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Jordan is hoping to triple oil imports from neighbouring Iraq to help meet domestic demand, the Jordanian energy minister, Khalid Irani, has said.

The country currently imports almost all of its energy needs, and has asked Iraq to increase supplies of crude transported by truck from the current level of 10,000 barrels a day to 30,000 barrels a day, the Minister told Bloomberg.

“This is within the terms of the agreement that we already have between Jordan and Iraq; we are awaiting their response.”

This would account for about a third of Jordan's needs, but its consumption is expected to rise by more than 30% over the next ten years.

The Middle Eastern country projects its electricity consumption to almost double in the next 10 years to 5,200 megawatts.

Jordan also wants to increase imports of natural gas, build a nuclear plant and develop its own oil shale and renewable energy projects.

Jordan has the world’s fourth-largest reserves of oil shale and has signed accords with Royal Dutch Shell Plc and Estonia’s Eesti Energia AS for the extraction of shale oil to feed power plants.

(Sources: Bloomberg)

The local administration in the province of Maysan [Missan] has reportedly agreed a deal with a Swiss-Russian firm to set up two power stations  in the city of al-Amara, according to Aswat al-Iraq.

“The Missan local government agreed today (Sept. 25) with Russia’s Wintercroft Capital to build two steam-operated power stations with capacities of 650 megawatt and another gas-operated plant with a capacity of 500 megawatt,” Amer Nasrallah, Missan provincial council’s energy committee chairman told the news agency.

“The two power plants, to be carried out by means of deferred payment over a period of 8-10 years, would solve many of the electricity-related problems in the province and with even provide a surplus of more than 650 megawatt,” added Nasrallah.

Missan’s actual power needs are estimated at more than 400 megawatt. It gets only 200 megawatt now from neighboring provinces through the transformer station 400 KV, set up in 2008 and lies near the al-Kahlaa power station.

A delegation from Wintercroft Capital arrived in Maysan on Wednesday (Sept. 22) to activate a memorandum of understanding signed with the Missan provincial council in April this year.

IBN has so far been unable to find any background information on this "Wintercroft Capital".

(Source: Aswat al-Iraq)

By Eugen Iladi.

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

The inability of Iraqi political elites to form a government more than six months after the March elections is hardly surprising given the fragmented poll results and deep divisions separating top leaders. All major parties and their representatives seem determined to hold onto power as a matter of political, economic and perhaps even physical survival.

The stalemate is aggravating the security and economic situation and threatens to drive the war-ravaged country further into political instability and massive unrest. An uptick in violence since March could signal renewed sectarian divides and a new impetus for the insurgency.

But things don’t have to escalate to that level and Baghdad need only look in its own backyard for models of a better arrangement.

Erbil, the capital of the autonomous region of Iraqi Kurdistan, has transformed itself into a haven of safety, functionality and prosperity by regional standards. The Kurdistan Regional Government, while not free of infighting and political maneuvering, is by far a more efficient administrator of local resources and services compared to the overall situation elsewhere in Iraq.

Instead of opposing further Kurdish autonomy and self-reliance, Baghdad could learn from the region and emulate some of its successes. Incorporating functional elements that work in Erbil would not only help the entire country move forward but could also foster a bond and a sense of shared values between the regions that form the emerging federal democracy of Iraq.

The two dominant political parties of Kurdistan, the Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP) have between them monopolized most aspects of life in Kurdistan based on their historical and heroic fight against Saddam Hussein’s regime. When a new challenging opposition movement, Gorran, gained the second highest number of seats in the 2009 local elections, none of the players resorted to overt violence to overcome their opponents. Instead, they expressed their differences and fought at the polls.

Another stark contrast between the thriving Kurdistan region and the rest of the country is its ability to provide basic services for the population. While Baghdad continues to be plagued by massive power shortages, Erbil enjoys a constant flow of electricity with only minor interruptions. In fact, Kurdistan consumers get an average of 20 hours of constant electricity per day and projections call for closing that gap by early next year when new power plants are due to come on line.

This is in large part due to investment programs and incentives that attracted foreign operators to build generating facilities in the autonomous region, taking advantage of its vast oil and gas resources. Kurdistan estimates its oil reserves at about 45 billion barrels and its natural gas reserves at 20 trillion cubic meters.

Erbil is also welcoming of investment from abroad. The German Chamber of Commerce chapter in Erbil promotes business ties and attracts major German companies to the region. Italian, French, Austrian, American, Russian Turkish and other Arab energy, construction, apparel, and manufacturing companies are also investing in the region at an accelerated pace. RWE, Rosneft and a slew of smaller but significant players clamor for a piece of the action in this most stable of all Iraqi regions. Turkey is emerging as the premier trading partner of Kurdistan with economic ties expected to push towards $10 billion by next year, a significant development given the uneasy historical relations between Ankara and Erbil.

Cultural and travel ties are also increasing with Erbil stealing the lime light from Baghdad. France maintains a cultural center in Erbil and the German School reopened its first location in the country earlier this month after its previous Baghdad school was closed down in 1990. Austrian Airlines has a direct Vienna-Erbil link and Lufthansa resumed its Erbil route this spring, after a two-decade hiatus, while postponing indefinitely the resumption of Baghdad flights.

The Erbil Stock Market is scheduled to start trading during the first quarter of 2011 with a startup capital of nearly $10 million. With an open attitude towards investment and a legislation to match it, the KRG is forging ahead with major oil and gas, commercial and residential construction projects worth several billion dollars.

The new Baghdad central government, when one is formed again, would be well served to learn from Erbil.

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

U.S. energy firm ContourGlobal is in talks with the authorities in the oil-rich province of Kirkuk regarding the construction of a 400-megawatt power plant, according to a report from Azzaman.

Governor Abdulrahman Mostefa was quoted as saying that the plant would not be part of the country’s national grid as it wpuld be used exclusively to meet the province’s energy needs.

“The province seeks to finance its own electricity projects,” he said.

Oil-producing Iraqi provinces are taking their own measures to generate more electricity on their own – thanks to massive allocations of hard cash they have been receiving under a new plan which gives them one dollar per each barrel of oil they produce.

At the current rate of production, Kirkuk takes in more than $600,000 per day.

A delegation from ContourGlobal is currently in Kirkuk and the “ governor urged the members to implement the project in the province,” sais a anomynous source.

Kirkuk, despite holding massive oil reserves, suffers from black outs lasting about 20 hours a day.

The source said the U.S. firm’s representatives attending the meeting agreed to go ahead with the project once details on guarantees and financing have been worked out.

The governor, according to the source, wants to see the plant ready in two years.

Once completed, the province would have enough electricity for round-the-clock supply, according to the report.

ContourGlobal was founded in late 2005 by Chief Executive Officer Joseph Brandt and Reservoir Capital Group, a $4 billion USD investment fund based in New York.

(Sources: Azzaman, ContourGlobal)

The Diyala State Company For Electrical Industries had sales of more than 4.12 billion dinars ($3.4 million) during August, according to a statement from the Industry Ministry.

“The company has supplied the electricity distribution departments in Missan, Anbar and Diala with 308 generators to improve the performance of their networks,” said the statement received by Aswat al-Iraq news agency.

The Diala State Company For Electrical Industries has signed 16 agreements with Oil and Electricity Ministries during June and July 2010, with a combined value of more than 9 billion dinars, to provide them with generators.

(Source: Aswat al-Iraq)

The Iraqi government has purchased 500 power transformers from its Industry Ministry to upgrade the electricity supply in the Maysan province.

“The total cost of the deal is around $4.4 million [5.3 billion Iraqi dinars],” the ministry said in a statement of Wednesday, according to Aswat al-Iraq news agency.

It explained that according to the contract, the ministry will supply 100 transformers, 11/250 KVA, and 400 others, 11/400, all within three months.

(Source: Aswat al-Iraq)

National Overview

The total number of officially reported hostile incidents nationally was 126 last week, consistent with the number of incidents recorded during the last reporting period. The number of incidents in the west rose by a quarter this week and incidents in Baghdad also rose significantly. The south east saw a very minor rise in the number of incidents. Incidents in the south central, north and north central areas decreased this week.

Although incident levels have remained consistent over this fortnight, the incidents occurring last week affected far fewer casualties and caused less damage. Insurgents operating in the north central and western areas appear to be benefiting from increased freedom of movement brought about by the fall in number of U.S. Forces.

There were further attacks on infrastructure during the reporting period, including Improvised Explosive Device attacks against electrical pylons in Hillah, power generators in Baghdad and a water tower in Anbar. These attacks are assessed to have been the work of Al Qaeda in Iraq (AQIZ) or their associated movements seeking to undermine local and national Government.

The resilient militant networks who undertook the 25 August attacks will be difficult to uproot and we can expect further synchronized attacks to come, probably to correspond with future religious festivals or indeed new government formation. The Ramadan / Eid religious ceremonial period provides a unique opportunity for insurgents to attack when the security forces and civilians’ defences are low. This year the Eid festival will coincide with the anniversary of the 9/11 terrorist attacks, which is potentially an irresistible coincidence for Al Qaeda in Iraq (AQIZ) and their associated movements to launch large scale attacks.

The most likely culprits were neo-Baathist insurgents, probably with assistance from Islamist elements such as Al-Qaeda in Iraq (branded as the Islamic State of Iraq). Though almost all the mass casualty bombings were remote-controlled car bombs, at least two of the thirteen devices were suicide-detonated, indicating an Islamist element. According to Olive’s contacts in the U.S. government, key former regime leaders such as Izzat Ibrahim al-Douri are floating to the top of the boiled-down insurgency. These figures are able to bridge the divide between nationalist and Islamist wings of the insurgency and even to cross sectarian and ethnic lines to some extent. The objective of such movements is to maintain resistance and foster a state of chaos until such time as the Iraqi people call for a stronger nationalist government. At that point, it is posited by U.S. intelligence analysts, elements of the old Baath will seek to gain power through election, running on a platform of experience in security and governance, technocratic competence, and toughness vis-à-vis Iran.

Baghdad

Reported incidents in Baghdad rose from 34 to 47 last week. The International Zone was targeted for three days in a row during the reporting period. This is a continuation of Shia’a militants’ harassment campaign to coincide with the draw down of US Forces. One of the attacks was seemingly conducted to coincide with the visit of US Vice President Joe Biden. Shia’a insurgents were also responsible for the IDF attack against Victory Base Camp – none of the attacks resulted in death or serious injury.

An electricity generator was targeted with an Improvised Explosive Device in the Shia’a area of west Rasid. This may have been carried out by Sunni insurgents to stoke up anger and provoke a response. Such attacks are often conducted to undermine faith in the ability of the GoI to provide basic essential services.

Under Vehicle Improvised Explosive Devices remained the most prevalent form of assassination in the City in this reporting period. An Iraqi Police Services member working at the passport office in Kadimiyah was killed by an Under Vehicle Improvised Explosive Device on 31 August and an Iraqi Security Forces Colonel was injured by device on 02 September; several civilians (probably with links to Government of Iraq or Iraqi Security Forces) were also targeted during the review period. However, the most significant Under Vehicle Improvised Explosive Device attack was aimed at Hussein al Mir’ibi, a leading figure in the Shia’a Fadhila party and member of the Iraqi National Alliance, who did not sustain any injuries from the attack.

Basra

There was only one significant hostile incident in Basra last week which took the form of an Improvised Explosive Device attack against a Private Security Company vehicle as it transited south west of Az Zubayr on route Tampa. The Improvised Explosive Device damaged the vehicle but did not result in any injuries. The area in which the attack took place has been targeted several times in the recently as insurgents know that there is a large volume of United States Forces – Iraq, Iraqi Security Forces and Private Security Company traffic in the area.

The discovery of two Improvised Explosive Devices and an Explosively Formed Projectile around the province indicates that Shia’a insurgent intent remains high. The Explosively Formed Projectile discovery was made in the vicinity of route Tampa in Umm Qasr and was likely designed to target a passing United States Forces - Iraq or Private Security Company convoy as there are an increasing number transporting United States Military equipment out of Iraq via Umm Qasr port.

Atmospherics in Basra were tainted by more demonstrations in the City protesting against the lack of electricity in the province. According to open sources, authorities in Muthana province took action against illegal electricity lines enabling them to increase the electricity supply. Further civil demonstrations in the south east region can be expected.

By Tariq Abdell, Founder & Chairman, Mesopotamia Insight.

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

The end of U.S. combat operations in Iraq presents a unique opportunity for a new beginning in U.S.- Iraq’s relationship. However, given Iraq’s crippling challenges and U.S. sluggish economy, the success of a such strategic partnership is contingent upon the political will of both U.S. and Iraqi governments, the support of the international community, and the genuine commitment of the international oil companies - Iraq’s biggest investors.

Drawing on past experiences, the stakeholders (U.S. government, Iraqi government, UNDP, World Bank, international oil companies, etc…) need to devise a concerted post-conflict reconstruction strategy, Marshall plan type, that is capable of  a) averting the collapse of State's institutions and b) creating the conditions for a sustainable socio-economic recovery. However, before undertaking a such colossal challenge, stakeholders need to build a strategic framework defining  the mission's objectives (attainable and realistic), organizational design (steering committee, for instance) , stakeholders' roles and responsibilities, needed resources, and performance metrics.

Respectively, I'll explore key stakeholders' roles and responsibilities in Iraq's post-conflict reconstruction  as it's mandated by their respective missions.

Iraqi government

In this process, Iraqi government should be treated as an equal partner that is fully responsible and accountable of its actions before its constituents and the international community. Consequently, the new elected government needs to formulate a comprehensive development strategy in concert with key stakeholders, including the planning for the impending multi-billion dollar mega-reconstruction projects, and the followings are some key areas of common interest and cooperation:

• National reconciliation to fend off ethno-sectarian strife and political violence.
• Reining in corruption and enhancing institutions efficiency.
• Providing basic services (e.g., drinking water, electricity, running sewer, health care, education, etc....)
• Promoting rule of law and human rights.
• Tackling  illiteracy challenges, a serious threat to the country’s future.
• Creating jobs, higher unemployment rates are source of societal and political upheavals e.g., organized  crime, militias, etc....
• Revamping severely languished infrastructure.
• Reviving the country strategic industries to curtail its dependence on petrodollars.

U.S. Government 

To ensure the success of its new mission "New Dawn" in Iraq, the U.S. needs to learn from its past mistakes - $53 billion of unfinished or poorly executed projects-- and capitalize on its acquired knowledge and understanding of Iraq's ethno-sectarian fabric, political landscape, and socio-economic dynamics. Thus, U.S. Department of State's Iraq strategic partnership office ISPO and USAID  should play a crucial role in coordinating and overseeing the reconstruction efforts in concert with other stakeholders e.g., Iraqi government, UNDP, etc....

United Nations Development Programme

Given UNDP extensive experience --Honest broker-- in conflict and post-conflict zones, the UNDP is well-positioned to promote and oversee national reconciliation, rule of law, and rehabilitate State's decadent institutions to enhance efficiency and  inclusiveness - Hiring and promotions are merit-based and not politically dictated.

World Bank

Given the decay of Iraq's financial institutions  as result of decades of wars and sanctions, the World Bank's role,  key partner in this reconstruction efforts, is to provide post-conflict reconstruction expertise, financial and technical assistance,  which are key ingredients for a sustainable development.

International oil companies (IOCs)

Given the current Peak Oil and IOCs vested interest in a stable and secure Iraq, IOCs should play a major role in this reconstruction efforts. Oil sector is the engine of Iraq’s economy  -%90 of government revenue. Nonetheless, the oil sector challenges are hampering the country's economic recovery:   

• Major oil fields require billions of dollars for rehabilitation and development as result of decades of wars and sanctions.
• Current oil workforce is in desperate need of training and technological know-how.
• Oil sector is a highly politicized field.

Thus, given Iraq's vast reserves of oil and gas,  IOCs' should help revamp the oil sector swiftly by introducing technological know-how, the industry best practices, and fostering local workforce. With such perspicacious initiatives, IOCs will help enhance the oil sector efficiency, increase production, spur economic recovery;  and, eventually, countervail some of deep-seated distrust and apprehension.

In sum, in the absence of a clear post-conflict reconstruction strategy, Iraq's convoluted political impasse and the international community inaction -- lack of political will-- are recipes for a prolonged political instability and ethno-sectarian strife; subsequently, jeopardizing all the hard-earned successes (e.g., fair elections, strong Army, etc...) and exacerbating  geopolitical tensions. Moreover, given the endured sacrifices, thus far,  in blood and treasure -- thousands of lives and over $ 751 billion war price tag -- it's imperative to stand by Iraq in these difficult times to prevent it from reverting to a military dictatorship or ,worst, religious tyranny.  In his speech to congress (12th March, 1947), President Truman exquisitely puts it when he warns us against lose of hope, destitution, and their grim outcomes chiefly chaos and tyranny:

"... The seeds of totalitarian regimes are nurtured by misery and want. They spread and grow in the evil soil of poverty and strife. They reach their full potential when the hope of a people for  a better life has died. We must keep that hope alive. If we falter in our leadership, we may endanger the peace of the world - and we shall surely endanger the welfare of our own nation..."

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

 The author, Tariq Abdell, is an Iraq analyst, and Founder & Chairman of Mesopotamia Insight

He can be contacted at: [email protected]

or

Followed on twitter: http://www.twitter.com/atariqx

The US general charged with the military's reconstruction efforts in the Middle East said on Tuesday that Iraq will need at least another three years before it is able to satisfy current electricity demand,  but this demand continues to rise as Iraqis purchase more consumer goods for their homes such as refrigerators and air conditioners.

"Probably 2013, 2014 would be the earliest that I think they would be able to have a shot at generating enough power, with the requisite distribution and transmission capability, to have some sort of sustained, close to, 24 hours (per day) of power," Brigadier General Kendall Cox told reporters at a briefing in Baghdad.

Cox is commander of the US Army Corps of Engineers (USACE) Transatlantic Division, which handles USACE projects in the Central Command area, stretching from Egypt to central Asia.

He estimated that current demand for electricity in Iraq was between 12,000 and 14,000 megawatts, with supply at just over 6,000 megawatts.

Violent protests swept the country over the summer months when temperatures hit 54 degrees Celsius (130 degrees Fahrenheit), leading to the the resignation of the Minister of Electricity.

(Source: Reuters)

Authorities in Iraq say they will install “giant power generators” in Baghdad in their latest bid to put an end to power shortages.

The plants will have capacities of about 5MW - hardly 'giant', but the plan is to have more than 500 of them in place throughout the city by next summer, operated by private investors, but linked to the national grid.

Electricity shortages have worsened recently and Baghdad’s nearly 6 million people now have barely two hours of uninterrupted supply daily from the national grid.

The U.S. alone has invested more than $5 billion dollars [6 trillion Iraqi dinars] to revamp the grid. Billions more have been poured into the electricity system by the central government.

Nonetheless, power supplies are still much worse than before the U.S. overthrow of the former regime in 2003.

A new committee headed by the under-secretary of the Electricity Ministry, and comprising the Governor of Baghdad as well as other senior government officials, says it is time for Baghdadis to say “good-bye” to power shortages.

But many in Baghdad are skeptical and say all government promises to improve public services, including electricity, have come to nothing.

However, Baghdad's Governor, Salah Abdulrazzaq [Salah Abdulrazeq] says it is different this time, saying all government departments will be involved in the effort to supply Baghdadis with continuous power supplies.

The idea this time is to install large power generators with a capacity of up to 5 megawatts in various neighborhoods throughout the capital.

Abdulrazzaq wants to have at least 500 such generators in place by the summer of 2011. These generators will be operated by private investors but linked to the national grid.

“The generators should produced about 1,750 megawatts of electricity,” he said.

It is the first time private investors are allowed to install power generators as part of the national grid. It is not clear what impact the hundreds of power generators will have on the environment particularly in densely populated neighborhoods.

Baghdad alone needs more than 3,500 megawatts to meet domestic consumption.

That means the government should divert up to 1,500 megawatts from the national grid to Baghdad of a total national power production that hovers around 5,500 megawatts.

(Source: Azzaman)