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The 12-member Organization of the Petroleum Exporting Countries' (OPEC) crude oil production output averaged 29.12 million barrels per day (b/d) in June, down 160,000 b/d from an estimated 29.28 million b/d in May, according to a just-released Platts survey of OPEC and oil industry officials and analysts.

Lower volumes from Iraq and Nigeria accounted for 110,000 b/d of the 160,000 b/d overall drop.

Excluding Iraq, which does not participate in OPEC output agreements, the 11 members bound by quotas (OPEC-11) pumped 26.74 million b/d in June, down 90,000 b/d from May's 26.83 million b/d, the survey showed.

But despite the lower volumes in June, the OPEC-11 overproduced their 24.845 million b/d target by 1.895 million b/d. The latest estimates suggest that compliance with the 4.2 million b/d of output cuts agreed in late 2008 increased to around 57.3% in June from 52.7% in May but remained well below the almost 82% achieved in March 2009.

"This is the Goldilocks market for now, not too hot, not too cold," said John Kingston, Platts global director of news. "Yes, OPEC is producing more than the International Energy Agency's call for OPEC crude for full-2010, but that's to be expected in the second quarter, when markets traditionally build inventories. Stocks are healthy from a consumer's perspective, but not so bulging that it is causing market anomalies. This stability is reflected in the narrow range prices have traded in for several weeks now."

Saudi Arabia and Kuwait boosted output, by 20,000 b/d and 10,000 b/d respectively, to produce 8.27 million b/d and 2.3 million b/d.

Elsewhere, volumes dropped by between 10,000 b/d and 70,000 b/d.

Iraqi output fell by 70,000 b/d to 2.38 million b/d in June from 2.45 million b/d in May as a result of weather-related export loading delays and a bomb attack on the northern pipeline network.

Nigerian volumes fell back to 2.01 million b/d from 2.05 million b/d, a drop of 40,000 b/d.

For other oil, energy and related information, visit Platts online at www.platts.com.

Before launching his war to topple Saddam Hussein's regime, George Bush, the former US president, promised a strong independent Iraq. Instead the country has become a bloody battleground for regional and international forces, not to mention al-Qaeda. Today US, Israeli, Turkish, Saudi Arabian and Syrian forces compete to shape Iraq's political landscape.

Sometimes this competition is fought with brute force and sometimes by proxy through Iraqi political parties and armed groups. The prize is Iraq's geopolitical value as a lynchpin of Gulf stability and its huge oil reserves.

While on the economic front, US companies have all but surrendered their quest to monopolize Iraq's oil; Chinese companies have signed at least three deals in recent weeks, and have emerged as Iraq's single largest investor in the oil and gas sector. Concerned Iraqi nationalists condemn this interference but predict that Iraqi nationalism will eventually sweep away all this meddling.

A spokesman from A.A.I.B. Insurance Brokers, a company specialising in Iraq observes; perhaps we should remember the words of Deng Xiaoping the Chinese politician who led the country to towards a market economy during the 80-‘s and early 90’s with his "socialist market economy" model. He is generally credited with advancing China into becoming one of the fastest growing economies in the world for over thirty years and vastly raising the standard of living of hundreds of millions of Chinese. He once said “I don't care if it's a white cat or a black cat. It's a good cat so long as it catches mice."

So in the case of Iraq, it’s not important what colour the cat is - which companies develop the oil and gas sector. What is important is that extra employment is created, oil exports are boosted, and substantial funds flow into the coffers of the Iraqi Finance Ministry.

The people need to see that the oil and gas sector is refurbished and developed quickly, safely and efficiently.

Dubai-based construction firm Al Habtoor Leighton Group is in discussions over a $700 million offshore project in Iraq as it seeks more business outside the difficult UAE market, its CEO said on Tuesday.

Al Habtoor, an affiliate of Australia's Leighton Holding, is also eyeing a new infrastructure contract in Saudi Arabia and two in Oman by year-end, the firm's chief executive and managing director Laurie Voyer told Reuters.

"The company is very keen to take on more business outside the UAE," Voyer said at the Reuters Global Real Estate and Infrastructure Summit in Dubai.

Al Habtoor has said it hopes to generate about 50 per cent of its revenues by early 2012 from the UAE, down from around 80 per cent currently.

He said the firm would also look to slow its expansion plans into Libya in order to establish itself in other Gulf Arab countries.

Al Habtoor is in discussions over an offshore pipeline and SPM (single point mooring) project in Iraq in what would be its first contract there, and hopes to hear whether it is successful by the end of July, Voyer said.

"We're putting together a business case at the moment and (getting) a better understanding what it might take to move into Iraq," he said.

Construction firms have been rapidly expanding operations outside the UAE, where house prices in Dubai, the emirate hardest hit by the financial crisis, plunged some 60 percent from their peaks in 2008, and billions of dollars worth of projects were put on hold or cancelled.

Saudi Arabia

Al Habtoor is eyeing a second contract in Saudi Arabia by year-end and hopes to have its own trading license in the kingdom in September, which Voyer said would help the firm win more business there.

"All of the metrics that you look at say there is a lot of work out there, but 85 per cent of the work is given to local companies. It's very difficult for a company like us to get the other 15 per cent," he said.

It won its first contract in Saudi Arabia last year in a joint venture with Saudi Arabian building firm Al Rajhi Projects.

Al Habtoor's total order book is expected to rise to around Dh30 billion ($8.17 billion) over the coming year from around Dh22 billion.

Its projects include the $1.8 billion St Regis Hotel and the $1.4 billion Khalifa Port projects in Abu Dhabi.

Iraq expects to cover a projected budget deficit of about $18 billion this year by selling oil at higher-than-expected prices, Finance Minister Baqir Jabr al- Zubaidi said.

“We will cover the budget with the difference in oil prices,” Zubaidi said in an interview today in Istanbul, where he’s attending an Arab-Turkish forum. The Iraqi budget is based on oil prices at $62.5 per barrel, and in agreements already made “we sold at $74,” he said.

The government also plans to sell domestic bonds valued at about $4 billion this year, al-Zubaidi said. About $2.4 billion of those bonds have already been sold. The minister said Iraq doesn’t plan to sell on international markets.

Iraq holds the world’s third-largest oil reserves, with 115 billion barrels, behind Saudi Arabia and Iran. The International Monetary Fund forecasts that its economy will expand 7.3 percent this year and 7.9 percent in 2011.

IMF and Iraqi authorities are projecting average production of 2.6 million barrels of oil a day and exports of 2.1 million barrels a day this year. Next year, those projections rise to 2.9 million and 2.3 million.

Al-Zubaidi said the government expects the economy to expand about 10 percent next year and is targeting a growth rate of 12 percent in 2012 and 14 percent the following year.

He said the budget may expand from about $70 billion this year to $100 billion by 2013 and $150 billion within seven years, driven by revenue from oil bids.

The Iraqi central bank cut its key interest rate by 1 percentage point to 6 percent in April to fuel growth.

A French navy ship with 95 sailors on board docked Tuesday at the southern Iraqi port of Umm Qasr, in the first such visit in 32 years amid French efforts to "revive" ties with Baghdad.

The two-day stop by the Ducuing, a military dispatch ship, began with a reception organised by the Iraqi navy, who offered their French counterparts Qouzi, a traditional Iraqi dish made of freshly-slaughtered sheep and rice.

"The purpose of this visit is to revive and rebuild the friendly relations of old between the French and Iraqi armed forces," Ducuing commander Captain Jean-Olivier Grall told AFP.

"The French army and navy are ready to cooperate with the Iraqi navy. This can occur in several areas as part of training and regional cooperation," he added.

The ship and its 95 sailors arrived in Umm Qasr, at the southernmost tip of Iraq and where the Iraqi navy has deployed extensive security measures in a bid to prevent possible attacks, from the Saudi Red Sea port of Jeddah.

"We are honored to resume this tradition, we are the first in 32 years to dock here," Grall said. "We are rediscovering a place that has been somewhat overlooked."

His counterpart Rear-Admiral Adel Hassoun also hailed the occasion.

"We are very pleased with this visit," he said. "It is all part of developing relations between the French and Iraqi navies."

"In the future, we hope to develop strategic relations with the French navy, which is a very experienced force."

( AFP )

Crude oil prices are high enough to encourage investments in marginal fields, Iraqi Oil Minister Hussain al-Shahristani said.

Iraq, holder of the world’s third-largest oil reserves, is producing oil at “far below” its potential and plans to add four oil refineries with 750,000 barrels of capacity a day to tap rising demand from Asia, al-Shahristani said at the Asia Oil and Gas Conference in Kuala Lumpur today.

“It’s not expected that there will be much oil available from other parts of the world,” he said. “Any additional demand, particularly from Asia, will have to be met by Iraq.”

The Middle East nation is seeking foreign investors to boost output after six years of conflict and prior sanctions destroyed its infrastructure. The country completed two bidding rounds for oil development rights last year and has awarded a dozen contracts to international companies.

The country will receive $150 billion in investments from fields awarded last year, al-Shahristani said.

Nations counting on oil for revenue and investments have seen income fell as crude prices declined on concern slower growth will sap demand for energy. The price of crude oil in New York lost 14 percent in May, the biggest monthly drop in 18 months, partly on concern the euro region’s debt crisis will slow economic recovery. U.S. crude oil inventories have risen every week but two since the week ended Jan. 22, according to data from the U.S. Department of Energy.

Refinery Study

Foster Wheeler AG said last week that it won a contract for a feasibility study and the engineering and design of an oil refinery at Nassiriyah in Iraq, as the Middle Eastern country seeks to boost its capacity to meet domestic demand and allow for some exports.

Iraq plans to build a 300,000 barrel-a-day facility at the southern city of Nassiriyah, Foster Wheeler said in a Business Wire statement June 2. The company didn’t disclose the value of the contract.

“Within a couple of years Iraq should be an exporter of petroleum products rather than an importer,” al-Sharistani said.

Iraq consumed about 638,000 barrels a day of oil products in 2008, up from 596,000 barrels daily in 2007, according to a report from the U.S. Energy Department.

OPEC Meeting

The Organization of Petroleum Exporting Countries, which supplies 40 percent of the world’s oil, isn’t planning any emergency meeting before its next scheduled meeting, he said. The next scheduled gathering is on Oct. 14.

Oil prices are “reasonable” and there is no shortage of supply, Mohamed al-Hamli, the United Arab Emirates oil minister. said June 2.

OPEC is set to reduce shipments this month as demand from Europe and the U.S. remains weak, according to tanker-tracker Oil Movements.

OPEC will ship 23.47 million barrels a day in the four weeks to June 19, the consultant said in a report on June 3. That’s down from a revised figure of 23.6 million for the four weeks to June 12 and 23.7 million in the four weeks to June 5. The data exclude Ecuador and Angola.

OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the quota system.

Kuwait's Zain has signed a services management agreement with Motorola. Under the three-year contract, Motorola will operate and manage the Kuwaiti telecoms 3G network as well as handle the design, planning, support and optimisation.

The two firms also have existing contracts in Iraq, Saudi Arabia, Nigeria and Jordan for several different technologies, network domains and service functions.

( AME Info FZ LLC )

An Iraqi soldier at the roadblock motions for Ryan’s taxi to stop and then walks up to the taxi.

Leading High Risk Insurance Specialist Opens Second Iraq Office

AAIB Insurance Brokers, the leading Iraq insurance provider, has appointed Mr Michael Carr FCII as the Divisional Director of its Iraqi registered company Al Fajer Insurance and Reinsurance Brokers.  He will be based at AAIB’s latest office to open in Iraq, located in the southern city of Basra.

Mike Carr has over 25 years experience in the insurance sector working across a variety of operational, product management and business development roles.  His UK experience was built up at Zurich and Pearl before moving to work in Saudi Arabia, Jordan and Iraq.  He joins Jordan based AAIB from Saudi based company SABB Takaful, where he was the company’s Chief Operating Officer.

AAIB Founder and Managing Director William Wakeham said: “Mike’s appointment and the opening of our Basra office signals exciting times for AAIB.   We have been operating in Iraq since 2004 and have built up huge amount of knowledge and an incredibly sophisticated and cost effective portfolio of products.  In line with our ethos, to work alongside out clients on the ground, we are now expanding our presence in Iraq which is being driven by experienced and highly knowledgeable members of the AAIB team like Mike.  I am delighted to have him on board.  He is a huge asset to the company and an invaluable support to our clients working in Iraq.”

Jordan based AAIB was the first foreign insurance business to register offices in Iraq when it opened Al Fajer Kurdistan Insurance and Reinsurance Brokers in Erbil in October 2008.   The following year it opened the first ever registered premises in Iraq’s capital Baghdad which also operates under the locally registered name Al Fajer Insurance and Reinsurance Brokers.  In line with AAIB’s commitment to supporting the Iraqi insurance industry the company is actively recruiting and training up local Iraqi staff for administrative and other core functions in its offices.

AAIB is also the first company to provide dedicated medical insurance policy for local employees in Iraq, Iraqi Kurdistan and Afghanistan.   Launched in July 2009, the Regional Health and Health + Plans provide cover for in-patient and day-patient hospital treatment, including injury and illness resulting from acts of war, terrorism and kidnap.   The policy is underwritten with ‘A’ rated security through Lloyds of London and was specifically developed to meet the needs and requirements of international companies looking to provide essential healthcare benefits to their local employees.  With premiums starting from less than $10 per employee, per month, the policy has proved popular with companies, both large and small, looking to reaffirm their commitment and provide the best possible employment benefits and practises - not only for their expatriate staff, but also their local employees.

A pioneer of Iraq's insurance sector, AAIB’s reputation as one of the leading organisations in handling all major insurance requirements in challenging and high risk regions is gaining momentum.  Earlier this year, Managing Director William Wakeham was invited to address delegates at the annual Marsh National Oil Companies Conference in Dubai which, as part of the 2010 theme ‘NOCs into the Future: the Challenges and Opportunities Ahead’ addressed the current issues related to the management and transfer of energy risks in Iraq.   In his speech, entitled “Doing business in Iraq - real life and practical routes to success” Mr Wakeham imparted invaluable insights and lessons to some of the world’s leading oil companies.

For more information or interviews please contact:

Abby Smith at [email protected] or call M: +44 7825 336 933

Iraq's oil minister said Tuesday that world crude prices are "reasonable" and are high enough to encourage oil investment without hurting the global economic recovery.

Hussain al-Shahristani's remarks in an interview with The Associated Press added to perceptions that OPEC is not eyeing any immediate changes in output despite the past weeks' large price swings.

The 12-nation group has left its output targets unchanged for about a year-and-a-half, fearing that any sharp revisions could undermine slow gains as the world struggles to emerge from its worst recession in over six decades. It is scheduled to meet next in October.

Al-Shahristani said there has been "good progress" in the economic recovery and oil prices are not impairing that process.

"On the one hand it (oil price) is sufficiently high to encourage investment, to develop marginal fields, mostly outside of OPEC countries," al-Shahristani said. He stressed that it was important that there be "production from other regions and areas, to reduce total dependency on OPEC output."

"On the other hand it is not too high to adversely affect the recovery of the world economy," he said. "I think we are at the right balancing point."

The benchmark crude oil futures contract for July delivery was trading near $72 a barrel in late trading in Europe. That is within range of what OPEC kingpin Saudi Arabia and others in the producer bloc say is a reasonable price for producers and consumers.

Prices have fallen from $87 per barrel in the span of weeks on worries that Greece's debt crisis could spread to other European countries, undercutting the economic recovery.

The drop in prices, however, carries serious implications for Iraq, which sits atop the world's third largest proven reserves of conventional crude oil.

After years of sanctions and war, Iraq has staked its economic recovery on developing its oil sector.

Oil revenues make up nearly 95 percent of Iraq's income. The Baghdad government is relying on 12 deals with international oil companies, 11 of which were the result of two international bidding rounds last year, to dramatically increase oil output in future years.

But the lack of a petrochemical law, ongoing insurgent attacks and uncertainty about who will lead the next government continue to be challenges to developing the oil sector.

The oil minister said he expected the country's oil production capacity would climb to over 12 million barrels per day in six years.

Analysts, however, say that level is unrealistic given continuing security issues and the condition and limits of Iraq's current oil infrastructure, including pipelines.

Al-Shahristani said Iraq was taking steps to boost its export infrastructure.

Earlier Tuesday, Iraq's Supreme Court ratified election results from the country's March 7 contested parliamentary vote, clearing the way for a new government to be formed. The court ratified the results and declared a secular alliance led by former Prime Minister Ayad Allawi the winner.

Al-Shahristani, a key supporter of Prime Minister Nouri al-Maliki's State of Law coalition, said he is not pursuing any position with the new government should the premier retain his job. But he said he would consider staying on if al-Maliki asked.

( Associated Press )