Monthly Archive for June, 2008

Audit pans Iraq and U.S. efforts to account for oil, fuel and revenue flow…

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Iraq Oil Report
on June 8, 2008
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Plus:
*Iraq working with neighbors on joint oilfields
*Electricity Ministry signs with GE

The summary audit results of Iraq’s 2007 oil sales and revenue flow conducted by Ernst & Young has been released by the International Advisory and Monitoring Board for Iraq. It landed a significant blow to Iraq’s efforts to ensure all oil and fuel produced is accounted for and the movement of Iraqi funds is transparent.

The IAMB monitors how Iraqi funds – most of which are oil sales – are collected and spent. This is per a U.N. Security Council resolution to ensure transparency and block creditors and other legal claims against Iraqi funds. (These claims by many countries and companies, it should be noted, are mostly outstanding debt owed from the Saddam era; i.e. the blood of everyone Saddam killed are on the hands of these companies and countries as well.)

The money is kept in the Development Fund for Iraq, which is held at the Federal Reserve Bank of New York.

The audit questioned 13.8 million barrels of oil produced but unaccounted for last year; a continued lack of metering throughout the oil value chain; $849 million in oil sales that was deposited in the bank accounts of the state oil marketer SOMO instead of the DFI; oil bartering to Syria for electricity and fuel that could violate U.N. resolution; and DFI accounting gaps.

The report was first presented at the IAMB’s most recent meeting in Kuwait City last month; the next is to be held in August.

The IAMB press release of the meeting can be viewed HERE.

A pdf of the report summary is HERE.

Iraq, home to the world’s third largest proven oil reserves, is in talks with neighboring Iran and Kuwait to reach a deal to pool shared oilfields, Reuters reports. “We have informed them of the necessity of signing an agreement to unify the oil fields and to move away from a situation where each side has control from its side as that will bleed these fields in an uneconomical way,” said Oil Minister Hussain al-Shahristani.

Iraq has signed a contract with General Electric Co worth $480 million to build three power plants and is negotiating with Hyundai to buy diesel generators, the country’s electricity minister said on Friday, Reuters reports.

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U.S. negotiators say Iraq must sign a bi-lateral security deal or lose billions in oil revenue…

Published
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Iraq Oil Report
on June 6, 2008
in Uncategorized
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Plus:
*Iraq oil union chief calls ministry a human rights abuser for anti-union actions
*Barzani says up to Kirkuk decision without referendum
*Oil Smuggling bill passes Parliament
* BGR Energy Systems signs third SCOP deal
*Senate Committee says Bush admin. misled on Iraq threat
*Much, much more…

The US is holding hostage some $50bn of Iraq’s money to pressure the Iraqi government into signing an agreement seen by many Iraqis as prolonging the US occupation indefinitely, according to information leaked to Patrick Cockburn reports for The Independent. US negotiators are using the existence of $20bn in outstanding court judgments against Iraq in the US, to pressure their Iraqi counterparts into accepting the terms of the military deal.

All of Iraq’s funds in 2003, as well as funds seized from the previous regime, and all subsequent revenue – most of which is from oil – are held in an account at the Federal Reserve Bank of New York, per U.N. mandate and U.S. presidential decree. This not only lends transparency mechanisms, but prevents pre-2003 creditors and those awarded damages by court from taking hold of the money.

Iraq’s budget is paid via transfer of those funds to the Ministry of Finance’s account in the Central Bank of Iraq.

The president of the Iraqi Federation of Oil Unions, Hassan Juma’a Awad, has issued a statement calling the Oil Ministry’s actions in the South Oil Company a “human rights crime.”

He said the eight workers were union activists as well and transferred from the South Refinery Co. to the Daura refinery. (See Iraq Oil Report May 30 for more on the moves.)

“This act is a clear evidence that the Iraqi state is after liquidating Trade Unions in this important Iraqi economic sector, Oil. It is important to note that the south is the main source of Oil in Iraq,” Awad says in the statement. “The oil sector there comprises more than 39 thousand workers. The Iraqi state had no intention of having an Oil trade Union in that sector because it represents a threat to its authority.”

Iraq Oil Minister Hussain al-Shahristani says the short-list of companies qualified to bid for long-term oil field development deals was done on technical not political lines, TurkishPress.com reports.

Shahristani is also negotiating six two-year deals to boost production by 600,000 barrels per day. Simon Webb and Ahmed Rasheed have the latest for Reuters.

Iraq is to take tougher action against oil smugglers under a new law passed on Thursday aimed at plugging leaks in its oil industry that cost it billions of dollars every year in lost revenue, Ahmed Rasheed reports for Reuters. The Oil Derivatives Smuggling Law will give authorities the power to seize smugglers’ assets, including tankers and other vessels, impose fines and jail offenders for up to five years.

The head of parliament’s oil and gas committee, Ali Hussain Balu, estimates $3.8 billion are lost annually to crude smuggling if you factor that at $100 per barrel.

The oil and gas equipment division of BGR Energy Systems has bagged a contract for design, engineering, manufacture and supply of 70 oil products storage tanks for new Aumara Oil Products Depot, Iraq, The Economic Times of India reports. The contract is valued at $9,295,300 and will be completed in 12 months. It is BGR’s third contract with Iraq’s State Company for Oil Projects.

The scope of contract includes design, pre-fabrication and supply of steel storage tanks along with cooling water system, foam system, fire protection system, radar gauges and other instrumentation.

Kurdistan Regional Government Prime Minister Nechirvan Barzani is OK with power-sharing in Kirkuk, Reuters reports. The oil-rich city is a major part of a set of disputed territories that has been a wedge in relations between the federal government and the KRG. A U.N. proposal is due out soon.

“We are pushing for a solution, not especially a referendum. We have asked the UN to be technically involved because the situation is complicated,” Barzani said, Mohammed A Salih reports for Asia Times Online.

The United Arab Emirates said on Thursday it would name an ambassador to Baghdad within days, a step that eases Iraq’s diplomatic isolation in the Arab world, Reuters reports.

Iraq’s government has opened 22 state-run companies for domestic and international investment, hoping investors will see opportunities here now that violence is on the decline, a senior official said Thursday, Sinan Salaeddin reports for The Associated Press.

A long-delayed Senate committee report endorsed by Democrats and some Republicans concluded that President Bush and his aides built the public case for war against Iraq by exaggerating available intelligence and by ignoring disagreements among spy agencies about Iraq’s weapons programs and Saddam Hussein’s links to Al Qaeda, Mark Mazzetti and Scott Shane report for The New York Times.

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Iraq oil exports tops 2M barrels per day…

Published
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Iraq Oil Report
on June 3, 2008
in Uncategorized
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Plus:
*Barzani says it should triple
*Electricity Ministry predicts stable supply in three years
*Girl Denied Education
*Alive in Baghdad: Another College Year in Baghdad
*Much more…

Iraq has raised oil exports to a post-war high, Oil Minister Hussain Shahristani told Ahmed Rasheed of Reuters. “In May, we have exceeded for the first time 2 million barrels-per-day (bpd) as an export rate,” Shahristani said. He also said proposals have been submitted for all six Technical Support Contracts to boost production.

Iraq should boost crude oil export capacity to 6 million barrels a day, nearly three times the amount the country currently sends to international markets, a top Kurdish political leader urged Tuesday, Barbara Surk reports for The Associated Press. The goal set by Nechirvan Barzani, the prime minister of Iraq’s semiautonomous Kurdish region, gave no proposed timetables and would far exceed even the nation’s peak oil output shortly before the 1990 invasion of Kuwait. But the Kurds and the Iraqi government are locked in a dispute over the rights to sign oil contracts, and export levels remain a critical issue for both sides.

The Iraqi Minister of Electricity Waheed Kareem expects that Iraq will have a reliable supply of electricity in three years’ time, revealing ministerial plans to set up more power generating stations in the country, Voices of Iraq reports.

The construction of six power plants will be finalized next year in a bid to sustain the country’s national power grid, the official spokesman for the Iraqi electricity ministry said, Voices of Iraq reports.

Girls Denied Education: Parents concerned about militia violence are pulling their daughters out of school, Samah Samad reports for the Institute for War & Peace reporting.

Faith and Fears: the latest from War News Radio, exploring the impact the war in Iraq has had on the country’s religious communities, both inside Iraq and elsewhere. First, we learn about the history of one of Iraq’s most threatened religious minorities - the Mandaens. Then, we talk with an Iraqi Mandaen now living in the US to hear what the future may hold for his community.We take a closer look at Iraq’s Sunni-Shi’a divide and at the different beliefs and practices that separate the two groups. Finally, in our series, A Day in the Life, we hear about the frustrations of an Iraqi Imam as he struggles to guide the faithful in times of fear.

A multi-union trade union conference was held in Basra last week called on the government to abolish 1987’s Public Law No. 150, a Saddam-era decree forbidding workers employed in the public sector from forming or joining a union, according to a release by ICEM. A statement issued to the government of Prime Minister Nouri al-Maliki that followed the meeting also called on it to abolish Decree No. 8750, the draconian instrument put in place in 2005 by the occupational forces. That measure effectively confiscated all trade union funds, and prohibited unions from collecting dues or maintaining assets.

In addition, the 15 trade unions present issued a demand for revival of Article 22, Paragraph 3 of the Iraqi Constitution, which would guarantee Iraqi unions the right to form or join free and democratic trade unions.

Alive in Baghdad: Another College Year in Baghdad
Some of the people among Iraqi society most affected by the war are the students; there are about five million students all over Iraq. These students are facing a great danger because they go out in the streets regularly, heading to their schools, colleges, or universities. The girls are facing the risk of being kidnapped or attacked if they don’t wear a veil or scarf, the boys facing the risk of being kidnapped by the militias controlling the area around their school.

A proposed U.S.-Iraq security agreement is shaping up as a major political battle between America and Iran, as the debate over the future of troops here intensifies ahead of the fall U.S. presidential election, Robert H. Reid reports for AP. The agreement, which both sides hope to finish in midsummer, is likely to be among the issues discussed this weekend when Prime Minister Nouri al-Maliki is due to visit Iran — his second trip there in a year.
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