Thread: Kurdistan Economy

Iraqi Kurds push for recognition of oil deals
By Associated Press ,
http://topnews360.tmcnet.com/topics/...-oil-deals.htm
BAGHDAD (AP) — Iraq's Kurds said Tuesday they won't resume oil exports from their self–ruled territory unless the central government recognizes the contracts they have already signed on their own with international energy companies.
The Kurds' condition could foil ambitious Iraqi plans to raise daily oil exports to 2.25 million barrels in 2011 from the current 1.9 million. Oil revenues account for nearly 95 percent of Iraq's budget as the energy–rich nation tries to rebuild the country after decades of wars and international sanctions.
Since the 2003 U.S.–led invasion that toppled the regime of Saddam Hussein, the Kurds have sought greater control over oil in their autonomous region in northern Iraq while Baghdad has argued that oil is a national resource under the central government's control.
Ali Hussein Balo, an adviser to the Kurdish Ministry of Natural Resources said the crude–rich region can significantly contribute to the nation's target of raising oil exports next year by shipping 150,000 barrels a day out of the country, but only if all "our deals are recognized officially in a signed paper by Baghdad," he told the Associated Press (News - Alert).
Iraqi Kurds have signed more than two dozen production sharing agreements with mid–sized companies from Turkey, U.K., Austria, U.S., Canada, Korea and China. Under those deals, the companies are entitled to a share of the profits from the oil produced.
The deals are deemed illegal by the Baghdad central government that has only awarded 15 oil and gas service contracts to international companies since 2008.
Baghdad managed to negotiate more attractive terms in its deals, paying developers just a flat fee for each barrel produced, rather than surrendering a share of the profits. They do not recognize the Kurdish deals and refuse to honor the production sharing agreements.
The Kurds started exports in June 2009. They were halted few months later amid disagreements with Baghdad over payments.
Iraq's new oil minister, Abdul–Karim Elaibi, last week declared the dispute over how private companies accounted for equipment costs and other expenses for reimbursement has been settled, clearing the way for the exports to resume.
Elaibi said Baghdad would receive all the oil produced for export and would pay only the costs incurred by the developers.
"Baghdad wants everything free of charge," Balo said by phone from Irbil, the capital of the Kurdish autonomous region in northern Iraq. "We can't do that since we are committed to the companies to have a share in the produced oil," he said.
In 2004, the Oslo–based DNO became the first independent Western oil company to secure an oil deal in Iraq after the 2003 U.S.–led invasion by signing a production sharing contract with the Kurds to develop the Tawke field in Dahouk province.

= Impasse On Kurdish Exports Signals Broader Iraq Oil Uncertainty
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Friday, Dec 31, 2010
By Hassan Hafidh
Of DOW JONES NEWSWIRES
http://www.zawya.com/story.cfm/sidZW20101231000107

AMMAN (Dow Jones)--Recent Kurdish statements downplaying progress on an agreement with Baghdad to resume Kurdish oil exports underscore the challenges facing the Iraqi oil industry despite renewed optimism in the wake of the new Iraqi cabinet.

In recent days, newly-appointed Iraqi Oil Minister Abdul Kareen Luaiby has expressed hope that Kurdistan would resume oil exports shortly, possibly within days. Luaiby initially suggested Baghdad would also recognize of oil deals signed by Kurdistan with international oil companies, before saying there were no new developments on the long-simmering controversy.

The optimistic tone of Luaiby's remarks seemed to confirm expectations among some Kurdish officials and outside analysts that the new Iraq oil ministry would be more sympathetic to Kurdish demands than previous oil minister Hussein al-Shahristani.

But Ali Hussein Ballo, an advisor to the Kurdistan Regional Government's minister of natural resources, said that Kurdistan won't resume exports absent a written agreement with Baghdad. While praising Luaiby's tone, Ballo said there is no time-frame to resume exports.

"We need a written agreement that regulates the mechanism of crude oil exports resumption and paying back contractors," Ballo said. "We are ready to start immediate negotiations."

The resumption of Kurdish oil exports, considered vital to Iraqi aspirations to boost production from today's 2.5 million barrels a day, is just one of myriad issues facing the Iraqi oil industry as it heads into 2011. Iraq has said it hopes to reach some 12 million barrels a day by the end of 2017. But most analysts are skeptical of those targets, citing a range of issues, including the lack of a national oil law and wanting security and logistics.

Although the two sides could very well reach an agreement soon to resume oil exports from the Kurdish fields, broader disagreements will continue to define the relationship between Baghdad and the Kurdish region, said Ahmed M. Jiyad, an associate of the London-based Centre for Global Energy Studies and an independent consultant.

"I don't think there will be an inevitable solution to the impasse," Jiyad said. "The Kurdish demands are difficult to implement." For example, the Kurdish production-sharing agreements are illegal under the Iraqi constitution, Jiyad said.

Kurdish officials have said the resumption of exports could add as many as 200,000 barrels a day to Iraqi production by the end of 2011. The exports have been largely curtailed since summer 2009.

Beginning in June 2009, oil produced in the KRG was exported via the pipeline to Mediterranean port of Ceyhan in Turkey, with all sales proceeds going to the Iraqi treasury through the Iraqi Development Fund at the New York Federal Reserve Bank. But foreign oil companies suspended Kurdish exports three months later, because of the lack of a payment system for compensating the exporters.

DNO International ASA (DNO.OS), which had been producing some 45,000 barrels a day before suspending most output in 2009, can ramp up to 50,000 barrels a day from the Tawke oil field "on short notice," a spokesman said.

"As soon as a robust system for exports and payment are in place, we are ready to start exporting," said DNO spokesman Tom Bratlie.

The KRG can also export additional 50,000 barrels a day from Taq Taq which is operated by a consortium consisting of China's Sinopec and Turkey's Genel Enerji.

Luiaby has said in recent days that the Kurds reached an agreement with Baghdad in April to export oil via the national export system, with revenues going to the central treasury, which would then compensate the companies.

But Ballo denied that they reached an agreement with Baghdad in April. "There were talks only," he said.

The Kurds, who have maintained semi-autonomous rule for almost the last two decades, are also pressing the Baghdad central government to recognize some 37 production-sharing contracts signed with private oil companies, and honor these multi-billion deals and pay the contractors' operating costs and capital cost recovery.

Baghdad argues that the Kurdish deals are null and void because they are yet to be approved by the central government, while the Kurds say that they are in line with the new constitution.

The other thorny issue that could impede any solution is the oil-rich Kirkuk. The Kurds want to annex to their region the northern Kirkuk province which is inhabited by Kurds, Arabs and Turkmen. While many Iraqi Arab politicians think Kirkuk should stay under the rule of the central government, the Kurds believe Kirkuk is Kurdish and that most of the Arabs were brought in by former Iraqi leader Saddam Hussein.

The Kurdish issues are "likely to be at the center of political tensions in the new government," said risk consultant Eurasia Group in a recent research note. Reaching an agreement on an oil and revenue sharing law in 2011 "will require a whole new round of protracted political bargaining" compared with recent compromises effected by Prime Minister Nouri al Maliki to assemble the cabinet.

While the emergence of the new Iraqi cabinet is "an extremely positive development," Eurasia Group cautioned the coalition could "still become unstable" in the coming months.

Gulf Keystone faces claim from Excalibur on Kurdistan assets

http://www.pennenergy.com/index/petr...one_faces.html
Eric Watkins

OGJ Oil Diplomacy Editor

LOS ANGELES, Dec. 30 -- Excalibur Ventures LLC has gone to court in New York and London with claims of entitlement to a 30% stake in Gulf Keystone Petroleum's oil assets in Iraq's northern Kurdistan region.

Gulf Keystone said Excalibur began proceedings in New York Dec. 23 to assert claims that it introduced Gulf Keystone’s management to opportunities in the Kurdistan region and had a contract to develop the area together 3 years ago.

Excalibur also filed the claims in London on Dec. 21 where it sought a "worldwide freezing” of Gulf Keystone's assets. The London court refused Excalibur’s request on the grounds that it did not consider there was any risk that the firm’s assets would be dissipated.

Excalibur, described on its web site as offering advisory services related to Iraq from project finance to translators and security, is run by Rex Wempen, cofounder of the US-Iraq chamber of commerce and former security consultant.

Observers in London said that Gulf Keystone is expected to argue that it never had a contract with Excalibur, but will acknowledge its Chief Executive Todd Kozel had worked with Wempen through a firm called Texas Keystone.

Texas Keystone has a commercial relationship with Gulf Keystone, providing professional management and administrative services. Texas Keystone also initially led the pursuit of opportunities for oil exploration in Kurdistan, from which Gulf Keystone later profited.

In particular, Texas Keystone is said to have negotiated Gulf Keystone’s contract with the Kurdistan Regional Government (KRG) for the Shaikan oil field, which is estimated to hold as much as 4.2 billion bbl of oil.

Kozel said his firm will contest Excalibur's actions in both courts, saying, “We believe we have very good grounds to vigorously challenge these claims.”

In Kurdistan, Gulf Keystone holds interests in four blocks:

• Shaikan, 85 km northwest of Erbil, covering 283 sq km. Interests under the production-sharing contract are Gulf Keystone 75% (operator), MOL 20%, and Texas Keystone 5%.

• Akri-Bijeel, adjacent to Shaikan block. Interests in PSC are MOL 80% (operator) and Gulf Keystone 20%.

• Sheikh Adi, northeast of Dihok and to the west and on trend with the Shaikan structure. Gulf Keystone, operator, holds an 80% interest in the PSC. KRG holds 20%.

• Ber Bahr, north of Dihok on a trend with Shaikan and Sheikh Adi blocks. Ber Bahr PSC is operated by Genel Energy International Ltd., 40%. Gulf Keystone holds 40% and KRG holds 20%.

In August, Gulf Keystone reported a stable test rate of 1,250 b/d of 19.7° gravity oil at the Shaikan-1 discovery in Iraq Kurdistan, up from 128 b/d on a test in 2009 (OGJ, Aug. 11, 2010).

Kurds Upset At Paying Kuwait For Saddam’s Sins
http://www.rudaw.net/english/news/iraq/3385.html
ERBIL, Iraqi Kurdistan: Iraqi Kurdistan will have to pay US$197 million annually from its oil revenues toward Iraq’s debt to Kuwait beginning from next year, according to a new bill currently before the Iraqi parliament.

Iraq still owes $22 billion of the approximately $53 billion which the United Nations (UN) ordered Iraq to pay Kuwait as compensation for war damages incurred during the Iraqi invasion of Kuwait in 1990.

Bayazid Hassan, a Kurdish member of the previous Iraqi government’s Oil, Gas and Natural Resources Committee, said the proposed Iraqi Budget Law would require the semiautonomous Kurdistan region to export a minimum 150,000 barrels of oil per day (bpd) when it came into force in early 2011.

The revenue from this oil – around $3.94 billion annually – would be transferred directly to the Iraqi oil account, and five percent of this would be required to go toward Kuwait’s compensation, he said.

“According to the Constitution, Iraq’s oil is for all Iraqis, and five percent of the entire Iraqi oil income must go to Kuwait,” said Hassan, a lawmaker from the Kurdish opposition party Gorran.

Article 11 of the Iraqi Constitution states that the country’s oil and gas belongs collectively to all Iraqi citizens, regardless of their religious background or in which region they live.

Additionally, according to a 1991 UN Security Council resolution, Iraq must pay five percent of its oil income into Kuwait’s specially created compensation fund.

Hassan said Iraq was involved in international negotiations to have its debt to Kuwait waived, but if these were not successful, Iraq would have to redeem the entire debt.

Sami Abdulla Atrushi, a member of the former Iraqi government’s Financial Committee, said the country’s debt requirements to Kuwait were an unfair burden on average Iraqis.

“It’s an injustice against Iraqis in general and Kurdish people in particular,” said Atrushi. “Neither the Iraqi people nor their current government…agree with the policies employed by the former [Ba’athist] regime [of Saddam Hussein], especially those against Kuwait.”

Atrushi said the Kurdish people were the “first victim” of Hussein’s policies, referring to the Ba’athist regime’s genocidal persecution of the Kurds, and that therefore the compensation requirements were especially inappropriate for Iraqi Kurds.

“It’s a great injustice that Kurds should compensate Kuwait’s losses due to the Ba’athist regime’s policies, because the regime employed the same policies against the Kurdistan region,” said Atrushi. “The [required] five percent of Kurdistan’s oil income would be better spent on development and reconstruction in the region. The effects on Kurdistan from the former regime can still be felt here.”

According to the proposed Budget Law, Iraqi Kurdistan’s oil contribution of 150,000 bpd will not alter its already existing allotment of 17 percent share of Iraq’s overall oil income. With a barrel of oil valued at around US$73, Kurdistan’s crude oil exports will add US$10.95 million per day to Iraq’s oil account.

Mehma Khalil, an Iraqi lawmaker with the alliance of Kurdistani parties, points to shortcomings in the new budget bill.

“The 150,000 bpd export requirement from the Kurdistan region combined with its 17 percent share of Iraq’s oil income points to a political agenda, which the Iraqi oil and finance ministers are behind,” said Khalil, adding that Iraqi Kurdistan was in need of compensation just as much as Kuwait was, due to the Ba’athist regime’s destruction of the Kurdistan region.

“Five thousand of our villages were destroyed; thousands of our mass graves have yet to be discovered,” he said. “Kuwait does not really need that money of ours.”

In addition, Khalil said both Kuwait and Saudi Arabia had given enormous support to Hussein’s former regime in annihilating and oppressing the Kurds.

“It is the Kurds’ right to ask for compensation from both these countries,” said Khalil. “I will not allow the Iraqi parliament to pass such a law.”

Source: The value of trade exchange between the Kurdistan region and Turkey amounted to eight billion dollars last year

The head of the delegation Turkish Commercial, which includes 37 people from the owners of companies varied, all business contracts with a number of businesses in the Kurdistan region, and that during the delegation's visit the city of Sulaimaniyah on Tuesday, noting that the value of trade between Turkey and the Kurdistan region amounted to eight billion U.S. dollars in 2010, according to a news announcement.

The declaration noted journalist who received the agency Kurdistan News (Rn) a copy of it today that "trade delegation Turkish consisted of the governor (Ademan) Ramadan, Sudan, and the mayor to maintain Najib Buick Aslan, and a business delegation and the owners of capital, and was greeted by the Governor of Sulaymaniyah Behrouz Mohammed Saleh.

During the meeting which was attended by the mayor of Sulaymaniyah, discussed bilateral relations between the two provinces in the fields of trade, tourism, economic, and cultural exchanges between the two sides, said Governor (Ademan) that "the delegation's visit to the region reveals the desire of the Turkish state to promote relations with more than one region Iraqi Kurdistan, and for this purpose was a formal invitation to the Governor of Sulaymaniyah province, to visit (Ademan) Turkish."

He pointed out that Sudan "culture, language and common religion is a strong motivation to participate in the process of rebuilding the city of Sulaymaniyah, the other objective of the visit of the Turkish delegation."

Met the Turkish delegation later, with the President and members of the Union of Exporters, Importers, the Kurdistan, and the number of dealers in the city of Sulaymaniyah in the hall of the Sulaimaniya Palace, and after the meeting, signed by the President of the Turkish delegation, Ramadan, Sudan, and the President of the Union of Exporters, Importers, the Kurdistan Mustafa Abdul Rahman commercial contracts and a number of memoranda of understanding between the parties , followed by organizing a press conference where he unveiled a Sudan that the value of trade exchanges between Turkey and the Kurdistan region amounted to eight billion dollars in 2010.

For his part, said Mustafa Abdel Rahman that "Turkish companies visiting Sulaimaniyah currently working in the fields of textiles, restaurants, and food, building materials, and agricultural crops, livestock products, automotive, energy, electricity, transportation, and beauty salons."

He pointed out that "the aim of the Turkish delegation's visit is to strengthen and enhance trade relations between Kurdistan and the city (Ademan) Turkish, and the signing of joint contracts between merchants parties."

http://www.aknews.com/ar/aknews/2/209492/

Abul Gheit: Iraq's Kurdistan region grows and develops very quickly

The Egyptian foreign minister, on Sunday, Iraq came out or on the verge of out of the dark tunnel in which he faced in the past seven years and that he kissed on the development and economic growth, indicating that the Kurdistan region of Iraq is moving rapidly towards development and reconstruction, construction and growth in all levels, both infrastructure and services, political, technical and other. Indicating that he found the region a beautiful model for Iraq in its transition to the new democratic.

Said Ahmed Aboul Gheit told a news conference attended by a reporter and news agency Kurdistan (Rn) that he "found Iraq in his recent visit he had gone out or are about to get out of the dark reality that the development during the past seven years." Indicating that he "found a lot of balance between the political forces Iraqi and a lot of economic growth."

He stressed that "Baghdad is able to manage the calm face of the forces of terror and obscurantism as well as addressing other problems." Adding that "found Iraq's Kurdistan region of Iraq, a beautiful model in the new democratic transformation.

On the participation of a large Iraqi delegation at the Economic Summit, Abul Gheit said that "there is considerable support for Egypt to Iraq and support to host the Arab summit in Baghdad and Egypt will participate at the highest level."

Aboul Gheit pointed out that "the feasibility of the Arab Economic Social and Development will demonstrate the feasibility of a positive process of joint Arab action where re-activation potential of Arab economies and linking to each other, and the completion of infrastructure in all areas, and remove all obstacles to road transport, maritime and railway transport to be one of the leading priorities of this Summit, in addition to Almcwoat interest in funding small and medium-sized according to the offering, which was presented by Kuwait in the first Economic Summit 2009."

http://www.aknews.com/ar/aknews/2/210990/

Kurdistan Investment: Britain plans to open an accredited bank in Sulaimaniya

A spokesman for the investment the Kurdistan region, that a delegation headed by the British Ambassador to Baghdad John Jenkins visited the city of Sulaymaniyah on Saturday night, and held a meeting with a number of contractors and investors to discuss the economic situation and industrial city, indicating that the Jenkins expressed his intention of opening an accredited bank in Sulaimaniya.

The Yassin Mahmoud, told the Kurdish news agency (Rn) "The visit of the British ambassador to the Kurdistan region is an important point of the city of Sulaymaniyah, came at the invitation of the Federation of investors the Kurdistan, as has been discussed a number of important issues of common interest between the two sides during the meeting of the British ambassador investors in the city".

He said Mahmoud as saying that "there are 22 British companies operating in the Kurdistan region, including the only two companies in the city of Sulaymaniyah, so we talked about the geographical significance of the city for the British Embassy, British companies and the lack of it."

And that "the British ambassador pledged to convene a conference featuring the British side and officials of Sulaymaniyah and investors in the next stage and before the month of March next, the foundation primarily foreign companies active in the city."

Mahmoud said that "Jenkins spoke about the policy of his country moving towards strengthening the economic relations between Britain and the Kurdistan region, and the granting of visas for traders Aldaimip Kurds, or at least give them a visa for a period of two years."

He added that "Britain is making efforts to open a British bank supported the Kurdistan province in the near future, and especially in the city of Sulaymaniyah, as well as to bring the insurance companies, and a number of consulting firms to the city."

According to Mahmoud "we have received commitments from the British ambassador to Baghdad and his accompanying delegation to the necessity of establishment of a number of large plants in Sulaymaniyah, that carry our insurance through their banks and major companies."

http://www.aknews.com/ar/aknews/2/212658/

Norwegian company announces its willingness to start exporting oil from northern Iraq

DNO said. That. International or the Norwegian oil facilities and infrastructure in the Kurdistan region of Iraq is ready to start the export of oil field Tauki the province at short notice.

The company confirmed its stated earlier that the export capacity of its facilities in the Tawke of 50 thousand barrels per day at least, indicating that it would announce any new information or material once available to them.

The announcement came after the Norwegian company reported that the Kurdistan Regional Government that it has reached an agreement with Iraq's central government for the resumption of oil exports from the region as of early February next year.

http://radionawa.com/Ar/NewsDetailN....431&LinkID=155

Lawmaker urges referendum on Kurdistan constitution

After almost one year and half suspension of referendum on the Kurdistan Region's constitution, the head of the Regional parliament's legal committee urged parliament to conduct the public voting.

Speaking to AKnews, Sherwan Haydari urged the presidency of the Regional parliament and the Independent High Electoral Commission of Iraq (IHEC) to coordinate and set a date for the process.

Haydari said it is time to set a date for the referendum while he blamed some "political factors which Baghdad also was involved in," for the delay.

The Kurdish officials sought to conduct the process along with the legislative voting in Kurdistan July 25, 2009; however, the IHEC refused to conduct the process due to some "technical issues". Nevertheless, the Kurdish observers' suspected political pressure by some Iraqi sides triggered the postponement.

Sozan Shahab, the head of the Kurdistani list in the Kurdish parliament told AKnews her bloc (majority's bloc) has proposed to the Kurdistan Region's presidency to identify a date for the referendum. The bloc is waiting for response.

Kurdistan's Constitution was first drafted in 1992, amended in 2002 and ratified Nov.7 the same year.

However, after the fall of Saddam Hussein regime in 2003, a committee was set up to adapt the constitution to the recent changes. The mission ended in 2006.

It was only three years after, on June 22, 2009 that the final draft went public which contained 160 articles, up by 38 from the first draft, along with a modified preface.

Under the Kurdish constitution, Kurdistan is run by a parliamentary, presidential and democratic system. The territory of the Region, in addition to Erbil, Sulaimaniya and Dohuk provinces, includes some disputed areas which are to be determined by article 140 of the Iraqi constitution. Islam is identified as the majority creed and a major source for legislation. No law should contradict Islamic laws.

http://www.zawya.com/Story.cfm/sidZA...20constitution

Kurds to export oil starting in February

Baghdad opened the door for foreign oil companies operating in the Kurdish north to get paid under a new deal for exports through Turkey, a spokesman said.

The Iraqi Oil Ministry in a deal with the Kurdistan Regional Government paved the way for the resumption of oil exports starting in February.

Asim Jihad, a spokesman for the Iraqi Oil Ministry, said the agreement paves the way for foreign oil companies to get paid for their work in the Kurdish north, Bloomberg News reports.

The agreement calls for about half of the petroleum products produced in the Kurdish provinces to be used for domestic demand with the rest exported through Turkish ports on the Mediterranean Sea.

Oil flowed for just four months after it started in June 2009 because of legal disputes between the Kurdish government and Baghdad.

Addax Petroleum and DNO stopped exporting crude because they weren't getting paid for their work. Foreign oil companies, Bloomberg News adds, are owed around $400 million for their work in Iraqi Kurdistan.

DNO said after Iraqi lawmakers reached a power-sharing deal on a new government in November that 2011 would be productive for the company in Iraq.

http://www.upi.com/Science_News/Reso...6791295877399/