Monthly Archive for October, 2008

Iraq to join oil revenue transparency pact

Published
by
Iraq Oil Report
on October 31, 2008
in Uncategorized
. 0 Comments

Plus:
*Oil Minister Shahristani joins PM Maliki’s coalition list
*The Green Zone Sit-in
*VIDEO: Two-part series on the Surge & Sadr
*Operation Hotel California: entering Iraq in 2002
*Iraqi women face increasing threats
*All Iraqis in danger with bad water

It’s an exhausting and complicated process, but Iraq is taking steps to open up its oil and revenue interactions to the world’s watchdogs, Ben Lando reports for United Press International.

“The commitment from the government is strong,” said Eddie Rich, Middle East director for the Extractive Industries Transparency Initiative, fresh from a meeting with key Iraqi government officials in Baghdad, including Minister of Oil Hussain al-Shahristani and Deputy Prime Minister Barham Salih.

“They have said they are determined to implement EITI,” he said. Since declaring its intentions in February, Rich said the government of Iraq has appointed a national EITI coordinator and said it was open to civil society involvement in the process — two necessary steps. Now Iraq needs to formalize a work plan detailing the scope and process for becoming “what we call a candidate or implementing country.” It then has two years to fully implement its work plan and for the process to be externally validated. …

Oil sales account for 95 percent of total Iraqi revenue, and that’s with the world’s third largest proven reserve holder operating well below its ability. Keeping tabs on the revenue stream, therefore, is vital for Iraqis.

EITI is a new body, fully operational since 2006. Because the rules are so new, and because the road is steep, no country is yet fully compliant with EITI.

“In a case like Iraq, it’s perfectly normal for it to take a while to get started,” Rich said. “It’s a difficult process in Iraq, of course.”

Iraq is the first all nationalized oil sector country to attempt EITI. Iraq would have to turn the lights on internal operations of the state-owned oil companies as well as any interaction in the export market and with international oil firms.

For more on Iraq’s success and roadblocks in ensuring the free flow of oil and revenue, read Iraq to Take Over Oil Revenue Oversight Despite Critique, by UPI’s Ben Lando, published Thursday.

Also found Here.

Iraq’s oil minister is taking sides in the growing intra-Shiite pre-election struggle, joining the coalition led by Prime Minister Nouri al-Maliki’s Dawa party, an interesting twist in the attempt for the two main parties to corner local election markets, Reidar Visser writes on Historiae.org. Dawa and its largest rival-turned-coalition-partner-turned-rival, the Islamic Supreme Council of Iraq, are in competition with each other as well as other factions like the Sadr and Fadhila parties, which will show well in majority Shiite and poorer areas.

For more on the party lists ahead of the Nov. 2 deadline, read Visser’s work, like this quote: “The Daawa coalition, on the other hand, has scored one important victory: it now includes the independent list of (Oil Minister) Husayn al-Shahristani alongside the two main factions of the Daawa. ISCI has long attempted to portray itself as a party with particularly close ties to the Grand Ayatollah Ali al-Sistani (who, for his part, has failed to reciprocate); the decision by someone like Shahristani to join the Daawa coalition rather than ISCI must be something of a defeat for them, as the Iraqi oil minister is thought to have good relations with Sistani. Still, this merely emphasises a division that dates back at least to February, when Maliki and independents of the United Iraqi Alliance (UIA) were at odds with ISCI over the provincial powers law. Other new elements in the Daawa coalition are smaller local parties from Dhi Qar and Qadisiyya as well as some Turkmen and Fayli Kurd parties. There still seems to be some competition for the UIA independents though. The blocs associated with Qasim Dawud and (former Oil Minister) Ibrahim Bahr al-Ulum have formed an independent coalition at the national level (i.e. at the national office of the elections commission), but at the same time they also participate in various local lists.”

The Green Zone Sit In: Ali Sattar still has painful memories of the moment a US army tank crushed the small trolley from which he sold soup to passerbys. The trolley was Ali’s livelihood and since losing it he has been jobless and without money, Kholoud Ramzi writes for Niqash.

Following the event, Ali launched a sit-in at the Green Zone entrance together with his wife and his two sons, Amer and Yassin, demanding to see a government official and gain compensation. His solitary protest is now nearly one-month old. …

For some former soldiers the threat is more than just financial. A study prepared by the ‘Protect the Iraqi Army from Unemployment’ organization says some former soldiers have been forced to live in hiding. “They live in fear of being targeted or assassinated,” for their association with the former regime said Salem Abdul-Mutalib al-Azzawi, the organization’s president.

For the likes of Ali who can show themselves publicly the threat seems equally dangerous. Without a job or money, the hardships of daily life are becoming unbearable. With few other options open to him, he says he will continue his sit-in until he gets a response.

In July of 2002, 8 Americans crossed the Harburr River from Turkey into Kurdistan. Their mission? To strike and kill Al-Qaeda, and take down Saddam Hussein’s Baathist dictatorship. Charles “Sam” Faddis was the leader of that operation and was interviewed on The Marc Steiner Show. Faddis is the co-author with Mike Tucker of the new book Operation Hotel California: The Clandestine War Inside Iraq.

Has the US military troop surge worked in Iraq? Has the Al-Mahdi army finally been defeated, and is this the end of the armed Shia resistance to the occupation? Filmmakers Rick Rowley and David Enders report in this two-part series for AlJazeera’s People & Power:

Beyond the Wall – Part 1:

Beyond the Wall – Part 2:

Attacks on women’s rights in Iraq continue, the latest threats come from the northern Kurdistan region. The KRG parliament was persuaded to ease up restrictions on women’s rights to divorce, PUKMedia.com reports, but only if a woman puts this condition in the marriage contract before the wedding. A telling, if not poorly translated quote from the article: “However, several lawmakers rejected this article which allows women to have the right of divorce, saying women are rather an emotional creature and this right might have strong danger against disintegration of the family ties.”

This comes following protests that the KRG parliament is keeping a man’s ability to have multiple wives alive in the legal system. Avin Ibrahim Fattah argues in the Kurdistani Nwe newspaper that its rubbish to point to Islamic law when legalizing polygamy, since some Islamic countries prevent it. “Therefore, authorizing polygamy by law is only for the desires of men not in the sake of carrying out a religious end,” she said. “The deadlock of polygamy and heritance are not the only problems of women in the personal status law, otherwise the right of divorce, which is monopolized for our men, had been used clearly and violently by our men.”

Oppression of women in Iraq often takes a violent turn, Ben Lando reported for The Washington Times in July:

Four gunshots through the kitchen window. Two to the leg, one to the stomach, one to the head. The woman, who will remain unnamed for her safety, survived the attack, but she is still in hiding.

“For seven years, it was a secret place for housing women,” said Kazhal Ali, the administrator of Asuda, a nongovernmental organization (NGO) in northeastern Iraq that runs shelters for abused women, including the one who was attacked.

“Now it is discovered,” Ms. Ali said, “and we changed the shelter to another place.”

And in this International Women’s Day article for United Press International, Ben Lando writes:

Iraqi women say they are increasingly targeted for anything from their clothes to driving to attending school, as society shifts from Saddam Hussein’s brutality to one facing violence in the streets and religious fundamentalism.

Iraq’s ambassador to the United States, Samir Sumaida’ie, began his welcome to the International Women’s Day celebration he was hosting this week not with the praises for his countrywomen, but with a moment of silence.

Guests packed into the embassy reception hall bowed their heads — some covered in the Muslim hijab, most not — “to remember what Iraqi women have endured and are enduring,” he said before dusting off a quick chronology of Iraqi women’s achievements: 1923, the first women’s magazine; 1935, the first woman law school graduate and doctor; 1938, the first woman judge. …

A new report from Women for Women International notes Iraqi women polled say the situation since 2004 has gotten worse. Nearly 70 percent of Iraqi women respondents think women are increasingly targeted in Iraq and attribute it to “less respect for women’s rights than before, that women are thought of as possessions, and that the economy has gotten worse.” Just more than 76 percent “said that girls in their families are not allowed to attend school, and 56.7 percent said that girls’ ability to attend school has gotten worse since the U.S. invasion.”

Millions of Iraqis risk deadly disease as they lack clean water. A new report from the International Committee of the Red Cross said 40 percent of Iraqi households aren’t connected to a water network, which is a particular concern. “There has been some improvement in recent months, both in terms of security and essential services. More people now have access to health services and clean water. But far too many Iraqis still have no choice but to drink dirty water and live in insalubrious conditions,” said Juan-Pedro Schaerer, the ICRC’s head of delegation for Iraq. “This leads to more sick people seeking treatment in a health-care system already stretched to the limit.”

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Iraq oil revenue audit to be handed over to all-Iraqi team

Published
by
Iraq Oil Report
on October 30, 2008
in Uncategorized
. 1 Comment

Plus:
*Oil law back in Parliament
*New wells and other work to boost oil production
*However, questions remain
*Status Of Forces Agreement update
*The Turkey-U.S.-Iraq-Iraqi Kurd dance
*Iraq Press Roundup
*Much more

The U.N.-mandated auditor of Iraq’s oil revenue says, despite accounting troubles, it is ready to hand off its work to an all-Iraqi team at the end of the year, United Press International’s Ben Lando reports.

Oil revenue is estimated at 95 percent of Iraq’s total annual income. The United States and Iraq have been criticized for lax oversight and transparency of the funds. Iraq’s new government is improving but is slow in spending its entire capital budget.

The International Advisory and Monitoring Board, or IAMB, said the Iraqi Committee of Financial Experts, or COFE, had its work cut out for it. The notion was seconded by a newly released mid-year audit of Iraq’s oil revenue transparency.

The United Nations established the IAMB to watchdog the Development Fund for Iraq, where all oil proceeds are deposited, as well as the leftovers of the Oil-for-Food program and other assets. Ninety-five percent of Iraq’s oil revenue is deposited in the DFI, with 5 percent dedicated to compensation of victims of the 1991 Gulf War.

Two DFI accounts are kept at the Federal Reserve Bank of New York. One, of about $30 billion, is untouched in order to buoy the Iraqi dinar’s value. The other is where all of Iraq’s government expenditures are drawn from. …

The British-based auditors KPMG issued a scathing interim review of Iraq’s oil revenue transparency from January through June 2008. A final draft will encompass the entire year and will be released next year.

The audit said Iraqi and U.S. officials tasked with ensuring accounting and transparency of the oil revenues have:

- only partially implemented a master plan for oil metering throughout the value chain of the national oil industry, despite more than a year of planning.

- incomplete records in the DFI of Iraqi assets frozen in other countries.

- incomplete records of “contractual commitments entered into by the U.S. agencies” under the guise of the Coalition Provisional Authority.

- not kept records of oil and fuel bartered instead of sold for cash, worth an estimated $426 million.

- not accounted for the $779 million of oil revenue kept in a bank controlled by the State Oil Marketing Co. instead of the DFI.

The audit said these factors and others are hindering its ability to assure complete accounting of Iraqi revenue.

Read the entire story: Click Here. (Contact Iraq Oil Report if free UPI registration does not work.)

For the pdf of the KPMG audit: Click Here.

The Iraq Parliament’s Oil & Gas Committee has been given a newly approved version of the oil and gas law, Iraq Oil Report can confirm. This follows on Ben Lando and Alaa Majeed’s UPI report Monday that the committee had received a draft but sent it back to Prime Minister Maliki and the Council of Ministers. They complained it was improperly sent to the Parliament. A source tells Iraq Oil Report the version approved by negotiators February 2007 and amended by the Shoura Council is the version approved. While there are many opponents of the various versions of the oil law, it is likely that the Parliament wants to begin the long-awaited debate, which will surely lead to further changes of the law.

Drilling new wells and other work will increase 2009 Iraq oil production by 200,000 barrels per day, Reuters reports, Oil Minister Hussain al-Shahristani saying. He estimates Iraq will average 2.5 million to 2.7 million bpd next year.

Iraqi workers and contractors of the Ministry will continue their maintenance and enhancement work. That, plus success in the Kurdistan Regional Governments exploration and production deals (barring political entanglements) and Baghdad’s deal making could lead to Shahristani’s estimate being realized.

However, he predicted Iraq would end this year averaging 2.8 million bpd, and the most recent data on production and exports sees it as volatile as the price of oil.

Shahristani is currently meeting with International Monetary Fund officials in Amman, Jordan, Voices of Iraq reports.

A decline in oil exports and the price of oil has led Iraq to cut $10 billion to $15 billion from its nearly $80 billion budget, Suleiman al-Khalidi reports for Reuters. Oil revenue accounts for nearly 95 percent of Iraq’s income. The 2009 budget is still in draft form, awaiting government approval.

London-based Heritage Oil announced it has contracted a rig and will begin its first drilling in its Kurdistan Regional Government exploration block. A company release said it contracted a rig through the Great Wall Drilling Co., which is already in country and expected to spud before the year’s end.

SOFA Update:

The changes Iraq wants to the Status Of Forces Agreement with the United States have been made public. Sam Dagher reports for The New York Times “the amendments would ban American troops from using Iraqi territory to carry out attacks on other countries, further limit when the troops would have immunity from Iraqi laws and allow inspections of American arms shipments.” Also a major issue is whether the immunity applies to the controversial private contractors, Dan Sagalyn reports for NewsHour.

The U.N. mandate authorizing the occupation of Iraq expires Dec. 31, following numerous extensions. Without its renewal or the bilateral deal being negotiated now, the presence of occupation forces in Iraq would lose its last legs of legitimacy. Iraq President Jalal Talabani said after a meeting with U.S. Ambassador to Iraq Ryan Crocker that it was “important” and both countries would “benefit” from the SOFA, Reuters reports.

Massoud Barzani, president of the semi-autonomous northern Iraqi Kurdish region, told The Washington Post he was “doubtful” Iraqi political leaders will approve the agreement. Barzani met with Bush and other leaders during a Washington visit this week.

The White House said many Iraqi politicians have many opinions, Reuters reports, such as a prominent Iraqi lawmaker saying a post-2011 occupation is a non-starter, Voices of Iraq reports. White House Spokesperson Dana Perino also responded to a plea by Reps. Bill Delahunt (D-Mass.) and Rosa DeLauro (D-Conn.) to just get a U.N. mandate renewal: “Because we’ve gotten this far, we might as well try to continue to work on it.”

Dagher also reports of a possible renewed intra-sectarian strife in southern Iraq, where political parties and their militias are vying for control of the oil rich areas ahead of local elections early next year and national elections at the end of 2009. The Wasit provincial governor is warning of this struggle. Wasit was just given the security file from coalition forces, and is where the Ahdab oil field is located. Development of the field was recently awarded to the China National Petroleum Corp. Originally a production sharing contract signed by Saddam Hussein in the late 1990s, it was renegotiated to a service agreement.

Turkey is watching carefully negotiations between its biggest ally and it’s most volatile neighbor (and potential big ally). President Abdullah Gul sees U.S. and Turkish foreign policy as nearly identical, including in Iraq, Ben Lando reports for The Washington Times.

While Turkey opens up diplomatic routes with Iraq’s Kurdish Barzani leadership, Emrullah Uslu writes in the Eurasia Daily Monitor this could anger the Kurdish separatist PKK even further, as it sees Barzani’s aim of Kurdish leadership in competition with imprisoned PKK leader Abdullah Ocalan and an end-around Turkey’s negotiations with its own pro-Kurdish Democratic Society Party.

This could be a slick attempt by Turkey to pit its two largest Kurdish opponents against each other. Or, as Frank Hyland writes in Terrorism Focus, Turkey-Barzani rapprochement is a direct practical result of increased PKK violence.

Iraqis are now faced with nuclear contamination after buried metal from the old nuclear projects have been dug up and sold on the scrap metal market, Adel Kamal reports for Niqash.

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

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Iraq Oil Report must read: Q&A with Iraq oil revenue auditor Joe Christoff

Published
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Iraq Oil Report
on October 29, 2008
in Uncategorized
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Plus:
*Barzani and Bush meet in Washington
*SOFA update
*Alive in Baghdad: How do Iraqi youths spend their free time?
*Iraq Press Roundup
*Much more

Q & A: Joseph Christoff of the U.S. Government Accountability Office talks with the Council on Foreign Relations’ Greg Bruno about Iraq’s oil revenue. The GAO and Christoff’s analytical reports have found room for criticism of both Iraqi and U.S. efforts in keeping tabs on and spending Iraq and U.S. funds in Iraq. Christoff talks about real Iraq budget surpluses, problems with spending money on capital projects, and what could happen after the U.N. resolution expires in December which ensures transparency of the oil revenue and protects creditors from claiming Saddam-era debt in the post-Saddam era.

The leader of Iraq’s Kurdish region, Massoud Barzani, is in Washington, D.C., for talks with President Bush, Vice President Cheney and other leaders. According to a statement from his office prior to the trip, he’s accompanied in Washington by the KRG envoy to the U.S. Qubad Talabani (son of Iraqi President Jalal Talabani), as well as KRG Natural Resources Minister Ashti Hawrami, Iraqi Deputy Prime Minister Barham Saleh, KRG Deputy PM Roj Noori Shaways, the head of KRG security (and Pres. Barzani’s son) Masrour Barzani and others.

Bush and Barzani met Wednesday in the Oval Office and issued a statement without taking questions:
“We talked about the progress on the election law and on the hydrocarbon law, but we also talked about the status of forces agreement,” Bush said. “I informed the President we received amendments today from the government. We’re analyzing those amendments. We obviously want to be helpful and constructive without undermining basic principles. And I remain very hopeful and confident that the SOFA will get passed.” Barzani restated his support of the SOFA and Bush’s leadership in Iraq and removing Saddam Hussein.

The State Department released this information from the meeting between Barzani and Secretary of State Condoleezza Rice Tuesday: “The Secretary met with Kurdistan Regional Government (KRG) President Massoud Barzani today while he visited Washington for a meeting with President Bush. They discussed the Kurdistan Regional Government’s support for the Strategic Framework Agreement, the Status of Forces Agreement and continued KRG efforts with the Government of Turkey on the PKK. They also discussed recent political developments in Iraq, including KRG support for minority representation for the upcoming provincial elections, and the need for the KRG to work with the Government of Iraq within the constitutional framework to end the stalemate in Parliament on proposed hydrocarbon legislation.”

SOFA Update: Iraq’s government spokesman said the deal will prevent the country from being used to attack neighbors, The Associated Press reports. The Iraqi government has restarted negotiations on their side and proposed undisclosed changes.

First responding with typical unilateralist my way or high way rhetoric (”door is shut on SOFA”)Agence France-Presse reports President Bush is open to Baghdad’s suggestions. The article also touches on powerful cleric and political operative Moqtada Sadr opposes the SOFA and Grand Ayatollah Ali Sistani is warning against it overstepping sovereignty.

And Human Rights Watch warns if detainees turned over to Iraqi forces as part of the SOFA risk even greater threat of torture.

Philadelphia Inquirer International Affairs Columnist Trudy Rubin says the next president of the United States will have his hands full with the Iraq question.

The United Nations has doled out another $889 million in Iraq oil revenue to victims of Saddam Hussein’s Kuwait invasion in the 1990s. It’s part of the regular payment process, The AP reports. While the U.N. Compensation Commission has OK’d $52 billion in claims, it has only paid $26 billion, with about $80 million allegedly overpaid. Iraq was garnished 25 percent of its oil income by the U.N. until 2003, and now 5 percent is diverted to the fund.

Iraq is jump-starting electricity and water projects in Karbala, Voices of Iraq reports.

A shoddy job on Iraq reconstruction, even resulting in your contract being terminated, doesn’t mean you won’t get another gig in Iraq with U.S. taxpayer funds, Elizabeth Newell reports for Government Executive. “The SIGIR report showed that none of the contractors whose reconstruction projects were terminated for default were placed on the excluded parties list. In fact, at least eight companies that had contracts terminated received new contracts and purchase orders. An Iraqi company that won two contracts to rehabilitate electrical substations for $45 million — both of which were terminated for default — was subsequently awarded three contracts to provide equipment.”

The Iraq Press Roundup by UPI’s Alaa Majeed.

The threat to Iraqi Christians has grown so much that the communities in northern Iraq are arming themselves and forming militias, UPI reports.

Alive in Baghdad: How Do Young Iraqis Spend Their Free Time?


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Oil for Soil: Crisis Group proposes ‘grand bargain’ on Iraq oil land dispute

Published
by
Iraq Oil Report
on October 28, 2008
in Uncategorized
. 1 Comment

Plus:
*Iraqi Kurd-central government tension escalates
*Iraq limits oil companies to one lead role in oil deals
*Former SCOP Chief Khawaja’s recommendations
*U.S. threatens Iraq aid and other SOFA developments
*Basra worker protest
*Iraq Press Roundup
*Much more

Oil for Soil: the International Crisis Group is proposing what its calling a “grand bargain” to head of escalation of conflicts between Iraq’s Kurdistan Regional Government and the central government in Baghdad.

The full pdf of the proposal can be downloaded here.

A summary follows this update:

Tensions between Baghdad and the KRG appear to be escalating, not only on the oil law that was rejected again Monday. An attempt to form non-Kurdish tribal councils in heavily Kurdish Kirkuk – the northern oil capital – and Kanaqin has been nixed by the Kurdish leadership there, Alissa J. Rubin reports for The New York Times.

These two cities and a large strip of land outside the official KRG territory has grown increasingly tense 10 months past a deadline for a referendum in these disputed territories and as local elections are only months away. The land was gerrymandered and ethnically cleansed by Saddam Hussein, and the Iraqi Kurdish leadership is vying for it to be attached to the KRG’s semi-autonomous northern region. While all of the land is officially considered under the purview of the central government, portions have been under the security and administrative umbrella of the KRG. Kanaqin, for example, recently saw Iraqi troops move in to take over security from the Kurdish forces, called the Peshmerga.

And now in Mosul, where insurgents are being routed – and Iraqi Christians ethnically cleansed – Iraqi troops and Peshmerga may face off, Sam Dagher reports for The New York Times. The U.S. says if it comes to confrontation, it will officially support neither side, both of which are considered allies.

“Grand Bargain” summary: ICG believes “piecemeal approach” to the Kurdish-Arab dispute in Iraq is no good and the “grand bargain” will solve or put on ice issues like “Kirkuk and other disputed territories, revenue sharing and the hydrocarbons law, as well as federalism and constitutional revisions.”

From the executive summary:

The main culprit is a dispute over territories claimed by the Kurds as historically belonging to Kurdistan – territories that contain as much as 13 per cent of Iraq’s proven oil reserves. This conflict reflects a deep schism between Arabs and Kurds that began with the creation of modern Iraq after World War I; has simmered for decades, marked by intermittent conflict and accommodation; and was revitalised due to the vacuum and resulting opportunities generated by the Baath regime’s demise in 2003. In its ethnically-driven intensity, ability to drag in regional players such as Turkey and Iran and potentially devastating impact on efforts to rebuild a fragmented state, it matches and arguably exceeds the Sunni-Shiite divide that spawned the 2005-2007 sectarian war.

Stymied in their quest to incorporate disputed territories into the Kurdistan region by constitutional means, Kurdish leaders have signaled their intent to hold politics in Baghdad hostage to their demands. At the same time, the Iraqi government’s growing military assertiveness is challenging the Kurds’ de facto control over these territories. Rising acrimony and frustration are jeopardizing the current relative peace, undermining prospects for national unity and, in the longer term, threatening Iraq’s territorial integrity. Rather than items that can be individually and sequentially addressed, Iraq’s principal conflicts – concerning oil, disputed territories, federalism and constitutional revisions – have become thoroughly interwoven. Federalism cannot be implemented without agreement on how the oil industry will be managed and revenues will be distributed. Progress on a federal hydrocarbons law and a companion revenue-sharing law is inconceivable without agreement on the disposition of disputed territories that boast major oil fields, such as Kirkuk. And the constitution review has faltered over failure to settle all those questions, the solutions to which will need to be reflected in amendments reached by consensus. …

A sober assessment of these requirements suggests a possible package deal revolving around a fundamental “oil-for-soil” trade-off: in exchange for at least deferring their exclusive claim on Kirkuk for ten years, the Kurds would obtain demarcation and security guarantees for their internal boundary with the rest of Iraq, as well as the right to manage and profit from their own mineral wealth. Such a deal would codify the significant gains the Kurds have made since they achieved limited autonomy in the wake of the 1991 Gulf War and especially after April 2003, while simultaneously respecting an Arab-Iraqi – as well as neighbouring states’ – red line regarding Kirkuk.

Key Recommendations:

U.N. Assistance Mission for Iraq (UNAMI): facilitate negotiations; determine KRG-Iraq boundaries in the meantime.

Iraq government and KRG: OK UNAMI involvement; fast-track oil law and related laws (revenue sharing, Ministry of Oil, Iraq National Oil Co.) without signing any new oil and gas deals or developing fields in disputed territories (KRG only); reach deal on definition and administration of disputed territories.

Iraq government: Adopt UNAMI recommendation on boundaries; establish “stand-alone governorate or a uni-governorate federal region” of Kirkuk for 10 years; establish power-sharing in Kirkuk with a leadership mixed of Arabs, Turkomans, Kurd and Christians; approve a KRG-accepted oil law; accept the oil law of the KRG; and OK KRG’s autonomy on development of oil and gas in the region, including exports; provincial elections by end-January 2009.

KRG: Take action against the PKK which Turkey wants.

Turkey: Formally recognize the KRG; assist KRG exports of oil and gas; stop military action inside Iraq.

U.S. Government: Back the “grand bargain”; formally oppose KRG annexation of Kirkuk but protect established boundaries.

Iraq will limit companies bidding in the first round of oil and gas tenders to taking the lead in only one project. The Middle East Economic Survey (MEES) reports companies can have a minority role in more than one project, though. The Oil Ministry has said it prefers consortium of companies to single firm bidders. The companies will “bid on three parameters: a per barrel fee for stabilizing current field capacity, a per-barrel fee (or, in the case of gas, per-million cubic feet) fee for incremental production, and finally an enhanced production target for a field’s plateau production,” MEES reports. The companies are vying for 20 year deals that will give them 49 percent stake in the Rumaila, Kirkuk, Zubair, W. Qurna-1, Bai Hassan and Maysan province fields and a 75 percent stake in the Akkaz and Mansouriya gas fields. The first round of the bidding was announced Oct. 13 in London. Deals are expected to be signed by the end of June.

Suggested Parameters For Development Of Oil And Gas Fields In Iraq, a list of recommendations for developing Iraq’s oil sector by the immediate former head of the State Company for Oil Projects Falah al-Khawaja in the Middle East Economic Survey (MEES).

Selected recommendations:

- Ensure that the selection covers the demography of Iraq as a whole. Thus all Iraqis in all areas will be involved in the oil and gas development, assuaging fears that any particular Iraqi community is being potentially sidelined by oil development.

- Aim for the transfer of modern technology, especially in areas where we have little or no experience such as heavy oil, enhanced oil recovery and gas field operations.

- Maximize Iraqi direct execution of hydrocarbon fields development and, wherever possible, structure bidding rounds to allow as much national execution as is realistic, with reputed consultancies.

- Upgrade the civil infrastructure necessary for implementation of such huge projects (roads, bridges, hotels, housing schemes) as well as power, water supplies and so on. The state should take the lead in this developmental push, in tandem with the oil ministry, as part of an integrated national plan.

- Hasten the development of border fields. … Delineation of border fields and utilization agreements will not only bring development to these areas, but diffuse potential future conflicts.

- Introduce the idea of ‘packaging’, ie call for development of the fields together with gas treatment, oil refining and power generation facilities.

The U.S. is threatening to cut tens of billions of reconstruction and development aid to Iraq if politicians don’t sign a deal keeping U.S. troops in the country, Leila Fadel reports for McClatchy Newspapers: “Army Gen. Ray Odierno, the top U.S. military commander in Iraq, informed Iraqi officials last week that if their country doesn’t agree to a new agreement governing American forces in Iraq, it would lose $6.3 billion in aid for construction, security forces and economic activity and another $10 billion a year in foreign military sales. The warning was spelled out in a three-page list that was shown to McClatchy on Monday. Iraqi officials consider the threat serious and worry that the impasse over the so-called status of forces agreement could lead to a crisis in Iraq. Without a new agreement or a renewed United Nations mandate, the U.S. military presence would become an illegal occupation under international law.”

Meanwhile, Iraqi leaders have sent to the U.S. negotiators proposed changes to the deal that will allow U.S. forces to remain in Iraq after a U.N. authorization of the occupation ends Dec. 31. Mariam Karouny and Waleed Ibrahim report for Reuters the changes are both content and legalese, clarifying interpretation of the pact. Voices of Iraq reports Foreign Minister Hoshyar Zebari and U.S. Ambassador to Iraq Ryan Crocker have been meeting about the SOFA as well.

Iraq’s government spokesman said the U.S. raid on Syria, launched from bases in Iraq, violated the Iraq constitution, Mariam Karouny reports for Reuters. One of the expressed fears from Iraq (and its neighbors) is that the Status Of Forces Agreement will allow the U.S. to launch such attacks, most prominently on Iran.

In a related story, Voices of Iraq reports the British are also discussing a forces deal.

Turkish media is reporting candidates Obama and Biden want a peace summit between Turkey and Iraq’s Kurdish leadership. Here’s Hurriyet’s take. While the two sides will need to work out their sometimes rocky relationship, especially with separatist Kurdish PKK attacks increasing of late, it will be hard for Turkey to sit down in an official government to government capacity. Turkey is wary of giving Iraqi Kurds too much recognition, as they fear it will strengthen them and lead to calls for greater autonomy, or even independence, and embolden Turkey’s own Kurdish population.

Iraqi Kurds are protesting a new law by the KRG recognizing male polygamy. Voices of Iraq reports a new Personal Status law gives men more rights than women, including allowing multiple marriages.

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

Thousands of workers protested in Basra Monday, demanding the Ministry of Finance reverse a plan to cut salaries. U.S. Labor Against the War, posted on its website a message from Amjad Al-Jawhary of the General Federation of Workers Councils and Unions in Iraq that protestors included “steel, petrochemical, paper and other plants in Basra who were headed by Hassan Juma, head of Labor Unifying Bureau and Oil workers and Abuwatan, vice president of Labor unifying Bureau and GFWCUI in Basra.”

Basra workers demonstrate Monday (photo credit: uslabor.org)

Basra workers demonstrate Monday (photo credit: uslabor.org)

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Maliki, oil and gas committee to meet on Iraq oil law

Published
by
Iraq Oil Report
on October 27, 2008
in Uncategorized
. 2 Comments

Draft version received in Parliament Sunday, kicked back to council of ministers for legal clarification

Plus:
*Japan envoy meets on Iraq oil
*Chinese team expected in November
*Industry Ministry workers demand pay promise
*Reaction to U.S. attack on Syria-Iraq border
*KBR accused of sticking U.S. taxpayers, shocking American workers in Iraq
*Fallujah sewage project at $100M, waste still in the streets
*Barzani back from Iran, en route to Washington
*Iraq in the Time of Cholera
*Much more

The Iraqi Parliament’s Oil and Gas Committee will meet Tuesday with Prime Minister Nouri al-Maliki to determine the fate of the draft oil law, after a version of the long-awaited bill made a brief appearance in Iraq’s Parliament Sunday before being kicked back to the Council of Ministers.

Ben Lando and Alaa Majeed of United Press International spoke to committee members who, despite differing opinions of what the final oil law should look like, all say they want the Council of Ministers to sign off on the legislation and give it to Parliament once and for all.

The law has been — and remains — stuck in a dispute between segments of Iraqi society over two key issues: to what extent companies other than the Iraqi state oil companies should be allowed to enter the oil and gas sector, and to what extent control over the oil strategy will be decentralized to the local governments (oil-producing provinces and regions).

Since negotiators struck a deal in February 2007, the committee has received four different versions, none of which has the full Council of Ministers’ approval, including the latest version.

Ali Belo, the chairman of the committee and member of the Kurdistan Alliance party, said he wants the Council of Ministers to approve the February draft or an updated version so the Parliament can begin debate. …

Abdul-Hadi al-Hasani, the deputy chairman of the committee and a member of Maliki’s Dawa Party, part of the Shiite-led coalition in government, said they told Mahmoud al-Mashhadani, Parliament speaker and member of the Sunni Iraqi Accord Front, they didn’t want a legal point-of-order argument to stall the bill before the legislators — and oil experts, campaigners, non-governmental organizations, media and citizens — got the chance to debate the law.

Hasani said the committee wanted the first reading this week but will now press Maliki and his Council of Ministers to “clarify the matter as quickly as possible.”

“It could take some time; it’s not really a quick law to be passed. It is the most important law in Iraq’s economy,” he said. …

It’s not clear how the draft law can make it through Parliament at this time. The body is busy on key issues with upcoming provincial elections and the federal budget amid an oil price free fall. At the same time, the Status of Forces Agreement to keep U.S. forces in the country not only will dominate any legislative session but also has invigorated the nationalism that comes into play with a law as controversial as the oil law. By offering up a nationalized oil sector to the international oil companies — especially without a plan to rebuild the capacity of the once-leading Iraqi oil workers and the domestic industry capability — the law is viewed suspiciously.

Hasani said three related laws — revenue sharing, restructuring the Oil Ministry and reconstituting the Iraqi National Oil Co. — are no longer being considered as a package with the oil law.

“Everything is subject to discussion; there is no doubt about that,” Hasani said when asked if the version the Council of Ministers gives to Parliament could be altered in the democratic process.

Read the entire article: Click Here (free registration required).

Japan’s ambassador to Iraq has met with a key Parliamentarian on cooperation in oil and other sectors, Voices of Iraq reports.

China’s Energy Ministry is expected in Iraq next month to meet on developing the Ahdab oil field, Voices of Iraq reports. The field was granted to the China National Petroleum Corp. in the late 1990s as a production sharing contract but this month was renegotiated and resigned as a service contract.

The Qudas Generation Plant project will boost power generation by 200 megawatts by early 2009, according to Erich Langer of the U.S. Army Corps of Engineers.

Workers in Iraq’s Industry Ministry companies are demanding due pay after a protest in Basra, Voices of Iraq reports.

A U.S. attack on the Syrian side of the border with Iraq provoked reaction from Syria and Iran, which called it U.S. unilateral aggression in the region,Katherine Zoepf reports for The New York Times. “The United States is trying to negotiate a strategic agreement with Iraq that would allow American troops to remain in the country and carry out military operations. The pact faces strenuous opposition from neighboring countries, especially Syria and Iran, because of concerns that the United States might use Iraqi territory to carry out attacks on them. … Also Sunday, the chief of the Wasit provincial council announced that he had refused to sign a memorandum of understanding with United States forces that was intended to formalize Wasit’s transfer to the control of Iraq’s own security forces. Wasit, a province that borders Iran, was due this week to become the 13th of Iraq’s 18 provinces to be handed over to full Iraqi control. The council chief, Muhammad Hassan Jasem, said he had rejected the memorandum because its first article gave the United States permission to continue military operations in Wasit.”

The Pentagon’s contractor office claims KBR – the former Halliburton subsidiary – produced such poor work on the taxpayer’s dime that U.S. personnel were frequently shocked, among other allegations, James Risen reports for The New York Times. “The Defense Contract Management Agency, the Pentagon agency in charge of supervising contractors in Iraq, determined in August that KBR, the Houston-based company that provides virtually all basic services for the American military in both Iraq and Afghanistan, has been guilty of “serious contractual noncompliance” in Iraq, the officials said. … KBR, formerly a subsidiary of Halliburton, has had a virtual monopoly on military services contracts in Iraq since the 2003 invasion, garnering more than $24 billion from its business in the war zone. Questions about the quality of KBR’s electrical work on American bases in Iraq have plagued the company throughout 2008, leading to investigations and hearings by Congress as well as an inquiry by the Pentagon’s inspector general. Internal Pentagon documents obtained by The New York Times suggest that the electrical problems may be more widespread than had been believed. A chart compiled by Army officials and not previously made public shows that more American personnel have been electrocuted in Iraq than the Bush administration has acknowledged.”

A $100 million project to provide a livable sewer system to embattled Fallujah failed because of poor U.S. contracting and insecurity. (It also serves as necessary context when Iraq’s government is criticized for not spending more of its money on reconstruction projects.) Julian E. Barnes reports for the Los Angeles Times: “Sewage continues to run in the streets, and the Special Inspector General for Iraq Reconstruction found that the system may never be properly connected to individual homes, lacks the necessary fuel to operate and is unlikely to ever cover the full city. … Auditors found that in addition to the security problems it faced, the project was derailed after it was twice redesigned, costs skyrocketed and the U.S. government was paralyzed by “indecision” about what to do.

Once scheduled for completion in January 2006, the project, which had a budget of $32.5-million, now is supposed to be finished in April, while costs have shot up to $98 million.

It was originally to cover all 24,400 dwellings in Fallouja, but will serve only 9,300 houses, about 38% of the city, at a cost of more than $10,000 a home. But despite all the money allocated, no funds have been set aside to connect the homes to the sewer system. … The initial contractor, FluorAmec of Greenville, S.C., was removed from the project after a year. That company was replaced with a string of local contractors.

Flynn said it was amazing that as much work on the system got done — thanks, he said, largely to the Army Corps of Engineers.

But he added that the project is in danger. The sewer system needs between 4,800 and 6,000 gallons of fuel a day to run, but fuel is in short supply. If the system, if it becomes operational, were to shut down, sewage would back up into homes within a day.”

Days after meeting with Iranian leaders, the head of Iraq’s Kurdistan region is en route to Washington, D.C. Massoud Barzani, president of the KRG, is leading a delegation to Washington to meet with President Bush and others, Voices of Iraq reports. At the top of the agenda is surely the stalled status of forces agreement with the United States. Last week his nephew and the prime minster of the KRG, Nechirvan Barzani, told Deborah Haynes of The Times of London a year’s end deadline for the agreement will likely be missed but U.S. troops will remain in Iraq at some level for at least the next 12 years.

The magic of cinema fades, Ahmad al-Sa’dawi writes for Niqash. In forgotten days of peace cinema-going was long a favoured Iraqi pastime. Iraqis young and old relished a trip to the cinema and the industry flourished, gaining regional fame. Today, however, the tradition is in danger of fading away completely.

Iraqis are threatened not just by bullets and bombs, but by environmental catastrophe, Aseel Kami reports for Reuters. “Long after the shooting and bombing stops, Iraqis will still be dying from the war.

Destroyed factories have become untended hazardous waste sites, leaking poison into the water and the soil. Forests in the north and palm groves in the south have been obliterated to remove the enemy’s hiding places.

Rivers are salted, water is contaminated with sewage, and land is strewn with mines, unexploded bombs, chemical waste, rubble and trash.

‘When we talk about it, people may think we are overreacting. But in fact the environmental catastrophe that we inherited in Iraq is even worse than it sounds,’ Iraqi Environment Minister Nermeen Othman said in an interview.

‘War destroys countries’ environments, not just their people. War and its effects have led to changes in the social, economic and environmental fabric,’ she said. ‘It will take centuries to restore the natural environment of Iraq.’”

Fishing in Iraq, once a prominent lifeline, now entails evading Iranian and Kuwaiti harassment for the few fish stocks remaining, Raheem Salman reports for the Los Angeles Times. “Some days, fisherman Aoun Saleh loves life on the seas: the friendships, the jokes, the singing, especially when they have a big catch. But some days he rues the day he first walked onto the docks.

Like the time, he says, the Kuwaiti sailors stopped his boat in midwinter and forced the entire crew to swim in the cold waters. Or when the Iranian coast guard held him and other fishermen captive, forcing them to cook and clean for them. More recently, he said, Iranian sailors stopped his boat in Iraqi waters, stole the fish and threatened to take the Iraqis to Iran.”

Iraq in the Time of Cholera: With all the tragedies that the occupation brought to Iraq, the last thing it needs now is an epidemic, the cholera which is spreading in big numbers. , writes Sabah Ali.
–

Iraqi oil exports slide since May but turnaround expected

Published
by
Iraq Oil Report
on October 24, 2008
in Uncategorized
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Plus:
*Turkey state oil firm holds Iraq oil deal talks in Japan
*Samarra power station gets fast-track
*Emir of Anbar’s Dulaim tribe talks elections
*West Point report: Iran more successful in political infiltration than militias
*Babylon security now in Iraq’s hands
*Inside the mind of the PKK
*Christians, minorities fear in Iraq
*That’s Not Tea!

Iraqi oil exports have declined four months in a row, according to data released by the nation’s Oil Ministry, which is optimistic it can reverse the trend, Ben Lando reports for United Press International.

Meanwhile OPEC, of which Iraq is a founding member, is cutting production as oil prices tank.

Post-2003 oil exports surpassed the 2 million-barrel-per-day milestone in May, but the taps have slowed since, with about 1.64 million bpd last month. That’s a drop from 1.75 million bpd in August, 1.9 million bpd in July and 1.94 million bpd in June when oil officials predicted 2.8 million bpd by year’s end.

Officials are blaming weather, regular repairs, power outages and other technical issues, as well as attacks, which are more infrequent now than at any time since the U.S.-led invasion.

Falah al-Amri, the head of Iraq’s State Oil Marketing Organization, said October exports are averaging between 1.75 million and 1.8 million bpd, Iraq’s Alsumaria TV reports. Read the entire story here. (free registration required)

Turkey’s state-owned oil company wants to land an agreement for an Iraq oil consortium by year end. It’s meeting with Japex, Inpex and Mitsubishi, and government officialsthe BBC reports, as part of this effort. Iraq’s government has explicitly stated recently that collaboration by the oil companies vying for a deal in Iraq is preferred to single company bids.

Iraqi Electricity Minister Kareem Waheed gave instructions on Friday to accelerate the first stage of the diesel-powered station in the city of Samarra, a ministry spokesman said, Voices of Iraq reports.

Sheikh Ali Hatem al-Suleiman is emir of the Dulaim tribe and leader of the Iraq National Salvation Front, the political front of Anbar province’s awakening movement. Niqash’s Nirmeen Hamid met with al-Suleiman and asked him about his bloc’s preparations for the elections, fears of electoral fraud and the integration of awakening soldiers into the government army.

An MP from the Fadhila party on Friday attributed the resignation of the party’s lawmaker Seham Kazem for security and social reasons,Voices of Iraq reports. “Kazem resigned from the parliament for security and social reasons after the killing of her husband and a number of her relatives so she had to resign to devote herself to her children,” Mukhles Blasem told Aswat al-Iraq.

Iranian Strategy in Iraq: Politics and “Other Means,” a new report written by Joseph Felter and Brian Fishman for the Combating Terrorism Center at West Point.

This report, utilizing unclassified reports from the interrogation of Shia fighters in Iraq, addresses Iran’s dual-strategy of providing military aid to Iraqi militia groups while simultaneously giving political support to Iraqi political parties. Although the report details the scope and nature of Iranian support to Iraqi militias, it concludes that Iran’s political efforts are the core of its effort to project influence in Iraq. The report also concludes that Iran has recently worked to reduce the level of violence in Iraq while concentrating on a political campaign to shape the SFA and SOFA agreements to its strategic ends. The report does not address Iran’s economic and social influence in Iraq.

The report can be read in full here.

The U.S. military formally handed control over Babil province to Iraqi security forces during a ceremony Thursday morning in the once-violent central state, Corinne Reilly reports for McClatchy Newspapers. The Iraqi army and local police are now responsible for security in 12 of Iraq’s 18 provinces, though U.S. forces continue to assist across the country.

A statement by the U.S. Embassy here called Thursday’s handover “a positive step on the path to Iraq’s self-reliance.” Babil is a mainly Shiite Muslim province, though it includes Sunni Muslim areas that are part of the region once known to U.S. forces as Iraq’s “triangle of death.” Babil is named for the ruins of ancient Babylon, which are still there today.

The PKK Party Congress sets long-term strategy based on threat perceptions, Nihat Ali Özcan and Saban Kardas write in Terrorism Monitor. To counter the political and military threats from inside and outside Turkey, the PKK has initiated proactive policies in line with the conclusions of the tenth congress. If it fails to mobilize ethnic sentiments among Kurdish speaking constituents, the DTP might have to concede electoral success in the 2009 municipal elections to the AKP, which has been making political inroads in southeast Turkey. Recent developments highlight the PKK’s determination to raise tensions in Turkey to reverse this process.

UPI reports 42 PKK members were killed in recent fighting.

More than half of the Christians living in Mosul have fled the northern Iraqi city in the past two weeks, some going to Syria, after receiving death threats, the United Nations refugee agency said on Friday, Laura MacInnis reports for Reuters. “It is still not clear who is behind the intimidation that caused them to flee,” Ron Redmond, spokesman for the U.N. High Commissioner for Refugees (UNHCR), told a news briefing.

The solidifying of power in the hands of big parliamentary blocs is raising the fears of Iraq’s Christian, Mandaean and Yazidi minorities, concerned by the growing legislative and security supremacy of these groups, Muhammed Abdullah writes for Niqash. These fears have risen to the fore following the presidential ratification of the provincial council election law on October 8, which omitted a draft clause (article 50) guaranteeing a number of seats for Iraq’s minorities. Minority groups have reacted with concern to this development, saying it sets a dangerous precedent of minority exclusion. They have called for an amendment to be introduced into the bill before elections are held guaranteeing minority rights.

It is unlikely that tea in Iraq has ever been employed for so many uses.

Children in Kirkuk use it to mark out football pitches; other Iraqis burn it as fuel for baking bread; and some even mix it with mud to build animal shelters.

The one thing that Iraqis do not want to do is drink the stuff, Diaa al-Khalidi writes for Niqash.

“That black material the government started to import in 2003 is absolutely not tea and cannot be compared to tea,” exclaimed Abu Murad, a tea-distributor from near Kirkuk. Abu Murad said that he obliges people to take some of the government-supplied tea when they collect other rations in order to avoid it crowding his store. “Let them throw it wherever they want,” he said. Similarly, the Ministry of Trade forces suppliers to accept tea along with other rations. “If we refuse to take it, they don’t give us the other items,” said Abu Murad.
–

Iraq oil not part of OPEC cuts

Published
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Iraq Oil Report
on October 23, 2008
in Uncategorized
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Iraq not bound by quota; struggling to reverse decline
Plus:
*Walid Khadduri on the return of Big Oil to Iraq
*Iraq presidency council gives oil smuggling law OK
*SOFA Update: English text and analysis
*Labor Minister target of suicide bomb
*Iraqis suffer for lack of basic services
*The Mahdi Army bides its time
*Much more

As OPEC decides to catch falling oil prices by cutting supply, Iraq Oil Minister Hussain al-Shahristani says anything below $80 per barrel will be a hit on next year’s budget, George Jahn reports for The Associated Press.

Iraq is not bound by OPEC quotas because of ongoing wars and sanctions that hampered development of the oil sector. Its top priority now, however, is stopping the month on month decline in production and exports, which began this fall after record post-2003 output. Reuters reports Iraq expects October data to show a turnaround that will continue through November.

The return of international oil companies to Iraq continues to instigate an old debate in this country. Politicians had objected to the presence of foreign firms and the rights they demand through the numerous accusations they had directed at previous governments on this matter, Veteran Iraq reporter Walid Khadduri writes in Al-Hayat. With time, the issue became worse and more complicated, subjecting the country’s entire oil policy to accusations which have obstructed the development of this sector in comparison to what neighboring nations have accomplished. Although the issue is still limited to general principles, new developments can be cited, including the role of oil in the invasion of Iraq in 2003, the possibility of adopting an independent oil policy that takes into consideration the interests of Iraq while it remains under occupation, and the issue of transparency during negotiations at a time when corruption prevails on the national level.

Iraq’s Presidency Council OK’d a law aimed at oil and petrol smugglers, The Associated Press reports. Little about this has been released, perhaps overshadowed by SOFA disputes. It’s likely the same law reported by UPI’s Ben Lando in April as having received a first reading in Parliament.

A bi-lateral deal to keep U.S. forces in Iraq has hit some snags after Iraqi public and political opposition surfaced. The details of it, currently, are not known and certainly evolving, but the American Friends Service Committee translated the latest Status Of Forces Agreement, which can be found here.

The SOFA would replace the existing U.N. resolution allowing U.S. occupation of Iraq, which expires Dec. 31. It has been given one-year extensions the past few years and Alissa Rubin and Katherine Zoepf report for The New York Times another extension has been backed by U.N. Security Council member Russia. The article has a good breakdown of opposition and proponents of the SOFA.

UK-based Iraq political analyst Munir Chalabi has an analysis on the popular resistance site ZNet.

For word on the Iraqi street, check out the Iraq Press Roundup, a recap of Iraqi news, by UPI’s Alaa Majeed.

Reidar Visser in historiae.org has a great analysis as well.

Iraq’s Labor Minister was targeted in a suicide bombing that killed 11 people, Katherine Zoepf reports for The New York Times.

Turkey’s President Abdullah Gul said the country is doing “a great deal” in Iraq and defends his country’s treatment of ethnic Kurds there in an interview with visiting journalists, bloggers and think-tankers and recorded by United Press International’s Ben Lando.

In al-Mashtal area, east of Baghdad, women are obliged to walk long distances and wait several hours at water distribution plants every day in order to fill plastic gallons with drinking water, Hayder Najm writes for Niqash. With an ongoing shortage of water in Baghdad, these women are desperate for clean water and this is their only option.

A new survey of Iraqis finds security, vital services and unemployment far and away the most important issues citizens face. Conducted by the Iraq Center for Research and Strategic Studies, which can be viewed here, Iraqis polled panned the political parties; the level of water, electricity and other services; are mixed on the SOFA; support a strong central government; and give nearly the same mixed reviews on Iraq establishing a strategic relationship with either the United States or Iran.

The Iraqi Health Ministry said at least 17 percent of its national water supply and some 30 percent in Baghdad is not fit for human consumption, UPI reports.

What the good news from Iraq really means: an analysis of key services like water, electricity and schools and how it relates to security, by Michael Schwartz in TomDispatch. (Schwartz’s new book is War Without End: The Iraq War in Context)

This glimpse of the degraded conditions at one Baghdad public school … is symptomatic of the larger reality in Iraq. In a sense, the (often exaggerated) decline in violence in that country has allowed foreign reporters to move around enough to report on the real conditions facing Iraqis, and so should have provided U.S. readers with a far fuller picture of the devastation George Bush’s war wrought.

In reality, though, since there are far fewer foreign reporters moving around a quieter Iraq, far less news is coming out of that wrecked land. The major newspapers and networks have drastically reduced their staffs there and what’s left is often little more than a collection of pronouncements from the U.S. military, or Iraqi and American political leaders in Baghdad and Washington, framing the American public’s image of the situation there.

In addition, the devastation that is now Iraq is not of a kind that can always be easily explained in a short report, nor for that matter is it any longer easily repaired. In many cities, an American reliance on artillery and air power during the worst days of fighting helped devastate the Iraqi infrastructure. Political and economic changes imposed by the American occupation did damage of another kind, often depriving Iraqis not just of their livelihoods but of the very tools they would now need to launch a major reconstruction effort in their own country. …

On a daily basis, this cauldron of misery renews powerful feelings of discontent, which explains why American military leaders regularly insist that the country’s current relative quiescence is, at best, “fragile.” They believe only the most minimal reductions in U.S. forces in Iraq (still hovering at close to 150,000 troops) are advisable.

Even if Washington prefers to ignore Iraqi realities, military officials working close to the ground know that the country’s state of disrepair, and an inability to deal with it in any reasonably prompt way, leaves a population in steaming discontent. At any moment, this could explode in further sectarian violence or yet another violent effort to expel the U.S. forces from the country.

Mahdi Army Bides Its Time, by David Enders in The Progressive.

Ali approaches me at a Friday prayer service in Sadr City. He wants to talk. A U.S. missile, he says, hit his house in May and killed his two sisters and badly wounded his mother. He is a member of the Mahdi militia and can no longer return home for fear the Iraqi army will arrest him. He is careful not to be seen talking to me, since unauthorized contact between us could get him in serious trouble with the militia. We quickly arrange to meet a few hours later at my hotel, and then he shakes my hand and walks away, disappearing again in the crowd of thousands of worshippers.

Like the bulk of the Mahdi militia, Ali has gone to ground. He abides by the cease-fire that Muqtada al-Sadr has ordered, but he chafes at the presence of Iraqi troops, who patrol Sadr City.

“We’ve had three Saddams. The first is gone. The second wears the clothes of a cleric. The third wears sunglasses,” Ali says, referring to Abdul Aziz al-Hakim, the leader of the Supreme Islamic Iraqi Council (SIIC), a rival Shiite political party, and Nouri al-Maliki, the Iraqi prime minister.

–

Iraq oil law getting pushed by longtime supporter

Published
by
Iraq Oil Report
on October 21, 2008
in Uncategorized
. 1 Comment

Plus:
*Japan, Turkey team up for Iraq oil and gas bid
*CNPC starts Ahdab work
*Oil price drop sparks budget changes
*Oil smugglers arrested
*new video–Alive in Baghdad: Two Families Survive Iraq’s Militias
*Basra port privatization begins
*The Iraq Press Roundup
*And much more

A lawmaker from the parliament’s commission of power on Tuesday said he would collect signatures from MPs to accelerate presenting oil and gas law in the Council of Representatives, Voices of Iraq reports.

Mitsubishi Corp. and Japan Petroleum Exploration Co. will discuss with Turkey’s state-controlled company next week on joint exploration and production in Iraq, the holder of the world’s third-largest oil reserves, Bloomberg reports.

A Chinese oil delegation on Sunday arrived in Wassit province ahead of preparations for development work on al-Ahdab oilfield, VOI reports.

Oil giants find scramble for Iraq is a game with complex rules, The Observer’s Tim Webb reports. Western firms eyeing lucrative deals fear legal difficulties.

Iraqi finance officials, taken by surprise by the sudden drop in crude prices, are drawing up contingency spending plans to trim next year’s budget by an estimated 19%, Gina Chon reports for the Wall Street Journal. The country is dependent on oil sales for some 90% of government revenue. Politicians here have been under intense pressure to show signs of economic improvement amid a generally brighter security situation. Government spending is key to that effort — to improve basic services such as electricity and water; to carry out big reconstruction projects; and to create jobs.

Policemen arrested four oil smugglers, including a man wanted by security authorities, northwest of Kirkuk on Monday, a senior security official said, VOI reports.

An authorized source from the Iraqi Ministry of Industry on Monday said that Al-Iz General Company produced a domestic solar energy unit, VOI reports.

The official spokesperson of the Iraqi Ministry of Electricity on Monday said that Kareem Waheed, the electricity minister, met the Chinese ambassador in Baghdad, and demanded that he contact the Chinese company responsible for executing Zubaidiya power station in Wassit, to commence the project, VOI reports.

Alive in Baghdad: Two Families Survive Iraq’s Militias

The sectarian conflict in Iraq was one of the main problems that has continued to limit stability and security in certain Iraqi provinces. Many people were forced to sell their house and flee to other neighborhoods or to leave Iraq entirely. In other cases they were not able to sell any of their property such as cars or furniture, and had to flee immediately.

Iraq has completed a study for a port at Umm Qasr in the southern Basra province, Hugh Tomlinson reports for MEED. Engineers from the State Company for Iraqi Ports have designed a new project to fit between Umm Qasr’s existing north and southern ports. The government is likely to pursue similar short-term lease agreements at other berths to ease concerns in Basra that the privatisation will mean relinquishing control of a national asset. However, the ministry is still close to appointing an international consultant to oversee planning for the privatisation.

US referees Iraq’s troubled Kurdish-Arab fault line, Scott Peterson reports for The Christian Science Monitor. At a flash point for violence, an Army general plays diplomat. Few issues will affect Iraq’s future more than the final relationship between the Kurds – whose autonomous Kurdistan Regional Government (KRG) in northern Iraq has its own president, ministers, militia, and flag – and the Shiite-run central government in Baghdad.

The reports keep getting more persistent: Nuri al-Maliki is apparently building ties to southern tribes at the expense of – and sometimes to loud protests from – ISCI and Badr, Reidar Visser writes on historiae.org. The latest case to receive some attention in the Iraqi press is Nasiriyya and Dhi Qar.

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

U.S. report: old Iraq southern oil pipelines could break

Published
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Iraq Oil Report
on October 15, 2008
in Uncategorized
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Plus:
*KRG denies DNO export permit rumor
*Kirkuk gas pipeline blast not affecting oil exports
*Details on the Iraq oil and gas bidding process
*Bush cuts Iraq oil grab ban from defense bill
*Alive in Baghdad: A fuel crisis?
*Top McCain official wanted Saddam off rogue list to secure oil deal
*Iraq Press Roundup
*Much, much more

Pipelines vital to Iraq’s oil industry are in such poor condition they could rupture at any time, choking off the supply of oil from the region and devastating the country’s economy, Daniel Dombey and Carola Hoyos report for the Financial Times. A previously undisclosed notification to the US Congress says the ageing underwater pipelines, which link storage facilities near Basra to offshore tanker fueling terminals, are in urgent need of back-up or repair.

The Iraqi Kurdish region denies reports that Norwegian firm DNO received the OK to begin exporting oil, prompting speculation of a broad political deal, United Press International’s Ben Lando reports. The Tuesday report pushed DNO shares up 54 percent, though the company says no permit has been granted. Export rights also hinge on political progress. “When we are ready to export, we will export,” said the Kurdistan Regional Government’s Minister of Natural Resources Ashti Hawrami. He refused to respond to the claims, giving only basic details on how the KRG does oil business. He said the way contracts work, the operator must be technically capable of entering Iraq’s export routes — in this case, tying into the northern pipeline to Turkey — and then apply for a permit.

Oil exports not affected by Kirkuk gas pipeline explosion, the cause of which is unknown, Reuters reports.

For more on the Iraq Oil Ministry’s bid round, announced Monday,International Oil Daily’s Ruba Husari breaks it down:

- Payment: cash or oil. “Remuneration under the service fee will be deferred until the incremental production comes on line for the oil fields, which is expected to be within 24 months of the effective contract date or once incremental production hits 10 percent above baseline production. Remuneration will start on first production for the gas fields.”
- “Tender protocols and data packages will be made available to the participating companies by the end of the month”
- “They will be required to pay a participation fee for each field they intend to bid on ranging between $250,000 for the two non-producing gas fields on offer and $500,000 for the giant producing fields.”
- Ministry conducts bidding workshops early next year; questions and comments through March
- Bids submitted May-June
- Rumaila and Kirkuk fields only open to companies pumping more than 500,000 barrels per day now
- West Qurna-1, Zubair, Missan, Bai Hassan open to all pre-qualified
- Smaller companies allowed to participate in consortiums with proper operators; limit of three bids per consortium
- Winners have three weeks to sign deal, which will be OK’d by council of ministers; 90 days to open Iraq office; operations directorate established in 30 days from deal
- Contract signed with North, South or Missan Oil Co’s., who will get 51 percent stake
- Income tax at 35 percent rate
- Signing bonus: $10M and fee per barrel above baseline production

President Bush has struck from the new defense authorization bill a section banning the U.S. from controlling Iraq’s oil, The New York Times’ Charlie Savage reports.

Alive in Baghdad: Is there a fuel crisis?

The Oil Department in province of Anbar had disbursed cards for the petroleum products distribution to families in ready for winter, as precautionary plan to avoid the scarcity of petroleum products when demands increase at low temperatures during winter, Iraq Directory reports.

John McCain’s presidential transition chief worked with two pro-Saddam Hussein lobbyists to ease sanctions and attempted to buy and sell Iraqi oil, Murray Wass writes in Alternet.org. William Timmons and the two lobbyists — who have been convicted or pleaded guilty to federal charges – carried out their effort in 1992, and could have earned $45 million if it were blocked as Saddam was considered an enemy of the United States.

The chief strategist and co-founder of a pro-Iraq war organization scheduled to endorse Republican Bob Schaffer in his run for the U.S. Senate on Wednesday was paid to promote investment in the Kurdistan region of Iraq at the same time Schaffer had a hand in securing an oil contract in Kurdistan—despite warnings the deal could prolong the war, Ernest Luning reports for The Colorado Independent.

Gulf Keystone Petroleum Ltd. said it continues to make rapid progress on both blocks in the Kurdistan region of Iraq, and added that preparations for spudding the first well in the Shaikan block are advanced, Thomson Financial reports. A drilling rig is expected to arrive in the country before the end of this year with a target date for the commencement of drilling in early 2009, the company said.

Security, Society & Politics

US more cautious in Iraq appraisals, Howard LaFranchi reports for The Christian Science Monitor. Last week, both Gen. David Petraeus – the US commander in Iraq during the “surge” of US troops who is about to assume the top spot in the US Central Command – and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, said that they see recent progress in Iraq as “fragile” and “reversible.” And Gen. Ray Odierno, the US commander in Iraq who replaced General Petraeus, is speaking publicly of his concern that power struggles exacerbated by the upcoming elections could undo recent political gains.

Haj Ali’s family had been home for less than a month when a makeshift bomb blew off part of his garage. The message was clear: Go back to wherever you came from, Corinee Reilly reports for McClatchy Newspapers. Iraqis are being attacked and killed for returning to their homes

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

Iraq’s Economy

A steep drop in the price of oil may force Iraq to scale back its $79 billion budget for 2009, the Finance Ministry said Wednesday, Sinan Salaheddin reports for The Associated Press. Also, a U.S. projection for a cumulative $79 billion budget surplus this year based largely on oil revenues is now unlikely. The surplus projection by congressional auditors brought angry demands from Americans for Iraq to shoulder more of the financial burden of reconstruction.

Engineering teams from the State Company for Iraqi Ports on Wednesday completed all studies concerning the construction of a new port in Basra’s Umm Qasr, a spokesperson for the Iraqi Ministry of Transport said. “The new port will include four quays, four stores and an administration building,” Jawad al-Kharsan told Aswat al-Iraq. “The port will be located between the northern and southern ports, and will provide a new opportunity for investors in a manner that will increase operational energy efficiency in Iraqi ports,” Kharsan noted.

British forces in southern Iraq view the handover of Basra International Airport as a key objective to economic development in the region, officials say, UPI reports. British military officials said expanding the dual-use facilities at the 20-year-old airport is vital to restoring the economy in the port region and the rest of the country, the British Ministry of Defense said Wednesday.
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Iraq begins oil and gas field bidding process for international oil firms

Published
by
Iraq Oil Report
on October 13, 2008
in Uncategorized
. 1 Comment

Plus:
*Turkish special envoy in Baghdad for PKK talks with Barzani
*Iraq aims at 2008 provincial elections
*Finance Minister blasts budget surplus critique
*Iraq Press Roundup
*Much more

Iraq’s Oil Ministry announced most of the details 35 of the world’s largest oil companies were waiting for as the country begins to open the third-largest proven oil reserves in the world to foreign investors, Ben Lando reports for United Press International (registration free but required).

Oil Minister Hussain al-Shahristani led a delegation to London to meet with pre-selected oil companies approved to bid on nearly 38 percent of Iraq’s 115 billion barrels of oil. Two gas fields are also up for grabs.

Some critics, however, said the ministry should have delivered more details, as promised, both to be commercially viable and to follow through on pledges of transparency.

Others raised concerns the first return of international oil companies since nationalization three decades ago will lead to the control Big Oil had on Iraq from discovery of oil there in the 1920s.

The oil minister of Iraq’s Kurdish region also panned the deals.

Shahristani is moving forward nonetheless in his goal of increasing Iraq production to 4.5 million barrels per day within five years and 6 million bpd within 10 years. Iraq produced 2.29 million bpd last month, according to the global energy firm Platts, a drop from the 2.5 million bpd post-war peak during the summer.

The contract model itself was not made public as the ministry had previously said, but it appears to be a hybrid between the more politically safe service contracts and an industry-preferred deal that carries some risk and reward.

The company or consortium of companies will own a 49-percent stake in a field’s 20-year development program, with the respective state oil firm carrying the remaining stake. The ministry aims to finalize deals by the end of June 2009. Until then more details will be released, including the requirement of Iraqi participation and control of the operation.

Read the entire story, Click Here.

U.S. public radio show Living on Earth has a two part interview on Iraq’s oil sector and developments.

Part 1: (mp3 file) geopolitical analyst Peter Ziehan of the analysts Stratfor.

Part 2: former Oil Minister Issam Chalabi.

The Turkish Special Envoy to Iraq is to be in Baghdad Tuesday to hold talks with Nechirvan Barzani, prime minister of the Kurdistan Regional Government regarding the PKK issue, among other issues and talks regarding Turkey’s relationship with Iraq and the KRG, Iraq Oil Report can confirm.

Ankara has been holding secret talks with the Iraqi Kurdish administration on ways to cooperate against the outlawed Kurdistan Workers’ Party (PKK), which launches attacks on Turkey from its bases in northern Iraq, Today’s Zaman reports.Safin Dizayee, who is in charge of external relations for Iraqi Kurdish leader Massoud Barzani’s Kurdistan Democratic Party (KDP), met with Turkish officials at the Foreign Ministry on Oct. 3, when a PKK attack on a border outpost killed 17 soldiers.

The Kurdish Globe reports negotiations are to begin on record soon.

Turkish officials are not confirming reports Nechirvan Barzani will be coming to Ankara for discussions, but say there’s nothing preventing such a trip.

Iraq will do all it can to hold a provincial election by the end of this year instead of leaving the long-awaited vote until early 2009, Prime Minister Nuri al-Maliki’s office said Monday, Waleed Ibrahim reports for Reuters. The election was due in October, but after delays in passing the law authorizing it, the poll had been expected to take place by the end of January.

The Iraqi finance minister said reports of a billion-dollar budget surplus amid massive U.S. spending on the war effort are misleading, UPI reports. Speaking with the Council on Foreign Relations, Iraqi Finance Minister Bayan Jabr Solagh said August reports of a budget surplus of as much as $79 billion through 2008 fail to take into account the true nature of the Iraqi financial system.

Foreign reporters are leaving Iraq, Ernesto Londoño and Amit R. Paley report for The Washington Post in an excellent depiction of the status of foreign coverage of the Iraq war.

Read what Iraqis read: the Iraq Press Roundup by UPI’s Hiba Dawood.

Scots push Basra as a land of opportunity, John Penman reports for The Times.

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