Iraq Oil Report

Iraq is likely to abandon plans to sign up to $3 billion in short-term oil contracts, a U.S. diplomat said, putting in doubt deals that would give foreign oil firms their first major foothold in the country for decades, Missy Ryan reports for Reuters.

“It appears that on present form (the Iraqi government) probably won’t proceed with most of these or all of them,” Charles Ries, coordinator for Iraq’s economic transition at the U.S. embassy, told reporters in Baghdad.

“But I think that some of the companies are open to continued discussions even on relationship grounds, and some of the companies … don’t think it’s worth their time.”

Frustration over the sluggish pace of Iraq’s oil production is rising in the country and abroad as global prices soar. Much of Iraq starves for electricity and fuel as vast amounts of oil and gas sit untapped in the ground. Iraq’s oil industry needs a virtual overhaul to reach a level of production that could erase chronic fuel shortages in the country and rake in windfall profits to be had on the world market. The Iraqi government and more than two dozen oil companies are in the midst of drafting plans to begin the work. But the chances of success anytime soon are far from certain, Mark Kukis writes for Time.

Iran’s energy minister said his country was ready to offer technical services to Iraq in the fields of energy and electricity, expressing content with the current level of cooperation between the two neighboring countries, Voices of Iraq reported.

“Iranian experts, who acquired a good know-how in setting up power stations and extension of high-pressure lines, are ready to offer their experience to their Iraqi counterparts,” Pervez Fattah.

The Chinese firm, Shanghai, has started constructing a major thermal power plant in the southern Province of Wasit, Salah al-Rubaai reports for Azzaman.

Electricity Minister Kareem Waheed attended the laying down of the foundation stone for the plant, the largest ever project a foreign firm begins constructing in Iraq since the 2003 U.S. invasion.

Kareem said on completion the plant will generate 1320 megawatts of electricity.

He said under the $924 million contract the Chinese were to have the plant constructed in 48 months.

“It is a good initiative from a foreign firm to start implementing such a project in the country following the improvement in security.

“Hopefully this will encourage other firms to follow suit,” Waheed said.

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