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

Global Insider: Egypt-Iraq Relations
Global Insider: Egypt-Iraq Relations
http://www.worldpoliticsreview.com/t...iraq-relations
THE EDITORS | BIO | 10 DEC 2010
Egypt recently opened a consulate in Erbil, making it the first Arab country with diplomatic representation in Iraqi Kurdistan. In an e-mail interview, Michael Wahid Hanna, a fellow and program officer at the Century Foundation, discussed Egypt-Iraq relations.

WPR: Historically, how would you characterize bilateral relations between Egypt and Iraq?

Michael Wahid Hanna: Following a rupture over Anwar Sadat's overture to Israel in 1977, bilateral ties between Egypt and Iraq improved due to Egyptian support for Iraq in its protracted war with Iran. But relations were dealt a subsequent blow by Egypt's decision to take a military role in the coalition of forces that took on Iraq's Baathist regime in the 1991 Gulf War. The decision was important as a signifier of Cairo's understanding of its interests as tightly linked to U.S. regional foreign-policy priorities. Cooperation with its primary ally, the U.S., was and is a key determinant of Egyptian security, military and foreign policy.

Following the First Gulf War, Egypt remained wary of Saddam Hussein but consistently called for the removal of international sanctions. Egypt also began expanding its trade ties to the regime through the U.N. Oil-for-Food program. By 2001, Egypt was Iraq's fourth-largest trading partner, with trade reaching $1.7 billion annually. Importantly, Egypt is not a frontline border state with Iraq, so its concerns regarding the Iraqi regime are more muted than other Sunni Arab states, such as Saudi Arabia, that have been more exposed to developments in Iraq. This allowed Egypt to prioritize its economic ties with Iraq.

WPR: What has Egypt's postwar approach been to bilateral and subnational relations with Iraq and its regions?

Hanna: Egypt's geographical distance from Iraq limits its role in Baghdad. Though it has registered displeasure with Iran's enhanced influence in Iraq this has not corresponded to serious attempts to blunt Iranian influence through diplomatic engagement with the Iraqi government, given Egyptian suspicions about a Shiite-led Iraq and concern for the status of Iraq's Sunni Arabs. Egypt did organize an international conference on Iraq in November 2004, but it was not particularly useful or successful, reflecting Cairo's diminished diplomatic influence in the region.

In 2005, Egypt was the first Arab government to send an ambassador to Baghdad, however Ambassador Ihad al-Shaerif was kidnapped and murdered, and a replacement was not named until 2009. Egypt's foreign minister, Ahmed Abu al-Gheit, made an important symbolic visit to Baghdad in 2008, which paved the way for full diplomatic restoration.

The Arab world, along with Turkey, has been concerned about Kurdish aspirations within postwar Iraq. There is widespread resentment among the Arabs about the diminution in the country's Arab identity since 2003. The Arab world's interactions with the Kurdistan Regional Government have been accordingly limited.

WPR: What is driving Egypt's pursuit of closer relations with Iraqi Kurdistan, and what impact could it have on broader bilateral relations?

Hanna: The U.S. has leaned heavily on its regional allies to begin reintegrating Iraq into the regional order. This is seen as important to stabilizing the country through expanding economic linkages and in blunting Iran's role by revitalizing Iraq's relations with the Arab world. Moves supporting this objective will be viewed favorably by the U.S.

The distance between Egypt and Iraq allows Cairo more flexibility in its approach to Iraq. Egypt can again prioritize economic relations at a time of continuing domestic economic distress. In this sense, it is a very pragmatic decision.

The Kurdistan move may have positive effects in signaling a greater Arab acceptance of Iraq's heterogeneity and the fact that Iraq's Kurds have secured a unique role for themselves within the structures of the Iraqi state. It should be a welcome message to the Kurds, who have also been suspicious of the Arab world's intentions, particularly in light of the region's acquiescence to their brutal repression by Saddam.

Iran 'dominant player' in Iraq politics: leaked memo
http://www.google.com/hostednews/afp...2ef720c2eb.791
(AFP) – 5 days ago
PARIS — Tehran is a "dominant player" in Iraq using "all means of diplomacy, intelligence and economy" to get a pro-Iranian regime there, leaked US diplomatic cables published by Le Monde newspaper Sunday said.
"Iran is one of the dominant players in Iraqi electoral politics," US ambassador to Baghdad Christopher Hill wrote on November 13, 2009, according to Le Monde's translation of the WikiLeaks cable.
Tehran "uses all the means of diplomacy, security, intelligence and economic tools to influence its allies and its Iraqi detractors to establish a more pro-Iranian regime, in Baghdad as well as in the provinces," Hill wrote.
To achieve this Iran "has understood that it needs to show great operational, and sometimes ideological, flexibility."
It is "not rare" for Iran "to finance and support Shiite or Kurdish rivals -- and sometimes even Sunni -- with the aim of developing financial dependence," Hill wrote.
"Exact figures are unknown but Iranian financial assistance to those who accept it is estimated to be 100 to 200 million dollars (75 to 150 million euros) a year."
Hill said that Iran's main political obstacle in Iraq "remains the dominant authority and the religious credibility incarnated by Grand Ayatollah Ali al-Sistani, who, while an Iranian national, is a critic of the 'Wiliyat-i-Faqih' (Guardianship of Islamic Jurists) doctrine in power in Iran."
In another cable dated September 24, 2009, Iraqi Prime Minister Nuri al-Maliki says that Iran reportedly "envisaged launching long-range missiles" at the Ashraf refugee camp north of Baghdad.
The camp is home to around 3,500 supporters of the National Council of Resistance of Iran, principally the People's Mujahedeen of Iran that advocates the overthrow of the Islmic regime in Tehran.

Iraq Oil Exports to Increase With New Offshore Facilities in Persian Gulf
http://www.bloomberg.com/news/2010-1...sian-gulf.html

Iraq’s oil exports will increase next year when two new offshore mooring facilities for tankers are completed and the country’s Kurdish region resumes shipments of crude, Oil Minister Hussain Shahristani said.

Shahristani also told reporters in Baghdad today that a $12.5 billion agreement between Iraq, Royal Dutch Shell Plc and Mitsubishi Corp. for the capture of flared-off natural gas will not be ready this week.

Lawyers representing the companies and the government will meet tomorrow to discuss the final draft of the agreement, which still requires approval from Iraq’s Council of Ministers, he said.

While Iraq generates most of its revenue from oil sales, the government is seeking to produce gas as fuel for power plants and for export. The country awarded licenses in October in its first auction of gas concessions since the U.S.-led invasion that ousted Saddam Hussein in 2003.

Iraq has the world’s fifth-largest oil reserves, excluding oil in its semi-autonomous northern Kurdish territory, and its gas reserves rank fifth in size in the Middle East, according to data from BP Plc.

The Kurdistan Regional Government told the central government that it was ready to export 150,000 barrels of oil a day in 2011 through a pipeline to Turkey, Shahristani said. Kurdistan’s oil exports will be handled by the State Oil Marketing Organization.

Repaying Expenses

Iraq’s central government may reimburse some of the expenses of companies that have signed contracts with Kurdish authorities, with ownership of those assets transferring over to the government in Baghdad, he said.

“The companies can present invoices for costs on equipment or drilled wells in Iraq, and if they are reasonable, like the ones signed by the Oil Ministry with other companies, the costs will be paid and the ownership will be transferred to Iraq,” Shahristani said.

Oil supplies from the Kurdish region of northern Iraq halted a year ago after it failed to agree with the central government about how to pay operators including DNO International ASA and Addax Petroleum Corp.

“Iraq’s oil production is rising steadily, but our export facilities are still not up to the required capacity to absorb production levels,” he said. “There are four offshore moorings under construction in southern Iraq, and when two of them start working next year, crude exports will rise.”

Doubling Capacity

Iraq plans to start work in mid-December on offshore oil facilities in the south, where export capacity is due to more than double by mid-2012, the head of the state-owned South Oil Co. said on Nov. 26. Export capacity will increase to 4.5 million barrels a day by mid-2012 from the current 1.8 million barrels a day, Director General Dhia Jaafar al-Musawi said.

The country plans to build two offshore “megapipelines” and three single-buoy moorings where tankers can load crude in the Persian Gulf. Each mooring will add some 900,000 barrels a day in offshore loading capacity. Half of the surveying and the clearing away of unexploded munitions required for this expansion has been done, al-Musawi said.

Iraq exported 58.7 million barrels, or about 1.89 million barrels a day, in October, the State Oil Marketing Organization said. The exports generated the highest revenue this year with $4.526 billion.

Pipeline to Syria

Iraq and Syria have completed technical talks about a planned pipeline for transporting Iraqi oil to Mediterranean ports, AlWatan daily reported, citing an official speaking with the Kurdistan Independent News Agency. The results of the talks were positive, and Iraqi officials will report on the discussions within three days, the Damascus-based newspaper reported, citing comments by an adviser to the Iraqi government, Salam Al-Quraishi, talking to AKNEWS, the Kurdish news agency.

The 225-kilometer (140-mile) pipeline would transport Iraqi crude across Syria to the Mediterranean Sea and have an export capacity of about 1.7 million barrels of oil a day, he said.

A pipeline with a capacity of 600,000 barrels a day already links Iraq’s northern oil fields in Kirkuk to the Mediterranean port of Ceyhan, Turkey.

Italy's Eni boosts production in Iraqi oil field
http://www.businessweek.com/ap/finan.../D9JTOFL01.htm

A consortium led by Italy's Eni SpA says it has achieved a 10 percent increase in output from one of Iraq's most promising southern fields.

Eni, Occidental Petroleum Corp. and South Korea's KOGAS said in a statement Sunday that current production from the Zubair field stands at 201,000 barrels per day. That's up from the 183,000 barrels per day production level in February when their deal to develop the field went into effect.

Zubair was one of 15 oil and gas fields awarded during three bidding rounds since last year.

Under the 20-year contract, the Eni-led consortium must boost production to 1.2 million barrels a day in seven years and sustain that level for another seven years.

Oil sales make up 95 percent of the country's annual budget.

Iraq eyes 'Super Six' to boost oil output
http://www.upi.com/Science_News/Reso...9691291928249/

BAGHDAD, Dec. 9 (UPI) -- Iraq is concentrating its drive to quadruple its oil output on its six "super fields," which analysts say have the potential to produce in excess of 10.5 million barrels a day by 2017.

That's just short of the Oil Ministry's declared target of up to 12 million bpd in the next six years. There is a lot of skepticism in the global oil industry that Iraq will be able to meet such an ambitious target that would challenge Saudi Arabia's supremacy.

But in recent months, some of the foreign oil companies awarded 20-year production contracts at the Super Six -- Rumaila, West Qurna 1, West Qurna 2, Majnoon, Zubair and Halfaya -- in 2009 have generally reported production increases.

Dhiya Jafaar, director of the Iraq's state-run South Oil Co., reported in November that production in the region, which contains two-thirds of Iraq's known reserves, was running at 1.68 million barrels per day and was expected to reach 1.82 million bpd by the end of the year.

The Super Six, which between them hold around 74 percent of Iraq's reserves, are key to Oil Minister Hussein al-Shahristani's plan to boost production to bankroll postwar reconstruction.

Here's how these major fields are performing, with projected production increases:

Rumaila: Iraq's biggest field with the equivalent of 17.8 billion barrels of oil. That makes it the fourth largest oil field in the world. It contains around 15 percent of Iraq's oil. It is operated by BP and the China National Petroleum Corp.

Production is 1.052 million bpd and is expected to reach its initial production rate of 1.065 million bpd by the end of the year, Jafaar says. That's three years ahead of schedule.

West Qurna 1: Contains 8.7 billion barrels. Exxon Mobil of the United States and Royal Dutch Shell secured the production contract in 2009. Production has been slipping but is expected to hit the IPR of 285,000 bpd within a year.

West Qurna 2: Holds 12.9 billion barrels and is operated by a consortium headed by Russia's Lukoil and StatoilHydro of Norway. Peak production of 1.8 million bpd is expected by the end of 2012, sustainable for more than a decade.

Majnoon: With reserves of 12.6 billion barrels, this is one of the top Iraqi fields and lies near the border with Iran. It is operated by Royal Dutch Shell and Petronas, which say they have boosted production from a paltry 46,000 bpd to 70,000 bpd, rising eventually to 1.8 million bpd.

Zubair: Operated by a consortium of Italy's ENI, the U.S. Occidental Petroleum Corp. and the Korea Gas Corp. of South Korea. It has reserves of 4.1 billion barrels. Production is 200,000 bpd, up from 183,000 bpd in 2009. That's expected to eventually reach 1.2 million bpd.

Halfaya: Contains 4.1 billion barrels and is operated by the China National Petroleum Corp. Production is running at 3,600 bpd but potential output has been pegged as high as 535,000 bpd.

The Baghdad government expects production from just three of these fields -- Rumaila, West Qurna 2 and Zubair -- to hit 7 million bpd within six years.

Following the arrival of the foreign companies, with their advanced exploration and drilling equipment, including 3-D seismic surveys, Iraq was able to determine its reserves with much greater accuracy than in the past.

In October, Baghdad raised its proven oil reserves from 115 billion barrels to 143.1 billion barrels largely on the companies' upgraded assessments. That's an increase of 24 percent.

The sharp rise in reserves wasn't unexpected. There had been no exploration work conducted for two decades and reserves data were largely based on outdated technology.

Energy analysts estimate that Iraq may have another 100 billion barrels of oil in untapped reserves.

The Iraqis say the modern technology that's now coming in will squeeze out more oil than was previously thought possible.

"Iraq's reserves lie in a few huge fields that have not been fully explored since the early 1970s," observed Colin Lothian of Wood Mackenzie, the international energy consultancy.

"Iraq's current reserves estimate … will rise significantly in the next decade. The potential exists that Iraq could rival Saudi Arabia, but much will have to happen before that."

WorleyParsons wins Rumaila oil field contract: sources
http://www.theaustralian.com.au/busi...-1225968785228

WORLEYPARSONS has won a contract to carry out engineering and design work at the Rumaila oil field in southern Iraq

Sources familiar with the deal said the front-end engineering and design, or FEED, contract was awarded to WorleyParsons by Iraq's state-run South Oil, BP and China National Petroleum, which jointly operate the Rumaila oil field with estimated proven oil reserves of 17 billion barrels.

WorleyParsons will carry out FEED work for the project, although the contract has yet to be approved officially by the Iraqi government, the sources said.

BP and CNPC, both of which signed a 20-year service contract in November last year with Baghdad to develop Rumaila, plan to increase production by 10 per cent this month from 1.06 million barrels a day.

The group has already started drilling at the field as they awarded earlier this year contracts worth up to $US500 million ($508.2m) to drill 49 wells. Some $US15 billion is expected to be invested in the project over the 20-year duration of the contract.

The BP-led consortium has pledged to almost triple production at the field to 2.85 million barrels a day. BP holds a 38 per cent stake in the venture, while CNPC has 37 per cent and Iraq's SOC holds the remaining 25 per cent.

The three contractors will receive a fixed fee of $US2 for each additional barrel of oil produced from Rumaila.

The Rumaila deal is one of 12 signed with international oil companies last year and this year in a bid to revamp Iraq's war-hit oil industry and quadruple the country's production of 2.35 million barrels a day now.

Has OPEC built enough capacity during the lean years?
http://sify.com/finance/has-opec-bui...ldEeeggdi.html

NEW YORK (Reuters) - With oil prices near $90 a barrel for the first time in two years, one of the biggest questions for analysts is has the Organization of the Petroleum Exporting Countries assembled enough spare capacity to quench over-heated markets this time?

At least five major banks including Goldman Sachs, Societe Generale and JP Morgan raised their mid or long-term oil price forecasts last week, betting on faster than expected oil demand growth slashing the world's buffer supplies within two to three years.

The most bullish forecast came from Goldman Sachs, the largest investment bank in commodities. The bank's energy analysts warned that if their projections for global oil demand growth of over 2 million barrels per day (bpd) in both 2011 and 2012 prove correct, OPEC spare capacity could quickly be exhausted.

But even with oil at a 26-month peak on the back of near record demand over the last quarter, the majority of industry analysts remain more sanguine about the supply outlook ahead of the producer group's meeting in Quito, Ecuador, on Saturday.

Exact data on OPEC spare capacity remains a closely guarded secret within individual members, but the majority of industry analysts peg the current figure at between 5 and 6 million bpd.

That compares with as little as 1.5 million bpd in 2008 when prices were spiralling towards $150 a barrel, before the global financial crisis slashed demand and saw prices crash.

"Overall, global demand is not growing fast enough to draw down spare capacity over the next 2-3 years," said Manouchehr Takin, Senior Petroleum upstream analyst at the Centre for Global Energy Studies (CGES) in London.

Takin said Saudi Arabia alone, the world's largest crude oil exporter, is sitting on up to 5 million bpd of spare capacity. Its size and ability to substantially ramp up production lends it sway over the rest of OPEC.

OPEC itself has stated the group holds more than 6 million bpd of capacity, and said in its annual world oil outlook report this level would be maintained until 2014.

If that is to be the case, Saudi Arabia will cede some power to other members. The kingdom has no plans to expand capacity after ramping its production capabilities to 12.5 million bpd in 2009, Saudi-owned al-Hayat newspaper reported in October, citing high level sources.

By contrast, Abu Dhabi's National Oil Company (ADNOC) plans to add 213,000 barrels per day (bpd) to its crude production by 2012, with a longer term target to increase output by about 400,000 bpd to 1.8 million bpd over the next 10 years.

In Iraq, analysts polled by Reuters in October forecast production in the one OPEC member currently exempt from output targets would hit 2.8 million bpd next year from around 2.5 million currently, before leaping to 4.6 million by 2015.

Analysts at JBC Energy in Vienna, who advise several OPEC members, estimated current UAE spare capacity at 500,000 bpd, with Kuwait sitting on 350,000 bpd.

Peter Wells, analyst at UK-based Neftex Petroleum Consultants said while he saw Saudi Arabia's spare capacity as lower than some at 3.4 million, he calculated Nigeria, Algeria, Libya, Qatar and Iran all also had spare capacity between 150,000 and 300,000 bpd each.

WHEN TO GET NERVOUS

Analysts say that historically the market does not become nervous until spare capacity dips to 2 million bpd or below.

Societe Generale said they see spare capacity dropping towards 2 million bpd between 2013 and 2015, though noted that next year it will remain "ample".

Several on the industry side think even SocGen's more conservative view could be underestimating supplies.

"In our base case scenario, we see OPEC's spare capacity declining to a low of 4.7 million bpd in 2012 and 2013 before starting to move up again," analysts at JBC Energy said.

"Increasing Iraqi production capacity and weakening global oil demand growth are the main factors behind this development," they added, saying Iraq spare capacity could hit 8 million bpd within 10 years.

Stronger demand than most are predicting would be required to drag spare capacity down before then.

While demand grew by a rapid 2.5 million bpd this year, according to the International Energy Agency (IEA), most analysts see this as partly a rebound from declining demand during the economic crisis in 2008/2009.

The IEA sees demand increasing by just over 1.3 million bpd in 2011, substantially below the rate this year. OPEC sees demand growing by just under 1.2 million bpd.

Demand growth at that pace will largely be met by countries outside the producer group.

Additionally increased OPEC production of crude-like natural gas liquids (NGL) will effectively increase the supply of oil while not counting against OPEC production targets.

"There's a huge tranche of OPEC NGL capacity coming onstream next year. That could be as much as 700,000 bpd," said Greg Priddy at Eurasia Group.

"Even if demand grows faster than currently expected and non-OPEC supply surprises to the downside, you're still unlikely to see the call on OPEC rise by more than 500,000 bpd next year."

Iraqi leaders struggle to slice pie
By Sami Moubayed
http://www.atimes.com/atimes/Middle_East/LL09Ak01.html

DAMASCUS - Iraqi Prime Minister Nuri al-Maliki has promised that his new coalition government will be ready by December 15. Easier said than done, no doubt, as lawmakers met in parliament on Saturday to hammer out crucial issues related to the powers of the speaker, the 2011 budget and the Council for Strategic Policy.

Ex-prime minister Iyad Allawi, who came out with a slim majority of 91 seats in the March elections, has been promised chairmanship of the council, which has yet to be created, as compensation for not being appointed premier.

His MPs are busy gathering signatures to push for the council to be ratified by parliament, amid heavy debate regarding what powers the council and its chairman will have.

When the deal to form a new government was finally approved in November, United States President Barack Obama spoke to Allawi over the phone, assuring him that the council would have real powers, almost equal to those of the prime minister, and would not be a symbolic or ceremonial one.

"It better not be," is what Allawi's team is saying in public, worried that Maliki will find it difficult to share power and relinquish some authority to his foe and predecessor.

The initial draft law has the council comprised of nine members, which includes chairman Allawi, the prime minister, the president, the minister of interior, the minister of defense, the director of intelligence, the president of Iraqi Kurdistan and his prime minister, along with any MP who heads a bloc that won over 15% of parliamentary seats in March.

The chairman would be empowered to invite other members, or cabinet ministers, to serve on the council, whose decisions would be binding if 80% of the council voted on a resolution. How the prime minister can sit as a council member, under the chairmanship of Allawi, needs to be resolved, drawing an analogy with the Arab League, where the heads of state sit as members in a council chaired by a non-head of state.

In addition to hammering out the logistics of the new council, the Iraqi National List (al-Iraqiya) that is headed by Allawi is making strong demands, insisting that it will not be left out of the loop after winning a parliamentary majority in March. Among its demands is expanding the powers of the speaker of parliament, who it got to name in November, and not sharing them with any of the speaker's deputies.

The Iraqi National Alliance (INA) is strongly opposed to this suggestion, realizing that it would make Allawi the de facto speaker of parliament, in addition to his duties as council chairman. Among other things, Allawi's Iraqi National List was earmarked to name the minister of foreign affairs, but it is now clear that post will continue to be held by the Kurds. Instead, Allawi's team is demanding the Ministries of Finance, Municipalities, and Agriculture. It is also eyeing the Ministry of Industry and Youth Affairs, given that the powerful Ministry of Oil will seemingly go to the INA. No agreement had been reached as of the weekend on the less powerful, but very strategic, Ministry of Housing.

Additional posts in debate are non-ministerial ones that nevertheless are crucial, like governor of the central bank and director of Iraqi intelligence. Jamal al-Batikh, an MP who is close to Allawi, is a strong candidate for the security post, although Maliki wants it for his bureau chief, Tarek Najm. Adnan al-Asadi, a veteran of the Ministry of Interior, is eyeing the post of minister and so is Shirwan Waeli, the outgoing Shi'ite minister of national security.

The Ministry of Interior is very strategic, as all parties remember only too well how when it was held by the Supreme Iraqi Islamic Council (SIIC), militias flourished on the streets of Baghdad and accusations flared over SIIC members using the ministry's police cars - and dungeons - to settle scores with traditional enemies.

A new post that is raising snowballing speculation is that of the deputy prime minister of energy, which will probably serve as an alternate authority to the minister of oil. Given that INA has secured the Oil Ministry, Maliki is pushing to name outgoing minister Hussain al-Shahristani, one of his prime allies, as deputy prime minister for energy.

To date, Shahristani is undecided on whether to accept or not, depending on how powerful the new post will turn out to be. Another candidate for the post is Ahmad Chalabi. This post is crucial in a country aiming to become one of the world's Big Three in oil exports by 2017.

According to sources in Baghdad, the powers of the ministry, if such a post were created, would be ceded to the premiership and its role would be reduced into a technical one, much to Maliki's advantage. Another new post on everybody's radar is that of a third vice-presidential counterpart to President Jalal Talbani, in addition to the Sunni and Shi'ite one, which this time will go to a member of the Turkmen community. A strong candidate for this job is the MP Abbas al-Bayati.

Once all of these issues are resolved, MPs have to deal with the promising numbers of the 2011 budget, which currently stands at 93 trillion Iraqi dinars (US$79 billion), based on an oil price of US$73/barrel, and average crude output of 2.25 million barrels per day (bpd). This budget is 9% higher than that of 2010, forecasting government revenue of 78.7 trillion dinars. Iraq is planning to increase oil production to between eight and 12 million bpd by 2017.

Last but not least, Iraqi politicians will have to accommodate the increasing demands of the powerful Muqtada al-Sadr, who commands 40 seats in parliament. In 2006, Muqtada was given strong portfolios like health, education, and commerce. He will likely make louder demands this year, although sources close to Maliki insist that the Ministries of Defense and Interior will under no circumstances be given to the Sadrists.

Muqtada's team, however, insists that no aim is too high for the Shi'ite cleric, who by virtue of his power base and influence can demand any job within the next government for his men. He has the power to make or break the cabinet, depending on the extent that the prime minister meets his political ambitions.

Iraq's oilmin Shahristani offered new post in govt
http://af.reuters.com/article/energy...6B117X20101202

* New deputy PM post created to oversee energy affairs

* Shahristani yet to make up his mind

* Iraqiya eyes finance, Kurds want foreign affairs

By Suadad al-Salhy

BAGHDAD, Dec 2 (Reuters) - Iraqi Oil Minister Hussain al-Shahristani has been offered a top post in the next government to oversee the country's energy policies, which could mean he will no longer head the oil ministry, politicians said.

Shahristani, the architect of major energy deals that could catapult Iraq to the top ranks of global oil powers, is yet to make up his mind whether to accept the new post as Deputy Prime Minister for Energy Affairs or remain head of the oil portfolio, lawmakers close to the talks said.

Powers of the newly created post are yet to be determined and are still being discussed among Prime Minister Nuri al-Maliki's Shi'ite coalition and may need the blessing of other political blocs.

"Hussain al-Shahristani is one of the main names put forward to take one of those posts, either the ministry of oil or the deputy prime minister for energy affairs," said Abbas al-Bayati, a senior member of Maliki's State of Law bloc.

"We still want to get the oil ministry and the Kurdish Alliance insists on keeping the foreign affairs ministry, which means the Iraqiya bloc will get the finance (ministry). This is almost agreed upon but nothing has been finalised yet."

Shahristani wants to make sure he would have enough power to influence Iraq's energy affairs if he let go of the oil ministry, politicians close to the negotiations said.

"The problem is that Dr. Shahristani is not interested in the deputy prime minister's post if it will not control the oil ministry," said a senior politician in Maliki's Dawa party.

The new deputy prime minister will oversees the ministries of oil, electricity, transportation, and possibly a new portfolio for investments. It was unclear how much authority the oil minister would have if more was given to the deputy premier.

Baghdad signed a series of oil deals with international oil companies after two bidding rounds last year that could boost Iraq's output capacity to 12 million barrels per day (bpd) from around 2.5 million bpd now.

Shahristani has been credited with masterminding those deals, which could power Iraq out of war and decline into oil's big leagues.

More than eight months after an inconclusive parliamentary election on March 7, Shi'ite, Sunni and Kurdish factions reached agreement last month on dividing up top government jobs.

Maliki said he would form a government by mid-December that would incorporate all the main political factions, including the cross-sectarian, Sunni-backed Iraqiya bloc led by former prime minister Iyad Allawi.

Political factions are negotiating over cabinet jobs, in particular the so-called sovereign ministries -- interior, defence, foreign affairs, finance and the hotly contested oil portfolio.

Not only the cabinet posts are at stake. Positions down to director general in each ministry will be divided up, with each bloc trying to secure as many government jobs as it can.

Kadhim al-Shimary, a member of Iraqiya, said his bloc expects to win the finance ministry, while the Kurdish Alliance would keep the foreign ministry and oil would go to the Shi'ite-led National Alliance as part of an initial deal among the political factions.

The National Alliance is a merger of Maliki's State of Law, with 89 seats in parliament, and the Iran-friendly Iraqi National Alliance (INA), with 71 seats.

If Shahristani turned down the deputy prime minister's nomination for the sake of the oil ministry, the new post could be filled by Ahmed Chalabi, a senior Shi'ite politician of the INA, oil ministry and political sources said.

"Chalabi could be a safety valve between the central government and the Kurds if he took this post, because he is well respected by the Kurds," a source close to Chalabi said.

Key Production Growth Target Achieved at Iraq's Zubair Field
http://www.tradingmarkets.com/news/s...d-1356317.html

Dec 7, 2010 (Al-Bawaba via COMTEX) --
Eni, Occidental Petroleum Corporation (NYSE: OXY | PowerRating) and Korea Gas Corporation (KOGAS) announced today that they have achieved and sustained a 10-percent increase in oil production at the Zubair field, near Basra in southern Iraq.Production from the Zubair field has grown to more than 200,000 barrels of oil per day from the approximately 183,000 barrels of oil a day produced when the consortium started field operations in the first quarter of 2010.The consortium, led by Eni (32.81%) with partners Oxy (23.44%), KOGAS (18.75%) and the Missan Oil Company (25%), signed a technical service contract in late January to redevelop the Zubair field with Iraq's state-owned South Oil Company (SOC) and Missan Oil Company as State Partner.With the successful 10-percent increase in initial production, the consortium's contract cost recovery mechanism commences, with the group additionally earning $2 per barrel on the incremental oil production.The consortium plans to increase production from the Zubair field to 1.2 million barrels of oil a day, representing an increase of about 1 million barrels of oil per day. Target production is expected to be reached progressively within the next six years and maintained for seven years thereafter."Oxy's success in Iraq is a direct result of an outstanding partnership with the Iraqi government and our consortium partners in developing one of the world's great oilfields," said Dr. Ray R. Irani, Chairman and Chief Executive Officer of Occidental Petroleum. "We are proud of our initial results in Iraq as well as our continued success in numerous other projects across the Middle East."The redevelopment of the Zubair field, one of the largest discovered fields in the world, will support Iraq in becoming a major player in global oil markets. It also will foster social and economic development at a regional and national level, by providing training and development opportunities for the thousands of Iraqi workers of Zubair and by promoting much-needed economic stimulus.The Zubair Field Operating Division manages the rehabilitation and expansion project, which is staffed mainly by employees from South Oil Company with expert support from the consortium. (C) 2010 Mena Report (www.menareport.com)