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According to a report from Reuters, Turkish clothing and beer are hot sellers in the streets of Erbil, the capital of Iraq's Kurdish north, while in the South, Iranian cars roam the streets of Basra and Iranian pilgrims flock to Iraq's holy sites.

Sunni Ankara and Shi'ite Tehran, old rivals turned friends, are vying for post-war economic clout in neighbouring Iraq to capitalise on an expected oil boom, and have been flexing their muscles in Baghdad's government formation talks, diplomats and politicians said.

Both Iran and Turkey are using Iraq to increase their respective economic and political power.

Turkish companies are top investors in hotels, real estate, industry and energy in Iraq's semi-autonomous northern Kurdish region, and increasingly in the Shi'ite south where Iranian influence had been almost unchallenged, says Reuters.

Iran is Iraq's main trading partner and has been one of the largest investors in its construction and industrial sectors since the fall of Sunni dictator Saddam Hussein.

"It is clear that they are competing, specifically in Turkey's effort to dam in Iranian influence. Iran has undoubtedly gained a significant role in Iraq since 2003, and from about 2007 on, Turkey has started to push back," said Joost Hiltermann of the International Crisis Group.

"They are holding each other in balance."

Iraq's State Oil Marketing Company (SOMO) has issued a tender for 2,600 tonnes of gas-oil for the Ministry of Electricity.

Bids will be accepted until 12:00 on 20 December, 2010, Baghdad time.

Please click here to download the English tender document ...

... and here to download the document in Arabic.

Najaf's provincial council confirmed that it has been given final approval to get a loan of ID 47 Billion [$40m] for the province to buy new electricity generators to be run by Najaf's citizens.

A source in the province told the National Media Center that generators will be distributed to jobless citizens with guaranties to maintain their service, he added that generators will offer better service to people in the province, and good returns for operators.

(Source: National Media Center)

GE (NYSE: GE) today announced that it will provide gas turbine technology to Mass Global Investment Company, an independent power producer, to help meet northern Iraq’s growing demand for electricity. Under the agreement, GE will supply three Frame 9E gas turbines and generators for the 375-megawatt expansion of the Arbil Power Plant, located in Iraq’s Kurdistan region.

“Our mission is to support Iraq’s overall efforts to continue developing and expanding its energy infrastructure,” said Ahmad Ismail, chairman of Mass Global. “We are confident that working with a global technology leader such as GE, with its proven and reliable advanced energy technology, will contribute significantly to helping us fulfill our mission, which is in line with the Kurdistan regional government’s initiative calling for the private sector to help meet the energy requirements in this region.”

This new contract follows an announcement earlier this year that GE is providing equipment for two other projects in the same region that are part of Mass Global’s ongoing efforts to support Kurdistan and Iraq’s current and future power needs. When all of the current projects are completed, the total electricity capacity of Mass Global-developed power plants in the Kurdistan region will be increased to 2,200 megawatts.

“This latest agreement builds upon our growing relationship with Mass Global to provide innovative technology and services to help ensure that the people of northern Iraq have a reliable and secure supply of electricity,” said Joseph Anis, GE Energy’s president for the Middle East. “This agreement also reflects GE’s ongoing commitment to support Iraq in boosting its power generation and infrastructure growth.

An investment delegation from the Korean company Hyundai, specialized in establishing and equipping oil-fired power plants, visited Anbar province on Tuesday to discuss proposals for investment in the province, according to a report from AKnews.

Wissam al-Rawi, the head of the Energy Committee of Anbar Council, said that the council discussed investment with the Hyundai delegation and ways of operating oil-fuelled plants and satisfying the needs of citizens through setting up several power stations.

Khalil Ibrahim al-Awwad, the director of the electricity distribution department, said that the Korean company’s proposals to set up three large stations and link them to a central plant were discussed in detail.

"The Korean company Hyundai has a long history in building plants and generators,” he said.

Hyundai's representative, Medhat al-Hamdani, said that "the company is ready to begin working in Anbar and eliminate the electricity problem. Its mission is to quickly establish power stations that work using oil, as a result of deteriorating conditions and the lack of gas or diesel.”

Hamdani said that the new plants would satisfy the power supply needs of the province, particularly during the scorching summer months when extra electricity is needed to power air-conditioner units and water coolers.

Consumer payments were also discussed: Interest free credit installments and governmental subsidies were the two possibilities currently being examined.

(Source: AKnews)

A confidante of Prime Minister Nouri al-Maliki claims there will be a shake-up in the oil and energy portfolio when the new cabinet positions are announced.

According to Iraq Oil Report, Hussain al-Shahristani will move from his current position as Minister for Oil and Acting Minister for Electricity, into a newly-created Deputy Prime Minister role with responsibility for oil and electricity issues.

This effectively creates an additional plum vacancy to be gifted as part of the negotiations between the rival blocs, while allowing Maliki's right-hand man to retain at least some control of this key function.

The report says Maliki targets to have cabinet positions decided by 15th December.

(Source: Iraq Oil Report)

Local government in Basra province announced that a new gas-powered electricity station with a capacity of 500 MW will soon be built in Najibia region in the north of the province.

Technical deputy Munthir Niema told NMC that the cost of the station will depend on petro-dollar balance, and its output will be used for Basra only. He added that the station will consisted of four units.

Niema mentioned that another three stations will be established in the province in the near future according to the agreement with international companies Siemens and General Electric.

Meanwhile, the Ministry of Oil has announced that Shell will create a major new gas recovery plant in Basra.

(Source: National Media Center, AKnews)

The Iraqi Oil Ministry announced on Tuesday plans to establish a natural gas extraction company in Basra in collaboration with Shell, according to reports from AKnews.

Ministry spokesman Assem Jihad told the agency that the joint venture would extract the gas from the fields in Basra to power electrical generators.

"The company will seek to reach a daily production of 700m cubic feet of gas for use in electricity generation, and thus electricity will improve markedly,” he said.

Surplus gas will be exported, contributing to the venture’s profitability.

"There have been offers from many investment companies to invest in gas extraction,” he explained, “especially since Iraq is seeking to ensure its production of gas and oil meets international standards."

Meanwhile, Basra's local government has announced the creation of a new 500MB gas-fired power station.

(Source: AKnews, National Media Center)

Last week a Central Bank of Iraq (CBI) official revealed that October year-on-year core CPI inflation jumped to 3.2% from just 1.87% in September, breaking a nine-month downtrend. At first glance, you might conclude that Iraq is now at the start of the same CPI uptrend that its neighbors, and indeed much of the developing world, have been experiencing all year as a result of money printing by the Federal Reserve. (See chart. Note that Iraqi core inflation excludes fruits and vegetables, nonalcoholic drinks, and gas and gasoline.)

Such a development would have important implications for the dinar. While in other countries central banks raise interest rates to control inflation, this remedy would be of little use in Iraq. As the leading role of state-sector banks and enterprises makes the economy relatively insensitive to rate hikes, the only way for the CBI to keep a lid on rising prices is to lower the local currency cost of imported goods through exchange rate appreciation. Dinar bulls might therefore take the core inflation jump as good news.

But it turns out the jump was due mainly to higher prices for housing, water, and electricity, which suggests that it may be more the result of October’s ten-fold increase in electricity tariffs than anything else. While it would still not be surprising if Iraqi inflation began to trend higher given what's going on in the rest of the region, the October number thus cannot be taken as evidence that this is already happening.

Iraq will soon ask for bids on projects to install and run 22 gas turbines that could boost its power generating capacity by 30 percent in the next few years, an official from the Ministry of Electricity said on Tuesday.

Reuters reports that the ministry plans to ask companies to build plants in four provinces, install and operate turbines it has already purchased from General Electric, and sell the power back to the government.

Power-starved Iraq, trying to rebuild after years of war and economic sanctions, hopes to triple its electricity capacity to 27,000 megawatts from the current 9,000 MW in four years.

Laith al-Mamury, the head of investments and contracts at the Electricity Ministry, said the deal will allow the companies to buy the turbines on a delayed payment plan.

“I believe on November 30 [the tender details] will be offered to the companies,” Mamury told Reuters in an interview.

“We have the units. The investor will come to finish the rest of the equipment and operate the plant for 20 to 25 years,” he said.

The 22 gas turbines, valued at $40 million [47 billion Iraqi dinars] each, would be installed in Diwaniya, Muthanna, Maysan and Basra provinces, Mamury said.

The turbines would produce 125 MW each, or 2,750 MW in total, more than 10 percent of Iraq’s ultimate goal of 27,000 MW. They were among 72 turbines Iraq purchased in 2008 from GE and Siemens in deals worth more than $5 billion.