Iraq Oil Report

Plus:
*Oil Ministry Shahristani in BBC interview
*Iraqi Kurdistan’s Oil Minister Ashti Hawrami vows to sign more deals
*OMV rejects Shahristani’s claim, will stick with KRG deal
*Kurds threaten to withdraw from government
*Iraq’s ambassador to U.S. optimistic on the draft oil law
*Shell, Repsol register for oil bids; Exxon wants in too

Negotiations between international oil companies and Iraq Oil Ministry officials appear to be progressing, despite protests at a conference in London. Iraq is in direct talks with the world’s largest oil companies and is prepping for a first round of bids to develop its oil fields, United Press International reports. Iraq’s reserves, the third largest in the world, are producing about 2.3 million barrels per day, and Iraq Oil Minister Hussain al-Shahristani said the direct talks will help boost that to 2.8 million bpd by the end of the year. Protests were organized by the group War on Want, and their protests were covered by Dow Jones Newswires.

More on BP by Terry Macalister in The Guardian. It’s CEO is ready to move forward on technical service deals, Dow Jones Newswires reports. Oil major Royal Dutch Shell and Spanish energy company Repsol YPF have both registered to compete for contracts to develop Iraq’s huge oil reserves, company sources said on Wednesday, Simon Webb reports for Reuters. As part of Shahristani’s plan to sign upstream contracts this year, companies have until Feb. 18 to pre-register with the Oil Ministry. ExxonMobil is also keen on getting in on the action, Reuters reports.

The United States is watching from the sidelines as negotiations stall between the federal Iraqi government and the regional leadership in Kurdistan over two laws to govern oil production and revenue sharing. “This is essentially and at its core a negotiation between Iraqis about Iraq’s own future,” Ambassador Charles Ries told Reuters on Tuesday.

Shahristani sat down with the BBC’s Owen Bennett-Jones for a great 20+ minute interview. He reiterates that the oil law is being blocked by disputes over who controls the oil strategy. He also criticizes the Kurdistan Regional Government’s oil deals. Other topics include security issues and upcoming bidding rounds in the oil sector, following the draft oil law regulations.

KRG Oil Minister Ashti Hawrami vowed to sign more deals despite pressure from Shahristani, Reuters reports. The two were at the same conference in London, hosted by Chatham House. The same day the KRG issued a release an international attorney supported their claims on the oil deals.

Austria’s OMV is adamant its deals with the KRG are legal and will continue investment this year, despite Baghdad’s blacklist, Thomson Financial reports. OMV, like SK Energy of South Korea, had their contracts to purchase Iraqi oil cut.

The Kurds will withdraw from the government of Prime Minister Noori al-Maliki if their share of the country’s oil revenues is reduced, Kareem Zair reports for Azzaman.Mahmoud Othman, a Kurdish member of parliament, and a veteran Kurdish politician accused “certain political factions” in the government of attempts to “slash the gains Kurds have made” since a U.S.-led invasion toppled the regime of former leader Saddam Hussein.

Iraq’s ambassador to the United States is optimistic political factions will strike a deal on a controversial oil law, despite oil sector advances without it, UPI’s Ben Lando reports. “The oil law is still in the pipeline,” Samir Sumaida’ie told reporters Tuesday. “When is it going to be actually finished depends on certain roadblocks to be removed. That is part of the discussions that are taking place.”

There’s more on the Sumaida’ie briefing in Security, Society & Politics below, including what to do about Blackwater, what happens if the U.S.-Iraq security pact isn’t reached, and what’s left in terms of reconciliation.

Rumor mill: Iranian theft of Iraq oil. This issue, which was touched on in Monday’s Iraq Oil Report. It will be clarified in upcoming reports, because there is too much speculation unproven to confirm allegations that Iran has taken over 15 wells in Missan province and also is sending Iraqi oil to Iran. Kerry Laird in Rigzone has a recap.

Iraq to benefit from higher oil revenues, report says, Eric Watkins reports for Oil & Gas Journal. “The report said Iraq’s record quarter oil production was tied to increases in output in northern Iraq. Production from this region reached its highest level since the start of the war, averaging 492,000 b/d, a rise of more than 123% from the same period in 2006. … Pipeline security programs are boosting the country’s oil exports and its income. The Infrastructure Security Protection (ISP) Program, funded by the Economic Support Fund, provided $110 million for oil pipeline exclusion zones (PEZ) to prevent the illegal tapping and attacks on pipelines.”

A top Kurd in the Kirkuk Provincial Council warns of joining Iraqi Kurdistan automatically if a referendum for the oil-rich province doesn’t take place. Iraq’s Constitution calls for a referendum for voters in Kirkuk and other disputed territories in Iraq’s northern area, just outside the official area controlled by the Kurdistan Regional Government, UPI reports. A long process, capped by a referendum, was to take place by Dec. 31, 2007. A U.N.-orchestrated agreement was reached days before that date, giving all sides six months to figure out a solution. Iraq’s Kurdish leaders demand a vote while Arabs, Turkomen and others want a negotiated settlement.

A large fire erupted at Iraq’s Baiji oil refinery on Monday, Reuters reports.

In Kurdistan region an electricity plant was inaugurated south of Al-Sulaimaniya city with a power of 123 KW and with a cost of 28 million dollars, Alsumaria TV reports. It is a transformer station that links the regions’ electricity to Iraq national electricity system.

When the joint patrol arrived in Saydiyah, there was already a crowd of more than 150 Families waiting for kerosene Jan. 31. On this momentous occasion, Multi-National Division - Baghdad Soldiers from Company A, 4th Battalion, 64th Armored Regiment, along with policemen from 1st Battalion, 5th Brigade, 2nd Iraqi National Police Division, distributed the fuel to the neighborhood’s residents for the first time since September, Capt. Mark Miller reports.

Security, Society & Politics

Widow’s story illustrates plight of Iraqi women, writes McClatchy Newspapers Baghdad Bureau Chief Leila Fadel. “On Jan. 13, 2007, a knock on the door changed Teeba Jaweed’s life. An employee at her husband’s supermarket stood before her, breathless. “Your husband’s been shot,” he said. … This is one widow’s story, but Teeba Jaweed, like so many others, has nowhere to turn for help. Sawsan al Barak, an official who deals with women’s issues at the Ministry of Human Rights, said there are at least 1.5 million widows, many of whom lost their husbands to war-related violence.”

“Despite 4 years of millions of dollars in aid, equipment, education, and advisors, Iraqi police force development lags far behind the military,” writes U.S. Army Lt. Col. Tony Pfaff in the new report, Development and Reform of the Iraqi Police Forces, published by the U.S. Army War College’s Strategic Studies Institute. “Numerous reasons are offered to account for this gap: corrupt practices left over from the previous regime, infiltration by militias, weak leadership, competition by better armed and organized criminal and militant groups, and so on. However, the military is also subject to these same influences, thus none of these explanations by themselves or in combination are satisfactory. The author argues that the poor political and security environment impacts social, political, and cultural factors in ways that are predictable, understandable, and, with external help, resolvable. The author offers valuable insights into the creation of such programs as well as a number of policies and practices advisors may adopt to best facilitate the creation of a just and effective Iraqi police force.”

“Continued democratization and economic development is the best way for Turkey to drain the swamp of domestic support for the Kurdistan Workers Party (PKK). A comprehensive solution also requires cooperation between Turkey and the Iraqi Kurdistan Regional Government, from whose territory the PKK operates. Instead, Turkey has gone for the military option, risking a regional conflagration that would destabilize Iraq,” writes David L. Phillips in a Wall Street Journal op-ed. Phillips is project director of the National Committee on American Foreign Policy and a visiting scholar at Columbia’s Center for the Study of Human Rights. “After U.S. President George W. Bush agreed on Nov. 5 to provide actionable intelligence on the PKK to Ankara, Turkey launched a series of air strikes against targets in Iraqi Kurdistan. Though nearly 30 PKK members were killed in the first attack in December, subsequent sorties only struck some empty caves and abandoned settlements, inflicting little damage to the terrorists’ infrastructure or capabilities.”

The Iraq Press Roundup, a wrap of Iraqi editorial pages, by UPI’s Hiba Dawood.

More stories from the reporters roundtable with Amb. Sumaida’ie:
Iraq would seek an extension of the U.N. mandate authorizing U.S.-led forces on its soil if it cannot reach a bilateral deal with the United States by the end of the year, an Iraqi official said on Tuesday — Reuters.

Iraq’s ambassador to Washington said today that his country has made progress on the political front to match recent security gains from the U.S. military surge, but he acknowledged that the key parts of the reconciliation program remain stalled — The Washington Times’ David R. Sands.

The status and role of private security firms like Blackwater in Iraq is central to upcoming talks between Washington and Baghdad — Agence France-Presse.
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