Thread: Archive News - Iraqi Dinar Think Tank - 01/10/09 - 27/03/10

Iraq seen as key area for GCC investment in 2010
2010 represents a strong opportunity for GCC companies to export their knowledge and experience to Iraq, according to a global business consultancy.

Control Risks believes that improvements in the security environment and the political situation in Baghdad mean that a number of industries – not just the energy sector – are being welcomed into the northern Gulf country.

“The second oilfield bidding round showed that both the Iraqi government and foreign companies had undergone the learning process,” said Jonathan Wood, global issues analyst at Control Risks.

“The Iraqi government has learnt how to attract foreign direct investment [FDI] in a more efficient way, and the overseas firms have learnt to broker more realistic deals and profit margins.”

Wood said that oil wasn’t the only area of interest, with companies winning contracts in the power generation, telecoms, financial services, logistics, cement and construction fields.

In the first nine months of 2009, one report claimed that the UAE was the highest foreign investor in Iraq, at $37 billion, representing around a quarter of all global investments during that period.

The study, by Dunia Frontier Consultants, said that the only other Gulf country to make a significant investment in Iraq was Kuwait, with $6.8 billion during that period.

http://www.arabianbusiness.com/57945...stment-in-2010-

Vice commends the Government's actions for the protection of Iraqi funds abroad

Commended the President of the Finance Committee in the House of Representatives Alaa al-Sadoun the Government's actions to protect Iraqi funds abroad, which will end the mandate of the Development Fund for Iraq by the end of the year.

Saadoun said that the government's actions to protect Iraqi funds good, especially after doing the transfer of these funds from U.S. banks to other more confident.

The Chairperson of the Finance Committee that the government also sought to remove Iraq from Chapter VII of the Charter of the United Nations.

http://translate.googleusercontent.c...rqJZBG5xruzvDA

Central Bank: interest rate in Iraq higher than the inflation indicators

Central Bank of Iraq, on Thursday, that interest rates in banks are still higher than inflation indicators in Iraq, indicating that the reserve bank's hard currency to U.S. $ 42 billion.

The adviser said the appearance of the central bank governor Mohammad Saleh said in an interview for "Alsumaria News", "The interest rate at the bank, amounting to 7%, higher than the inflation that exists in Iraq, which has a 6% according to statistics of the Central Statistical Bureau for 2009."

Saleh added that "the setting of interest rates in the bank depends on the level of inflation, which reflects the basis for index of consumer prices excluded from transport costs and fuel depends on the supply rather than demand," noting that interest rates are affected by shocks and economic fluctuations. "

It was the Iraqi Central Bank to cut interest rates from 9 to 7% last June to fit with the decline in the rate of inflation, which reached 7% in 2009.

According to Saleh, the director general of statistics at the Central Bank that it was "lowering interest rates one point in time to the present 6% to match inflation, which is one of the right things and affects in the economic development in Iraq."

The Central Bureau of Statistics and Information Technology of the Ministry of Planning and Development Cooperation is responsible for setting the rates of monthly and annual inflation, which depends on the basis of indices for commodity groups of foodstuffs, beverages and tobacco, furniture, medicines and medical services to determine rates of inflation in Iraq.

Advisor to the Governor, denied the central bank should "lead the process of reducing the interest rate one point to leave the capital abroad," attributing to the fact that "interest granted by the banks abroad is simple does not exceed 0,05% compared with the awarding of Iraqi banks."

Salih stressed that "the Iraqi Central Bank reserves reached the time being, only $ 42 billion, not counting reserves, the Iraqi government, including oil revenues," pointing out that "the reserve bank and the Iraqi government reached 80 billion dollars in 2008 due to high oil prices $ 147."

The CBI, with headquarters in Baghdad and has four branches in Basra and Sulaymaniyah, Irbil and Mosul, he founded the bank under the law of an independent Iraqi Central Bank of Iraq issued on 6 March 2004, and shall be responsible for the maintenance of price stability and the implementation of monetary policy, including exchange rate policies and management foreign reserves and the issuance of currency management, as well as to regulate the banking sector.

http://translate.googleusercontent.c...LQSQxTTA8-75Zw

Kogas plans to invest 6.5 billion dollars to develop oil field in Iraq

Kogas said the South Korean company said on Wednesday it will invest $ 6.5 billion in the development of Zubair oil field in the Iraqi part of a consortium will sign a final agreement on Friday on the field that its reserves amount to four billion barrels.

He won the consortium led by Italian oil company Eni and includes Kogas and Occidental Petroleum of the US the right to develop oil field in southern Iraq last year following the first tender by the country's oil fields decades since the US invasion in 2003.

KOGAS said that the production capacity for the field amount to 195 thousand barrels per day is expected to increase to 1.2 million barrels per day.

The project is one of a series of agreements that would improve to the level of Iraq's third largest exporter of oil from the No. 11 currently occupied by him and provide billions of dollars in revenue it needs to rebuild after years of wars and economic decline

For South Korea's deal comes under the direction of government to invest a record $ 12 billion in energy resources abroad this year to run the economy based on manufacturing industries.

Is seeking a fifth-largest importer of oil in the world to acquire the assets of production to secure energy supplies rather than relying on the purchase of the troubled global market.

http://translate.googleusercontent.c...puhBW_JBIVXbnw

«Central» Iraq is a law of electronic banking

The Director-General of the unity of the banking and credit of the Central Bank of Iraq and Idi Walid Abdul-Hussein said in a statement to the «life», the central bank is a law of electronic banking, and submitted to the State Advisory Council for discussion and approval, in addition to preparing a new system of payments helps to provide advanced banking services, referring to the topic to facilitate handling of the provisions of Article 28 of the Banking Act which identified some activities are not allowed for private banks, and try to correct them to serve the Iraqi economy and banks.

He pointed at a seminar organized by the company «the money for electronic banking services» to discuss products, electronic banking and banking constraints in Iraq, the central bank has developed a system of 5 points, raising the level of assessment allows the banks that provide quality services, which assist him in obtaining a loan contract with an external State agencies and funds referred to him by «Trade Bank of Iraq».

He stressed that the central bank seeks to enhance the contribution of banks to GDP, which currently does not exceed 7 per cent. He stressed that the central bank seeks to enhance the contribution of banks to GDP, which currently does not exceed 7 per cent.

He called on Chief Adviser to the Prime Minister and former oil minister Thamer Ghadhban, to «a more vital role to the finance sector and banking activity which is a very important sign, in domestic economic activity», and to develop financing mechanisms required for development in the country.

He explained that the private sector has an important and vital, particularly in the banking activity in the mechanisms and the introduction of modern methods.

http://translate.googleusercontent.c...RbdJ-a3ixcldjg

To allow government institutions to open accounts in private banks

Prime «Association of Iraqi private banks» Fouad Al_husnevi in a statement to «life», that the Iraqi government has given directives to the self-financing services and insurance, to open accounts in the Iraqi private banks (eligibility), to provide investment opportunity for the private sector and providing facilities to businessmen. He said the directive came after a meeting with Iraqi Finance Minister Baqir al-Zubaidi and a delegation of «Business Council, the Iraqi National», which was submitted proposing to create an investment fund dedicated to private sector financing and concessional interest rates. The Al-Zubaidi said all private bank capital is 100 billion Iraqi dinars (85 million) has a chance to open up government funds, up to 4 million dollars for each adoption, what constitutes a qualitative leap in the performance of private banks (33 banks), which exceeds the total capital of 1.5 billion.

Officials in the private banks, pointed out that «the past year has seen the most negative towards the resolution of banks, when it issued the Ministry of Finance in January (Jan) decided last year to prevent government departments to open accounts in private banks and withdrew all the money and deposited in the accounts of government ».

The Chairman of the Board of Directors of «Ashur International Bank for Investment» Wadi Handal in a statement to «life», said the decision to disrupt the financial situation has caused the private banking sector and led to an imbalance in the balance of cash available in many banks, and delays in opening letters of credit.

On the incompatibility of laws and legislation with the requirements of private banks, Handal said that article 28 of the Banking Act which prevent their entry into the investment sector, is one of the obstacles that impeded the growth of the sector, calling for reconsideration this year.

http://translate.googleusercontent.c...RvChewpyg0nOBQ

President Talabani: I expect to be a coup in Iraq in the future

President Jalal Talabani ruled out a military coup to get at the present time, but it may be possible to happen in the future.

Talabani said in a statement taken Reporter That the parties that fought against the dictatorship and is now defunct address the rule of vigilance and to be cautious in future so do not allow for any party you like the remnants of a military coup in the Baath Party deployed inside and outside Iraq, noting that the recent statement issued by the Baath Party Pavilion offender Azza table and from which the statement stressed that while it will withdraw U.S. troops from Iraq, we will engage all our military formations and liberate Iraq from the force, which is controlled by now working for a foreign agenda and restore order to the Baath Party, which is the Next-Governing in Iraq, "according to the statement."

http://al-iraqnews.net/new/siaysiah/51428.html

Red Star Over Iraq
China's ambitions in the Iraqi oil fields could change the landscape

It may be the start of the biggest oil job in the world. Each day, 20 workers from BP and China National Petroleum Corp. (CNPC) buckle down to the task of prepping the Rumaila oil field in southern Iraq for rapid development. In industry lingo, Rumaila is a "supergiant"—a 50-mile-long deposit of sweet crude with estimated reserves of 16 billion barrels, whose output may someday rank second only to Saudi Arabia's vast Ghawar field. The Saudis, though, have carefully managed their oil assets for decades. In contrast, Rumaila, a lightly inhabited expanse of date groves and Bedouin encampments, has not had a proper upgrade since the 1970s. The Iraqis contracted with BP and CNPC last year (BP) to juice Rumaila's production from 1.06 million barrels a day to 2.85 million, all in seven years. No one has ever tried such a ramp-up at a field as huge as this one. Putting Rumaila back in full working order will take tens of thousands of workers, 1,000 new wells, and billions in investment.

BP is the largest partner in the venture, but only by a dipstick: It has a 38% stake, while the Chinese hold 37% (the rest is owned by an Iraqi company). The media focus has been on BP's decision to take up the Rumaila challenge for a low fee of only $2 for every barrel the venture produces. But the more important story could be China's role. "CNPC's involvement brings together the country with the most rapid growth in energy demand in history with the country that plans the greatest buildup of production capacity ever," says Alex Munton, an Iraq specialist at Edinburgh-based oil consultants Wood Mackenzie.

China has moved fast. In a little over a year, CNPC, China's main oil producer with revenues of more than $188 billion and a 1.5 million-worker payroll, has won large stakes in three Iraqi oil fields. The total production target for those fields is around 3.5 million barrels per day—close to China's domestic output. In two of the ventures, China is the controlling partner. Over two decades or so, CNPC may spend some $20 billion on the fields, the most of any oil company in Iraq since Saddam Hussein fell. For China's oil industry, "Iraq is a game-changer," says Wenrang Jiang, an authority on the country's energy thirst who teaches at Canada's University of Alberta.

TIED TO THE LEADERSHIP

Carved out of China's oil ministry in 1988, state-controlled CNPC managed the oil and gas fields of north China before expanding to Peru, Sudan (where it has been criticized for working with the regime), and Venezuela. It has a reputation as insular and bureaucratic, especially compared with China National Offshore Oil Corp. CNOOC, founded in 1982 with a mandate to drill in offshore locales with foreign companies, has E.xecutives who speak English as a matter of course and travel widely. "CNPC always viewed itself as a direct successor of the oil ministry," says Victor Gao, CNOOC's former general counsel and currently a private equity investor. "So it's more orthodox; it considers itself a government entity."

Jiang Jiemin, 54, who has run CNPC since 2004, is a man of few words. In Iraq, though, Jiang and his team played their hand well. Months before the Rumaila deal, CNPC got the rights to develop Ahdab, a medium-sized field. That means CNPC is one of a few outside oil companies with operating experience in Iraq. Jiang has also forged a good relationship with BP CEO Tony Hayward, who sees CNPC as the gateway to China. BP "wants to have them as a partner wherever they can," says Bob Maguire, head of oil and gas investment banking at Perella Weinberg Partners in London. "They are the largest NOC [national oil company] in Hayward's mind." CNPC declined to comment for this story.

BP and CNPC bring different strengths. BP has been studying the field by agreement with the Iraqis and already has worked out a development plan. And the Chinese? Beijing-based CNPC has access to affordable credit from China Development Bank and China Exim Bank. In an industry where supplies are tight, "they have spare capacity, rigs, and other equipment available that you could mobilize and put on the ground," says Andy McAuslan, BP's Iraq commercial director. (He adds that contracts for oil services in Iraq will be awarded competitively.) Fast deployment in Iraq is key. According to their contract, BP and CNPC won't start getting paid until they have boosted production 10%. The Chinese know how to manage thousands of workers in distant, often hostile locales such as Central Asia and the Sudan. It also knows how to develop onshore fields: In China, it pumps the equivalent of 3.3 million barrels a day. Besides the role in drilling wells and pumping oil, Chinese companies are good candidates to build the oil terminals, refineries, and pipelines Iraq will need to get its crude to global markets.

China is the low-cost provider in the industry. "As a general rule of thumb, Chinese management and labor costs are about one-third if not one-fourth of Western costs," says Gao, the ex-CNOOC E.xecutive. Nine colleges and universities focus exclusively on oil studies in China: "The Chinese treat the industry as a life-and-death issue," says Gao. The Western oil industry's workforce is aging rapidly. "Analysts always mention that the oil majors face personnel shortages," says Xu Xiaojie, an independent oil and gas adviser in Beijing. "In China we have a surplus."

The Iraq ventures still face formidable obstacles—sectarian strife, corruption, and government instability, among them. The Iraqis also may not welcome large numbers of Chinese to their fields. "Yes, bringing in low-cost engineers is China's advantage," says Trevor Houser, a partner at the Rhodium Group, a New York-based research firm that studies India and China. "But that has created tensions [elsewhere]. Look at Zambia, where an election was pretty much fought over China."

China and CNPC, though, have no choice. The Chinese are hungry for crude and for a position among the world's top oil companies. Iraq may prove the best place to satisfy both desires.

http://www.businessweek.com/magazine...5044386657.htm

Iraq seeks to cash in on its gas

Iraq is seeking to exploit its vast natural gas reserves, a resource that has had to play second fiddle to the country's oil wealth, and has signed a strategic energy agreement with the European Union to develop the gas fields.

But just as Iraq's drive to develop its major oil fields and quadruple production through a chain of multibillion-dollar contracts with international oil companies could be set back by an upsurge of violence surrounding national elections slated for March 7, so too could Baghdad's ambitions for its gas reserves.

The Europeans are desperate to break their dependence on Russia for their gas supplies, which Moscow has a habit of turning off during the winter.

Having Iraqi gas flow through the planned 2,000-mile Nabucco pipeline that would funnel gas westward from Central Asia and the Middle East through Turkey, Iraq's northern neighbor, to Austria, would forge a strong energy link between Europe and Iraq.

"Iraq represents a vital link for the EU's security of supply," EU Energy Commissioner Andris Piebalgs declared during the signing ceremony in Baghdad on Monday.

Iraq has an estimated 111 trillion cubic feet of natural gas, with much, much more yet to be tapped, according to industry analysts. But as with the country's oil fields, these have never been fully explored or exploited. Only 20 percent of Iraq's oil fields, which contain the equivalent of 115 billion barrels of oil, have been developed. An even smaller percentage of Iraq's gas reserves have been developed. But the infrastructure is so neglected that large amounts of gas produced in the oil fields are flared off rather than being stored or utilized through domestic consumption.

The Baghdad government has yet to disclose its plans for developing Iraq's gas reserves. But it would presumably entail securing agreements with international energy companies to do that, as has been done with a dozen or so of the country's major oil fields over recent months.

Last summer Prime Minister Nouri al-Maliki offered to supply Nabucco, the EU's flagship project for the development of the so-called Southern Corridor energy route bypassing Russia, with 15 billion cubic meters of gas a year from 2015. That would have the support of U.S. President Barack Obama's administration as Nabucco would cut out Russia and Iran from the energy contest. It would also boost U.S. efforts to isolate Iran's economy and force it to curb its controversial nuclear program.

Monday's agreement with the EU also envisions an Energy Action Program for 2010-15 -- which jibes with the timeframe mentioned by Maliki -- covering energy efficiency, energy demand management and renewables. The EU said it was also ready to help Iraq produce a national gas development plan, develop its electricity grid and "identify sources and supply routes for gas from Iraq to the European Union."

Turkey, which has long had ambitions to become the regional energy hub linking Europe to the huge energy reserves of the Caspian Basin and Central Asia, already takes oil from Iraq's northern Kirkuk fields through twin pipelines terminating at the Mediterranean port of Ceyhan. Northern Iraq is believed to contain sizeable gas reserves, which could be transported to gas terminals in Turkey and then pumped to Europe.

Iraq has for some time also been examining the possibility of developing the Western Akkaz gas field, which could feed European customers through neighboring Syria. Oil Minister Hussain al-Shahristani said in 2008 that Akkaz "has five wells that are ready to be interconnected and provide the Syrian market with approximately 50 million cubic feet per day of Iraq gas."

The Middle East Economic Survey, a weekly energy newsletter published in Cyprus, says that Akkaz could also feed 450 million cubic feet of natural gas per day to the planned Nabucco system. There is a catch, though: Akkaz is located in western Anbar province, a flashpoint in the insurgency led by al-Qaida, and is thus extremely vulnerable to terrorist attack.

http://www.upi.com/Science_News/Reso...4931264092012/

Iraq signs contract to develop al-Zubair oilfield with Italy’s Eni

Iraqi Oil Ministry signed on Friday the final contract to develop the giant al-Zubair oilfield in Basra with a consortium led by Italian energy giant Eni SpA.Eni and its partners won the right to develop the 4 billion barrel oil field last year following the country’s first postwar licensing auction held in June.

Under the terms of the deal, Eni, Italy’s biggest energy company by market value, and its partners will be paid $2 for each extra barrel of oil they extract on top of current production at the field, but will be liable for a 35% tax on profits.

Eni has said the development of the field would require investment of about $10 billion in the first six years to raise output to 1.125 million barrels a day from 195,000 barrels a day at present.

According to the 20-year long service contract, the consortium would pay the ministry $300 million as a refundable five-year loan instead of paying a signature bonus as the case in the deals listed in the second bid round held December last year.

http://en.aswataliraq.info/?p=125677