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

Key Iraqi border town retaken amid regional power plays

Iraqi Prime Minister Haider al-Abadi raised the Iraqi flag Nov. 5 after climbing a sandy berm from which Islamic State (IS) flags could be seen about 200 meters (656 feet) away on the Syrian side of the border.

Al-Monitor’s reporter was the only Western journalist reporting from the border area at Qaim with the Iraqi forces in the first few days after the town's liberation, according to several officers on the front. No Western media were present during the actual operation, they said, during which access to even the surrounding area was severely restricted.

The city of Qaim, along Iraq’s westernmost edge, was proclaimed liberated Nov. 3, even though some of the nearby areas were not cleared until the following day.

The Iraqi army, counterterrorism forces and local tribal fighters trained by the international anti-IS coalition and non-local Popular Mobilization Units took part in the fighting.

Al-Monitor saw no civilians in the central areas or near the Syrian border while driving through the dusty, heavily damaged wasteland of Qaim’s streets Nov. 5. In the days following the liberation, Al-Monitor visited the only three families said to have remained in one area of the city.

A Nov. 6 sandstorm covered Qaim with a copper-colored layer of dust, severely limiting the visibility in the town and along the entire road toward it from the Jazeera operations headquarters in Haditha, roughly 150 kilometers (93 miles) away along a road torn up by improvised explosive devices (IEDs) that dips through wadis and passes by destroyed bridges.

A long string of knocked-down electricity transmission towers, still seemingly fully intact otherwise, can be seen from the road. There is no cellphone reception of any kind in the area. Frequent firing could be heard from the Iraqi side of the border at Qaim toward al-Bukamal in Syria on Nov. 6.

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

The Iraqi State Organization for Marketing Oil (SOMO) announced Nov. 2 that it is arranging with Turkey to allow SOMO to sell Iraqi crude from the disputed territories through the pipeline from Kirkuk to the Ceyhan Turkish port.

The Kurdistan Regional Government (KRG) used to export about 500,000 barrels per day independently through Ceyhan before the Baghdad operation to retake the disputed areas in mid-October.

It was not long after the Iraqi army took over the oil fields in Kirkuk in a military operation to “impose security,” as described by Prime Minister Haider al-Abadi, that the federal government resumed oil pumping operations.

The operations started about a week after the clashes between governmental forces and Kurdish peshmerga forces. Meanwhile, the Ministry of Oil rushed to increase oil production, and on Oct. 23, the ministry requested the help of the British petroleum company BP in increasing production in Kirkuk oil fields to more than 700,000 barrels per day. The ministry also announced the formation of a ministerial committee to advance the oil industry in the province of Kirkuk.

Kirkuk has more than 35 billion barrels in oil reserves and a production capacity ranging from 750,000 to 1 million barrels per day. The federal government seems determined to control the oil sources, especially in Kirkuk and the disputed areas. In light of this, on Oct. 19, the Iraqi minister of oil warned all countries and international petroleum companies against signing contracts with any Iraqi party without first consulting the federal government.

By Ahmed Tabaqchali. Originally published by Iraq in Context; re-published by Iraq Business News with permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Between February 2017 and mid-October, Rosneft signed a number of deals with the Kurdish Regional Government (KRG) that established for it, and by extension for Russia, a major position as both an investor and stakeholder in the Kurdish Region of Iraq (KRI)’s hydrocarbon resources and infrastructure.

The move was interpreted, especially by the KRG, as implicit support for the KRG in its bid for independence, especially in light of the latest deal signed following the reassertion of Iraq’s federal control over Kirkuk and other disputed territories. While there is an element of truth to this thinking, the deals are part of a wider geopolitical positioning for Russia as a major gas supplier to Europe and as an emerging power in the Middle East.

The deals provide Rosneft, and by extension Russia, effective control of the KRG’s Oil & Gas infrastructure, and a controlling stake in the region’s finances in more ways than one.

Within the oil space it has established this in three ways. The first was by providing USD 1.5bn in financing via forward oil sales payable over 3-5 years. This would be payable in kind from the KRG’s exports, until recently at about 550,000-600,000 barrels per day (bbl/d). However, the loss of the Kirkuk fields takes away about 430,000 bbl/d of production or eventually about half of the KRG’s exports.

This leaves the KRG with a tiny revenue stream after payments to International Oil Companies (IOC)’s, from which to make payments on forward oil sales of up USD 3.5 bn including Rosneft’s USD 1.5bn. A complicating factor is the repayment of other KRG debt, estimated at over USD 21bn by end of 2017, which will have to be factored into debt payment sustainability.

By Adnan Haj Omar, Editor-in-Chief of Arabisk London Magazine.

The operations to annihilate ISIL once and for all have finally reached their last stage. The latest round of peace talks in Astana has resulted in the finalisation of a de-escalation zone. The Kurdish issue has become a common denominator and a priority to be addressed by most of the regional powers involved.

The Syrian Army has regained control of numerous areas of the country, while attempts to reconciliation are ongoing in regions like Reef Dimashq and Reef Homs. In addition to that, the reopening of the Nasib border crossing with Jordan has now been put on the table.

In the light of these premises, it is impossible not to ask ourselves a few questions: Where does the reconstruction of Syria stand in all this? Has it really started thanks to the efforts carried out by both the Syrian government and its allies? Can the Damascus International Fair be considered the starting point of the reconstruction? Many more questions could be asked.

According to a report issued in July 2017 by the World Bank, called “Toll of War: The Economic and Social Consequences of the Conflict in Syria”, more than 20% of the Syrian homes have either been completely razed to the ground or heavily damaged, while statistics on the number of schools, hospitals, roads, oil and gas plants that have been entirely or partially destroyed are much higher. The report also estimates that the removal of 15M tons of rubble in Aleppo and Homs only will take years.

According to current estimations, the costs for the reconstruction of Syria range between 200 and 350 billion USD. If these numbers are correct, will the Syrian government, Russia, Iran and those countries that wish to take part in the process like Jordan, Lebanon and Iraq be able to sustain these costs, a big part of which will be investments? Or will they need a larger international cooperation which includes not only international institutions but also the governments of rich states, such as those of the GCC and the EU or the US?

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

With its shelves filled with books by Russian and Italian authors alongside contemporary Iraqi writers, Books Town provides a welcome refuge in Baqubeh in Diyala governorate, which is known for sectarian violence and the Islamic State (IS).

The bookstore, which is a frequent stop for many intellectuals in Diyala governorate, is owned by Tayseen Ameer, a 31-year-old engineer. A woman who runs a bookstore is a rarity in the area but this has not stopped Ameer, who was dismayed that only a few bookstores cater to customers sitting down and reading.

“I wanted to spare local readers the effort of traveling all the way to Baghdad to buy books,” Ameer told Al-Monitor.

She said that she has faced many obstacles since she opened her bookshop in 2016 at the town's commercial center, where most shops and large markets are owned by men. Some of her family members opposed her opening the bookstore, while some people who walked in harassed her, saying she had no business doing a man’s job.

Ruqaiyya Abd Ali, a lawyer who spends her mornings selling books in the well-known Mutanabbi Street, was the first woman to open a bookstore in Iraq. Since February 2015, Abd Ali has been selling books on the sidewalk, rather than in a bookstore, and her visibility as a bookseller has encouraged other women to follow in her footsteps and sell books on the street.

“I was surprised with the public and media interest in my business in Mutanabbi Street. I did not even know that I was the first woman to work as a bookseller [in Iraq],” Abd Ali told Al-Monitor, adding that she encourages more women to take up the profession.

Iraq’s foreign minister Ibrahim Jaafari (pictured) met his Russian counterpart in Moscow on October 23 where he said Baghdad seeks stronger economic ties and the development of a strategic partnership with Russia.

“Relations are already at an excellent level in various areas: politics, economy, security. After turning the page of the fight against terrorism, our task is to give impetus to the economic development," Jaafari told reporters prior to his meeting with Sergei Lavrov.

Russia's Foreign Minster Sergey Lavrov said that Russia would continue business interactions with the Kurdistan Region, but in coordination with Baghdad.

"I want to confirm once again our commitment to the respect for sovereignty and territorial integrity of Iraq, the commitment to solving all the problems that arise through an inclusive national dialogue, involving and taking into account the interests of all ethnic, religious and political groups," Lavrov said.

Neither commented on the recent deal signed between Russian oil giant Rosneft and the Kurdistan Regional Government (KRG) which if implemented give the Russian company a controlling percentage of oil production in the Kurdish region.

(Source: GardaWorld)

By John Lee.

Russia's Gazprom Neft has said it expects production at the Badra oilfield to stay between 85,000 and 90,000 barrels per day (bpd) in 2018.

Deputy chief executive Vadim Yakovlev (pictured) told Reuters that Baghdad has not asked the company to curtail production, despite reports that the Oil Ministry had asked foreign producers to cut investment to reduce the cash-strapped government’s contribution in shared ventures.

Yakovlev added that production at Badra is expected to plateau as high as 110,000 bpd in the future.

(Source: Reuters)

Russia's Rosneft and Kurdistan Regional Government (KRG) have announced the start of joint implementation of an infrastructure project for the operation of the oil pipeline in the Kurdish Autonomous Region.

According to a statement from Rosneft, its share in the project "may amount to 60%".

"The other project participant with 40% share will be KAR Group, who is the current pipeline operator," it added.

Rosneft Chief Executive Officer Igor Sechin (pictured) said:

"The entry into the infrastructure project will contribute to achievement of Rosneft’s strategic objectives and will enable Rosneft to enhance the efficiency of oil transportation to the end customers including supplies to the Company’s refineries in Germany".

(Source: Rosneft)

Russian state-controlled oil company Rosneft and the Government of the Kurdish Autonomous Region of Iraq signed the documents required to put into force Production Sharing Agreements (PSA) with respect to five production blocks located in the Kurdish Autonomous Region.

The share of Rosneft Group Subsidiaries in PSA will be 80%, the amount of payments for the projects farm-in and geological information for each of  five blocks ranges from 40 mln. USD  to 110 mln. USD and may total to 400 mln.USD (incl. 200 mln.USD that can be compensated by oil produced from block), the heads of terms of the agreements and the basic principles of product distribution are similar to the PSA in Iraqi Kurdistan that were signed by other international oil and gas companies.

The parties agreed to implement the geological exploration program and to start pilot production as early as in 2018. In case of success, in 2021 it is planned to start full-field development of the blocks. According to conservative estimates, the total recoverable oil reserves at five blocks may be about 670 million barrels.

The documents were signed in pursuance of the Investment Agreement which was concluded at the St. Petersburg International Economic Forum in 2017.

(Source: Rosneft)

By Dr. Olgu Okumuş for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

On Sept. 28, when Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan jointly stated their support for the sovereignty and territorial integrity of Iraq, they also made a point of stressing their countries' continued commitment to two joint mega energy projects: the Turkish Stream gas pipeline and the Akkuyu nuclear power plant.

The success of these projects would diminish the importance of the Kurdistan Regional Government (KRG) as a regional economic actor, pushing the significance of its oil and gas resources into the background.

Given the KRG's apparent hope to leverage such resources as part of a continued drive for independence — a drive Erdogan has said would lead to "even more serious mistakes” by the KRG — Erdogan and Putin’s joint statements are worthy of increased scrutiny.

This was the second visit by the Russian leader to Turkey since the improvement in relations that has taken place after ties suffered a major blow when Turkish forces shot down a Russian jet in November 2015. Putin’s first visit, in October 2016, was also energy-inspired, as it occurred at Erdogan’s invitation to participate in the 23rd World Energy Congress.

Last week’s meeting was labeled a "solely pragmatic meeting” by the Kremlin, because it covered several essential bilateral trade issues, such as Turkey’s purchase of Russia’s S-400 missile system, Russia’s embargo on Turkish tomatoes and the two countries’ joint energy projects. At the leaders' press conference, they stressed their discussions on energy projects, while also commenting on international security issues such as Syria and the KRG independence referendum.

Turkey needs a cooler relationship with the KRG. Since January 2013, the Turkish-British joint venture Genel Energy’s truck-based deliveries from the KRG have been bypassing the Baghdad-controlled Kirkuk-Yumurtalik oil pipeline; the oil has instead been going to Turkey’s Ceyhan port on the Mediterranean Sea. This had already prompted concerns about the KRG’s drive for economic and political independence, and pushed Ankara into the middle of an international diplomatic crisis.