Iraq Oil Report

Iraqi Oil Minister Hussain Al-Shahristani said Tuesday the country will likely drop oil service contracts with foreign companies if they don’t have their proposals finalized by a June deadline and will move forward with the work on its own, Dow Jones Newswires reports. “June is already a bit late… We may drop them if they aren’t signed soon ( after June),” Shahristani told journalists here after an industry conference. He didn’t specify whether he was referring to all contracts or those targeting specific fields that individual companies are vying for.

Kuwait has agreed to review the question of reducing Iraq’s compensation payments imposed after the 1991 Gulf War, Iraqi government spokesman Ali al-Dabbagh said on Tuesday, Ulf Laessing and Rania El Gamal report for Reuters. But Kuwaiti Foreign Minister Sheikh Mohammed Al-Salem Al-Sabah said any change in the compensation regime must be decided by the U.N. Security Council in New York.

Even as American and Iraqi troops are fighting to establish control of the Sadr City section of this capital, the Iraqi government’s program to restore basic services like electricity, sewage and trash collection is lagging, jeopardizing the effort to win over the area’s wary residents, Michael R. Gordon reports for The New York Times.

Iraqi culture under fire, CNN’s Ralitsa Vassileva speaks to journalist and author Hadani Ditmars about the war in Iraq and Iraqi culture, especially women’s rights in Iraq and the Baghdad Symphony.

Lawmakers told State and Defense department leaders that their lack of farsighted interagency coordination is blurring jurisdictions in countries like Iraq and Afghanistan. But Secretary of State Condoleezza Rice, Defense Secretary Robert M. Gates and Joints Chiefs Staff Chairman Adm. Michael G. Mullen defended their approach of letting Defense take the lead on foreign military training programs that have traditionally been funded by State, Rafael Enrique Valero reports for Government Executive.

The surgeon generals of the Army, Navy and Air Force told senators the optimal tour in Afghanistan and Iraq to reduce combat stress should be six to nine months with 18 months at home, far shorter than the cut in tours from 15 to 12 months ordered by President Bush last week, Bob Brewin reports for Government Executive.

The U.S. Army maintains its policy of mandatory tour extensions despite pledges from the Defense Department last year to stop the practice, records show, UPI reports.

The Foreign Ministers of Iraq (a Kurd), Turkey and the U.S. Secretary of State met for half an hour in the sidelines of a conference of Iraq’s neighbors held in Kuwait, PUKMedia reports.

In December 2006, in an effort to build a national consensus on a “new way forward in Iraq,” the Iraq Study Group painted itself as a portrait of bipartisan chumminess, with all political hackery checked at the door, Daniel Libit reports for The Politico. Sixteen months later, seven of the 10 ISG members are backing presidential candidates with radically different views about how to proceed in Iraq.

In the Iraqi government’s fight to subdue the Shiite militia of Moktada al-Sadr in the southern city of Basra, perhaps nothing reveals the complexities of the Iraq conflict more starkly than this: Iran and the United States find themselves on the same side, James Glanz and Alissa J. Rubin report for the International Herald Tribune.

The Iraq Press Roundup by UPI’s Hiba Dawood.

The Association of Muslims Scholars’ Al Basaer Newspaper said Gen. Kevin Bergner, special assistant to the president and senior director for Iraq, admitted in a briefing March 26 in Baghdad that Iran had a major influence in Basra and northeast cities of Iraq, and called upon Iran to intervene in order to end the violence among the Shiite Mahdi Army militia, Iraqi forces and other Shiite militias related to the Shiite Dawa and Supreme Iraqi Islamic Council parties.

The paper said five years after the occupation of Iraq and the loss of thousands of soldiers and millions of dollars, the United States is asking for the help of a neighboring country that is, according to the White House, an enemy or at least a threat to U.S. interests.

Errant Iraqi police and criminal elements within their ranks are in the cross-hairs of U.S. forces in a move to protect improved security and sectarian reconciliation in Muqdadiya and its surrounding villages, Richard Tomkins reports for UPI. At the same time, closer scrutiny is being paid to the Sons of Iraq neighborhood watch volunteer groups to increase discipline and ensure Iraqi government rules are followed to the letter.

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The fact that Turkey’s national oil company was not among 35 companies approved over the weekend by Iraq’s Oil Ministry to bid for soon-to-be announced tenders to develop oil and gas fields led to disappointment is Ankara, particularly at a time when Turkey planned to strengthen relations with its neighbor through further energy cooperation, Today’s Zaman reports.

The minister of energy has stated “we will not stop inquiring,” the Sabah newspaper reports.

Click Here for more on the announcement.

In the past few years, Iraq’s oil and gas sector has been featured in numerous conferences aimed at linking top government officials with the global energy industry, all of which have taken place outside Iraq.

In October, the Iraqi American Chamber of Commerce and Industry and the Ministry of Oil will bring the meeting home — a first event at the new convention center at the rebuilt Baghdad International Airport.

IACCI Chief Executive Officer Raad Ommar told United Press International’s Ben Lando the event will bring the biggest names in Iraq oil for the summit.

Iraqi troops cordoned off the Basra office of Shi’ite cleric Moqtada al-Sadr’s followers on Friday and prevented them from holding prayers in a move that seems sure to inflame tensions, Reuters reports.

A company of Iraqi government troops in Sadr City retreated when they came under attack from Shiite militiamen who used the cover of a sandstorm, police said Friday, Slobodan Lekic reports for The Associated Press.

Since the very first conflicts, until it was made illegal under international law, rape was a part of warfare. But a series of recent allegations against Private Military Contractors suggests that it is not just a historical phenomenon, David Isenberg writes for UPI. Earlier this month the Senate Committee on Foreign Relations held a hearing on the issue. The title, “Closing legal Loopholes: Prosecuting Sexual Assaults and Other Violent Crimes Committed Overseas by American Civilians in a Combat Environment,” said it all.

Consider Dawn Leamon’s story, which is chronicled in detail in the April 3 issue of The Nation. She says that while working for the U.S. contractor Kellogg Brown Root she was raped in Iraq earlier this year by a U.S. soldier and a KBR colleague.

Villagers in the north continue to support rebels fighting Turkey and Iran, even though many have been displaced by recent fighting, Yahya Ahmed reports for the Institute for War & Peace Reporting.

Lack of opportunities and growing conservatism prompts many to contemplate emigration, IWPR reports.

U.S. efforts in Iraq were hobbled by a set of faulty assumptions, a flawed planning effort, and a continuing inability to create security conditions in Iraq that could have fostered meaningful advances in stabilization, reconstruction, and governance, according to a new study by the Institute for National Strategic Studies at National Defense University, Choosing War: The Decision to Invade Iraq and Its Aftermath.

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Below are the companies from the Ministry announcement, listed alphabetically. Iraq Oil Report will have more today on this.

1. Anadarko Iraq Company
USA
2. BG International
UK
3. BHP Billiton Petroleum Pty Ltd.
Australia
4. B.P
UK
5. Chevron Iraq Ltd.
USA
6. CNOOC China Ltd
China
7. CNPC
China
8. Conoco Phillips
USA
9. Edison International SPA
Italy
10. ENI
Italy
11. Exxonmobil
USA
12. Hess Corporation
USA
13. Inpex Holding
Japan
14. Japex
Japan
15. JSC Gazprom Neft
Russia
16. Kogas
Korea
17. Lukoil
Russia
18. Maersk
Denmark
19. Marthon International Petroleum Limited
USA
20. Mitsubishi Corporation
Japan
21. Nexen Inc. (International oil & Gas nexen Inc.)
Canada
22. Nippon oil
Japan
23. Occidental Petroleum
USA
24. ONGC
India
25. Petronas
Malaysia
26. Pertamina
Indonesia
27. Premier
UK
28. Repsol
Spain
29. Shell Iraq
Netherlands
30. Sinochem
China
31. Sinopic Group
China
32. Statoil Hydro
Norway
33. Total
France
34. Wintershall Basf Group
Germany
35. Woodside
Australia

PLUS:
*Oil and the Basra battle
*The northern pipeline protector
*Power grid still a target
*Kirkuk deadline looms large
*Baquba violence increases

Iraq oil production decreased in March, along with OPEC as a whole, as Baghdad was pressed by Washington to spend more of its revenues, United Press International’s Ben Lando reports.

Oil flow has been steady at as much as 350,000 bpd according to Iraq’s Oil Ministry. Exports from the south have been around 1.6 million bpd. The rest is consumed domestically.

During hearings this week on Capitol Hill, General David Petraeus, commander of multi-national forces in Iraq, and U.S. Ambassador to Iraq Ryan Crocker, have been scolded by members of Congress for not requiring Iraq to spend more of its funds.

All of Iraq’s oil sales are collected in an account of the Central Bank of Iraq at the Federal Reserve Bank of New York, per U.N. mandate to prevent theft and misuse after Saddam Hussein’s toppling.

The money is then transferred from the CBI’s account to the Iraq Finance Ministry to be disbursed as part of the budgetary process. Iraq, however, not only lacks the institutional capacity to spend the money, but is hampered by politics, fears and reality of corruption, and violence and spends only a fraction of its capital budget.

Members of Congress have suggested legislation requiring the funds be spent or U.S. expenses incurred since the invasion to be repaid by Iraq.

Iraq’s budget for reconstruction both this year and last year is larger than the U.S. budget for Iraq reconstruction.

More by The Associated Press’ Anne Flaherty.

The recent fight in Basra between Iraqi forces and Shiite militiamen was about more than a government bid to reassert itself in a city where Moqtada al-Sadr’s Mahdi Army was digging in. It was also about oil – and smuggling. Before the assault began on March 23, the Iraqi government drew up a list of about 200 suspected oil smugglers it hoped to round up – including the brother of the governor of Basra Province and, according to Iraqi Oil Minister Hussein al-Shahristani, several leaders linked to Mr. Sadr’s militia, Sam Dagher writes in this excellent piece for The Christian Science Monitor.

Excerpts:

“We have cleansed large swaths on both sides of Shatt al-Arab that were being used to smuggle oil products and other materials,” says Mr. Shahristani, who spoke during an interview at the Oil Ministry in Baghdad on Monday, describing the government achievements in Basra so far.

“Many of the gangs are colluding with local officials, powerful parties, or militias; it’s a web of interrelations,” he says. …

To be sure, many question the government’s power and will to stop oil theft and smuggling since the botched operation in Basra. The government would also have to convince average Iraqis that its crackdown on smuggling is being done for their benefit – and that of the economy as a whole – and not to serve the agenda of ruling Shiite political parties.

Shahristani says responsibilities for protecting oil facilities and guarding against smuggling and theft in Basra shifted at the start of the year from the Oil Ministry’s Oil Protection Force (OPF), which has been abolished, to a newly created unit of the Interior Ministry known as the Oil Police. The Interior Ministry is widely viewed as being dominated by Mr. Maliki’s Shiite allies.

The OPF in Basra was under the sway of the Fadhila Party of Gov. Muhammad Mosabeh al-Waeli. Shahristani says tribesmen loyal to the government are being actively recruited now into the Oil Police. …

The word in Basra is that Governor Waeli is under some sort of house arrest and that his brother Ismail has fled to Kuwait. The head of the local provincial council, Muhammad Sadoun al-Abadi, who belongs to a branch of Maliki’s Dawa Party, is now running day-to-day affairs in close coordination with Maliki, according to a Basra-based scholar familiar with the situation. …

The intra-Shiite struggle for power and resources in the south is nothing new and has been under way since the fall of Saddam Hussein in 2003. But the battle in Basra has now drawn a clear line between those Shiites in the ruling coalition – including Maliki and the powerful cleric Abdul-Aziz al-Hakim – and two main rivals that split from it last year: Sadr’s movement and the Fadhila Party.

Iraq’s electricity sector continues to be a target as violence in Baghdad takes aim at power plants, UPI reports. A power plant in Sadr City, the poor neighborhood and Shiite stronghold of Moqtada Sadr, was reportedly attacked.

Sheikh Abu Saif al-Jubburi is a man to be reckoned with in Iraq’s northern oil hub, where the tribal leader and his 800 men protect strategic pipelines and US troops in the volatile region, Herve Bar reports for Agence France-Presse. After the US-led invasion of Iraq in 2003, Jubburi left a lucrative trade “selling potatoes” which he says earned him “up to $10,000 a day” to devote himself to guarding roads in areas where there are oil pipelines and keeping the precious crude flowing. The pistol-toting father of 18 is now the uncontested master of 885 men and 80 checkpoints on the Hawija-Kirkuk highway that runs alongside pipelines that transport Iraq’s black gold north to Turkey.

The question of who will control Iraq’s disputed oil province of Kirkuk is looming large as a UN-brokered deadline for a vote on its future approaches amid continuing ethnic and political tensions, AFP reports.

Security, Society & Politics

In Iraqi Shiite Factionalism and Iran’s Role in the Basra Fighting, Reidar Visser in The Jamestown Foundation’s Terrorism Focus also explains the internal cohesion and disputes that give better context to last week’s Basra battle and the ongoing fighting.

Visser is research fellow at the Norwegian Institute of International Affairs and editor of the Iraq-focused site Historiae.org.

The author of “Basra: The Failed Gulf State” also on Tuesday held a Q&A session on Washington Post .com

As violence rises again in Iraq, negotiations to institutionalize US economic dominance continue unabated. While the battle of Basra raged last week, a series of talks between the Bush administration and the US-backed Maliki government rolled forward. These negotiations may have at least as many implications for Iraq’s future as the violence on the ground, Maya Schenwar writes for Alternet.

The official spokesman for the Iraqi government said that the cabinet decided to allocate $100 million to Basra, $100 to Mosul, and $150 million to Baghdad, mainly Sadr City and al-Shuaala, the Voices of Iraq news agency reports.

An Iraqi military document has revealed important details of a security draft representing current talks between the government of Iraq and the US concerning an agreement between the two states, senior military officials said, Basil Adas reports for Reuters.

Iraq disapproves Blackwater contract renewal, Alsumaria TV reports.

Last month’s Winter Soldier hearings, testimony by veteran and active duty U.S. service members in the wars in Iraq and Afghanistan, received zero coverage by The New York Times. After pressure from Fairness and Accuracy In Reporting (FAIR), NYT public editor Clark Hoyt explains why.

The Transportation Ministry announced that the cost of rehabilitating and constructing transportation system is estimated to be about 50 million dollars, Alsumaria TV reports.

As violence continues in Baghdad and southern Iraq, it seems quiet on the surface in Baquba, the volatile city 40km north of Baghdad. But few believe truce between the U.S.-backed Awakening Groups and the government security forces can last, Ahmed Ali and Dahr Jamail report for Inter Press Service.

Iraq’s humanitarian crisis has worsened, and decades of conflict and deteriorating basic services are reducing people’s ability to cope with the hardships they face, a senior U.N. aid official said on Monday, Suleiman al-Khalidi reports for Reuters.

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Plus:
*Port takeover and blow up the smugglers
*Iraq oil production not up yet after Basra
*Maliki’s 7-point plan
*British Navy helping stand up Iraqi Navy
*DNO up on export deal
*Pelosi plays the blame Iraqis game

Negotiators are hammering out a new draft Iraq oil law after previous versions stalled, and as Parliament is moving forward on two new laws, one reconstituting the state oil company and another cracking down on oil and fuel smuggling, Ben Lando reports for United Press International.

“Shortly, we’ll see a new draft which there is more common ground,” said Abdul-Hadi al-Hasani, deputy chair of the Iraqi Parliament’s Oil, Gas and Natural Resources Committee, which has already seen four versions of a draft oil law. The latest draft is based on “good dialogue” between the central and Kurdistan region governments, he said, and the Council of Ministers will soon approve it and send it to his committee.

A new oil law has officially been in the works for two years, and sources United Press International spoke to both echoed Hasani’s optimism as well as said a divide over the law remains too large.

The law is one piece in a four-part package of legislation aimed at modernizing Iraq’s oil sector.

Another is a law re-establishing the Iraqi National Oil Co., the state company dissolved as Saddam Hussein consolidated power over Iraq’s oil via the Oil Ministry. Hasani told UPI in a telephone interview from Baghdad that the INOC law has been passed from the Council to his committee.

“We are going to discuss it next week,” he said, calling it “one step in the right direction.”

Hasani said INOC would incorporate all state companies operating in the oil and gas sector.

The remaining legislation — a law reorganizing the role of the Ministry of Oil and a revenue-sharing law, which decides how oil sales are captured and redistributed — both remain with the Council of Ministers.

“We’ve been asking for it and we’re waiting on it,” Hasani said. “These two laws if they come in will really prepare good ground to be able to pass the hydrocarbons law, which everybody is waiting for.” …

Hasani said a new law targeting smugglers has already received a first reading. It comes after last week’s Iraqi Security Forces siege on Basra and still ongoing but smaller targeting of smuggling operations in the country’s oil capital, as well as black-market clouds that hang over Iraq’s largest oil refinery, Baiji, in the north. …

The New Sabah newspaper reports Iraqi Security Forces are “to sink all the boats that are used for smuggling and empty the public buildings and lands occupied by smugglers in no more than one month.”

The Addustour newspaper reports the Iraqi army has taken control over security and control of the Khor al-Zubair and Umm Qasr ports.

Click HERE to read the entire story.

Iraq has yet to fully restore 100,000 barrels per day (bpd) of oil output that has been shut in since a bomb attack on a pipeline last Thursday, an Iraqi oil official told Reuters. “Output in the area is lower than what it should be,” the official said. “I don’t know when it will be restored.”

Iraqi Prime Minister Nouri al-Maliki outlined a seven-point plan for Basra following operations pitting Iraqi security forces against Shiite militias, UPI reports.

The British Royal Navy have been training Iraqi marines to help protect key Iraqi oil facilities in the the Persian Gulf. Footage filmed by Britain’s Sky News show Iraqi marines performing military drills on al-Basra and Khor al-Amaya oil terminals, 14 miles from the country’s coast.

Norwegian oil producer DNO said it is confident it will win an important oil export licence in Iraq some time in 2008, CEO Helge Eide told Thomson Financial.

The status and development of DNO in Iraqi Kurdistan can be seen in this newly published report.

The visit of a Kurdish delegation either representing the Kurdistan Regional Government or the Kurdistan Democracy Party (KDP) is not imminent, Kurdish official sources reported Wednesday, according to The New Anatolian.

Military units pay an average of $3.23 a gallon for gasoline, diesel and jet fuel, using about $88 a day per service member in Iraq, Anne Flaherty reports for The Associated Press. A penny or two increase in the price of fuel can add millions of dollars to U.S. costs. The U.S. military, through its Defense Energy Support Center, buys fuel on the open market, paying from $1.99 a gallon to as much as $5.30 a gallon under contracts with private and government-owned oil companies. The center then sets a fixed rate for military units, currently $3.51 a gallon for diesel, $3.15 for gasoline, $3.04 for jet fuel and $13.61 for avgas, a high-octane fuel used mostly in unmanned aerial vehicles.

If Shiite militias controlling southern Iraq rose against U.S. forces in the event of a U.S. attack on Iran, they could have the capability to cut U.S. land supply lines to the U.S. Army currently operating in central Iraq, William S. Lind writes for UPI. If that happened, U.S. Army forces in Iraq would quickly begin to run out of supplies, especially petroleum, oils and lubricants, of which they consume a vast amount. Once they are largely immobilized by lack of fuel, and the region gets some bad weather that keeps U.S. aircraft grounded or at least blind, Iran sends two to four regular army armor and mechanized divisions across the border.

Blame the Iraqis, again – House Speaker Rep. Nancy Pelosi spouts out the continued ignorance of the “shoes untied” Democratic Party, complaining about the cost of the war on U.S. taxpayers and saying Iraqis “haven’t paid for anything,” the Talk Radio News Service reports.

Notwithstanding the fact that the power of the purse lies with Congress and Ms. Pelosi’s party is in the majority, Iraqis are actually paying more this year than the United States…well, just read UPI’s Ben Lando’s recent article explaining what Iraqi funds are going to and how members of the Democratic Party are pretty much clueless on the Iraq facts.

Security, Society & Politics

The chief of the U.N. Mission in Iraq and other representatives met with Iraqi officials to discuss recommendations for eight provincial election officials, UPI reports.

Read Iraq’s editorial pages: The Iraq Press Roundup, by UPI’s Hiba Dawood.

Iraqi Economics

World Trade Organization Working Party members, on 2 April 2008, supported Iraq’s rapid accession to the WTO and argued it would contribute to the country’s integration into the world economy. Iraq’s Trade Minister, H. E. Dr. Al-Sudani, stated that Iraq was determined to overcome the country’s difficult circumstances to move forward on the accession process and added that Iraq’s membership would represent a significant addition to the international community.

Official source at ministry of water resources said that general department of dams in the ministry has prepared a list including 13 big and small dams that would be erected during next years in the north and south of the country, al-Sabaah reports.

Technical and engineering staff in Wassit electric department started rehabilitating the damaged generators and the cables which resulted from the last attacks in the past week, al-Sabaah reports.
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