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Spanish equipment rental company GAM (General de Alquiler de Maquinaria) has announced a major investment to enter the Iraqi market.

Chief Operating Officer, Carlos Araoz, told IRN that the new depot in Erbil would be part funded using $20 million from an American source.

"In Iraq I will not have Loxam or Lavendon competing with me. There is an amazing infrastructure plan and oil and gas projects."

He added that GAM's Saudi Arabian contacts were helping it enter the Iraqi market.

Mr Araoz said there were few security problems in northern Iraq and that the Kurdistan depot would be linked to a new branch in Turkey planned in the coming months.

(Source: Access International)

Anbar Council has launched a project to upgrade its three border crossings, with the intention of raising additional revenue, the head of the council’s investment committee said on Tuesday.

The three border crossings are:

• Arar (on border with Saudi Arabia);
• Tarbiel [Tirbil] (on border with Jordan); and
• al-Tanf (on border with Syria).

The project will involve the building of several garages for lorries and at least one hotel.

“The revenues [from increased traffic through these border posts] will be used to finance projects throughout Anbar,” said Mezher Hassan, head of the council’s investment committee.

Iraq, 1980. The Iranian F15s swooped around the partially constructed Ishtar Sheraton, followed the Tigris river beside Abu Nawas Street and launched their missiles at Al Dora refinery. Thirty years of war and unrest had begun. I know because I was there – I was the project quantity surveyor then, working for the State Organisation of Tourism. On the other side of the table, and working for the contractors was my future business partner, Evan Anderson, so our firm is truly founded on its Iraq experience.

Now it is 2010 and we all hope that a new, peaceful phase for the Iraqi people can start. The US army is leaving, and democratic elections have been held. The conditions of working and security are not yet ideal but those of us who have affection for Iraq and perhaps a long strategic vision mixed with optimism must try to be positive and provide support wherever we can.

Of course, commercial benefit is the driver, but there is also an element of goodwill that motivates me to participate. Iraq has been good to me, financially and professionally. Maybe soon I can return some of the debt owed. I hope so.

So, my blog starts, but it will quickly develop and convert to the blog of my company, Blair-Anderson Iraq. But first then a bit more history of how we got here.

My name is Stewart Blair. I am the joint owner of the Blair-Anderson Group, www.blair-anderson.com who have many years experience in the construction industry in what is known as the Middle East. We have provided cost management services to clients from the UAE to Saudi Arabia, Bahrain, Qatar, Kuwait and Egypt. We have been established for almost 25 years in this field.

In 2003 our company joined forces with an Iraqi civil engineer with whom we had worked in Dubai on several projects successfully, and a business bond had been created. We decided then that the combination of our international experience, including a credible Iraq and Haider’s enthusiasm to become involved in his native Iraq would demonstrate our ability to handle assignments in Iraq. Haider Al-Ali is the managing director of the company.

This blog will try to track our business development efforts and also try to impart and share some construction cost and risk knowledge as we discover it.

Let us start with a construction oriented look at the Iraq market. Why Iraq? Well, the projects I was on, such as the Ishtar, Palestine and Babylon hotels, the Rashid hotel, Taji Island and Baghdad University were probably the last to benefit from modern peaceful technology. The highest of these was 22 floors, perhaps 75 metres. We have now completed several towers in the UAE exceeding 75 floors!

The ambitions of Iraq need to be serviced by modern technology therefore. In our opinion, every urban facility and service is needed. For construction, the best way to view the market is as an island, where everything needs to be imported. Of course there will be local materials and skilled labour and workforce, but a lot has to be done to catch up so that proper construction and maintenance can be achieved.

The first conclusion then is that it will be expensive. We will explore all the various cost heads as our blog progresses, but we are also cautious as all development needs a return, and until the economy can afford to provide that by an accelerated increase in earnings per capita and so GDP, we suspect private development will not be as fast as may be expected or hoped for.

Even now, we are experiencing a significant level of difficulty. As our services tend to be at the front end of the procurement process, we notice a lack of confidence in government agencies in their own buying processes. We understand that there will be a certain nervousness – why not, no significant purchases of international services have been made for years, and the “I will not be ripped off “ syndrome is strong.

The construction and development procurement process is in our view then a priority. Therein lies our conflict of interest though, so until others take up this issue there is not much, that service providers like us can do. This blog may reach such others then, and that is our hope, so they can assess the value of our services without the pressure of a sales pitch. We look forward to sharing our experiences, and perhaps success with our readers over the coming months.

Stewart Blair is founder and director of Blair-Anderson Holdings, specialising in project reviews, management and control systems feasibility/viability studies, cost planning and the management and settlement of disputes on major international projects. He has been involved in sensitive dispute management assignments both in the Middle East and Internationally. He has also been responsible for successful cost planning and cost control on several major projects comprising high rise, commercial, hotel and touristic developments.

A delegation from the Saudi al-Jumaih Holding Company briefed Iraqi Vice President Abdel Abdulmahdi [Adel Abdul Mahdi] on the projects the firm is planning in the oil and electricity sectors, according to a report from Aswat al-Iraq.

Abdulmahdi welcomed the Saudi firm and all other Arab and foreign companies planning to invest in the Iraqi market’s various sectors.

Kuwait has signed an agreement to share oil from cross-border fields with Iraq and is waiting for its northern neighbour to reciprocate, the emirate’s oil minister has said, according to a report from The National.

The deal could help to smooth the often thorny relationship between the two countries 20 years after Saddam Hussein’s armies occupied Kuwait – an incursion that sparked the First Gulf War.

A committee representing both governments met this month, the Kuwaiti minister, Sheikh Ahmed Abdullah Al Sabah,said last Wednesday.

“The Kuwaiti side already signed the declaration, and now we’ve sent it to Iraq to sign it,” Sheikh Ahmed said.

The agreement stipulated that a company had been created to work on both sides of the border “so nobody will claim that one side took more oil than the other”, he said.

“An international adviser will come and look at the field and say how much is allowed [for] this side and the other side, and the cost will be shared equally,” Sheikh Ahmed said.

Production from cross-border oilfields has been a problem between the Gulf neighbours. In the run-up to the 1990 invasion, Iraq accused Kuwait of stealing its oil by slant-drilling into the Iraqi side of the giant Rumaila oilfield – which is known as Ratqa south of the border – to steal its oil. Kuwait denied the allegation.

Whether the allegation was true or not, Saddam used it as an excuse to invade Kuwait.

After an eight-year war with Iran, Iraq was left heavily in debt to Kuwait and Saudi Arabia.

Iraq also accused Kuwait of producing more oil than allowed by OPEC’s quota system, driving down international oil prices and hurting the Iraqi economy. Manouchehr Takin, an analyst for the London-based Centre for Global Energy Studies who wrote the 2008 report “Stealing Iraq’s Oil: Is the Iraqi Press Right?”, said Rumaila was the most contentious of several oilfields that straddle the border.

A high rate of production on one side of the border essentially “sucks the oil from the other side”, Mr Takin said.

Range Hospitality, a dynamic, progressive and innovative institution focused on hospitality and real estate, has launched the Al Rawdatain Gardens development in Iraq's pilgrimage centre, Karbala, to cater to the significant shortage of accommodation.

Approximately 18 million pilgrims visit Karbala during the peak seasons every year. With a current shortage of accommodation in the city, Al Rawdatain Gardens aims to cater for this demand at accessible prices. Investment in this development is available through Mulkiya Intifa'a - a Shariah Compliant Fractional Ownership proposition.

Iraq's $112 billion economy whose GDP is growing at an average rate of 5.1% over the last three years has seen the Government actively encourage foreign investment through a number of initiatives including an amendment to the National Investment Law.

His Excellency Shehzada Shabbir Bhai Saheb Nuruddin, brother of His Holiness Moula Syedna Mohammed Burhanuddin (TUS), leader of the Dawoodi Bohra Community, has been appointed as Range Hospitality's honorary chairman.  Range Hospitality has recently strengthened its roster of shareholders through the appointment of Ali Hussein Al Nemer (Saudi Arabia), Alykhan Karmali (Uganda), Munaf Ali (United Kingdom) and Mohammed Asaria (United Kingdom) to the Board of Directors.

"We are delighted to be the recipient of Shehzada's support and guidance and honored by his participation. The Board of Directors comprises individuals from various parts of the Muslim world which will ensure a wider catchment area for our offering - Mulkiya Intifa'a," said Mohammed Asaria, Vice Chairman, Range Hospitality.

Earlier this year, Range Hospitality mandated Abu Dhabi-based investment company, Noor Capital PSC, to procure the necessary initial funding for the Al Rawdatain Gardens development. In addition, Range Hospitality has appointed Dewan Architects & Engineers, an architectural firm with over 25 years experience and projects spanning over 10 countries in the Middle East, Asia and North Africa, also known for the Yas Marina Hotel and Marriott Courtyard Dubai, as the lead architects and consultants. Control Risks, a leader in specialist security consultancy with over 30 years experience in the Middle East and seven years in Iraq is another of the leading names supporting the project.

// Range Hospitality has taken every step to protect its Mulkiya Intifa'a investors. "We are providing an Escrow account with one of the leading global financial institutions, Standard Chartered Bank, to assure security of investment and timely delivery of the project to our investors," said Munaf Ali, CEO, Range Hospitality. He further added: "Although it is not mandatory for Range Hospitality to have an escrow account for a development in Iraq, this is a self-regulating step to ensure investor confidence given the current market sentiment."

As the first modern development to be built in Karbala, Al Rawdatain Gardens will have an elegant 12-storey residence structure at its core comprising a mix of fully furnished and serviced studios, one-bedroom and two-bedroom suites. Spread over 55,000 square metres, the development is designed and furnished in accordance with international standards, with full air conditioning and heating, including internet access and safety deposit boxes. The entire development will include a total of 624 suites, extensive public areas, four restaurants, landscaped gardens, health facilities, 24-hour security, child care facilities, business centre, and guest services.

"We are receiving independent approaches from some of the world's leading hotel operators to manage Al Rawdatain Gardens," Asaria revealed. "We are in the process of operator selection and the calibre of the companies approaching us is clear evidence of the importance of Karbala within 'New Iraq' and the wider MENA region."

In conclusion, Ali mentioned: "Range Hospitality was established to achieve both commercial and altruistic objectives.  We have committed to donate 20% of our annual profits to charities under the direction of our Charitable Donation Committee."

About Range Hospitality
Range Hospitality was founded to develop hospitality projects in emerging markets and areas that benefit from significant volumes of pilgrims. Range Hospitality's ethos is to provide the highest quality international standard services to its guests and is a socially responsible investor - at all times ensuring its developments adhere to important local customs. Range Hospitality is owned and supported by a number of prominent business families from across the Islamic world.

An Iraqi oil industry veteran, Dr Thamir Al Uqaili, says there is a general belief that the production plateau targets (PPTs) of the international oil companies who have won contracts in Iraq are too ambitious and that export will face a marketing problem.

The exploration of Iraq’s rich oil and gas fields will be under the spotlight during Iraq Energy Future 2010, a top meeting of oil executives and Iraqi energy regulators in Istanbul from 27-28 September, as global companies that have won contracts prepare to start the development of various fields.  Dr Al Uqaili heads up a distinguished list of speakers and experts and will host a roundtable discussion at the event addressing operational challenges, opportunities, legislation, infrastructure and pipeline modernisation.

Common issues on different oil sites
A 30-year-old veteran of Iraqi oil companies such as the Iraq Petroleum Company, Basra Petroleum Company, Iraq National Oil Company, State Company of Oil Projects and the Iraq Drilling Company, Dr Uqaili comments on the challenges facing the IOC winners of the 1st and 2nd bid rounds as they prepare their teams and sites:  “There are certainly common issues, mainly use of production surface facilities, export terminals in addition to achieving and maintaining the contracted plateaus ‘PPTs’ (production plateau targets).”

Maintaining field pressure and boosting production is a key area for the IOCs to solve as they get started, says Dr Al Uqaili: “The fields are multi-reservoir fields of different characters. The IOCs are evaluating the characteristics and requirements of each reservoir. The evaluation includes revising recoverable oil under water injection and may be other solutions, to be able not only to achieve the production plateau target but to maintain it for some seven years. “

Export infrastructure

According to Dr Al Uqaili there are several production or export facilities that need upgrading and expansion to ensure Iraq can export its output.  “A new production centre like Hlafaya-Nahr-Umer-Majnoon down to the Fao [Faw] sea terminal and removing the bottlenecks in the pipelines from Rumaila and Zubair depots to the Fao terminal”, he continues, “as well as sea lines from Fao to the Basra sea terminal and installations of single buoy moorings (SBMs) in the Basra sea terminal”.

He also believes that the current bottleneck in the Iraq-Turkey export pipeline must be removed and perhaps a third line constructed.  Furthermore, should Iraq reach an agreement with Saudi Arabia, the Iraq Petroleum Saudi Arabia (IPSA) pipeline should be put into service.  He continues:"There is the possibility of constructing a pipeline each to Kuwait and Jordan.  Furthermore, we can resolve the current stalemate of the oil export from Kurdistan by using Iraq’s transport transportation system.”

Safety and security

“The main worries are security and political stability”, says Dr Al Uqaili, “that may severely affect fulfillment of a reliable national integrated plan that includes other sectors beside the oil sector. This integrated plan has not been started yet.”

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)
• Mounir Bouaziz, Vice President Commercial, New Business, LNG, Middle East and North Africa, Shell EP International

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

For more information:
Programme director: Claire Pallen [email protected]
Mobile: +44 78 330 93510

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:  [email protected]

AAIB View

A spokesperson from A.A.I.B. Insurance Brokers observed "a number of commentators have recently raised the question of the achievability of the documented production targets within the planned timescales, feeling that they may not be realistic considering the circumstances faced.

However, penalty clauses built into contracts if certain project milestones are not met and output targets are not achieved, are additional spurs for the International Oil Companies and the oilfield support and service companies to strive to meet contractual deliverables and get the Oil and Gas sector infrastructure refurbished and expanded as quickly as they are able to.

The challenges of operating in Iraq in this sector are formidable and should not be underestimated. The security situation, the bureaucratic procedures faced by businesses operating in the country, the current degree of political uncertainty, the transportation bottlenecks at Umm Qasr etc. have all been highlighted and are caused for concern.

However the International Oil Companies and their support network have faced similar obstacles before in many other challenging environments such as Angola and Nigeria, etc. and have gained valuable experience in overcoming such obstacles.

They have demonstrated adaptability and determination and they will certainly need these qualities in order to build a long term presence in Iraq and in supporting the modernisation and expansion of Iraq’s Oil and Gas sector.

Iraq's State Oil Marketing Organisation (SOMO) has cut the official selling price for September shipments of its Basra Light crude to Asia, reducing the cost to its lowest level in eighteen months, while raising its price to the US.

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.

Basra Light Crude is now priced at:

• For US, a discount of $1.30 relative to the ASCI for September (up from a discount of $1.40 in August);
• For Europe, a discount of $2.95 relative to North Sea for September (down from a discount of $1.95 in August);
• For Asia, a discount of $1.55 relative to Dubai-Oman (down from a discount of $1.10 in August).

While Kirkuk crude will sell for:

• For US, a premium of $0.25 relative to the ASCI for September (same as in August);
• For Europe, a discount of $1.80 relative to North Sea for September (down from a discount of $0.95 in August).

Iraq exported 627,000 barrels of crude a day to the US in 2008, representing about 6.4 per cent of all US oil imports, according to the Energy Information Administration.

Saudi Arabia this month cut prices for September liftings of all crude grades to Asia and lowered prices for light crudes to the US.

(Source: Wall Street Journal, Gulf News, Arab Times)

Related articles:

• Iraq Oil Revenues 95% of State Income
• Iraq Oil and Gas Report

Basra International Fair Ground
25 - 28 November 2010

Iraq is opening its doors. International Basra Oil and Gas Conference & Exhibition will take its place as the first and foremost gas and oil exhibition of the region. Events will have support from Iraq Government.

Exploring Iraq's true natural resources, modernizing its oil and gas industry is the single and most expensive project of the world at least for the next decade. Basra Oil & Gas as the first will be a unique meeting point for interested parties to achieve the results of this project.

Given these advantages, Iraq can expand its oil production rapidly and supply the international oil market with substantial amounts of oil exports.  Considering the above possibilities of Iraq can make use and benefit from the future development of the international oil market and especially the future rapid increase in the global demand for oil. The International Energy Agency estimates that world demand will increase from the present level of 85mn b/d to 116mn b/d in 2030. In other words, in the next 23 years the global demand for oil will increase by about 30mn b/d. How will this increase be met and by whom?

Most of the world oil reserves (1,200bn barrels) are located in OPEC countries with its share reaching 76%. The Gulf countries’ share (Iraq, Iran and GCC states) is 62%.Therefore, there is a concentration of global oil reserves in a few countries, namely in the Gulf region including Iraq.

PR campaign has already started with ministries. Conference aims to cover macro dynamics of oil and gas industry in Iraq; emphasizing opportunities, challenges, and affects of projects. The governmental authorities, national oil and gas companies, recognized names of the industry will be involved with their speeches. Lunch, dinner and cocktail programs, along with other sponsorship opportunities are available.

Basra is ready and wants your business. There is no alternative for these events in the region. Participants of the first year will have a priority for the next years. Space is limited  and interested companies are urged to register early.

Basra: logistical hub of Iraq

Basra has no less than 70% of Iraq's oil reserves but what makes Basra crucial is not just the oil reserve in the region but also its strategical location which is an attractive logistical port for the international companies. The city is located along the Shatt al Arab waterway near the Persian Gulf and defined as the southern gateway of Iraq.

There are 4 big advantages to invest in this region:  Large oil and gas reserves, low cost of oil production, oil fields are located across Iraq, and also the oil export routes are many and can go through several directions such as the Gulf, Turkey, Syria, Saudi Arabia, Iran, Jordan and Kuwait.

The Al Basrah Oil Terminal is the main Iraqi oil terminal for off loading oil from Iraq. It accounts for approximately 80% of their GDP on a daily basis and receives an average of 6 tankers per week and pumps around 1,5 million barrels of oil a day.

Basra is connected by air through its international airport with connecting flights to number of international capitals. Strategically located within the province of Basra, the city of Basra has four extensive highways, river transportation systems on both the Tigris and Euphrates rivers, and a railway linking it to Baghdad.

Basra has a big potential to become perhaps the next Dubai with the shimmering skyscrapers in the future. It is already home to majority of professionals and company headquarters in the country However, to expand its oil industry, this region needs foreign investment, as this is a capital intensive industry. There is already number of companies operating in the region, but the potential of the region is not fully obtained. Therefore, International Basra Oil and Gas Conference & Exhibition will be the perfect platform to meet for all companies in the industry.

Because of the security measures taken by the government, Basra  has become a very safe city and no any big incident has happened for last three years. If any incident occurs, expert security staff is planted and they  reach any place in the city within minutes.You may also have additional information about the city from your country's embassy.

Basra is one of the oldest Islamic cities which was established during the Islamic conquest in 625 A.D. The Prophet's companion, Utba Bin Gazwan, choses the city site in 14 A.H. (636 A.D.), and the city was formally planned and built by Abu Musa Al-Asha'ari six months prior to the building of Kufa city upriver. Basra was constructed close to Al-Busaira from the most ancient eras of history.

A network of canals flowed through the city, giving it the nickname "The Venice of the Middle East", at least at high tide. The tides at Basra fall by about 9 feet. For long, Basra grew the finest dates in the world.

The city was renovated by the financial help of the allies and  now  it is on way of being one of the glorious cities of Gulf region.

http://www.basraoilgas.com/
[email protected]

A group led by Gazprom Neft aims to start drilling in Iraq's Badrah oilfield next year as part of its plan to reach 15,000 barrels per day by the last quarter of 2013, a company executive said yesterday.

Gazprom and its partners plan to issue a tender this month to drill three to four new wells and could award a contract later in the year, said Alexander V Kolomatsky, project director Middle East at Gazprom Neft, the oil unit of Russia's Gazprom, according to a report from Reuters.

"We will call for several tenders for 3D seismic I think within a week, then for drilling... we will issue (drilling) tenders during this month," he told Reuters on the sidelines of a conference between international oil companies and the Oil Ministry in Baghdad.

In January, Iraq signed a deal with Gazprom, Turkey's TPAO, Korea's Kogas and Malaysia's Petronas to develop its eastern Badrah oilfield, which has estimated reserves of 100 million barrels of oil. The field is near Iraq's border with Iran.

Kolomatsky said initial expectations of total investment in Badrah were about $2 billion. The company was also in the "final stage" of negotiations with Iran to develop the Azar oilfield, a part of Iraq's Badrah field which lies across the border, he said.

"I think talks are going well... but it's difficult with sanctions," he said. The Russian company last year signed a memorandum of understanding with the National Iranian Oil Co (NIOC) to study the development of Azar and Shanguletwo oilfields in Iran.

Iran, a major oil exporter and holder of the world's second-largest gas reserves, has been hit by a new wave of international sanctions for its nuclear program and the United States has also stepped up its push to isolate Tehran economically.

Kolomatsky also said the Russian firm is looking for other opportunities to increase its activities in Iraq and could be interested in bidding for exploration and production rights in areas like the unexplored Western Desert along the border with Saudi Arabia and Jordan.

(Source: Reuters)

Related articles:

• Petronas Recruiting Hundreds of Staff for Four Iraqi Projects
• Foreign Investment Continues, as Lukoil Announces Plans
• Gazprom to Offer $10 Bn of Bonds