Top Energy Stories
Iraqi Electricity Minister Majid Mahdi Hantoush gave a detailed interview to Iraq Oil Report this week. There are many ways the Iraqi government could deliver 24 hours of electricity service per day — but none without a financial or political cost. Hantoush outlined some of his plans. One major step involves addressing runaway demand. Another fundamental problem is the lack of planning around new construction of houses, buildings, neighborhoods, and cities. (Without understanding in advance where there is going to be new demand, the Electricity Ministry has been unable to build and service the infrastructure to deliver sufficient power.) Then there is the simple matter of generation capacity. Even if Iraq's transmission and distribution infrastructure were operating perfectly, the country still isn't generating enough power to meet demand. Hantoush wants to address the shortfall with new solar projects — some of which have already been awarded — and by converting more power plants to combined-cycle. In the meantime, Iraq remains reliant on Iranian gas and electricity supplies, which at times account for up to one-third of Iraq's power. Hantoush addressed these topics and more in the interview; read the full transcript on Iraq Oil Report.
Both the Iraqi federal government and the Kurdistan region achieved one-year highs for monthly oil revenue in February. Nationwide oil exports increased to 3.395 million barrels per day (bpd) in February, up from 3.266 million bpd the month before. As global oil prices surged, Iraq benefited from the biggest monthly oil revenue haul since February 2020 — just over $5 billion. Read the full story on Iraq Oil Report.
Six months ago, Iraq's surging exports might have prompted significant drama within an OPEC-plus coalition concerned with strict quota compliance. But rising global prices have changed the mood. Saudi Arabia surprised oil markets in January by announcing a unilateral and voluntary cut of 1 million bpd, which began to take effect in February. Then, at a meeting on March 4, Saudi Energy Minister Prince Abdulaziz bin Salman said those cuts will be extended until the end of April. Without that Saudi generosity, the coalition might have fractured this week. Some countries, like Russia, were pressing for increased production, while others, like Iraq, have lagged behind in making compensation cuts for past quota-breaking. But everyone left the videoconference happy. Russia and Kazakhstan will raise output by a modest 150,000 bpd combined, and OPEC members including Iraq will keep their production steady in April. That resolution exceeded the expectations of oil markets, where participants were expecting an increase in OPEC-wide production, with uncertainty around whether and how long Saudi Arabia would extend its extra cuts. Oil jumped on the news and hit its highest price in more than a year.
How To Transport Personnel in a Pandemic
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And to hear directly from FronteraSky President Carlos Barbosa, read his interview with Iraq Oil Report.
The Pope Comes To Iraq
Iraq spent the week preparing for the first-ever papal visit to the country. The Pontiff touched down at 2 p.m. on Friday and was greeted by smiling officials and cross-confessional dancers in traditional garb. The visit has huge symbolic significance for Iraq’s persecuted Christian population and is a public relations boost for Prime Minister Mustafa al-Kadhimi amid ongoing security and economic woes.
The streets of Baghdad were lined with billboards reading "we are all brothers" to welcome Pope Francis, write Samya Kullab and Nicole Winfield, reporting for AP. In central Tahrir square, a mock tree was erected with the Vatican emblem, and Iraqi and Vatican flags lined the streets. The Pope has been in lockdown for the last year due to the COVID-19 pandemic but sees the importance of meeting Iraq’s beleaguered Christian minority. He will also deliver a message of reconciliation and fraternity. The pope and his delegation have been vaccinated against the coronavirus, but the Iraqi delegation has not, and Iraq is seeing a new spike in coronavirus infections. “I come among you as a pilgrim of peace, to repeat, ‘You are all brothers,’” Francis said in a video message on the eve of his visit. “I come as a pilgrim of peace in search of fraternity, animated by the desire to pray together and walk together, also with brothers and sisters of other religious traditions.”
This is the Pope’s first trip outside Italy since November 2019, according to Reuters. His visit will take him to four cities. After his arrival, Francis will say Mass at a Baghdad church where gunmen killed 50 worshippers in 2010. He will meet top clerics in Najaf, and travel north to Mosul, where churches still bear the scars of conflict. And the Pope is also due to visit Ur, birthplace of the prophet Abraham. The Pope will rely on the Iraqi security forces for protection during his trip, according to the AP, and will travel in an armored car instead of the usual "popemobile."
Should the Pope's visit to Najaf also be understood as a blow to Iran? Brookings Institution post-doctoral fellow Marsin al-Shamary wonders if Francis is implicitly endorsing the primacy of Grand Ayatollah Ali Al-Sistani and the religious establishment in Najaf, known as the Hawza, over the religious leadership of Iran as the preeminent authority in Shia Islam. That kind of international clout could help ensure the enduring influence of Najaf even after Sistani is no longer at the helm. "It will also determine whether the gains that this visit is said to achieve — from the recognition of Najaf’s centrality to its role in global interfaith collaboration — are durable,” she writes.
More Top Stories
Ten rockets landed on Al Asad Airbase in western Anbar province on Wednesday. The Iraqi base houses both Iraqi and U.S. troops. One U.S. contractor died of cardiac arrest during the attack, according to the Washington Post’s Mustafa Salim and Louisa Loveluck. The attack comes after U.S. President Joe Biden ordered a strike against Iran-back paramilitaries in Syria, near the Iraqi border, in retaliation for prior attacks against U.S. positions by Iran-backed groups in Iraq.
Special protections afforded to Iraq’s beleaguered Christians are also causing resentment among other minority communities on the Ninewa plain, writes Jane Arraf for the New York Times. Reporting from Bartella, she writes that the Iraqi government granted church officials the authority to approve building projects and land sales in an effort to help members of the marginalized group, who fear they will be wiped out. But local members of the Shia Shabak minority are unhappy with this decision. A Shabak leader, Saad Qado, told Arraf that Shabaks are oppressed, don’t have clean water to drink, and that no one cares. A Christian woman overseeing Shabak construction workers in Bartella told Arraf, “This land is more precious than gold. It is the land of my father and grandfather. [The Shabak] are good people. But relations are complicated.”
More and more people are falling into poverty in Iraq's Kurdistan region. Reporting for Rudaw, Hannah Lynch writes about the growing class divide. She reports from the Haidar Baqal bazaar in the Saidawa neighborhood in Erbil and meets shoppers who are struggling because of unemployment and cuts to salaries and pensions as a result of the financial crisis hitting the country. The coronavirus pandemic is also partly to blame, as well as the ongoing budget disputes with Baghdad, the recent devaluation of the Iraqi dinar, and other problems stemming from the war against the Islamic State militant group. Iraq’s GDP contracted by 11 percent in 2020, according to the IMF, and a projected rebound this year is dependent on the Iraqi government making “wide-ranging structural reforms.”
Oil Companies Face New Regulatory Hurdles
A message from New Frontiers:
International oil companies, oil service companies, and other contractors in Iraq face a major new compliance challenge. The oil sector has long enjoyed a de facto exemption from some Iraqi regulations, including Ministry of Labor requirements associated with social security and work permits. But in September 2020, the government started enforcing the rules on foreign oil contractors. If they don't comply, companies risk severe consequences — including payment delays, visa problems, and exclusion from tenders.
To learn more about these latest challenges, Iraq Oil Report spoke with Steve Rahola and Mustafa al-Janabi, two key leaders of New Frontiers Business Consulting. For more than a decade, New Frontiers — which is also known by its Kurdish-language name, Asteki Nwe — has been on the ground navigating Iraq's bureaucracy, gaining the experience and relationships necessary to help foreign companies. Read the full interview here.