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Kuwaiti telecoms firm Zain (ZAIN.KW), which is selling its African assets to India's Bharti Airtel, will concentrate on the Gulf and Middle East region and is open to new investments, its chief executive said on Tuesday.

On Feb 16, Zain said it would pocket up to $5 billion from the planned sale of its African assets, excluding Sudan and Morocco, to Bharti Airtel in a $9 billion deal and use the rest to pay down debt. Nabil bin Salama, who took over the chief executive post earlier this month, said returns from the sale of most of its African assets will provide it with the cash for possible new investments.

Bin Salama said Zain has gained a strong foothold in the Middle Eastern market during its expansion period under the group's outgoing chief executive Saad al-Barrak. Its client base in seven Arab countries is over 31 million, he said.

He said the company's share in the Iraqi market could be increased, and Zain "expects a lot from the Saudi market" despite tough competition." The Sudanese and Lebanese markets were also promising, he added.

The Economist reports that Chinese oil companies are shifting their focus from Iran to Iraq, as Iraq attracts the latest technology to increase its oil production.

“Iraq will have to pull off an unprecedented feat. In the history of the modern oil industry, no country has increased output with the speed the Iraqis envisage. Over the next seven years Iraq intends to go from producing 2.5m barrels per day to 12m b/d, a target that exceeds Saudi Arabia’s current output by more than 30%.”

The scale of the challenge is huge, involving not just increased port and pipeline capacity, and “countless pumping stations”, but even the provision of paved roads.

As this oil starts to come on stream, the question of OPEC quotas will become an issue, but the Oil Minister “makes the plausible argument that Iraq under-produced for decades and deserves to catch up, but this has irritated the Saudis”.

The New York Times reports on how terrorist attempts to derail the auctions of Iraqi oilfield development rights have failed, and the process went ahead as planned. “The terrorists tried to send a message to the oil companies through the bombings,” the oil minister, Hussain al-Shahristani, declared on Iraqi television. “But this message was not delivered.”

After decades of decline, Iraq’s oil industry looks set to recover its place among the world’s leading producers, perhaps even to challenge Saudi Arabia for the top spot by the end of the decade.

“[If the IOCs] are reasonably successful in delivering on the commitments we’ve made, it is quite likely we will see Iraq increase its production to around 10 million barrels per day within about 10 years,” Tony Hayward, chief executive of BP, told the World Economic Forum at Davos, Switzerland, last month. “[Absent unforeseen political events] the resources there are relatively easy to bring on-stream.”

But Associated Press quotes a more sceptical source from the International Petroleum Week conference in London as saying "I haven't found a single person who finds that target [12 million bpd] achievable … it's much lower than that, but even so, Iraq is a complete game-changer, even if it delivers half of that."

And the oil services companies are set to benefit hugely from all this. The success of the auction in December “implies a huge amount of service activity over the next two or three years,” said Andrew Gould, chief executive of Schlumberger, the oil field services giant.

Repairing pipelines, rebuilding terminals, and upgrading all the other infrastructure needed to get the oil to the market should be worth billions to the likes of Halliburton, Schlumberger and Bechtel.

(Sources: New York Times, Associated Press)

Azzaman reports that Russian energy giant Lukoil is discussing with local officials in Basra the details of implementing its contract to develop the West Qurna-2 oil field.

Governor Shaltah Aboud is reported to have promised the Russians “to engage in full cooperation and do his best to remove all obstacles.”

“We have discussed with Russia’s Lukoil and its partner Norway’s StatoilHydro, which have won the contract to develop the giant field of West Qurna-2, ways to solve the problems they might face,” Aboud said.

One important issue is employment – Aboud wants to see Lukoil and StatoilHydro employing as many Iraqis as possible.

“Lukoil expressed readiness to accommodate (certain) numbers of Iraqis and work for their career development,” the governor said. “We are planning more meetings with Lukoil and StatoilHydro on the nature of the services they intend to offer the province’s population.”

The Iraqi government ratified the agreement last month; it will last 20 years with a possible extension of five years. Lukoil has a 56.25% share, StatoilHydro 18.75%, and Iraq’s North Oil Company 25%.

The Qurna oilfield, just 65 kilometers from the port of Basra, has proven reserves of around 13 billion barrels. Under the deal the firms are to substantially raise the field’s output to 1.8 million barrels a day.

Production is expected to start by the end of 2011 and will involve drilling more than 500 wells, but it will take several more years to hit the 1.8 million bpd target. A meeting also took place on Friday between the consortium and the Iraqi Ports Company, to discuss methods of getting the oil to Basra port.

Iraq has the world’s third largest oil reserves, behind Saudi Arabia and Iran, with an estimated 115 billion barrels of proven reserves.

(Sources: Azzaman, Oil & Gas Financial Journal, Aswat Al Iraq)

Iraq's oil minister Hussain al-Shahristani just made it clear at a press conference that Iraq is gunning to knock Saudi Arabia out of the top slot for oil production.

Markets won't to wait too long for this to happen either, and OPEC better not try to stop them:

Hellenic Shipping News: “We can’t find a reason to prevent Iraqi production becoming higher than any other OPEC state or even states outside OPEC. We expect that to happen in the next six to seven years with co-ordination and agreement with other OPEC producers,” he said. Iraq has signed a series of oilfield development deals with global oil firms – which bid on prime fields at two energy auctions last year – in a nation with the world’s third largest crude reserves, emerging from years of conflict and sanctions.

Unlike OPEC’s 11 other members, Baghdad is not subject to the output targets the group uses to set supply levels. OPEC exempted Iraq in the 1990s, when it was under sanctions. “Iraq has been deprived of having a fair export level over the last years, during which we were not able to produce or export oil while other states got benefit from this and were able to export at higher levels,” Shahristani told reporters.

“Opec should put into consideration Iraq’s need for oil revenues to rebuild its economy and country. Iraq has a definite need for these revenues.”

Iraq signed final contracts with Angolan state oil company Sonangol on Tuesday to develop the Qayara and Najmah oilfields.

Qayara has reserves of some 800 million barrels and Najmah 900 million. Both are in the violent Nineveh province in Iraq's north, where Sunni Islamist insurgents like al Qaeda remain active almost seven years after the U.S. invasion.

The deals were awarded in Iraq's second bidding round for oil contracts, held last month in Baghdad.

The Sonangol deals are two of a series that Iraq has started to sign which could vault its oil output capacity to 12 million barrels per day in seven years, a level rivalling top producer Saudi Arabia, compared with 2.5 million bpd now.

That would give the country the billions of dollars it needs to rebuild after decades of war and sanctions, and help it to emerge from the violence triggered by the 2003 invasion.

Sonangol clinched the deals with an offer of a $6 a barrel remuneration fee and a plateau production target of 110,000 barrels per day (bpd) for Najmah, and a fee of $5 a barrel and output target of 120,000 bpd for Qayara.

The fees are among the highest paid to any of the oil firms that won one of the 20-year oilfield service contracts tendered last year, reflecting the risks and relatively low quality of oil at the two sites.

The firm had initially proposed a remuneration fee of $8.50 a barrel for Najmah and $12.50 for Qayara, but later agreed to the Oil Ministry's lower offer

Sonangol has said it will invest $2 billion in Qayara, and that several firms have shown an interest in forging joint exploration partnerships with it.

Angola emerged from an almost three-decade long civil war in 2002 to rival Nigeria as Africa's top oil producer.

US super major ExxonMobil and its Anglo-Dutch peer Shell, today signed a final contract for the development of Iraq's 8.7-billion-barrel West Qurna Phase One oilfield

The partners, who will work with an Iraqi state-run oil company, won the right to develop the super giant field in negotiations with the Oil Ministry last year following Iraq's June oilfield auction, the first since the 2003 US invasion, a Reuters report said.

ExxonMobil's regional vice president Richard Vierbuchen and Shell Gas & Power vice president Mounir Bouaziz signed the deal in the presence of Iraqi Oil Minister Hussain Shahristani in Baghdad.

The companies plan to increase output from the oilfield to 2.325 million barrels per day from its current level of 279,000 bpd.

It is one of several deals following two oil contract auctions last year that have the potential to take Iraqi capacity to 12 million bpd - rivaling top producers Saudi Arabia and Russia - from 2.5 million bpd now.

It may be the start of the biggest oil job in the world. Each day, 20 workers from BP and China National Petroleum Corp. (CNPC) buckle down to the task of prepping the Rumaila oil field in southern Iraq for rapid development. In industry lingo, Rumaila is a "supergiant"—a 50-mile-long deposit of sweet crude with estimated reserves of 16 billion barrels, whose output may someday rank second only to Saudi Arabia's vast Ghawar field. The Saudis, though, have carefully managed their oil assets for decades. In contrast, Rumaila, a lightly inhabited expanse of date groves and Bedouin encampments, has not had a proper upgrade since the 1970s. The Iraqis contracted with BP and CNPC last year (BP) to juice Rumaila's production from 1.06 million barrels a day to 2.85 million, all in seven years. No one has ever tried such a ramp-up at a field as huge as this one. Putting Rumaila back in full working order will take tens of thousands of workers, 1,000 new wells, and billions in investment.

BP is the largest partner in the venture, but only by a dipstick: It has a 38% stake, while the Chinese hold 37% (the rest is owned by an Iraqi company). The media focus has been on BP's decision to take up the Rumaila challenge for a low fee of only $2 for every barrel the venture produces. But the more important story could be China's role. "CNPC's involvement brings together the country with the most rapid growth in energy demand in history with the country that plans the greatest buildup of production capacity ever," says Alex Munton, an Iraq specialist at Edinburgh-based oil consultants Wood Mackenzie.

China has moved fast. In a little over a year, CNPC, China's main oil producer with revenues of more than $188 billion and a 1.5 million-worker payroll, has won large stakes in three Iraqi oil fields. The total production target for those fields is around 3.5 million barrels per day—close to China's domestic output.

In two of the ventures, China is the controlling partner. Over two decades or so, CNPC may spend some $20 billion on the fields, the most of any oil company in Iraq since Saddam Hussein fell. For China's oil industry, "Iraq is a game-changer," says Wenrang Jiang, an authority on the country's energy thirst who teaches at Canada's University of Alberta.
TIED TO THE LEADERSHIP

Carved out of China's oil ministry in 1988, state-controlled CNPC managed the oil and gas fields of north China before expanding to Peru, Sudan (where it has been criticized for working with the regime), and Venezuela. It has a reputation as insular and bureaucratic, especially compared with China National Offshore Oil Corp. CNOOC, founded in 1982 with a mandate to drill in offshore locales with foreign companies, has executives who speak English as a matter of course and travel widely. "CNPC always viewed itself as a direct successor of the oil ministry," says Victor GAO, CNOOC's former general counsel and currently a private equity investor. "So it's more orthodox; it considers itself a government entity."

Jiang Jiemin, 54, who has run CNPC since 2004, is a man of few words. In Iraq, though, Jiang and his team played their hand well. Months before the Rumaila deal, CNPC got the rights to develop Ahdab, a medium-sized field. That means CNPC is one of a few outside oil companies with operating experience in Iraq. Jiang has also forged a good relationship with BP CEO Tony Hayward, who sees CNPC as the gateway to China. BP "wants to have them as a partner wherever they can," says Bob Maguire, head of oil and gas investment banking at Perella Weinberg Partners in London. "They are the largest NOC [national oil company] in Hayward's mind." CNPC declined to comment for this story.

BP and CNPC bring different strengths. BP has been studying the field by agreement with the Iraqis and already has worked out a development plan. And the Chinese? Beijing-based CNPC has access to affordable credit from China Development Bank and China Exim Bank. In an industry where supplies are tight, "they have spare capacity, rigs, and other equipment available that you could mobilize and put on the ground," says Andy McAuslan, BP's Iraq commercial director. (He adds that contracts for oil services in Iraq will be awarded competitively.) Fast deployment in Iraq is the key. According to their contract, BP and CNPC won't start getting paid until they have boosted production 10%. The Chinese know how to manage thousands of workers in distant, often hostile locales such as Central Asia and the Sudan. It also knows how to develop onshore fields: In China, it pumps the equivalent of 3.3 million barrels a day.

Besides the role in drilling wells and pumping oil, Chinese companies are good candidates to build the oil terminals, refineries, and pipelines Iraq will need to get its crude to global markets.

China is the low-cost provider in the industry. "As a general rule of thumb, Chinese management and labor costs are about one-third if not one-fourth of Western costs," says GAO, the ex-CNOOC executive.

Nine colleges and universities focus exclusively on oil studies in China: "The Chinese treat the industry as a life-and-death issue," says GAO. The Western oil industry's workforce is aging rapidly. "Analysts always mention that the oil majors face personnel shortages," says Xu Xiaojie, an independent oil and gas adviser in Beijing. "In China we have a surplus."

The Iraq ventures still face formidable obstacles—sectarian strife, corruption, and government instability, among them. The Iraqis also may not welcome large numbers of Chinese to their fields. "Yes, bringing in low-cost engineers is China's advantage," says Trevor Houser, a partner at the Rhodium Group, a New York-based research firm that studies India and China. "But that has created tensions [elsewhere]. Look at Zambia, where an election was pretty much fought over China."

China and CNPC, though, have no choice. The Chinese are hungry for crude and for a position among the worlds top oil companies. Iraq may prove the best place to satisfy both desires.

The Ministry of Finance in Iraq signed a bilateral agreement with Denmark to write- off the debt owed by Iraq by one 100%, and affirmed that States which will reduce debts on Iraq would have a priority in the implementation of investment projects in it.

The Finance Minister Bayan Jabr said in a statement issued by the ministry that Iraq was able to reduce 120 $ billion of the debt owed in its trust, amounting of to 140 billion dollars, adding that this reduction comes as a continuation of the process of debt cancellation promised by the creditor nations of Iraq.

Al-Zubaidi , said the signing of the agreement with Denmark will reduce the remaining debt amounting about 20% after he signed with them earlier the convention for reduction of 80% of the debt of 55 $ million, noting that Iraq has begun negotiating States extinguished 80 % of the debt to extinguish the remaining amount . The minister pointed out that Iraq will give priority to investment companies of the States which will reduce debts on Iraq, 100 % for work in Iraq, noting in this regard that Iraq had managed to write- off debt for some foreign countries like the United States and Cyprus and Malta and the United Arab Emirates, and reduced its debt by 80% for a number of countries, including Russia, Germany and France. "

Al-Zubaidi pointed out that debts owed by Iraq to Saudi Arabia and Kuwait, which he refused to reveal their size has not been resolved, stressing that Iraq is seeking to sign a number of agreements to reduce debts, with some Arab countries like Egypt and Morocco. For his part, said Danish Ambassador Michael winder, "Denmark is continuing to support Iraq in all fields of economic, agricultural and industrial as well as support for human rights situation and provide support to Iraqi universities, pointing out that Danish companies looking out for work in Iraq as soon as possible.

The head of Anbar's provincial council on Saturday said that it has received a budget of nearly $1.153 U.S. dollars for next year, adding that it is not enough to finance projects in the province.

"The council will inform the ministries of finance and planning of its objection to the lack of financial allocations," Jassem al-Halbousy told Aswat al-Iraq news agency.

Halbousy called on concerned authorities to keep the area factor, not only the population of Anbar, in mind when considering a budget for the province.

Ramadi, the capital city of Anbar province, lies 110 km west of Baghdad.

Anbar is the largest province in Iraq geographically. Encompassing much of the country's western territory, it shares borders with Syria, Jordan and Saudi Arabia. Anbar is overwhelmingly Sunni Muslim Arab. Anbar's main cities are Falluja, the capital Ramadi, Haditha, Hit, Aana and Rutba.

The name of the province translates "granaries," as this region was the primary entrepôt on the western borders of Lakhmid Kingdom.

The province was known as Dulaim until 1962 when it was changed to Ramadi. In 1976 it was renamed Anbar.