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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)

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.