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The Arab Advisors Group analyzed the ADSL rates in nineteen Arab countries. Iraq and Lebanon have the highest ADSL fees, while Morocco and Egypt have the lowest fees. When rates are analyzed in relation to GDP per capita in each country, the GCC countries and Morocco lead the pack.

ADSL remains the prevailing Internet broadband technology in the Arab World. Uptake is strong in most countries especially as ISPs launch promotions and reduce their rates. The Arab Advisors Group has analyzed the ADSL service provision and rates in the following nineteen Arab countries: Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, UAE and Yemen.

The Arab Advisors Group’s analysis revealed that the 1024 Kbps speed is the most common speed offered in the Arab region. The average total annual cost for the 1024 Kbps residential ADSL service in the Arab region stands at US$ 736.4 per year. Rates are lowest in Morocco followed by Tunisia, Egypt, Algeria, Jordan, Yemen, Palestine, Kuwait, Oman, Mauritania, Syria, Qatar, KSA, Libya, Bahrain, UAE, Sudan, Lebanon, while Iraq offers the highest rate. Libya does not have the 1024 Kbps ADSL speed; however, the Arab Advisors Group’s ranking for the country is based on extrapolating from its rates of other speeds. The research also revealed that ISPs tend to waive ADSL connection fees as part of their ongoing promotions.

The strategies on Iraq of neighbouring states seem to be coming clearer.

This week, al-Maliki has been in Iran to meet both Mahmoud Ahmadinejad,  the Iranian president, and Ayatollah Ali Khamenei, the Iranian head of state. Al-Maliki described the two countries' relationship as "strategic", saying: "We ask Iran and our neighbours to support our reconstruction and to boost economic and commercial co-operation, which will help improve stability in our region." Both Ahmadinejad and Khamenei called for the political groups in Iraq to come to a deal quickly.

Khamenei said: ""The Iraqi nation is vigilant and aggressors cannot dominate this country again. May God get rid of America in Iraq so that its people's problems are solved." Iranian television also reported that Ahmadinejad completely supports a strong and independent Iraq that "serves its own people and works for regional progress and Islamic values."

The meeting has been played down by the United States, with State Department spokesman Phillip Crowley saying that the visit shouldn't be over-interpreted, because the two countries are neighbours. "Ultimately, this has to be an Iraqi decision as part of its own political process." However, he also said that: "We are concerned about any neighbouring country that would meddle in Iraq's affairs." 

The US has shown its concern for Iran meddling for some time, believing that it has encouraged violence and terrorism in Iraq. If Iran was to support al-Maliki and remove the terrorist influences of which it's accused of by the US and Allawi, it could improve the bond between the two countries at the expense of al-Maliki's opposition and western powers.

Former Iraqi PM and current contender Iyad Allawi was last week in Saudi Arabia for talks about Iraq's political situation with King Abdullah, as reported by Iraq Business News. Analysts have claimed that al-Maliki is too close to Iran for Saudi Arabia's tastes. In a CNN interview at the weekend, Allawi said Iran was "trying to wreak havoc in the region."

Al-Maliki is also visiting Egypt and Turkey to build more regional support for his premiership.

(Sources: Reuters, Aswat al-Iraq, US State Department, AFP)

Two weeks ago Iraq revised its estimates of oil reserves upwards, and this was immediately followed by Iran doing the same.

Now Reuters reports that a former oil minister has cast doubt on the numbers and on the motivation of the governments in issuing the figures, saying that the estimates are politically motivated and not justified by the evidence.

Mr Issam Al Chalabi, who served as Iraqi oil minister in the government of Mr Saddam Hussein, said Iraq's announcement last week that its proven oil reserves were 25% higher was 'unreliable'. Unfortunately the announcement that was made last week has not been substantiated by proper evidence; he said that it is not a reliable figure. This is not the way to handle the reserves. I think it was made for political reasons.

According to BP data, Iraq raised its total estimate of proven oil reserves to 143 billion barrels making it the holder of the world's third largest reserves after Saudi Arabia and Venezuela.

Iraqi officials said that the figures had been inflated by new estimates for the West Qurna and Zubair oilfields. But Mr Chalabi, who was Iraqi oil minister from 1987 to 1990, questioned the motivation for the new estimate.

Iraq's proposed budget, which has gone to Cabinet, should give it a deficit of $18.6bn dollars in 2011 and surplus in 2012, according to Kippreport.

Iraq's huge reliance on oil will continue as it needs 2.4m barrels of oil per day next year to reach its target, said Deputy Finance Minister Fadhil Nabi. Assuming an oil price of $70, it's looking at 95% of its revenues from oil.

If all the signed oil deals pay off, capacity should increase from 2m-2.5m barrels per day up to 4 million per day in 2013, and 12 million in six or seven years. which would rival Saudi Arabia.

It was the International Monetary Fund that calculated Iraq's budget was likely to move in to surplus in 2012 and that this was based on conservative assumptions for exports and oil prices. The revenues are likely to be used to finance yet more reconstruction.

The IMF approved a loan payment of $740m to Iraq this month as part of a $3.7bn program, which it would not have granted had it not been convinced that Iraq was keeping the economic environment stable.

The budget must be approved not only by cabinet, but by the fractious parliament.

(Sources: IMF, Iraq Ministry of Finance, Kippreport)

Under the watchful eye of Saudi King Abdullah and his intelligence chief, Prince Muqrin bin Abdul Aziz, Prime Minister Nouri al-Maliki is drawing nearer to winning enough support to form a government.

Al-Maliki is pushing his momentum gained from his recent near-miss in parliament by appealing to all rival parties to show "flexibility and realism", reports the Tehran Times. He showed no signs of giving way. "All of us, from all affiliations, have to sit together and talk and talk, even if it takes longer, until we reach a meeting point," he said to opposing Sunni tribal leaders in Baghdad.

Tehran Times says this is a "hint at growing confidence by al-Maliki that he's in a position to call the shots over possibly forming a new government and dividing up the key posts and Cabinet seats among the country's three main factions: majority Shias, Sunnis and Kurds."

Having won over previous opposition from a Shia faction he's now looking to Kurdish parties. If he can convince them to back him he will gain a majority in parliament. This is despite the rival Sunni bloc coming top in the spring vote. It has been unable to find enough partners to push Al-Maliki aside.

Foreign powers are showing continued interest in the ongoing contest. USA Vice President Joe Biden called President Barzani, head of the Kurdistan region, to confirm that the United States supported a government formed from national partnerships that reflect the results of the election, according to the Kurdistan Regional Government. However, Mr Biden said in the conversation that the USA does not support any individual candidates.

Former Iraq PM Iyad Allawi was at a meeting over Iraq's political situation with King Abdullah, the intelligence chief and Saudi amabassador to Washington  Adel al-Jubeir, according to AFP.

Analysts believe that al-Maliki is too close to Iran for Saudi Arabia's tastes. Allawi's Iraqiya bloc received two more seats than Al-Maliki's State of Law Alliance in the election, but the two sides were unable to come to a deal, despite Saudi Arabia's worries that it is necessary to prevent instability.

Echoing America, a Saudi official said: "Choosing a prime minister is an issue for the Iraqi people."

With a Kurdish political negotiator saying his bloc is close to a deal with Al-Maliki, this is sure to anger Sunnis, writes Gulf News. One of the key issues was making a priority the return of land to Kurdish people who were pushed out during Saddam Hussain's regime. However, Foreign Minister Hoshyar Zebari is not so positive: "We are not very close to the final solution," he said.

Even so, Al-Maliki looks increasingly like the man to form the next Iraq government.

(Sources: Gulf News, Kurdistan Regional Government, Tehran Times)

As our weekly newsletter goes to press, BP has just announced a major new event for contractors interested in its giant Rumaila oilfield.

There will be opportunities in the areas of:

• Engineering and Project Management Services (EPMS);
• Engineering, Procurement and Construction (EPC); and
• Construction.

This is hugely significant to the development of Iraq's economy, as the field will be second only to Saudi Arabia's Ghawar field when it reaches full production of 2.85 million barrels per day.

Just to put that in context, it equates to about 3.3% of current world output.

Here at Iraq Business News we have consistently argued that Iraq is on the path to a prosperous and productive future, and this announcement is another big step along that path.

Francisco Sanchez, US Undersecretary of Commerce for International Trade, who is currently leading a delegation of American businesses to Iraq, said on Wednesday:

• "The opportunity to create partnerships and engage is not a year-and-a-half from now or two years from now, where perhaps you’ll see a continued reduction in attacks or violence. If you want to play a role here, you really have to be here now."

As this and other stories develop, we remain committed to keeping you informed of news in all areas of Iraq's business life.

Please click here for more information on the Rumaila contracts, and click here to see a presentation about plans for the oilfield.

Will your business be part of the Iraqi success story? If so, Upper Quartile and AAIB are the perfect team to guide you. For more information please contact Gavin Jones or Adrian Shaw.

Abu Dhabi's Invest AD has launched an Iraq Investment Fund to channel investment into high-growth companies in a country where improving stability and increased oil production should fuel strong economic expansion in coming years.

Invest AD is seeding the fund and is marketing it alongside its other equities and private equity funds that invest in the Middle East and Africa.

"As Iraq stabilise, it should take its place as one of the major economies in this vibrant region," said Invest AD Chief Executive Officer Nazem Fawwaz Al Kudsi. "The country is overcoming difficult circumstances to make real progress towards an open economy, and we see tremendous opportunities in the long term. By entering the market early, we hope to capitalize fully."

The new fund, which is open to institutional and high-net-worth investors early in October, will make investments primarily in listed equities, but also in unlisted opportunities.

Iraq is widely considered one of the last frontiers in emerging markets, although the stock market is tipped to grow rapidly in coming years as the country recovers from conflict.

Invest AD, established by the Abu Dhabi government in 1977, is among a handful of companies to offer global investors access to Iraqi equities, and the only one based in the Middle East.

Mr Al Kudsi says that Invest AD is seeing growing regional and international investor interest in Iraq. "They see the growth potential, whether through fixed or portfolio investments. The Iraqi equity market is still quite small by regional standards, but from small beginnings come big opportunities. We expect our fund to grow in line with this."

Iraq's economy will grow by over 7 percent annually in the next couple of years, according to the International Monetary Fund (IMF), with the country's current account and fiscal deficits turning to surplus as oil production increases.

Iraq has the world's third-largest proven oil reserves and the country has signed 11 oilfield development deals with major oil firms including Royal Dutch Shell, Italy's Eni, Exxon Mobil, Occidental Petroleum Corp and South Korea's KOGAS. These deals are projected to lift the country's capacity within seven years to just under Saudi Arabian levels of 12 million barrels per day, from 2.5 million now.

National Overview
The total number of officially reported hostile incidents nationally increased, returning to the expected rate during this reporting period. 112 incidents were recorded last week compared to 75 the week before.

Hostile activity in Baghdad accounted for approximately half the total number incidents, more than double the number of incidents recorded in Baghdad in the last reporting period. Elsewhere the north central region, which normally follows closely behind Baghdad with high hostile incident levels – showed relatively subdued activity levels. This is probably the result of Iraqi Security Force operations reducing insurgent capability during the previous reporting period. However, due to the proven resilience of the Al Qaeda in Iraq insurgency in the region it is assessed that their operational strength will be resumed within a couple of weeks.

Hostile incidents in the south central and south east regions largely focused on targeting the United States Forces – Iraq with the number of incidents remaining consistent with previous recordings. Despite only one recorded successful attack, insurgents in Dhi Qar province are showing increased intent which may lead to elevated incident levels in the coming weeks. Incident levels in the northern region were in line with expectations, although they would have been higher were it not for Iraqi Security Forces action that prevented two mass casualty attacks. A number of successful arrest operations will have further restricted insurgent movements in the region.

Political Overview
The political deadlock is beginning to approach endgame and it appears likely that there will be a step forwards in terms of government formation by the end of October or perhaps sooner. There are two possible outcomes. The most likely outcome is that Prime Minister Nouri al-Maliki will be re-nominated as prime minister by a bloc that consists of Maliki’s State of Law Alliance (SLA), most elements of the pan-Shiite Iraqi National Alliance (INA) and the Kurds. There are signs that Maliki – possibly with backing from Iran – has won the support of the Iranian-influenced Sadrist movement and the Iranian-controlled Badr list, two key elements of the INA. The other major part of INA – the Islamic Supreme Council of Iraq (ISCI) – is still holding out, largely due to the personal antipathy of ISCI and its leader, Ammar al-Hakim, towards Maliki. Sources within the Iraqi government state that Hakim has even imperiled his party’s longstanding ties with Iran in an attempt to block Maliki’s re-election. Under this scenario, the government would be a re-run of earlier years, with an Iranian-influenced pan-Shiite bloc governing the country with Kurdish support, The Iraqiyyah movement led by Iyad Allawi, representing most Sunni voters, would be left on the outside of the government. This would likely exacerbate the security situation in the Sunni provinces and western Baghdad, and would also result in even more significant Iranian penetration of Iraq’s security organs.

An alternate and less likely scenario is the long-awaited formation of an anti-Maliki coalition. The persistence of rumours concerning this possibility could simply be the wishful thinking of Maliki’s key opponents – Allawi and Hakim – and the possibility has been consistently supported and boosted by Saudi-owned media. Under this scenario, Iraqiyyah, ISCI and the Kurds would enact their fears about a second Maliki government to support the INA’s alternative candidate to Maliki – the easily-manipulated Adel Abd’al-Mahdi, an ISCI politician who is acceptable to most factions and countries but is purely a compromise candidate with no personal support base and little leadership potential. In theory, Allawi would let Abd’al-Mahdi be prime minister, Allawi would take the presidency and the Kurds would shift their powerbase to the parliamentary speaker’s chair. Supporting the effort to ensure this outcome, Allawi and the Gulf Arab media has moved into overdrive on the theme of Maliki as Iran’s chosen candidate. If Iraqiyyah were at the centre of a new government instead of on the outside, there could be fewer negative security effects for Iraq. On the downside, certain areas such as Basrah could witness more violence as a result of strained relations between ousted Maliki supporters still embedded in local governments and the security forces. However, these issues may be largely academic as there are many pointers to suggest that the time for an anti-Maliki alliance has well and truly passed.

Baghdad
Shia’a insurgents were responsible for eleven separate indirect fire attacks against the International Zone during the reporting period. The number of indirect fire attacks has risen each month since June, and September looks set to record the highest monthly number for such attacks this year. Indirect fire attacks on the International Zone tend to occur during high profile visits such as the visit of U.S. Vice President Joe Biden on 04 July, though this rise in attacks may be related to discontent caused by the stalled political situation.

Al Qaeda in Iraq or their associated movements conducted a coordinated mass casualty attack in Baghdad on 19 September. Two vehicle borne improvised explosive devices detonated at approximately 1015hrs in the Mansour and Khadimiyah areas of the city. The attack in the western Mansour district killed at least ten and wounded 58, while the attack in Khadimiyah killed 19 and wounded 53. The attacks had the desired effect of making headlines and undermining confidence in the ability of the government of Iraq to keep its citizens safe. If the Al Qaeda in Iraq and Associated Movements supply chain remains sufficiently robust then similar attacks are likely in the next two weeks.

Elsewhere the usual pattern of assassination attacks against off duty national security force and government of Iraq employees continued unabated. Drive by shootings and under vehicle improvised explosive devices were the most common modus operandi in these attacks, designed to intimidate and deter Iraqis from participating in the state administration.

The various Shia’a and Sunni insurgent groups will have had time to regroup over the Eid period and a higher rate of incidents resulted as predicted. However, trends show that after a week of high incident levels there usually follows a much quieter period, partly due to reactive Iraqi Security Forces action but more likely as a result of the time it takes to re-supply an insurgent grouping. Incident numbers are therefore likely to decrease slightly next week.

Basra
On 19 September Forward Operating Base Minden was targeted with two rounds of indirect fire from the direction of the Shatt al Arab river. This attack was the first against Forward Operating Base Minden since September 2009 and is the second indirect fire attack against a small U.S. Forces base in Basra since 16 September when Camp Bucca was targeted. On 26 September two 107mm rockets were discovered on launch rails to the north of Basra Contingency Operating Base. This diversification of targeting may be a result of successful Iraqi Security Force operations that have seen the capture of indirect fire teams engaged in attacks against Basra Contingency Operating Base during July and August.

A small arms fire incident was reported close to the Provisional Joint Co-ordination Centre in Basra City on 21 September. The details of the incident remain unclear but it is possible that this was an attack against a U.S. Forces vehicle visiting the base. Criminal attacks involving small arms fire continue to blight route Aspen. Two attacks this week were assessed as criminal activity, either hi-jack attempts or retaliation attacks by associates of a criminal gang that were killed by U.S. Forces while attempting to hi-jack a convoy on 05 September. Despite 05 September show of force by U.S. Forces, this area will continue to witness incidence of criminal activity for the foreseeable future.

Basra’s Iraqi Security Forces continued to find improvised explosive devices and mount search and arrest operations throughout the province leading to the detention of dozens of suspected insurgents and criminals. These actions combined with a marked improvement in the posture of Iraqi Army soldiers manning checkpoints in the city are helping to improve the reputation of the national security forces thus increasing public confidence.

ExxonMobil (XOM.N) and its partner Royal Dutch Shell (RDSa.L) plan to more than double the number of new wells in Iraq's West Qurna Phase One in order to reach its projected production target, an Exxon executive said on Monday.

According to Reuters, quoting ExxonMobil's Iraq Vice President, James Adams, Exxon aims to drill two to three times the current 370 wells in the field as part of its development plan for the field, to reach plateau output of 2.325 million barrels per day.

"In order to reach the output target, we need to drill two to three times the number of wells that are already there," Adams told reporters on the sidelines of an industry event.

Asked how many wells the firm will be able to drill this year, he said, "a handful", adding that at this stage the companies are still evaluating the field.

Current production is in the range 200,000 to 250,000 bpd, he said. In July, Adams told Reuters the consortium aimed to raise production by 10 percent by the end of the first quarter of 2011. IBN published the quarterly agreed targets for Iraq's Southern oilfields for coming year in this article.

The initial development plan agreed by Exxon and its partners for the West Qurna Phase One oilfield includes drilling eight new wells and overhauling up to 50 wells this year, an Iraqi oil official said in May.

Adams confirmed that Exxon was taking the lead among international oil companies in managing a multibillion-dollar water injection scheme, which could help raise extraction rates in Iraq's southern oilfields such as West Qurna, Majnoon, Zubair, Rumaila, Gharaf and Halfaya.

"The government made the decision to require that this [water injection project] be done on a communal basis. They invited us to take the lead," he said.

The Exxon-Shell contract to develop the 8.7-billion-barrel West Qurna Phase One project was one of a series that Iraq has signed with international oil companies to develop its vast reserves.

If the projects all turn out as planned, Iraq could quadruple its oil output capacity to Saudi levels of 12 million barrels per day, potentially giving it the billions of cash it needs to rebuild after decades of war, sanctions and neglect.

(Source: Reuters)

BP's boss in Iraq says the political impasse that has delayed the formation of Iraq's new government for more than six monthsit has had no effect on its work on Iraq's biggest oilfield.

BP is moving ahead with developing the supergiant Rumaila oilfield and could award new contracts for work in the field later in the year, BP Iraq's President Michael Townshend told Reuters.

"We have not seen any delays in contracts that caused us to reduce or stop our work," he said.

Most of the work in the field does not need approval by Iraq's cabinet, so the lack of a new government and of a functioning parliament is not holding up tenders.

Contracts worth more than $20 million are reviewed by the Rumaila Joint Management Committee (JMC), and contracts of more than $100 million are reviewed "with a time limit" by state-run South Oil Co., he said.

Rumaila produces almost half of Iraq's total output of 2.5 million barrels per day, and contains and estimated 17 billion barrels of crude reserves.

BP and its Chinese partner CNPC signed a 20-year development contract for Rumaila and expect to increase output to 2.85 million bpd. If achieved, that would put Rumaila in second place worldwide after Saudi Arabia's Ghawar, the world's largest oilfield.

The plan to boost crude output in Rumaila includes a major oil well drilling programme that will continue through 2011. As we reported during the summer, international service companies have been awarded contracts worth nearly $500 million to drill 49 new wells at the field.

BP and its partners aim to put in over 50 electric submersible pumps (ESP) this year, said Townshend.

In addition, new generator sets are being installed, and work is moving ahead on connecting existing wells to the degassing stations, and on well refurbishment, which is currently being carried out at 14 wells.

"We will be replacing rigs that were on SOC contract at the end of year, but on an overall basis I would expect the total number of workover and drilling rigs to remain relatively steady through next year," he said.

"In addition to these contracts we should be in place to start awarding the start of seismic and some engineering work."

Drilling new wells, overhauling existing ones and installing electric submersible pumps are ways to overcome the natural decline of the field and boost production.

Current crude production is "a little over 1 million barrels a day", he said, declining to give a specific output figure. If left alone the natural decline of the Rumaila field is around 15 percent per year, he added.

In May, Salah Mohammed, head of the Rumaila Division at the South Oil Co, said production from Rumaila was around 1.045 million barrels per day (bpd), and expected to reach 1.150 million bpd of crude by the end of the year.

"Everything that we have seen so far, shows that the ability of the reservoir to produce is still fundamentally there," said Townshend. "That is really reassuring."

(Source: Reuters)