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On Tuesday, Basra Council discussed projects which will be implemented in 2011, according to a head of the reconstruction committee.

The projects are in several budgetary categories and have a total value of 286 billion Iraqi dinars ($240m).

“The council made a comprehensive assessments of all projects for 2011 in the areas of health, electricity, education, water and other services sectors, as part of the budget to develop the region,” Mustapha Attiya told Aswat al-Iraq news agency.

“The total cost of these projects is 286 billion Iraqi dinars,” he added, without giving more details.

(Source: Aswat al-Iraq)

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Iraqi President Jalal Talabani met with an Iranian official on Sunday to discuss bilateral economic relations and ways to expand trade between the two countries, according to a presidential press release.

“Talabani welcomed Ali Agha Muhammadi, the economic assistant to the first vice president of Iran, and his accompanying delegation, and expressed Iraq’s keenness on furthering bilateral ties with neighboring Iran at the political, economic and cultural levels,” read the release as received by Aswat al-Iraq news agency.

The president expressed “Iraq’s appreciation of the government and people of the Islamic Republic of Iran for their support for Iraq in its strife against dictatorship and Iraq’s moving to a new stage of independence, stability and freedom”.

Muhammadi, for his part, “reiterated Iran’s wish to further friendly ties and cooperation with Iraq, particularly in the economic field”.

The Iranian official said there are ample opportunities for investment in Iraq, namely in the transport and electricity spheres.

(Source: Aswat al-Iraq)

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An official spokesman of Basra province said Sunday that a delegation from Russian energy company Neftegaz Export has arrived to the city to discuss investment projects with the governor.

Sheltagh Abboud received on Sunday the Deputy Director of Neftegaz Export, Vladimir Fumujev, and a delegation accompanying him, who were seeking a foothold in Iraq for the "friendly Russia", referring to the likelihood of Neftegaz Export obtaining contracts in local oil fields.

"The Russian company has expertise in a range of disciplines important to Iraq, especially in the areas of generating and distributing electricity, refining drinking water, and sewage water treatment, in addition to the implementation of oil projects in the fields of northern Rumaila, West Qurna and Al-lahis", spokesman Salem al-Taqi said.

Fumujev expressed the desire to invest in a number of projects in Basra, al-Taqi added.

Neftegaz maintains offices in many cities in the world with the main headquarters in the French capital Paris. It is ready to open an office in Basra in the coming days as well, according to the spokesman.

Basra, due to its strategic location, has been attracting foreign companies recently especially companies investing in the sectors of electricity, tourism, housing.

(Source: AK News)

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Iraqi Prime Minister Nouri al-Maliki called on Iranian companies to contribute in the reconstruction operations in Iraq, according to a statement of his office.

“This came during al-Maliki’s meeting with Iranian Ambassador to Baghdad, Hussein Qomi [Hassan Kazemi Qomi] , at the end of his term in the country,” said the statement received by Aswat al-Iraq news agency.

“The premier underlined Iraq’s keenness to develop relations with all neighboring countries, including Iran,” the statement added.

He urged Iranian companies to contribute in the reconstruction operations and to invest in Iraq.

The ambassador asserted his country’s support for the political process and the efforts exerted by the Iraqi government to strengthen security and stability in the country.

The outgoing ambassador has been accused in the past by US military commander General David Petraeus of belonging to the elite unit of Iran's Revolutionary Guards, the Quds Force.

(Source: Aswat al-Iraq, Al Jazeera)

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Energy Risk reports that Moody's has raised its rating of Malaysian state-owned Petronas's A1 senior unsecured debt from negative to stable, despite the group's riskier business profile following a major acquisition of a large oil field in Iraq.

"We expect the company's $20 billion capital expenditure for the Iraqi fields to be spread out over a period of 20 years," says Philipp Lotter, lead analyst and senior vice-president at Moody's.  "Annual capital expenditure is expected to peak in the first five years, which potentially allows Petronas to fund capital expenditure in later years with the reinvestment of early returns from the fields."

Lotter added that Petronas's strategy to partner with leading oil and gas companies in all of the Iraqi fields, coupled with its growing track record in managing international investments, provide a degree of comfort with regard to the associated execution risk.

In December last year, Petronas and Royal Dutch Shell won the rights to develop and produce oil in the Majnoon oil field, which has an estimated 12.6–12.8 billion barrels of oil. The consortium says it aims to have a peak production target of 1.8 million barrels per day (b/d).

In the past two years, consortia led by major energy companies have waded into Iraq, signing producing field technical service contracts (PFTSC) to secure fields for crude oil production. Some of these are pledging production of around 1 million b/d by 2017, though this is seen by analysts as somewhat optimistic for a country with high political uncertainty.

A PFTSC was developed by the oil ministry to be used for the first bid round. It is a hybrid model contract to be added to more than 100 fiscal regimes that govern international oil companies' participation in some 75 countries.

Experts have previously said that despite companies securing the rights to produce and develop oil in these fields, the risk is high due to the lack of a petroleum law, poor infrastructure and geopolitical risk. Issues over export rights could also affect the companies ability to sell the finished products.

"One of the main things that Iraq needs to tackle is the basic security issues, such as the ability to provide electricity, power, roads, and hospitals," says David Hart, oil and gas analyst at corporate finance and broking house Westhouse Securities. "While improvements in this area are occurring, many people would say that the country needs to resolve this in order to provide secure environment for oil and gas production. However you can't wait for that to happen, Iraq needs the oil revenue to help bring about this change."

This week, Iraq's oil minister Hussain al-Shahristani urged foreign energy companies to honour their contracts to explore and develop oil reserves in Iraq, as it is "the nation's highest priority".

"You have to prove to us and to the world, your ability to implement these contracts in accordance with the timeframe and the conditions stipulated in the deals," said Al-Shahristani speaking at an oil symposium in Iraq. "Success is not only reaching the production targets, but reaching these targets at a lesser cost, as much as possible. I hope we work together to reduce the costs."

(Source: Energy Risk)

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The head of the investment and strategy committee of Dhi Qar provincial council, Ahmad Taha, announced that a new round of investment licenses will be awarded soon to foreign and Arab firms.

The licensing round will include waste recycling, environment, electricity and gas stations projects.

Al SumariaTV also reported that "oil refineries will be established as well in the province".

(Source: Al SumariaTV)

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The Iraqi Industry Ministry has ordered its factories to work on generating electricity required for production, to minimize the load on the national electricity network. The ministry noted that power shortage is causing losses to its factories.

“The ministry has issued contracts to purchase large generators for this purpose,” the ministry said in a press release on Tuesday, as received by Aswat al-Iraq news agency.

Meanwhile, the Basra Provincial Council has approved an investment project with an international firm that will supply the al-Faw district with electricity. That project should be completed within 30 days.

In Kirkuk, Siemens is providing a 260MW generator to the electro-gas station in Taza area, according to AK News. The project is expected to take 18 months.

The Tuz Khurmatu electro-gas station in Kirkuk will also be upgraded by Siemens, with two new units producing 256MW and 65MW.

(Sources: Aswat al-Iraq, AK News)

AAIB View:

A spokesperson from A.A.I.B. Insurance Brokers commented: The fact that the Iraqi Industry Minister has needed to issue this sort of statement shows that industrial output is being impacted and further stresses the need to improve matters as the lack of sufficient output from the National Grid acts as a brake on industrial production.

Various estimates have appeared in the media as to how demand for electricity in Iraq may grow, ranging from five to fifteen percent per annum. As the economy recovers, industry expands and domestic consumption increases, more demands will be made on the electricity sector.

Work to reform, repair and improve the electricity sector has been underway for some years; however the Governments aggressive plan to invest heavily in new power generation and distribution capacity over the next five years is a clear sign of the importance placed on this subject, nationally and at a governorate level. We have seen a number of announcements from Government officials relating to contracts and projects for the construction of new power infrastructure, or to the refurbishment of existing power plants and bearing in mind the lead times for bringing extra capacity into production, many are hoping for early implementation of these projects.

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The government has given the green light to Iraqi provincial authorities to invest in power plants.

The move comes amid reports that the central government has almost given up hope of revamping the national grid on its own.

The move is also part of the government’s new policy to grant provincial authorities and private entrepreneurs a bigger say in the ailing power sector.

Previously, the provinces were only permitted to set up local power plants with a capacity not exceeding 30 megawatts. This condition has been removed, according to Faid al-Shamari, head of Najaf’s provincial council.

Shamari described the government’s decision as positive since it removes restrictions on investing in electricity by Iraqi provinces.

He said the Province of Najaf needed up to 600 megawatts while its share from the national grid is only 180 megawatts.

He said Najaf’s provincial council will make the best use of the new regulations and will give the building of new power plants in the province top priority.

Investments in electricity must come from provincial coffers, but Shamari said private investors, both Iraqi and foreign, were interested.

Granting private entrepreneurs a bigger say in the national grid follows bloody demonstrations protesting power shortages in several major cities in Iraq.

(Source: Azzaman)

(Image: Bayji Power Plant)

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Iraq's Prime Minister, Nouri al-Maliki, called for the development of economic and trade relations with South Korea, according to a statement of his office on Monday.

“On Monday (July 19) Al-Maliki held a meeting with a delegation of South Korean companies, Ambassador Su B. Park, and Head of the National Investment Commission Sami al-Aaraji,” said the statement received by Aswat al-Iraq news agency.

“The premier underlined the Iraqi government’s keenness to develop relations with South Korea, especially in economic and trade fields,” the statement added.

The South Korean ambassador expressed the wish that his country would play a bigger role in Iraq’s housing, oil, energy and electricity sectors.

(Source: Aswat al-Iraq)

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U.S. firms are welcome to invest in the oil-rich province of Kirkuk, an official statement said.

The statement, issued following a visit by some U.S. business representatives, said there were good investment opportunities in the province particularly in oil development, electricity and the refining of crude oil.

The province, of which the city of Kirkuk, one of Iraq’s largest oil centers is the capital, is still restive due to rivalries over its oil fields between various Iraqi ethnic groups.

Kurdish claims over the province are being disputed by Arabs and Turkmen, an Iraqi ethnic Turkish group which makes up a sizeable portion of Kirkuk’s population.

The statement said the U.S. representatives held meetings with provincial officials and visited several sites in the province.

The U.S. business leaders outlined the areas they are interested in, the statement said.

It said the provincial officials told U.S. investors  that some projects were urgent in order to upgrade public utilities, housing  and the service sector.

“We are planning to construct a large refinery and a large airport as well as power plants,” the statement said.

(Source: AK News)

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