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The governor of Nineveh province, Atheel Nujaifi, has expressed support for the oil deals signed in October between ExxonMobil and Kurdistan Regional Government (KRG), according to a report from AKnews.

Atheel, who was reportedly opposed of Exxon's KRG deals, said in a interview with Iraq Oil Report that joint oil development could help ease tensions in disputed territories.

The governor said:

"I believe we have the same authority that the KRG has. In the constitution, there's no difference between the provinces and the regions ... the KRG activated their authority. We didn't do it, until now."

The Mosul leaders claimed that that two of the blocks, Al Qush and Bashiqa, belong to Nineveh province and some of them threatened "violent punishment" if Exxon were to continue exploring in the disputed areas.

Following the signing of the Exxon contracts, a delegation from Mosul visited Baghdad to support Deputy Prime Minister Hussain al-Shahristani, who was working to cancel the deals.

But Exxon and the KRG's meetings with Nujaifi have reportedly changed him from an opponent to a powerful ally in the area. The governor said: "They have given him assurances that the province will benefit from Exxon's investments."

The governor is a brother of the Speaker of the Iraqi Parliament, Osama [Usama] al-Nujaifi.

(Source: AKnews)

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Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

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Companies Mentioned:

Calik Energy, Dana Gas, DNO, Exxon, Genel Energy, Gulf Keystone, KAR Group, WesternZagros

Action Calls:

• Market Tracker to transition to subscription-only service: Market Tracker available in two subscription offerings after 25 June.
• Kurdish pipeline plan: next moves: What to expect from Baghdad, Erbil, and Kurdish oil companies.
• WesternZagros' Kurdamir-2 more than doubles oil potential in Eocene reservoir: Positive news flow continues, but shares may react more to Baghdad-Erbil.

Headlines:

• Sadr called to Iran for consultation: No confidence not likely to succeed anyways, but shows importance of Iraqi stability to Iran.
• Maliki looks to expand Tribal Support Councils: Maliki already plumping for coming elections with grassroots, bypassing politicians.
• KAR signs massive Kurdish power plant deal: Kurdish development continues to accelerate.

Calendar Events Discussed:

• June 21 - Parliament returns from 7 week break

Click here to access the report, or to add your email address to Dunia's mailing list to receive the Iraq Market Tracker via email.

Vizocom has announced the opening its fully staffed office in Basra, to extend its services for the industrial as well as social communities in the region.

Vizocom has been providing Communication and IT services in Iraq and Afghanistan for years. It also has an impressive portfolio for providing services to Oil companies (Exxon Mobil, Honeywell, Shell, BP, ENI, UNAOIL, Petro China, SLB, Baker Hughes International, OJSC, etc.) and Security Companies (REED INC, Triple Canopy, Sabre Security, G4S, Olive Group, TAAZ, etc.).

• The services provided include:
• VSAT and Internet over fiber
• VOIP and Video Conferencing
• LAN (CAT6/fiber) and WLAN infrastructure
• Microwave links
• Procurement of IT and office equipment (Cisco, DELL, HP, APC, Juniper, Motorola, Thuraya)
• CATV and IPTV
• CCTV and Security Surveillance
• Fire Alarm and PAGA Solutions

Wednesday was Day 1 of Iraq's two-day auction for the rights to 12 new exploration fields, but the long-awaited and often-delayed event was widely considered a disappointment, with only two bids received and only one deal agreed.

The reason, say critics, is that Iraq is playing hardball on the terms offered to the 47 international exploration firms.

This can be a difficult judgement call for governments, with many regimes around the world accused of selling off their national resources too cheaply, sometimes in return for kickbacks.

Taking a very long-term view, Iraq has many large existing fields to develop, and could easily afford to leave any as-yet-undiscovered oil and gas in the ground until conditions improve and prices are more favourable.

But that's not the plan, with the Oil Ministry reportedly intending to grant the fields to Iraqi companies if they are not allocated on Thursday.

If that is the case, we will be very interested to see what terms and business models are agreed with these locally-based companies.

Upper Quartile and AAIB work closely with businesses in the Iraqi energy sector. To see how they can assist your business in Iraq, please contact Gavin Jones or Adrian Shaw.

The first day of Iraq's fourth energy auction resulted in just one successful bid, with four of the today's six exploration fields receiving no bids from the 47 pre-qualified bidders. The six blocks offered today were numbers 2, 9, 6, 12, 1 and 11.

A consortium of Kuwait Energy (40%), Turkey's TPAO (Turkiye Petrolleri AO) (30%) and the UAE's Dragon Oil (30%) won the rights to explore a 900-square-kilometer (350-square-mile) Block 9, near the Iranian border in the oil-rich southern Basra province. It will be paid $6.24 for each barrel of oil equivalent it finds.

An unsuccessful bid was made for the rights to the 8,000-square-kilometer (3,100-square-mile) Block-6 in the southern Anbar and Najaf provinces. A consortium led by UK's Premier, along with Vietnam's PetroVietnam and Russia's Bashneft, sought $9.85 for each barrel of oil equivalent, but the government offered to pay only $5 per barrel and withdrew the lot.

Four other blocks attracted no bidders. The bidding will continue on Thursday for the other six blocks, and for blocks 2 and 6 which will be offered again to give companies that weren’t present today a chance to bid. Seven of the 12 exploration blocks are believed to hold natural gas, and the rest both natural gas and oil.

The oil minister said that if Thursday's auction also attracts little interest, Iraqi companies would explore those lots, ruling out the possibility that contract terms would be revised.

(Sources: AKnews, AFP, Associated Press, Bloomberg)

Iraq's fourth energy bidding round takes place on Wednesday and Thursday, but Reuters reports that tough contract terms mean Baghdad may struggle to drum up major interest.

The 12 new oil and gas exploration blocks are some of the last potentially rich unexplored territories left.

As in previous auctions, foreign energy companies would prefer production-sharing contracts, through which explorers can claim a share in profits, to the service contracts that are being offered, under which they would be paid a fee for their services.

In February, Baghdad made concessions to lure participants to the round, dropping a clause that required companies to partner with a state oil operator. But Iraq Oil Report says that the terms insist that companies recognize Baghdad as Iraq's sole oil authority, preventing them from signing deals with the Kurdistan Regional Government (KRG).

Reuters says the companies that win bids will be able to extract gas discovered in the blocks immediately, but the Iraqi government has retained the option to pay companies compensation to keep oil in the ground and boost its own reserves.

These latest exploration blocks are mostly in remote parts of western and central Iraq, making them harder to protect against possible insurgent attacks.

"Neither the terms nor the acreage on offer are attractive, so I wouldn't be surprised if there were little interest from the international oil companies," one anonymous senior Western oil executive told the agency.

According to a final tender document, the outcome of the bidding will be decided only according to the remuneration fee companies seek for each barrel of oil equivalent produced. The bid with lowest fee will win an exploration block.

Industry sources said companies would have to bid $10 to $20 a barrel for the service fee to compensate for the risk involved.

On the other hand, Baghdad-based oil analyst Hamza al-Jawahiri told Reuters, "who could miss such a golden opportunity to invest in such promising areas. The crude and gas are there and it only needs someone to poke them."

Please click here to see the full list of companies qualified to bid in the auction.

(Sources: Reuters, Iraq Oil Report, Ministry of Oil)

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Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.

Companies Mentioned:

Exxon, Lukoil, Pakistan Petroleum, Shell, Statoil, Total, Zhenhua

Action Calls:

• News to watch: 4th Round Auction: First test of many for the TSC model; watch for defections and where per-bbl fees come in.

<liBaghdad decides to cut gasoline to Kurds, before changing mind: Why the reversal? Bigger question may be from where the next break will come.

Headlines:

• Maliki goes after Nujaifi in his home province: Maliki goes after rival in his home territory, stake claim to disputed province.
• P5+1 mostly a non-event domestically: We said to watch this, but it won't affect domestic calculus too much.
• Basra Provincial Council debates anti-Turkish measures: Potential indicator of Baghdad's relations with Ankara, and possibly Erbil.

Calendar Events Discussed:

• May 30-31 - 4th Round Oil and Gas Auction
• June 15 - Parliament returns from 6 week break

Click here to access the report, or to add your email address to Dunia's mailing list to receive the Iraq Market Tracker via email.

Kurdistan's minister for natural resources, Ashti Hawrami (pictured), has said that Exxon Mobil is still operating in oil fields in the Kurdistan Region.

According to the report from AKnews, his statement came in response to a remark by the Iraqi Oil Minister, Abdul-Kareem al-Luaibi [Elaibi], who told Arabic Sabah newspaper that the US company has suspended its work in Kurdistan fields until the issues between Erbil and Baghdad are over.

Exxon Mobil in no way has suspended its work in Kurdistan, Hawrami said, criticizing Baghdad officials for repeating such media statements while the company is still operating in the region.

(Source: AKnews)

Advertising Feature

Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.

Companies Mentioned:

BP, CNPC, Exxon, Genel Energy, Total

Action Calls:

• Iraqi Kurdistan to push ahead with oil exports: Gives KRG "plan B" for oil revenues and leverage in negotiations.
• Genel expands again in Kurdish Region: Shows resilience of Kurdish oil companies despite the ongoing standoff.

Headlines:

• Iraq summons Turkish Ambassador: Suddenly makes sense in the context of Kurdish pipeline announcement.
• Mutlak allowed to return to post: "Mercy" for Mutlak, doesn't guarantee same for Hashimi.

Calendar Events Discussed:

• May 23 - P5+1 Nuclear Talks in Baghdad
• May 30-31 - 4th Round Oil and Gas Auction
• June 15 - Parliament returns from 6 week break

Click here to access the report, or to add your email address to Dunia's mailing list to receive the Iraq Market Tracker via email.

Iraq has invited international consultancy firms to assist in managing the country's multi-billion dollar oilfield water injection projects. The scheme would assist in raising the extraction rates in order to stop declines in production at fields such as Majnoon, Zubair and Rumaila.

Dhiya Jafaar, head of the state-run South Oil Company, told Reuters that the company has already sent letters to consultancy companies and expects to receive offers soon. Iraq's oil minister Abdul-Kareem Luaibi [Elaibi] said last week that several firms had been shortlisted.

The winning firm would replace ExxonMobil in leading the project; Exxon reportedly lost the contract in February, but Jafaar told Reuters that this was not connected with the company's exploration deals in Iraqi Kurdistan, saying instead that the reason was "poor coordination and the project economics submitted by Exxon".

(Source: Reuters)