Archive

Kurdish region PM Barzani says “progress” on Iraq oil law…

*But Iraq Oil Ministry says not so fast
*All Saddam-era oil deals canceled, to be up for bid
*Iraq to sign two-year deals with Big Oil in June
*Scattered Dreams: Iraq’s Refugees
*$1.5 M for Sadr City
*Iraq Press Roundup

Iraq’s Kurdish region leader said talks in Baghdad on key controversial issues, including the oil law, showed “positive … cooperation and progress,” United Press International reports. Nechirvan Barzani, prime minister of the Kurdistan Regional Government, said in a statement the central and regional governments met in Baghdad “to discuss the mechanism of relations between our two bodies as partners in the governance of Iraq, the advancement of our political process and other various issues regarding the future of Iraq.”

This confirms a report last week by UPI’s Ben Lando that negotiations between the KRG and Baghdad are leading to reconciliation of those deals, though there is still plenty of roadblocks to be cleared.

Iraq’s Oil Minister Hussain al-Shahristani says the deals signed by the KRG are not valid, Marta Falconi reports for The Associated Press. “We do not recognize them,” al-Shahristani said. The draft law requires an open bidding process, and also would establish which foreign countries are eligible to work in Iraq, he said.

All of the oil deals signed by Saddam Hussein have been “canceled” and the companies must bid for the fields again, the Iraq Oil Ministry spokesman says. This appears to be a change in policy, as the ministry had said that four deals still carried legal weight and, although they’d have to be brought in line with the new law, would still be honored, UPI reports. Iraq had contracts with ONGC of India, CNPC of China, Pertamina of Indonesia and PetroVietnam that were considered valid and were reportedly under negotiation.

Shahristani said two-year support contracts with the world’s largest oil firms to boost production in five key fields by 100,000 barrels per day each won’t be signed until June, Reuters reports. He also said that the largest of Iraq’s producing oil fields, as well as the Akkas gas field, will be included in the fields up for bid this summer, but large discovered but not yet producing fields will not.

Italian energy giant Eni is considering investing in Iraq with the expected passage of new legislation on oil revenue distribution, Agence France-Press reports. “It will be possible … to sign contracts in a new legislative framework,” Eni CEO Paolo Scaroni was quoted as saying on the sidelines of an energy meeting in Rome.

Italian rig manufacturer Drillmec has won a $207m order to provide 17 drill rigs to the state-run Iraq Drilling Company, for work in the southern oil fields and the northern Kirkuk region, the Middle East Economic Digest reports.

Iraq’s Industry & Minerals Ministry signed two joint venture deals at a Dubai conference this week Trevor Lloyd-Jones reports for Business Intelligence Middle East. “We are making all of Iraq’s state-owned enterprises available for partnerships with the private sector,” Hariri said. Asked about whether the security situation was still at the early stages to enable the flow of investment to go ahead, the Minister said that the challenges within Iraq were still considerable, but on the other hand the rewards were sufficiently high to attract international companies.

War News Radio explores the crisis of internally and externally displaced Iraqis five years after the war began.

General David Petraeus, in testimony before US congressional committees last week, portrayed Iraqi Prime Minister Nuri al-Maliki’s late March offensive in Basra as a poorly planned effort that departed from what US officials had expected, Gareth Porter reports for Asia Times online. What Petraeus, the US commander in Iraq, did not reveal is that Maliki was deliberately upsetting a Petraeus plan to put US and British forces into Basra for a months-long operation to eliminate the Mahdi Army from the city.

The civilian spokesman for Iraqi military operations aimed at securing Baghdad said the government set aside $1.5 million for basic services in Sadr City, UPI reports.

The Iraq Press Roundup, a recap of Iraq’s editorial pages by UPI’s Hiba Dawood.

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Turkey upset about Iraq oil snub…

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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Iraq Gov’t Spokesman: Deal reached on oil law, Kurd contracts, Peshmerga funding, U.N.’s Kirkuk effort…

Iraq’s central and Kurdish region governments have reached a deal on an oil law, including a method for weighing the validity of the oil deals the Kurds have signed with foreign firms, the top government spokesman told United Press International.

Ali al-Dabbagh said an agreement has also been made on the classification and funding for the Kurds’ security forces, the Peshmerga, which will become a battalion within the Iraqi Ministry of Defense. And he said the sides agreed to allow the U.N. process for determining the future of oil-rich Kirkuk and other disputed territories to play out.

“There is an understanding between the central government and the regional government for the oil law,” Dabbagh said in a telephone interview from Brussels, where Iraqi Prime Minister Nouri al-Maliki is meeting with EU officials. Maliki’s governing coalition has seen defections and opposition growing over the past year. Dabbagh said political parties have recently pledged support, and meetings in Baghdad with top Kurdistan Regional Government officials have led to “a new atmosphere.” …

The February 2007 oil law draft establishes a federal oil and gas council that would serve as a policymaking body. Dabbagh said the council would decide national versus local control over oil and gas fields and exploration blocks, as well as the legitimacy of the KRG oil deals.

“This is going to be reviewed and is going to be checked whether they are workable with the new law or not,” he said. “If not they should be amended in order to have them matching with the new regulation of the oil law.”

He said a revenue-sharing law and legislation reconstituting the national oil company and reorganizing the Oil Ministry will “be passed simultaneously (with the oil law) and as a sort of compromise package.”

There are still issues to iron out before an agreement is finalized, he said. …

CLICK HERE to read the entire story.

Here’s a pdf file of the February version of the law.

Shares in Norwegian oil and gas producer DNO soared on Wednesday on the news, Wojciech Moskwa and Joergen Frich report for Reuters. DNO shares initially jumped by as much as 24 percent on media reports — later denied by Iraq’s oil ministry — of a completed deal for Baghdad to honour oil contracts signed by the Kurdish regional government.

The United Nations will suggest a formula next month to resolve conflicts on several disputed areas in Iraq that could serve as a template for the future of Kirkuk, Paul Taylor reports for Reuters. Staffan de Mistura, the U.N. special representative in Iraq, said he would propose options by May 15 for deciding under which authority to put four disputed locations, not including Kirkuk. He declined to identify them but said they would set an example. “This could show how Kirkuk could be handled. It is certainly a template for similar and other bigger problems,” he told reporters after talks with NATO and European Union officials.

Meanwhile, the European Union said on Wednesday it was close to clinching a preliminary energy pact with Iraq as part of the bloc’s efforts to reduce its heavy dependence on Russian oil and gas, Mark John reports for Reuters.

For more:
EU Hungry for Iraq Gas and Oil and Iraq-Turkey-U.S. Gas Talks Begin both by UPI’s Ben Lando.

Iraq’s Iskandariyah power plant runs on raw crude and at less than half capacity, but the country’s demand “is so great” there’s no time for maintenance, UPI reports.

The Iraqi government announced the creation of 2,000 jobs, half of which are in Basra, to help remove land mines in the country, UPI reports.

Conditions needed for Iraqi refugees and internally displaced people to return to their homes don’t exist, a U.S.-based refugee committee said Tuesday, UPI reports. “All relevant actors should discourage returns until the violence subsides and people can receive adequate assistance and protection,” Refugees International said in a report on Iraqi refugees and internally displaced people. “In particular, the government of Iraq should not use returns as an indicator of success in stabilizing the country.”
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Iraq Oil Ministry announces 35 companies qualify for upcoming oil and gas field bidding

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

The Iraq oil circus comes to Washington

This week the circus came to town. Not Ringling Bros. and Barnum & Bailey, but Gen. David Petraeus and Ambassador Ryan Crocker, and with it the three rings of a five-plus year war and occupation, politicians in their populist best pitches and the media echo of what’s going on with Iraq’s oil revenue.

Petraeus, the commander of coalition forces in Iraq, and Crocker, the top U.S. diplomat in the country, were obliged to lead what was for this week the greatest political show on Earth: explaining the meaning of the war a year after the “surge” in U.S. troops led to a decrease in violence (aside from the massive uptick over the past two weeks).

The two said Iraq is improving its ability to spend money on reconstruction and most new U.S. spending, outside of security, would be on capacity-building needed to spend the funds.

The five years have meant hundreds of billions of dollars in U.S. taxpayer spending — mostly on military — and Congress is asking now “for what?” And Congress — armed with a failed “benchmark” of passing an oil law, the inclusion of which may have added a fracture in the polarized Baghdad political scene — breathed fire on Iraq’s leadership for how it uses its oil revenue and turned the snake charmer onto Americans and the media.

“U.S. efforts to date have not resulted in key Iraqi ministries having the capacity to effectively govern and assume increasing responsibility for operating, maintaining, and further investing in reconstruction projects,” former chief U.S. auditor David Walker testified before a Senate committee last month.

Anthony Cordesman, Iraq expert at the Center for Strategic and International Studies, points to a Special Inspector General for Iraq Reconstruction report published in January that between 2003 and 2008, $50.6 billion of Iraq’s money was spent on reconstruction, $47.5 billion was spent in U.S. funds and nearly $16 billion in other donations.

“In short, we used more of their money for reconstruction than ours,” he told United Press International.

Read the entire story here.

Iraq oil production drops slightly as Baghdad criticized for spending oil proceeds…

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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Iraqi Kurd MP pans Iraq oil law…

Plus:
*BP exec says service contract a few months away
*Black Gold: War News Radio’s five-part series on Iraq’s oil struggles
*Sterling banks on Kurdistan, sells U.S. assets
*Attacks take out northern Iraq power
*Iraq-AmChamIraq plan energy conference

An Iraqi parliamentarian representing Iraq’s Kurds says his party will not approve a draft oil law that has been altered from the February 2007 version, United Press International reports.

Last week Abdul-Hadi al-Hasani, the deputy chair of Parliament’s Oil and Gas Committee, told UPI’s Ben Lando there were renewed negotiations over a draft law governing development and investment in Iraq’s oil sector.

BP hopes to sign within a few months a service contract designed to boost output in Iraq by 100,000 barrels per day (bpd), a senior BP executive told Simon Webb of Reuters. The deal is one of five that Iraq is negotiating with oil majors to boost output by 500,000 bpd, or nearly a quarter, from its largest oil fields. Iraqi officials had hoped to sign the deals by early April.

Black Gold: War News Radio explores the big questions still unanswered about the situation in Iraq. This week, a focus on oil:

Violence in the oil rich city of Basra from the people who live there; fuel rationing and buying from the black market in Kirkuk; US Army Brigadier General Edward Cardon about how oil infrastructure fits into the American military strategy for rebuilding Iraq; Iraq’s oil production is still far lower than expected. We find out about one cause: the country’s aging oil infrastructure; finally, we consider the controversy over Iraq’s proposed hydrocarbon law.

Sterling Energy will sell its U.S. assets to raise cash and increase focus on its Iraqi Kurdistan and Africa projects, UPI reports.

Attacks on northern Iraq’s power sector have halted a power plant near the Mosul dam, UPI reports.

Iraq’s Oil Minister and the American Chamber of Commerce – Iraq are organizing an Iraqi energy summit to take place in October at the new Baghdad International Airport Convention Center.

The general company for industrial consultation at the industry ministry carried out works of establishing secondary generator electric station in Nafar district in Diwaneya city for the interest of municipalities and public works ministry, al-Sabaah reports.

Security, Society & Politics

Alive in Baghdad: Reconstruction in remote parts of Baghdad. The project in Sadr City to improve the quality of their sewer system involves completely removing the old system, and performing a complete renovation. There were not only problems with the system do to damage from the ongoing conflict in Iraq, but previously there were long-standing capacity issues, and the sewer system is not able to handle all of the homes depending on it.

Watch the video HERE.

A spokesman for the Iranian foreign minister said Monday Tehran received a request from the United States to discuss restoring peace in Iraq, UPI reports. The spokesman, Mohammad Ali Hosseini, said Tehran received the request Monday through the Swiss Embassy in Tehran, which deals with U.S. diplomatic channels to Iran.

A struggle between Sunni Arabs and Kurds has torn apart the city of Mosul and could play a crucial role in drawing the region’s boundaries, Ned Parker reports for the Los Angeles. Far from the volatile Shiite rivalries that have shaken Baghdad and Basra, this city has been devastated by an epic struggle for land and power between Sunni Arabs and Kurds that has shattered the social fabric and could very well shape the future boundaries of northern Iraq.

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Major Iraq Developments: New oil law being drafted; INOC law progress; New smuggling law moves forward…

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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Iraqi-born Ayatollah bans attacks on Iraq oil sector…

Plus:
*Shell CEO confirms ready to help Iraq oil
*Who controls Iraq’s oil?
*Battles of Basra and oil
*Violence deaths up in Iraq
*Iraqis resent Green Zone

Lebanon’s top Shiite cleric Grand Ayatollah Mohammed Hussein Fadlallah has issued a religious edict banning attacks on Iraq’s oil industry and other public infrastructure, Naharnet reports. Fadlallah also urged Iraqis on Monday to solve their problems through dialogue.

Royal Dutch Shell is ready to help Iraq boost oil production once that country’s government finalizes a petroleum law covering big energy projects, the head of the oil giant said on Tuesday, Reuters reports. “We are very much prepared to go back to Iraq,” Shell chief executive officer Jeroen van der Veer said at the Center for Strategic and International Studies think tank in Washington.

UK’s Channel 4 excellent video Who Controls Iraq’s Oil, featuring the first glimpse of DNO’s Tawke oil field and problems exporting and a dialogue of Iraqi, UK and Iraqi experts on the oil issue:

The Battle of Basra and its Oil Dimension, by noted Iraq journalist Walid Khadduri.

The Iraqi army’s crackdown on Shi’ite gunmen in Basra is a long overdue battle the government needs to win to assert its authority over the oil-rich province and end the oil smuggling that is robbing the state of billions of dollars, Platts reports. The first round in the battle to control Basra, Iraq’s second-biggest city and its main oil export terminal, has ended without a clear winner, with the militias still entrenched in their strongholds after a week of fierce fighting in which up to 300 people may have died, security sources said March 31.

The Basra Fallout

Perhaps the best way to understand what led to, happened and is the consequence of last week’s violence in Basra is a “choose your own adventure” book. Absent that, below is continuing and varied coverage of note:

Did Maliki do Sadr a Favor in Basra? Noah Shachtman asks in Wired.com

As the smoke clears over new rubble in Iraq’s second city, at the heart of Iraq’s oil region, it’s apparent that the big winner of the Six-Day War in Basra are the forces of rebel cleric Muqtada al-Sadr, whose Mahdi Army faced down the Iraqi armed forces not only in Basra, but in Baghdad, as well as in Kut, Amarah, Nasiriyah, and Diwaniya, capitals of four key southern provinces, Robert Dreyfuss reports for The Nation.

Iraqi Prime Minister Nouri al-Maliki on Tuesday ordered government security forces to stop random raids and arrests in Basra after nearly a week of fighting, UPI reports.

What Direction for the al-Mahdi Army after the Basra Offensive? Babak Rahimi asks in The Jamestown Foundation’s Terrorism Focus.

Iraqi forces appear to have done “a pretty good job” in an offensive to regain control of Basra from Shiite militias, US Defence Secretary Robert Gates said Monday, Middle East Online reports. “We’re obviously hopeful that he will achieve most of his objectives, and see calm return as well,” Gates told reporters enroute here from Brussels, referring to Iraqi Prime Minister Nouri al-Maliki.

Security, Society & Politics

Violent civilian deaths in Iraq climbed to their highest level since mid-2007, Iraqi government figures showed on Tuesday, Reuters reports.

Iraqis resent the Green Zone, not only because it symbolizes the American occupation in Baghdad, but also because it is the only region in Iraq which does not suffer from a lack of services unlike other Iraqi cities and regions, Basil Adas reports for Gulf News.

The U.N. Security Council is expected to revisit the Iraq issue and its assistance program there, according to the Security Council Report.

Consumers for Peace is asking Congress to quiz Gen. David Petraeus on alleged war crimes. Petraeus and Amb. Ryan Crocker are to testify next week as their new reports on Iraq are due.

An American attack on Iran could cost the United States the whole army it now has in Iraq, William S. Lind writes in a UPI column. Admiral William “Fox” Fallon’s possibly forced resignation was the last warning the American people are likely to get of an attack on Iran. It does not mean an attack is certain, but the United States could not attack Iran so long as four-star Adm. Fallon was the head of U.S. Central Command, which covers Iraq and Iran. That obstacle is now gone.

A recap of Iraq’s editorial pages, the Iraq Press Roundup by UPI’s Hiba Dawood.

European and Iraqi parliamentarians meet in Baghdad, Voices of Iraq reports.
##

Basra break in violence allows oil workers to leave, head to work…

Plus:
*The State of Basra
*Crescent Petroleum sponsors Iraqi universities in oil confab
*Oil deals unlikely for months
*Iraq war drains U.S. budget for fuel
*Iraqi parties prevent ban on honor killing
*Japan-Iraq collaboration

A lull in fighting in the oil-rich province of Basra allowed oil field workers to return to work, ensuring output of around 2 million barrels per day continued without disruption, Reuters reports.

For more on this threat, United Press International’s Ben Lando spoke Friday with the leader of the oil workers Friday.

Three Iraqi universities sent delegates to the GetEnergy 2008 summit in London this month, courtesy of Crescent Petroleum, UPI reports. Crescent, based in the United Arab Emirates, is among the international oil companies hoping to land a deal in Iraq’s oil and gas sector. The companies have provided free training and studies to Iraq’s Oil Ministry. Crescent and Dana Gas, of which Crescent is a major shareholder, are developing gas prospects in Iraqi Kurdistan. While companies that have signed deals with the Kurdistan Regional Government have been threatened with blacklisting by Baghdad, Crescent appears untouched.

Iraq and five oil majors are unlikely to sign service deals to boost output from some of the country’s largest fields before June after a slowdown in negotiations, Simon Webb reports for Reuters.

Oil giants line up to claim their slice of Iraq’s riches, writes Patrick Sherwin, senior consultant in the financial services practice at Control Risks.

After invading one of the most petroleum-rich countries on earth, the U.S. military is running on empty. Today the average American G.I. in Iraq uses about 20.5 gallons of fuel every day, more than double the daily volume consumed by U.S. soldiers in Iraq in 2004, Robert Bryce writes in the cover story for The American Conservative. Thus, in order to secure the third-richest country on the planet, the U.S. military is burning enormous quantities of petroleum. And nearly every drop of that fuel is imported into Iraq.

If the US’s principal interests in Iraq can be summarized in one word - oil - then the EU’s can be summarized in two: oil and gas, David Cronin writes in The Guardian.

The State of Basra

Fighting has lulled in Basra, following a deal struck by Moqtada Sadr and Iraqi Parliamentarians – in Iran, Leila Fadel reports for McClatchy Newspapers. Sadr ordered the Mahdi Army to only fire if attacked, Erica Goode and James Glanz report for The New York Times.

The clash between Iraq’s security forces and the Mahdi Army, mostly, left hundreds dead and the survivors needing food and water, Aljazeera reports.

The U.N. humanitarian office says there’s a fuel shortage as well.

A major reason for the defeat of the Iraqi army is the unpopularity of the country’s leaders. Many of the soldiers switched sides, The Times reports, and have been fired, Azzaman reports.

Aljazeera has a profile of the Mahdi Army.

Aref Mohammed for Reuters reports on Basra when the dust clears and ongoing violence in Baghdad, as the Green Zone gets pummeled still.

More narrative of the fight:

19 Tense Hours in Sadr City Alongside the Mahdi Army, by The Washington Post’s Sudarsan Raghavan

The biggest surprise about the raging battles that erupted last week in southern Iraq was not that the combatants were fellow Shiites, but that it took this long, Ned Parker writes for the Los Angeles Times.

All explanations are possible for the current fighting in Basra, the largest city in southern Iraq situated in an area which floats on massive oil riches, Fatih Abdulsalam writes for Azzaman. But the reality of the situation which tells volumes about what is happening is the fact that war, in the fullest sense of the word, has been raging without interruption in Iraq for the past five years.

The country’s powerful Islamic parties and leaders are resisting reform of a law that sanctions lenient punishments for those found guilty of so-called honor killings, Basim al-Shara’ reports for the Institute for War & Peace Reporting. Article 111 of the Iraqi penal code - passed in 1969 - allows a lesser punishment for the killing of women if the male defendants are found to have had “honorable motives.”

Acting Minister of State for Women’s Affairs Narmin Othman’s initiative is primarily backed by secularists and has received the support of about 60 members of parliament from the secular Iraqi List and the Kurdish Alliance, according to Iraqi List MP Maysoon al-Damalogy.

However, representatives from the Shia United Iraqi Alliance - the most powerful bloc in parliament, led by Prime Minister Nuri al-Maliki - and the Sunni-led Iraqi Accord Front both oppose the legislation.

Japan-Iraq relations: investment and presence

The following is the latest newsletter published by The Shingetsu Institute for the Study of Japanese-Islamic Relations:

THE GSDF LEGACY IN SAMAWA

It may surprise you to hear that the Shingetsu Institute hasn’t issued a report on recent Japanese activities vis-a-vis Iraq since late November of last year. That’s a four-month gap! The main reason we haven’t talked about it is because the Japanese media and MOFA aren’t saying too much about it either. For example, the ongoing ASDF mission in Iraq has been virtually invisible as far as I’ve been able to discover. My hunch is that most of the Japanese public has now forgotten all about it. Out of sight, out of mind.

Yesterday, however, Kyodo News was kind enough to produce a follow-up piece on GSDF reconstruction projects in Samawa. For the entire period that the GSDF was stationed in its base near Samawa, the Koizumi Administration and its camp followers repeatedly insisted that their presence was needed there in order to carry out ‘humanitarian and reconstruction support activities.’

It is not easy to evaluate clearly the degree to which the local community in Samawa really benefitted from the GSDF activities. During the GSDF deployment itself, most news reports suggested that a majority of the local people were pleased to have the Japanese among them as they imagined that their presence would signal major improvements in the local economy and because the Japanese troops didn’t shoot anybody. On the other hand, there was a minority — apparently affiliated with the Mahdi Army of Muqtada al-Sadr — who did not welcome the GSDF on the Iraqi nationalist grounds that they were allies of the American occupiers. These people fired mortars at the GSDF base and created a sense of threat, but never actually wounded any Japanese soldiers. The fact that the GSDF was able to complete their 2 1/2 years in Iraq without taking any casualties can be regarded as a success for the political supporters of the mission. They seem to have benefitted from a combination of careful planning, risk-avoiding local strategies, and simple good luck.

The total amount of money that Japan spent on Iraqi reconstruction is impressive. Tokyo pledged US$1.5 billion in grant aid and US$3.5 billion in loans at the Madrid Conference of October 2003. Since that time, MOFA has been announcing various projects on which this money would be spent. MOFA says that the US$1.5 billion in grants has already been completely distributed, and that in fact an additional US$105 million in emergency grant aid was provided to Iraq over the course of 2007 (see Shingetsu Newsletter No. 529). Beyond all of this, Tokyo has pledged to forgive 80% of Iraq’s debts from the Saddam Husain era, which totaled about US$7.6 billion (see Shingetsu Newsletter No. 123). I’m not an economist, but I wouldn’t be surprised to learn that the real cost of the Iraq adventure to the Japanese taxpayer is now well over US$10 billion.

At any rate, the point of the Kyodo News report released yesterday is that for all of this investment, the real improvements in Samawa may not be so great. As they put it, ‘there are many examples of mismanaged support.’ One of the key problems seems to be that the local Iraqis don’t have the technical training necessary to complete and operate these projects. (In the 1980s, Iraq was one of the most sophisticated countries in the developing world in this respect.)

Muhammad Jordan, chairman of the construction committee of the al-Muthanna provincial council, stated that ‘it is strange to rely on others to rebuild your home. The Japanese did their best to assist the al-Muthanna people, but the problems were with those (Iraqi) people.’ Saad Rahim Salman, a manager at a large local power plant said, ‘It is the first time for the Iraqi people to embark on such a large-size project from scratch. There are no foreign engineers… There are many holidays in Islam.’

The Kyodo News report continues by noting that ‘there are precision medical devices that cannot be used due to a lack of parts, and power generators abandoned because of the delivery of secondhand ones.’

Some local people, like schoolteacher Salah Khlaif, supported the GSDF mission: ‘The withdrawal was too early. I wanted Japan to stay longer.’ Others, like the unemployed Haidar Nassir, were not impressed with the help from Tokyo: ‘The Japanese support has left only vulgar rich people and corruption behind.’

Returning to the crucial power plant project mentioned above, an engineer at the plant referred to the fact that construction has been well behind schedule. Construction began in April 2006 and was scheduled for completion last November. The new target is June of this year. The engineer explained, ‘The appearance is 90% complete, but the core part is still only 60% complete.’

Hmm. So it appears attractive on the face of it, but is hollow at the core, eh?

That’s not a bad metaphor for Tokyo’s entire Iraq War policy.

THE ‘STRATEGIC PARTNERSHIP’ AND THE RECONCILIATION DIALOGUE

Did Japan Focus and the Shingetsu Newsletter change Japanese policy on Iraq? I don’t know. But since the time I wrote my critique of the concept of the ‘long-term and strategic partnership’ between Japan and Iraq the slogan seems to have disappeared from MOFA statements. Perhaps my essay caused them to reevaluate their message? Or perhaps they have dropped the slogan for reasons entirely unrelated to my essay in Shingetsu Newsletter No. 807? Or is the slogan still alive, but they just haven’t mentioned it in the last four months?

This past week Tokyo hosted the ‘Second Seminar on National Reconciliation of Iraq.’ The program saw invitations to thirteen Iraqi MPs and others (eleven actually attended) who were Shia, Sunni, and Kurdish. The only participant who was named in the press was Kurdish parliamentarian Alaa al-Talabani. As the official MOFA statement put it: ‘The Seminar is held based on the consideration that the promotion of national reconciliation among different ethnic/sectarian groups is essential for a solid stabilization of Iraq, while the current security situation in Iraq showing signs of improvement. It is expected that Japan’s efforts of holding such Seminar would contribute to that end. During the period, the delegation will have meetings with the Japanese Government officials as well as the members of the Japanese parliament. The participants will also discuss among themselves on the current issues of Iraq such as Oil and Gas Law, Amendment of the Constitution and Federalism. Further, visit to Hiroshima is planned so that they can share the experiences of Japan’s post-war democratization, peace building, and reconstruction.’

However, the MOFA statement said nothing about the ‘long-term and strategic partnership’ between Japan and Iraq as we might have expected on such an occasion.

A somewhat similar program occurred in February. Upon the request, apparently, of the office of Iraqi President Jalal Talabani and the Iraqi Foreign Ministry (both offices currently held by Kurds), MOFA and JICA offering training programs for Iraqi diplomats.

Again, on that occasion, there was no mention of the ‘long-term and strategic partnership.’

It thus seems that the ‘long-term’ partnership may have thus lasted all of eight months.

RECENT JAPANESE AID TO IRAQ

In the past four months, most reports on Japan-Iraq relations have concerned aid programs. The following is a round-up of both public and private aid stories:

– In late December, Tokyo donated through the UNHCR 1,000 tents for Iraqi refugees.

– At the beginning of this year, it was announced that an unnamed Japanese signed an agreement of cooperation with Iraq’s Electricity Ministry. The company was to rehabilitate the gas-powered Taji electrical station located in northern Baghdad. Apparently, the awarding of this contract to the unnamed Japanese company was tied to a grant that Tokyo offered to the Electricity Ministry.

– In January, it was announced that the next round of reconstruction loans, part of the US$3.5 billion mentioned above, would be targeted on repair of the Al-Musaib thermal power station in suburban Baghdad, the restoration of tanker mooring facilities off Basra, and the construction of roads and bridges near Samawa.

– In February, the Yomiuri reported about a Yokohama-based NPO that was selling chocolate in the run-up to St. Valentine’s Day in order to raise money for medicine and classes for Iraqi children.

– Also in February, MOFA donated almost US$19 million through the UNDP for the establishment of a maternity and children’s hospital in Falluja. This project seems to have a close relationship to the activities of the Hashida Memorial Mohammed Fund run by the wife of slain Japanese journalist Shinsuke Hashida.

– This month, MOFA offered almost US$30,000 for another maternity and children’s hospital in Sadr City, Baghdad.

MOFA PRESS SECRETARY STATEMENTS

In the past six months or so, the MOFA press secretary has offered only these two official statements on internal Iraqi issues:

Statement by the Press Secretary on the Adoption of the Accountability and Justice Law by the Iraqi Council of Representatives
January 13, 2008

On January 12, the Iraqi Council of Representatives adopted the Accountability and Justice Law. The Government of Japan welcomes this as an important progress towards the national reconciliation of Iraq.

The Law enables former Ba’ath party members who were purged from public offices since 2003 to reassume a public position. The Government of Japan expects that this will contribute to gathering momentum for the progress of the national reconciliation and to further improving the security situation in Iraq.

The Government of Japan has been rendering assistance to Iraqi national reconciliation endeavors by, in particular, hosting the Iraqi National Reconciliation Seminar, and it is determined to continue to assist the efforts of Iraq. The Government of Japan will also actively support Iraqi economic reconstruction by implementing various economic assistance projects.

Statement by the Press Secretary on Consecutive Suicide Bomb Attacks in Baghdad, Iraq
February 3, 2008

Japan greatly feels shocked and indignant over the consecutive suicide bomb attacks in Baghdad, Iraq, which caused many deaths and injuries on February 1. Terrorism cannot be justified for any reason, and Japan reiterates its firm condemnation of these atrocious acts of terrorism that victimize many innocent people.

Japan expresses its deepest sympathy for those who have been killed by terrorist attacks, including this time, and condolences to the families of the victims. It also expresses its heartfelt sympathy toward the injured and prays for their early recovery.

Japan expects that the ethnic and religious groups will show mutual respect, and continue making efforts toward nation-building while promoting national reconciliation. Japan will proactively support such effort of Iraqi people.