Posted on 29 January 2014.
By John Lee.
Iraq and Iran, which together hold more oil reserves than Saudi Arabia, are planning to challenge Saudi Arabia’s grip on OPEC and its status as the “swing producer” in the cartel, according to a report from The Telegraph.
With Iraq poised to triple its capacity to 9 million bpd by 2020, the result could be a dramatic fall in oil prices.
Hussain al-Shahristani (pictured), Deputy Prime Minister for Energy, said:
“We feel the world needs to be assured of fuel for economic growth … It’s very difficult to predict actual world (oil) demand by 2020 because the world economy is unpredictable … Iran has been in touch with us; they want to share our contracts model and experience.“
This news that Baghdad is working with Iran to help it attract investment ahead of the possible lifting of sanctions could be seen as a challenge to Saudi Arabia. Oil companies are understood to be queuing up to win Iranian oil deals.
The report speculates that, even if Iraq is able to achieve its target of boost production capacity as planned, it is unlikely to be able to put in place sufficient pipeline and port infrastructure to export the additional crude; the main export terminal near Basra will require billions of pounds worth of improvements in addition to the refurbishment of its pipeline network.
Currently, crude oil exports account for 93 percent of Iraqi government revenue.
(Source: The Telegraph)
Posted in Oil & Gas
Posted on 26 January 2014.
Sweden’s Elekta has received an important order from Iraq for state-of-the-art radiation therapy equipment.
The deal includes 10 Elekta Synergy Platform linear accelerators (linacs) to be delivered to five Iraqi Ministry of Health sites (two linacs per site): Babil, Basrah, Karbala, Missan and Nasriah.
The deal for each site includes treatment planning software (TPS), MOSAIQ Oncology Information Systems, patient fixation solutions as well as services.
The total contract is valued at more than $16 million and will be booked during Elekta’s third fiscal quarter. Shipment is planned to commence in early 2014.
Elekta’s President and CEO, Tomas Puusepp (pictured), says:
“It is with great pride that we announce this order. Elekta will give Iraqi doctors the possibility to offer their patients world class care.”
Posted in Healthcare
Posted on 26 January 2014.
By Denise Natali for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
As al-Qaeda continues to terrorize parts of Iraq, another battle looms over the country: control over Iraqi hydrocarbons and revenues. The Kurdistan Regional Government (KRG) is pressing ahead with its plans to independently export and sell Kurdish crude to Turkey, while Baghdad has threatened to cut the KRG’s budget and take legal action against Ankara. These tensions are occurring as oil-producing provinces are making their own oil and revenue demands, and threatening to boycott parliament and stage demonstrations.
While this type of brinkmanship is common to post-Saddam Iraqi politics, it underlines the new fault lines that have emerged between Baghdad and provincial and regional authorities. These lines indicate that a viable power-sharing arrangement will be determined by fair access and distribution of the country’s oil wealth.
The heightened energy rhetoric reflects the opportunity to maximize political interests and leverage by Erbil and Baghdad. The KRG calculates that the weakened Iraqi Prime Minister Nouri al-Maliki needs Kurdish backing in the forthcoming elections to win a third term. KRG support includes Peshmerga (Kurdish militia) security assistance against al-Qaeda threats, particularly in the disputed territories.
The KRG’s strengthened position also is shaped by its energy sector successes, including a newly-built pipeline that connects to the Iraqi-Turkish pipeline (ITP), oil contracts with major international oil companies (IOCs), and Turkish partnership. The KRG also is “fed up” with Baghdad and the numerous failed attempts to export its crude and secure consistent or full payment.
These developments have encouraged a more nationalist and less compromising KRG position. Whereas in 2010 the KRG recognized Iraqi State Oil Marketing Organization (SOMO) as having the sole right to export Kurdish crude, by 2013 it had denied SOMO’s role in Kurdish energy sector development. Instead, the KRG states that its newly created Kurdistan Oil Marketing Organization (KOMO) is now the region’s export agency. The KRG has also tendered sales of its crude in the Turkish port of Ceyhan via KOMO to affirm this right.
Posted in Oil & Gas
Posted on 24 January 2014.
The Weir Group has announced it has signed a contract with LUKOIL to provide general maintenance services for the West Qurna-2 oilfield in Southern Iraq.
The agreement, which is for two years and is estimated to be worth a total ofUS$98m (£59m), will see Weir engineers deliver mechanical, electrical, maintenance and pipeline services for the related production facilities, including the Mishrif Central Processing Plant.
Weir has invested over US$8m in establishing its service centre in Basra, Iraq and it is the first in-country location to offer fully comprehensive maintenance services for all kinds of rotating equipment, valves and wellheads. The facility is also the first in Iraq to obtain API and ISO licences.
West Qurna-2 is one of the largest undeveloped oilfields in the world. Mishrif will initially produce 150,000 barrels of oil per day (bod), increasing to 400,000 bod by the end of 2014. The processing facility is expected to be operational in the first half of 2014, at which time Weir will commence work under the terms of the contract. Weir will recognise input on a monthly basis over the course of the contract in accordance with the agreed work plan.
Weir Chief Executive, Keith Cochrane (pictured) said:
“This substantial contract demonstrates the importance of Weir’s long experience of working in Iraq and our reputation for delivering high quality engineering services in support of the country’s developing oilfield infrastructure. It also reflects our global capability, a key strength of our Group which allows us to capture opportunities in high growth markets and be a partner of choice to our worldwide customers.”
(Source: Weir Group)
Posted in Construction & Engineering, Oil & Gas
Posted on 22 January 2014.
By Reidar Visser.
The following article was published by Reidar Visser, an historian of Iraq educated at the University of Oxford. It is reproduced here with the author’s permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
The Iraqi cabinet made big headlines today with a shock decision to form three brand new provinces. Supposedly, there will be new governorates in Tuz Khormato (a Turkmen-dominated area currently in Salahaddin province), the Nineveh plains (a Christian-dominated part of Nineveh province) and Falluja (centre of the current Sunni-led uprising in Anbar province).
With a recent decision to create Halabja as a separate governorate in Kurdistan, some observers declared that Iraq all of a sudden has 22 provinces, after decades of relative administrative stability in 18 governorates since the early 1970s.
It is not like the inhabitants of Falluja, Tuz and the Nineveh plains will feel any major changes related to administrative status when they wake up tomorrow. Some of the uncertainty regarding the new move of the Iraqi government can be glimpsed from the language of the cabinet decision itself: The agreement on the formation of these new decisions was made “in principle”, to be completed after the necessary formalities “had been completed”.
Those formalities were not detailed: A special committee including members of the ministries of justice and municipalities will look into the “standards and procedures” necessary to complete the transformation.
This ambiguous choice of language in turn reflects wider legal uncertainties regarding any decision to form new provinces. In theory, despite the absence of any constitutional reference to administrative boundary changes, after 2003 such administrative changes were governed by a Baathist-era law, law no. 159 from 1969, which vested the power to change administrative boundaries in cabinet.
Posted in Politics
Posted on 15 January 2014.
By John Lee.
Oilfield services company Baker Hughes Incorporated has warned the markets that it will take a hit of $80 million as a result of the disruption to its operations in Basra.
The company said in a statement:
“Following the disruption to its business in Iraq during the fourth quarter, Baker Hughes resumed operations by the end of December. Due to the lost revenue related to this event, expenses associated with personnel movements and security measures, and other nonrecurring items, the pretax and after-tax profit impact from the disruption in Iraq during the fourth quarter is approximately $80 million, or $0.18 per share.“
Baker Hughes suspended operations in November and issued force majeure notices to its customers.
(Source: Baker Hugher)
Posted in Construction & Engineering, Oil & Gas
Posted on 12 January 2014.
The University of Cincinnati was awarded a $300,000 grant through the Public Diplomacy Grants Program to build an alumni university program with Iraq, as the U.S. continues efforts to rebuild Iraq’s educational system and economy. The program is administered through the U.S. Embassy in Baghdad.
The alumni university program will benefit educators in Iraq who have previously participated in nation-building programs sponsored by the U.S. Embassy. In 2010, UC was among a handful of the nation’s universities that were selected to participate in a three-year University Linkages Program (ULP) with Salahaddin University-Hawler – a program sponsored by the U.S. Department of State.
The new grant will expand on that partnership and develop course materials and workshops to support professionals in higher education as well as community leaders in Iraq. As those professionals gain experience through the program, they will become trainers for other Iraqi participants.
“The Alumni University program will feature professional development workshops for leaders in higher education and the community – workshops that emphasize civic and cultural leadership,” says Holly Johnson, associate dean for innovation and opportunity in the College of Education, Criminal Justice, and Human Services (CECH).
“We want to prepare participants for leadership roles on the local, regional and national level – preparing a select group of alumni from the former linkages programs to lead workshops in exchange programs and overseas studies, leadership development, public speaking and grant writing,” Johnson says.
UC’s colleges represented in the former linkages program with Iraq, CECH and the Carl H. Lindner College of Business, will continue to be participants in the alumni university program and will expand UC’s institutional partnerships beyond Salahaddin University-Hawler in Iraq with Iraqi nationals from across a number of universities, including Basrah University and the University of Baghdad.
UC will begin hosting “train-the-trainer” sessions with Iraqi educators toward the end of March in Cincinnati, with plans for future workshops to be conducted later in the spring.
(Source: University of Cincinnati)
Posted in Education & Training
Posted on 09 January 2014.
By Padraig O’Hannelly.
Today we are proud to bring you the 200th edition of our Iraq Business News newsletter, and to mark the event we open this week’s newsletter with three excellent articles from our panel of Expert Bloggers:
- Robert Tollast interviews a Basra-based Engineering Director about the positive developments taking place in the province;
- Ahmed Mousa Jiyad gives his assessment of the recent report from the Iraqi Extractive Industry Transparency Initiative (IEITI); and,
- Madeleine White tells us how a new initiative to help women entrepreneurs started on the pages of Iraq Business News.
From a modest start, our newsletter is now read by nearly 20,000 people each week, while our website averages over 280,000 pageviews every month.
Our readership includes some of the best-informed decision makers in sectors such as energy, infrastructure, security, international development, and investment.
We’d like to thank all our readers, advertisers, expert bloggers, and the contributors to the (often lively) debates in the comments sections of our articles, for making Iraq Business News a ‘must read’ for all who are interested in transformation of Iraq — we couldn’t have done it without you!
Your friends and colleagues might also appreciate receiving our weekly newsletter in their inbox, so why not forward this to them — they can subscribe free of charge by simply clicking here and entering their email addresses.
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Posted in Blog