Iraq is to get high-speed trains linking the provinces, a senior official at the Ministry of Transport said.

Talking to Aknews, deputy transport minister Bangin Rekani explained their desire for extensive railways and 240km/h trains. The plans have been presented to the cabinet for approval. The railways, which will provide a huge boost to the Iraqi economy, will also connect the country to its neighbors.

“The ministry has insufficient funds to implement the project, and therefore is awaiting the approval of the council of ministers to dedicate extra funds.”

France’s Alstom has already been in discussions to build and service a high-speed rail link between Baghdad, Iraq’s capital city, and the country’s second largest city, the port of Basra.

(Source: Aknews)

The drilling and completions contract covers 23 wells in the West Qurna phase two field.

LUKOIL has awarded Baker Hughes a two-year contract to provide full drilling and completion services for 23 wells in the West Qurna field in southeast Iraq, 50km west of Basra.

Under the terms of the contract, Baker Hughes will provide engineering and project management for the turnkey drilling and completions scope of the project. Baker Hughes will supply drilling services, formation evaluation, casing and tubing running services, completion tools and services, wellbore intervention services, and wireline logging as well as perforation operations.

Baker Hughes will also contract all third-party services, equipment, personnel, tools and materials required for the project, including the provision of up to five drilling rigs and three workover rigs.

Some of the wells will be drilled directionally, targeting the Mishrif formation, with step outs of up to 3,000m. The wells are closely spaced, so the operation will employ a cluster (pad) drilling technique. The five drilling rigs and three workover rigs will be mounted on skids for fast, efficient rig moves.

In 2010 Baker Hughes opened a 120,000 square-metre operations base in Basra to serve the Iraq oil and gas industry. The base includes a workshop to support a wide range of Baker Hughes products and services. The facility also houses chemical blending capabilities and inventory, as well as bulk drilling fluids storage for quick response to customers’ requirements.

In addition to the LUKOIL drilling and completions award, Baker Hughes manages and operates drilling and workover rigs in the Zubair field for an international oil company. Baker Hughes also has a strategic alliance with the South Oil Company to support the development of Iraqi wireline capabilities; and supplies electrical submersible pumping (ESP) systems and services, including real-time remote monitoring and automation capabilities to optimize production to three major international operators.

The Iraq Future Energy Conference will be hosted in Istanbul, Turkey, from 26th September to 29th September.

There is a full programme to demonstrate how energy and infrastructure companies can take a piece of the projects worth tens of billions of US dollars.

Attendees can learn about the Ministry of Oil’s four-year plan ending in 2014, the reorganisation of the Ministry of Oil, new regulations related to energy, and on getting the balance between domestic energy needs and exports, and how the electricity and oil and gas sectors can help.

There will be talks from Shell, Total and StatOil on their own projects, and attendees will learn what is on offer in the fourth bidding round for oil and gas-related projects.

Other sessions cover Iraq’s ambitious infrastructure plans, including upgrading pipelines and building storage terminals, as well as information on the financing and how to overcome Iraqi bureaucracy.

And all that is just part of what’s happening on the first day of the conference. For more details, visit The Energy Exchange.

A Turkish company’s proposals for new schools, rebuilding infrastructure, more local energy and medical facilities is likely to be accepted by the local government in the region of Wasit, south-east of Baghdad, reports Aswat al-Iraq.

I.F. Spor’s plans include wind power and health projects such as a cancer treatment centre.

Other redevelopment projects in the region include oilfield sites, residential homes, a power plant, a five-star hotel and a 100-bed hospital.

Wasit has been known to strike off contractors that fail to meet reasonable standards. It has already blacklisted 19 companies for their slackness in implementing projects and removed licences from five more.

(Source: Aswat al-Iraq)

Basra council decided this week to renovate and upgrade Basra International Airport as part of preparation to host the Gulf Cup in 2013, reports AKnews.

The airport is Iraq’s second biggest. Jabbar Amin Jaber, Basra Council chairman, said: “More than $100 million (116.5 billion Dinars) were allocated to begin the construction within the next couple of days.”

The airport will be brought up to international standards, and infrastructure in the surrounding area, including electricity on the roads leading to the airport, will also be upgraded.

It has spent much of its existence, spanning six decades, closed due to the two Gulf Wars and the Iraq War. Now it has several dozen international flights every day.

The Gulf Cup comprises of eight nations competing in football, volleyball, handball and basketball.

(Sources: AKnews)

It is a story that could fit in the national newspapers of any country in the world: “central government projects delayed”.

Yet Iraq seems determined to do something about the delays to these development projects, reports AKnews, as the government is voluntarily giving up central control to local councils to oversee the projects’ completion, after several major projects have suffered severe setbacks.

While bureacracy and corruption are typically blamed, a recent slow down in economic growth might be playing a part.

We are yet to learn which projects will be affected.

(Sources: AKnews)

By Tariq Abdell, Iraq’s political risk analyst, and Founder & CEO, Mesopotamia Insight

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

 Iraq’s impending multi-billion dollar mega-reconstruction projects (housing, roads, hospitals, bridges, airports, schools, dams, etc…) and its colossal and untapped natural resources – billions of proven oil and gas reserves- are irrefutably the modern day ‘s El Dorado, affording risk-taking  investors a unique and unparallelled opportunity to thrive and prosper.

 Nonetheless, venturing into Iraq’s quagmire (fragile democracy, geopolitical tensions, severely languished infrastructure, and impoverished population) without strategic foresight and versatility entails grave risk and dire consequences far beyond repair: assets depletion, workforce distress, capital exposure and, ultimately, investments annihilation.

 Furthermore, in the absence of socio-economic data repositories, as result of decades of isolation, to support strategic foresight analysis and corporate sustainability strategies, international investors’ only cogent alternative is to device a comprehensive strategy incorporating constructive engagements, strategic partnerships, and the needed political capital as viable mean to foster and strengthen their corporate sustainability and, ultimately, competitiveness.

 Given Iraq’s decades of wars, sanctions, and economic hardship, the suggested strategy will entail four interconnected points:

Constructive engagements

 Understanding local communities’ value systems, cultural nuances, and earning their trust is an absolute imperative for international investors’ survival and competitiveness. To this end, international investors need to engage all the stakeholders in their areas of operation (e.g., tribal and religious leaders, NGOs, media, members of the provincial government, etc…) via a participatory and inclusive approach to foster mutual understanding, respect and, most importantly, common interest.

Strategic partnerships

  With the already established relationships, that is corroborated with strategic insights, international investors ought to capitalize on the achievements of the previous phase, by strengthening and solidifying those relationships perceived to be promising, fruitful, and prone to grow into sustainable strategic partnerships.

 Corporate social responsibility

 Given the socio-economic dynamics of their areas of operation, International investors must adopt an acculturated corporate social responsibility – not charity- to attain broad and immediate impact. To this end, international investors, in concert with local partners, ought to leverage their strategic partnerships to deliver their envisioned corporate social responsibility strategies. For instance, international investors need to work closely with local NGOs and institutions (Basrah University, for instance) to solve a communal problem or foster a fruitful cooperation.

 Political capital                 

  To ensure their businesses survival and success in an environment replete with uncertainty, international investors ought to foster their political capital that commensurate with their operational efficiency by leveraging their strategic partnerships and the achievements of their constructive engagements.

 Case in point:

 Given Basrah’s high unemployment rates – 70%- and its colossal oil reserves, IOCs could play a crucial role in the local economy by introducing the critically needed technical know-how and, thus, help develop local workforce literacy through strategic partnership with local institutions such as Basrah University – suitable platforms for knowledge sharing and dissemination. Unarguably, such perspicacious initiatives would help alleviate Basrah unemployment, spur economic recovery, strengthen IOCs’ political capital, and, ultimately, their corporate sustainability.

 Drawing on past experiences (Eastern bloc, for instance), transitioning from years of planned economy into free market societies – adaption of democratic and free market principles- is an intricate and time consuming process, that is exacerbated with the geopolitical tensions. Therefore, to overcome the unforeseen externalities associated with Iraq’s post-conflict environment, international investors ought to:

• Recalibrate their corporate sustainability strategies to reflect Iraqi market’s idiosyncrasies. Among them, political landscape, tribal and cultural nuances, ethno-sectarian fabric, institutional and bureaucratic hurdles.
•  Build in-house leaders and foster their global mindset, transcultural competence, and societal capital. Such virtues are essential prerequisites for the implementation of the aforementioned strategies.

Simply put, “Ignorant both of your enemy and yourself, you are certain to be in peril”  Sun Tzu, a renowned Chinese military general, strategist and philosopher.

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 Iraq’s political risk analyst, and Founder & CEO of Mesopotamia Insight

He can be contacted at: atariq2000@hotmail.com

or

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

Shares in Gulf Keystone fell 30% on Wednesday as markets opened for the first time since last week, when Excalibur Ventures in New York issued a legal challenge. Three hours after the London market opened the share price has recovered somewhat, but still leaves a fall of around 10% at 167 pence.

Excalibur believes it is entitled to 30% of oil explorer Gulf Keystone’s blocks in the northern region of Kurdistan, according to Reuters. Excalibur called for an immediate freeze on all Gulf Keystone’s assets, but a UK court refused on the basis that the assets are not likely to dissipate.

Gulf Keystone is focused in Iraq with a share in four blocks. Todd Kozel, the chief executive, said “We believe we have very good grounds to vigorously challenge these claims in both the US and UK courts. We are confident of being able to defeat these claims in any legal jurisdiction.”

Undeterred by the claims, Gulf Keystone announced today that it is looking to be promoted from the small London AIM market to a full listing, which would move it into the top 250 companies listed in London by size.

However, to do this it will have to overcome the regulator’s concerns that it has no oil reserves, that it is not in profit, and that it has not yet pumped any oil. This may be difficult, as Dynamic Global Advisors, the assessors that estimated its reserves to be 1.9bn to 7.4bn barrels of oil, is virtually unknown, according to the Financial Times.

Kozel is looking to get 8,000 bpd in test production in January to encourage the regulators to approve the company’s move to the main market.

(Reuters, Growth Company Investor, Financial Times)