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By John Lee.

Iraq plans to invest up to $1.6 billion on renewable energy over the next three years, according to a report from Retuers.

The new solar and wind power stations will to add 400 megawatts to the national grid, helping to close the gap between the 8,800 MW produced and the 14,000 MW needed.

Laith al-Mamury, the head of the planning and studies department at the ministry of electricity, said invitations have been sent to about 25 leading companies to manufacture and install solar and wind power plants.

The companies include Japan's Toyota Tsusho Corp, Swiss engineering group ABB and Egypt's Orascom Construction.

The ministry has allocated an initial $200 million from the 2013 budget to add 50 MW to the grid next year, focusing on deserted and border areas.

Mamury said each megawatt of solar or wind energy will cost around $3.5-$4 million, but the initial outlay would be offset by lower running costs because the stations do not require fuel.

In the long term, the aim is for solar and wind energy to account for 2 percent of power generation.

Although Iraq has vast oil and gas reserves, Mamury said, "we should save oil for the coming generation not only sell it or burn it".

(Source: Reuters)

A new report jointly compiled by the Iraq Prime Minister’s Advisory Commission and the U.S. Agency for International Development warns that over dependence on oil revenues has the potential of creating significant economic and market distortions.

According to the report, released at an October 4 conference in Baghdad’s Al-Rashid Hotel, rapid expansion of oil wealth, together with the other ingredients of an undeveloped market system and the legacy of decades of a planned economy are “a recipe for political and economic chaos” should a power struggle develop for the control of the government that dominates the economy and disburses billions of dollars in salaries and subsidies.

The Revision of Iraq’s Economic Priorities Conference was co-hosted by PMAC and the USAID-Tijara Provincial Economic Growth Program and brought together Iraqi leaders from the executive branch, the Council of Representatives, businesses, labor unions, and academia.

Thamir Ghadhban, chairman of PMAC, stressed the need for a clear vision for economic policy and a timeframe for the execution of its goals, pointing out that: "the transition from totalitarian regimes to pluralism, accompanied by the transformation of the state-controlled economic system to a market economy, is difficult and lengthy.”

• Investment almost $1 billion - highest foreign investment in Iraqi oil and gas sector
• Total 67 million barrels produced since 2008 – highest by private sector in Iraq
• Project achieves government fuel cost savings of $5.4 billion

Dana Gas and Crescent Petroleum, in their capacity as joint operator of the Khor Mor field, have announced that total production in their gas operations in the Kurdistan Region of Iraq has reached 80,000 barrels of oil equivalent per day at the 4th anniversary of production.

Total investment to date is close to US$1 billion and total cumulative petroleum production to date has exceeded 67 million barrels of oil equivalent, making it the largest by the private sector in Iraq’s oil and gas sector.

The daily production includes 340 million cubic feet of gas per day and 15,000 barrels per day of condensate liquids, and there are plans for further expansion. In total, over 279 billion cubic feet of gas and 13 million barrels of condensate liquids have been produced by the companies since the start of production in October 2008, with the gas supply to local power stations enabling 1,750 MW of new electricity supply locally.

This has ensured almost continuous power supply for 4 million people in the Kurdistan Region, in contrast to the electricity crisis in other parts of Iraq, and provided US$5.4 billion of savings in fuel costs for the government, with annual savings of $2.5 billion going forward and major environmental benefits in cutting greenhouse gas emissions while transforming and energizing the economic and social development of the entire region at the same time.

Iraq’s energy sector holds the key to the country’s future prosperity and can make a major contribution to the stability and security of global energy markets, the International Energy Agency (IEA) says in a special report of the World Energy Outlook released today – the first time that the IEA has conducted a comprehensive review of the energy sector of a major Middle East producer.

The IEA’s Iraq Energy Outlook finds that Iraq makes by far the largest contribution to global oil supply growth over the coming decades, with current production of 3 million barrels per day (mb/d) more than doubling by 2020 and going on to reach more than 8 mb/d by 2035. Iraq becomes a key supplier to fast-growing Asian markets, mainly China, and the world’s second largest oil exporter by the 2030s, overtaking Russia.

"This landmark study confirms the increasing importance of Iraq to the global energy system, highlighting the key role it is expected to play in meeting growing energy needs and the responsibilities it will assume as a strategic source of world oil supply. Put simply, this report shows that we all have an interest in Iraq realising its potential and revitalising its economy," said IEA Executive Director Maria van der Hoeven.

"Developments in Iraq’s energy sector are critical for the country’s prospects and also for the health of the global economy." said IEA Chief Economist Fatih Birol, the report’s chief author. "But success is not assured, and failure to achieve the anticipated increase in Iraq’s oil supply would put global oil markets on course for troubled waters."

Catching up with rising demand for electricity is a critical domestic challenge, as prolonged power cuts are still experienced on a daily basis in many parts of the country. The report estimates that, if planned new capacity is delivered on time, electricity generation will meet Iraq’s demand for power in 2015. Natural gas can play a much more important role in Iraq’s future and a vital first step will be to reduce the amount of gas that is currently flared. Once domestic needs are met, Iraq can also provide a cost-competitive source of gas supply to neighbouring countries, to European markets and to Asia, according to the report.

Meeting the anticipated levels of oil, gas and power supply over the period to 2035 will require over $530 billion in energy investment in Iraq, with the annual investment need highest in the current decade. But Iraq stands to gain much more – almost $5 trillion in revenues from oil export over the same period (an average of $200 billion per year). Revenues of this magnitude can transform Iraq’s future prospects, with the potential to stimulate much-needed economic growth and diversification. To achieve these ambitions, Iraq will need strengthened institutions and human capacity, a stable regulatory framework and sound long-term strategies for the energy sector, and efficient, transparent management of revenues and spending.

The Iraq Energy Outlook has been produced in close co-operation with the federal government of Iraq, the regional and provincial governments and officials across many government bodies, including fact-finding visits by the IEA team to Baghdad, Erbil and Basrah.

To download the free report, please click here.

Iraq will invest around $500 billion in energy and linked industries with the help of the private sector by 2030, the Deputy Prime Minister for Energy told a conference hosted by the Iraq Britain Business Council and Iraq's National Investment Commission.

Dr Hussain al-Sharistani (pictured) said the move would generate around $6 trillion in revenues and create around 250,000 new jobs.

Speaking in Baghdad he also unveiled plans for what he called: "a massive development plan for the oil and as industry," including new terminals, refineries and pipelines.

Al Sharistani said:

"The volume of work is unprecedented in the oil industry."

"As for investment opportunities; investments between now and 2030 in the energy sector and linked industries will amount to about $500 billion, of which 80 billion is expected to come from the private sector."

Shahristani delivered a broad ranging vision of Iraq's energy needs and also revealed plans for the Ministry of Electricity's to upgrade and build new power projects to solve power outages which leave millions of Iraqis with electricity for only 8-10 hours a day.

He said:

"Power generation capacity is expected to reach 22 gigawatts to meet demand in 2016.

"The ministry of electricity is also planning to upgrade the existing and the new gas turbine stations from single to combined cycle to increase power to about 30 gigawatt in 10 years."

Shahristani said the Ministry planned to exploit solar energy. He added:

"There are invitations for companies to build solar power stations in remote desert areas and this is part of the set plan to develop the power sector in Iraq."

The two day conference was also attended by Iraq Deputy Prime Minister Dr Rowsch Shaways who said:

"My goal is to bring life to our economy to achieve a proper standard of living for our people and enable Iraq to take its place in the world community.

"The Iraqi people deserve the best and we are seeking assistance from nations like Britain. We need to get away from the state doing everything. The Iraqi market is promising and it is broad and thirsty for investment."

Baroness Nicholson of Winterbourne led the IBBC delegation of 30 mainly Western businessmen and women to the Iraqi capital and told the conference:

"Nearly ten years since the dark days of the previous regime the steady light of freedom and democracy is burning in Iraq today. Foreign investment is needed to ensure that light turns into a glittering future for Iraq."

(Source: IBBC)

By John Lee.

At Iraq Business News we are committed to bringing you up-to-date information to help your business in Iraq.

With that in mind, our revised Tenders Service has listed 26 new opportunities this week alone, covering such products and services as industrial valves, pharmaceuticals, dental supplies, construction equipment, and consultancy services.

With the oil and infrastructure sectors ramping up rapidly, we are sure that this service will help you to keep your finger on the pulse of the Iraqi economy, and identify new opportunities for your business.

To let us know about tenders, please email [email protected].

If you're considering applying for contracts in Iraq, Upper Quartile and AAIB are here to help you. For more information please contact Gavin Jones or Adrian Shaw.

 BASRA 2013 البصـــــرة

“Project Iraq 2012” expected to lay solid foundations for the region’s bustling construction sector

For the fifth consecutive year, “Project Iraq” – the International Exhibition for Construction and Environmental Technology, Materials and Equipment – will be held at Erbil International Fair Ground (EIF), bringing together local, regional and international companies and decision-makers in the construction sector.

Organized by IFP Iraq – member of International Fairs & Promotions (IFP) Group, Project Iraq is the largest specialized exhibition in Iraq and one of the fastest growing shows in the entire Middle East. In last year’s edition, the show brought together 393 local, regional and international companies from 20 countries, scoring a 30% growth in the number of participants.

Project Iraq’s ongoing success is widely influenced by the country’s dynamic construction market which is fueled by reconstruction and development projects across all economic sectors, including infrastructure, housing, hospitality, education and others. In 2010, Iraq’s construction industry was valued at US$ 5.6 billion with an annual growth forecast of 6.18% until 2014. Today, the busy pipeline of current and underway projects is triggering a massive demand in terms of building material, technology, and qualified human resources.

Consequently, “Project Iraq 2012” is the ideal platform for engineers, energy experts, field specialists, investors and entrepreneurs, buyers, and distributors to gather, share innovations and seize valuable business opportunities. Expanding over 11,000 sqm, the show is expected to draw a professional crowd of more than 23,000 visitors, giving them the exclusive opportunity to learn more about the latest industry trends from more than 400 international exhibitors; to network with key decision-makers and other professional trade visitors from both the public and private sectors; explore new business opportunities, joint ventures, and much more.

Supported by a wide pool of international official bodies from Belgium, China, Egypt, Germany, Greece, Iran, Italy, Syria and Turkey, and local governmental bodies including the Ministries of Consternation & Housing and the Ministries of Electricity, “Project Iraq 2012”has attracted international participants from the four corners of the world namely from Belgium, China, Egypt, Finland, France, Germany, Greece, India, Iraq, Iran, Italy, Jordan, the Kingdom of Saudi Arabia, Kuwait, Lebanon, Spain, Syria, Thailand, Turkey, the United Arab Emirates and the United Kingdom.

Exhibits at the show will include the latest innovations covering all construction aspects such as building material, stones and stone products, heating, ventilation and air conditioning (HVAC) systems, machinery and vehicles, sanitary products, wood products, metal products amongst other; and aimed at helping visitors improve their company productivity, upgrade their projects’ quality, grow their business and deliver faster.

Adding value and depth to every visitor’s experience, Project Iraq is held concurrently with “Energy Iraq 2012” -the 2^nd International Exhibition for Electricity, Alternative Energy, Lighting and HVAC - the only international exhibition in Iraq and the neighboring countries exclusively dedicated to electricity, alternative energy, lighting and HVAC.

Don’t miss Project Iraq 2012 from 17 to 20 September 2012, atErbil International Fair Ground (EIF) from 14:00 till 20:00 daily. To pre-register your visit, log on to www.project-iraq.com.

Siemens will supply Khormala gas turbine power plant in northern Iraq with four SGT5-2000E gas turbines and four SGen5-100A generators along with the associated auxiliary and ancillary systems. The customer is the KAR Construction and Engineering Company Ltd., which is erecting the Khormala plant for the independent power producer KAR Group headquartered in the city of Erbil. Commissioning is scheduled for 2013. The order value for Siemens is worth more than USD129m.

The four-unit Khormala gas turbine power plant is located 25 kilometers south of Erbil, the region's capital, which falls under the administrative authority of the Kurdistan Regional Government (KRG). With an installed electrical generating capacity of 640 megawatts (MW), this is the first major power plant project for the KAR Group, who will also operate the facility. Plant output is enough to meet roughly one quarter of the region's power demand, delivering electricity to over four million people.

Siemens Energy Sector is the world's leading supplier of a complete spectrum of products, services and solutions for power generation in thermal power plants and using renewables, power transmission in grids and for the extraction, processing and transport of oil and gas.

Earlier this year, Dietmar Siersdorfer, Siemens Energy CEO, Middle East, said:

“Iraq is facing acute and critical challenges in providing reliable power to all the country’s residents and Siemens is fully committed to assisting the Ministry of Electricity in meeting those challenges.

“We have a long history in Iraq and the wider Middle East, and understand that this is an issue of utmost importance to the Ministry and the people of Iraq. With our complete portfolio of proven products and service solutions, we are well-positioned to address this issue.”

Sources: Siemens

By John Lee.

The Kurdistan Regional Government (KRG) has extended its deadline for the federal government to pay the money it says it is due in respect of oil exports to 15th September, after which time it will again halt exports of Kurdish crude.

Baghdad, on the other hand, has threatened to trim Erbil's budget by $3 billion as a result of the KRG's failure to ship the budgeted quantities of oil.

Meanwhile, the country rations food and continues to suffer from electricity shortages and run-down infrastructure.

Despite record oil exports, Iraq can ill afford to lose the revenues from 175,000 barrels of oil per day, totalling over £500 million per month, and both sides must find a way to resolve their differences before the deadline at the end of next week.