* Repairs following storms in south and northern bomb successful
Plus:
*Maliki reportedly asks British for energy help
*Parliamentarians displeased with Electricity Minister
*Iraq preps record budget for 2009
*Cholera epidemic spreads
*Reidar Visser on the Democratic Party’s Iraq plan
Iraq has resumed oil exports following a storm that shut in the southern port of Basra and the completion of repairs to the bomb-damaged northern pipeline that carries crude from the northern Kirkuk fields to the Turkish Mediterranean port of Ceyhan, Eric Watkins reports for Oil & Gas Journal.
Iraq asked Britain on Thursday for technical support in its oil industry, Prime Minister Nuri al-Maliki’s office said, Agence France-Press reports. In talks with the visiting minister of state for energy, Malcolm Wicks, the premier also sought closer bilateral economic ties, including greater British investment, a statement said.
The Unified Iraqi Coalition on Thursday demanded Electricity Minister Karim Wahied to resign after his failure in running the ministry, a lawmaker from the UIC said, Voices of Iraq reports. “The UIC demanded the electricity ministry to resign during a meeting held today to save his face because his inability to provide electricity during his post,” Abd Ali Lafta said. Karim Wahied is one of the UIC minister in al-Maliki’s government.
Iraq’s Finance Ministry on Wednesday said that the country’s 2009 budget will stand at a record at $78.88 billion, The Associated Press reports. Ministry spokesman Adnan Abdul-Rahman said the budget was based on an average oil price of $80 a barrel next year. Abdul-Rahman added that $60.26 billion will go to operational expenses, while $18.62 billion will go to investment and improvements in infrastructure. The budget is expected to be the largest ever submitted.
There is growing frustration in Washington that Iraq is not spending more of its own money to stabilize and rebuild the country, Bill Rogers reports for Voice of America. High oil prices have earned Baghdad billions of dollars, and some in the U.S. Congress say Iraq should be using more of that money to pay for its own reconstruction.
The looming crisis: Displacement and security in Iraq, a new report from the Brookings Institution, which says that lost in discussions of the military surge, the pace of troop drawdowns, and political benchmarks are millions of displaced Iraqi women, children, and men. Their plight is both a humanitarian tragedy and a strategic crisis that is not being addressed.
The big problem with Democrats when it comes to policy on Iraq is that they either focus exclusively on withdrawal (and thereby close their eyes entirely to the mistakes of the Bush administration in shaping Iraq’s political system between 2003 and 2008), or they engage with questions regarding choice of political system but do so in a manner that is even less in harmony with Iraqi traditions than Republican policy is, writes Reidar Visser of the Iraq-focused website historiae.org. (Visser is also a research fellow at the Norwegian Institute of International Affairs.)
Plus:
*Parliament held up on election law
*Voter registration low
*Alive in Baghdad: Getting to School in Iraq
The Bush administration would press the Iraqi government to adopt an oil trust fund for distributing revenue or risk economic assistance under a bill proposed by Sens. Hillary Clinton and John Ensign, Ben Lando reports for United Press International.
The New York Democrat and the Nevada Republican see their legislation as an end-around the Iraqi political debate over an oil law and a measure to rally Iraqis while ensuring oil transparency.
If approved, the State Department must give the Iraqi government an “oil trust plan” and certify it to six congressional committees within 90 days of enactment of the legislation.
If the department fails to do so, 10 percent of certain reconstruction aid in the Economic Support Fund to Iraq would be withheld immediately, and another 10 percent every 30 days until the certification is completed.
Iraqi lawmakers failed to agree Wednesday on a new U.N. proposal aimed at breaking the deadlock over a law paving the way for provincial elections, which the U.S. considers key to building peace among the country’s rival religious and ethnic communities, The Associated Press reports.The balloting has been delayed due to Kurdish objections to power-sharing proposals for oil-rich Kirkuk, which Kurds want to annex into their semiautonomous region.
As Iraq’s parliament haggles over an election law, election officials say they are disappointed by low voter registration ahead of provincial polling that could take place this year, Gina Chon and Zaineb Naji report for The Wall Street Journal. Last month, only 2.9 million out of 17 million eligible voters went to election centers during a registration drive, according to election-commission figures. That was after officials extended their deadline by a week. Just 100,000 of Iraq’s internally displaced population of more than two million have applied for absentee ballots.
Alive in Baghdad: Getting to School in Iraq
Over the last five years violence, terrorism, and fundamentalism have a severe impact on the ability of Iraq’s children to receive an adequate education. This week Alive in Baghdad’s Isam Rasheed speaks with parents, teachers, and children about the issues facing the Iraqi education system.
Vice President Dick Cheney gave former House Majority Leader Dick Armey misleading information to win his support for the U.S. invasion of Iraq, a book says, UPI reports.
Plus:
*Oil Ministry to explain oil and gas bidding to companies in London next month
*Karbala sees 13 power projects
*Finance Ministry agrees to worker demands
*Recap of weekend violence highlights troubled future
*Artists transform the blast walls
*Exploring Al-Qaida in Iraq and the Awakening’s fate
*Much more
A bomb blast on an oil pipeline last Wednesday was the cause of a halt in Iraq’s northern oil exports since then, but flows should resume in the next 24 hours, the North Oil Company said, Ahmed Rasheed reports for Reuters.
Oil exports have dropped dramatically in recent days, to about 900,000 barrels per day, which means exports from the south have been hampered as well, though the cause is not known.
International oil companies bidding on Iraqi oil and gas fields will meet with top Oil Ministry officials next month in London, Ahmed Rasheed reports for Reuters. At the Oct. 13 London meeting, Oil Minister Hussain al-Shahristani will unveil the model contracts, which the oil deals will be based on, as well as release of technical details the companies will need to bid for and, if chosen, develop the fields. Reuters reports the oil fields up for grabs are Rumaila, Kirkuk, Zubair, West Qurna 1, Bai Hassan and Maysan (Bazargan, Abu Gharab and Fakka) and the Akkas and Mansuriyah gas fields. A second set of fields will be bidded on later this year or early next year.
Thirteen electricity projects have been scheduled for implementation in the holy Shiite city of Karbala at a cost of over one million dollars, the city’s mayor said on Saturday, Voices of Iraq reports.
Iran and Iraq will establish three free trade zones along their borders, the Tehran Times reports, with a special focus on fuel and energy sectors.
Iraqi workers and the Ministry of Finance have reached a tentative deal following wage cuts and other moves that prompted worker protests. According to U.S. Labor Against the War, a U.S. based union group which works closely with Iraq’s workers: “the Iraqi government reversed its order to cut wages by up to 30% and eliminate many industrial labor benefits. The authorities agreed to direct negotiations with the representatives of the workers.”
Iraq does not need any financial aid from the United States, the government spokesman said, in the wake of criticism from some U.S. politicians that Washington is paying too much towards Iraq’s reconstruction, Mohammed Abbas reports for Reuters. Ali al-Dabbagh was rebutting criticism leveled by members of U.S. Congress that the United States has paid enough in Iraq reconstruction and other costs. Iraq has actually paid more for reconstruction than the United States, and there are questions as to how much of the U.S. $48 billion was not misspent or gone missing altogether, let alone the usefulness of the projects paid for.
America and Al Qaida: Filmmakers David Enders and Rick Rawley explore the Sawha, or Awakening, and its role in fighting Al Qaida.
Roundup of violence that foreshadows in Iraq:
At least 31 people were killed and 60 wounded in a car bomb attack on Friday in the center of the predominantly Shiite town of Dujail, north of Baghdad, according to Iraqi police officers in Dujail and in the provincial capital, Tikrit, Sam Dagher reports for The New York Times. A policeman in Dujail, about 35 miles north of Baghdad in Salahuddin, a mainly Sunni Arab province, described a scene of mayhem and destruction that had become less common as violence had dropped countrywide in recent months. In another attack on Shiites on Friday, two people were killed and 12 were wounded when a suicide bomber detonated his explosives-laden vest among prayergoers in the town of Sinjar in the northern province of Nineveh, the American military said. Sinjar lies in an area of the north that is disputed by Kurds, Sunni Arabs and a Kurdish-speaking sect known as Yazidis.
Eight Kurdish pesh merga soldiers were killed in a roadside bombing in a disputed part of eastern Diyala Province on Saturday, adding to tensions with the Iraqi government and local Arabs over the Kurds’ presence in the area, Dagher reports in a separate article for The Times. Among the dead in the bombing, in the town of Khanaqin, was the senior pesh merga commander for the area, according to the local police chief, Col. Azad Issa. The bomb, which went off as the Kurdish force was patrolling.
Strip of Iraq ‘on the Verge of Exploding’,Amit R. Paley reports for The Washington Post. Kurdish leaders have expanded their authority over a roughly 300-mile-long swath of territory beyond the borders of their autonomous region in northern Iraq, stationing thousands of soldiers in ethnically mixed areas in what Iraqi Arabs see as an encroachment on their homelands.
Iraq’s Deputy Prime Minister Barham Salih, a Kurd, met with powerful non-political Shiite leader Ayatollah Ali al-Sistani at his home in Najaf, Mina Al-Oraibi reports for Asharq Alawsat, to discuss the heightened tension between the Kurdish and Shiite led parties leading Iraq’s government.
A Sunni Arab leader of a citizen patrol group in Baghdad who had been a proponent of reconciliation in his neighborhood was assassinated over the weekend, Sam Dagher reports for The New York Times. The killing of the leader, Fouad Ali Hussein al-Douri, a Sunni mosque imam who directed a group of about 65 guards in the Jihad neighborhood in western Baghdad, is the latest in a string of attacks on members of the so-called Awakening Councils. Relations between the Awakening Councils and the Shiite-led government have become increasingly strained.
Iraq: Violence is down – but not because of America’s ’surge,’Patrick Cockburn writes in The Independent. If fewer US troops and Iraqis are being killed, it is only because the Shia community and Iran now dominate.
The Iraqi TV crew brought the gifts that had come to be the trademark of their reality show: some basic household appliances and a delicious supper to break the Ramadan fast for a family of little means.
They’d done it many times before. But this episode didn’t get made. Gunmen seized four of them from their vehicles, hauled them down the street and executed them.
The show is called Your Iftar on Us, after the Arabic word for the evening feast, and it airs on the privately-owned Sharqiya network. It didn’t have much in the way of production values but it had a wide following. People watched it because it made them feel good.
“The people were so happy to see us,” said the host, a young woman named Farida Adel. She was speaking Saturday, hours after everything went bad, when Sharqiya broke into its regularly scheduled programming and showed her alone on the screen. “All of them invited us inside their houses. They were so happy that we’d come to Mosul,” she said.
The Bush administration is pushing through a broad array of foreign weapons deals as it seeks to rearm Iraq and Afghanistan, contain North Korea and Iran, and solidify ties with onetime Russian allies, Eric Lipton reports for The New York Times. From tanks, helicopters and fighter jets to missiles, remotely piloted aircraft and even warships, the Department of Defense has agreed so far this fiscal year to sell or transfer more than $32 billion in weapons and other military equipment to foreign governments, compared with $12 billion in 2005.
Parliament on Sunday suspended legal immunity for secular Sunni lawmaker Mithal Alusi, opening him up to possible felony charges for traveling to Israel last week to participate in an international counterterrorism conference, Nicholas Spangler and Mohammed al Dulaimy report for McClatchy Newspapers.
More than 12,000 Iraqi refugees have been admitted into the United States this fiscal year, according to a press release from the State Dept. and Dept. of Homeland Security.
–
Plus:
*DNO nearer to export oil
*IMF gives Iraq marks on economy
*Basra power plant up and running
*Rumors over Maliki future
*Alive in Baghdad: Sadr City
*Much more
Norway’s DNO will expand its successful Tawke project in northern Iraq, moving closer to being able to export oil via pipeline, Ben Lando reports for United Press International. Exporting the Kurdistan region oil depends more on politics than geology, however, as the central Iraqi government and Kurdistan Regional Government have not agreed on KRG exports. DNO announced Friday its Tawke production-sharing contract has been amended and now includes part of the area included in the Dohuk production-sharing contract, as well as a 15 percent working interest increase to 55 percent.
Here’s what UPI’s Lando found about the export debate during a recent trip to Iraq.
For more on oil contracts in northern Iraq, read Lando’s UPI article “Wildcatters in controversial northern Iraq oil deals optimistic.”
The IMF Executive Board has given good grades to Iraq during its first review of the Stand-By Agreement. An IMF statement said, in part, “Progress has been made in strengthening governance and fighting corruption in the hydrocarbon sector, through oil-metering and Iraq’s participation in the Extractive Industries Transparency Initiative. An extension of the metering system to all oil sector activities will further strengthen transparency in the sector.”
Renovation work on Basra’s al-Najibiya electricity station has been completed, according to the Ministry of Industry and Minerals, noting that all work has been carried out by “Iraqi hands,” Voices of Iraq reports.
Americans, increasingly resenting recent moves by Iraqi Prime Minister Nouri Al Maliki, could seek to topple or even assassinate him, says a secret report by a Kurdish political party, which is part of the national government, Basil Adas reports for Gulf News. The report, which Gulf News has seen, says Al Maliki does not want to see any US soldier in Iraq after 2011 and he preferred strong political, economic and military relations with the Americans but not the presence and influence of the US military in his country.
The Iraqi government will not turn its back on the men who paid in blood for the country’s fragile peace, said the officials on stage in the ballroom at Baghdad’s al-Rasheed Hotel, referring to U.S.-paid Sunni militias, Nicholas Spangler and Mohammed al Dulaimy report for McClatchy Newspapers. But the Awakening leaders listened warily. “I don’t trust a word they said,” said one, afterward.
Analysts, U.S. Officials Differ on Maliki’s Plans for Sons of Iraq, Hampton Stevens writes for World Politics Review. Among the gravest risks to the continuing improvement of the situation in Iraq is that Sunni militias now allied with the United States will not be successfully integrated into Iraqi Security Forces or find employment in the civilian economy, say Iraq analysts and U.S. government officials. But independent observers and U.S. officials differ sharply in their assessments of the possibility of a reversal in the Sunni “Awakening,” which is almost universally credited as a significant factor in recent reductions in violence.
Deputy Prime Minister Barham Saleh noted that provincial elections might be carried out in late December using old procedures if lawmakers fail to agree on a new election law, Alsumaria TV reports.
Alive in Baghdad: What Happened in Sadr City?
This week on War News Radio: a closer look at the recent hand over of Al-Anbar Province to Iraqi Security Forces, and learn why this transfer of power is especially significant; the latest on the cholera outbreak that is threatening southern Iraq; Muslims across the world are celebrating Ramadan this month - find out how Iraqis are marking the holiday – all on War News Radio.
Plus:
* Total, Shell confirm oil TSA talks over
* Baghdad energy conference postponed to December
* Alleged secret Defense Ministry torture prison found in Basra
* Alive in Baghdad: Shanasheel, Iraqi Traditional Architecture
* Much more
Iraq expects to sign a gas deal with Royal Dutch Shell within a year and negotiations to sign the deal will start soon, an Iraqi oil official said, Hassan Hafidh reports for Dow Jones Newswires. The Iraqi Oil Ministry needs to agree with Shell the terms of a joint venture in which Iraq’s South Gas Co. will possess 51% of the venture and Shell 49%, the official said.
Total confirms its negotiations to develop the West Qurna oil field under a short-term deal to increase production have been halted. “We are disappointed in not being able to successfully conclude these negotiations,” Total spokeswoman Lisa Wyler told The Associated Press in an e-mail, Sinan Salaheddin. “We are committed to working with the Ministry of Oil to consider further development opportunities within the oil and gas industry in Iraq.”
More on Iraq’s new oil deal prerogative by Andrew E. Kramer of The New York Times. The only new information for regular Iraq Oil Report readers is confirmation by oil companies that the short term deals were nixed and this from U.S. Senator Charles Schumer: “I’m glad the Iraqis heard our plea that to do this now would be bad for Iraq and bad for Iraqi-American relations,” Senator Schumer said in a telephone interview on Wednesday.
Schumer went on to tow the Bush administration line of demanding Iraq pass a hydrocarbons law, adding he’ll propose legislation that demands profits from any new Iraq oil deals go to reimburse U.S. reconstruction costs in Iraq.
For more on the genesis of congressional opposition to the deals, read the June 25 “Congress pressing Bush to block, reverse Iraq oil deals,” by United Press International’s Ben Lando.
A first-of-its-kind energy conference in Iraq has been postponed to December because of delays in construction of the new convention center, United Press International reports. Organizers of the Iraq Energy Expo and Conference, to be held at the new Baghdad International Airport Convention Center, announced the new dates of Dec. 3 to 5, adding they don’t think the delay will detract from the event.
The British Royal Navy entered Iraq’s only deepwater port in Umm Qasr for the first time since the U.S.-led invasion in 2003, UPI reports.
Iraqi Parliament’s Human Rights Commission has found up to 200 malnourished and disease-stricken Iraqi detainees locked in a secret prison in the southern city of Basra, Mohammed Hamdoun reports for Azzaman. The commission’s spokesman, Amer Thamer, said many of the detainees bore signs of torture. He said the prison is operated by the Defense Ministry and none of the inmates has ever been tried or given access to legal assistance. “We put the blame for the horrific conditions of the inmates squarely on the Defense Ministry,” he said.
Iran supports the work of the United Nations toward safeguarding Iraqi sovereignty but calls for a more active role, the Iranian foreign minister said, UPI reports.
Kurdish lawmakers said they wanted reassurance from the United States that F-16s slated for sale to the Iraqi government would not be used against Iraqis, UPI reports.
Officials with the Iraqi Communist Party met with Iraqi Prime Minister Nouri al-Maliki in Baghdad to discuss the long-term security deal with Washington, UPI reports.
The U.S. troop surge in Iraq brought positive security gains but did not ease the underlying turmoil among rival camps in Iraqi politics, UPI reports. An analysis released Wednesday by the research organization Center for American Progress, based in Washington, says the surge of U.S. troops failed in its primary goal of creating a representative Iraqi central government.
Plans by U.S. strategists in Iraq to hand over authority over the Sunni-led force Sons of Iraq to Baghdad stoke concern over the durability of sectarian calm, UPI reports.
Alive in Baghdad: Shanasheel, Iraqi Traditional Architecture
Iraqi society is quite proud of its different types of architecture and design. Their buildings have evolved and taken different shapes over Iraq’s history.
Plus:
*More on the Shell gas deal
*German, UAE and Iran investors eye southern refineries
*Alive in Baghdad: Selling Fuel
*Kidnapping in the NOC
Iraq won’t award temporary oilfield services contracts to international companies before a bidding round aimed at bringing in foreign expertise to boost crude production, Oil Minister Hussain al-Shahristani said, Bloomberg News reports. Iraq will instead go ahead with new long-term exploration contracts before approving a new energy law, he said. The country pre-qualified 35 U.S., European and Asian companies for a new exploration licensing round.
Royal Dutch Shell Plc, Europe’s largest oil company, is set to start operations in Iraq after a 35-year absence when it signs an agreement with the Iraqi Oil Ministry to capture gas outside the southern city of Basra, Bloomberg reports. The Iraqi cabinet approved the venture between Shell and the ministry, Shell spokesman Peter van Boesschoten said today in a telephone interview from The Hague.
Foreign investors from Germany, the United Arab Emirates and Iran are offering to set up oil refineries in southern Iraq, Azzaman reports. These entrepreneurs, both individuals and companies, want to set a foot in the country with signs that conditions are returning to normal, said Kadhem Ismael head of the Investment Commission in the southern Province of Dhi Qar.
JURIST Special Guest Columnists Nancy Wohlforth and Fred Mason, Co-Convenors of U.S. Labor Against the War, say that the proposed Iraqi oil law would put effective control of most of Iraq’s vast oil resources into the hands of foreign companies and make a mockery of any real Iraqi sovereignty
Alive in Baghdad: Selling Fuel in Baghdad
The gas and the fuel for cars has always been a problem for Iraqis inside Iraq, the irony that Iraq has one of the worlds largest reservoirs of oil is not lost on Iraqis.
A civil servant who works for the Iraqi North Oil Company (NOC) was kidnapped by an armed group, southwestern Kirkuk, manager of the province’s suburbs and districts police said on Monday, Voices of Iraq reports.
Parliament’s session was adjourned without approving the provincial council elections law, MP from the Kurdistan Islamic Union said, while Parliament’s speaker decided to hold a meeting for the heads of the parliamentary bloc for this purpose on Wednesday, Voices of Iraq reports.
Nicholas Spangler and Sahar Issa have more for McClatchy Newspapers: A premature vote, warned Ali Adib, of the ruling Dawaa Party, could lead to another veto by the Kurdish leadership. “It means we’ll go into crisis and the positions of the blocs will freeze and get more and more complicated,” he said.
Iraq’s finance minister traveled to Kuwait on Sunday to discuss payment of debts and compensation for Saddam Hussein’s 1991 invasion of that country, Nicholas Spangler reports for McClatchy.
Hundreds of children, some as young as nine, are being held in appalling conditions in Baghdad’s prisons, sleeping in sweltering temperatures in overcrowded cells without working fans, no daily access to showers, and subject to frequent sexual abuse by guards, current and former prisoners say, Jonathan Steele reports for The Guardian.
Iraq’s Cabinet approved an initial gas agreement between the Oil Ministry and Royal Dutch Shell to invest in a joint venture to tap natural gas in southern Iraq, a government statement said.
The agreement calls for establishing a joint venture between the state-run South Oil Co. and Shell to exploit the fields, the statement added without any other details.
Shell is expected to invest US$3 billion to US$4 billion over five years to gather at least 500-600 million cubic feet of flared gas per day from the southern fields, the AP reported.
The state-run South Oil Co. is expected to control 51 percent of the venture, while Shell would hold the remaining 49 percent.
The agreement provides for construction of a number of liquefied natural gas facilities, the statement said.
Iraqi oil exports eased slightly in August due to lower shipments of Kirkuk crude from the country’s north, shipping data compiled by Reuters showed.
Exports averaged 1.83 million barrels per day (bpd), compared with 1.85 million bpd in July, according to Reuters. The total comprised 1.52 million bpd from the south and 310,000 bpd from the north.
Iraq has built up output this year due to more stable flows from the north, where sabotage and technical problems previously kept production all but idle, allowing Baghdad to earn more cash to fund reconstruction.
Exports of Kirkuk crude from the north declined because there were some interruptions in pumping along the pipeline to Turkey, shipping sources said.
Iraqi Oil Minister Hussein Shahristani called Japanese companies working in oil industry to participate in Iraq reconstruction, the ministry spokesman Issam Jihad said.
He also added that the Japanese cooperation with the Ministry in oil field is very wide, al-Sumaria reported.
Jihad also pointed out that Oil Minister, while receiving Japanese officials in Baghdad and a number of Japanese businessmen, called Japanese industries specialized in Oil Industry to enter the Iraqi market and to participate in reconstruction of Iraq economy.
He also added that Japanese societies uttered willingness to cooperate with Iraq Oil Ministry in different fields especially after the stabilization of the security situation in Iraq.
Iraqi oil policy has finally surfaced on the radar screens of local politics, five years after the US-led invasion. However, much confusion and misunderstanding still surrounds the exact process of how the industry would develop and what role would be retained for the proposed National Oil Company (NOC) and its affiliates, and how wide a door would be opened for International Oil Companies (IOCs).
While the Ministry of Oil has strived to retain a clear role for the federal authorities in drawing up an oil policy, it has faced persistent challenges from both the Kurdistan Regional Government (KRG) and from federal institutions in Iraq, including the cabinet, as well as private interests, who point to the fact that the KRG has been able to sign 22 contracts with the IOCs, while the federal Ministry of Oil has not signed a single development agreement so far, writes Walid Khadduri for Petroleumworld.
China says a multi-billion dollar oil deal with Iraq is still being negotiated. This contradicts reports last week from Iraqi officials, who said the deal had been signed, Daniel Schearf reports for Voice of America.
China’s Foreign Ministry on Thursday said negotiations with Baghdad to exploit an Iraqi oil field continue.
Iraq’s embassy in Beijing last week said Iraqi officials had signed a $3 billion deal with China National Petroleum Corporation.
Iraqi officials in Baghdad later confirmed the reports, but China’s Foreign Ministry spokeswoman, Jiang Yu, indicated they were wrong.
Iraq should solve security problems and set up a credible legal framework for cooperation with international oil companies.
Carlo Stagnaro, Director of the Energy Department in the Italian Bruno Leoni Institute, told Trend Capital by e-mail that huge investments were needed to rebuild the oil infrastructures. This leads to the need to set up a credible legal framework.
“If at least a reasonable certainty is provided, a double dividend can be expected for Iraq: oil and gas exploitation will help the country to start growing, and the wealth creation may help to stabilize it politically,” Stagnaro said.
Fresh details have emerged of the service deal signed with China for the development of the Al-Ahdab oil field, giving an indication to other oil majors about the type of contracts on offer in the country in the continued absence of an oil law.
London-based consultant Global Insight says China National Petroleum Corporation (CNPC) will develop the field and manage production for a 20-year period at an initial price of $6-a-barrel, which will fall to $3-a-barrel as investments are recouped.
Global Insight notes that although CNPC is not allowed to market the crude itself, the relationship will place it in a good position to guarantee a flow of oil from Iraq to China.
Iran is pressuring Iraqi authorities to exclude U.S. oil majors from contracts to develop the country’s massive oil fields, sources at the Oil Ministry said.
The sources, speaking on condition of anonymity, said the authorities currently favor Chinese and Russian companies to those of the United States, Azzaman reported.
Their remarks come following a contract the ministry signed last month with China’s state-owned oil firm CNPC.
The $3bn oil services contract is a renegotiated deal of the Ahdad oilfield which CNPC had agreed to develop in 1977.
China is the first country to win such a contract since the 2003 U.S. invasion of the country.
“After several very difficult years, economic prospects for Iraq are improving and the authorities are persevering with the implementation of their economic program in 2008. With the recent improvement in security, oil production and exports are increasing while inflation has been reduced,” the IMF said. “Progress has been made in strengthening governance and fighting corruption in the hydrocarbon sector, through oil-metering and Iraq’s participation in the Extractive Industries Transparency Initiative. An extension of the metering system to all oil sector activities will further strengthen transparency in the sector.”
Iraq has approved a $3 billion deal with China to develop the al-Ahdab oil field.
It’s the first Saddam-era oil deal to be honored by the new Iraqi government. It initially was canceled after the 2003 invasion.
A government statement says the Cabinet approved the deal on Tuesday. It was signed last week in China.
Under the contract, China National Petroleum Corp. will develop the field for 20 years, the AP reported. It’s expected to produce up to 25,000 barrels a day after three years, and eventually reach 125,000 bpd.
The field is in Wasit province, about 99 miles southeast of Baghdad.
U.S. policy makers and American consumers in the past few months have been immersed in concerns about soaring oil prices and how to lower them. Fuel prices are also expected to be a focal issue when American voters cast their ballots in the upcoming presidential elections.
But while I can understand Americans’ fears about fuel prices and availability, writes Sarmad Ali for The Wall Street Journal, I have a harder time understanding why Iraqis — with their oases of crude oil reserves and untapped oilfields in the south and the north — have had to put up with high oil prices and severe shortages of gasoline, diesel and cooking gas.
Iraqi security forces took control of Sunni Anbar province from the US military Monday, a milestone in moves to wind down the American presence in a key area that was an insurgent stronghold.
Iraqi troops paraded with flags flying at a formal handover ceremony in the provincial capital Ramadi, once a byword for vicious fighting, though underlying political tensions are yet to be resolved, reports Ian Black for The Guardian.
Security progress after the U.S. troop surge has not been matched by internal political reconciliation. The Iraqi parliament has yet to pass a controversial election law that has been delayed by a dispute over the oil-rich northern province of Kirkuk.
Lebanon hopes to sign a deal with Iraq in the next two months to buy crude oil below market prices, after Baghdad agreed to sell oil to Jordan at $22 a barrel, Bloomberg’s Massoud A. Derhally reported.
“We are hoping for a similar agreement,” Lebanese Minister of Finance Mohamad Chatah, 57, said in an interview in Beirut. “There is clearly a desire on the part of the Iraqi government to help Lebanon.”
An agreement will help reduce inflationary pressures in Lebanon, which imports all of its energy and has an annual $2 billion energy bill, excluding what it pays for electricity, Chatah said. Lebanon’s trade deficit widened 34 percent in the first half of this year to $5.6 billion from a year earlier.
Iraq oil flowed to Turkey at the rate of 480,000 barrels per day on Thursday after exports restarted on Wednesday, Trade Arabia reported.
The pipeline from northern Iraq to Turkey’s Ceyhan oil terminal in the Mediterranean is Baghdad’s secondary export route. Most of its exports are through the main terminal at Basra in the country’s south.
The oil flow through the pipeline to Turkey stopped for a day earlier this week. A vessel was due to complete loading a million barrels of oil at Ceyhan on Thursday for Italian refiner ENI.
Another ship was waiting to load 600,000 barrels for Italian refiner Iplom, he added.Total Iraqi crude in storage stood at around 200,000 barrels on Thursday.
Iraqi Kurdistan has been primed for a wave of foreign investment for years, but officials say the grand goals of a relatively peaceful northern enclave are frustrated by violence plaguing the rest of Iraq.
“We have many things: oil, iron, phosphate,” said Baqi Salaye, a Kurdish businessman.
Investments in housing, tourism, industry and other sectors, not including oil and natural resources, total around $16 billion from 2006 through mid-2008, Missy Ryan reported for Reuters.
U.S. officials say foreign investment across Iraq has also been hindered by a lack of confidence in its overall regulatory regime. They expect change with the passage of an oil law in Iraq, which has the world’s third largest proven reserves.
Senator Barack Obama had other fish to fry than energy policy during his Thursday speech at the Democratic National Convention, which is why he dispatched one of the biggest campaign issues in just four terse paragraphs. The upshot? Sen. Obama’s energy recipe seems a lot more centrist and less ambitious than many Democrats would probably like.
That was clear from his supply-side trifecta: support for more natural gas (which often means gas shale); support for more clean-coal technology, an expensive and as yet unproven technology; and his embrace of nuclear power provided it can be “harnessed safely,” presumably a reference to the lingering issue of nuclear-waste storage, writes Keith Johnson for The Wall Street Journal.
But the headliner was his “clear goal” as President: “In ten years, we will finally end our dependence on oil from the Middle East.” Not U.S. dependence on oil, but on imports from the Middle East.
