Thread: Archive News - Iraqi Dinar Think Tank - 22/06/2010 - 04/10/2010

Bureaucracy Delays Investment – NIC

“Investment in Iraq is weakened due to delays in issuing investment licences for projects, and due to the bureaucracy that is involved; the Iraqi economy needs to change from a centralized economy to a free one”, said Kamel al-Zaidi, a member of the Investment committee, on Tuesday.

The process is too cumbersome and is not suited to large projects. The investment committee hasn’t achieved its goals, and in three years only three licences were issued — they are for: “al-Rashid camp”, “future project”, and “Ten in Ten project”, al-Zaidi added.

“Iraq needs to change the centralized economy to a free one, that is, there must be freedom in the selection of projects and capital in the investing companies”.

Iraq is seeking to attract investments into the country to contribute to its reconstruction after having suffered from neglect and damage throughout the long years of siege and war.

These efforts are also hampered by the precarious security situation, which raises the fears of investment companies to enter the Iraqi market.

The National Investment Commission was formed in 2007 and is responsible for all federal investment projects, while the regional and provincial committees are responsible for investment planning and granting investment licenses in their areas.

http://www.iraq-businessnews.com/?p=6225

Moody’s Boosts Petronas Rating on Iraq Exposure

Energy Risk reports that Moody’s has raised its rating of Malaysian state-owned Petronas’s A1 senior unsecured debt from negative to stable, despite the group’s riskier business profile following a major acquisition of a large oil field in Iraq.

“We expect the company’s $20 billion capital expenditure for the Iraqi fields to be spread out over a period of 20 years,” says Philipp Lotter, lead analyst and senior vice-president at Moody’s. “Annual capital expenditure is expected to peak in the first five years, which potentially allows Petronas to fund capital expenditure in later years with the reinvestment of early returns from the fields.”

Lotter added that Petronas’s strategy to partner with leading oil and gas companies in all of the Iraqi fields, coupled with its growing track record in managing international investments, provide a degree of comfort with regard to the associated execution risk.
In December last year, Petronas and Royal Dutch Shell won the rights to develop and produce oil in the Majnoon oil field, which has an estimated 12.6–12.8 billion barrels of oil. The consortium says it aims to have a peak production target of 1.8 million barrels per day (b/d).

In the past two years, consortia led by major energy companies have waded into Iraq, signing producing field technical service contracts (PFTSC) to secure fields for crude oil production. Some of these are pledging production of around 1 million b/d by 2017, though this is seen by analysts as somewhat optimistic for a country with high political uncertainty.

A PFTSC was developed by the oil ministry to be used for the first bid round. It is a hybrid model contract to be added to more than 100 fiscal regimes that govern international oil companies’ participation in some 75 countries.

Experts have previously said that despite companies securing the rights to produce and develop oil in these fields, the risk is high due to the lack of a petroleum law, poor infrastructure and geopolitical risk. Issues over export rights could also affect the companies ability to sell the finished products.

“One of the main things that Iraq needs to tackle is the basic security issues, such as the ability to provide electricity, power, roads, and hospitals,” says David Hart, oil and gas analyst at corporate finance and broking house Westhouse Securities. “While improvements in this area are occurring, many people would say that the country needs to resolve this in order to provide secure environment for oil and gas production. However you can’t wait for that to happen, Iraq needs the oil revenue to help bring about this change.”

This week, Iraq’s oil minister Hussain al-Shahristani urged foreign energy companies to honour their contracts to explore and develop oil reserves in Iraq, as it is “the nation’s highest priority”.

“You have to prove to us and to the world, your ability to implement these contracts in accordance with the timeframe and the conditions stipulated in the deals,” said Al-Shahristani speaking at an oil symposium in Iraq. “Success is not only reaching the production targets, but reaching these targets at a lesser cost, as much as possible. I hope we work together to reduce the costs.”

http://www.iraq-businessnews.com/?p=6199

INTERVIEW: Iraq, Intl Cos Discuss Building 4 Refineries - Deputy Oil Min

The Iraqi oil ministry is talking to several international oil companies about investment in four planned refineries throughout Iraq to meet increasing domestic demand, the country's deputy oil minister has said.

"The estimated cost of these four new refineries that are designed to produce some 740,000 barrels a day of refining capacity is more than $20 billion," Ahmad al-Shammaa told Dow Jones Newswires in an exclusive interview late Thursday.

Shammaa said Iraq's first priority refinery is in Kerbala governorate south of Baghdad with a production capacity of 140,000 barrels a day and an estimated cost of $4 billion.

Kerbala refinery is in the front-end engineering and design phase now. Technip SA (TEC.FR) which was awarded the FEED contract last year, is expected to finish the designs at the beginning of next year, he said.

The ministry is offering investors three options: build, own and operate, build, operate and transfer and a joint venture with a state company, he added.

Designing the refinery is the last step before inviting companies to tender for the refinery. However, three South Korean companies have already shown interest in building the refinery, he said without naming them.

The second priority is to build a refinery in Missan governorate in southern Iraq with a capacity of another 150,000 barrels a day, he said.

U.S. companies Shaw Group Inc (SHAW) along with Stone & Webster Inc (XD-SEW), are designing the refinery and they are expected to finish the front-end engineering design next year. It will also cost around $4 billion, Shammaa said.

Iraq also plans to build the Nassiriya refinery, near the city of Nassiriya in the south, to process 300,000 barrels a day. Shammaa said that products of the refinery will be exported via Iraq's export terminal in Basra in southern Iraq. The refinery is being designed by Foster Wheeler AG (FWLT) "We need also to work out a network of pipelines that would carry products to our export terminals in Basra," he said.

The fourth refinery is planned in the oil-rich Kirkuk governorate with another 150,000 barrels a day processing capacity, he said. Shaw Group and Stone & Webster are designing the refinery.

Iraq, the only member of the Organization of Petroleum Exporting Countries that doesn't have to adhere to an oil production quota, is facing a fuel shortage. The country, which has the world's third largest crude reserves, presently imports more than a quarter of its fuel needs.

Iraq has three major refineries in Baghdad, Basra and Baiji 200 kilometers north of the capital, as well as a scattering of smaller refineries throughout the country, with designed capacities of 750,000 barrels a day. But outstanding repairs, crude transport bottlenecks, acts of sabotage and crude oil storage capacity cut their operational capacity to around 530,000 barrels a day.

The Iraqi oil ministry and the national investment commission held a joint conference at the ministry's headquarters in Baghdad last month, in an attempt to attract international refinery investors to build these refineries. At that meeting, the ministry announced that it would give a discount of 5% to its crude oil prices to investors in these refineries.

The Iraqi refining sector has been eclipsed by the higher profile of the upstream development of the country's vast oil reserves. If the 11 deals signed last year and this year with international oil companies prove to be successful, Iraqi output capacity will jump from 2.5 million barrels a day to more than 12 million barrels a day in seven years, increasing the demand on the country's refineries

http://www.lse.co.uk/sharecast-news-...Deputy_Oil_Min

Iraqis’ patience wearing thin, warns Shiite cleric

Iraqis are losing patience with politicians who cannot form a new government four months after the general elections, said a senior Shiite cleric and politician.

Moqtada al-Sadr, leader of the Sadr Movement and its armed wing the Mahdi Army, made it clear that the incumbent Prime Minister Nouri al-Maliki should go.

He said there was agreement across the board for the prime minister to step down and give way for the formation of a new government.

Iraq held general elections in March in which a coalition led by former Prime Minister Ayad Allawi won by a slight majority, but falls quite short of two-thirds majority needed for forming a new government.

Sadr said his movement, which won 40 seats, was open for talks with all Iraqi factions.

“Only talking to the Americans is forbidden. That will never happen,” he said.

Sadr’s positioning is crucial to the formation of the government.

He held talks with Allawi in Damascus this week and described the discussion as “fruitful”.

He said he hoped the meeting will accelerate the emergence of a new government “that will bear the interests of the Iraqi people in mind.”

http://www.azzaman.com/english/index...07-23\kurd.htm

Jaafary: US not entitled to interfere in Iraq crisis

Head of the national reform party Ibrahim Al Jaafary affirmed that the US Administration is not entitled to interfere in Iraqi affairs mainly in the government formation issue.

The next Prime Minister will be from the National Alliance, Al Jaafari told reporters. Talks between both coalitions are in progress, he added.

Asked about a compromise candidate for Premiership, Ibrahim Al Jaafari noted that this option is possible.

http://www.alsumaria.tv/en/Iraq-News...aq-crisis.html

Iraqi parties working on resolving crisis

Kurdistani Alliance senior official Mahmoud Othman revealed that political parties are deploying efforts to name the three presidencies within the coming week.

There is almost an agreement to end the issue this week, Othman noted. If no agreement is reached, the open parliamentary session will be delayed, he added.

Kurds have not defined their stand yet towards the alliance, Othman said.
The National Coalition is bind to present one candidate for Premiership if Al Maliki is substituted by another candidate, Iraqi National Coalition member Mohammed Al Bayati said.

The National Coalition is not willing to relive the experience with Al Maliki, he added.

If Sate of Law Coalition insists on Prime Minister Nuri Al Maliki as their sole candidate, the National Coalition will consider allying with other parties including Al Iraqiya List and Kurdistan Alliance.

http://www.alsumaria.tv/en/Iraq-News...ng-crisis.html

Abadi : There are political actors trying to torpedo the talks to form a government

According to a member coalition of law Haider al-Abadi said the Iraqi political parties are trying to block the talks and negotiations on forming a government in order to internationalize the problem.

And Ebadi said in a statement that some blocks hinder negotiations aimed at forming a government to internationalize the issue, noting that there are political players have an interest in working to internationalize the issue not to provide solutions.

Abadi said that within the bloc, agreed that Iraq does not resort to regional states to assist it in trying to get other features to the detriment of the other blocs, calling the situation a "risk approach".

He said today he was there known to the political forces in order to get some gains, to pay, whereupon things to the brink of the abyss, and this is a risk, noting that the policy of pushing things to the brink of an abyss that could lead to falling over the edge already.

http://radionawa.com/ar/NewsDetailN....444&LinkID=151

National Commission for Investment : 58 companies made investment to build four refineries in Iraq

The head of the National Investment Commission Sami al-Araji said 58 companies had made investment to build four new refineries in a number of provinces which the Ministry of Oil has been promoted last month.

"They said in a statement published by the agency's news reports, said the symposium held by the Oil Ministry last month to promote the establishment and build four new refineries in a number of governorates, attended by some 400 businessmen, as well as representatives of Arab and international companies that produced thereby on the progress of 58 companies to build refineries, noting That the ministry will be the four refineries after the completion of designs for these companies.

And that the investment will be either fully or in partnership with the Ministry of Oil or will be by building a refinery and then handed over to the Ministry of oil after a period agreed between the parties.

http://radionawa.com/Ar/NewsDetailN....346&LinkID=155

The European Union has opened offices in Basra and Erbil

European Union mission to support the rule of law in Iraq, said Francisco Diaz, Chairman, will return to Baghdad at the end of this month, to start to extend its mission and the opening of two new offices in Basra and Erbil. The statement issued by the Mission, it will expand its activities in Iraq in the training of officials from developed and middle cadres in senior management and criminal investigation. The statement pointed out that the mission since its founding in 2005, involving more than three thousand four hundred judge, an investigating judge and police officers in specialized courses.

http://alforattv.net/index.php?show=...ticle&id=47006

Continue to work to draft security fence the border between Iraq and Saudi Arabia

Saudi authorities have uncovered near the accomplishment of a border fence between Iraq and Saudi Arabia, which was to begin its inception more than a year, with completion expected in the coming months.

Media spokesman for the leadership of Saudi border guards Fahd al-Shaalan said that it was completed about two thirds of the front fence, while the completion of 243 miles of fence on the back of the Saudi border - Iraqi.

For his part, General Ali Al- Anzi still the commander of border guards in the northern region "that al-Qaeda and the smuggling of drugs and arms, is the biggest danger to be faced."

He added that "all these threats to the same degree of risk both at the Saudi border - Iraqi or adjacent to any limits of another State", he said.

The rise in the border fence up to two meters and a half meters and consists of 3 layers, each layer consists of a set of barbed wire wrapped around each other, which makes passing very difficult task. This is the first phase of the fence that will in the post-modern control techniques and cameras, which will link directly to the sectors in which each holds the responsibility of securing the borders with the Iraqi side.

It is noteworthy that the northern border area on which to build the security fence project is located in the far north of Saudi Arabia, which runs along the international borders of Iraq and Jordan, covering almost 125 thousand square kilometers.

http://www.radiodijla.com/cgi-bin/ne...?id=2010-07-24