Iraq Oil Report

Iraq’s Kurdistan Regional Government made a sudden but not unexpected announcement Tuesday it had signed four more controversial oil deals. While the move highlights success in the region, it comes as the central government in Baghdad struggles to meet long-term agenda items like a national oil law.Iraq’s government reacted to the news in the same vein it has to similar deals in the past: criticizing the KRG for a perceived unilateral move in an oil sector lacking needed identity and saying it is fueling the fire separating KRG-Baghdad compromise.The KRG released a statement Tuesday that it had approved four production-sharing contracts for exploration and production in the region. It had signed two of them already, with Heritage Energy Middle East Ltd., a subsidiary of the Canadian firm Heritage Oil and Gas, and Perenco Kurdistan Ltd., a subsidiary of Perenco S.A. of France.

The other two will be announced “shortly,” the statement said, and there will be more deals to follow. Last month the KRG signed a production-sharing deal with Dallas-based Hunt Oil and at the time said more were in the pipeline.

While the KRG has little of the proven reserves, geological structures make its leaders and oil firms think there’s plenty of black gold to be found and pumped.

Read my entire article for UPI HERE.

In the oil-rich region of Kirkuk, its Arab residents are taking the government cash and leaving. This may pave the way for less tension, and make the referendum more likely where remaining voters will decide whether to join the estimated 11 billion barrels of proven Kirkuk reserves to the KRG.

But the more successful the Kurds are, the more there’s both a fear and reality of an independent nation of Kurdistan. Among the most ferocious opponents: Gen. Yasar Buyukanit, the head of Turkey’s military, itching for a fight after losing religious-based confrontations with his own government.

Stephen F. DeAngelis writes on his Enterprise Resilience Management blog about the two economies of Iraq:

Because the Arab south is embroiled in civil strife between Sunni and Shi’a Muslims, its economic develop has been stifled. In the more secure north, economic development has raced ahead. Since a train’s engine can go no faster than its caboose, the north is naturally frustrated to be held back in some areas because of its ties to the south. Oil is one of those areas. This frustration finally reached a tipping point and the Kurdish Regional Government signed an independent oil agreement that raised more than eyebrows…

DeAngelis is the founder, president and CEO of Enterra Solutions, a fairly new but fast rising company aimed at helping companies and nations succeed in the new age of terrorism and other threats.

Last week Enterra signed a memorandum of understanding with the Kurdistan Regional Government for its Development in a Box product aimed at bolstering civil society, government and the economy while protecting the region from attacks, or at least mitigating the damage.

Iraq Fuels

Iraq Slogger reports on the varying prices for gasoline in the fuel-starved Iraq, and finds most prices are above the government mandated amount.

Iraq’s Electricity

Iraq’s Electricity Ministry has billions of dollars to fund projects aimed at getting Iraqis round the clock electricity. Deborah Haynes reports for the TimesOnline there are few takers because of the violence.

Society, Security and Politics

Reuters reports that some residents of Basra find it quieter now that the British are gone. It seems removing at once a target and instigator for firefights in the country’s oil capital has alleviated some tension. But there’s plenty of air left to be sucked within the power vacuum the 2003 invasion and occupation itself created.

The Iraq Press Roundup by UPI’s Hiba Dawood.

The Institute for War and Peace Reporting has an excellent series on media in Iraq.
While this isn’t such an oil issue on the surface, it is one of those peripheral stories that will have a direct impact on how much you will know about the communities, society and politics of the communities where the oil is located.
For example, two of the stories in the series:

Climate of Fear Stymies Basra Reporters

Biasted Kirkuk Media Inflame Tensions

Correction

On Sept. 27, Iraq Oil Report said Statoil (which is StatoilHydro as of Monday), opened up an office in Irbil. The company has not opened an office there, but is still considering it.

It appears that U.S. Sen. Joe Biden’s attempt at breaking the political deadlock in Baghdad with legislation calling for a weak central government in Iraq has done more for bringing politicians together than all recent U.S. efforts combined.

Of course, Iraqis (except for the Kurds) are united against his plan, as is the U.S. embassy in Baghdad, Ned Parker and Raheem Salman of the Los Angeles Times report.

Biden, however, says his amendment –- approved by 75 of 100 Senators — to the 2008 defense appropriations bill is being misunderstood. He said it doesn’t control Iraq’s future, only reinforces the 2005 constitution which calls for federalism to some extent.

His legislation calls on Iraq’s government to approve an oil revenue sharing law as one measure to ease tensions within political factions.

During a phone press conference today, I asked him to explain how the oil sector as a whole would operate under his weak-central government plan.

“The revenue law should be part of the oil law,” Biden said, and all of the oil decisions “will be a central decision.”

Iraq’s Oil

The first batch of discount Iraq oil has reached the Jordanian refinery.

International Energy Agency: Iraq and Angolan production growth to to be part of OPEC’s enlarged capacity.

Nasir al Ali reports in Asharq Alawsat on enjoying Ramadan in Iraq with little fuel and money.

Ewa Jasiewicz of the oil research group Platform, writes for The Independent on what she took from the Iraq oil officials and international oil company leaders who gathered earlier this month in Dubai.

Black gold turns grey as Western giants prepare to draw from the wells of Iraq:
The big oil multinationals thought the prize was theirs under new production-sharing agreements in the war-torn country. But the ‘Iraqi wealth for the Iraqi people’ movement is growing amid internecine conflicts and trade union resistance.

Iraq is open for business,” promised oil ministry officials. “Investment can reduce Iraq’s poverty and help bring peace,” came back the chorus from oil company chiefs.

Gal Luft, executive director of the Institute for the Analysis of Global Security, writes the Baltimore Sun ’War for Oil’ claim doesn’t fit the facts.

Society, Security and Politics

The war has made millions of Iraqis refugees. The U.N. reports some displaced Iraqis are now begging to make ends meet.
Implications for oil: Correct or not, oil is seen as a major motive for the war. With the quality of life so reduced by the war, including people forced to beg for money, how will the Iraqi citizenry react to anyone but Iraqis involved in the oil sector?

The Iraq Oil Report by UPI’s Hiba Dawood.

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