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The United Nations Development Programme (UNDP) has announced that it is boosting its partnership with the Government of Iraq and the Iraqi people.

"We have tripled the number of our staff based in Iraq to 44 with further increases planned in the next year. Each and every one of them is committed to improving the lives of Iraqis through an enhanced partnership with the Government of Iraq and its people" said Ms. Amat Al Alim Alsoswa, Director of the Regional Bureau for Arab States of UNDP, during a meeting with the press in Baghdad.

The announcement to increase UNDP’s staff presence in Baghdad comes as UNDP is getting ready to undertake the first annual review jointly with the Government on its four-year country programme in Iraq which focusses on strengthening democratic governance, combating poverty, empowering women and youth, promoting environmental protection and supporting the revitalisation of Iraq's economy.

UNDP has worked to support the Government and people of Iraq for more than 35 years now. Since 2003, it has actively supported the transition towards reconciliation, peace and stability in the areas of democratic governance, poverty reduction, restoration of basic services such as water and electricity, crisis prevention and recovery, energy and environment, and the Global Fund to Fight HIV/AIDS, TB and Malaria.

Most recently, UNDP contributed to strengthening the democratic process in Iraq primarily through the 2010 national elections. With continued work on anti-corruption, rule of law, justice, human rights, public sector reform, disaster risk reduction, environment and climate change.

“I am proud of the progress Iraq has achieved in overcoming years of conflict and violence and getting onto the right development track." said Alsoswa.

(Source: UNDP)

Azzaman news agency reports that Iraq's Ministry of Electricity has struck a deal with Siemens for the construction of three electrical transformer stations.

The deal, said to be worth $76 million, is the latest in a series of contracts by the ministry to upgrade the national grid and increase the supply of electricity, which is currently less than half the total demand.

The three stations will all be in southern Iraq, and will take two years to complete.

Iraq imports electricity from both Iran and Turkey at a cost of hundreds of millions of dollars per year.

(Source: Azzaman)

AFP reports that the Iraqi cabinet has approved a $540 million contract for French firm Alstom to build a 182.4 megawatt gas power plant in central Iraq.

Ggovernment spokesman Ali al-Dabbagh said in a statement that the plant, which should be up and running 18 months after the signature of the contract, is to be built in Mansuriya in the Diyala province, about 50 kilometres (30 miles) northeast of the capital.

The cabinet chose Alstom over the Iranian company company Mabna "because the offer was more attractive and less expensive," he said.

Alstom has already been selected to refurbish a gas power plant in the central province of Najaf.

(Source: AFP)

The past week has seen two of the biggest oil stories in recent times in Iraq -- the approval by the Iraqi cabinet of the $17 billion project with Shell and Mitsubishi to capture gas from Iraq's main southern oilfields, and the confirmation that the KRG has signed an exploration agreement with the giant ExxonMobil.

The Shell contract has been very broadly welcomed, and it brings us closer to the day when Iraqi homes and businesses will have a reliable supply of electricity, powered by the gas that is currently flared off into the atmosphere.

Exxon's project, on the other hand, is more politically sensitive, and the full implications of it remain to seen.

But it is very clear that significant deals such as these in the energy sector will be required to push Iraq forward towards greater prosperity and stability. And as the UK's Ambassador Michael Aron said this week:

"A combination of stability, economic development and the creation of a competitive private sector offer huge opportunities for international and Iraqi business. And it puts Iraq right back at the centre of the global economy it left 20 years ago ...

"Ultimately, business will go where conditions are best."

Few would argue with that.

Will your business be part of the evolving Iraqi success story? If so, Upper Quartile and AAIB can help you. For more information please contact Gavin Jones or Adrian Shaw.

Reuters reports that Iraq's cabinet approved a $17 billion deal with Royal Dutch Shell and Mitsubishi on Tuesday to capture gas that is now being flared off in the oilfields around the southern oil hub of Basra.

The 25-year venture is expected to help Iraq make use of more than 700 million cubic feet per day of gas that is being burnt off at Rumaila, Zubair and West Qurna, government spokesman Ali al-Dabbagh said. "The value of the contract is $17 billion for 25 years," he added.

The deal establishes a new company called the Basra Gas Company, a joint venture of the South Gas Company and the consortium of Shell and Mitsubishi, and could open the door to the export of liquefied gas. The contract is one of the largest signed by Iraq.

Capturing flared gas is considered vital to ramping up power production in Iraq, where electricity demand is around double the supply.

Under the terms of the deal, which Iraq and the companies initialled in July, the government will hold 51 percent of the joint venture, with Shell at 44 percent, and Mitsubishi 5 percent.

Iraq loses an estimated 1 billion cubic feet per day of gas, mostly from southern fields. The Shell project may eventually handle up to 2 billion cubic feet of gas per day.

Iraqi officials have said the project could include building an LNG export facility with a maximum capacity of 600 million cubic feet of gas per day, so long as Iraq's own gas needs are satisfied first.

A summary of the official agreement obtained by Reuters after the initial signing in July lists a $4.4 billion LNG export unit, in addition to the $12.8 billion estimated cost of rehabilitating existing gas facilities and building new ones, but it does not say when the LNG plant might be built.

The Shell-Mitsubishi partnership expects an internal rate of return on the project of 15 percent on an initial investment of $6.98 billion, while SGC plans to put in $3.7 billion of public funds initially and fund the rest through gas sales.

(Sources: Reuters, Bloomberg, Dow Jones)

The Kurdistan-Iraq Oil and Gas Conference in Erbil heard confirmation that the Kurdistan Regional Government has signed an oil exploration contract with ExxonMobil, the world's largest oil company.

Ashti Hawrami, the minister for natural resources, told the conference that the KRG had signed a contract with ExxonMobil and that the federal government was kept informed throughout the negotiations.

He said, "This will make a dynamic change in the region and will lead to mergers and acquisitions." He said that Kurdistan had initially signed contracts with "small and beautiful" companies and was now working with "the giant and magnificent".

In answer to questions from the audience, Dr Hawrami said the ExxonMobil contract was signed on October 18 and involves six exploration areas. "This agreement is good news not just for us but for all Iraq. This is also good news for the industry. It adds more value in terms of expertise and investment," he said.

Dr Hawrami was speaking at the two-day conference which attracted hundreds of industry executives from around the world, including representatives from major oil companies not currently working in the region.

The conference was opened by Prime Minister Barham Salih on Sunday and was attended by Kamal Kirkuki, the Speaker of the Kurdistan Parliament, Selahattin Cimen, Turkey's deputy energy minister, and Britain's ambassador to Iraq Michael Aron.

The Iraqi Ports Administration announced today that a power generation vessel arrived at Khor al-Zubair port last week.

Aswat al-Iraq reports that the Turkish vessel will supply the national electrical grid with 110 megawatts of power.

This is the third electricity generation vessel to arrive in Basra province.

Two vessels are already working in Umm Qasr port supplying the network with 200 megawatts.

(Source: Aswat al-Iraq)

By John Filson, for the Common Ground News Service (CGNews). Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

US President Barack Obama recently confirmed that he will bring US troops home from Iraq by the end of the year and, at the same time, reiterated that the United States will remain committed to an Iraq that is “stable, secure and self-reliant”, with institutions that are “just, representative and accountable.”

The future of Iraq, however, hinges not on the status of US troops or its deep oil wells but on whether Iraqis can muster a sense of hope in their collective future.

Iraqis waiting for hours in line for gasoline or fanning away flies until the electricity comes back on are understandably sceptical of government promises. They bear the scars of their own government’s dismal history. They also believe the United States has its own interests in mind, and does not have unlimited political will to slough through decades of messy, expensive problem solving.

Many Iraqis believe life has not improved since 2003, the start of the Iraq War that led to the toppling of Saddam Hussein’s regime. Unemployment, poor infrastructure and simmering social divides are daily tensions that have prevented families from relaxing. There is no safe traffic system, no clean legal system, no inclusive political system and no fair economic system.

Iraq’s National Reconciliation Minister Amir al-Khuzaei talks to NIQASH about why his job may be redundant once the US leaves, how armed militias will join the political process and the Libyan connection with Saddam Hussein’s followers.

Any opinions expressed are those of the author and interviewee, and do not necessarily reflect the views of Iraq Business News.

Once US troops withdraw there may no longer be any need for the National Reconciliation Committee, argues Amir al-Khuzaei, the government minister responsible for reconciling various ethnic, sectarian and political divisions in Iraq. Because then armed groups inside Iraq who say expelling the US is the reason for their existence, will no longer have any need to resist, he notes.

Al-Khuzaei, who is a member of current Iraqi Prime Minister Nouri al-Maliki’s political party, also talked to NIQASH about whether the most recent round of removals of former Baath party officials, who were previously loyal to deposed Iraqi leader Saddam Hussein, was due to information from the new leaders of Libya. He explains how well conciliatory dialogue was going with those Iraqis still demonstrating against the current government and whether former followers of Saddam Hussein are plotting a new round of insurgence against the rest of the country.

NIQASH: There are those who raise doubts about the reconciliation process led by the current government. What exactly are you doing and what are your objectives?

Al-Khuzaei: After the fall of Saddam Hussein’s regime, everyone knows that the majority of Iraqis joined in the political process. They all approved of a permanent Constitution, one that guaranteed freedom, democracy and a peaceful transfer of power. However there were some parts of Iraqi society who had doubts about these changes in the country. The aim of the reconciliation process is to engage with these factions and to try to get their support for the political process.

NIQASH: Which parties or factions are you trying to get involved in the reconciliation process?

Al-Khuzaei: Everyone - with the exception of those who excluded themselves, such as al-Qaeda, or those who were excluded by the new Iraqi Constitution, such as the Baath party [Saddam Hussein’s former political party].

The Provincial Council of Thi Qar [Dhi Qar] has announced that the ministry of electricity has approved the award of a contract to build a 500-megawatt power station to a local company.

Aswat al-Iraq reports that the council expects the work to start this month, after verifying the company's records and abilities.

The contract had previously been withdrawn after the resignation of ex-electricity minister Raad Shalal, as Deputy Premier for Energy Affairs Hussein Shahristani cancelled all contracts with Iraqi companies.

There are two power generation stations in Thi Qar. The first was built by a Russian company in 1978 and has a capacity of 800 megawatts, and the second is the gas powered station with 40 megawatt capacity.

(Source: Aswat al-Iraq)