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Bloomberg reports that the United Transformers Electric Company of Saudi Arabia, and the Turkish unit of Siemens AG, have signed contracts to supply transformers to Iraq.

United Transformers (UTEC) will provide 1,250 units with a total capacity of 400 kilovolts for $11.6 million, while Siemens Turkey will provide another 1,250 with a total capacity of 31.5 kilovolts for $1.7 million, Electricity Ministry spokesman Masaab Serri told reporters on Wednesday in Baghdad.

(Source: Bloomberg)

U.S. troops have begun the first wave of their final withdrawal from Iraq, and are on schedule for a complete pull-out by the end of the year.

It marks the end of a long military engagement in Iraq, at one time involving 176,000 military personnel in the country.

They leave behind them a very different country, and as they are moving out, even more investment is moving in.

To help you keep up with the changes, we've just added two new documents to our reports service, covering the key areas of energy exploration and electricity generation:

• Oil and Gas Exploration and Production Outlook in Iraq to 2015; and,
• Iraq Power Market Outlook to 2030.

And remember, if you're considering taking that step into the Iraqi market, Upper Quartile and AAIB are the perfect team to help you manage the risks and grasp the opportunities. For more information please contact Gavin Jones or Adrian Shaw.

Iraq's Electricity Ministry has criticized the Iranian company Sanir [Sunir] for its alleged failure to complete the construction of the Sadr gas power plant in Baghdad, reports AKnews.

Ministry spokesman Musab al-Mudarres said that the complex still does not have distribution centers, control centers, management chambers and housing facilities.

"The Electricity Ministry did not fail to pay Sanir, so the company is responsible for the completion of the Sadr gas station," Mudarres said.

According to the Electricity Ministry, it allegedly opened the Sadr gas plant last April with an expected capacity of 320 MW and for $220 million USD (258 billion IQD). Somehow, Sanir still had to complete the plant after its opening.

(Source: AKnews)

In our ongoing efforts to brings you all the best information on doing business in Iraq, we continue to add to the list of reports available from our reports service.

This week we've added two reports on energy exploration and electricity generation:

• Oil and Gas Exploration and Production Outlook in Iraq to 2015, an essential source for industry data and information relating to the exploration and production industry in Iraq. It provides asset level information related to active and planned oil and gas fields and exploration blocks in Iraq. The profiles of major companies operating in the upstream industry in Iraq are included in the report.
• Iraq Power Market Outlook to 2030: The report includes a detailed analysis of the current investment climate in the country’s power sector and over the next decade across 6 broad parameters. Each parameter has a weight assigned, and a weighted average score is calculated to obtain the final country ranking in that region. The study also maps the relative ranking of the key countries in the region according to the current investment opportunities in the country and that by 2020.

We'd welcome your recommendations for other reports that you'd like us to carry, and any other suggestions that you may have to improve Iraq Business News - please let us know in the comments section below.

In an interview with Bloomberg, the new CEO of the Abu Dhabi National Energy Company (TAQA) said the state-run company looking at more opportunities in Iraq, and aims to exploit the synergy in its oil, gas and power businesses.

Last week the company agreed to invest $46 million in WesternZagros Resources, acquiring a 19.9 percent stake in the Calgary-based explorer, which has permits to seek deposits in two blocks in Iraqi Kurdistan.

Carl Sheldon, 53, said:

“We could do power there too; we’re looking at an opportunity there now. We’d like to see power businesses next to the oil and gas businesses, and oil and gas businesses next to the power businesses. As we begin to focus much more on the Middle East and Africa, our ability to deliver power and water solutions into those markets is powerful.”

Founded in 2005, Taqa inherited control of several United Arab Emirates power and water plants from its majority owner Abu Dhabi Water and Electricity Authority and expanded into oil and gas.

Taqa’s profit more than doubled to 435 million dirhams ($118 million) in the second quarter as it benefited from a 47 percent advance in Brent crude prices to an average of $116.99 a barrel. The company will release third-quarter results on Nov. 15.

Sheldon expects to see an increasing presence of regional banks funding Taqa as international banks become more capital constrained and devote more of their resources to their home markets. The company owes about $10 billion in public bonds and another $10 billion in bank debt, he said.

Shares in TAQA have lost 21 percent so far this year.

“You may see things like WesternZagros, small, long-term investments for the future in that sort of $50 million scale,” said Sheldon. “You won’t see a big step-out acquisition. But we don’t rule it out. As we develop our portfolio, you’re always asking yourself, ‘should I build it, or buy it’?”

(Source: Bloomberg)

Five unspecified "directors" are suspected of corruption in electricity contracts, the parliamentary Investigative Commission said today.

According to the report from AKnews, the Committee did not say if these "directors" are employed by the government, nor did it specify what exactly the "directors" are directing, but committee member Uday Awwad said that the "directors" received payments from foreign companies.

It is unclear if these were the same companies that had been suspected to be involved in the cases of corruption worth $1.7 billion USD (2 trillion IQD) that led to the resignation of Electricity Minister Raad Shallal in August.

Shallal was replaced as acting electricity minister by Deputy Prime Minister Hussein al-Shahristani, who was also suspected of corruption by the Investigative Committee.

Last week, the Iraqi parliament approved Abdul Karim Aftan al-Jumaili from Iraqiya List as new Electricity Minister.

Uday Awwad said that the final report of the Committee's investigation will be presented in the parliament's next legislative term, after the parliamentary recess ends in December.

(Source: AKnews)

The following article was published by Reidar Visser, an historian of Iraq educated at the University of Oxford and currently based at the Norwegian Institute of International Affairs. It is reproduced here with the author’s permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Perhaps the most significant development in yesterday’s parliament session came towards the end: Parliament will be on holiday until 20 November.

That’s right: Despite continuing political stalemate, Iraqi lawmakers will not meet for another 6 weeks or so. Ostensibly, the reason for the long holiday is the fact that it coincides with the pilgrimage to Mecca in early November. It is expected that a large number of deputies will be out of the country.

One cannot help wonder, though, whether political expediency may have played a role in the decision. Asma al-Musawi, a Sadrist, reportedly said a request to the federal supreme court for extending the term had been rejected on constitutional grounds! That statement should arouse some serious incredulity since the constitution only stipulates that there shall be two parliamentary terms annually of altogether 8 months and that parliament can also extend its work for an additional 30 days if 50 members or the parliamentary speaker request it. As usual, there is a delay in the publication of the court ruling – if there actually is one, that is.

More likely, the will to call for such an extension was missing because the long holiday will fit the agenda of the biggest political parties perfectly. For Prime Minister Nuri al-Maliki and his State of Law coalition it makes sense because they can continue to rule Iraq as a de facto minority government. For the secular Iraqiyya, the long holiday probably makes sense as well, not least since what they are able to do in terms of effective parliamentary opposition is limited anyway. Hence, they may well prefer to remain muttering on the sidelines.

This stalemate, or variations of it, is likely to continue until there is some kind of rapprochement between the two main factions. In this respect, one interesting development yesterday was the approval of a new electricity minister from the Karbuli bloc within Iraqiyya. It means that in terms of ministers, the factions of Iraqiyya outside the direct control of Ayyad Allawi at least technically speaking remain more integrated in the Maliki government than Allawi’s own Wifaq movement. Potentially, a future decision on the security ministries and the defence portfolio in particular might have a further impact on that relationship.

Still, with the upcoming holiday recess we are fast approaching the one-year anniversary of the formation of the second Maliki government and still have no ministers of interior or defence approved by parliament. Maybe that is exactly the situation Maliki wants to have.

Iraq named a new electricity minister on Monday, after the previous minister Raad Shallal [Shalal, Shallal al-Ani] stepped down under government pressure in August following allegations of fraud in two electricity contracts.

"Parliament voted by majority to nominate Abdulkarim Aftan [Abdul Karim Aftan al-Jumaili] as electricity minister," Faiza al-Obeidi, an MP with the Iraqiya list that proposed him for the position, said.

"The majority of the political blocs welcomed the fact that Aftan took the position, which gives hope that he will succeed at managing the ministry."

Cabinet general secretary Ali al-Alaak told AFP on Monday that Aftan had submitted a plan to address Iraq's chronic power shortages to Prime Minister Nouri al-Maliki and Hussein al-Shahristani, the deputy prime minister charged with energy issues.

(Sources: AFP, AKnews)

The following report was published on 26th September 2011 by the International Crisis Group. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

To download the full report, please click here.

EXECUTIVE SUMMARY AND RECOMMENDATIONS

After years of uncertainty, conflict and instability, the Iraqi state appears to be consolidating by reducing violence sufficiently to allow for a semblance of normalcy. Yet in the meantime, it has allowed corruption to become entrenched and spread throughout its institutions. This, in turn, has contributed to a severe decay in public services. Prime Minister Nouri al-Maliki’s government has exacerbated the problem by interfering in anti-corruption cases, manipulating investigations for political advantage and intimidating critics to prevent a replication of the type of popular movements that already have brought down three regimes in the region. The government’s credibility in the fight against corruption has eroded as a result, and this, together with troubling authoritarian tendencies, is giving ammunition to the prime minister’s critics. To bolster its faltering legitimacy, Maliki’s government will have to launch a vigorous anti-corruption campaign, improve service delivery and create checks and balances in the state system.

As violence spread following the 2003 U.S. invasion, the state suffered in equal measure to the general population. In an environment of escalating kidnappings, explosions and assassinations, public services were thoroughly devastated. In the wake of the dramatic February 2006 Samarra bombing, entire ministries were empty, as officials dared not travel to work. Longstanding projects were abandoned overnight. Judges and parliamentarians found they had become targets. Oversight agencies, which should have been less exposed to risk because of their lack of direct contact with the general population, were forced to roll back their operations, leaving state institutions without effective safeguards against corruption or abuse. As a result, state output declined dramatically for a number of years, even as the annual budget steadily increased due to elevated oil prices. The state’s paralysis contributed to the proliferation of criminal elements and vested interests throughout the bureaucracy.

Last week Erbil hosted for the fourth time the Project Iraq construction trade exhibition, together with the Elenex Iraq energy and electricity show. This year's construction fair was the largest so far, attracting exhibitors from 20 countries and thousands of visitors.

Project Iraq 2011, the 4th International Trade Exhibition for Construction & Environmental Technology for Iraq, was held concurrently with Elenex Iraq 2011, the first exhibition entirely dedicated to energy, taking place at the Erbil International Fairground from 19-22 September.

At the opening of the exhibitions, the Kurdistan Regional Government (KRG) ministers for Housing and Reconstruction and for Electricity welcomed all the participants. Minister Kamaran Ahmed Abdullah and Minister Yasin Sheikh Abu Bakir Mawati said that they were delighted that the trade shows are betting bigger every year, attracting visitors from all over Iraq.

The speakers at a press conference to launch the trade show included Engineer Nahro A. Assadi, deputy Minister, Ministry of construction & Housing, Mr. Hama Amen Hawramy, Advisor of the Minister of Electricity, Mr. Aziz Abdo, Director General of Trading in the Ministry of Trade and Industry , Mr. Fady Jreissati, representing IFP Iraq, The conference was attended by a number of government representatives, diplomats and business leaders, and enjoyed strong media coverage.

Mr. Jreissati gave an overview of the exhibitions and their importance, praising government efforts towards economic development and accelerated growth all over Iraq and in the Kurdistan region particularly. He expressed his gratitude to the representatives of the Kurdistan Regional Government, in particular the Ministries of Electricity and Construction and Housing, for their support to the company's events, and commended the management of Erbil International Fairground, proudly underlining its cooperation with IFP Iraq.