Iraq Oil Report

Plus:
*Negotiated deals with Big Oil done by first quarter 2008
*Contracts on oil fields from bids signed by end ‘08, more next year
*Exports to Turkey resumes, fears remain it can’t deliver on crude contracts
*Political party that runs Basra may rejoin national government
*Iraq’s editorial pages

Iraq has its sights set on 300,000 to 400,000 extra barrels per day of production this year, a hope Oil Minister Hussain al-Shahristani pins on recent months of successful increases in oil flow and relatively more secure and sustained output.

Jane Barrett and Alex Lawler report for Reuters Shahristani, on the sidelines of the World Economic Forum in Davos, Switzerland, said the hoped for increase in production will all be dedicated to exports.

Iraq averaged 2.3 million barrels per day last month, though production decreased last week, and Shahristani pegged 2008 to reach between 2.6 million and 2.7 million bpd. To do so, Iraq will need to increase and maintain security, particularly in its northern oil sector. It would also need to follow through and actualize needed repairs and investment in the oil sectors nationwide, though capital improvements have not been a strong suit of the Oil Ministry.

Shahristani also teased Reuters about upcoming deals for developing Iraq’s oil sector, saying technical support contracts will be signed in the first quarter of this year, which are likely to be directly negotiated with the world’s largest oil companies on two year terms. He said by the end of 2008 a bid round for other large field developments will have been concluded and contracts signed. He said another set of oil fields will be bid on next year.

It’s from the unexploited fields where Iraq’s future lays, and Shahristani told The Associated Press such exploration and exploitation will have Iraq producing 6 to 8 million bpd in 10 to 12 years.

Iraq’s exports of oil to Turkey have resumed despite concerns the country’s limited success in the northern pipeline isn’t sustainable, United Press International reports.

Iraq’s key oil port will celebrate Sunday with the inauguration of the second of a growing fleet of new oil tankers, UPI reports.

2008 will be the year of Iraq oil, according to Phil Flynn in his FXStreet.com article The Greatest oil story never told. It’s a quick read of detachment – in 2007 “The Iraqi oil industry was a joke and Iraqi oil exports were almost non- existent,” Flynn writes, in somewhat offensive and xenophobic tones.

Iraq is stepping up efforts to win international investment and develop local business around its southern oil city of Basra, Deputy Prime Minister Barham Salih said on Friday, Dominic Evans reports for Reuters. Hoping that economic growth might help cement recent fragile security improvements, the government is setting up the Basra Development Commission, led by a leading British businessman.

The political party that nominally controls Iraq’s oil capital, Basra, said it may rejoin the governing coalition in Baghdad if structural change is made to leadership and positions. The Fadhila Party withdrew from the coalition, though kept its Parliamentarians seated, shortly after Oil Minister Ibrahim Bahrul-Uloom was replaced. The party, along with other Shiite and Sunni parties who withdrew support for Prime Minister Nouri al-Maliki’s government, claimed party favorites were chosen for key posts and others were marginalized.

But now the coalition – made up of Maliki’s Dawa Party, the Islamic Supreme Council of Iraq and the Kurdistan Coalition – are facing internal discontent and growing coordination between its opponents who not only oppose Maliki’s governance but the Kurds’ oil prerogatives and ISCI’s crawl toward Kurd-like autonomy for nine provinces in the south as well.

Fadhila did not join the anti-Maliki coalition, however. In fact, it released a statement the next day assuring it didn’t. The coalition included the Sadr Movement, with whom Fadhila has an on again-shoot at each other again relationship in Basra. ISCI, on the other hand, has attempted to push Fadhila out of Basra, which makes this latest proclamation of potentially joining ISCI’s coalition even more intriguing. The Voices of Iraq news agency reports Fadhila is demanding “new foundations” for the coalition, and a “cabinet reshuffle.”

Iraq’s 2008 budget is unlikely to be passed soon because it contains many loopholes, a lawmaker said on Friday, noting that approving the budget in its current status will cause a legal problem, Voices of Iraq reports. Lawmakers refused to ratify the $48 billion budget this week because of disputes over allocations, particularly for the autonomous northern region of Kurdistan.

Despite the fundamentalist infusion in the “new” Iraq, Voices of Iraq reportsthis weekend in Baghdad is the summit titled Iraqi Women’s Scream: Stop the Humanitarian Crisis. It’s sponsored by “the Iraqi feminist movement,” as VOI puts it, as well as al-Amal Association and the U.N. Development Fund for Women.

It may seem modest progress amidst today’s Iraq, but changing the Iraqi flag may lead to the end of a sore point between Iraq’s Kurds and Arabs. Kurdistan Regional Government President Massoud Barzani is asking the Kurdish Parliament to hold a special session and consider raising the flag officially, the Voices of Iraq news agency reports.

The KRG, a semiautonomous region that has struck serious discord with Baghdad and prompted speculation of wanting Kurdish independence, refused to raise the old Iraq flag. In fact, according to sources there, it was banned. Instead, the Kurdish national flag was proudly flown – a sun surrounded by green, white and red stripes.

This week Iraq’s Parliament changed the national flag, though the extent it is permanent and acceptable by all Iraqis is still debatable. For a good understanding of the changes, read Peter Smith’s piece in The Christian Science Monitor. Whether the deep divide between Iraq’s Kurdish and national government’s will be bridged by the new flag compromise remains to be seen.

Insurgents targeted in Anbar and Baghdad provinces did not disappear. Instead they’ve moved north and started raising deadly hell in Mosul and more in the oil hubs of Baiji and Kirkuk. Kim Gamel writes for The Associated Press Maliki has dispatched more police and said “our troops” will be sent there, though the U.S. to Iraqi ratio isn’t quite clear.

More in telling Iraq violence:

A suicide bomber posing as a policeman killed the police chief of northern Iraq’s Nineveh province Thursday as he visited the site of an attack a day earlier, Tina Susman reports for The Los Angeles Times. Alsumaria TV reports Sheikh Abdul Mahdi Al Karbalai, one of the legal deputies of Grand Ayatollah Ali Al Sistani, escaped an attack while he caught minor wounds in the city of Karbala. Two of his bodyguards were killed while two others were wounded.

With its international mandate in Iraq set to expire in 11 months, the Bush administration will insist that the government in Baghdad give the United States broad authority to conduct combat operations and guarantee civilian contractors specific legal protections from Iraqi law, according to administration and military officials, Thom Shanker and Steven Lee Myers reports for The New York Times.

Heavily criticized within Iraq during the first two years of the current U.S. occupation for focusing on spiritual matters rather than resistance, Iraq’s Sufis have begun to take up arms against Coalition forces, Fadhil Ali writes in The Jamestown Foundation’s Terrorism Monitor. The mystical approach to Islam known as Sufism has deep roots in Iraqi society. Adherents to Sufism normally stress prayer, meditation and the recitation of the various names of God as part of their effort to create a mystical communion between themselves and Allah. Yet at various times and places—such as 19th century Africa or the 19th and 20th century North Caucasus—Sufi orders have formed the core resistance to colonial and imperial occupation efforts.

Find out what Iraqis read in their editorial pages. The Iraq Press Roundup by UPI’s Hiba Dawood.

—-