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Iraq is not discussing the purchase of the Russian S-400 missile defense system, Iraq’s ambassador to Russia has told Rudaw, following rumors Baghdad is in the market for such a system to counter recent Israeli airstrikes on Iraqi territory.

“There haven’t been and there aren’t any discussions or consultations between the Iraqi government and the Russian government concerning the acquisition of S-400 weapons,” the Iraqi ambassador said.

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(Source: Rudaw)

(Picture: Соколрус)

By Ruslan Mamedov for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News. 

A series of alleged Israeli strikes on Iran-linked targets in Syria, Lebanon and Iraq have sent shockwaves across the region and beyond. The attacks on Iraq in particular are unprecedented, with long-term effects yet to be revealed.

The immediate effect, however, is that both the general public and the elites of Middle East nations have raised the need to protect their skies more effectively. Currently, air defense systems are hindered by more than a lack of innovative equipment.

They are also hindered by their overdependence on external powers, especially the United States. Shortly after the strikes, it didn’t take long for Russia to move closer to Iraq in terms of military-technical cooperation.

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(Picture credit: Соколрус)

By John Lee.

Iraq's Deputy Foreign Minister Muayad Salih has said that he expects Russian companies to increase their investment in Iraq.

Tass quotes him as saying that a Russian company is starting to develop of fields in the area of the Ramadi city, adding:

"Hopefully investments there will top $45 billion by 2030."

Meanwhile, the head of the Legal Department at the Iraqi Foreign Ministry, Mr. Luqman Al-Faily, met with the Russian ambassador to Baghdad Mr. Maxim Maksimov, at the Ministry’s headquarters in Baghdad.

During the meeting, they discussed procedures for the mutual exemption of entry visas between the two countries for holders of diplomatic, service and special passports.

(Sources: Iraqi Foreign Ministry, Tass)

By John Lee.

Russia's Stroytransgaz has signed a preliminary contract for the exploration, development and production of Block 17, in Anbar province.

At a signing ceremony in Wednesday, Deputy Prime Minister for Energy Affairs and Oil Minister Thamer Abbas Ghadhban said that preliminary studies and information indicate the existence of oil reserves ranging between 2 and 4 billion barrels oil equivalent of gas. The block measures 12,000 square kilometers.

The Director General of Petroleum Contracts and Licensing Department, Abdul Mahdi Al-Amidi, said that the contract commits the company to build a residential complex in Anbar province in addition to the development of infrastructure and services for the province, with an estimated value of $100 million dollars.

Stroytransgaz was sanctioned by the US Department of the Treasury's Office of Foreign Assets Control (OFAC) in 2014 in relation to Russian activity in Ukraine.

The deal needs final approval by Iraq's Council of Ministers.

(Sources: Iraqi Oil Ministry, OFAC)

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

The Ministry of Oil and the “Odious Contract’ Trap” with ExxonMobil’ Consortium

Talks have intensified recently about the continuation of negotiations between the Ministry of Oil (MoO) and ExxonMobil/CNPC consortium that might lead to the signing of a contract for the "South Iraq Integrated Project (SIIP)" at an estimated cost of $53 billion and a duration of 30 years, but no official confirmation or indications on the fundamental contractual provisions that were agreed on and those still pending.

In the light of the available information, material evidence, actual examples, international geopolitical considerations and comparative analysis, a detailed evidence-based research and Report* was done on the project and related negotiation.

The report on SIIP’ possible contract comprises:

• A necessary introduction and caveat;
• Political and geopolitical implications of ExxonMobil behavior and its apparent link to the “deep state” based on many evidences that actually and factually had negative consequences on oil projects, for example, in Russia and in Iraq.

In Russia, ExxonMobil caused a delay of almost four years in the development of the Pobeda oil discovery in the Kara Sea when ExxonMobil withdrew, in late 2014, from its deal with Rosneft due to imposing US sanctions on Russia.

Iraq had three bad experiences with this company in recent years. The first, when ExxonMobil negotiated secretly and concluded, against declared government policy, deals with KRG in 2011 soon after the company secured West Qurna 1 contract through first bid round with the federal ministry.

That move led to excluding ExxonMobil from leading Common Seawater Supply Project (CSSP), reduce its Participating Interest in WQ1 and blacklisting it from any upstream project.

The second and third bad experience occurred this year when the company evacuated, unilaterally and without government consent, all its foreign staff from WQ1. All these three incidents caused tremendous damage to Iraqi economic interest.

• Potential strategic risks, of an enormous scale, on SIIP that could be generate from the growing deterioration of the American-China relations as evidenced from the blacklisting of two major state oil companies, i.e. Zhuhai Zhenrong Corp and Sinopec. US escalating tension against Iran adds further geopolitical risks;
• Analyses of what would be SIIP contract was premised on what was reported by national and international sources that are originally based on information given by unnamed Iraqi officials. That was due to the absence of clarity and lack of transparency of the ministry regarding essential contractual terms and conditions.

Based on the analyses and findings of the report, I am compelled to clearly alert and strongly, frankly and loudly warn both the Prime Minister and the Minister of Oil of the danger of pushing Iraq into a "trap of an odious contract” and by specifying ten of its most grave risks and disadvantages:

1. ExxonMobil, as the consortium leader, is granted a monopoly position that allows the company directly controlling all vital oil projects in southern Iraq, and thus the entire national economy, for thirty years;
2. It poses a multiplicity of major threats to national security and economic interest due to what can be called contractually-connected high strategic and geopolitical risks, since SIIP comprises many critical and vital projects such as Common Seawater Supply project-CSSP (for water injection), pipelines, storage tank-farms, export facilities, gas processing units and two oilfields;
3. It contravenes the fundamental premises of the Iraqi Constitution because the contract requires “mortgaging/ reserving/ booking” two oilfields, with a combined plateau production of 500kbd, exclusively for the two foreign oil companies, i.e. ExxonMobil and CNPC, for the entire term of the contract- 30 years;
4. It offers “Profit-Sharing Contract”, which, in reality, represents the monetary side of a “Production Sharing Contracts”, which, is impermissible by the Constitution;
5. The announced astronomical cost (of $30bilion) increased already by $11billion in less than ten weeks while negotiating!;
6. It offers all rent (windfall) resulting from oil price increases exclusively to the two foreign companies, nothing for Iraq!;
7. It prevents SOMO (the only State Oil Marketing Company) from performing its role in marketing crude oil from the “mortgaged” two oilfields; this contravenes established policy, undermines annual state budget laws and weakens almost 50 years of SOMO’s function;
8. It reduces the “national efforts” in the development of oilfields, thus, contradicting declared Ministry policy, weakens Iraq’s flexibility to comply with OPEC decisions through “swing fields”;
9. Inconsistent with the regulations for tendering and contracting government projects;
10. It lacks both transparency and competitiveness.

Therefore, I suggested to the Ministry of Oil not to continue on wasting time and causing further delays: it should officially declare that it is not in Iraq's economic interest and national security to award SIIP to ExxonMobil-CNPC (and for this matter to any one consortium) and end, immediately, all and any related negotiations.

In the event that the Ministry of Oil and/or the Government insist on going ahead with this Odious Contract with ExxonMobil-CNPC, it becomes inevitable to refer the matter to the Federal Supreme Court to invalidate the contract on the bases of incompatibility with the Constitution; for eradicating the highest interest of the Iraqi people, including future generations (principle of inter-generational equity)  and for returning Iraq to what looks like abhorrent concessions of the, colonial, past.

*A brief of the original Arabic text of the entire report was circulated widely within many networks and was published by and posted on many websites, and accessible on the following links:

الحذر يا وزارة النفط من "فخ العقد البغيض" مع شركة اكسون موبل

https://www.akhbaar.org/home/2019/8/261291.html

http://www.tellskuf.com/index.php/mq/83987-as174.html

http://www.sahat-altahreer.com/?p=49115

Click here to download the full article in pdf format.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.

By John Lee.

Indian-based Asian Oilfield Services Limited has announced that it has won orders totalling $37 million in Iraq.

The orders relate to seismic acquisition at Block 12, with $12 million for a 2D survey and $25 million for a 3D survey.

Block 12, located in the Najaf and Muthanna provinces, is being developed by Russia's Rosneft, and PetroVietnam.

According to a statement issued to the Bombay Stock Exchange, the order is to be executed within FY20 and FY21.

The company has previously carried out 3D surveys at the Shakal block and Taza block in Iraqi Kurdistan.

(Source: Asian Oilfield Services)

By John Lee.

Russia’s Gazprom Neft is reported to be interested in expanding its operations in Iraq.

Reuters says boss Alexander Dyukov told the annual general meeting on Friday that the company, which is already developing the Badra oilfield, is also "looking at" the Mansuriyah gas field near the Iranian border.

It says that Iraqi government is expected to launch a tender to develop Mansuriyah later this year. Iraq Business News understands that the field is currently being developed by TPAO (37.5%), Oil Exploration Company (25%), Kuwait Energy (KEC) (22.5%), and Kogas (15%).

(Source: Reuters)

Rosneft’s money might help Iraqi Kurdistan meet its domestic gas demand, but it could also cripple its long-term export ambitions, according to an oil analyst.

In an opinion piece for Energy Reporters, Nick Augusteijn argues that Rosneft’s deals are vehicles for Russia’s "increasingly assertive foreign policy".

Click here to read the full story.

(Source: Energy Reporters)

By John Lee.

Iraq is reportedly still holding discussions over the possible import of wheat from Russia.

Deputy trade minister Haitham Jameel Ismail al-Khshali told Reuters that a group of experts is looking into the issue, but it could be months before they reach a decision.

(Source: Reuters)

By John Lee.

Russia's Rosneft will reportedly conduct geological exploration in Iraqi Kurdistan this year.

CEO Igor Sechin (pictured) is quoted as telling the annual general meeting:

"The company continues to implement the project to develop fields in Iraqi Kurdistan in the Middle East, where a geological exploration program is scheduled for this year to ensure production in the future."

He added that pilot production at the Bijeel field began in the first quarter.

(Source: Tass)