Plus:
*Iraq’s next oil deals
*Basra exports back
*DNO production up
*Tee times in Iraqi Kurdistan
*Much more…
Al Herman is no diplomat. His choice words are frank, sometimes unprintable, and usually effective.
As America’s top adviser to Iraq’s Electricity Ministry for the past 28 months, he’s butted heads professionally with Iraqi ministers and the U.S. commanding general.
On Friday, the Angel of Light, as he’s been dubbed, turned out the lights of his office in Saddam Hussein’s old Republican Palace for the last time, Ben Lando reports for United Press International.
Demand for electricity is growing at a faster pace than supply, and a lack of security and needed infrastructure still plague the effort, but Iraq’s power stations are generating record electricity. The minister of electricity announced this month a $480 million deal with General Electric.
“I’m pretty positive about it,” said the 63-year-old with an often-used raspy smoker’s chuckle. “There’s a lot of activity going on. We would be setting records every day if the drought hadn’t occurred last year,” cutting power generation from the dams by 50 percent from last year.
Herman headed a handful-size team within the Iraq Transition Assistance Office, an evolution of the now shuttered Iraq Reconstruction Management Office, as the State Department’s senior consultant on the electricity sector.
Early efforts to refurbish or build new infrastructure were too grand for Iraq’s fragile system and led to wasted money. But the new plan led by ITAO and, until last week, Herman, is to build capacity to operate and maintain the infrastructure, allowing for growth. …
“You’re talking about a massive, massive reconstruction effort,” said Herman, who estimates $30 billion is needed for the reconstruction and expansion of the electricity sector, as well as tens of billions in related fuel infrastructure for the power plants. “It takes time to reconstruct.”
That blunt explanation may not sit well with Iraqis, where in any given household in any given area there are complaints of receiving only a few hours a day of irregular electricity, at best. …
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Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power, Andrew Kramer reports for The New York Times.
While these deals are not new to Iraq Oil Report readers (most prominently Dec. 6 and Feb. 1.) there are a number of nice new nuggets:
Any Western oil official who comes to Iraq would require heavy security, exposing the companies to all the same logistical nightmares that have hampered previous attempts, often undertaken at huge cost, to rebuild Iraq’s oil infrastructure.
And work in the deserts and swamps that contain much of Iraq’s oil reserves would be virtually impossible unless carried out solely by Iraqi subcontractors, who would likely be threatened by insurgents for cooperating with Western companies. …
The no-bid deals are structured as service contracts. The companies will be paid for their work, rather than offered a license to the oil deposits. As such, they do not require the passage of an oil law setting out terms for competitive bidding. The legislation has been stalled by disputes among Shiite, Sunni and Kurdish parties over revenue sharing and other conditions.
A clause in the draft contracts would allow the companies to match bids from competing companies to retain the work once it is opened to bidding, according to the Iraq country manager for a major oil company who did not consent to be cited publicly discussing the terms.
While the current contracts are unrelated to the companies’ previous work in Iraq, in a twist of corporate history for some of the world’s largest companies, all four oil majors that had lost their concessions in Iraq are now back.
The BBC’s Marcus George has a great companion piece:
It’s difficult to imagine today, but 50 years ago the Iraqi oil industry was directed from offices thousands of miles from Baghdad.
In the 1950s, number 214 Oxford Street, London, was the headquarters of the Iraq Petroleum Company.
For three decades, the IPC held a stranglehold over Iraqi oil - a monopoly only broken with nationalisation in the 1960s.
But once again, foreign oil companies are waiting for another opportunity to return to Iraq. With governments eager to see the rocketing price of crude oil kept under control, focus on Iraq is increasing.
And writing in an Op-Ed for UPI, Consumers For Peace director Nick Mottern has another take.
Basra exports are back after weather, Alsumaria TV reports.
Norwegian oil company DNO said on Wednesday its output in Iraq, on a working interest basis, jumped to 11,685 barrel per day in May from 5,961 barrels in April, Reuters reports.
In the twilight years of the Iraqi monarchy in the late 1950s, Dhia Jafar, then Iraqi development minister, inaugurated two hydroelectric dams in the mountains of Kurdistan. For more than half a century afterwards, no new power stations were commissioned in the northern regions of Iraq, Simeon Kerr reports for the Financial Times. Now Hamid Jafar, the minister’s son, is developing and transporting natural gas to fuel two new power stations in Irbil and Suleymaniya, aiming to deliver stable power to Iraqis who still have only a few hours of mains electricity a day.
Getting a tee time in Iraq may seem far-fetched, but a $4.5 billion development planned in the more secure northern Kurdish area would bring 9 holes, a country club and a resort to northern Iraq, Ben Lando reports for The Washington Times. The Tarin Hills project announced this month is a made-to-order community including apartments and houses, a mosque, primary and secondary schools, a medical center and a lake running through what is now dusty foothills home to no one but a few scattered families and shepherds.
The rest of Iraq is focused on security and building up the fledgling government, and getting vital services to citizens. Kurdish citizens, too, still want for regular electricity, food and other daily supplies.
Iraq’s parliament will start holding sessions outside the U.S.-protected Green Zone in the fall, the deputy speaker said Tuesday, Qassim Abdul-Zahra reports for The Associated Press.
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