Thread: Archive News - Iraqi Dinar Think Tank - 06/05/09 - 04/09/09

Iraq oil showdown
In an email to Iraq Oil Report, responding to a recent article about the oil dispute with Oil Minister Hussain al-Shahristani, the top oil official in the Kurdistan region issues a written assault in an already tense war of words.

The Kurdistan Regional Government has signed two dozen contracts with international oil companies to explore for and produce oil. It cites the 2005 Constitution as giving it such authority. Two projects are ready to begin export, which would be added and needed income, but wrapped into a larger dispute over authority and revenue.

But the KRG’s moves are controversial, despite their technical success. Iraq has yet to determine crucial issues: to what extent foreign oil companies will be allowed into Iraq’s still nominally nationalized oil sector and how to rebuild, if at all, a leading national oil sector. The Ministry of Oil in Baghdad has signed half dozen agreements in the past six months and is readying deals both directly negotiated and two rounds of bidding for oil and gas fields, all aimed at increasing output. Shahristani says the 2005 Constitution maintains the oil strategy as a right of the state, and claims KRG deals are a unilateral usurpation of such authority.

While both Shahristani and Ashti Hawrami, the KRG minister, move forward with their projects, this new showdown over exports from two fields in the KRG highlights a third crucial issue that transcends oil: in the “new” Iraq, how much authority does Baghdad wield?

“If Dr. Shahristani is calling actions taken under the acts of the Kurdistan Parliament to be “illegal and illegitimate,” Hawrami writes to Iraq Oil Report, “then he is acting unconstitutionally and as a member of the government nominated in the name of that constitution he should rethink his position again.”

He goes on to challenge directly Shahristani: “If he disagrees with our contracts or he really thinks that they are illegal, then go and do something about it.”

“Finally, before he has said many times that we will never be permitted to export, so what has happened to make him change his mind now? The answer is clear that he has no authority and he cannot do anything to prevent it, hence agreeing with the decision made by the KRG,” he concludes, referring to two alleged letters from the North Oil Co. giving the exports the green light.

Below is the response, unedited, in full:

"I am responding to the article appeared on the Iraq Oil Report stating that [Shahristani called the production-sharing agreements (PSAs) between the KRG and IOCs “illegal and illegitimate”]. In response to that I would like to offer the following:

1. Dr. Shahristani is stating a personal view only, his views do not reflect the views of the Federal Government, or the Federal Parliament or the Federal Energy Committee of the Parliament. Indeed, his views are not even shared by most of his own Oil Ministry staff.

2. Dr. Shahristani’s authority in the Kurdistan Region is not recognized, nether constitutionally nor in practice, and he is not in a position to influence what we are legally and constitutional doing.

3. His old slogan of “illegal and illegitimate” is becoming a very boring. This message and his “blackmail list” of companies are unproductive and embarrassing for Iraq as a country. No one is paying any attention about what he saying.

4. We are acting according to the laws of the Kurdistan Region, passed by the constitutionally recognized Regional Parliament. The laws of KRG authorized us to sign contracts and develop the regional petroleum resources for the benefit of all of Iraq. If Dr. Shahristani is calling actions taken under the acts of the Kurdistan Parliament to be “illegal and illegitimate”, then he is acting unconstitutionally and as a member of the government nominated in the name of that constitution he should rethink his position again.

5. He is politicizing the situation for personal reasons, and his attacks on KRG’s achievements are aimed at shifting the attention away from his own Ministry’s poor performances and failures.

6. Perhaps he can explain why MoO has failed to increase the production? Why MoO has not been able to develop at least one of many readily available giant oil discoveries to arrest the decline despite $8 Billion funding made available to him? And why MoO continues to flair all the associated gas valued at least at $10 billion per year?

7. If he disagree with our contracts or he really thinks that they are illegal, then go and do something about it. There is a constitutional process that he should adopt to solve the problem, rather that staging media events to repeat his boring political message, which is harming Iraq.

8. Finally, before he has said many times that we will never be permitted to export, so what has happened to make him change his mind now? The answer is clear that he has no authority and he cannot do anything to prevent it, hence agreeing with the decision made by the KRG. The backdated letter sent to us on 10th May (2 days after our announcement) confirming agreement to the export are appreciated. For now that is what matters to us, the rest is irritation and will go away soon.

Regards

Ashti Hawrami"

http://www.iraqoilreport.com/the-biz...showdown/1474/

Interesting,

The Kurdistan region is decades ahead of Bagdad in all areas of economical factors, including the oil contracts they have been completing for past couple years while Bagdad spins its wheels and does nothing but talk, no actions. Bagdad along with administration should be embarassed, and they should leave the Kurds alone to continue with progress on developing oil production and exporting for the good of all of Iraq.

Success to all, Mike

Samarai meets oil & gas committee & Deputy Minister of Oil to discuss oil & gas bill

Iraqi Parliament Speaker Iyad al-Samarai met with the committee of oil and gas, Iraqi Deputy Minister of Oil and a number of the ministry’s director generals to set a scheduled time aiming to discuss the draft law of oil and gas in the parliament.

During the meeting, Samarai saw necessary that the Iraqi government should be bound by a fixed time to complete all necessary procedures about the draft law of oil and gas during that time. Later, it should send it to the parliament for discussion and then adoption.

Delay in passing the Law of Oil and Gas has posed dire consequences for the oil sector since several large global firms are not ready to implement investment projects due to lack of the law, he concluded.

http://pukmedia.com/english/index.ph...10978&Itemid=1

Alsabaah

Samurai proposed time limit for establishing the law of oil and gas

The President of the House of Representatives, Dr. Iyad al-Samarrai with the oil and gas in the Parliament and the Under-Secretary of the Ministry of Petroleum and a number of general managers in the Ministry draft oil and gas law and the obstacles that stand in front.

A statement of the Samurai emphasized the need to take the initiative to the House of Representatives not to lose the opportunity to the development of the oil sector, adding that "the best solution is to identify the time period in which the government would be obliged to submit all the supplements approved by the Council of Ministers to become law, the draft integrated and ready for display the Council for approval. "Samurai also discussed according to the statement received by" morning, "a copy of, a number of issues related to Iraq's oil policy and the means developed to achieve the highest revenues of the State.

On the other hand, discussed the Foreign Relations Committee in the House of Representatives during a meeting held yesterday file Kuwaiti reparations and other issues. A statement received "morning," a copy of which was that "the Foreign Relations Committee held a meeting chaired by Sheikh Hamam Hamoudi, Chairman of the Committee, the participation of the Undersecretary of the Ministry of Foreign Affairs, Lubaid Abbawi to discuss a range of issues in the forefront of the file of Kuwaiti reparations." and that the presence of the Undersecretary of the Ministry of The Foreign Affairs Committee on the proposal to explore the opinion of the Ministry and the Government's key themes, including agreements to Iraq intends to join the Iraqi asylum law in force and the position of Baghdad from Kuwait and file compensation policy of the Government of the American people file complaints against the country. "The statement noted that" were also discussed, Security Council Resolution No. (487) to Iraq to compensate for losses caused by Israeli air raids strike the Iraqi nuclear reactor in 1981.

The "morning" has raised the issue of compensation from Israel, in its issue of February 11 last, which quoted informed sources as saying : that there is a campaign by the Alliance MP Mohammed Naji Mohammed collaboration with a number of MPs include seeking to give effect to the international resolution of the UN Security Council to obtain financial compensation, estimated at billions of dollars in Israel on its military offensive in July that the reactor, the reactor was not that of the previous regime but for the process of development.

http://209.85.227.132/translate_c?hl...VTBL8gvSjxsPPw

Olayan: the coming days will witness the announcement of a new political bloc

Deputy Chairman of the Board of Olayan behind national dialogue in Parliament that the next few days will witness the emergence of a political grouping of forces and personalities within and outside the political process in order to contest the next election.

Olayan said in an exclusive statement of the "morning" that "there are numerous contacts were underway with the participation of forces, whether in the political process or that had not been involved previously to contain a political bloc within the new national far from sectarianism, racism and sectarianism represents the various Iraqi Mkunathm and nationalities to participate in the forthcoming elections, the consolidated list of with different orientations, "as he put it. Olayan said that he" agreed with some of the actors in the political landscape in conjunction with the ongoing dialogues and discussions with many of the political forces and personalities of national and clan to join the new bloc, "indicating that" representing the main actors in this cluster is the National Dialogue Council and the reform and development (solution) and a group of scientists and intellectuals of Iraq and local formations Salahaddin and Kirkuk and the bloc led by the National Independent MP Nadim al-Jabiri, and the Iraqi national unity, in addition to others that hope joining the bloc."

Olayan said "discussions with the forces expected accession to the bloc's new in the final stages and will be announced during the next few lines have been developed after the work of the Block", pointing out that "The visit of former House Speaker Mahmoud al-Mashhadani and MP Nadim al-Jaberi comes to Cairo in the context of meetings with some opposition figures and parties for the purpose of attracting the new assembly and to prepare to go into the parliamentary elections in an active and influential."

http://209.85.227.132/translate_c?hl...tcx9u0k4PlfCKw

Shahristani: Iraq's Kurdish regional government responsible for oil contracts signed

Iraq's Oil Minister Hussain al-Shahristani said Friday that the Iraqi central government is not responsible for the contracts signed by the Ministry of natural resources in the Kurdistan Regional Government of Iraq with foreign companies. He pointed out that the latter agreed to assume the responsibility of the government in Baghdad to export oil in the region and its proceeds.

He said al-Shahristani told reporters on the sidelines of his participation in the work of the World Economic Forum at the Dead Sea, the export of Iraqi oil in the North must be made through the central government in Baghdad, according to export mechanisms accredited to it, and the Government of the Kurdistan region of Iraq and agreed to do so.

He added that the Minister of natural resources in the region declined to hand over oil revenues north of the central government and has to conclude contracts with international companies, without recourse to the central government, stressing that the latter has no right to do so.

The Kurdistan Regional Government of Iraq has signed more than a year ago to invest in contracts for oil and gas and international oil companies, and made amendments to old contracts.

Shahristani said the Iraqi government was put to the Government of Kurdistan, the idea of handing over the contracts with international companies for the central government for review and scrutiny, but the Territory Government had not responded to this argument, "and thus bears the responsibility for these contracts."

The government of Kurdistan, Iraq announced that it will be issued according to the laws governing the oil in the Iraqi Federal Constitution. The government says the Kurds in Baghdad said they do not have the right to enter into or sign contracts without obtaining approval from the central authority, but the Kurds have refused to do so.

It is noteworthy that the oil revenues constitute 90% of the income of the Iraqi government, which seeks to raise the level of production to rates before the U.S. invasion of Iraq in 2003. The Iraqi oil industry suffered from the weakness of foreign investment and the need for the development of oil fields and installations, which was also the target of attacks by insurgents. Because of the weakness of the production has not benefited much from the proceeds of Iraqi oil record levels reached in 2008 the price of the past, which sometimes amounted to $ 147 a barrel, before declining prices reached a rate of 60%.

And Iraq is a member of the Organization of Petroleum Exporting Countries (OPEC) and has the third largest oil reserves in the world at about 115 billion barrels, at least.

http://209.85.227.132/translate_c?hl...pW-g3xakVa6W2g

Iraqi oil minister rejects Kurdish oil plan

Iraq’s oil minister has stepped up a dispute with the country’s northern Kurdish region over control of the country’s oil resources, saying Baghdad would not pay foreign companies for their oil exports from autonomous Kurdistan.

Hussein Shahrestani said the Iraqi government was under no obligation to ensure that the companies were paid for oil sent through pipelines from Kurdistan into Iraq and then exported by the Iraqi government to international markets.

“If [the Kurdish oil minister] can get a dollar out of the [Iraqi finance] ministry, let him call me,” he told the Financial Times.

Ashti Hawrami, the Kurdistan Regional Government’s oil minister, said to the FT earlier this week that the Kurdish government has told oil companies working in the northern Iraqi province that they will be able to export oil using Iraq’s main pipeline as early as next month. His comments appeared to signal a breakthrough in a long-running dispute about sharing Iraq’s oil wealth.

The oil ministry in Baghdad confirmed that crude extracted from some fields in Kurdistan could be exported. The question that remained unanswered, however, was who would pay the oil companies operating in northern Iraq.

Mr Hawrami said DNO, a small Norwegian oil producer, and Switzerland’s Addax were given assurances by the KRG that they would be paid but whether the Kurdish government will be compensated for that by Baghdad is far from clear.

Mr Hawrami said talks with the finance ministry in Baghdad could produce an agreement, and suggested that Mr Shahrestani was the only government member who adamantly opposed any compensation.

The companies say they have been told they would be paid by the KRG regardless of whether it reaches a compromise with Baghdad.

But Mr Shahrestani’s comments appear designed to deter companies from further dealings with the KRG.

He said that contracts signed by the KRG with the oil companies were not recognised by the Iraqi government as a whole, not only his ministry. The KRG, he added, already receives 17 per cent of Iraq’s oil budget and should compensate the companies with these funds. The only other option for the KRG, he added, was to hand over the contracts to Baghdad.

Oil has been a main sticking point in a long-running dispute between the Kurdish regional and Baghdad central governments and this has prevented passage of a national hydrocarbons law that would outline foreign participation in the sector and how revenues should be shared between Iraq’s various regions.

But the permission to export an extra 100,000 barrels a day (as a start) was not the result of negotiations but rather an uncoordinated move that has done little to ease the bitterness between the two sides.

http://www.ft.com/cms/s/0/c25d9670-4...nclick_check=1

The Commission on oil and gas parliamentary accuses oil ministry to waive the Constitution

Member of the committee charged with oil and gas in the parliament, Ali Hussein, Blue, and the Oil Ministry to waive the Constitution not to be given any powers to the Kurdistan region in the management of its oil.

The MP for the Blue Kurdistan Alliance bloc that "the oil ministry did not want to give the powers of the Territories in the management of oil, but would like to manage the oil and the central dispute of the Constitution because there is a constitutional rule that refers to the laws can not be in violation of the Constitution."

The MP added that the Blue "paragraph of the oil and gas issues in the controversial constitutional amendments," he said, noting that "the Kurds see this issue from the standpoint of the constitutional and the other parties want to go and change the Constitution so that they remain confined to the center of all the authorities."

http://209.85.229.132/translate_c?hl...nwyJwuWsQ8n7Vg

Adviser to the Central Bank: The World is facing financial constraints and low Awaidalmozanp needs foreign currency

adviser said the Central Bank of Iraq's adherence to the bank in achieving its objectives as laid down in law and his call not to prejudice the cash reserve.

The appearance of Dr Mohamed Saleh told the independent press (Iba) said Saturday that reducing inflation and to maximize the purchasing power of the Iraqi dinar and the achievement of balance in the cash market, the necessities of an ongoing World Bank in its application and implementation in support of the national economy.

He explained that the preservation of and use of foreign reserves as the best in the face of market movements is the first concern of the monetary policy of the Central Bank of Iraq.

Saleh added that the successes achieved by the bank is facing major constraints forth down the first budget, the financial returns resulting from lower oil prices and the second is the continuation of the market to meet the needs of foreign currency and to meet the demand of the reserve available.

He rejected calls for the benefit of using the reserve to address the budget deficit because of the continuing decline in the price of a barrel of oil than expected in the general budget of Iraq. Returned as a criticism of human offset obligations within the foreign currency balance sheet of the bank.

He also called for the development of economic policy for the development of the productive sectors to enhance the budget and create additional revenues, along with oil revenues.

The Oil Minister Hussain al-Shahristani said yesterday that the government may be forced to use reserves of foreign currency and loans if they do not rise in oil prices.

http://www.ipairaq.com/index.php?nam...itics&id=11530

Shahristani asserts the possibility of ratification of the province of Kurdistan's oil contracts if they are in the interest of Iraq

Clearer and Oil Minister Hussain al-Shahristani, the oil revenues produced by oil contracts signed between Kurdistan and foreign oil companies will go to the central government treasury.

And al-Shahristani told reporters on the sidelines of the World Economic Conference held in Jordan that "the Kurdistan Regional Government has agreed to link the oil fields of national oil pipeline network heading to Turkey," adding that "companies that have entered into oil contracts with Kurdistan government to produce these binding contracts for the Ministry of Oil Official "The Minister of Oil," The Ministry has ratified it and that her grandmother is in the interest of Iraq."

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