Archive News - Iraqi Dinar Think Tank - 22/06/2010 - 04/10/2010

Figures regarding investment plan amounts incorrect – minister

Iraq’s oil minister said on Tuesday that recent statements made by some politicians regarding the investment plan amounts for the past four years are incorrect.

“80 per cent of the budget spent to pay salaries of the employees and retired people and to security forces and health sector, while 20% was allocated to the investment plan,” Hussein al-Shahrestani said at a press conference with the planning minister in Baghdad, attended by Aswat al-Iraq news agency.

“The 20% is less than $40 billion not $300 billion,” he said, noting that “in 2006 3$30 billion was allocated for the investment plan, while in 2007 $40 billion and $41 billion in 2009.

For his part, Planning Minister Ali Baban said that “the total amount allocated for the investment plan for 2006, 2007, 2008 and 2009 is $38 billion from the oil revenues, which registered $171 billion for the four mentioned years.”

http://en.aswataliraq.info/?p=134447

Iraq: the ownership of the land " hindered "the development of investment and an invitation to strengthen ties with Saudi Arabia

An Iraqi government adviser said Monday, that the real problem facing investment in Iraq is the ownership of the land is located by the investment projects, with economic expert called for, the Iraqi government to strengthen economic ties with Saudi Arabia.

He said the economic adviser to Prime Minister Abdul Hussein Al-Anbuge told Kurdistan News (Akaniwz) "The land problem in Iraq will not be easily solved because of the complexity of this file and the absence of real efforts to clarify the ownership of the land."

He added that "30 percent of the land ownership of the property is not known for years it has caused problems and hindered the fact many of the investment projects in the country."

The Iraqi Council of Representatives on 13 October, in October 2009 approved the Law on the First Amendment to the Investment Law as approved by the Presidency Council, and included a paragraph of the amendment to allow non-Iraqis to own land for the purposes of housing projects exclusively.

For his part, the economic expert for the full Yasiri Kurdistan News Agency (Akaniwz) "the future Iraqi government is supposed to do economic relations with Saudi Arabia as a country economist in the Middle East as well as an oil country and has close ties with major international oil companies."

He explained "It is very important to separate the Iraqi government between the political and economic problems with Saudi Arabia to the maturing of the economic reality in the stage ahead", following to say "surely that Saudi Arabia has worked badly in Iraq, and we must not deny the economic role of the important plays in the region".

And that "to attract the investment companies and the oil working in Saudi Arabia, a move that would draw the new features of the economy of Iraq."

http://www.aknews.com/ar/aknews/2/163364/

Rumaila Oil Output up 10% by End of Year

On July 1, the operational management of Iraq’s Rumaila project was officially transferred to Rumaila Field Operating Organization (ROO), a consortium led by CNPC, BP and Iraq’s South Oil Company.

On July 3, BP, CNPC and Iraq’s South Oil Company held a ceremony at Basra to mark the transfer. More than 130 representatives from the three companies as well as from Iraqi government, the oil ministry and concerned sectors of the community attended the ceremony, which marks the consortium’s official taking over of the oilfield.

BP and CNPC signed a 20-year service contract with Iraq in November to increase Rumaila’s output to 2.85 million barrels a day, making it the world’s second-largest producing oilfield. Iraq intends to raise oil production to 6 million bpd by 2015 to boost its war-ravaged economy.

The contract was the only oilfield deal awarded by Iraq in June 2009 in the first bidding round since the U.S.-led invasion in 2003.

http://www.iraq-businessnews.com/?p=5629

Senior Economist : "Al Qaeda" did not succeed in destroying the Iraqi economy

The Economist Iraq, Tuesday, Iraq's economy is strong because of investment companies worldwide have contributed to its restructuring , particularly after 2003, noting at the same time that Al Qaeda could not, despite all his attempts to hit the country's economy.

Ahmed Salman told Kurdistan News (Akaniwz) that "al Qaeda could not demolish the structure of the Iraqi economy after the security services were able to narrow it down, as well as the failure of those sympathetic to him in the financing of its armed forces."

Iraq relies on oil mainly in support of its budget financial and occurred during the year, contracts with several international companies to develop some oil fields in the two rounds of licensing the first, second, and often Maystahedv Qaeda vital installations in Iraq, as part of a plan by the militant group.

After pointing Salman the economy of Iraq has "roots strong" after making the phrase "economic reforms", he said that this was due also to the presence of investment companies worldwide have contributed to the reconstruction of infrastructure destroyed after the recent war led by the United States in 2003 to topple Saddam Hussein.

He pointed out that al-Qaeda in Iraq hit "permanent paralysis" because of the killing of many leaders, and expressed the hope that the next government on economic development in Iraq.

American forces in Iraq, confirmed on several occasions, that "Al Qaeda in Iraq faces major collapses, turning to gangs to extort millions of dollars a year from companies in a desperate attempt to find alternatives to funding for activities falling."

And al-Qaeda , his wings spread in a number of Islamic countries , including Iraq, is a militant organization founded in the Eighties the past, and pursuing a "jihad" international against the West and "collaborators" with him.

http://www.aknews.com/ar/aknews/2/163439/

Iraq oil brings $2 bln extra income in H1-minister

OPEC member Iraq's oil revenues were about $2 billion more than expected in the first half of 2010, the country's oil minister said on Tuesday.

The extra income would help Iraq to narrow its budget deficit, originally planned at 22.9 trillion dinars (around ($19.6 billion), Oil Minister Hussain al-Shahristani said.

"What we got from the Iraqi oil sales in the first half of this year is around $2 billion more that what we have planned for at the time of setting the 2010 budget," Shahristani said in a news conference.

"The 2010 budget was based on deficit ... now we have managed to reduce that deficit."

Iraq's parliament in January approved a 2010 budget that set federal spending at 84.7 trillion Iraqi dinars (around $72 billion). Iraq had assumed its crude, the main revenue earner, would fetch $62.5 a barrel in the year to end 2010.

The budget puts expected average oil exports at 2.15 million barrels per day (bpd) in 2010. Benchmark U.S. crude was trading at near $77 a barrel on Tuesday.

Iraq's crude exports in June averaged 1.9 million bpd, the same level as the previous month, according to the head of the State Oil Marketing Organisation (SOMO).

In March, the International Monetary Fund (IMF) said Iraq will likely have two more years of budget shortfalls before stronger oil prices and production lift it back into surplus in 2012.

Iraq's 2010 budget law authorised the government to seek a $4.5 billion financing arrangement with the IMF and contemplates $2 billion in financing by the World Bank. The funds would be used to cover part of the deficit.

http://www.londonstockexchange.com/e...entId=10570522

KRG: No escape of oil and its sale is being remnants of refineries in Kurdistan and outside the

Government denied the Kurdistan region of Iraq, Sunday, for smuggling crude oil through the border crossing points, confirming that the export is solely through a pipe Iraqi hyphen to Ceyhan in Turkey since 2009, with said that what comes across the border by truck is the remnants of the liquidation of crude oil refineries in the region and Iraq.

The government said the Kurdistan region of Iraq said in a statement meant today and received "Alsumaria News" copy of "The region does not export oil through the border crossing points, but through a pipeline to Turkey began last year, 2009, and otherwise do not export oil from the territory of the other outlets".

The spokesman stressed that "being sold via the border by truck is the waste oil refineries in the region and beyond," explained "that waste is sold by auction companies, and the Iraqi government has also sold to companies at prices lower than international prices, while the use of corporate border outlets in the Territory for the export of such waste. "

The statement added that "the Iraqi government sell oil on the black to the private sector at prices lower than world market prices in order to develop the Iraqi economy, but unfortunately this policy has become a factor for trading him out of Iraq."

The spokesman for the Kurdistan Regional Government to "territory keen to work with the Iraqi government to end the trade in black residue oil refineries in the region is not alone, but in all border outlets in Iraq."

The New York Times published a report on the eighth of this month, it referred to the concern of the American Administration to the existence of the smuggling of Iraqi crude oil and oil derivatives, cross-border points in the Kurdistan region, as deduced from Washington's attempts to impose sanctions on Tehran.

With, consider the KRG reportedly the report of the American newspaper "untrue." He described the Kurdish official publication of news reports about the involvement of the region behind the smuggling of oil and "political purposes", meant to disguise the smuggling of large Iraqi crude oil through southern Iraq to Iran.

The differences on oil contracts and oil and gas law the national highlighted files contentious relationship between Erbil and Baghdad, although the Territory is the first of June last year the export of oil from the fields officially, but quickly stopped the differences on the dues of companies working on oil extraction to stop the export, which lasted only about 90 days, which is turned off since September last year and so far.

http://translate.googleusercontent.c...BfFgjXRyHi0xkw

Foster Wheeler Awarded PMC Contract for Iraq Crude Oil Export Expansion Project

Foster Wheeler AG announced today that its Global Engineering and Construction Group has been awarded a project management consultancy (PMC) services contract by South Oil Company (SOC) for the Iraq Crude Oil Export Expansion Project onshore in southern Iraq and offshore in Iraqi waters. SOC is a company under the Ministry of Oil of the Republic of Iraq.

The Foster Wheeler contract value for this project was not disclosed and will be included in the company's third-quarter 2010 bookings.

The project will include the installation of two new onshore and offshore pipelines plus three single point moorings and a central manifold and metering platform. Scheduled for completion by July 2013, the project is expected to boost Iraq's Basra export capacity from 1.8 million barrels per day (bpd) to 4.5 million bpd by 2014.

Foster Wheeler's scope of work will include monitoring and administering the purchase orders and contracts that have been placed by SOC in accordance with the recommendations made by Foster Wheeler during the execution of the basic engineering contract for this investment. These awards include the critical long-lead equipment items, such as valves, linepipe and the single-point moorings and the offshore and onshore engineering, procurement and construction (EPC) contract. In addition, Foster Wheeler will make the award recommendation for the EPC contract for an offshore central manifold and metering platform and associated jacket and will provide subsequent administration and management of this contract.

"Foster Wheeler is delighted to have been involved in this strategically important project since its inception in 2007 and is committed to working with SOC to support the development of this vital oil export infrastructure," said Umberto della Sala, president and chief operating officer, Foster Wheeler AG.

"South Oil Company is committed to completing this world-class project in accordance with the schedule requirements," commented Dhyaa Jafaar Hyjam, director-general of SOC. "All agencies are working together to achieve this goal and SOC is pleased that Foster Wheeler will be a key player in ensuring the successful realization of increased oil export capacity."

Foster Wheeler AG is a global engineering and construction contractor and power equipment supplier delivering technically advanced, reliable facilities and equipment. The company employs approximately 13,000 talented professionals with specialized expertise dedicated to serving its clients through one of its two primary business groups. The company's Global Engineering and Construction Group designs and constructs leading-edge processing facilities for the upstream oil and gas, LNG and gas-to-liquids, refining, chemicals and petrochemicals, power, environmental, pharmaceuticals, biotechnology and healthcare industries. The company's Global Power Group is a world leader in combustion and steam generation technology that designs, manufactures and erects steam generating and auxiliary equipment for power stations and industrial facilities and also provides a wide range of aftermarket services. The company is based in Zug, Switzerland, and its operational headquarters office is in Geneva, Switzerland.

http://www.marketwatch.com/story/fos...k=MW_news_stmp

Iraqi Electrical Access Can't Wait
Adequate power for civilians will be key to maintaining stability once U.S. troops leave

Two senior resignations will have caught the keen attention of Gen. David Petraeus last month. Clearly the case of Gen. Stanley McChrystal has had a bigger and more immediate impact on Gen. Petraeus's life. But he will also have noted with concern the resignation of Karim Waheed from his post as minister of electricity in Iraq.

In successfully dealing with the Iraq insurgency, it was knowledge and understanding of matters other than the purely military that frequently allowed Gen. Petraeus to surprise visitors. He correctly identified the paramount importance of electricity for the well-being of Iraqis and how an increased supply would reduce support for the insurgency while stimulating the economy at the same time.

Gen. Petraeus and U.S. Ambassador Ryan Crocker constantly and forcefully reminded the Iraqi leadership of the importance of electricity and the need to expand its availability. Their advice was backed up with resources, technical advice, and unique powers of influence. As a result the system was stabilized, a growth plan developed and, as generation output steadily increased, there was great optimism.

But progress in the last 18 months has not been sustained, and many Iraqis still get less than six hours of electricity per day. Mr. Waheed's resignation came only a short time before he would likely have been replaced anyway, amidst the current efforts to form a new Iraqi government. Yet Iraq's leadership still does not seem to have grasped the gravity of the electricity situation. Following Mr. Waheed's resignation, Prime Minister Nouri al Maliki gave a press conference where he attempted to explain the size of the problem the country faces, and reportedly declared that things wouldn't improve for two years while "the power stations being constructed by GE and Siemens were completed."

The even more grim truth is that neither GE nor Siemens are building power stations in Iraq. Both companies have significant orders for generators from the government. But the cost of the generators takes up only about 50% of the total cost of a power station, and the generators are the quickest part to procure. The construction and commissioning of the full power plants is the real challenge. That's a job for consulting engineers and construction companies, none of whom have yet been selected, let alone contracted, to start the work.

Were all such contracts signed tomorrow and work was to proceed at all possible speed, it would remain a tall order to get the additional power on the grid within two years. With the Ministry of Electricity's siting plan still subject to revision; with no decisions yet on how to provide the power plants with fuel; and with a general unwillingness to maintain or improve the plants Iraq already has, there is little prospect of progress.

Meanwhile the people of Iraq have just struggled through the hottest June for many years. And, in a country where only about 7,000 megawatts of electricity are generated daily against a demand at least double that, the equivalent of 4,000 megawatts of gas continued to burn in flares in the southern oilfields, while politicians argued about whether to ratify a two-year-old deal with Shell to capture it.

Mr. Waheed prevaricated and postured, but failed to make the decisions and commitments necessary to transform Iraq's electricity situation, despite the advice and support he had from Western experts. He was indecisive and mercurial, apparently incapable of strategic thought, mired in detail, unwilling to delegate, and seemingly terrified of being taken advantage of by the very contractors he had to rely on. Despite being a highly qualified engineer in his own right and having a genuine desire to improve conditions for the Iraqi people, he possessed neither the organizational, managerial nor leadership skills to succeed.

Nevertheless there is still potential for a turnaround if a new minister is willing to make the right choices. Generators (and a huge number of them) are on order. The Ministry of Oil's announcement to build modern refineries in Iraq, its proposed increase in oil production, and the recent announcement that the Shell gas-capture project will finally proceed, should eventually deliver copious quantities of gas—the fuel of choice for electricity generation in Iraq. In the Kurdish region, two large power stations of the sort that are envisaged for the rest of country were built and brought on line within 20 months using private contractors, showing what can be achieved. And the U.S. government, in perhaps its last substantial gift to the Iraqi electricity ministry, has commissioned an electricity master plan.

Appointing "best of class" consulting engineers to oversee the construction projects is a priority. This, and a willingness to take heed of the expert advice that is still available to them, would allow an Iraqi government to make a dramatic improvement in the country's electricity supply by the summer of 2012, and could conceivably make Iraq a net exporter of electricity by 2020. Any government that committed itself to such a program and then achieved it (and it is entirely achievable) should be guaranteed a landslide at the next election. The stimulus that such a plan would give the economy should be enough to pay for all the work.

Mr. Waheed was repeatedly told this but did not, or could not, act on it. And Mr. Maliki's government failed to listen to those who told them that Mr. Waheed was not going to succeed if he maintained his posture.

Securing adequate electricity access for civilians may be the single most important factor to keep peace and stability in Iraq once U.S. troops start to draw down. In this vital mission, the Iraqi government has lost too much time already; they can't lose any more.

http://online.wsj.com/article/SB1000...googlenews_wsj

Despite Obstacles, Ad Agency Edicoo Thrives in Iraq

As if running an ad agency isn't stressful enough, Mahmoud Zebari has a few extra concerns to worry about besides marketing shaving cream and baby diapers: for example, ethnic tensions between Sunni and Shiite Muslims and car bombs.

The agency he founded in 2007, Edicoo, is based in Erbil, Iraq's fourth-largest city and a leading commercial center given that Baghdad is occupied by U.S. military forces.

Surprisingly, given the security concerns and financial state of Iraq overall, Edicoo's business is thriving, said Mr. Zebari. The agency took in $4 million in revenue during its first two years of operation and employs about 15 people.

Mr. Zebari, a handsome, well-dressed 34-year-old from Mosul, a Kurdish city about 50 miles west of Erbil, met with Ad Age in Beijing during a recent global meeting of ICOM members. Edicoo joined the international network of independent ad agencies earlier this year as the group's "first member in an active war zone," said Gary Burandt, the association's executive director.

Mr. Zebari, who studied management at Turkey's Bilkent University, started the agency after noticing sharp increases in consumer spending as well as marketer interest in Iraq. A worker with a government salary in 1994 earned just less than $15 per month; today, the same job pays almost $450. And about 230,000 cars were sold last year just in Erbil.

"Iraqis are getting richer and feeling freedom after Saddam [Hussein's removal from power in 2003]," Mr. Zebari said.

http://adage.com/globalnews/article?article_id=144858

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Originally Posted by Seaview

Economist : delayed formation of the government cost the country huge losses

Economic expert said that it is difficult to estimate and limit the size of the losses resulting from delays in forming an Iraqi government , noting that the investment sector will be the first affected by it.

The expert added as Abdul Hadi in contact with the agency, the independent press (Iba) all of the delay in forming an Iraqi government that would lead to delays in the implementation of investment projects which have been developed through the investment plan for the government and the state budget.

Abdul Hadi pointed out that the delay in forming a government will lead to a delay in Cecchelalrwip strategy for the new government and decision-makers through passing the obstacles and mistakes made by the current government.

He stressed that the economic effects of the postponement of the House of Representatives for its first session will be tailored to despite the fact that the impact would be indirectly on the various economic sectors.

The community that Iraq would suffer economic losses in the millions by delaying the adoption of investment projects in the country or delayed payment of dues for such projects through supplementary budgets, delaying the movement of economic development in the country.

http://www.ipairaq.com/index.php?nam...onomy&id=27694

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is everybody else as amazed as I am at this ZOO going on in Iraqi Politics??...i mean the whole wide world is watching these politicians make A**HOLES out of themselves..and as this economist states it has cost the country huge losses in investments...their people are no better off now then when Saddam was in power....CORRUPT and STUPID...those two words come to mind right away when i think about Iraqi politicians...thanks for your posting Seaview....keep up the good work...Pat