Iraq’s State Oil Marketing Organisation (SOMO) has raised the official selling prices for its Basra Light and Kirkuk crude grades for October loading to the U.S. and Europe.

In common with some other countries, Iraq’s oil is priced relative to regional benchmark prices:

* For shipments to US, contracts are priced are relative to the Argus Sour Crude Index (ASCI);

* Shipments to Europe are priced relative the North Sea Spot BFOE; and

* Asian shipmentas are priced relative to the Dubai-Oman crude benchmark, published by Platts, the energy-information division of McGraw-Hill.

October prices are as follows:

• Kirkuk crude to Europe increased the most, rising by $1.95 a barrel, and will sell at a premium of 15 cents a barrel to the North Sea (Dated Brent) benchmark;
• Basra Light to Europe will cost $1.50 a barrel more in October than in September and will sell at a narrower discount of $1.45 a barrel to Dated Brent;
• U.S. buyers will see a fifth consecutive price increase for the grade, with the discount to the ASCI narrowing to $1.15, an increase of 15 cents;
• Kirkuk oil for U.S. buyers will climb 10 cents a barrel to a 35 cents premium above the ASCI benchmark;
• The discount for Basra Light to Asia narrowed by 20 cents to $1.35 a barrel below the Dubai-Oman benchmark.

(Sources: Bloomberg, Reuters)

China’s CNPC and its partners Total and Petronas have invited oil service companies to bid for the redevelopment of 10 oil wells in the 4.1 billion-barrel Halfaya oilfield.

Bidders are invited to provide acid stimulation services on 10 wells within a one-year period to maximize the inflow area of the wellbore in oil and gas formations.

The tender closes on Sept. 27 and the offer stays valid for 90 days after the bid closing date.

The group also issued a tender for detailed engineering, procurement, construction, commissioning and maintenance to build a temporary oil storage and filling station at Halfaya.

The first tender is an engineering, procurement and construction contract to build an oil storage and filling station, a person familiar with the project told Dow Jones Newswires.

The other tenders call for the supply of dual-fuel generators, complete defense system, and Toyota Land Cruiser and pickup cars.

In August, CNPC and its partners said they planned to start drilling new wells this month in the Halfaya field as part of a plan to boost output to 70,000 barrels per day in 2011 from 3,000 bpd now.

(Sources: Dow Jones, Reuters)

The Iraqi government has formed a committee to discuss its numerous disputes with the Kurdistan Regional Government (KRG), AKnews reports.

Salam Yaseen, an economic adviser to the Iraqi government, told AKnews that the committee will discuss a range of issues with the Kurds including the oil and gas exports by the KRG that recently caused uproar in Baghdad.

The Kurdish and Iraqi governments have had deep disagreements for years over the management and control of oil resources in the country’s northern Kurdistan Region.

Recently disputes took another turn when the KRG announced the signing a new deal with the German utility company RWE to export gas to Europe.

He said the committee will soon start its work to resolve the differences over KRG’s gas exports.

Meanwhile, Iraq’s deputy oil minister told AKnews that so far oil and gas disputes between the KRG and Iraqi government have remained unresolved.

Assem Jihad said improving the relations between the KRG and Iraqi government will help increase Iraq’s crude oil exports.

The Iraqi government had already said some regional countries were trying to “complicate” the relations between the Kurdish government and Baghdad.

The Iraqi government has frequently objected to the oil and gas contracts between the Kurdish regional government and foreign firms saying it is a violation of the Iraqi constitution. But, Kurds insist that their contracts are constitutionally valid.

(Source: AKnews)

By Tariq Abdell, Founder & Chairman, Mesopotamia Insight.

The opinions expressed here are those of the author, and do not necessarily reflect the views of Iraq Business News.

The end of U.S. combat operations in Iraq presents a unique opportunity for a new beginning in U.S.- Iraq’s relationship. However, given Iraq’s crippling challenges and U.S. sluggish economy, the success of a such strategic partnership is contingent upon the political will of both U.S. and Iraqi governments, the support of the international community, and the genuine commitment of the international oil companies – Iraq’s biggest investors.

Drawing on past experiences, the stakeholders (U.S. government, Iraqi government, UNDP, World Bank, international oil companies, etc…) need to devise a concerted post-conflict reconstruction strategy, Marshall plan type, that is capable of  a) averting the collapse of State’s institutions and b) creating the conditions for a sustainable socio-economic recovery. However, before undertaking a such colossal challenge, stakeholders need to build a strategic framework defining  the mission’s objectives (attainable and realistic), organizational design (steering committee, for instance) , stakeholders’ roles and responsibilities, needed resources, and performance metrics.

Respectively, I’ll explore key stakeholders’ roles and responsibilities in Iraq’s post-conflict reconstruction  as it’s mandated by their respective missions.

Iraqi government

In this process, Iraqi government should be treated as an equal partner that is fully responsible and accountable of its actions before its constituents and the international community. Consequently, the new elected government needs to formulate a comprehensive development strategy in concert with key stakeholders, including the planning for the impending multi-billion dollar mega-reconstruction projects, and the followings are some key areas of common interest and cooperation:

• National reconciliation to fend off ethno-sectarian strife and political violence.
• Reining in corruption and enhancing institutions efficiency.
• Providing basic services (e.g., drinking water, electricity, running sewer, health care, education, etc….)
• Promoting rule of law and human rights.
• Tackling  illiteracy challenges, a serious threat to the country’s future.
• Creating jobs, higher unemployment rates are source of societal and political upheavals e.g., organized  crime, militias, etc….
• Revamping severely languished infrastructure.
• Reviving the country strategic industries to curtail its dependence on petrodollars.

U.S. Government 

To ensure the success of its new mission “New Dawn” in Iraq, the U.S. needs to learn from its past mistakes – $53 billion of unfinished or poorly executed projects– and capitalize on its acquired knowledge and understanding of Iraq’s ethno-sectarian fabric, political landscape, and socio-economic dynamics. Thus, U.S. Department of State’s Iraq strategic partnership office ISPO and USAID  should play a crucial role in coordinating and overseeing the reconstruction efforts in concert with other stakeholders e.g., Iraqi government, UNDP, etc….

United Nations Development Programme

Given UNDP extensive experience –Honest broker– in conflict and post-conflict zones, the UNDP is well-positioned to promote and oversee national reconciliation, rule of law, and rehabilitate State’s decadent institutions to enhance efficiency and  inclusiveness – Hiring and promotions are merit-based and not politically dictated.

World Bank

Given the decay of Iraq’s financial institutions  as result of decades of wars and sanctions, the World Bank’s role,  key partner in this reconstruction efforts, is to provide post-conflict reconstruction expertise, financial and technical assistance,  which are key ingredients for a sustainable development.

International oil companies (IOCs)

Given the current Peak Oil and IOCs vested interest in a stable and secure Iraq, IOCs should play a major role in this reconstruction efforts. Oil sector is the engine of Iraq’s economy  -%90 of government revenue. Nonetheless, the oil sector challenges are hampering the country’s economic recovery:   

• Major oil fields require billions of dollars for rehabilitation and development as result of decades of wars and sanctions.
• Current oil workforce is in desperate need of training and technological know-how.
• Oil sector is a highly politicized field.

Thus, given Iraq’s vast reserves of oil and gas,  IOCs’ should help revamp the oil sector swiftly by introducing technological know-how, the industry best practices, and fostering local workforce. With such perspicacious initiatives, IOCs will help enhance the oil sector efficiency, increase production, spur economic recovery;  and, eventually, countervail some of deep-seated distrust and apprehension.

In sum, in the absence of a clear post-conflict reconstruction strategy, Iraq’s convoluted political impasse and the international community inaction — lack of political will– are recipes for a prolonged political instability and ethno-sectarian strife; subsequently, jeopardizing all the hard-earned successes (e.g., fair elections, strong Army, etc…) and exacerbating  geopolitical tensions. Moreover, given the endured sacrifices, thus far,  in blood and treasure — Thousands of lives and over $ 751 billion war price tag — it’s imperative to stand by Iraq in these difficult times to prevent it from reverting to a military dictatorship or ,worst, religious tyranny.  In his speech to congress (12th March, 1947), President Truman exquisitely puts it when he warns us against lose of hope, destitution, and their grim outcomes chiefly chaos and tyranny:

“… The seeds of totalitarian regimes are nurtured by misery and want. They spread and grow in the evil soil of poverty and strife. They reach their full potential when the hope of a people for  a better life has died. We must keep that hope alive. If we falter in our leadership, we may endanger the peace of the world – and we shall surely endanger the welfare of our own nation…”

The opinions expressed here are those of the author, and do not necessarily reflect the views of Iraq Business News.

 The author, Tariq Abdell, is an Iraq analyst, and Founder & Chairman of Mesopotamia Insight

He can be contacted at: atariq2000@hotmail.com

or

Followed on twitter: http://www.twitter.com/atariqx

Iraq's South Oil Company, working with the IOCs, has set quarterly
production targets for the country's southern oilfields for 2011,
according to documents obtained by Reuters.

Production is targeted reach an average of nearly 2.3m bpd by Q4 2011.

 Oilfields            Q1          Q2          Q3          Q4

 Rumaila           1,175,000   1,201,000   1,226,000   1,250,000

 West Qurna 1        260,000     270,000     285,000     300,000

 Majnoon              70,000      80,000      90,000     100,000

 Zubair              280,000     310,000     340,000     360,000

 Gharaf                  -           -           -        35,000

 Nahr Bin Umar        45,000      50,000      60,000      70,000

 Ratawi               10,000      14,000      18,000      25,000

 Luhais               60,000      70,000      80,000      85,000

 Tuba                 10,000      15,000      20,000      30,000

 Nassiriya            15,000      20,000      30,000      30,000

TOTAL              1,925,000   2,030,000   2,149,000   2,285,000

(Source: Reuters)

quarterly 2011 production targets for
Iraq's southern oilfields

South African President Jacob Zuma said there are no legal means to prosecute traders for paying bribes to win Iraqi oil contracts under the United Nations’ oil- for-food program that operated before 2003, according to a report from Bloomberg.

Zuma closed an investigation into trader Sandile Majali, citing loopholes in local laws. Majali was named in a UN probe that found 2,253 companies paid illegal kickbacks to Iraq to win business from the program designed to enable Saddam Hussein’s government to sell oil to pay for humanitarian aid.

Zuma said in reply to a parliamentary question that he would not extend the lifespan of the Donen Commission, which probed the role of South African companies in the so-called Oilgate scandal, nor would he release its findings.

“Whether it is proven that the South African nationals did pay the surcharges to the Iraqi government, I have been advised that in terms of our domestic law these nationals cannot be prosecuted,” said Zuma.

Majali, who traded oil through his companies Montega Trading and Imvume Management Ltd., denies having paid bribes to win contracts and says the ruling African National Congress “promoted” his business activities in Iraq. He has described himself as an adviser to former President Thabo Mbeki

The ANC used Imvume as a front company to try and profit itself from oil trading, the Johannesburg-based Mail & Guardian reported in July, 2005, citing documents signed by the party and the company. The party agreed to lobby against sanctions imposed against Hussein’s government, in exchange for the oil allocations, the newspaper said.

The Foreign Ministry has rejected allegations that its policy was compromised by contracts in the oil-for-food program.

Zuma said today that he has asked Justice Minister Jeff Radebe to “consider passing the relevant legislation and/or amend existing legislation to rectify any shortcomings in our domestic law.”

The Democratic Alliance, the country’s main opposition party, said it would use every available mechanism at its disposal to challenge Zuma’s decision.

“Despite regular protestation that his government is tough on corruption, the president’s handling of this matter is indicative of the ANC’s attitude towards executive misconduct,” Athol Trollip, the party’s parliamentary leader said in an e- mailed statement. “The decision not to further investigate the oil-for-food scandal has been made in the interests of the ANC.”

(Sources: Bloomberg, Independent Online)

Iraqi Oil Minister Hussain al-Shahristani sees no reason for OPEC to reconsider its current production levels at its next meeting, due to be held in Vienna on 14th October.

According to report from Reuters, he sees no big demand for crude and says current production levels should be maintained, but OPEC should hold an extraordinary meeting if world crude prices fall below $70.

Shahristani said there was production and consumption “stability” in world markets, but the global economic recovery was slow, and urged OPEC members to comply with production cuts, saying that current compliance is only at 50 percent.

(Source: Reuters)

Shell continues to work hard to deliver joint projects with its Iraqi partners, the South Gas Company, and expects a final agreement on the Heads of Agreement (HoA) soon, after the Iraqi cabinet endorsed the project end of June this year.  This is according to the architect of the 2008 agreement, Mounir Bouaziz, Shell EP International’s Vice President Commercial, New Business, LNG, Middle East and North Africa.  The HoA will eventually form the gas joint venture, Basrah Gas Co (BGC), with the immediate aim of boosting much needed power generation in Iraq.

Mounir Bouaziz, who was one of the first senior IOC executives to visit Baghdad after 2003, has since then spearheaded Shell’s activities in the region and most recently steered the winning consortium of the giant Majnoon oilfield bid.

Basrah Gas Company (BGC)
The establishment of the Basrah Gas Company (BGC) marks an important milestone in supporting Iraq to make a better use of the gas, which is currently being flared, according Mounir Bouaziz.  “Gas is a key part of the chain in delivering sustainable power generation”, he says, “together with our partner, the South Gas Company, we have been working hard to deliver joint projects that have resulted in an estimated 135 mmscfd of gas, and circa. 500 tonnes per day of LPG being gathered, that were previously flared.  This represents around 20% of the currently flared gas, and over a third of the current Iraqi LPG import requirements.”  He continues:  “We continue working with our Iraqi partners and expect a final agreement soon, as the Iraqi Cabinet endorsed the project end of June 2010. Now we are waiting for the final conclusion and ratification of the contracts by the Cabinet”.

Reduction of flaring
The joint venture between Shell, Mitsubishi and South Gas Company is set to capture and exploit gas flared from four giant southern Iraqi oilfields.  According to the Shell LNG specialist, it is difficult to provide an exact figure on how much the project will be able to reduce the flaring.  “What I can say is that progress is being made”, says Mounir Bouaziz, “the current level of flaring equates to approximately 20 million tonnes per year, in CO2 equivalent emissions. The JV would initially focus on gathering this gas in order to reduce the flaring and turn this resource, currently being wasted, into value for Iraq – by helping the country meet its domestic needs for power generation and creating a new income stream.”

Huge potential for gas exports
“We have worked for many years with the Ministry and the national Oil and Gas companies on a Gas Master Plan”, he continues: ”it is exciting to realise that Iraq could develop into a prominent gas industry, and match some of the top gas exporters. I am personally excited about the opportunity to play a role in this challenge.”

Mounir Bouaziz acknowledges and supports the fact that domestic needs take preference.  “There is no doubt about that”, he continues, “yet, there is still phenomenal potential for export through LNG and pipelines, simply because the large associated gas volumes expected from the ongoing oil-field developments. I would like to emphasise that any gas export will be subject to Government approval.”
Majnoon oil field:  local communities

In December 2009, Petronas joined Shell to form the winning consortium of the giant Majnoon oil field bid, one of the largest oil fields in the world, estimated by the Iraqi government to hold 38 billion barrels of oil in place.  According to Mounir Bouaziz good progress is being made.  “What pleases me is the news I am getting about the relationships and cooperation with the local communities in Majnoon. I visited these communities myself a day after signing the contract, and I am delighted about the acceptance of the Basrawis to the project and Shell’s presence.”

Visit www.Basrahgas.com for the latest information about the Basrah Gas Company (BGC).

Iraq Future Energy 2010
Mounir Bouaziz forms part of a distinguished list of speakers and experts who will discuss the exploration of Iraq’s rich oil and gas fields during Iraq Future Energy 2010, a top meeting energy executives and Iraqi regulators from 27-28 September in Istanbul, as global companies that have won contracts prepare to start the development of various fields.

The complete interview with Mounir Bouaziz and other top speakers at Iraq Future Energy 2010 are available at:  www.theenergyexchange.co.uk/iraq10

More high-level speakers at Iraq Future Energy 2010 include:

• His Excellency Thamir Al Ghadhban, Chairman, Advisory Committee to the Prime Minister of Iraq, Former Oil Minister
• Michael Townshend, President Iraq, BP
• Dr Abdul Hadi Al Hassani, Vice Chairman, Oil and Gas Committee, Iraqi Parliament
• Baroness Nicholson of Winterbourne, Executive Chairman, IBBC (Iraq Britain Business Council)
• Dr Thamir Al Uqaili, Independent Consultant in Iraq’s oil and gas sector

Event website:  www.theenergyexchange.co.uk/iraq10
Event dates and location:  27-28 September 2010 – Point Hotel Barbaros, Istanbul, Turkey

For more information:
Programme director: Claire Pallen c.pallen@theenergyexchange.co.uk
Mobile: +971 50 264 1202

For more information, interviews and media accreditation:
Communications manager:  Annemarie Roodbol
Tel.  +27 21 700 3558
Fax.  +27 21 700 3501
Mobile: +27 82 562 7844
Email:  annemarie.roodbol@clarionevents.com

Turkey’s Energy and Natural Resources Minister, Taner Yıldız, has said Turkey will renew the agreement with Iraq for the Kirkuk-Yumurtalık crude oil pipeline on Sept. 19.

The flow of oil through the pipeline was severely affected by the seven-year US occupation of Iraq. The very limited flow has continued to decrease over the last few years.

Yıldız noted that the pipeline has a capacity of 70 million tons per year but that the initial flow of oil will be half that in the first three years. Following the US withdrawal of combat forces from Iraq, Turkey and Iraq are now looking to boost the amount of oil to be transported from Kirkuk in northern Iraq to Yumurtalık in the Ceyhan region of Turkey’s southern province of Adana. Yıldız said a draft has been prepared and that the final agreement is expected to be signed in Baghdad on Sept. 19.

“This is the continuation of a project that will be beneficial for both the Ceyhan and Adana regions as well as for Turkey. At the same time, Iraq needs to export the oil and natural gas it produces, so this is a project that will support Iraq’s path to normalization. In addition to that, it will also be beneficial for increasing the revenue of both Turkey and Iraq. We are renewing the agreement for the Kirkuk-Yumurtalık crude oil pipeline, which has served us for many years. As you know this pipeline has a larger capacity than Baku-Tbilisi-Ceyhan [BTC]. As a result of this agreement we anticipate 70 million tons of oil per year will eventually be carried through the pipeline — although the initial flow of oil will be half this for the next three years. I believe that as Iraq normalizes it will come to a level where it will increase the flow to full capacity and that this will be achieved by its exports via Ceyhan. I believe this will be beneficial for both countries,” Yıldız said.

According to data from state-owned Turkish Pipeline Corporation (BOTAŞ), the Kirkuk-Yumurtalık pipeline carried 36.7 million tons of oil in 2001. The following year, in 2002, Iraq exported another 28 billion tons of oil but the pipeline was closed in 2003 when the US attacked Iraq. Following the war, the exports restarted in 2004 with only 6 million tons but the volume of petroleum flow declined over subsequent years. The volume of annual oil exports from the Kirkuk-Yumurtalık pipeline was recorded as around 2 billion tons for 2005, 2006, and 2007. Last year, the flow of oil reached 26.6 million tons as normalization in Iraq continued to gain momentum.

(Sources: Today’s Zaman, Anatolia)

Iraq has tightened security around oil infrastructure and oilfields in the south, in response to intelligence suggesting al Qaeda and other insurgent groups plan to attack oil facilities, a security official said.

Reuters reports that Ali al-Maliki, head of the municipal security committee in the southern oil hub of Basra, said the information indicated that al Qaeda in Iraq and Saddam Hussein’s outlawed Ba’ath party were switching their sights to economic targets and oil companies.

“We have received intelligence information of a plan to target oil facilities, including oilfields, by al Qaeda and Baathist insurgent groups,” Maliki told Reuters in an interview.

“We have prepared a pre-emptive plan to protect vital oil facilities and foreign oil investors,” he added, without providing details.

“We have met representatives from foreign oil firms in coordination with the South Oil Company and pledged to provide full protection at the oilfields and highways they use.”

It is difficult for Sunni Islamist insurgents to operate in the largely Shi’ite undetected, and al Qaeda in Iraq and other insurgent groups are usually associated with attacks on oil pipelines in Iraq’s north, where they continue to find safe havens.

The main threat so far in the south are the Iranian-made roadside bombs planted by Shi’ite militia to target U.S. forces.

The head of the oil police in Basra, Brigadier Moussa Abdul Hasan, said his forces were on alert, but a lack of cooperation and coordination with the private security companies hired by oil firms was hampering their efforts.

“We are well prepared to stop any attacks and to deal with the worst scenarios,” Abdul Hasan told Reuters. “Our main concerns are to keep the routes to oilfields widely used by foreign firms clear of roadside bombs.”

(Source: Reuters)

Reuters reports on Sunday that the cut in Baghdad’s allocation of fuel to Iraqi Kurdistan is related to the admission last month that the region is has been exporting petroleum products through Iran.

We reported at the weekend that the cut was in response to the new gas agreement between the Kurdistan Regional Government (KRG) and the German company RWE, which Baghdad regards as illegal.

The decision to cut supplies to the semi-autonomous Kurdish Regional Government was ordered by Oil Minister Hussain al-Shahristani, Oil Ministry documents obtained by Reuters showed.

“Based on instructions from the oil minister, it was decided to cut the allocation of kerosene and diesel fuel sent to provinces in the Kurdish region by 50 percent until further notice,” one document said.

Shahristani has said any exports of crude oil would be illegal because the law only allows the State Oil Marketing Organisation (SOMO) to sell crude abroad. But he has also complained about the resale of refined products because Iraq does not produce enough to be self-sufficient and has to import.

Kurdish officials condemned the decision to restrict kerosene and diesel supplies to their region, and said they would make every effort to ensure fuel prices did not rise.

“The decision to cut fuel supplies is unjust and we will do our best to stop any negative implications,” Serwan Abu Bakir, a senior official at the Kurdish natural resources ministry, told Reuters on Sunday.

Tensions between central government in Baghdad and the KRG have been increasing in recent months.

(Source: Reuters)

Seven years after the invasion that ousted Saddam Hussein, Iraq largely has been unable to revamp business laws that would help make the country more attractive to investors, according to a report from Bloomberg.

“Investors still note security concerns, but now are more likely to cite regulatory hindrances and other practical barriers to doing business,” the U.S. State Department said in its 2010 Investment Climate Statement on Iraq.

Foreign direct investment totaled $1.1 billion in 2009, most of it in the oil industry, according to the United Nations July World Investment Report. Neighboring Iran, under a fourth set of UN sanctions, took in three times as much.

Lawmakers in the outgoing parliament weren’t able to approve 72 draft laws meant to help accelerate economic growth, said Thair Feely, director of the government’s Baghdad Investment Commission.

Legislation awaiting approval includes a measure that would make it easier to register a company. “It can take four or five months and costs a fortune, about $15,000 to $20,000, compared to only 200 pounds ($300) in the U.K.,” Feely said by phone from Baghdad. “It’s unfair.”

The World Bank estimates it takes an average of 77 days to open a business in Iraq, almost four times the average in the region. Iraq fell three places in the Washington-based bank’s 183-country ease-of-doing-business scale to 153rd this year, below Tajikistan and Haiti.

Issues such as a cash-based banking system, corruption and limitations on land ownership have also damped investment, said Arndt Fritscher of the Berlin-based Rebuild Iraq Recruitment Program, which works with 160 European, mostly German, companies with business interests in Iraq.

“The security situation is not our problem because we just pay more,” Fritscher said. “German industry is ready to go, but there is no basis to go from. We would like to set up power plants, for example, we just need the ground.”

Iraq’s National Investments Law of 2006 bars foreigners from owning land, though it was amended in November to allow non-Iraqis to buy property for housing projects. Berlin-based Transparency International, an anti-graft group, placed Iraq and Sudan in fourth to last place in its 2009 corruption index of 180 countries.

The economy is estimated to have expanded 4.2 percent last year, the Washington-based IMF said, powered by oil exports. Companies including London-headquartered BP Plc, Royal Dutch Shell Plc, which is based in The Hague, and Paris-based Total SA, have signed contracts with Iraq to boost oil production after two bidding rounds for development rights last year, even in the absence of a hydrocarbons law. A third bidding round for natural-gas deposits is set for later this year.

“The oil business has such great profits and returns on investments that companies are willing to take risks,” said Ascanio Martelli, chairman of Bari, Italy-based Atami Group, which acts as a consultant for Italian energy companies working or seeking to work in Iraq, in a telephone interview.

The government has pushed through some measures to attract investors. The National Investments Law exempts foreign companies from paying taxes for 10 years and from paying import fees for three years.

“We are trying to offer incentives,” Iraqi government spokesman Ali Al-Dabbagh said in an interview from Baghdad. “Our industries have many problems that do not encourage foreign investors or even local industrialists.”

Iraq needs $400 to 500 billion to get things back on track, according to the Baghdad Investment Commission’s Feely.

“Unfortunately, we only receive hopes and promises,” he said. “We can’t do it without foreign investment. We can’t do it on our own.”

(Source: Bloomberg)

Gulf Keystone (LSE: GKP), the Kurdistan-focused oil explorer widely rumoured to be a takeover target, has announced the commencement of drilling operations on its Shaikan-3 appraisal well, effective September 2, 2010.

This is a shallow appraisal well, very close to the Shaikan-1 well, the site of last year’s discovery of the giant Shaikan oil field. The Company has a 75 percent working interest in the Block.

The Shaikan-3 well will be drilled to 1,100 meters (depending on well results) and is designed to evaluate and test the Cretaceous age intervals for producible oil volumes. Much of the Cretaceous interval in Shaikan-1 could not be completely logged, tested or evaluated due to lost circulation and other drilling difficulties. A large percentage of the interval is saturated with various hydrocarbons such as tar and heavy oil.

The purpose of the Shaikan-3 well is to further evaluate these hydrocarbon volumes and determine if they are capable of commercial production. The total pore volume of the Cretaceous age interval is very large and, if the drilling and testing are successful, the presence of readily producible hydrocarbons could add significantly to the 1.9 (P90) to 7.4 (P10) billion barrels of oil in place already discovered in the deeper Jurassic and Triassic formations. Drilling and testing is expected to take two months.

Germany’s Siemens is eyeing up electricity investments in Basra.

“A delegation from Siemens met today (Sept. 2) with officials of the provincial council’s electricity committee to discuss ways to carry out projects in the power sector in Basra,” Ziyad Ali told Aswat al-Iraq news agency.

“The delegation expressed readiness to carry out power projects in the fields of construction of 11/33 kilovolt stations,” he said.

Also, a consortium of Turkish companies has proposed building a power station in Basra and a refinery to feed the plant with fuel, Ali added.

(Source: Aswat al-Iraq)