Thread: Archive News - Iraqi Dinar Think Tank - 06/10/2010 - 24/01/2011

IMF - Letter of Intent


IMF - Letter of Intent - Dated 18th September 2010

The following item is a Letter of Intent of the government of Iraq, which
describes the policies that Iraq intends to implement in the context of its request
for financial support from the IMF. The document, which is the property of Iraq,
is being made available on the IMF website by agreement with the member as a

service to users of the IMF website.


http://www.imf.org/External/NP/LOI/2010/irq/091810.pdf

IMF - Iraq: First Review Under the Stand-By Arrangement, Request for Waiver of Nonobservance of a Performance Criterion, Waiver of Applicability, and Rephasing of Access

The following documents have been released and are included in this package:

• The staff report, prepared by a staff team of the IMF, following discussions that ended on September 18, 2010, with the officials of Iraq on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on September 20, 2010. The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF.
• A Press Release.
• A statement by the Executive Director for Iraq

The document(s) listed below will also be separately released.

Letter of Intent sent to the IMF by the authorities of Iraq*

Technical Memorandum of Understanding*

*Also included in Staff Report

The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.

Full Text

http://www.imf.org/external/pubs/ft/...10/cr10316.pdf

850 businesses seek opportunities in Kurdistan
http://www.kurdishglobe.net/displayA...F427E75A3F71E7

The Kurdish Globe
By Aiyob Mawloodi--Erbil
The capital of Kurdistan Region hosts the 6th Erbil International Trade Fair
European countries in particular showed great presence at the Trade Fair, as they seek to "use Kurdistan as a gateway toward expanding their activities and presence all around Iraq."

Breathtaking Land Rovers welcomed participants of the 6th Erbil International Trade Fair on the Erbil Fairgrounds on October 18-21, leading visitors to the hall entrance where some 850 foreign and local companies showcased their various products and services and sought partners and business opportunities in the fast-developing economy of the region.

The fair, opened by KRG Prime Minister Dr. Barham Ahmed Salih, is one of the most organized and crowded exhibitions in terms of the number of exhibitors and the variety of products and services shown.

Another unique characteristic of the fair was the wide participation of European companies, especially from Germany, France, United Kingdom, Czech Republic, Poland, Italy, Austria, and other European countries.

According to organizers of the event, the wide participation of giant companies from Central Europe and around the world is a sign of the economic development in the region and the effectiveness of organizing such fairs.

The KRG has been a key supporter of these events, and has always encouraged foreign businesses and investors to invest in Kurdistan and do business with local companies. It has also tried to persuade foreign businessmen to utilize the opportunity and the situation, and use Kurdistan as a gateway toward expanding their activities and presence all around Iraq.

Zdeněk Cvrkal, from the Czech Republic's Association of Engineering Technology, participated in the exhibition. He said their products are mainly manufacturing equipment and machinery for the industry sector. The majority of their clients are from the rest of the country, mainly from Baghdad and Basra, but his company has found Kurdistan the place to enter the country.

"Since the security and stability of the other parts of Iraq is bad and we cannot go there directly to find partners, we thought that Erbil would be the best alternative," said Cvrkal in a "Globe" interview at his booth during the last day of the exhibition. Many customers remained inside the main exhibition hall and a few waited to discuss business with him. "From here, one can easily reach the right customer from anywhere in Iraq."

Cvrkal thinks that despite the good business environment, it is still too early for companies like his to find their niche in the market, since the industrial sector is still very small and limited and the demand for industrial machinery is still not at its peak.

Peter Herrmann, sales manager for the large and special fans department at Venti Oelde, a German manufacturer of industrial fans, believes that the market has good potential, and if companies like his take the risk and enter the market, there would be a chance of development and economic growth of the region and the country as a whole.

Prime Minister Salih said in a speech during the opening ceremony that the participation of 25 countries from America, Europe, Arab countries, and neighboring countries is a sign of their belief in the presence of the Kurdistan Region, and their belief in the future of the region.

"From here we say that today Kurdistan is a stable and developed foothold and a gateway for the whole Iraqi market," stated the Prime Minister in his speech. "Today Kurdistan is the connecting bridge between the world nations and a significant commercial chain between the countries of this region."

Kurdistan Region President Massoud Barzani visited the fairground on the second day of the event. He stated: "It is a pleasure to see how this event has evolved and expanded each year. The Kurdistan Regional Government has strongly supported foreign direct investment and the activity of the private sector, and I think what we see today is a reflection of the success of our policies."

Turkish and Iranian companies as usual had significant participation in the exhibition. As the trade relations between the two countries and Kurdistan Region and the country has steadily increased over the past few years, numerous companies from those two counties who have not yet been able to enter the market were seeking to seize their share in the booming market and find their customers.

Besides the trade fair, which was the largest business activity in the region during the week, other various events were organized for more direct and detailed business talks between the foreign delegations and local businesses.

One of the major events was a dinner reception organized by the Kurdistan Business Group, an informal network of international and local firms operating in the Kurdistan Region of Iraq, on Monday, October 18. The event was organized for the many diplomatic and business delegations in the Region for the 6th Erbil International Fair. More than 350 people attended the event.

KRG head of Department of Foreign Relations, Falah Mustafa, a number of international diplomats, and foreign and local business people as well as several visiting delegations were present, along with representatives of a wide variety of companies from Kurdistan and around the world. The gathering served as a complement to the Erbil International Fair, providing the opportunity to hold further informal discussions and explore the potential of the Region further.

"I am delighted that this gathering was organized and funded fully by the private sector," said Minister Mustafa in a speech during the gathering. We have emphasized that the Kurdistan Region is great base for Iraq-wide operations, and I believe companies have taken this into consideration."

In addition, Italian Ambassador to Iraq, Maurizio Melani, explained that Italy had participated in the trade fair for several years, and he lauded the KRG for holding a regular event that has steadily grown in size and prestige. He highlighted the important role of the private sector in developing partnerships, and reiterated his commitment to cooperation with the Kurdistan Region and all of Iraq.

The representatives of 20 German companies and trade officials met with Suleimaniya's Chamber of Commerce Tuesday, where German officials stressed their intention to strengthen trade exchange with the Kurdistan Region.

The German delegation was comprised of representatives from the Trade and Technology Ministry and the umbrella organization for the German chambers of commerce, as well as the German commerce net with the Middle East states.

As an indication of Germany>s support for the trade sector in the Region, the representative of the German delegation said their industry and trade office in Erbil endeavors to facilitate the arrival of the German companies into the Region. The office offers its services free of charge in Kurdistan.

A Polish delegation led by the country's Minister of Reconstruction in Erbil said they were here to strengthen economic and commercial ties with Iraq, for which they have chosen Kurdistan to serve as their bridge between the two nations. The delegation included a representative of the country's foreign ministry, and a number of companies that arrived in Kurdistan on Saturday to open an office of the Iraqi-Polish Chamber of Commerce, which was set up in June 2009 in Warsaw to promote Polish-Iraqi ties.

Lanka-Iraq to expand economic cooperation
Mahinda ALUTHGEDARA
http://www.dailynews.lk/2010/10/22/news42.asp
The Iraqi Government will implement a program to extend economic co-operation and relations with Sri Lanka in the near future. The matter has been discussed at length with the private sector in Iraq, said visiting Iraqi Trade Minister Dr Safa Aldin Mohamed addressing the seventh (sessions) meeting of the Sri Lanka-Iraq Economic and Technical Co-operation Council in Colombo yesterday.

The Iraqi Minister said the sessions provided an opportunity for the two countries to share experiences on Trade Agreements.

Industries and Commerce Minister Rizard Bathiyutheen addressing the sessions said bilateral relations between Sri Lanka and Iraq dated back to many years. The Co-operation Council was set up in terms of Section 5 of the Economic, Scientific and Technical Co-operation Agreement signed between the two countries in 1975. Bilateral trade between the two countries which totalled 8.76 million dollars in 2003 had reached 37.5 million dollars in 2009 and 98 percent of this accounted for Sri Lanka tea exports to Iraq.

Sri Lanka Chamber of Commerce CEO Harin Mahwatta, Sri Lanka National Trade Chamber Secretary Tilak Godamanne and Sri Lanka Bureau of Foreign Employment AGM L K Ruhunage were also present.

The Sri Lanka Chamber of Commerce and the Sri Lanka National Trade Chamber signed two agreements with Iraq for the promotion of trade between the two countries at these sessions.

Is the 'bidding game' on for oil reserves estimates?

By SYED RASHID HUSAIN | ARAB NEWS
Published: Oct 23, 2010 23:42 Updated: Oct 24, 2010 00:22
http://arabnews.com/economy/article168394.ece

The "bidding game" seems on. First Iraq, then Iran and now Kuwait — the trend is catching up.

Iraq apparently made the first move. Earlier the month, Baghdad announced it is raising figures of its proven oil reserves by a quarter — from 110 billion barrels to 143 billion barrels, surpassing Iran and putting it behind only Saudi Arabia in terms of conventional crude, and third after Venezuela if unconventional reserves are counted.

A week later, Iran too unveiled a massive boost in its estimated oil reserves. The new Iranian Oil Minister Massoud Mirkazemi, inducted into the Cabinet only on Aug. 20, made the announcement just days prior to the OPEC ministerial meeting in Vienna. He declared the new Iranian reserves figure to be 150.31 billion barrels, up from the previous estimate of 138 billion barrels and added that figure would be revised even higher soon.

"This latest figure will definitely go up by the end of the year," Reuters quoted him as saying.

The move saw Iran wrest back its place as the holder of the third-largest reserves base in the world. Mirkazemi also raised his estimate for Iran's gas reserves - the second biggest in the world after Russia's - to 33.1 trillion cubic meters, from 28 Tcm. Iran had discovered a new gas field in the southern Hormuzgan province, he said. The Sefid (White) field has an estimated 70 billion cubic feet of gas in the field, 72% of which is recoverable, he emphasized.

Then late last week, Kuwait also announced adding at least 12 billion barrels to its crude reserves. As per the OPEC data, Kuwait holds the world's fifth largest crude reserves, putting it currently at 101.5 billion barrels, after Saudi Arabia, Venezuela, Iran and Iraq.

Earlier in April, the Kuwaiti deputy prime minister for economic affairs had already hinted that the reserves in Burgan field were "much higher" than previously announced. Now citing well-informed oil sources, the Kuwaiti daily Al-Jarida said the new oil was found in Greater Burgan, the world's second largest oil field after Ghawar in Saudi Arabia, taking its reserves estimate close to 70 billion barrels.

Informed sources told the paper that new reserves have been discovered at a number of other reservoirs following a comprehensive study, which could boost the Gulf state's reserves further.

Kuwait's reserves have been an issue of considerable debate in recent years. In April, Kuwait's Deputy Premier for Economic Affairs Sheikh Ahmad Fahad Al-Sabah told a symposium that Burgan reserves were in fact higher than published figures. However, way back in January 2006, industry newsletter Petroleum Intelligence Weekly (PIW) had challenged the Kuwaiti reserve data, asserting that it had seen some internal Kuwaiti records that put its reserves at 48 billion barrels only. The official Kuwaiti figures are fudged, PIW had then claimed, emphasizing that Kuwait's fully proven reserves amounted to only 24.2 billion barrels and that Burgan holds only 20 billion more barrels. Kuwaiti oil officials, however, robustly contradicted the PIW report, saying it did not give an accurate and complete picture and it failed to take into account undeveloped reservoirs.

The report created a furor then — all around — raising question marks about the reserve figures of other OPEC producers too. Accusations kept flying that the reserves data being put forward by the producer's were fudged for strategic reasons.

The recent pronouncements over the last few weeks point to a rush to enhance the national reserves of some member countries. It may rekindle the debate about the very accuracy of the OPEC reserves data. This could also be a preamble to renewed pressure within OPEC to increase the output quota of the respective countries. One analyst felt that the countries were in a "bidding war" over reserves - usually a consideration along with other criteria such as production capacity - when it comes to allocating output quotas within OPEC.

Amrita Sen, an analyst at Barclays in London said that the rival claims by Iran and Iraq (and now Kuwait) "looks like a bidding war". During the Iran-Iraq war in the 1980s OPEC meetings too were dominated by Iraq demanding an output quota equal to Iran's. The situation was only resolved after the war, when some OPEC members gave up some of their shares for Baghdad to have an equal quota.

Sen however clarified that the headline reserves figure was only part of the story, and did not reflect a country's ability to pump crude and get it to market. "It is not a question of how much reserves they have got in the ground but how much oil they can produce. Iran's production rate from mature fields is one of the highest in the world," he said.

And in the back drop of all this, when Minister of Petroleum and Mineral Resources Ali Al-Naimi, who has been playing midwife to Saudi oil for decades now, asserts that despite all the claims and proclamations, the fact remains that cheap (Middle Eastern) oil era was far from over, he had a point. He indeed cannot be written off. For indeed no one could be better placed that Al-Naimi to assert so - for he has been an industry insider for more than five decades now and knows the ins and outs of the global gas station - that Saudi Arabia definitely is.

While addressing a conference celebrating fifty years of OPEC, Al-Naimi underlined the Ghawar field - measuring 280km by 30km and by far the largest conventional oil field in the world - has 88 billion barrels of remaining reserves.

Al-Naimi's estimate of Ghawar's remaining reserves is greater than what analysts such as the late Matthew Simmons have been underlining all these years. But in an era, when Aramco is definitely and openly claiming to be heading toward 70 percent recovery from its fields, instead of the industry average of 50 percent, upping the recoverable reserves from current estimates is definitely possible.

Bidding or no bidding and whether one like sit or not - thanks to technology - OPEC reserves are definitely on up.

Kuwaiti firm among winners as Iraq sells off gas fields
Three foreign consortiums awarded deals to produce gas as Iraqis seek to boost economy
http://www.guardian.co.uk/business/2...tracts-awarded

Iraq has awarded three of its established gas fields to foreign consortiums in the third stage of an energy sell-off that it hopes will transform the ravaged nation into a regional economic force.

The three fields, in the south, centre and far west of Iraq were sold at, or slightly below, the price the oil ministry had wanted. They were taken by three consortiums that now have rights to develop about 10% of Iraq's proven gas reserves – around 300bn cubic metres.

As was the case with the two rounds of oil auctions conducted late last year, the Iraqi government maintains overall control of the fields and will pay each consortium a fee per barrel of oil equivalent.

The largest field, known as Akkas, near the Syrian border, went to a joint South Korean-Kazakh bid from the Korean Gas Corporation and Kazakhstan company KazMunaiGas.

A second consortium, made up of the Korean Gas Corporation, Turkey's TPAO and Kuwait Energy won the rights to develop the Mansuriyah field in the volatile Diyala province in central Iraq, which stretches east to the Iranian border. It holds around 127bn cubic metres of gas, compared with Akkas's 158bn cubic metres.

Kuwait Energy was also a member of the winning consortium to develop the third field, known as Siba, on the Kuwaiti border south of Basra. Siba was by far the smallest of the three fields, thought to contain only 2.9bn cubic metres. It is being portrayed as a deal rich in symbolism for Kuwait, which is slowly re-engaging in Iraq following a two decade standoff that stemmed from the 1990 invasion of Kuwait ordered by ousted president Saddam Hussein.

The gas auction had been eagerly awaited by Iraq's government, which desperately needs revenue to rebuild antiquated infrastructure and drive foreign investment. The first two oil auctions appear to have been successful in breaking a long resistance to foreign investment. Like the gas auctions, the deals were structured to allow foreign firms to start reaping fees once the private sector efficiencies they introduced started to lead to increased oil production.

There is only limited infrastructure to support gas extraction and pipelines need to be built through still restive areas in Anbar and Diyala. A future Diyala pipeline would probably have the extra problem of running through or near areas that are still the source of territorial dispute between the central government in Baghdad and the semi-autonomous Kurdish regional government. However, the future returns on gas are thought to be potentially as lucrative as oil.

Only five of the companies that were licensed to join the auctions actually made bids. Oil minister Hussein Shahrastani said all three fields were auctioned for a price at, or just below, what the government had expected for them. "The contracts are very important and we hope they will help in creating jobs and providing electricity," Shahristani said.

Iraq has set a goal of raising its nationwide oil output from 2.4m barrels a day to 12.5m barrels a day within seven years. The oil ministry recently revised its levels of proven reserves from 115bn barrels to 143bn, a reservoir which is thought to be sufficient to power the economy for more than 100 years. Iraq's assessed reserves are the third largest in the world, behind Saudi Arabia and Iran.

In a separate deal, British-Dutch oil group Shell, is likely to soon finalise a $12bn bid to harness flared gas from oil fields near Basra. Giant flames and black fumes belch gas from oil fields around the country, costing Iraq at least $50 a second in lost revenue.

The Shell deal is awaiting final approval from Sharahstani's office.

Middle East, North African Economies Will Accelerate Next Year, IMF Says
http://www.bloomberg.com/news/2010-1...-imf-says.html

Growth in Middle Eastern and North African oil-exporting economies will accelerate next year as crude production rises, the International Monetary Fund said.

Gross domestic product in those countries will expand 5 percent in 2011 after growing 3.8 percent this year and 1.1 percent in 2009, the Washington-based lender said in its regional Economic Outlook released today in Dubai.

Those forecasts put oil exporters on course to grow faster than most of the world’s major economies, which are still struggling to overcome the worst global slump since World War II. The IMF said on Oct. 6 that it expects global GDP to expand 4.2 percent in 2011.

The economies of the Gulf Cooperation Council, which include Saudi Arabia, will be helped as crude oil production climbs to 26 million barrels per day in 2011 from 25 million barrels per day in 2010, the IMF said.

For oil exporters in the region “economic activity is picking up considerably,” the report said.

The combined current account surplus of these countries will rise by about $80 billion on current oil price expectations, the IMF said. Of this, close to $50 billion is accounted for by GCC members.

Non-oil growth among crude exporters is likely to be “less robust,” according to the report, picking up only by an estimated 1 percentage point between 2009 and 2011.

Sluggish Credit

“In most countries, non-oil sector growth continues to rely on supportive fiscal policy with private financing and credit still sluggish,” the lender said.

The economies of oil importers in the Middle East, North Africa, along with Afghanistan and Pakistan, are expected to grow 5 percent in 2010, compared with 4.6 percent in the previous year, according to the report. For 2011, growth is projected to ease to 4.4 percent.

The report recommended that oil importers in the region focus on reaching economic growth levels to create enough jobs, and diversify their exports to include markets in South America and Asia, instead of mainly relying on Europe.

Iraq Considers Arab Gas Pipeline Link

Iraq has discussed with Egypt the issue of linking up to a gas pipeline running from Egypt through other Arab states as a way to export its gas, Reuters has reported.

The Arab Gas Pipeline is aimed at supplying customers in Jordan, Syria, Lebanon and Turkey, and potentially Europe through Egypt.

http://www.iraq-businessnews.com/201...pipeline-link/

Exxon “On Track” at West Qurna 1

U.S. oil giant ExxonMobil said on Friday it was on track to reach its initial production target in Iraq’s West Qurna I oilfield next year, according to reports from Reuters.

“ExxonMobil is moving forward in accordance with the contract timeline and we are on track with our plans to reach the initial production target in 2011 in accordance with our contract terms,” Exxon told Reuters in a statement.

Current production at the field is more than 200,000 barrels per day.

The Vice President of ExxonMobil Iraq, James Adams, had said in recent months that Exxon and its partner Royal Dutch Shell aimed to raise production by 10 percent by the end of the first quarter of 2011 and that current production was from 200,000 to 250,000 barrels per day.

ExxonMobil and Shell ultimately aim to boost output to 2.32 million bpd.

http://www.iraq-businessnews.com/201...-west-qurna-1/

New details of leaked documents and the site Wikileaks

According to some documents that the al-Maliki "the repression of the Sunni Arabs by special forces carried out raids, arrests and assassinations after that assigned to these tasks at the behest of al-Maliki exclusively," indicating that "U.S. forces arrested in 2006, 17 gunmen dressed in military uniforms confessed upon arrest that they belonging to the force run by al-Maliki himself."

Documentation demonstrated that the "al-Maliki has issued orders to the Band for 2009 arrest of 5 senior police officers because they are Sunni Arabs, who were former Baathists," the report said another document that "Maliki is a year in Iraq as a threat to him and uses his power to support the Shiites."

The document indicates a third, according to Ochaeliks that Maliki had ordered the police "not to provide protection to the governor of Nineveh province Liberation of Iraq during his intention to visit one of the disputed areas has threatened to parties Kurdish shoot him if they do that visit," noting that "the security forces violated orders Maliki, accompanied the governor of Nineveh province during a visit to the region."

http://www.shatnews.com/index.php?sh...article&id=681