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08 March 2010 (Azzaman)

Russia’s Technopromexport has agreed to resume constructing a large power plant south west of Baghdad.

The al-Youssifya Power Station is one of the largest under construction in the country with an output capacity of 630 megawatts.

The Russians started work in 1990 and had to halt activities in 2003 due to U.S. invasion of Iraq.

But U.S. occupation troops occupied the plant and turned it into a military base, forcing the Russians to abandon the site altogether.

The Russian had completed nearly 35% of work on the plant when the Americans took it over.

U.S. troops are reported to have partially destroyed what the Russians had already done.

An Iraqi delegation was in Moscow last month, where it agreed with Technopromexport’s executives on terms to resume work at the plant.

Technopromexport, a Moscow-based firm, is a leader in construction of power projects and export of electricity.

Among its major power contracts in the country are the al-Hartha Power Station and other electricity projects.

The terms of the agreement have yet to be made public but the main hurdle for the Russians has insecurity.

BASRA - AP,03/03/2010

International oil executives have flocked to this southern Iraqi city to survey their potentially lucrative prizes: the fields that it is hoped will one day dramatically increase output of cheap, plentiful crude.

For their companies, the fields that they won the rights to develop in two biddings rounds last year are their first foray into Iraq's oil sector in over three decades.

For Iraqi Prime Minister Nouri al-Maliki, the executives and their investments are a vital part of his bid to win a second term in March 7 elections. Al-Maliki has billed himself to voters as the leader that can ensure the development of Iraq's dilapidated oil sector and bring in billions of dollars to rebuild the country's struggling economy.

Al-Maliki's promises could take years to fulfill and many experts see his predictions for increasing oil output as wildly optimistic. But what matters for the premier is persuading voters to keep him in his post to shepherd the process.

"Al-Maliki can present himself as a guarantor to these plans ... whether they are going to meet their huge targets or not," Mideast oil analyst Samuel Ciszuk of the London-based IHS Global Insight said.

Iraq sits atop 115 billion barrels of crude, the world's third largest proven reserves of conventional crude oil. But current production of about 2.4 million barrels per day remains well below levels before the 2003 U.S.-led invasion that toppled Saddam Hussein.

Al-Maliki's government has vowed, based on developers' promises, to raise output to more than 12 million barrels a day within six to seven years. The production increase would translate into hundreds of billions of dollars in sorely needed revenue for a government that relies on crude sales for 95 percent of its revenues.

Iraqi officials hailed the multibillion dollar deals as the dawn of a new day in the oil sector after two international auctions since June secured commitments from international firms to develop 10 oil fields. The government plans to develop 11 others left over from the two biddings on its own.

But meeting the government's timetable will be difficult. After decades of neglect because of years of war and Saddam-era sanctions, infrastructure is poor. Also, continuing violence in the country means security costs to keep workers safe as the U.S. looks to withdraw all its troops from the country by 2011.

"Bottlenecks are everywhere and it is going to be very tall order," Ciszuk said. "It's going to be very, very tough to do."

The southern city and province of Basra -- home to 70 percent of Iraq's daily oil output and its only Persian Gulf outlet -- is a key litmus test for al-Maliki. Five of the fields awarded in the auctions are located near the city, and representatives from 11 oil companies have been visiting since early this month to meet with oil officials and tour the fields.

Yet Basra, Iraq's second largest city with 3 million residents and a Shiite stronghold crucial for al-Maliki's Shiite-led government looks like a city that fortune overlooked.

Its dust-covered streets are strewn with mounds of garbage around which some of its poorest residents compete with sheep and goats for discarded food. Streets are packed with cars jostling for space with donkey carts and, in a few neighborhoods; residents still endure water and electricity shortages.

Al-Maliki's Coalition of State and Law secured a sweeping win in Basra and other parts of the mainly Shiite south in last year's provincial elections, boosted by his crackdown on militants and image as the protector of Iraq's security.

But his stature in Basra has been hurt by the continued lack of basic services and the faltering fight against corruption -- as well as continued militant attacks in Baghdad.

"During the last elections, they promised to change everything, but they didn't honor their word and instead they focused first on lining their pockets, then those of their aides," said Jassim Riadh Mohammed, a 43-year-old supermarket owner. Mohammed won't be voting for al-Maliki.

Al-Maliki also faces sharp competition in the south from rival Shiite parties, some of which harshly criticized his oil deals. The Sadrist party, loyal to radical cleric Muqtada al-Sadr, Fadhila Party and nationalist Iraqis, accused him of surrendering the nation's oil wealth to international companies.

Al-Maliki is hoping the promise from Basra's giant oil fields will be enough to win over voters. But years of neglect weigh heavily on that possibility.

About 60 kilometers (38 miles) northwest of Basra, roaring flames billow from Rumaila, Iraq's biggest oil field. The flames are the result of the burning of natural gas that is extracted along with the crude -- a reminder that Iraq desperately needs foreign help even in capturing and selling the gas instead of burning it off.

Rumaila, with an estimated 17.8 billion-barrel reserve, is considered the workhorse of Iraq's oil industry, producing about 1.1 million barrels per day. It was snapped up at the oil auction by British giant BP PLC teaming up with the China National Petroleum Corp.

Their consortium plans to drill 56 wells and upgrade equipment to boost output by 10 percent by the end of 2010, Dhia Jaafar, the director-general of the state-run South Oil Co., told The Associated Press.

They hope to ramp up ramp up production to 2.85 million barrels per day within seven years. Like other firms, the BP-CNPC consortium offered production targets in exchange for a per barrel fee in a 20-year contract.

The work in Basra's four other fields will begin in the next two months, Jaafar said.

Casting a shadow over development hopes is the lack of a legal rule book to govern foreign oil investments. The proposed national oil law has been in limbo since 2007 amid bickering between the Baghdad government and the semiautonomous Kurdish government in the oil-rich north.

That fight could put these deals in danger of being scrutinized or canceled by the new government.

The political rivalries among Shiites in the south also make investors wary.

"I think that's why we have not seen a lot of investment before the elections and before the results that will allow the companies to see who has become stronger and who has become weaker," said Ciszuk.

06 March 2010 (Iraq Directory)

Visions of the world head towards Iraq for investment opportunities after improvement in legally and security, and able to attract different foreign companies... The presence of the Minister of the Korean economy was accompanied by a large number of investors of the biggest Korean companies.

During the Korean delegation’s visit, they discussed investment opportunities in the areas of industrial energy and military infrastructure as well as in the field of knowledge... show the best evidence of this trend.

Nuri al-Maliki, the prime minister said while attending the opening of the Iraqi Korean Forum that this Korean presence in Baghdad and this scale reflects a genuine desire and willingness to work, which is a message to the world that Iraq is in the initial phase of construction and reconstruction were deprived of for decades. He pointed out that the improvements in security and legislation, as well as the legal guarantees and protection of foreign companies from political instability in Iraq. The Koreans also during their visit encouraged all investors in the world and in the forefront of Korea.

He said that much investment obstruction which Iraq had passed through them during the last period and work to create an attractive investment environment... He pointed out that the investment that is built according to the mechanisms of cooperation with international companies with advanced experience of up to the stage of people, being required to Iraqi ministries to offer all of its projects to international companies and Korean companies.

Particularly that Iraq needs large-scale projects in the field of electric power and industrial sectors. As well as in the housing sector should also be cooperation in the areas of training and exchange of experiences that help usually in construction...

Konkan Korean economic minister: said we carried with us a great desire in the activation of economic cooperation and research between the two sides of Iraq and Korea. He pointed out that Korean firms implemented various projects in Iraq during the seventies of the last century and lasted until 1989 and contributed Korean companies on a limited scale in 2003 implementation of some projects. He pointed out that Korea has sophisticated companies and industries in the areas of significant industrial, petrochemical, cars and roads as well as communications and electric power generation and water desalination. Konkan stressed Korean company’s desire of the union with Iraqi companies to activate cooperation in the implementation of projects.

But for this we need the cooperation of the Iraqi side with Korean investors to know the most important projects to be implemented through the mechanism of cooperation between the two countries as we work to transform forward in trade relations and transfer to a better state than they are now.

Sami Al Araji, Chairman of the National Investment said that the success of the investment process reflects a positive reality on the lives of Iraqi society. He pointed to the existence of more than 750 investment projects on display up costing more than $ 600 billion. Iraq is seeking to attract foreign investors and analysts to implement during the coming period. Al Araji continued by saying: Today we have the bids for construction of more than one and a half million units implemented during the next three years. Either in the field of electric power provided by foreign investors to build power plants with a capacity of up to 24 thousand MW, on the other hand preparations are underway to start implementing these projects. In addition to large housing projects in Al Rashed camp and the housing project west of Baghdad, as well as in Karbala and awaiting the implementation of the early stages of these projects, pointing out that Korean companies are determined to enter into this field. He added, saying the Korean side presented the Iraqi Oil Ministry a lot of consulting projects for modernizing Al Dora refinery, as the new company Hyundai for Heavy Industries to negotiate with the electricity for the processing of packets of energy supply.

On the other hand the company STX for Heavy Industries signed a Memorandum of Understanding with the Ministry of Industry and Minerals in the field of oil and petrochemical projects as well as Korean companies initiatives put forward a number of projects such as rehabilitation of power stations in Basrah and the use of gas associated with oil in the south and water desalination plants in Basrah.

Raid Fahmi Minister of science and technology, said: The Iraqi Korean Cooperation Forum is an important step at the level of development of cooperation with an important country in terms of economic and technological development. Because it is one of the most sophisticated global 10 countries in all sectors on the level of implementation of infrastructure projects. Especially that the conference dedicated to cooperation in the fields of electricity, oil and housing as well as the potential Korean extends for more than that in the fields of technology, industries and other Fahmi believes that there is a need to enter the Korean expertise to contribute to the development program in Iraq under the large Korean desire to work in Iraq in all sectors of the economy, beneficiaries of the investment law and its amendments, which came in line with the desire of companies that have the capacity and advanced implementation authority as the desire of both Iraq and Korea on the exchange of knowledge helps to raise the efficiency of workers in various fields. On the sidelines of the forum, it was signed by Iraq who was represented by Minister of Industry Fawzi Hariri, along with the Korean side represented by the Minister of Economy Konkan, memorandum of cooperation for the development of the petrochemical industry in Iraq. Hariri stressed that the industry is important and many countries are investing large sums to develop the industry and help develop many aspects of the Iraqi economy. He pointed out that such a project will cost more than two billion dollars.

Basra International Airport has announced that it will make space available to companies wanting to set up within the airport complex.

Domestic and international companies can lease land within the BIA airport grounds (outside of the USF-I COB limits) for a fee for a term of one or two years.

Interested firms will need to supply their own trailers for office/housing/conference needs, supply their own water/sewage/electricity, and supply their own internal security.

The cost, as quoted, is $150 per square meter per year, plus an additional 15% (of the total charge) for GOI-provided security (e.g. 1 square meter = $150 per year + $22.50/year for security = $172.50/square meter/year).  This security surcharge is for the outer perimeter and Alpha Gate (main airport entrance) security.  The lessee would be responsible for their own compound and security.

The Basrah International Airport (BIA) Director, Mr. Abdulameer Kanim has released the following information regarding leasing of available land space on the Basra Airport footprint:

• The Basrah International Airport (BIA) Director has stated that companies (domestic and international) can lease land within the BIA airport grounds (outside of the USF-I COB limits) for a fee for a term of one or two years. Interested firms will need to supply their own trailers for office/housing/conference needs; supply their own water/sewage/electricity; and supply their own internal security. The cost, as quoted, is $150 per square meter per year, plus an additional 15% (of the total charge) for GOI-provided security (e.g. 1 square meter = $150 per year + $22.50/year for security = $172.50/square meter/year). This security surcharge is for the outer perimeter and Alpha Gate (main airport entrance) security. The leasee would be responsible for their own compound and security: static and movement. This policy instituted in January 2010.

• It is understood that the Ministry of Transportation has transferred control of the Airport facility assets (business center and hotel facility) to Iraqi Airways. From this, it is understood that this will allow for the subsequent privatization of these facilities…more details to follow as more information is delineated.

Please contact the BIA Director, Mr. Abdulameer Kanim’s office at the following:

Telephone: +964 40 822170 (land line)

Gavin Jones

The Ministry of Electricity has warned parliamentary candidates against using lofty promises for the provision of power supplies as part of their campaigning.

Iraq is to hold elections on March 7. More than 6,500 are contesting the 325-seat parliament.

Nominated by 86 parties, competition is tough and some candidates are reported to be giving “unrealistic” promises regarding power supplies.

Electricity shortages may still last up to 20 hours in major cities and the country’s power output is so erratic that future predictions are almost impossible.

“This is a highly specialized sector in need of immense requirements. It cannot be used for electioneering purposes,” said an Electricity Ministry statement faxed to the newspaper.

“We are surprised to see some of our brother politicians talking about the provision of power supplies through investments without taking into account the reality of the situation.

“These politicians have not asked themselves if they have done the right thing by supporting the ministry to overcome the difficulties it is facing and assisting it to increase output,” said the statement.

The statement said in theory investments in power was massive. But in reality, it added, the conditions were not lucrative enough to lure foreign investors.

Instead of talking about things which are unrealistic, the politicians should work hard to provide the ministry’s power stations with fuel and water and increase allocations, it said.

Despite the difficult conditions, the ministry has been able to boost output to 43% from28% of domestic needs, it claimed.

(Azzaman)

Twenty-four solar-powered potable water stations will be built in a number of villages in  Wassit, “The stations, with a capacity of 1-5 cubic meters per hour, will be established in 14 districts and towns,” Majed al-Atabi told Aswat al-Iraq news agency.

He added that the stations will save a lot of electricity, as they rely on solar energy.

An agreement has been reached on Friday with a Turkish exporter of ready-to-use power pylons to increase capacity from 240 to 363 megawatt (MW) in Basra, according to the provincial council’s electricity committee chairman.

“The capacity of one pylon, due to arrive in the port of Umm Qasr soon, will be upped from 105 to 143 megawatt, while the second, to arrive in Khour al-Zubair port, will be upped from 125 to 225 megawatt,” Eng. Ziyad Ali Fadel told Aswat al-Iraq news agency.

Fadel pledged that the production of electricity in Basra will see improvement by the summer.

The Iraqi Ministry of Planning has finalised its development plan for the years 2010-2014, focusing on the oil and electricity sectors as a first priority, but extending as far as agricultural and rural development. The program includes more than 2,700 projects worth nearly $186bn.

(Sources: Aswat Al Iraq, Iraq Directory)

The sum of 1.2 billion Iraqi dinars was appropriated to extend electricity services to 10 villages in the district of Rawndoz, north of Arbil, according to the Mayor Sirwan Sereni on Sunday.

“The sum is allocated from the Provincial Development Budget (PDB) for Arbil to set a project that involves the installation of 1020 power posts and 20 transformers in an area 35 km long,” Sereni told Aswat al-Iraq news agency.

Rawndoz, 130 km north of Arbil, is a mountainous area where tourism is thriving, namely in the Bikhal resort.

“The project aims to extending services to all areas of Arbil, particularly mountainous areas, in a bid to refurbish tourism,” he said.

Arbil, the capital city of the semi-autonomous Iraqi Kurdistan Region, lies 360 km north of Baghdad.