I sat down with J. Jay Park in Dubai, the man who helped the Somali government craft its new oil law and has worked with all sides in Iraq oil law. He holds training sessions for the Iraq Oil Ministry, and represented Canada’s Western Oil Sands in their contract with the Kurdistan Regional Government.
We talked about what an oil law is supposed to do, and how it is framed for Iraq’s massive reserves.
He even let me pester him on model contracts, including what the controversial production sharing contract would and wouldn’t be suitable for in Iraq.
Read the entire interview, which I wrote for UPI.
Excerpts:
The attributes from the point of view of the state are: is there going to be fair share of resource revenue going to the state? …
From the point of view of the investor, what they want to know is: is this a regime in which if they make a discovery they will be able to complete that development so they can monetize the investment that they make? …
What many countries have done is they’ve established a state oil company and give it the management and ownership of the existing resource base. The enhancement and the development of that resource base is then within the control of that state oil company. But new exploration operations would then be open for assessment as to how the state should deal with that. Many states take different approaches to that.
Q: But when you just take a production sharing agreement or production sharing contract, and if those were to be one of the model contracts that are available for the Iraq government to sign with an oil company, where do you see this being applicable, in the four annexes, and where would it not make sense to do a production sharing agreement, from the government’s standpoint? In Annex 1, would you sign a PSA in Annex 1?
A: Want the answer? Click HERE.
Iraq’s Oil
Leslie Sabbagh and Tom A. Peter of the Christian Science Monitor write a good piece on security and development in the oil sector. They missed a little, though.
Hits:
At a recent meeting in Amman, Jordan, Iraqi oil officials discussed the possibility of developing fields in southern Iraq with Chevron, the Kirkuk fields with Shell, and the eastern Baghdad fields with Japex.
The Russian company Ivanov is looking at Ghiada in northwest Iraq, while Conoco Phillips and the Iraqi government’s Northern Oil Company (NOC) have an agreement to share information that could lead to the development of a new field in the Kirkuk area, says Manaa Abdullah, the director general of Northern Oil.
Plans are being discussed to build three new major refineries in the north, center, and south. The intent is to produce 6 million barrels a day, and to export 5.2 million barrels by 2010. The NOC would contribute 1.5 million to 2 million barrels, Mr. Abdullah says.
Misses:
Relying too much on U.S. and Iraqi government officials and not cutting through their, to put it nice, unwarranted optimism.
A campaign to stop sabotage on the key Iraqi oil pipeline running north from Kirkuk to Turkey has led to sustained oil exports for the first time since the war began, say US officers and Iraqi officials. …
Iraqi oil officials in Kirkuk say the region’s fields are producing 520,000 barrels a day at the moment, 320,000 of which are piped to Ceyhan on Turkey’s Mediterranean coast. Ministry of Oil officials say current national production is 2.4 million barrels a day – nearly prewar levels – though outside analysts estimate production is close to 2 million barrels.
The pipeline which is supposed to send Iraq’s Kirkuk-area oil to Ceyhan, however, is not working more than it is. It gets fixed, it gets attacked. It was fixed recently and modestly pumping oil, but was attacked again last week and not only calling into question any short-term viability of oil production and exports in the area, but the blast sent oil into the Tigris River, threatening the water supply all the way to Baghdad.
The global energy information firm Platts has Iraq’s average daily oil production in August at 1.99 million barrels per day.
Reuters reports Iraq sold 2.5 million barrels of Kirkuk oil from Ceyhan Wednesday, and will issue a tender for 5 million more.
The agency also reports a major crude line from Baiji to Baghdad was bombed out of commission.
The attacks on the Kirkuk-Ceyhan line have been so frequent between the Kirkuk-Baiji strip, the government has been talking about a new line that would end around Baiji via the KRG area. Adn Kronos International reports talks have started again but it will take some internal and external political finagling for that to happen.
John Fout, political correspondent for TheStreet.com, writes a somewhat more realistically optimistic piece that Federalism in Iraq Could be a Gusher for Oil.
While Iraqis have less and less faith in the national government, which many Iraqis view as stooges for both the United States and Iran (yes, the irony is so good you want to cry), most Iraqis don’t support the weak central government federalism plan, also referred to as soft partition by those who favor it less.
U.S. Sen. Joseph Biden has garnered enough support for such a federalism plan, or the war so far has gone so poorly many members of Congress are looking for a change, that his amendment to the 2008 defense spending bill was approved by 75 out of 100 Senators Wednesday.
A bit of good news: A U.S. Army Corps of Engineers built power line was built and handed over to the Iraq Ministry of Electricity.
Security, Society and Politics
Since the British backed away from Basra — well, actually, since they took control years ago — the security situation has gotten worse. Religious fundamentalism has curbed free society and political and gangland turf wars have crowded out real life in arguably Iraq’s most important province. Most of Iraq’s oil is located in or around Basra, nearly all of Iraq’s exports go through the capital city’s port.
Kim Sengupta writes for The Independent that British troops may have to come back.
The Website of the Council on Foreign Relations, CFR.org, has just published the first two installments of a debate on the statistical measures of violence in Iraq, as well as a detailed analysis of the data. CFR Senior Fellow Stephen Biddle and Lawrence Korb, senior fellow at the Center for American Progress, discuss the accuracy of these numbers here. Dr. Biddle’s analysis can be found here.
Robert Evans reports for Reuters on the growing refugee crisis
And last but not least, at all, a special congratulations to the 2007 winners of the Courage Award by the International Women’s Media Foundation: McClatchy’s Baghdad Bureau: Huda Ahmed, Shatha al Awsy, Sahar Issa, Alaa Majeed, Zaineb Obeid and Ban Adil Sarhan
In the midst of the war in Iraq, the women of McClatchy’s Baghdad bureau risked their lives just to get to work. Driven by the desire to report to the world about the situation in their country, they became the backbone of bureau.
Since the war began in 2003, Iraq has become the deadliest country in the world for journalists. According to the Committee to Protect Journalists, more than 100 journalists have been killed, approximately 80 percent of whom were Iraqi journalists. The conflict is the bloodiest for journalists since World War II.
Constantly under duress, the McClatchy reporters have dodged gun battles and tiptoed around car bombs just to do their jobs. They’ve been targeted for their work. They’ve lost family members and friends. Their homes have been destroyed.
* Shatha al Awsy – Awsy has narrowly missed homemade bombs and has avoided gun battles and car bombs, all the while managing tough interviews with government officials and members of parliament. Once, when more than 40 families were killed at an illegal checkpoint, she reported even as she mourned. Because of ongoing threats and the perpetual fear that someone would find out what she did for a living and have her killed, she was forced to destroy all documents that indicated her identity and leave Iraq.
* Zaineb Obeid – A single mother of two, Obeid nearly died when a bomb-laden vehicle detonated near her on her way to work. She was thrown into the air and temporarily lost her hearing. She returned to work only days later.
* Huda Ahmed – Often sleeping in the office to cover late-breaking news after curfew, Ahmed would awaken each day only to start all over again. She covered the battle in Najaf in 2004 and compiled eyewitness accounts of a bombing in Musayyib before she allowed herself to grieve over violence sure to continue. Ahmed is the 2006-07 IWMF Elizabeth Neuffer Fellow.
* Ban Adil Sarhan – Though she had no previous journalism training, Sarhan doggedly reported, even up to days before the birth of her son. In 2004, insurgents gunned down her husband, daughter and mother-in-law, and Ban continued to receive threats on her own life. She narrowly escaped from Baghdad and now lives in Oklahoma with her son.
* Alaa Majeed – Bold and unconventional in reporting, Majeed has found and led others to extraordinary stories and embraced journalism as a means to help her country. She proved adept at understanding politics and was unafraid to pursue tough stories about the government, even in a time of turmoil.
* Sahar Issa – An ambitious reporter, Issa tells tales of grief and destruction, even though they’ve struck all too close to home. Her eldest son was caught in a crossfire in late 2005; he was shot and killed instantly. Issa has also faced going to the morgue to claim the body of a nephew who was killed in a market bombing. She found his body in two pieces. Issa continues to report from McClatchy’s Baghdad bureau.
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