Iraq Oil Report

Plus:
*Russia and Iraq — quid pro quo on oil for debt
*Attacks on Iraq’s energy sector shut down power grid, bomb found on Electricity Ministry’s doorstep
*State Dept. critiqued by its own for lax dealings with Iraq government
*Iraqi Kurds in U.S. push for investment beyond oil
*Oil for refugees
*Much more…

Political disputes over Iraq’s Constitution need to be resolved before progress on the oil law, said the deputy head of the Parliament’s Energy Committee. “This will make the way to pass the law of oil and gas,” Abdul-Hadi al-Hasani told United Press International’s Ben Lando in a phone interview from London. “It will be very easy to be passed because we won’t have any disagreements. Roadblocks now are not technical, they are political.”

Russia’s Finance Minister said Russian firms will get special advantage to invest $4 billion in Iraq following Moscow’s agreement last week to erase $12 billion in Saddam-era debt. Alexi Kudrin also said Russia would get “special attention to the previously signed deals,” alluding to Russian firm Lukoil’s Saddam-era deal to develop the W. Qurna oil field, a massive field in Iraq’s south, Darya Korsunskaya reports for Reuters. Saddam cancelled the deal in 2002; he said Lukoil wasn’t doing the work while Lukoil said sanctions prevented it. Lukoil contends Saddam’s cancellation wasn’t legal under international law. Iraq’s government says otherwise and is currently in negotiations with Chevron for a technical service agreement for it. Lukoil’s vice president, however, says the firm will start work on W. Qurna in three to five years.

“A bomb struck a gas pipeline in northern Iraq on Monday, causing widespread power outages that the electricity minister warned could last up to a week,” The Associated Press reports. “The explosion devastated the section of pipeline in the Sebat district about 30 kilometers (20 miles) northeast of Tikrit, one of a series of recent attacks in an apparent show of power by suspected Sunni insurgents who have been driven north by U.S.-led crackdowns in Baghdad and surrounding areas. … Electricity Minister Karim Waheed said the pipeline had provided fuel to power stations in the northern cities of Kirkuk and Beiji and the blast would mean a weeklong cut in electricity for the area. … Waheed also said authorities had found a huge bomb Monday at the entrance to the electricity ministry in Baghdad. The explosives were safely defused, but the discovery underscored the continued threat to government infrastructure despite stepped up security measures. “Today the bomb reached the ministry’s entrance,” Waheed told The Associated Press. “If there is no security or political stability I cannot promise people any progress in the electricity sector.””

A blast at a gas pipeline feeding a power station on Monday and a car bomb targeting power lines at another station the day before have cut electricity to a quarter of Iraq’s roughly 27 million people, officials said, Reuters reports.

A car bomb cut power to northeast Iraq during a visit by U.S. Defense Secretary Robert Gates. “A car bomb blast on Sunday near the Mosul power plant severed cables of power pylons, disrupting supplies from the plant to the power network in the north-east,” the spokesman for the Ministry of Electricity, Aziz Sultan, told the Voices of Iraq (VOI) news agency, Deutsche Presse Agentur reports.The plant produces 400 megawatts and is located in Ninevah province. It and Salahaddin province suffered attacks Sunday, killing 53 people.

Iraqis are “not invested” in the draft oil law and it’s the U.S. State Department’s fault, a former top department official said in a newly leaked memo, UPI’s Ben Lando reports. Manuel Miranda, who recently left his post as director of the Office of Legislative Statecraft in Baghdad, issued a scathing critique of the U.S. diplomatic corps’ ability and capacity to engage and assist Iraq’s fledgling government. “Any experienced international lawyer could have judged in 15 seconds or less that the draft that your predecessor checked off as if done, was one in which Iraqis were not invested,” Miranda wrote. “This has repeated itself again and again.”

“The future” isn’t just oil, the head of the U.S. branch of Iraq’s Kurdish government said while courting investors in Washington Monday. The U.S. Chamber of Commerce is hosting a luncheon with the Kurdistan Regional Government, Iraq’s semiautonomous three northern provinces, featuring top U.S. and business officials.

“While the development of our oil and gas sector will be critical for our sustained development, and we place great emphasis on it, the Kurdistan region’s economy is not solely dependent on oil and gas,” Qubad Talabani, the KRG’s representative to the United States and son of Iraqi President Jalal Talabani, told UPI’s Ben Lando. “In fact, we are spoilt for choice. For example, we have enormous agricultural potential as well as a robust workforce that is entrepreneurial and industrious.”

The top parliamentarian in Iraq’s Displacement and Migration Committee wants “3 to 5 percent” of the country’s oil proceeds to be dedicated to helping refugees, UPI reports. There are an estimated 2.2 million internally displaced Iraqis and more than 2 million outside the country, according to the United Nations, effects of the 2003 invasion and subsequent decline in security and quality of life.

Iran will start development of a power station in Iraq’s Najaf province, a 320 megawatt grant from its neighbor, a provincial spokesman said, UPI reports.

Iraq’s Missan province says it has run out of kerosene after recent disruptions in Iraq’s refinery and electricity sectors, which has hampered fuel stocks, UPI reports. Accidental and malicious fires in refineries around the country and along the power grid, as well as reductions in fuel and power supplies from neighboring Turkey and Kuwait, have hurt the once gaining sectors.

U.S. Commerce Secretary Carlos Gutierrez was in Iraq over the weekend, talking to Iraqi leaders and at a luncheon organized by the American Chamber of Commerce in Iraq, Gina Chon reports for The Wall Street Journal. Gutierrez urged Iraq to diversify its business away from current oil domination as a way toward a sustainable economy, Agence France-Presse reports. Of course, his talk was a largely free market pep rally, and Iraq, being sovereign and all, may choose to rely on the nationalized economy some of its neighbors have relied on. At the very least, the world should be wary of pressing Iraq to “liberalize,” considering the damage such moves did during the Bremer year, totally ruining what was left of Iraq’s non-oil business sector.

“It’s all aboard for hope as the Basra express leaves on time.”

It pulls out of Baghdad Central station on the stroke of 9.00am — a tiny train loaded with great symbolic freight. It consists of nothing more than a locomotive, Martin Fletcher writes for The Times of London, three rickety old carriages and a goods van, and, on this particular morning, only 20 passengers. But what matters is that a rudimentary service to Basra, abandoned as Iraq was engulfed by violence, is finally up and running again.

Indeed, this is the first passenger service to resume anywhere in Iraq after the horrors of recent years, and its resumption is one of those telling little indicators that suggest the country might have turned a corner. …

The Iraq Press Roundup, a tally of views from Iraq’s editorial pages, by UPI’s Hiba Dawood.

The Road to Learning Can Be Dangerous, Ahmed Ali and Dahr Jamail report for Inter-Press Service. University professors now enjoy increased pay, but in the face of threats and isolation, there is little they are able to do in the world of academics.

The “bottom-up” leadership process in Iraq is a four-part series published b y the online Middle East roundtable, Bitter Lemons International.

To treat Iraq’s collapse into local politics as a success story is laughable, writes Jonathan Steele, senior foreign correspondent for The Guardian.

Anbar is quieter, not pacified, and the means employed are a distinctly mixed blessing, writes Gabriel Rose, a development worker in Anbar province.

Many of the support councils quickly become gardens where local leaders grow, writes Safa A. Hussein, former member of the Iraqi Governing Council and member of the Iraqi National Security Council.

The tribal mechanism has demonstrated its effectiveness and has earned a place in a modern Iraq, writes Jaber Aljaberi, president of the Iraq Future Foundation.
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Plus:
*Iraqi Kurdistan’s oil minister calls for fairness
*ONGC Mittal looking at Iraq
*Hard time in Parliament, budget faces walkout
*Sadr, seriously

Oil has started to flow again in the northern pipeline from Kirkuk to Turkey, Alsumaria TV reports. The pipeline has seen worse days, such as most of the time since the war began. It has been a major target of insurgents, keeping it offline more times than not. But repairs and a new security program starting summer ’07 has allowed more oil to flow. The recent issue is from an explosion (perhaps at the hands of clumsy smugglers) and electricity shortages.

Ashti Hawrami, the Kurdistan Regional Government Minister for Natural Resources, on Tuesday said that the oil and gas sector must be managed fairly to ensure the unity of Iraq, according to a KRG release. The Natural Resources Minister made the remarks in his presentation to a Middle East Energy Conference at the Royal Institute of International Affairs, also known as Chatham House.

ONGC Mittal Energy Ltd, a joint venture between India’s Oil and Natural Gas Corp and Mittal Investments Sarl, is eyeing for opportunities in exploration and production in Iraq, Reuters reports.

Finance Minister Bayan Jabr is traveling abroad to convince deep-pocketed foreigners that it is now safe enough to invest in Iraq, Gina Chon reports for The Wall Street Journal.But a tougher sell these days is persuading his colleagues in government that foreign investment is a good idea in the first place.

Dozens of Iraqi legislators walked out of parliament Thursday over a controversial draft law that would lay out rules for provincial elections and set an Oct. 1 date for a new local vote. The walkout postponed a planned vote on the U.S.-backed measure on redistributing power in Iraq, The Associated Press reports.The last time Iraqis voted for local officials was in January 2005, when nationwide elections ushered in representational government across Iraq for the first time in modern history.

A compromise on the main sticking point holding up Iraq’s 2008 budget appeared possible Wednesday, but it and several other key reconciliation laws face potentially long delays, lawmakers and ministers said, Wisam Mohammed and Ahmed Rasheed report for Reuters. Iraqi lawmakers are set to vote on Thursday on the budget as well as laws governing the distribution of power between Baghdad and Iraq’s 18 provinces and another that would free thousands of mainly Sunni Arab detainees from Iraqi jails.

The dramatic decline in bloodshed in Iraq – at least until last week’s terrible market bombings in Baghdad – is largely due to Muqtada al-Sadr’s August 2007 unilateral ceasefire, a new International Crisis Group report says. Made under heavy U.S. and Iraqi pressure and as a result of growing discontent from his own Shiite base, Muqtada’s decision to curb his unruly movement was a positive step. But the situation remains highly fragile and potentially reversible. If the U.S. and others seek to press their advantage and deal the Sadrists a mortal blow, these gains are likely to be squandered, with Iraq experiencing yet another explosion of violence. The need is instead to work at converting Muqtada’s unilateral measure into a more comprehensive multilateral ceasefire that can create conditions for the movement to evolve into a fully legitimate political actor.

IraqSlogger reports of an initiative by Sadr in a Baghdad neighborhood to help facilitate the return to their homes of Sunnis displaced by violence.

The Shiite political scene in Iraq is getting nowhere with proposals for the post-occupation phase, Abd Al-Hussein Shaaban writes in The Daily Star. Shiites jumped enthusiastically into the political process after they received confirmation that they would have a prominent role in the Iraqi Governing Council. The council brought a divisive formula to Iraqi society along sectarian and ethnic rather than political and ideological bases, giving 13 Cabinet seats to Shiites, five each to Sunnis and Kurds, one to Turkmen, and one to Chaldeans and Assyrians.

Iraq’s most influential Shiite cleric, Grand Ayatollah Ali al-Sistani, has sharply reduced his workload in recent months, raising new questions about the health of the aged leader and the prospect of a dangerous power vacuum without a clear and dominant successor, Hamza Hendawi and Qassim Abdul-Zahra report for the AP.Any change in al-Sistani’s role or reach could have far-reaching consequences for both Iraq and the United States, which consider the Iranian-born cleric as perhaps the most powerful figure in Iraq and a vital stabilizing force in the oil-rich Shiite heartlands of southern Iraq. The most worrisome scenario is that — as al-Sistani’s vast clout possibly wanes — the majority Shiites could further splinter into factions that could rattle Iraq’s Shiite-led government and boost militias openly hostile to Washington.

The United States will not promise to defend Iraq nor seek permanent bases there under a planned agreement on future relations between the two states, U.S. Defense Secretary Robert Gates said on Wednesday, Reuters reports. “The status-of-forces agreement that is being discussed will not contain a commitment to defend Iraq and neither will any strategic framework agreement,” Gates told a U.S. Senate panel. Karen DeYoung of The Washington Post has more.

Al-Qaeda, increasingly tamped down in Iraq, is establishing cells in other countries as Osama bin Laden’s organization uses Pakistan’s tribal region to train for attacks in Afghanistan, the Middle East, Africa and the United States, the U.S. intelligence chief said yesterday, The Associated Press reports. “Al-Qaeda remains the pre-eminent threat against the United States,” Director of National Intelligence Mike McConnell told senators more than six years after the Sept. 11 attacks.

A mother of five who says she was sexually harassed and assaulted while working for Halliburton/KBR in Iraq is headed for a secretive arbitration process rather than being able to present her case in open court, Maddy Sauer and Justin Rood report for ABC News.A judge in Texas has ruled that Tracy Barker’s case will be heard in arbitration, according to the terms of her initial employment contract. Barker says that while in Iraq she was constantly propositioned by her superior, threatened and isolated after she reported an incident of sexual assault.
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Plus:
*Oil Majors get special crude instead of cash deal for upcoming oil deals
*Iraq-Jordan oil import deal solidifies
*Smugglers near Baiji set pipeline ablaze
*Oil union leader keys British anti-war tour
*Iraq sends delegation to Qatar for gas cooperation
*Italy’s Edison, Shell want into Iraq gas too
*Turkish op-ed denies cutting N. Iraq’s electricity
*Security, Society & Politics
*America in Iraq

Iraq’s Foreign Ministry says it has passed on a letter of warning to Tehran regarding accusations Iran is illegally pumping Iraqi oil, United Press International reports. Accusations started over the weekend that Iran is stealing Iraqi oil, and actually forced Iraqis off the oil fields. The deputy chief of Iraq’s Commission on Public Integrity also says Iran is behind smuggling of oil and fuel products, and blames Iraq’s Oil Ministry for not doing enough. He also named the Fadhila Party, which controls the southern oil province of Basra and the southern oil protection force, as well as the current head of the CPI, also a Fadhila Party member, of being complicit in the smuggling.

Smugglers sparked a fire when trying to steal oil from a pipeline sending Kirkuk oil to Baiji, Iraq’s largest oil refinery. Reuters reports the refinery is still operating and oil has been routed around the affected line.

Iraq will pay with oil instead of cash to oil majors that sign special technical service agreements aimed at short-term increases in oil production, UPI reports. ExxonMobil, Chevron, ConocoPhillips and Shell are firms targeted for the deals, The Times of London reports. In exchange for the oil, the companies would direct training of Iraqi workers and equipment to Iraq’s largest oil and gas fields.

Jordan and Iraq revive their roller coaster deal for discount oil deliveries, The Associated Press reports. Iraq Finance Minister Bayan Jabr met with Jordan’s king and prime minister during a visit to Amman and struck a deal to provide 40,000 barrels per day of oil. Jordan has no oil proven oil reserves and special terms for Iraqi oil have been hampered by violence in Iraq. The AP also says Jabr talked about building a pipeline from Haditha, in western Iraq, to Aqaba, the Jordanian Red Sea port and other alternatives to Persian Gulf routes – where most of Iraq’s oil heads to market – fearing U.S.-Iranian upheaval.

The President of the Iraqi Federation of Oil Unions, Hassan Juma Awad, will begin a British anti-war tour later this month, according to the Stop The War Coalition website. He’s been a vocal opponent of the draft oil law, has an arrest warrant pending, though inactive, by the Iraq national government, and in an interview with UPI’s Ben Lando in London in November, blamed Iraq’s government for not investing enough of its own money in the oil sector and blamed the war for many factors affecting Iraq’s oil production.

Iraq will send a delegation to Qatar to talk gas development cooperation, Natalie Pearson reports for Dow Jones Newswires. Shell has been courting Iraq’s Oil Ministry to develop Iraq’s southern gas infrastructure, which is largely associated gas burned off. Shell also wants in on the large Akkas gas field in western Iraq, as is Italy’s Edison, Thomson Financial reports.

ExxonMobil is eyeing Iraq but a top official said it’s is “a ways down the road,” Dow Jones Newswires reports.

There is no Turkish electricity embargo on north Iraq, Ilnur Cevik writes in The New Anatolian. “Turkey is aware of the sensitivities of the Kurdish people of northern Iraq and does not want to lose their friendship. Thus Turkey has no intention of imposing an electricity embargo in northern Iraq that will actually hurt the ordinary Kurd. The halt of Turkish electricity to northern Iraq is due to the electricity shortage because of the lack of natural gas from Iran.” Iraq says Turkey is in part to blame for recent bouts of blackouts.

Society, Security & Politics

Quality of life issues continue to dominate Iraqi lives, and without these issues being resolved in any sustainable manner, there’s no hope of any sustainable economy. Especially the oil sector.

This Agence France-Presse article explains it from the get-go: “Baghdad is drowning in sewage, thirsty for water and largely powerless, an Iraqi official said on Sunday in a grim assessment of services in the capital five years after the US-led invasion.”

And clean drinking water is more important than a mere thirst quencher. Among the consequences, cholera, which last year Iraq was hit harder by than the past 40 years, Emad al-Shara’ reports for the Institute for War & Peace Reporting. The disease is unable to survive in winter, but even the relatively-prosperous Kurdish region fears yet another outbreak this summer, Ben Lando reports for UPI.

Political parties pay only lip-service to women’s demands for greater political clout, IWPR’s Barham Omar reports of the Kurdish woman’s glass ceiling. “Despite a reputation for courage on the battlefield, Kurdish women are unable to penetrate the upper echelons of power in the region’s top parties and government, according to politicians and women’s activists.”

Read what the Iraqi editorial pages say in the Iraq Press Roundup by UPI’s Hiba Dawood.

A breakaway faction of Prime Minister Nouri al-Maliki’s Dawa Party calls for removing sectarian quotas, the Voices of Iraq news agency reports.

An Iraqi Sunni secular leader announced on Monday that his political bloc has merged with the Independents bloc and will be represented in the parliament under the name “Arab Bloc For National Dialogue, the Xinhua news agency reports.

A new provincial election law is to be open-list, not the closed-list style that is a factor in the religious and ethnic factionalization of the Parliament now. But it is stalled because of dispute between legislators over the 2008 budget Al Sabaah reports.

If U.S. Congress is upset at the pace of Iraq’s legislative process, well, at least Iraq has ratified the Kyoto Protocol on climate change, as AFP reports.

America in Iraq

The “Great Mystery” of Iraq’s WMDs? The media watchdog Fairness & Accuracy In Reporting takes issue with the Jan. 27, CBS 60 Minutes interview with Robert Piro, the FBI agent tasked with interrogating Saddam Hussein, by reporter Scott Pelley.

Pelley (opening monologue): What happened to the weapons of mass destruction? Was Saddam in league with Al-Qaeda? Why did he choose war with the United States? …

PELLEY: And what did he tell you about how his weapons of mass destruction had been destroyed?

PIRO: He told me that most of the WMD had been destroyed by the U.N. inspectors in the ’90s, and those that hadn’t been destroyed by the inspectors unilaterally destroyed by Iraq.

PELLEY: He had ordered them destroyed?

PIRO: Yes.

PELLEY: So why keep the secret? Why put your nation at risk? Why put your own life at risk to maintain this charade?

But in Feb. 2003, in an interview with CBS’ Dan Rather:

RATHER: Saddam also rejected Bush administration allegations that besides the missile delivery system, he still has weapons of mass destruction.

HUSSEIN: I think America and the world also knows that Iraq no longer has the weapons. And I believe the mobilization that’s been done was, in fact, done partly to cover the huge lie that was being waged against Iraq about chemical, biological and nuclear weapons. That is why, when you talk about such missiles, these missiles have been destroyed. There are no missiles that are contrary to the prescription of the United Nations in Iraq. They are no longer there.

And two months earlier, CBS’ Bob Schieffer:

“Saddam Hussein says he has no weapons of mass destruction, but should we believe him?” Schieffer asked a visiting senator on Face the Nation what would happen if U.S. experts “conclude that Saddam Hussein is once again lying, as he has so often in the past, claiming he doesn’t have the weapons, when in fact we know that he has.”

FAIR concludes:

Before the invasion, CBS’s line was that Iraq was hiding prohibited weapons, and Saddam Hussein was lying about it. Now it maintains that Iraq did not have those weapons…and Saddam Hussein was lying about it. Is it really too much to ask that the network look back at their own coverage of five years ago before announcing that it’s solved one of the “great mysteries” of that era?

Former U.S. Ambassador to Iraq Zalmay Khalilzad: Iran benefits from U.S. wars in Iraq, Afghanistan, according to a report by the AP’s John Heilprin reports. He writes “The 2003 invasion of Iraq removed a key rival of Shiite Iran with the ouster of Saddam Hussein’s Sunni-dominated government. Iran has friendly ties with the Shiites now in power in Iraq … Whether or not U.S. actions have increased Iran’s power, the country also has been playing a greater role in Iraq’s economy, supplying Iraqis with electricity, household goods and food. Iraqi leaders from the Shiite bloc that are now in power have said their ties with Iran’s governing Shiite Persians will grow.”

The United States’ military and political ambition in Iraq is enormous and undiminished, but a true examination of what’s happening on the ground is still needed, Paul Rogers, professor of peace studies at Bradford University, writes for ISN Security Watch.But if what is happening in Iraq has been to a great extent sidelined in the US media and political argument, the country’s military situation and political problems still hold the capacity to upset the US’ calculations.

This means there’s a “False Sense of Security in Iraq,” Michael Shank writes in Foreign Policy In Focus.”The Pentagon ushered in the New Year with seemingly welcome news: Iraq’s security is improving. Attacks across the country fell 62% and, according to aid organization Iraqi Red Crescent, 20,000 Iraqi refugees returned home from Syria in December alone. The U.S. troop surge must be working. Even the Democratic opponents of President George Bush’s agenda in Iraq are befuddled by the news, unclear how to proceed. But wait, before America breathes a much wanted sigh of relief, do these measurements have merit? A closer look reveals that the refugee numbers, in context, are misleading and that security in Iraq remains ever elusive.”
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