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

New Government must negotiate with krg on oil

Just four months after the first barrel of oil left Kurdistan, in June 2009, conflicts between the Erbil government and Baghdad began mounting and exports ceased.

The two governments repeatedly announced the impending resolution of the conflict but Kurdish oil is yet to fill the Turkish Ceyhan pipeline. The crisis over oil contracts concluded by the region with 30 international companies also remains unsettled.

Ashy Horami, the Minister of Natural Resources in the Kurdistan region said that the central government refuses to pay the foreign oil companies operating in the region.

"All revenue from oil exports, be it from the South or the North, must go to the Treasury in Baghdad," he says.

According to the Kurdistan Region Government, the resumption of oil exports from the region's fields cannot continue if foreign companies operating in these fields are not given some of the profits according to the contracts they have signed.

The Iraqi Oil Ministry says that it does not recognise the contracts concluded by the Region's Government with foreign companies and will not divert a percentage of any profits to them.

The roots of the crisis date back to the year 2007 when the Iraqi government refused to recognise contracts concluded independently by the independently with foreign oil companies, declaring them illegal.

Hamza al-Jawahiri, an oil expert, said that the KRG and the central government in Baghdad interpret the constitution differently.

"While KRG believes that it is its right to develop its oil industry, conclude oil contracts and control oil production, the Oil Ministry in Baghdad considers that crude oil belongs to all Iraqis, not to citizens of any area be it in the center, the south or the north," he reveals.

Maliki's government finally agreed, in May 2009, on oil exports from the Taq Taq and Tawke oil fields in Kurdistan under the condition that export revenues go to the Iraqi state treasury and their distribution controlled by the Iraqi government.

The government, upon statements made then by its spokesman Ali al-Dabbagh, pledged to pay the foreign companies and the cost of investment without acknowledging the legitimacy of the oil contracts signed by the KRG. This decision allowed the KRG to officially begin exporting oil through the national pipeline in Kirkuk to the Turkish port of Ceyhan.

When the KRG’s first barrel of oil joined the export line on 1 June 2009, Iraq’s president, Jalal Talabani and the KRG’s Prime Minister, Masoud Barazani celebrated the event.

But developments on the ground stopped oil exports, depriving Iraq’s budget of much-needed revenue. The government reneged on its decision to pay the companies’ share of export revenues, reverting to its stance that the contracts were illegal.

DNO is a company tasked with the development of the Tawke oil field, which produces 40-50 thousand oil barrels/day. It owns 55 percent of the field. The Swiss Addax Petroleum Company, recently sold to the Chinese Sinopec Corp and the Turkish Genel Energy, is developing the Taq Taq oil field and owns 25 percent of the field with the KRG's share reaching 75 percent.

According to figures announced by the Iraqi Oil Ministry based on price rates over the past eight months, the losses incurred by the Iraqi economy, for not exporting its oil, reach about US$1.7 billion.

Oil expert, Hamza al-Jawahiri, thinks the real figure is much higher.

"Oil production in Kurdistan was expected to reach 1 million bpd over the next four years. The first year has already passed without any progress in developing production capacity," he explains.

For his part, Asem Jihad, the official spokesman for the Iraqi Oil Ministry, played down losses incurred. He told Niqash that stopping oil production in Kurdistan “has no big impact on the Iraqi budget."

Jihad added that there are some losses incurred and all additional revenue is useful contribution to the reconstruction process in Iraq.

"Revenues will positively impact on the Kurdistan region because it benefits from the petro-dollar allocated to the region: a one dollar revenue for every exported barrel," he said.

Sami al-Atroushi, a former federal parliament member, believes the subject of oil exports will remain a controversial topic.

“The two parties, the KRG and the central government have reached agreements but then abandoned them. No final settlement has been reached," he complains.

Al-Atroushi added that the KRG has recently made several proposals to resolve the dispute and develop production to reach 200,000 bpd by the end of 2010.

“The KRG has no objection against handing over Iraqi oil distribution to a marketing company.”

Such a company would be responsible for marketing oil across Iraq and paying revenue to the Finance Ministry, which would in turn distribute revenues among the different provinces.

The marketing company should either deposit a percentage of the revenues in the Region's budget to pay the companies' share or it should pay these revenues directly to the companies itself.”

According to Atroushi, there have been on-going negotiations between the two parties.

"Specialised committees were formed to study the amounts to be paid and the mechanisms to be adopted for payments. Until now there are still some outstanding problems and the current government is unable to resolve them. These problems will remain unresolved pending the formation of a new government.”

Jawahiri emphasises the importance of that.

“The conflict will not be resolved unless a new government is formed," he explained.

"There should be serious negotiations between Erbil and Baghdad governments to reach results. Both parties can resort to the Federal Court to help interpret the constitutional provisions which are the basis of conflicts between the two."

http://www.niqash.org/content.php?co...id=2738&lang=0

Audi Volkswagen Middle East Signs Dealer for Iraq

National Automotive Trading Co. announced as official partner

· Dealership to open in Erbil/Kurdistan in September

· Further expansion in Iraq planned

Dubai/Baghdad, August 15, 2010 - Audi Volkswagen Middle East has expanded its dealer network in the region by announcing National Automotive Trading Co, a Moin Behbahani Group company, as the official dealer for the Audi and Volkswagen brands in Iraq.

Construction of the Audi and Volkswagen showrooms and service facilities, located in Erbil/Kurdistan, are currently underway and are scheduled to open in September 2010. Further expansion plans will include fully fledged Audi and Volkswagen facilities in Erbil and Baghdad. The Audi terminals and Volkswagen showrooms as well as the service facilities will be built according to state-of-the-art corporate design and will offer the full range of services to ensure customer satisfaction.

Ahmed Shariefi has been appointed as Country Manager for National Automotive Trading Co. On the occasion of the contract signing Moin Behbahani, owner of National Automotive Trading Co, stated "Iraq is a market with enormous potential. We are proud to represent the prestigious brands of Audi and Volkswagen and we are confident of a successful future in Iraq."

In preparation to the opening of the showrooms and service facilities, extensive training programs for sales and after sales service teams have started to ensure international standards in the operations of both brands.

http://www.zawya.com/Story.cfm/sidZA...r%20for%20Iraq

The last U.S. combat units begin withdrawing from Iraq today

Soldiers begin the fourth Stryker brigade last remaining U.S. combat units in Iraq on August 15, the return trip to the United States.

The agency reported today that the withdrawal of Russia troops of the brigade comes days before the date set by U.S. President Barack Obama to withdraw all his troops from combat in Iraq on 31 this month ..

She added that, in accordance with the plan approved by President Obama will not stay in Iraq only 50 thousand soldiers are also returning to their homeland by the end of next year.

The United States, the U.S. withdrawal plan is proceeding according to schedule will not be affected by the delay in forming a new Iraqi government.

http://www.ipairaq.com/index.php?nam...urity&id=28992

Veterinary Specialist : Iraqi livestock, moving towards extinction

The Academy specializes in the field of Veterinary, on Sunday, said Iraqi livestock moving towards contraction and the yard, calling authorities on the implementation of strategic projects to preserve this wealth.

The Dean of the Faculty of Veterinary Medicine at the University of Dohuk Luqman Tayeb told the Kurdistan News (Akaniwz) that "there are no plans by the government to assist breeders of livestock and farmers", noting that "Iraq and the Kurdistan region depend on livestock and animal products imported cheaply from other countries, which compete with prices of livestock and animal products Local."

The good that "the relevant parts of the Kurdistan Regional Government, to benefit from the experiences of developed countries and the implementation of development projects in this sector and benefit from the efficiencies veterinarians and agronomists new graduates are unemployed, through the implementation of strategic projects for them, and support the development of livestock and their products in the region."

For his part, the Director of Veterinary Medicine in the province of Sulaymaniyah, Abbas Ali (l Akaniwz) that "the methods used in the care of livestock in the Iraq and the Kurdistan region, methods outdated," pointing out that "there is no large-scale projects for animal products."

He added that "this wealth in villages and in the hands of farmers, should the federal government and provincial government to help those farmers, to combat diseases and epidemics that are exposed animals, especially the diseases coming forth from the neighboring countries, in addition to secure nutritious feed and tools for her upbringing."

The first conference on livestock systems, in 7 of the month of August, by the Veterinary Directorate, Dohuk province, and was attended by a large number of specialists in this field and veterinarians and a number of professors from the faculties of Veterinary and Agriculture University of Dohuk, and raised the recommendations and proposals to the parties Concerned, for the development of livestock in the province of Kurdistan, Dohuk Governorate.

http://www.aknews.com/ar/aknews/2/173988/

The increasing number of UAE companies invested in Basra

A spokesman for the governor of Basra, Sunday, the number of UAE companies wishing to launch their investment projects in the province have increased in recent weeks.

Salem said he met Kurdistan News Agency (Akaniwz) that "Basra province received more than four UAE companies within a month, which indicates that the UAE companies wishing to put their investment projects has increased."

"The governor of Basra Cltag Aboud received a delegation from the UAE Advisory Office (Cabinet) membership included the Director-General of the Office of Mohammed Al Alaasm Senior Engineer charity Kabbah and the two sides discussed the activation of investment in conservation and ways to improve it and in all areas."

He met, "it was agreed at the meeting on some important aspects of the UAE companies to invest in residential and commercial complexes as well as some light industry worth in excess of 50 million dollars."

This has seen the province of Basra (550 km south of Baghdad) in a substantial number of foreign companies was the last of the Swedish delegation and Canadian companies that says it will work in the development of tourism projects.

http://www.aknews.com/ar/aknews/2/173894/

Baghdad fears that the cancellation of more than 50 over stalled agreement to form a government

Baghdad, 13 August (Akaniwz) - An official source in the Iraqi government ended its mandate on Friday, said that about 56 international agreement concluded by Iraq threatened with cancellation because of delay in forming a new government.

The source, who preferred anonymity, told news Kurdistan (Akaniwz) that" nearly 56 agreements signed by Iraq with the industrially developed countries and economically in many areas are threatened because of the SFO's delay in forming the new government." He said, adding that "the government yesterday took legal advice on the validity of regeneration of these important agreements."

He explained that "the current government has turned automatically to the Government is not bound by the right to conclude contracts and agreements the job because of pressure exerted by the political blocs."

He noted that "there is no clause in the Iraqi constitution to make the current government caretaker government is therefore trying to find a way out of the legal and constitutional re-signing of these agreements."

The results of the elections announced by the Electoral Commission for elections in March, the Iraqi National List provided by obtaining 91 seats, followed by a list of coalition rule of law, with 89 seats, National Alliance 70 seats, the Kurdistan Alliance 43 seats.

Did not reach the political blocs winner so far consensus to form a government at the time of issue is eligibility for the entity authorized to form the government under the hold more than one party of this right in accordance with the election results and the interpretation of Article 76 of the Iraqi Constitution, you see the Iraqi List (91 seats and is led by Allawi) They are the largest bloc that must be charged with forming a government building to achieve the highest votes in the elections held on 7 March last, in the view of the rule of law (89 seats, and Maliki) that the interpretation of the Federal Court to rule Constitutional given right to block the largest after the coalition form the government.

Concluded the Iraqi List and the Iraqi National List coalition agreement include a call to discuss the characterization of the Maliki government and discuss all the decisions taken by the Government from the date of March 16 last until now.

http://www.aknews.com/ar/aknews/2/173362/

Iraqi Finance : We look forward to international cooperation for the development of the banking sector in the country

An adviser to the Iraqi Ministry of Finance, on Sunday, leave a performance of the Iraqi banking, in the absence of banking transactions with international banks, as well as the absence of mechanisms and modern in transactions between banks, Iraqi governmental and private organizations.

Said Diaa Alckheon told Kurdistan News (Akaniwz) that "the banking sector in Iraq suffers from many problems, notably failure of performance of the Iraqi banking in dealing with international banks as well as the absence of mechanisms and modern in the treatment of Iraqi banks and government institutions working in the country."

"The Ministry of Finance looks forward to international cooperation for the development of banking in the country, in the presence of a large gap between the Iraqi banks and banking systems world." Explaining that "Iraq needs to qualify the financial sector dramatically over the coming period in the presence of an urgent need to expand banking Especially in the channels of financial exchanges with countries investing in Iraq."

It is noteworthy that Iraq has seven state-owned banks as well as 36 banks, civil strife, and it was the Iraqi Central Bank has asked banks to local civil society that have no dealings with international banks, to increase its capital to 250 billion dinars (214 million dollars) by 2013 in order to find local banks more capacity Competitiveness.

http://www.aknews.com/ar/aknews/2/173965/

2nd UPDATE: Kentz Iraq JV With Dome Group Unit Sees Contracts In 2H

Oil and gas engineering company Kentz Corp. Ltd. (KENZ.LN) said Tuesday it expects new contracts to come through in the second half of the year, after earlier signing a joint venture with Dome Group targeting engineering, procurement and construction projects in Iraq.

The joint venture company is currently bidding for contracts in Iraq, many of which are with newly-established operating companies, Elizabeth Rous, a spokeswoman for Kentz, told Dow Jones Newswires, adding that she expects something to "come through in the second half of the year."

Kentz has taken a 49% interest in Dome General Contracting Company Ltd. (Iraq), an equipment services provider in the Middle Eastern energy sector, for an undisclosed sum.

Rous was unable to say the amount paid for the stake in Dome, but said it was a "negligible" amount.

The driver for this joint venture is that bidding for new work will be done through a partnership that is an Iraqi company and satisfies the oil companies' need for local content on projects, Rous said.

"Dome's core competency is the provision of local engineering and construction resources", she said, adding that they have the networks, licenses and people on the ground, while Kentz will take management control of the venture.

Kentz Chief Executive, Hugh O'Donnell, told Dow Jones Newswires in June that Iraq would be a key focus for the company in the coming year and at that time said he expects a stream of contracts coming from the region in the coming 12 months.

Dome and Kentz are already working together on the design and construction of an onshore production facility in Yemen for an international oil company.

Evolution Securities analyst, Keith Morris, said he sees this joint venture as "a very positive step" towards Kentz winning Iraqi contracts later this year and into 2011.

Morris said that importantly for Kentz two of the winning operators from the 2009 licensing rounds in Iraq--Royal Dutch Shell PLC (RDSB.LN) and ExxonMobil Corp. (XOM)--are existing top ten clients.

Morris has maintained a "Buy" rating on the stock and kept a target price of 300 pence.

McCall, Aitken, McKenzie & Co analyst, Mark Breslin said Kentz remains one of his preferred plays in the energy services sector due to its healthy order backlog--of over $1.6 billion--the high quality of its earnings stream, and the high percentage of repeat business and demand for infrastructure in its core geographies.

Breslin has a "Buy" rating on the stock and a 333 pence target price.

http://online.wsj.com/article/NA_WSJ...03-705349.html

Weatherford Starts Drilling in Amara

U.S. firm Weatherford embarked on drilling a new oil well in eastern al-Amara city on Sunday, as part of a $224 million [262 billion Iraqi dinars] deal to drill 20 wells in 0rder to increase oil production, said Missan Oil Company’s information director.

“Weatherford started drilling the new well in the al-Bazrakan oilfield, (70 km) eastern Amara,” Ali Abbas al-Tarfi told Aswat al-Iraq news agency.

“The step is the first in a deal to drill 20 oil wells to increase the productivity of the province’s oilfields that now yield 100,000 barrels per day,” he added.

Tarfi noted that the production capacity for each well will be ranging between 20,000 and 30,000 bpd.

“The investment contract concluded with the company requires the wells to be drilled within 31 months,” he said.

Missan is home to six productive oilfields – al-Bazrakan, Abi Gharb, al-Fokka, al-Halfaya, al-Amara and the Majnoon filed that is shared with the South Oil company.

The province also has five explored non-productive oilfields – al-Huwayza, al-Rafie, Rafidain al-Sharqi, al-Dujaila and Kemit.

One of the largest oilfield services companies, Weatherford operates in more than 100 countries and employs more than 50,000 people worldwide. With a product and service portfolio that spans the life cycle of a well – drilling, evaluation, completion, production and intervention – and a robust research and development effort, the company is well positioned to meet the ever-evolving needs of the oil and gas industry.

http://www.iraq-businessnews.com/201...ling-in-amara/

Petrofac Wins Contract For Crude Processing in Iraq

Petrofac (LSE: PFC) has won a contract to build two new crude oil processing plants with a capacity of 50,000 barrels per day each, and to rehabilitate an existing crude oil plant, an official at Iraq’s Oil Ministry has reported to Reuters.

http://www.iraq-businessnews.com/201...ssing-in-iraq/