Posted on 09 April 2012.
Iraq’s Minister for Housing and Construction, Mohammed Sahib al-Darraji, spoke to Gavin Jones for Iraq Business News:
The Ministry of Housing and Construction is responsible for building over 2 million houses between now and 2015, as well as several thousand kilometres of highway and several dozen schools, hospitals and various other infrastructure projects; it’s a massive task and as the Minister of Construction told me yesterday “we cannot do this by ourselves – we need international companies to get involved”.
One example of this is Danish engineering consultancy COWI, which is about to sign a contract to design and build a 500 km highway from Baghdad to the Turkish border, connecting Basra to Baghdad to Turkey, and making one of the first significant steps in reconnecting the Silk Road.
Consulting firm Mackenzie & Mackenzie was appointed last year and has started a Public Private Partnership. One of the first steps will be a privatisation programme for the state-owned assets of the Ministry of Industry and the Ministry of Construction, with the Ministry of Construction determined to be in the lead for setting up international joint-ventures with the 9 state-owned companies they have – the first one scheduled to be sold this year.
Posted in Construction & Engineering
Posted on 07 April 2012.
Further to the rumours that Exxon Mobil plans to abandon it’s contract at West Qurna-1 in favour of pursuing exploration deals in Iraqi Kurdistan, the Kurdistan Regional Government (KRG) has issued the following statement:
“In a meeting with President Masoud Barzani in Washington DC this week, the CEO of Exxon Mobil, Rex Tillerson [pictured] stated that Exxon Mobil will continue its operations in the Kurdistan Region.
“The oil major signed a contract with the KRG last year to explore six fields in Kurdistan. Mr. Tillerson said Exxon Mobil is committed to the contracts that it has signed with both the Iraq government and with the Kurdistan Regional Government (KRG).“
This appears to contradict a recent statement from the Iraqi Ministry for Oil, in which it has claimed to have received a second letter from Exxon in which it says it has “frozen” its contracts with the Kurdistan Regional Government (KRG).
Iraq Business News sources in the southern oil province of Basra say they are astonished that Exxon appears to be putting priority on its operations in the Kurdish North of the country.
According to a report from Reuters, Shell, Exxon’s partner at West Qurna-1, backed out of a joint deal with Exxon and the KRG at the last minute, for fear of angering the administration in Baghdad.
Posted in Oil & Gas
Posted on 06 April 2012.
The Iraqi Agriculture Ministry has reportedly ‘demanded’ that the ministries of planning and finance increase the Palm General Authority’s allocations from 4bn to 8bn IQD ($3.4m to $6.8m) to ensure the success of the annual plan for the development of palm groves.
According to AKnews, Kamel Mukhlab, the director general of the authority, said they now have six aircraft which are used to treat diseases affecting the palms, as well as an excellent staff of 1,200 employee.
“Keeping the allocations the same is disastrous because we will have to dismiss most of the workers who work on daily wages”, said Mukhlab.
The Ministry of Agriculture began a widespread campaign to treat the palm groves near the areas that witnessed war and armed operations in the past.
The ministry announced the allocation of 2,500 donums [625 hectares] to plant palm groves for over 560 kinds of dates.
Iraq today has 11 million date palms and the ministry plans to increase to 30 million trees over the next ten years.
In the 1970s, Iraq’s 34 million date palms accounted for 30 percent of the total number found in the world. Official figures indicate that annual exports from Basra province alone reached more than 130,000 tons.
Posted in Agriculture
Posted on 27 March 2012.
Iraq’s state-run South Gas Company says its output will exceed 2 billion cubic feet by 2013, according to a report from Azzaman.
The company’s director-general, Hussein Khudhair, said in a statement that “once the projects under construction are completed, the production will be in huge quantities surpassing two billion cubic meters”.
He said “gigantic projects” were being implemented and the company plans to add 5,000 more employees to its payroll.
Basra holds up to 70 percent of the country’s oil reserves, and is also home to the state-owned Basra Gas Company.
It is estimated that the three fields of Rumaila, Zubair and West Qurna together flare off more than 874 million cubic feet of gas a day.
Iraq’s proven natural gas reserves are estimated at 110 trillion cubic feet but oil ministry officials say there are another 150 trillion in probable reserves.
Posted in Oil & Gas
Posted on 26 March 2012.
Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.
Click here to access the report.
DNO, ExxonMobil, Genel Energy
- Barzani speech takes aim at Iraqi government: Likely indicates negotiations, but don’t expect break on Exxon until after Arab League summit.
- DNO, Genel Energy hail success in Iraq: AWith their first earnings announcement under their belt, could Genel be better play than DNO?
- Attacks and precautions as Baghdad gears up for Arab League: Al Qaeda’s big chance to discredit Maliki is next week – look for action from both sides.
- Sadr holds major demonstration in Basra: Sadr shows continuing strength Arab street, but sidesteps Maliki’s show in Baghdad.
Calendar Events Discussed:
- 29 March – Arab League summit
- April – National Reconciliation Conference
Click here to access the report, or to add your email address to Dunia’s mailing list to receive the Iraq Market Tracker via email.
Posted in Banking & Finance, DFC Market Tracker, Investment, Oil & Gas
Posted on 22 March 2012.
The United Nations Development Programme (UNDP) and Shell Iraq have signed an agreement to implement a range of development projects in Southern Iraq. The four year partnership aims to increase the number of local area development activities, promote local small and medium enterprises and provide vocational training to respond to the private sector’s needs.
“UNDP believes that such partnerships are fundamental for the effective implementation of our development programmes in Iraq” said Peter Batchelor, UNDP Iraq Country Director. “Partnering with the private sector, particularly with international oil companies who are the largest investors in the country, is key to capacity building, generating employment and building strong and competitive inclusive markets” he added.
The partnership, the first between UNDP Iraq and the private sector, has two main components. The first includes vocational training to equip existing and future Iraqi workers to respond to the needs of the oil and gas sector. It also includes providing support for the establishment and development of micro, small and medium enterprises. The second includes a range of programmes to improve the quality of basic services for the residents of Basra province. This will be achieved through more inclusive and participatory planning processes, where local communities and civil society organisations are able to identify their own development needs and priorities.
Unemployment in Iraq is currently 11.5% of the labor force, slightly less than in recent years. More than 20% of Iraqi youth are unemployed, while at least one in every five women participating in the labor force is unemployed. In the Basra governorate, unemployment is 11 %.
Posted in Industry & Trade, Oil & Gas, Public Works
Posted on 21 March 2012.
Oil exports from Iraq’s southern ports have jumped by 150,000 bpd this month, according to shipping data tracked by Reuters.
Exports from the al-Basra Oil Terminal (ABOT), Khor al-Amaya, and the new single-point mooring on the Gulf have averaged 1.81 million bpd in the first 19 days of March, up from about 1.66 million bpd in February.
Posted in Oil & Gas
Posted on 21 March 2012.
As security measures are heightened ahead of the Arab League Summit in Baghdad levels of violence fell in Iraq last week with 26 people killed and 22 injured in nationwide incidents. This was a drop by half from the previous week and a very low figure in general for the country.
However, a spate of attacks swept the country on 20 March, killing at least 50 people and injuring over 250. The bombings have been claimed by al-Qaeda in Iraq and as analysed on Iraq Business News were likely an attempt to discredit the government. Many are now questioning the security measures put in place ahead of the summit although at the time of writing the event is still set to go ahead. To cancel it at this stage would constitute a major loss of face.
The government has announced that a public holiday will begin on 25 March, lasting beyond the course of the event. Official buildings will be closed and traffic congestion in Baghdad will be reduced as a result. This will make it easier for the security forces to manage the traffic and search more vehicles moving around the city. This is turn will hopefully make it more difficult for terrorists to infiltrate, but travel conditions will still be difficult for the personnel who continue to work in the capital.
Weekly Attacks in Iraq - the last 6 months. Note the decline in violence over the past week. Next week's bar will likely see a notable rise.
Violence Last Week
In the run-up to the latest assault conditions were relatively quiet countrywide. Only six bomb attacks were recorded last week, which is less than a third of the usual weekly figure. For a change, more people were killed in shooting attacks than in bomb blasts, with 18 people shot dead and 14 injured against only seven killed and eight injured by explosive devices over the course of the week.
Attacks were concentrated in the northern cities of Mosul and Kirkuk, with a scattering of attacks in districts surrounding the capital. Basrah also saw a demonstration on Monday as local residents and attendees from elsewhere in the southern provinces gathered to complain of a lack of development and high unemployment in the oil-rich region.
A number of blasts have also been reported in the city although they appear to have slipped under the radar of in-country news coverage. No casualties have been reported but security has been increased around central Basrah in response and personnel are reminded that conditions are neither ‘safe’ nor ‘stable’ in what should otherwise be considered a city with strong economic opportunities. Companies are still encouraged to look to the city as a good investment, but proper risk mitigation measures need to be put in place prior to any serious investment.
John Drake is a senior risk consultant with AKE, a British risk mitigation company working in Iraq since 2003. You can access AKE’s intelligence website Global Intake here, and you can obtain a free trial of AKE’s Iraq intelligence reports here.
Posted in Weekly Security Update