Custom Search

By John Lee.

Prime Minister Nuri al-Maliki has inaugurated the new Hilla gas-powered electricity station in Babil province.

Ministry of Electricity spokesman Musab Al-Mudarris said that the station's total power is 250 MW, using two 125-MW GE generators.

The project was carried out by the Al-Hurra International company at a cost of $84 million, under the supervision of the Ministry of Electricity.

The opening ceremony was also attended by Deputy Prime Minister for Energy Affairs Hussain al-Shahristani and Electricity Minister Karim Aftan [Karrem Aftan al-Jumali].

The following is the text of a speech to be delivered this morning by former British Prime Minister Tony Blair, who is addressing the Iraq Britain Business Council’s 4th London Conference on the theme: "Iraq: The Road To Success?"

This conference I know is one of several taking place that highlight the economic opportunity Iraq presents for the future, for Britain but also for investors from all over the world. Today, in particular, is a follow on from the IBBC Baghdad conference at the end of September.

The challenges that Iraq still faces are obvious: continuing security problems of terrorism, especially around Baghdad; services and infrastructure still far below what they can and should be; and bureaucracy and corruption in Iraq as elsewhere, a major source of discontent, And of course the political tensions remain high and often lead to paralysis when the country urgently needs movement. There is also the turmoil in the region not least in Syria. So the difficulties are manifest.

But this series of conferences is happening for a reason. There has also been progress. It is important not to exaggerate it; equally important not to ignore it. The economy of 2012 in Iraq is several times the size of ten years ago. Growth this year will be 9% and Iraq is set to be one of the fastest growing economies in the world over the next decade. A Government worker is paid now, on average around 4 times what he was ten years ago in real terms. Oil revenue now stands at $100 billion per annum and is set to treble by 2020. Last month Iraq surpassed Iran as exporter of oil. Iraq’s Central Bank now has the biggest reserves in its history. Baghdad stock exchange – with over 80 companies listed – will be joined by Basrah in due course. Basrah itself as its Governor recently remarked, is set for major change over the next few years. Three new satellite towns of 100,000 homes each; 60 projects for electricity under way to treble power production; and a doubling of the schools and universities. Contracts are also being drawn up for tenders for new roads, bridges and railways. The port and airport are on their feet and growing in business and trade. This is partly funded through the oil revenue now retained by Basra for its own use.

The Iraqi Council of Ministers has approved a draft budget of 138 trillion dinars ($115 billion) for 2013, an 18 percent increase on this year’s spending programme.

The figures are based on expected average oil prices of $90 per barrel, and exports of 2.9 million barrels of oil per day, of which 250 thousand bpd are planned from the Kurdistan region, Ali Al Dabbagh said in a statement.

Forty percent of the proposed budget is allocated for capital investments, with the rest set for the payment of salaries and other government operations.

The main priorities of the spending programme are electricity and security, which account for 21 percent and 14 percent of the proposed budget respectively.

(Sources: NINA, AFP, Dow Jones)

Deputy Premier for Energy Affairs Hussein al-Shahristani (pictured) has opened a new 250-MW, gas-fired power station in Karbala.

Sharistani said that the government is working on electricity generating stations in Babel, Karbala and Anbar provinces, while another 250-MW station will be opened in Hilla in the coming days.

Iraq recently announced that it also plans to invest up to $1.6 billion on renewable energy over the next three years.

(Source: Aswat al-Iraq)

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.