Iraq Oil Report

Iraq’s electricity minister asked U.S. firms to join the reconstruction effort of one of the country’s highest priority projects: bringing power to Iraqis, most of which have precious few hours of electricity a day.

Karim Waheed Hasan is in Washington and, according to a statement released by the U.S. Commerce Department’s Iraq Investment and Reconstruction Task Force, is looking for U.S. bidders on projects.

“We have the money, the manpower, and the fuel, but we need the material and the supervision,” he said at the U.S. Energy Association’s offices in Washington, DC. “I am here to urge U.S. companies to participate in Iraqi reconstruction.”

According to the release, the Ministry will spend $27 billion to 2016 to build new generation and transmission capacity, rehabilitate existing plants and equipment, to boost capacity to 10,000 megawatts.

Iraq just signed deals worth billions with Chinese and Iranian firms.

China’s Shanghai Heavy Industry has started work on a giant power plant in Kut, the capital of the southern province of Wasit, a $940 million project, Ali al-Mawsawi reports for Azzaman.

Two workers were injured after rockets hit Baghdad’s Dora refinery, Voices of Iraq news agency reports.

Iraq’s Economy

A new dam in oil-rich Kirkuk is being built to help move the area’s agriculture industry forward, Marwan al-Ani reports for Azzaman.

The 2008 budget won’t be approved until after Eid, Al-Sabaah reports.

Security, Society and Politics

Iraq’s Sadr uses lull to rebuild Army: Moqtada al-Sadr’s Shiite militia aims to return leaner, stronger, Sam Dagher reports for The Christian Science Monitor.

We’re ready to take over security, Iraq’s defense and ministers say, Al-Sabaah reports.

Iraq’s Interior Ministry has tasked 3,000 secret police with hunting down terrorists in Baghdad, Al-Sabaah reports.

Iraqi Vice President Tareq al-Hashemi is in Jordan to talk about the refugee crisis there, AFP reports.

Saudi Arabia and the United Arab Emirates have formally requested to reopen their embassies in Baghdad, Steve Negus reports for the Financial Times.

The Iraq Press Roundup by UPI’s Hiba Dawood.

Why the Worst Is Probably Over in Iraq, a new essay by the American Enterprise Institute’s Reuel Marc Gerecht. His premise is that political lefties are reluctantly admitting that the surge is working. The problem, however, is that the recent decrease in violence is merely relative — and hasn’t been matched with any real increase in the quality of life for Iraqis, economic enhancement, political reconciliation or deescalation of the sectarian/religious power vacuum — thus there’s no way to conclude the surge is a success in a couple months of “less horrible” news, after four and a half years of escalating hell.

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There have been nearly 600 pipeline attacks in Iraq since March 2003, though recent security strategies have allowed additional flow in the northern pipeline.

Attacks are also increasing in the power sector, especially among workers being targeted, according to an assessment from March 2003 to Nov. 17, 2007, made for United Press International by an expert in threats and vulnerabilities to the energy sector worldwide.

Iraq’s oil pipelines have been attacked at least 576 times, according to the expert, who analyzes data for UPI on the condition of anonymity, and oil fields and wells 45 times.

The entire United Press International story is HERE.

A pipeline from Kirkuk to Baiji was bombed Friday, Gulf News via Iraq Updates reports.

Iran’s Press TV reports it won’t affect exports.

Other coverage of it includes:

Associated Press via International Herald Tribune

Reuters via The Guardian

AFP

Iraq’s Parliament will hold what will surely be a contentious session on the country’s oil sector, with the national and Kurdish oil ministers summoned.

Iraqi media reports confirmed what sources had previously told United Press International on condition of anonymity: the dispute between the Kurdistan Regional Government and the national government over KRG oil deals is striking a chord in Baghdad.

Parliamentarians from Dawa, Fadhila and Sadr parties, National Dialogue Council, National List, National Dialogue Front, Reform and Progress Party, Turkoman, Yazidi and Rafidayin fronts apparently held a press conference Sunday demanding a number of things, including action by Baghdad on the KRG deals they claim are “illegal,” blacklisting companies who sign with the KRG.

Political and religious groups in the oil-rich city of Basra have signed a new peace accord to stem violence as British troops transfer control.

Women a target in oil-rich Basra, as at least 40 bodies have been found recently, increasingly targets of religious fundamentalists.

Excerpts from an interview of Chevron Corp. Vice Chairman Peter J. Robertson, by Lee Hudson Teslik for the Council on Foreign Relations.

When the situation in Iraq stabilizes, there’s a significant opportunity for Iraqi production to grow. To double or triple, over a period of time. And when and if the situation in Iran settles down, to where international companies can invest in Iran, there’s an opportunity to increase production there. So there’s a lot of “ifs” associated with it, but there’s clearly the potential for significant increases in production from the Middle East. …

But we’ve got lots of demand in the world, and it’s all going to depend on access. It’s going to depend on how well we do in the world on becoming more efficient. Leadership, both in this country and in others, could make a lot of progress on efficiency, and maybe slow down the demand increase. There’s plenty of gas in the world, and plenty of oil in the world, to keep prices well below where they are today. The question is, can we get access to it, will the investments be made, and what will the demand look like? In many of the countries that have these resources, the investments just aren’t being made. Investments aren’t being made in Russia at the rate they need to be. They’re not being made in Mexico at the rate they need to be. They’re not being made in Venezuela at the rate they need to be. They’re not being made in Kuwait at the rate they need to be. And Iraq. What happens in these places will define what the price of oil and gas is ten, fifteen years from now.

Iraq’s Civil Resistance, by Bill Weinberg in The Nation.

On July 4 the leader of a popular citizens’ self-defense force in Baghdad was executed. According to the Iraq Freedom Congress (IFC)–a civil resistance coalition–a unit of US Special Forces troops and Iraqi National Guard forces raided the home of Abdel-Hussein Saddam at 3 am, opening fire without warning on him and his young daughter. The attackers took Abdel-Hussein, leaving the girl bleeding on the floor. Two days later his body was found in a local morgue. Since late last year Abdel-Hussein had been the leader of the Safety Force, a civil patrol organized by the IFC to protect their communities. Like many IFC leaders, he had been an opponent of Saddam Hussein’s regime and was imprisoned for two years in the 1990s. His death was mostly ignored by the world media. …

IFC leaders, including president Samir Adil, who said, “Because he said, ‘No Sunni, no Shiite, yes to human identity,’ because he wanted to build a civil society in Iraq without occupation, without sectarian militias–for that they killed Abdel-Hussein. They think they can defeat the IFC, the only voice in Iraq that says yes to a free society, yes to a nonviolent society, no to occupation, no to sectarian gangsters. But contrary to that, after the assassination, many people joined the IFC. We received messages of solidarity from around the world. As long as we have the support of people like you, we will never give up.” …

Adil is clear on where he places the blame for the crisis of violent sectarianism. “The occupation and the US-imposed Constitution have divided Iraq, Sunni against Shiite. The IFC is the only force to oppose this division of society.”

The Safety Force is increasingly made up of trade unionists, a growing pillar of support for the IFC. In a September 8 press conference in Basra, representatives of the IFC’s Anti-Oil Law Front joined leaders of the Iraqi Federation of Oil Unions to warn the Iraqi Parliament against passing the US-written oil law, which would grant broad access to foreign multinationals. IFOU president Hassan Juma’a, also a member of the IFC’s central council, announced that the union will shut down the pipeline leading from Iraq’s southern oilfields if the law is approved. Five days earlier, the IFC had staged a protest in Baghdad’s Liberation Square. American forces surrounded the rally, blocking access to the square.

Weinberg’s also the editor of the online journal World War 4 Report and a co-founder of the National Organization for the Iraqi Freedom Struggles.

Iraq’s Economy

Baghdad press urges revolt against financial, administrative corruption, Voice of Iraq news agency reports.

Iraq Bonds Rally on Troop Surge, Oil Earnings, Highest Yields, Lester Pimentel reports for Bloomberg.

The country’s $2.7 billion of 5.8 percent bonds due in 2028 returned 15.2 percent since July, according to JPMorgan Chase & Co. index data. Only Ecuador’s debt gained more, rising 18 percent. Iraq’s securities yield 6.21 percentage points more than Treasuries, the most of any dollar-denominated government debt. …

A 46 percent increase this year in the price of crude oil, Iraq’s biggest export, has also boosted demand for the debt. Production rose to 2.5 million barrels a day from 2 million in September, Oil Minister Hussain al-Shahristani said last month. Crude reached a record $99.29 a barrel on Nov. 21.

The Iraqi Stock Exchange (ISX) index plummeted by 1% on Thursday compared to the previous session, closing at 34.400 points with a notable absence of non-Iraqi investors trading, Voice of Iraq reports.

U.S. plans to form job corps for Iraqi security volunteers: Shiite-led government’s slow hiring of Sunnis prompted change, Karen DeYoung and Amit R. Paley report for The Washington Post.

The Iraqi government and the UN have launched local regions development project aiming at boosting the local authorities’ capabilities and Iraq’s economy, Voices of Iraq reports.

Security, Society and Politics

Moqtada al-Sadr has helped reduce violence in Iraq, said Gen. David H. Petraeus, the top American commander in Iraq, Ann Scott Tyson reports for The Washington Post.

Sadr militia moves to clean house: Since halting attacks on U.S. and Iraqi forces, the Shiite cleric’s Mahdi Army has been weeding out alleged rogue elements, Ned Parker reports for the Los Angeles Times.

A few days after the Arab bloc’s decision to return to Kirkuk province council, Kurdish leaders began a political settlement process between Arabs, Kurds and Turkmen, which may end years of political uncertainty in the city, Basil Adas reports for Gulf News.

A top Sunni legislator among political untouchables in Iraq, Kathleen Ridolfo reports for Radio Free Europe/Radio Liberty.

Kurdistan region’s foreign policy explained, by Falah Mustafa Bakir, the Kurdistan Regional Government’s Head of Foreign Relations.

A Pentagon audit of a $5.2 billion fund used to train and equip Iraqi security forces found that United States commanders used sloppy accounting and could not always show that equipment, services and construction were delivered properly, the Associated Press reports via The New York Times.

The surge is a sideshow. Only total US pullout can succeed, writes Jonathan Steele in The Guardian. When resistance leaders are given an assurance that the Iraq occupation will end completely, real negotiations can begin.

After the Surge: The Only Iraq Worth Fighting For, by Keith W. Mines, Coalition Provisional Authority Governance Coordinator for the Al Anbar province of Iraq from August 2003 to February 2004, published by the Foreign Policy Research Institute.
“Four major proposals for a way forward in Iraq have been proposed over the past months, all of which ignore Iraq’s political center of gravity. …
Only 18-state federalism can create a united and functioning Iraq, and this starts with Iraqis, in the arena, engaging each other and getting on with the business of reforming their state in a way that it can function.”

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EDITOR’S NOTE: Next week I will be at a 5-day journalism conference and thus, barring any big movements, Iraq Oil Report will be the same breadth but less depth, with just links to the stories and information you rely on us for.

Also: If you haven’t signed up to get e-mail alerts when Iraq Oil Report is updated, there’s no better time. It also makes a great holiday gift.
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The leader of one of the most powerful Iraqi political parties said “good progress” has been made on the oil law, though he was short on details. …

The oil law, however, is stuck in Parliament’s energy committee and a resolution between the central government and Kurdistan appears far away. When asked to explain “good progress,” Abdel Aziz al-Hakim, the head of the Islamic Supreme Council of Iraq, said the oil and other laws have either “already reached the Iraqi Parliament” or “are still being prepared.”

“The Parliament should give its opinion about them during the next weeks or months,” he said.

Read my entire article for United Press International HERE, in which Hakim also plays down the beef with the Iraqi Kurdistan region over its 20-some oil deals.

Hakim’s statements are crossed, however, by statements by ISCI or other officials in Iraq’s national government show a more dire situation.

Oil Minister Hussain al-Shahristani said the dispute between the KRG and Baghdad are “irreconcilable for the time being,” Alex Lawler reports for Reuters.

Abbas al-Bayati, a parliamentarian representing ISCI, is calling for the oil deals the KRG has signed to be suspended, Mohammed Ameer reports for AFP.

The Kurdistan Alliance is a core component of the ruling coalition running the government in Iraq, however, and the extent the Kurdish oil deals are addressed, and compromise made over it and the oil law, will determine the future of the government.

But apparently the KRG deals are striking a chord with the Shiite and Sunni parties in Iraq which are not united on much. The feeling is the Kurds are moving unilaterally and because they don’t want strong central control over the oil sector, the Kurds are just looking out for themselves.

Parliamentarians want answers and are apparently calling on the KRG oil minister to answer questions in Parliament.

The Kurdish Regional Government (KRG) of northern Iraq will send a delegation to Baghdad next week, to discuss issues concerning oil, security and the Kirkuk referendum, Yaniv Berman reports for The Media Line.

For more reading on this: An interview with KRG Natural Resources Minister Ashti Hawrami, which I wrote for UPI. He was in town recently talking to U.S. political and business leaders and had talked of signing even more deals.

From the “what the heck are you talking about” file

Deputy U.S. Treasury Secretary Robert Kimmitt apparently pulled a number on reporters during a visit to Iraq.

He said the oil law, not security, is the number one impediment to oil companies coming into the country.

“A lot of times people think they’re not investing because the security situation is difficult,” Kimmitt said. “Well, the security situation is improving, and as the oil companies will tell you, they invest in many places in the world where security is a tough factor.”

If one looks at the more than 20 oil deals oil companies have signed with Iraqi Kurdistan already, where there is relatively little violence, it appears it doesn’t matter if there’s a legal structure.

The national oil ministry is on the verge of signing some deals on their own, without an oil law, as well, which points out Kimmitt’s absurdity and disregard for the Iraqi people in exchange for the desires of the international oil community.

Iraq has the world’s third largest proven oil reserves, and when the remaining 70 percent of the country is explored, plus the 30 percent explored better, its reserves will likely rival Saudi Arabia.

The security situation is not improving, as in a trend. There are some markers of less violence which can be viewed only in isolation because there are some very real issues of sustainability, i.e. persistent low quality of life for Iraqi citizens and continued and growing inter- and intra-ethno and religious faction disagreements.

Oil companies may sign deals if there’s an oil law, but under the security situation that remains, under ultimately a war zone and civil war, the deals would contain a risk premium giving terms way too generous to international oil companies than a country with such large, quality and easily extractable crude reserves should sign.

More on Iraq’s Oil

Kurd oil deals = smuggling, Shahristani says, Iran’s PressTV reports.

Senior Kurdish official lashes out at oil minister, Mohammed Hameed reports for Azzaman.

Arabs and Kurds reach accord in Iraq’s Kirkuk, AFP reports.

Kirkuk referendum debate continues, Alsumaria TV reports.

Negroponte sees Kirkuk referendum delayed to 2008, in Today’s Zaman.

Iraqis patrol southern borders for smugglers, Iraq Slogger presents from Basra, a rare look at the Border Police and Coast Guard forces.

Powering Iraq

Iraq’s Electricity Minister’s home attacked in Baghdad, guards injured, DPA reports.

New power station to be established in Thi Qar governorate, Middle East North Africa Financial News reports.

Iraq’s Workers

An interview with Hashmeya Muhsin Hussein, president of the Electrical Utility Workers Union, the first woman to head up a national union in Iraq, by Natacha David for InfoShop News.

Society, Security and Politics

Women under extremists’ guillotine in Basra, by Voices of Iraq via Iraq Updates.

Basra women fear militants behind wave of killings, Alaa Shahine, Dean Yates and Andrew Dobbie report for Reuters.

Say ‘no’ to Female Genital Mutilation; Say ‘yes’ to a law prohibiting FGM, by Kameel Ahmady in Kurdish Media via Iraq Updates.

Kurdish region rethinking independence: Turks’ recent threat to invade tells many they need Iraq, by Bay Fang for the Chicago Tribune.

Iraq Struggles to Control the PKK, by Roxana Saberi in Der Spiegel.

Sunni militias’ success seen as threat to Shi’ites, by Leila Fadel for McClatchy Newspapers.

Cholera: A Microscopic Insurgent, by Mark D. Drapeau is a fellow at the Center for Technology and National Security Policy at the National Defense University in The New York Times.

A Calmer Iraq: Fragile, and Possibly Fleeting, by Alissa J. Rubin for The New York Times.

The Iraq Press Roundup, by UPI’s Hiba Dawood.

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This week appears to be a buzz in Baghdad with KRG passing up meetings with oil officials in Texas to be there.

The oil minister of Iraq’s Kurdistan Regional Government cut short his U.S. visit to head to Baghdad, where Parliament this week is to question him on the 20 oil deals the KRG has sign already with international oil firms.

He and other officials from the KRG will appear sometime this week as criticism over the oil deals has created dissent, of some sort, with politicians in Baghdad upset the region is moving forward in its oil sector.

KRG Minister of Natural Resources Ashti Hawrami has irked the central government by signing the oil deals, and saying he’ll be signing more.

Baghdad says the KRG should wait for a national oil law governing the world’s third largest oil reserves to determine control over the oil fields, the rights to sign contracts, and the extent foreign oil firms can invest.

The Kurds blame Baghdad for moving too slow — though each blames each other for derailing the stalled draft oil law — and thus passed its own regional oil law and continued signing contracts.

Hawrami arrived in Washington, D.C., last month, and was to meet with government and business officials there and in Texas.

According to sources, Parliament will hold a hearing on the KRG deals. The Kurdistan Alliance is core part of the current coalition government in Iraq’s government, and any action against the KRG will not be taken lightly by the key member of the already fragile government.

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