Thread: Archive Latest News - Think Tank - 01/01/08 - 14/04/08

Kurdistan Tourism Minister receives a Greek businessmen delegation

Tourism Minister in Kurdistan region Namrud Baito Yokhana received a delegation of businessmen that represent a Greek company. The aim of this visit is to study economic relations between the two countries and to entice Greek businessmen to invest in Kurdistan region. Moreover, during the meeting they tackled the issue of establishing an academy that aims to train workers in tourism sector.

Kurdistan Tourism Minister receives a Greek businessmen delegation | Economics News | Alsumaria Iraqi Satellite TV Network

Iraq says close to Signing Technical Oil support Deals

Iraq is close to finishing negotiations with oil majors for technical support contracts that will hopefully be signed in March, Oil Minister Hussain al-Shahristani said on Friday.

Shahristani said in an interview that those companies included Royal Dutch Shell, BP, Exxon Mobil Corp, Total, and Chevron Corp.

"We are negotiating with these five companies. We are at the end of the negotiations," Shahristani said.

"They will study the fields with us, we will put together a plan to boost production, they will help us to select the equipment and deliver this equipment to us. There are other firms which showed interest in signing with us, so we might as well sign a few more as we go along."

He said he hoped the technical support contracts would add 500,000 bpd of oil to Iraq's output in a year.

Iraq says close to signing technical oil support deals | News | Hot Shares | Reuters&

No movement on Iraq's draft oil law -Shahristani

A draft oil law that would equitably share Iraq's vast oil reserves remains stalled in parliament with no sign of movement, Oil Minister Hussain al-Shahristani said on Friday.

Shahristani told Reuters in an interview that he believed a major obstacle to the law passing would be the signing of oil deals between the Kurdistan regional government (KRG) and some smaller foreign energy firms.

"There haven't been any developments on the oil law. The draft agreed on in February 2007, including the four appendixes, is the one with parliament," Shahristani said.

He said contracts signed by the KRG were illegal.

"The contracts should be cancelled to convince the parliament blocs that everybody is serious in committing to this law ... if it stays the way it is, the parliament will not pass it," Shahristani added.

No movement on Iraq's draft oil law -Shahristani | Markets | Reuters

EXCLUSIVE-UPDATE 1-Iraq moves Closer to Deals with big Oil Firms

More than 100 firms including foreign majors are vying for deals to tap Iraq's vast oilfields but a vital oil law is stalled by tension involving the Kurdish region, Baghdad's oil minister said.

Oil Minister Hussain al-Shahristani told Reuters in an interview on Friday that 115 firms had registered to compete for oil extraction and service contracts to help develop Iraq's oil reserves, the world's third largest.

Of these, ten were American, with companies also from Japan, Russia, Britain, Canada and South Korea.

An ministry official had previously put the number at companies that registered by a February 18 deadline at more than 70.

Shahristani also said Iraq was close to finishing negotiations with several oil majors for technical support contracts that would hopefully be signed in March.

Those majors included Royal Dutch Shell, BP, Exxon Mobil Corp, Total and Chevron Corp, he said.

Iraq currently exploits only a fraction of its reserves, among the cheapest to produce, and international oil firms have been positioning for years to gain access.

Shahristani said the fields up for grabs under the extraction and service contracts included Iraq's giant fields in the south along with Kirkuk in the north.

He declined to name the fields, but said the qualified firms would be announced in March.

"From announcing the qualified companies to the signing of the contracts will take a minimum one and a half or two years, but we will try to make it within a year," Shahristani said.

Shahristani said he hoped the technical support contracts would add 500,000 bpd of oil to Iraq's output in a year.

"We are negotiating with these five companies. We are at the end of the negotiations," Shahristani said, referring to the five majors.

"They will study the fields with us, we will put together a plan to boost production, they will help us to select the equipment and deliver this equipment to us. There are other firms which showed interest in signing with us, so we might as well sign a few more as we go along."

Iraq produces about 2.5 million barrels of oil a day, dwarfed by its 115 billion barrels of proven crude oil reserves. Only those of Saudi Arabia and Iran are larger.

STOP GAP

The service and extraction contracts are seen as a stop-gap until a crucial oil law is passed, and will not provide the long-term involvement big oil companies crave.

But the draft law, which would also equitably share Iraq's reserves, remains stalled in parliament, with no sign of any movement, Shahristani said.

Shahristani said he believed a major obstacle to the law passing would be the signing of oil deals between the Kurdistan regional government (KRG) and some smaller foreign energy firms.

"There haven't been any developments on the oil law. The draft agreed on in February 2007, including the four appendixes, is the one with parliament," Shahristani said.

He said contracts signed by the KRG were illegal.

"The contracts should be cancelled to convince the parliament blocs that everybody is serious in committing to this law ... if it stays the way it is, the parliament will not pass it," Shahristani added.

Iraq moves closer to deals with big oil firms | Markets | Reuters

Originally Posted by Seaview

Minister says commercial affairs assist in normalization of Iraq

Foreign Trade Minister Kür‏ad Tüzmen has stated that Turkey is supporting a return to normal conditions in its neighbor Iraq through ongoing commercial relations and that the military incursion into northern Iraq to eradicate the Kurdistan Workers’ Party (PKK) bases in this region is by no means an assault on Iraq.

“Turkey and Iraq have no problems with each other; we are standing on the Iraqi nation’s side now,” he noted, while adding that the battle with the PKK terrorists will continue until the terrorist group is cleared from the area.
The minister was speaking with the press in Ankara after a promotional meeting for the 3rd International Iraq Fair. State Minister for the Treasury Mehmet قim‏ek, Turkish Union of Chambers and Commodity Exchanges (TOBB) Chairman Rifat Hisarc‎kl‎oًlu and Iraqi Ambassador to Turkey Sabah Cemil Omran were also present at the meeting.

Tüzmen stated that commercial relations have always been maintained between the two countries even at the most difficult times. “Our exports [to Iraq] exceeded $2.8 billion in 2007. Adding the transit trade, investments, contracted projects and other commercial transactions, this amount comes to $6 billion. Our target is to take it even higher,” he said.

Hisarc‎kl‎oًlu pointed to the level of trade -- $3.5 billion as of the end of 2007 -- between Iraq and Turkey. Along with the trade volume, the projects undertaken by Turkish companies as a part of reconstruction activities in war-torn Iraq have also strengthened the significance of both countries to each other, he added.

The International Iraq Fair is the only international event the Iraqi Trade Ministry is sponsoring this year. It is being held for the third time this year, and hundreds of Iraqi businessmen established ties with their Turkish counterparts in the first and second editions, Hisarc‎kl‎oًlu said. Gaziantep is city in the southeastern Anatolian region; it is an economically deprived area relative to the western parts of the country. The city is hosting the fair again this year largely thanks to its position as the nearest industrial city to Iraq, and it has become a hub for businessmen who want to establish stronger business relations with the Middle East.

More than 900 companies from 30 countries participated in the fair in 2007, the TOBB president recalled, citing this fact as proof that Gaziantep and the event have been rapidly becoming a strategic location for trade with Iraq. Hisarc‎kl‎oًlu said thousands of visitors will attend the fair from Syria, Jordan, Saudi Arabia, the United Arab Emirates, Iran, Lebanon and Egypt. The fair will run from May 22-25. Economy and trade ministers from Middle Eastern countries, procurement specialists and a large number of Iraqi businessmen will have exhibits in the fair area, the TOBB chairman noted. He stated that the organizers are arranging flights and bus trips from Arbil, Baghdad, Mosul, Basra, Amman, Aleppo and Dohuk to transport participants safely to the fair.

The Small and Medium Industry Development Organization (KOSGEB), the governorship of Gaziantep, the Greater Gaziantep Municipality, the Gaziantep Chamber of Industry (GSO), the Gaziantep Chamber of Trade (GTO) and many more regional organizations are sponsoring the fair.

The Iraqi economy has performed well recently. The gross national product of the country was more than $100 billion (derived from purchasing power parity) last year, and the economy is expected to grow by 5 percent this year. An Iraqi dinar was being traded at $1.466 in 2006 but it gained value last year, reaching $1.255. Iraq’s exports amounted to $34 billion and its imports hit $23 billion in 2007.

http://www.iraqdirectory.com/DisplayNews.aspx?id=5638

Am I missing something in this report where it reports the Iraqi dinar was trading at $1.466USD in 2006, gaining value during 2007 to $1.255USD. Who is responsible for making statements of this nature?? A minor miscalculation wouldn't you agree???

Yeah - thats the journalist - the report is from 'Today's Zaman' originally. Reputable source. He meant 1466 dinars to the dollar in 2006 and 1255 dinars to dollar in 2007. Which is about right, give or take some. Just typed it up incorrectly. I don't think alot of journalists realise that there are people (specific forums for dinars) that pay such close attention to this stuff - currency etc. I mean, it is a little out of the loop.

Iraq urges Iranian firms to help ‘modernize’ Baghdad

Baghdad Mayor Saber al-Aisawi has asked Iranian firms’ help to upgrade level of municipal services in the capital.

The mayor has signed a joint agreement with Tehran under which Iranian firms are to start developing the city, home to more than six million people.

Iranian firms are to enter into joint cooperation deals with Iraqi counterparts “to construct roads, bridges, tunnels and help with garbage collection,” said Aisawi.

The deal is estimated at hundreds of millions of dollars.

Tehran Mayor Mohammed Baqer was in Baghdad last week and has promised to send in teams of engineers and technicians to reconstruct the war-torn capital.

“Iranian firms will help modernize the capital by building new parks, expanding green areas, constructing multi-storey car parks, improving the city’s sewage system and drinking water plants and network,” Aisawi said.

Aisawi’s counterpart is reported to have vowed to open a branch of Tehran’s municipal department in Baghdad, saying that the city’s inhabitants should very soon feel the difference.

Tehran has even promised to start work on the much delayed project of Baghdad metro.

In the years since the U.S. invasion of 2003, Iran has emerged as Iraq’s main trade partner. Trade exchange is estimated at billions of dollars.

Iranian firms are doing brisk business in most parts of Iraq apart from predominantly Sunni cities where anger at Tehran’s activities in the country is high.

Even the Kurdish-held north, a relatively safe enclave and most sympathetic to the U.S., relies heavily on trade with Iran for survival.

Azzaman in English

Treasury McCormick: Iraq Should Focus On Budget Execution, Oil Law

Iraq's government has made progress on economic reforms, but it still faces challenges in managing the budget and getting a long-stalled oil-sharing law passed, a senior U.S. Treasury official said Friday.

David McCormick, undersecretary for international affairs, told reporters after returning from a two-day trip to Baghdad that he came away impressed with the country's economic recovery over the past year. But he acknowledged that much needs to be done.

"They are moving down a path toward economic reform, and have made progress, but still have a long journey to go," he said.

Public spending has been falling short of budgeted levels, leading to a buildup of reserves at the Iraqi Finance Ministry. So U.S. Treasury officials plan to assist the government in improving execution and accountability, McCormick said.

The other major priority for the economy will be passage of a hydrocarbon law to govern distribution of Iraq's oil resources, he said, declining to speculate on when a deal on that contentious issue may occur.

Corruption is also still a major problem, and during the trip Iraqi officials signaled their intention to join the Extractive Industries Transparency Initiative. The EITI is a global initiative aimed at cutting down corruption for countries that produce oil and other commodities.

In meetings with Iraqi officials, led by Deputy Prime Minister Barham Saleh, McCormick noted a shift in focus in the bilateral economic ties between the countries "from reconstruction to capacity building and development, and from assistance to partnership," he said.

Iraqi officials recognize that the recent decrease in violence there provides a "window of opportunity" to move forward with economic reforms, he said.

The Treasury plans to take an increasing role in assisting in the economic agenda, particularly in restructuring the banking sector, he said. The department plans to send another 12 officials to Iraq for technical assistance, adding to the four already there.

When asked about the U.S. stance on Iran providing economic aid to Iraq, McCormick said that "to the extent that any country is able to give economic assistance that is focused on true economic reform that is to the benefit to the Iraqi people is a positive step."

Earlier Friday, Iran's Deputy Foreign Minister Alireza Sheykh-Attar told a state-run television channel that a $1 billion loan for Iraq is being planned to finance development projects, according to a text released by the British Broadcasting Corp.

Company News Story

Originally Posted by Seaview

Yeah - thats the journalist - the report is from 'Today's Zaman' originally. Reputable source. He meant 1466 dinars to the dollar in 2006 and 1255 dinars to dollar in 2007. Which is about right, give or take some. Just typed it up incorrectly. I don't think alot of journalists realise that there are people (specific forums for dinars) that pay such close attention to this stuff - currency etc. I mean, it is a little out of the loop.

Hello Friends!
As I recall from several months ago, in the Arabic world a "period" not a "comma", is the proper symbol to distinguish thousands. Thus, "one thousand" would be translated as... 1.000 whereas we would have... 1,000
Blessings On YOU! AL

Iraq: Korea Makes a Splash

South Korea has launched a major push into Iraqi Kurdistan, defying calls from both Washington and Baghdad to hold back from oil agreements with the autonomous Kurdish government. Lubricating the drive, Korean firms have pledged to conduct infrastructure projects worth almost $13 billion in the Kurdish area of northern Iraq -- a strategy already deployed by Seoul to secure entry to large oil producer Nigeria, and which could be stepped up by the country's incoming president.

Korea's play raises the stakes further in Kurdistan, where oil deals were initially dominated by marginal players, but have gradually moved to the mainstream. It also suggests that Seoul sees real promise in the autonomous region, to the point where it's ready to forsake both upstream opportunities and crude oil supply contracts with Iraq proper.

Instead of jostling with oil majors for work with Baghdad, state-owned Korea National Oil Corp. (KNOC) has clinched two deals with the Kurdistan Regional Government (KRG). A memorandum of understanding signed last week promised KNOC four oil blocks in Suleimaniyah governorate; in return, a Korean consortium led by Ssangyong Engineering promised to spend 12 trillion won ($12.7 billion) building a highway and social infrastructure in Kurdistan, such as hospitals or water treatment plants.

The deals were signed during a Seoul visit by KRG Prime Minister Nechirvan Barzani to meet South Korean President-Elect Lee Myung-bak. An enthusiastic Lee -- former head of construction giant Hyundai -- asked for greater access by Korean firms to Kurdistan; Barzani reciprocated by saying Kurdistan needed Korean experience and expertise.

In an earlier deal, a KNOC-led consortium in November signed a contract for the Bazian Block, nearby in Suleimaniyah (EC Nov.16,p10). That signing prompted Baghdad to halt term supplies of crude to consortium member SK Energy after it ignored demands to abandon work in Kurdistan. SK, the only Korean refiner that buys crude directly from Iraq, lifted around 60,000 barrels per day of Iraqi oil last year (EC Jan.18,p10).

More Aggressive

Lee, who will be inaugurated Monday, looks set to be more aggressive than outgoing President Roh Moo-hyun in meeting the country's strategic oil needs through investments in overseas fields. As Asia's fourth-largest oil importer, Korea wants domestic firms' international operations to meet 18% of national oil import needs by 2013 and 28% by 2016. International oil and gas output jumped 19% in the first half of 2007 to 110,000 barrels of oil equivalent per day, but represented just 3.8% of domestic demand.

By capitalizing on both Korean expertise in construction and engineering, the latest Kurdistan deal builds on a similar deal with Nigeria in 2006, when a Korean consortium earmarked $10 billion to upgrade a Nigerian railway and build a gas-fired power plant. The aid package helped KNOC win preferential rights for up to seven blocks (EC Nov.3'06,p11).

Although KNOC is owned by the state and leads the country's push for overseas oil projects, it downplayed Seoul's direct role in its latest deal, saying this was signed on a commercial basis given the strong oil prospects in Kurdistan, and that the government was not involved in crafting the arrangement. "We are aware of Baghdad's concerns and understand the legal issues with doing business in Kurdistan," said a KNOC spokesman. But he described warnings by Oil Minister Hussein al-Shahristani as "only the individual position of the oil minister … not the [federal] government on the whole."

KNOC moved into Kurdistan early on, signing a memorandum for cooperation with the KRG in January 2007. The KRG's passage of its own oil and gas laws last August boosted the Korean firm's confidence in the region's autonomy, especially as national petroleum legislation remains bogged down in Baghdad. KNOC will soon deploy staff to a new office in Kurdistan to work on the Bazian project.
Although details of the more recent package are still being worked out, one option would be for the KRG to pay for the infrastructure projects during the first year of work, with subsequent payments derived from crude sales from KNOC's blocks, estimated to hold at least 1 billion barrels in reserves. For Ssangyong and its consortium partners, the appeal lies in the prospect of establishing a foothold in Kurdistan and landing further construction contracts.

Korea offers a range of incentives to encourage upstream investments by local companies, including soft loans for exploration and production work and tax breaks on profits. In one attractive measure, firms are exempt from repayments on loans from a special government account if high-risk exploration activities fail, although they must pay a premium if work is successful. As a state company, KNOC could either tap into such funds or raise its own financing.

Beyond consortium leaders KNOC and Ssangyong Engineering, the Kurdistan projects involve some of Korea's leading industrial companies, including Doosan Construction, Kukdong Construction, Daesung Industrial, UI Energy and Samchully.

Iraq: Korea Makes a Splash