Iraq Oil Report

Plus:
*Progress on another joint venture, this time for oil drilling
*What the passage of an election law means
*Iraq Press Roundup

An Iraqi oil ministry spokesman says Iraq and China will finalize a US$3 billion oil agreement next week. Assem Jihad says a Chinese delegation will visit Baghdad to sign the deal, The Associated Press reports.

The contract to develop the Ahdab field in southern Iraq is one of four Saddam-era contracts that the Oil Ministry has said it will uphold but renegotiate the terms per the new government’s oil prerogatives, as United Press International’s Ben Lando has reported.

According to the AP story: the contract will let China’s biggest oil company develop the field for 20 years. It’s expected to produce up to 25,000 barrels per day after three years and eventually reach 125,000 barrels per day.

However, this is the first test of Iraq’s pledge of oil transparency, and if the contract terms aren’t proven publicly, there’s no way to verify how much Iraqis will gain, or lose, in the deal.

Another joint venture between an Iraqi state-owned oil company and multinational firm is moving along in the planning stages. the AP reports “At the moment we are at an advanced stage in negotiations and it is all going well,” said James Milton, a London-based spokesman for the company. Ramco Energy Plc owns 32.7 percent of Mesopotamia Petroleum. Two senior Iraqi oil officials this week confirmed the talks, and said similar negotiations are underway with Saipem, an Italian oil services company.

The Iraqi officials said the proposed deals would involved the state-owned Iraq Drilling Co., and that tentative agreements were expected at the end of this year. One of the officials, who holds a senior position in the Iraqi company, said discussions started a year ago and were taking place in neighboring Jordan and Turkey, in addition to Italy.

The officials also said the Iraq Drilling Co. was upgrading its equipment with the purchase of 24 new Italian-made rigs in two contracts worth about US$311 million. The company intends to increase drilling capacity from 30 to 200 wells a year in order to to meet Iraq’s five-year goal of increasing crude oil production from nearly 2.5 million to 4.5 million barrels per day.

Such keen overseas interest in Iraq’s oil prompted two Iraqi reporters on The New York Times in Baghdad to launch into a heated late-night discussion about whether oil had actually been good or bad for Iraq throughout its recent history. Ali Hameed and Atheer Kakan agreed to reprise that discussion in front of a microphone, hosted by Stephen Farrell.

Iraqi’s Upcoming Elections

Iraq’s parliament today approved the remaining article 24 of the provincial elections law that was partially approved on 22 July except for the provisions relating to elections in Kirkuk, Reidar Visser on historiae.org explains in better depth. He said the article was an Iraqi-U.N. draft, delaying a Kirkuk vote and allowing for a committee (2 each of Kurds, Turkomen, Arabs and 1 Christian) to write a report by end March 2009, off which an Iraqi Parliament Kirkuk special elections law for will be based. If that doesn’t work, then the Iraqi prime minister, president, speaker of parliament and U.N. will decide what to do next. Visser also explains the political context of the provincial elections turmoil, and argues it was a win by the “nationalist centralists” over the “federalists” – NOT to be confused with the debate waged in the early stages of the founding of the United States as U.S. politicians like to mistakenly compare it to.

The United States on Wednesday welcomed the passage of a long-delayed provincial election law by the Iraqi parliament, saying it showed the country’s fledgling democracy was making progress, Agence France-Presse reports. The law passed by the Iraqi parliament on Wednesday sets a January 31 deadline for provincial elections in 14 of the country’s 18 provinces. Members of parliament agreed to a compromise that will exclude not only the disputed northern oil province of Kirkuk but also the whole of the northern Kurdistan region from the new legislation.

Few of the hundreds of thousands of Iraqis forced to flee their homes have registered to vote in upcoming ballot, Zaineb Naji reports for the Institute for War & Peace Reporting. Ahmed Al-Kubaisi, a 25-year-old teacher who fled Baghdad for Ramadi in July 2006 after his brother was killed, said he has little faith in the politicians’ pledges, despite receiving help from a Sunni political party, the People of Iraq, led by Adnan Al-Dulaimi. The party helped him to find affordable housing and food aid, the kind of assistance that has won over some displaced voters in Baghdad and Ramadi. But Kubaisi says that he and his family will not vote in the provincial elections. “The political parties are responsible for all that has happened, all of the sectarian problems and violence,” he said.

Security and Society

American soldiers accidentally shot and killed the leader of a local U.S.-allied Sunni group Tuesday after coming under attack in a volatile area north of Baghdad, the military said, Kim Gamel reports for AP.

Read what Iraqis read: the Iraq Press Roundup by UPI’s Alaa Majeed.