Energy and Economic Stories

Iraq has imposed new legal restrictions on foreign ownership of Iraqi companies – a move that is deterring investors at a time when the country is trying to attract foreign capital to help diversify the economy and make up for the government's shrinking investment budget. The new restrictions come from legislation passed in 2019 that says foreigners can own no more than 49 percent of any company. When the law was first enacted, Iraqi policymakers indicated that exemptions would be given. But the legislation has not been amended, and now the Iraq Stock Exchange (ISX) has surprised investors by applying the law to all non-bank companies listed on the exchange. "The trading volume has disappeared," said Shwan Ibrahim Taha, the chairman of Rabee Securities, a brokerage house based in Baghdad. "We had a few clients who were on the edge whether they want to invest more, or not — they just pulled out. I can't begin to tell you how stupid this law is." Read the full story on Iraq Oil Report.

The Iraqi National Oil Company (INOC) has taken two significant administrative steps to become operational, signaling a potential sea change in the structure of Iraq's oil sector. In an Aug. 25 meeting, the newly constituted INOC board of directors approved company bylaws, according to a copy of the meeting minutes obtained by Iraq Oil Report. And the following day, Ihsan Ismaael — who is both oil minister and president of INOC — issued an order to shift control of seven state-owned oil companies from the Oil Ministry to INOC. The moves are part of a plan to give INOC responsibility for overseeing the day-to-day operations of Iraq's oil sector, while narrowing the Oil Ministry's role and turning it into a strategic and regulatory body. It remains to be seen, however, whether the efforts to stand up INOC will survive the impending national elections in October and the power-sharing negotiations that characterize the government-formation process. Read the full story on Iraq Oil Report.

Norway's DNO is killing two birds with one stone at its Tawke license: reducing gas flaring and combating natural production declines. A new plant at DNO's Peshkabir field is processing 30 million standard cubic feet per day (scf/d) of associated gas, which is produced along with crude oil, and pumping it through a high-pressure pipeline for injection into the nearby Tawke field's reservoir. “The lack of drilling of new wells has meant that Tawke production has been trending downward,” said DNO Executive Chairman Bijan Mossavar-Rahmani, speaking with analysts in July. "We have arrested that somewhat through our Peshkabir gas to Tawke field gas reinjection campaign.” The success of the gas reinjection project, involving an initial $110 million investment over an 18-month period by DNO and its junior partner Genel Energy, could provide some encouragement for other operators in the Kurdistan region who are coming under renewed regulatory pressure to end the practice of wastefully burning, or "flaring," associated gas. Read the full story on Iraq Oil Report.

Interviews

Ali Nazar al-Shatari is the deputy director general of Iraq's State Oil Marketing Company, commonly referred to its old acronym, SOMO. In an interview with Iraq Oil Report, Shatari said that Iraq will not surpass its record of nearly 4 million barrels per day (bpd) of exports anytime soon. The country can only take advantage of rising production capacity after it finishes replacing decades-old subsea pipelines that carry crude oil to export outlets in the Basra Gulf. Even more urgently, the Oil Ministry needs to complete long-delayed plans for a storage tank farm at Fao, which would allow the country to improve the quality and consistency of its crude and mitigate the effects of bad weather on tanker loadings — effectively enabling the country to squeeze more value out of each barrel while also increasing overall sales. In addition to infrastructure updates, Shatari gave insight into Iraq's crude marketing strategy now that it has launched the Basra Medium grade. Read the full interview on Iraq Oil Report.

Hossam Hussein Walli is the director general of the state-run South Refineries Company (SRC). In a period of coronavirus restrictions and budget constraints, southern Iraq's refining sector has been in something of a holding pattern, with major expansion plans appearing to hinge on negotiations with foreign investors. Walli gave updates on the status of an expansion of the Shuaiba refinery in Basra, the potential expansion of the Dhi Qar refinery, and negotiations with the Chinese company CNCEC for a 300,000 barrel per day (bpd) refinery at the Fao port. Read the full interview on Iraq Oil Report.

Iraq by the Numbers

Iraq's federal government and semi-autonomous Kurdistan Regional Government (KRG) exported a combined 3.414 million barrels per day (bpd) of crude oil in August, a 74,000 bpd increase over July, according to provisional data supplied by the Oil Ministry and industry officials. Iraq's federal government earned $6.533 billion in August, up from $6.476 billion in July — the highest monthly revenue since December 2019, when exports brought in $6.698 billion. Read the full story on Iraq Oil Report.

Do you need data? The Iraq Oil and Financial Dataset gives subscribers access to hundreds of datapoints every month tracking crude and fuel exports, pricing, field-by-field production, government spending, and more. Click here for a free sample.

More Iraq News

Bloomberg: Iraq makes a sharp cut to U.S. oil price, in contrast to Saudi

Iraq cut the price of its banner crude for U.S. customers sharply, a bold deviation from what Saudi Arabia chose to do with its own barrels just a few days ago.

The nation’s Basrah Light barrels will be sold at a discount of $1.15 per barrel to a regional benchmark in October for buyers in the Americas, according to a price list from Iraq’s state oil marketing company. That compares with a slight premium -- 15 cents a barrel -- against the same marker for September.

The move is eye-catching because, like many Middle East countries, Baghdad rarely diverges much from what Saudi Arabia does when it comes to pricing. But earlier this month, the kingdom kept its own flagship crude -- Arab Light -- at a $1.35 a barrel premium for October, unchanged from September.

Human Rights Watch: People with disabilities face election barriers

People with disabilities in Iraq are facing significant obstacles to participating in upcoming parliamentary elections on October 10, 2021, due to discriminatory legislation and inaccessible polling places, Human Rights Watch said in a report released today. Without urgent changes, hundreds of thousands of people may not be able to vote.

The 36-page report, ‘No One Represents Us’: Lack of Access to Political Participation for People with Disabilities in Iraq, documents that Iraqi authorities have failed to secure electoral rights for Iraqis with disabilities. People with disabilities are often effectively denied their right to vote due to discriminatory legislation and inaccessible polling places and significant legislative and political obstacles to running for office.

Reuters: Drone attack hits near U.S. forces in Erbil

A drone attack hit near U.S. forces stationed at Erbil International Airport in northern Iraq on Saturday, Iraqi Kurdish security officials said.

The internal security service for Iraq's autonomous Kurdish region, of which Erbil is the capital, initially said three rockets had hit near the airport. A second statement by the Kurdish counter-terrorism force said the attack had been carried out by explosive-laden drones.

AP: Iraq election chief vows fair elections despite concerns

Iraq is taking measures to close loopholes and conduct fair elections despite attempts to compromise the upcoming polls, the head of Iraq’s electoral commission said.

Judge Jaleel Adnan Khalaf, chairman of the Iraqi Independent High Electoral Commission overseeing the election on Oct. 10, told The Associated Press in an interview this week that it has identified and thwarted attempts of voter fraud.

“What we hear here and there is that citizens are selling their voter cards,” he said, referring to a way for candidates to essentially buy votes. “The commission has set strict regulations and strict rules.”

Al-Monitor: Kadhimi meets with Iranian president

Iraqi Prime Minister Mustafa al-Khadimi became the first foreign leader to visit Iran under the administration of President Ebrahim Raisi. The visit signals Raisi’s prioritizing of neighboring countries over Western countries.

... Iranian daily newspaper Javan ran an article about Khadimi’s visit headlined, “Mediator in Tehran.” The article read that Khadimi’s mediation efforts between Iran and Saudi Arabia and between Iran and the United States are two of the most important issues that the prime minister could discuss.

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