Thread: Archive News - Iraqi Dinar Think Tank - 28/03/10 - 21/06/10

UN pays out $590 million from Iraqi oil fund

GENEVA — A U.N. panel has approved $590 million in compensation payments for victims of Iraq's 1990 invasion of Kuwait.

The U.N. Compensation Commission says the money will go to five companies and four government or international bodies.

It did not disclose the identities of the claimants Thursday but said all are in Kuwait.

The panel, made up of the 15 U.N. Security Council member countries, has so far paid out almost $29.5 billion. Another $22.9 billion is earmarked to go to unidentified claimants in Kuwait.

Until the U.S.-led 2003 invasion that toppled Saddam Hussein the commission received 25 percent of the proceeds of Iraq's oil sales. Since the invasion that has been reduced to 5 percent.

http://www.google.com/hostednews/ap/...k1NLQD9FCT3EG0

Iraq election set to impact MENA funds
For funds investing across the Middle East, as well as those with holdings in the oil majors, a stable Iraq would be a major boost, writes country risk analyst Patrick Sherwen.

Despite fears of widespread violence and boycotting by some of the main parties, Iraq’s third parliamentary election since the fall of Saddam Hussein went well. Voter turn-out has been estimated at 62% and although there was a rise in the number of violent incidents in the run-up to and on the morning of the election, it had calmed down by midday. The result of the election was very close, and the outcome remains unclear – and may do so for another six months. However, it is already clear that no single party secured a majority of seats, and as such the players will shortly begin intense negotiations over the formation of a governing coalition, including who should occupy what position in government.

Whatever the final arrangement turns out to be, it will have a profound impact on investors in funds, such as the Franklin Mena and Barings’ much delayed offering covering the Middle East and North Africa (Mena) region, as well as those with holdings in the oil majors. Iraq’s neighbours – including Turkey, which has already invested heavily in the country, and Syria, which hopes to be the main route for imports and exports – have much to gain from a stable, prosperous Iraq. The question remains, however, whether the election can deliver that kind of outcome.

At the time of writing, the latest results appeared to show the two main political groups – State of Law and the Iraqiya Alliance – running neck and neck. Control Risks analysts were not alone in expecting a tight race but State of Law, led by prime ministerial incumbent Nuri al-Maliki, seemed to have a slight edge, thanks to his individual popularity and his existing control over state institutions. Nonetheless, his main rival Iyad Allawi, who was the first prime minister after Saddam’s fall, is pushing him hard and will fight to secure the premiership once more. Both sides now look set to win about 90 seats apiece, 73 short of the number needed to secure a majority in the 325-seat house.

Although there are numerous political parties in Iraq, the election was not fought on strict party lines. State of Law and Iraqiya are already coalitions in a sense, but will now have to widen their alliances to secure power. State of Law is made up of Maliki’s Dawa Party, the Iraqi Independent Bloc, several minority parties, some influential independent MPs, and key government figures such as oil minister Hussein al-Shahristani. This group campaigns on a nationalistic non-sectarian platform but is identified with the Shias. Iraqiya comprises the Iraqi National Accord, led by Allawi, a secular Shia, Sunni vice-president Tariq al-Hashemi, and the Iraqi National Dialogue Front (INDF), led by Saleh al-Mutlaq, a Sunni politician who was barred from standing as a candidate because of alleged links with the now banned Baath party of former dictator Saddam Hussein. They too position themselves as a secular, nationalistic group but have been embraced by the minority Sunni population.

It seems that sectarian sentiments have continued to play a determining role among voters. Maliki’s State of Law has clearly emerged as the principle voice of Iraq’s Shias, and Allawi as the main voice of the country’s Sunni minority, but despite their cross-sectarian rhetoric, neither bloc succeeded in penetrating the two communities. Throw into this already confusing mix two more groups – the Iraqi National Alliance (INA) and the Kurdish Alliance, both of which have also secured strong secondary showings in the election – and it is not surprising that it is expected to take up to six months to thrash out who will side with whom to secure the necessary majority. An additional factor likely to hinder the process, is that both of the major groups have now made allegations of electoral fraud against the other. In the context of such a tight race, this issue is likely to be one they are prepared to fight over, since it could potentially make a significant difference to their chances of success.

In this context, something that has upset both sides is the alleged irregularities reported in relation to the registration of certain communities of voters. For example, many members of the security services turned up at the polls to find their names were not down or that they had been registered hundreds of miles from where they lived. This is a group among which Allawi enjoys some popularity, having paid them relatively high wages when he was PM, so it has been seen by some as an attempt to engineer the outcome. This seems a strange echo of the 2000 US presidential election in which certain blocks of voters likely to have Democratic leanings ended up excluded from the process, causing considerable concern about the legitimacy of the result.

Another area of contention before the election was the Shia-dominated Justice and Accountability Commission’s (JAC) ban on more than 500 Sunni candidates, including Mutlaq, on the grounds they were linked to the Baath Party. This initially led Mutlaq to pull his INDF candidates out of the election and to entreat others to do the same. However, in contrast with 2005, when Sunnis boycotted the election, he reversed his position, thereby supporting the legitimacy of the process. Nevertheless, the JAC’s move has been interpreted by many as political manoeuvring on behalf of Shia groupings, and this has stirred new sectarian tensions. The worry now is that a government formed without Iraqiya could ex.cerbate these divisions.

One group that stands to benefit from this situation is the Kurds, and this in turn may have benefits for investors. As things stand, the Kurdish Alliance looks as though it will be in a position to act as kingmaker by offering itself as a partner in a post-election alliance. As part of this deal it is possible that the ongoing dispute over the control of disputed territories, including oil-rich Kirkuk, may finally be settled, together with the status of northern oil contracts, unilaterally signed by the Kurds, which Baghdad has thus far labelled illegal. A solution to these twin-problems would certainly boost investment opportunities in the northern oil sector.

All in all, although the election itself may be over, there is still an awful lot to play for.

Patrick Sherwen is a senior consultant in the financial services practice at Control Risks, a specialist risk consultancy with services that include investigative due dilligence, tailored political risk analysis and high-level employee screening.

http://www.citywire.co.uk/selector/-...aspx?ID=396895

Iraq Plans To Raise Oil Output To 4.5 Million B/D In 2014 From 2.4 Million B/D

Iraq, a founding member of the Organization of Petroleum Exporting Countries, is eying to increase its crude oil production to 4.5 million barrels a day in 2014 from the current 2.4 million barrels a day, the government has stated in an ambitous five-year plan.

The 2010-2014 plan, prepared by the planning ministry and approved by the cabinet this week, sees Iraq's oil exports hitting 3.1 million barrels a day in 2014, up from 2.150 million barrels a day this year.

Iraq, with proven oil reserves estimated at 115 billion barrels, the world's third largest, clinched 10 large oil deals with international companies in two major bidding rounds last year. The aim of deals was to boost the country's output to 12 million barrels a day in six to seven years from now.

Iraqi revenues from oil sales are expected to reach $48 billion in 2010 up from $41.3 billion last year, said the plan posted on the planning ministry's Web site. The plan sets an average oil price of $60 a barrel this year. In 2014, the plan said that oil revenues would hit more than $77 billion assuming that oil prices were $68 a barrel.

On gas, the plan suggested that production would reach 2.7 billion cubic feet a day in 2014 up from 800 million cubic feet a day achieved in 2008.

It said that the output increase would be met from two large Iraqi gas fields Akkas in the western Anbar province and Mansouriya in the eastern Diyala governorate. Both fields are untapped.

The oil ministry is planning to hold a third licensing auction this year which would include the two gas fields along with a third one--Siba in the southern Basra governorate.

Iraq, which has proven natural-gas reserves of 3.15 trillion cubic meters, has yet to develop its gas infrastructure. Iraq has been in talks with Royal Dutch Shell PLC (RDSA) to develop a gas infrastructure project in the south for more than a year. Talks have been extended for six more months. The draft deal has seen opposition from Iraqi politicians.

On downstream, the plan assumes that Iraq's refining capacity would increase to 1.45 million barrels a day from a current capacity of 580,000 barrels a day. Iraq currently imports almost half of its oil products needs.

Iraq's three aging refineries--Doura near Baghdad, Baiji 200 kilometers north of the capital, and Shuaaba in Basra--are working at half their capacities. Iraq has also set up small refineries with capacities ranging between 10,000 and 20, 000 barrels a day in various Iraqi governorates.

http://www.nasdaq.com/aspx/stock-mar...24-million-b/d

U.S. military: 45 000 U.S. troops will withdraw from Iraq the end of August next

Official spokesman said the U.S. military in Iraq, Gen. Stephen Lanza, five and 40 000 troops will withdraw from Iraq the end of August, stressing his country's commitment to the implementation of the security agreement between Baghdad and Washington. Lanza pointed out that the arguments and developments in the political process in Baghdad will not affect the timetables for the withdrawal of The U.S. military, ruling out a security vacuum.

http://www.alsumaria.tv/ar/Iraq-News/1-48473-.html

Maliki: electoral appeals legal issue, not political

Search Prime Minister Nuri al-Maliki with a delegation from the Council on Foreign Relations in the U.S. Congress the implications of recent legislative elections and the issue of electoral appeals. A government statement quoted Maliki as saying that the topic of electoral appeals is normally a question of law, not political, has happened in many countries including the United States, pointing out that the issue took a political dimension and the mobilization of domestic and regional which is inconsistent with the higher interests of the people. He believed al-Maliki said Iraq was not built only through partnership, and excluding any party believes it is mentally ill because the future will only be through understanding and through democratic mechanisms, according to the statement.

Prime Minister also met with the ambassadors of Iraq in Egypt and the Arab League, France and Japan, focusing on the importance of their role in reversing the positive side of Iraq and the transfer of the desire to strengthen bilateral relations with countries of the world as well as concern for the Iraqi community are opening the doors for investment with these countries.

http://www.alsumaria.tv/ar/Iraq-News/1-48470-.html

French shipping major revamps Iraqi port facilities
In another sign of the ever-increasing importance of the Iraqi economy, French shipping giant CMA CGM has confirmed that it will open its newly renovated deep water quay in Umm Qasr port, near the southern Iraqi city of Basra.

The move means that the world’s third-largest container line will be able to operate the first direct reefer service to and from Iraq, offering clients the ability to import and export perishable products by sea.

CMA CGM operates a two-vessel weekly service from Umm Qasr to the Gulftainer-operated Khor Fakkan Container Terminal (KCT) in Sharjah.

“This quay is dedicated exclusively to CMA CGM vessels and equipped with the most modern cargo-handling facilities thus allowing CMA CGM a complete autonomy in the handling of its containers into and out of Iraq,” said a company statement, released on Wednesday.

“These new infrastructures and services will strengthen CMA CGM leading position on the Iraqi market and will allow its customers to further develop their own activities in Iraq through these modern facilities.”

There has been increased interest in Iraq – particularly the country’s infrastructure – as post-war stability continues to improve.

In February, UAE-Australian joint venture Al Habtoor Leighton expressed interest in Basra as an area where the contractor was bidding for tenders, and said it was specifically looking at infrastructure, buildings and ports.

On Wednesday, US-based forecaster Global Insight predicted that trade volumes on the Far East to Europe routes - which take in Middle East ports - were forecast to rise by eight percent this year.

The shipping industry has been heavily affected by the economic crisis, with major lines suffering huge losses throughout the course of 2010.

But the number of container ships in lay-up stood at just 9.1 percent of the worldwide fleet at the beginning of March, the lowest figure since July last year.


http://www.arabianbusiness.com/58708...ort-facilities

Farewell, Hummer
The iconic and much loved Hummer b.rand has come to the end of the road in the Middle East, but can its beleaguered owner General Motors drive forward the changes it hopes to make in the automotive sector?

It's official - the Hummer is an endangered species. "We are winding down all our Hummer operations worldwide," Tim Lee, the new president of the US car giant's international operations, told a stunned gathering in Dubai during his first official visit to the Middle East since his appointment last December. Earlier this year, hopes were high that Chinese company Sichuan Tengzhong Heavy Industrial Machinery Company was going to buy the b.rand, but that move was blocked by Chinese regulators. The SUV, which is much loved by Middle Eastern motorheads and off-road enthusiasts, now joins Pontiac and Saturn on General Motor's list of b.rands which are headed to the great scrapyard in the sky.

"We have inventory that we intend to sell. They are great products but the b.rand itself is on the shelf and we are not producing Hummer today in the company," Lee adds in a bid to convince the dumbfounded crowd that the vehicles were now effectively collectors' items and no new Hummers will be shipped to the region.

To reiterate the point, Mike Devereux, the outgoing managing director of GM's Middle East operations, adds that there are only 537 Hummers left up for grabs in the Middle East region. The US car maker began selling Hummers in 1999 when it introduced the $140,000 H1 SUV. Its popularity saw it followed up with the H2 in 2002 and the H3 in 2005. The b.rand quickly developed a dedicated following in the Middle East and was the car's second biggest selling market after the US. The end of the road for the popular b.rand comes as another blow for the Detroit-based car maker, which last June filed for ‘Chapter 11' bankruptcy protection in the US. It was the largest US manufacturing company in history to declare itself bankrupt and cited $82.3bn in listed assets against $172.8bn in debts. Although it emerged from bankruptcy protection in July, the company was forced to cut more than 65,000 jobs in the US and close fourteen factories. The newly revamped GM received almost $62bn from the US and Canadian governments, which today own 61 percent and twelve percent of the company respectively. GM reported a $4.3bn loss for the second half of last year, but Lee claims this was mainly a result of the restructuring costs in the US and that the company is indeed on a strong footing.

"The operations have come out of the bankruptcy situation in a very healthy way," he says matter-of-factly. "Inside the details was the revelation that we were cash flow positive... [and] the balance sheet at the end of the year was extremely healthy and has continued to improve."

In late April, it was confirmed that GM had paid back the full $8.4bn in loans it received from the US and Canadian governments. Lee says this is part of its strategy to return to being a fully tradable company as soon as possible.

"Our intent is to pay off the loans from the balance sheet, make sure our cash balances are where we want them to be, declare our first quarter earnings and prepare the company for initial public offering of stock.

"Whether that happens this year or next year will depend on the equity markets and the overall economic climate around the world in terms of our sales rates. Our intention is to go public again and we want to do that as soon as possible."

In the Middle East, Devereux reports that GM actually increased its market share in the region, especially in the UAE and Kuwait. However, the volume of sales was still impacted and the number of units shipped was down. In 2008, GM sold 144,000 units in the Middle East and last year sales dropped 18.75 percent to 117,000. Lee has set a target of around 135,000 sales for 2010 and during the first quarter of the year 25,700 units were sold, which Devereux describes as "pretty flat" but "better than we thought it was going to be." The Middle East is GM's ninth largest market in terms of volume, but in terms of value it is the richest market and buyers generally spend more on average than in other markets. "I would say it is ‘the' richest market in the world," adds Lee.

Across the region, Devereux is most confident about the Iraqi and Syrian markets. "The Iraqi market is incredible and the Syrian market is up. Both of those markets have potential, Iraq has the potential to be as big as Saudi Arabia over the next four to five years," he says enthusiastically. However, his enthusiasm soon disappears when it comes to the UAE. "The UAE market is taking longer to recover," admits Devereux, who believes one of the main reasons is because of overly aggressive pricing in the market.

"In many sectors of the economy the Middle East has recovered. A lot of us assumed that things would stabilise in pricing but what we have seen is an acceleration of a lot of aggressiveness on deals.

"Frankly we are trying to balance between giving our customers great products but also making sure the resale value of the products three years down the road is very, very strong. If you buy a car today and someone discounts it 15 percent, then you have already lost money."

GM has remained conservative in its approach to incentivisation and while it does not publish its range of incentives in the Middle East, it is required to do so in the US. "In the US in March, GM was below the industry average, which is $2,500, which was pushed up by Toyota who was very aggressive with incentives as they have a lot of inventory piling up at their stores for all the obvious reasons," says Lee.

Another major reason for the slow recovery in the UAE is that car credit is still very tight and many of the emirates' lenders are still very risk averse. "We had about 35 percent of the credit applications for vehicles turned down [in March]. These are people walking into our showrooms and wanting to buy that new Malibu and not being able to get financing," says Devereux.

GM does not sell its cars directly to buyers but operates through a network of dealers and Devereux says that their dealers are also finding it difficult to get financing and that therefore impacts the volume of cars they can order. John Stadwick, Devereux's successor as managing director of GM's Middle Eastern operations, says that credit will be one of the first issues he aims to tackle in order to achieve the sales targets Lee has set out.

"We have meetings with local banks to work with them to maybe incentivise the markets and reduce some of the risk they have to finance some of our retail business," says Stadwick.
......................

"Our strategy is to build where we sell," he adds in relation to plans to produce cars in India. Unfortunately the same policy is not currently the case in the Middle East. "What are we building here? We are building nothing here," he says when asked about GM's production operations in the Middle East.

"Why? Because we don't have the critical mass of any model that would enable us to set up production here. Critical mass of any model is about 60-70,000 of any model and we have production in other locations that we can feed in here.

"If the business were to grow to an extent where we had that volume opportunity then we would certainly consider operations here," Lee says with a hint of optimism.

The new revamped GM is increasingly looking overseas to accelerate its recovery and Lee claims that the Chinese market will soon be GM's biggest market and that this year it expects to sell more cars in China than in the US. In the Middle East, GM needs to overcome issues such as the familiarity of some of its b.rands, price aggressiveness and credit availability. While these may be possible, hopes for the Hummer it seems are officially dashed.

http://www.arabianbusiness.com/587102-farewell-hummer

Kanna: 100 international companies waiting to restore the situation to build one million took place in the whole of Iraq

Deputy Chairman of the Economic Committee in the outgoing parliament, Kanna, "The 100 global investment firm pending the restoration of the general situation in Iraq in order to enter and build one million took place in the whole of Iraq."

"We were in contact with the agency, the independent press (Iba)," The process of building this issue of the role of provinces depend on the ratio of the population for each province."

Baghdad's share of these units 224 000 residential units and a share of the Kurdistan region 100 000 housing units.

He noted, "The coming period will also see the construction of plants giant electric power production of electricity, up more than 20 thousand megawatts."

The Ministry of Electricity announced that Iraq's need of electricity amounting to 13 000 MW.

On the Maalnth government for approving the Five-Year Plan 2010 - 2014 said we were "that any significant financial fall within the doors of the state budget need to pass the House," saying the government's decision "just a draft and will not be implemented before ratification by the new Council of Representatives."

The Iraqi government spokesman Ali al-Dabbagh has said that the ratification of the National Development Plan Five-year (2010-2014) comes to reducing the differences and barriers between urban and rural areas and the provision of infrastructure and social services and generate new jobs and increase awareness and acceptance of the principles of sustainable development for the realization of an integrated and coherent ensure activation Investment and optimized for human and natural resources in all Iraqi provinces.

http://www.ipairaq.com/index.php?nam...onomy&id=24525

Nostalgia Qadu: U.S. and UN pressure from behind the scenes to influence the political scene today

According to a member Council of Representatives outgoing nostalgia Qadu "There is big pressure exercised by the United States and the United Nations to influence the current political scene in Iraq."

The international calls had asked the various political forces to accept the final results of the elections.

The Qadu in contact with the Independent Press Agency (Iba), "The Observers of the political scene in the country believes that there is a deficit of political forces to solve some problems in some of them resorting to the powers and international bodies to intervene in order solution."

Has called the Iraqi List United Nations to intervene to rescue the political process from collapse on the back of the resolutions of the accountability and justice.

He Qadu "The recent decisions of the Commission held the political track is great," adding "Inalekianat political work to resolve the issue decisions of the Commission is the final stages of the solution," he said.

Considered strong, and political decisions of the accountability and justice that groundless constitutional and legal framework to them.

He stressed Qadu on "The formation of an interim government depends on the basis of legal and constitutional," saying "that these foundations do not exist in the presence of government that is able to resolve the differences." He said.

He called on former Prime Minister Iyad Allawi to form an interim government to save the political reality it is experiencing in Iraq.

http://www.ipairaq.com/index.php?nam...itics&id=24510

Sami Atrushi: the political situation in Iraq getting worse day after day

A member of the Kurdistan Islamic Union Sammy Alaterci that the political situation in Iraq getting worse day after day, calling on political parties to resort to direct dialogue and resolve the crisis.

The Alaterci in contact with the Independent Press Agency (Iba), "The decisions by the judiciary to exclude candidates from the electoral process is merely political decisions, despite their legal form," adding that the decision of removal must be done before the electoral process before the results of the primaries".

He added that "thousands of people braved the difficulties and terrorism and bombings that accompanied the electoral process to vote and choose their candidates, they can delete their voices so easily."

He pointed to the existence of solidarity to resolve the crisis in lost to the current tensions, especially since the current government are to challenge its legitimacy and survival, the fact that the regime in Iraq, a parliamentary system exercised its oversight role on the government, noting that "this delay can cause a political crisis."

He stressed the need Alaterci meeting of the "coalition of the state of law and the Iraqi List directly to talk about the outstanding problems and find a formula to form a Government of national partnership rather than resorting to the media and the launch of the".

http://www.ipairaq.com/index.php?nam...itics&id=24522