Plus:
*Reality sets in as KRG-Baghdad make oil export agreement
*PKK bombing of Kirkuk-Ceyhan pipeline requires new Turkish strategy
*Update and more exclusive documents on the Status Of Forces Agreement
*The Iraq Press Roundup
*Much more

Key members of Iraq’s Parliament, including the chairman of the Oil & Gas Committee, have issued a statement outlining concerns over the efforts of Iraq’s Oil Ministry and Shell to create a joint venture for natural gas, Ahmed Rasheed reports for Reuters.

Sticking points include the no bidding process, a potential virtual monopoly on Iraq’s southern gas and beyond, and the lack of involvement of Parliament and the local governments affected by the deal.

The Oil Ministry says all of the details will be negotiated in the coming year, and assures Parliament their concerns will be addressed. The committee has asked for a “public hearing” with the minister.

For background read UPI’s Ben Lando and Alaa Majeed:

Shell-Iraq gas company is a monopoly, secret agreement shows

Shell secures 25-year access to Iraq’s oil, gas

Gas deal no monopoly, Shell and Iraq say

There appears to be confusion over the results of Monday’s meeting between Iraq Oil Minister Hussain al-Shahristani and Kurdistan Regional Government Prime Minister Nechirvan Barzani and Natural Resources Minister Ashti Hawrami. Both sides said there was an agreement reached about exporting oil from the KRG’s Tawke and Taq Taq fields, which was confirmed to UPI’s Ben Lando by one of the operators of the fields.

But in an article by Sinan Salaheddin for The Associated Press has Hawrami predicting 100,000 barrels per day in KRG exports by next year, whereas the Baghdad Oil Ministry spokesperson Assem Jihad said “the export license has not yet been granted.”

Both are correct: Tawke and Taq Taq production has been hampered by politics, not technical capability, and could ramp up investment and then output in short order, and the 100,000 bpd target is realistic. That is, however, if the KRG and Iraq national government agree on key issues.

The KRG and Baghdad disagree over the KRG’s rights to independently sign exploration and development deals for oil and gas in its territory. The deals for Tawke and Taq Taq were signed prior to a February 2007 red line Shahristani has drawn; nearly all of the two dozen others were not.

Both sides have said in the past the technical aspect can be resolved and is not political. But two issues remain to be solved: 1. How this applies to the other KRG deals if they start producing oil and 2. Who controls – and monitors – how the oil flows from the fields to the export line, metering station and into Turkey, and exactly how and where the revenue is collected and distributed.

Two interesting snippets from a press release issued by the KRG:

When asked about a national oil law, Mr al-Shahristani said, “The Iraqi Council of Representatives has been unable to pass a national oil and gas law because of a lack of consensus among the political parties.” He later added, “The February 2007 draft law will be a good base for a hydrocarbon law in Iraq which will benefit Iraqis across the country.”

Mr Barzani and Mr al-Shahristani announced that both sides would prepare for the future joining of two oilfields, Tawke and Taqtaq in the Kurdistan Region, to the main northern export pipeline to the Turkish port of Ceyhan. They stated however that further talks would be needed before national export licenses would be assigned to the fields.

The Kurdish separatist group PKK has claimed responsibility for bombing the Turkish side of the oil pipeline linking Iraq’s northern oil fields to the Ceyhan, Turkey, export hub. It’s not the first time the PKK has targeted Turkey’s energy sector, but it is the first time the group has set ablaze Iraq’s oil, UPI’s Ben Lando reports.

Iraq’s government will now have to take more seriously Turkey’s complaints, but it’s up to Turkey to address the root cause of the PKK’s popularity and motivation. …

“It was extraordinarily effective,” said Gareth Jenkins, a PKK expert at The Jamestown Foundation who has lived in Turkey for nearly 20 years. “I don’t know why PKK hasn’t attacked energy infrastructure more.”

The latest attack came days before Iraqi Oil Minister Hussain al-Shahristani and leaders of the Kurdistan Regional Government of Iraq set aside protracted disputes over the draft Iraqi oil law and the oil deals the KRG has signed. During their meetings Monday in the KRG capital, Erbil, the two announced that oil from two of the KRG deals — with Norway’s DNO and the joint venture with Turkey’s Genel Enerji and Canada’s Addax Petroleum — would be allowed to be exported.

The oil will be piped into the Kirkuk-Ceyhan pipeline and sent to Turkey.

“Given that PKK is hitting Turkey out of bases on the Qandil Mountain in the KRG, hitting the Kirkuk-Ceyhan pipeline, if it starts carrying KRG oil, might prove self-defeating,” said Samuel Ciszuk, Middle East analyst for IHS Global Insight. …

According to an expert in threats and vulnerabilities to the energy sector worldwide who speaks to United Press International on condition of anonymity, there have been more than “164 PKK attacks, attempted attacks or suspected PKK attacks on energy infrastructure in Turkey since 1989.” …

SOFA UPDATE

Iraq’s Parliament is scheduling Thursday to vote on the U.S.-Iraq troop pact, as political factions fearing minority powers will be curbed or Iraq sovereignty at risk. Adam Ashton reports for McClatchy Newspapers a “companion measure” aimed at satisfying opponents to the Status Of Forces Agreement is being drafted as well, and could include a national referendum to make the pact legal.

The U.N. mandate, which has been extended before, expires at the end of this year. It provides international legal cover for the occupation, as well as guarantees Iraq’s oil money won’t be frozen by unpaid creditors of Saddam Hussein, a major worry of some politicians James Glanz and Steven Lee Myers report for The New York Times.

Iraq’s U.N. Ambassador Hamid al-Bayati assured UPI’s Ben Lando either a U.N. or U.S. based guarantee of the funds will be in place.

The SOFA is only the main framework document for U.S. forces in the country. Accompanying it is a “Strategic Framework” which details cooperation in economic and other sectors.

Iraq Oil Report follows up on its exclusive first publication of the full SOFA with the release of the The Strategic Framework for the Relationship of Friendship and Cooperation Between Iraq and the U.S.

Section V: cooperation in the fields of economy and energy

The building of a prosperous and diversified economy and growing in Iraq, and integrated into the global economic system, capable of providing basic services to the Iraqi people and welcomed the return of Iraqi citizens living outside the country at the present time will require unprecedented capital investment in reconstruction and development of Iraq’s natural resources and human characteristics, And the integration of Iraq into the global economy and its institutions. To this end, the parties agree to cooperate in order:

7. Facilitate the flow of direct investment to Iraq to contribute to the reconstruction and development of its economy.

8. Encourage the development of the sectors of electricity, oil and gas in Iraq, including the rehabilitation of facilities and vital institutions and the strengthening of Iraqi capabilities and rehabilitation.

“The Status of Forces Agreement and the wider Strategic Framework Agreement accompanying it are the latest in a long line of treaties, pacts and agreements negotiated by successive Iraqi governments with powerful western nations dating back to just after the First World War,” Stephen Farrell writes for The New York Times.

“Few of these treaties produced terms that satisfied domestic Iraqi nationalists. At least one — in 1948 — ended with riots and the forced resignation of Iraq’s first Shiite prime minister. That fact was unlikely to have been lost on Prime Minister Nuri Kamal al-Maliki’s own, Shiite-led, government.
We have collected contemporary reports from The New York Times of some of those previous negotiations. The echoes of today’s headlines are uncanny.”

Iraq’s Oil and the Future, a conversation between former Iraq Oil Minister Issam Chalabi and Professor Kjell Aleklett at Stockholm University.

A visit to India by Turkey’s energy minister furthered a proposed oil pipeline that would send Iraq oil and others’ to Israel, India and eastward, Platts reports.

More on the visit by Saban Kardas in the Eurasia Daily Monitor.

Iraq has approved a $144 million contract with Argentina’s Tenaris Oil Field Services, Reuters reports. The pipes will be used in drilling 100 new oil wells, government spokesman Ali al-Dabbagh said in a statement.

The Iraqi Ministry of Oil is planning to build a new oil refinery in Missan province at a cost of $4 million U.S. dollars, Voices of Iraq reports.

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

Basra’s development authority on Wednesday held a conference during which it revealed its strategic plan for the province for 2009.“The plan has been outlined to experts, who are expected to discuss them and give their opinions on the matter,” the chairman of the authority, Munadel Khanjar, told Voices of Iraq.

Hollywood heavyweights traded Beverly Hills for the hills of northern Iraq to take stock of the region’s potential film industry, USA Today’s Charles Levinson reports. The delegation from Hollywood was whisked around Kurdistan in armored Land Cruisers by bodyguards wearing business suits and earpieces.
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