union, as the Bundesbank warned in the 1990s,” he said.

“The euro was created for political reasons after the fall of the Berlin Wall to lock Germany irrevocably into Europe. It was not done for economic reasons,” he said.

Ben Simpfendorfer, Asia economist for RBS and an expert on the Middle East, told the FIKR conference that the rise of China had paradoxically disrupted the case for pan-Arab economic integration.

There was a natural fit ten years ago between rich oil state and low-wage manufacturers in Egypt and Syria, but cheap exports from China have forced poorer Arab states to retreat behind barriers to shelter their industries. “The rationale for a single currency has become weaker,” he said.

The GCC also agreed to create a joint military strike force – akin to the EU’s rapid reaction force – to tackle threats such as the incursion of Yemeni Shiite rebels into Saudi territory earlier this year.

This is a major breakthrough after years of deadlock on defence cooperation.

The Sunni Gulf states are deeply concerned about the great power ambitions of Shiite Iran and its quest for nuclear weapons, to the point where the theme of a possible war between Iran and a Saudi-led constellation of states has crept into the media debate.

They nevertheless repeated on Tuesday that “any military action against Iran” by Western powers would be unacceptable.

http://www.telegraph.co.uk/finance/e...-hegemony.html

Iraq oil: Dream investment or worst nightmare?
Analysts stress bidding foreign energy firms will either accept massive investment risks or give up lifetime opportunity.

International energy firms thinking of bidding for a piece of Iraq's oil fields face a tough choice, analysts say. Either they accept the massive risks of investing in the still-fragile country or they give up the opportunity of a lifetime. One analyst even likens it more to a marriage proposal than a business deal.

"You've got Iraq, you've got the best fields in the world, and in some respects, from an oil man's perspective, Iraq is the woman of your dreams," Alex Munton, Middle East analyst for research group Wood Mackenzie, said.

"But the wedding is going to cost a huge amount of money, and she has a lot of troubled relationships that you're going to have to deal with. What are you going to do?"

It is those "troubled relationships" that will give investors pause when deciding how much to bid, if at all, for service contracts offered by the Iraqi oil ministry on 10 fields in an auction that kicks off in Baghdad on Friday. Though Iraq has the world's third-largest proven crude reserves, behind only Saudi Arabia and Iran, there has been little exploration or development of fields in the past three decades. As a result, several of the fields on offer in the auction ending on Saturday are enormous. The two biggest, West Qurna-2 and Majnoon, have reserves of 12.9 billion and 12.6 billion barrels of oil respectively.

But concerns remain.

On Tuesday, coordinated bombings against mostly government targets in Baghdad killed 127 people and wounded around 450, the third such attack since August. That was a grim reminder that insurgents remain capable of large-scale violence, and that security remains fragile. In addition, exports of oil to the Turkish port of Ceyhan have been interrupted numerous times in recent months, most recently in November, because of sabotage against pipelines in northern Iraq. Tuesday's violence "could increase the risk the companies factor in their assumptions of cost and return," said Ruba Husari, the Baghdad-based founder and editor of www.iraqoilforum.com. "But at the same time, it's worth noting that the fields' areas have been totally safe."

"Iraq sums up as a place of huge opportunity and big risk, and the oil business is always risky. It has never been risk-free."

Oil ministry spokesman Assem Jihad has insisted the attacks will not derail the bidding.

"Preparations for the auction are ongoing," he said. "The explosions will not have any effect on the procedures or the auction. In fact, there is an even stronger insistence that we hold the auction."

As if to complicate the situation further, Iraq is also waiting on a key hydrocarbons law, discussion of which has been delayed until after elections slated for March 7.

Adoption of the law, which would regulate the sector and divide responsibility between Baghdad and Iraq's provinces, has been held up for three years due to disagreements between MPs from the country's various communities.

Foreign firms might also be dissuaded by the small profit margins that Iraq's service contracts offer. Successful companies will be paid a fixed fee per barrel, not a share of the profits, and the fee will only be paid once an agreed production threshold is reached. It was the disparity between the Iraqi government's offered fee and the bids from foreign energy companies that led to only one deal being agreed during the first such auction in June, though two more have since been reached. However, Baghdad is likely to be buoyed by increased participation from Asian energy companies, which are more willing to accept tighter margins, said Samuel Cizsuk at IHS Global Insight in London.

"The Chinese companies and Indian companies and some other Asian IOCs (international oil companies) or NOCs (national oil companies) are likely to bid very strongly," he said.

"These companies, especially the Chinese companies, have a willingness to accept much lower profit margins than the Western companies."

In this week's auction, the ministry will open bidding on fields one at a time. When a field is called out, investors will be invited to drop envelopes with details of their bids in a box. The ministry will then open the envelopes and assign a score to each bid, depending on the fee each firm requests and the output it says it can produce. The firm with the highest score will then have its fee compared to what the ministry is willing to pay, and if its bid is accepted, the company will have a brief period to consider whether or not to go ahead with the deal.

http://www.middle-east-online.com/en...iraq/?id=36151

Iraq will sign a preliminary agreement for a major oil fields to increase production

Ministry of Oil announced today that Iraq is preparing to host the leading energy companies later this month to sign their initials on the seven agreements for major oil fields.

The Deputy Director General of the Department contracts and licenses in the Ministry of Oil Abdul Mahdi al-Amidi In press statements, transfer of reporter The administration set the initial dates of the signing of contracts with the winning companies in the second round of bidding.

He added that invitations were sent to the winning companies to come to the headquarters of the Ministry of Oil in Baghdad to sign the initial contracts, which will be subsequently transmitted to the Council of Ministers for approval before signing the final agreements will be signed indicating that between 20 and December 30 now.

The ministry has pledged to sign the initial agreements within two weeks of the tender, which took place on 11 and 12 of the current month of December Is the second this year, as was the awarding of contracts during the auction of seven oil fields To companies including Russia's Lukoil and Shell and Malaysia's Petronas and China National Petroleum Corporation.

http://al-iraqnews.net/new/iconomi/46464.html

Adnan Jibouri: the next parliament demands for amendments to contracts and the Ministry of Oil

A member of the Commission on oil and gas bloc, Adnan al-Jubouri consensus "that the next parliament demands for amendments to contracts for the Ministry of existing oil with foreign companies by the next government to endorse it."

The Oil Ministry has conducted the second licensing round last weekend to develop a number of Iraqi oil fields.

"Jibouri in contact with the agency and the independent press (Iba) on Thursday that" the oil and gas These licenses are also contracts and the Kurdistan region is illegal and unconstitutional."

The Ministry of Oil, said the contracts did not need the commercial to be approved by the House of Representatives.

The Jubouri, "The Oil Ministry has failed to increase Iraq's production of oil, especially in light of easing the terrorist attacks on pipelines, stressing that there is no clear strategy for the Ministry in this respect."

Attributes the oil ministry and through their press releases down the output of crude oil to the continuing terrorist attacks suffered by pipeline transport of oil.

Jubouri called "The Oil Ministry not to give every important oil fields to foreign companies and give an opportunity for Iraqi companies for this area of exploration and extraction service for the benefit of the Iraqi various levels."

It is scheduled to begin and the oil ministry to sign formal contracts with tour companies winning licenses starting from the twentieth of this month.

http://www.ipairaq.com/index.php?nam...onomy&id=18832