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Markets hate uncertainty, but history has shown us that times of uncertainty create the greatest opportunities.

Warren Buffett's famous saying, “be fearful when others are greedy, and be greedy when others are fearful”, is true whether referring to the stock market or to risk-taking in general.

And Iraq is giving us plenty of risk and uncertainty at the moment:

• Security: What will happen when US combat forces are withdrawn?
• Government: Who will eventually win this titanic battle? Did Tuesday's meeting in Damascus between the secular Ayad Allawi and anti-U.S. Shia'ite Muslim cleric Moqtada al-Sadr bring us any closer to a resolution?
• Hydrocarbon law: As we've reported, both al-Maliki and Allawi are committed to honouring the existing contracts, but will the Supreme Court uphold them as valid? We'll update you on this as soon as the Court makes a ruling.

But the fact that these issues are coming to a head now means that they will be resolved sooner rather than later. Companies like ExxonMobil and BP are not letting these factors delay their plans, while others are seeing this as exactly the right time to get into Iraq.

Instead of waiting for everything to be resolved, the French government, for example, is building a heavily fortified business centre and boutique hotel where businessmen can sleep, eat and work in safety. They're not ignoring the risks, but they're seizing the opportunities while they are still available.

If you're considering taking that step into the Iraqi market, AAIB and Upper Quartile are the perfect team to help you manage the risks and grasp the opportunities. For more information please contact Gavin Jones or Adrian Shaw.

ExxonMobil (XOM.N) and its partner Royal Dutch Shell (RDSa.L) have not been affected by a delay in the formation of Iraq's new government, and work on their West Qurna Phase One project is moving ahead, an Exxon executive said on Monday.

Exxon expects to tender later this year to drill new wells in the supergiant field and will award contracts for well services within four weeks, which could include some work-over, said ExxonMobil Iraq Vice President James Adams, according to a report from Reuters.

"Right now things seem to be going ahead fairly well," Adams told Reuters on the sidelines a conference in Baghdad between oil company executives and the Iraqi Oil Ministry.

Iraq held a general election in March that produced no outright winner and as yet no new government.

"No, it's not affecting us," Adams said.

The Exxon-Shell contract to develop the 8.7-billion-barrel West Qurna Phase One project was one of series Iraq has signed with international oil companies (IOCs) to develop its reserves.

Adams said Exxon was taking the lead among the international oil companies in coordinating initial studies into a water injection scheme that could help raise extraction rates at West Qurna Phase One, Majnoon, Zubair, Rumaila, Gharaf, and Halfaya oilfields.

"We are taking the lead in terms of coordinating and undertaking the initial studies, because you don't want each field or each IOC to be doing their own design," he said.

He said the aim would be to produce 10-15 million bpd of water and while the project was in the very early stages of concept evaluation, it would definitely use seawater.

He said it would cost billions of dollars and that such projects typically took at least three years to complete.

"The timeline right now is undetermined but the timeline will be very fast," he said.

(Source: Reuters)

Related articles:

• International Oil Symposium in Baghdad
• West Qurna 1 to See 8 New Wells
• ExxonMobil to use water injection to enhance southern Iraqi oil ouput

Iraq's oil ministry is holding an international symposium beginning on Sunday to discuss the best ways for the government to co-ordinate and implement the country's oil expansion plans, a senior Iraqi oil official said Thursday.

Two oil licensing auctions last year awarded 11 deals to international oil companies that promise to add nearly 10 million barrels a day of capacity to Iraq's existing 2.5 million barrels a day by 2017.

"We will discuss the pace of implementation of the signed deals," Sabah Abdulkadhim al-Saaidi, head of legal and commercial office at the petroleum contracts and licensing directorate, told Dow Jones Newswires.

Saaidi said that the ministry has invited all the firms involved in the oil field projects to discuss their plans for development and the requirements and obstacles that lie ahead.

The symposium is expected to come out with recommendations that will be referred to the cabinet to be approved as guidelines for all ministries and relevant authorities to back the implementation of these oil field deals, Saaidi said.

"This intensive two-day program will issue recommendations to be referred to the cabinet to be approved as guidelines for all the ministries and relevant authorities to support the implementation [of the expansion]," Abdul Mahdy al-Ameedi, head of the Petroleum Contracts and Licensing Directorate, previously told International Oil Daily.

The two-day meeting is organized by the ministry of oil in co-operation with the cabinet's energy committee. The ministries of industry, trade, interior, finance and environment will send representatives to outline how they will support the oil ministry's efforts in implementing these strategic projects. In addition, officials from the local governments of Basra, Missan, Wasit and Dhi Qar and Nineveh will be also attending.

Iraq holds the world's third largest proven reserves of crude oil, with more than 115 billion barrels, but its oil infrastructure is creaking after decades of sanctions, war and neglect, and in dire need of boosting its oil production to help rebuild its war-torn infrastructure.

Baghdad signed late last year and early this year some 11 deals with international oil companies, including the majors such as BP PLC (BP), Royal Dutch Shell PLC (RDSA), Exxon Mobil Corp.(XOM), Total S.A. (TOT), Eni SpA (E) and Lukoil Holdings (LKOH.RS) among others.

(Source: Dow Jones, International Oil Daily)

Shell and its Iraqi state partner are in the process of awarding a deal to drill new oil wells at the super giant Majnoon oil field in southern Iraq, the head of Iraq's state-run South Oil Co., Dhiaa Jaafar, said on Tuesday.

Dow Jones reports that Shell, which partnered Malaysia's state-run Petronas to develop Majnoon, will also award engineering, procurement and construction contracts to build various production installations at the field, an Iraqi oil industry source familiar with the project said.

Jaafar told Dow Jones Newswires that both deals have not yet been awarded but they are "in process." He gave no further details.

Separately, an Iraqi oil industry source said that firms including Halliburton, Weatherford International, and Petrofac have been invited to submit bids for these two tenders.

A Shell executive contacted by Dow Jones refused to comment.

Shell said earlier that it was planning to drill 15 new wells over the next two years at Majnoon. This would help lift production to 175,000 barrels a day by 2012 from the current level of 45,000 barrels a day.

The Anglo-Dutch giant and Petronas were awarded a contract in December to develop the Majnoon field, which is located in Basra governorate and holds some 12.6 billion barrels of proven oil reserves. Shell owns 45% of the venture and Petronas 30%, with Iraq's state-run Missan Oil holding 25%.

Halliburton and Weatherford are already involved in oil services projects in southern Iraq. Petrofac said last month that it was establishing a presence in Iraq as it moves to increase its massive order book of projects.

World oil companies are moving ahead with development work at oil fields despite a political vacuum in Iraq after a general election in March produced no outright winner and raised concerns about increased violence in the country. U.S. Vice President Joe Biden concluded a visit to Baghdad on Monday, trying to mediate a solution among the various political blocs.

Shell is still keen to capture and sell gas in Iraq. As we reported last week, the Iraqi cabinet last week ratified a $12.5 billion deal with Shell and Mitsubishi to develop a gas-structure project in southern Iraq, paving the way for a final signature of the deal.

Iraqi officials said that the venture could produce up to 2.5 billion cubic feet a day when the project is developed.

Shell also partnered with ExxonMobil won a deal to develop the prized West Qurna Phase 1 oil field in southern Iraq. ExxonMobil holds the majority stake in that field.

(Source: Dow Jones)

Amman, 31 May 2010 - Dow Jones

The former head of Iraq’s largest state-owned oil company and advisor to the country’s oil ministry has criticised deals Baghdad signed with international oil majors to develop some of its biggest fields.

“There is no clear national plan on how to develop these huge oil fields,” Jabbar al-Luaiby told Dow Jones Newswires in an interview.

BP, Royal Dutch Shell and Cnooc Ltd, Exxon Mobil Corp and Italy’s Eni Spa. (ENI.MI) have bagged deals with Iraq to develop fields in the war-torn country, which holds the world’s third-largest proven oil reserves after Saudi Arabia and Iran, according to BP.

Al-Luaiby’s remarks could increase pressure on Baghdad to revise contracts awarded to foreign companies. Ayad Allawi’s Iraqiya bloc, which won the most seats in the recent parliamentary election, said it would like to review oil contracts signed with the majors.

“They’re huge deals that need the infrastructure, the potential and management which Iraq is currently lacking because of years of war, economic sanctions and destruction,” said al-Luaiby, who recently left his position as an advisor to Iraq’s oil minister.

Al-Luaiby added that international oil companies can still play a part in tapping Iraq’s vast resources once better infrastructure and oversight is in place. Foreign investment could help reverse the impact of two decades of war, sanctions and neglect on Iraq’s oil industry.

The initial development plan agreed by Exxon Mobil (XOM.N) and its partners for Iraq's West Qurna Phase One oilfield includes drilling eight new wells and overhauling up to 50 wells this year to boost output, an Iraqi oil official said on Monday.

International oil service companies will be invited to drill four new wells and state-run Iraqi Drilling Company is already working on drilling the remaining four planned for this year to increase production beyond current output of 225,000 barrels per day (bpd), Bassem Abdul Karim, head of the Operation Department in the South Oil Co., told Reuters in an interview.

"We will issue a tender for the other four wells ... and there will be workover (tenders) for 45 to 50 wells until the end of the year," he said in his office in the southern oilfield of Zubair. (Reporting by Ahmed Rasheed, Rania El Gamal and Aref Mohammed; editing by Jim Loney)

( Reuters )

The Iraqi Oil Ministry has awarded ExxonMobil a project to inject water in crude oil fields in an effort to enhance production. The contract, estimated at several billions of dollars, was meant to take place in oil fields in southern Iraq.

Officials said ExxonMobil would inject 12 million barrels of water per day from the Gulf into the wells. They said Exxon would share the costs of the project with companies selected to manage the wells, including Russia's LUKoil, Italy's Eni and Royal Dutch Shell

The Oil Ministry has determined that water-injection would be required to maximize production of the southern oil fields. Baghdad has sought to increase oil production to up to four million barrels per day.

The world’s biggest oilfield contractors are building bases in the deserts of Iraq in a bet they’ll profit as the country strives to boost crude oil output to rival Saudi Arabia.

Schlumberger Ltd., Halliburton Co. and Baker Hughes Inc. are among companies this past week that said they’re expanding operations in Iraq. Weatherford International Ltd., the fourth- largest oilfield-services provider by market value, will expand staff in Iraq to more than 1,000 by July, Chief Executive Officer Bernard Duroc-Danner told investors yesterday on a conference call.

The prize is a share of the billions of dollars to be spent as the war-torn country seeks within seven years to increase crude-oil production capacity to 12 million barrels a day, on a par with the world’s largest oil exporter, Saudi Arabia. Iraq’s current production is about 2.4 million.

“It’s all becoming more real, in that contract awards are getting closer,” said Jeff Tillery, an analyst at investment bank Tudor, Pickering, Holt & Co. in Houston. “It’s a big opportunity for these guys.” Revenue potential is high, he said. “The profit side is a little bit of a leap of faith.”

The risks are financial, legal and political. Contractors don’t yet have a firm grip on what costs might be, Duroc-Danner said. Last month’s parliamentary elections left no political party with enough seats to govern alone, and Iraq doesn’t have a law yet for how oil revenue will be distributed.

Second-Biggest Field

Iraq’s government has signed 10 contracts for oilfield development with London-based BP Plc, Exxon Mobil Corp. and other producers.

BP, which is leading development of Iraq’s biggest oil field, known as Rumaila, awarded $500 million in service contracts last month. Included were projects won by Geneva-based Weatherford and a partnership between Schlumberger, based in Houston and Paris, and state-owned Iraqi Drilling Co.

Rumaila may become the second-biggest oil field by production in the world, BP said earlier this year. Saudi Arabia’s Ghawar field is the largest.

Halliburton, which plans to invest $100 million in Iraq this year, said it’s in the process of securing its first major base in Iraq.

‘Plenty of Work’

“There’s going to be plenty of work in Iraq, and believe me, all the service companies will have opportunities there,” David Lesar, chief executive officer at Houston-based Halliburton, said on an April 19 conference call with investors. “So we’re going along at the pace we want, and we’re confident we’re going to be successful.”

Schlumberger’s base will have 300 people this year, and that number will double by early 2011, CEO Andrew Gould said last month.

“Competition will be fierce, start-up costs high, and we do not expect significant revenue before 2011,” Gould said at the Howard Weil Energy Conference in New Orleans. “The significance of Iraq will only really emerge once the post- election political landscape is understood and some form of oil law has been passed.”

Development of Iraq’s oil industry is moving ahead as security improves after decades of wars and sanctions.

Al-Qaeda

U.S. and Iraqi forces said yesterday that they killed two of al-Qaeda’s regional chiefs in raids. A day earlier, Prime Minister Nouri al-Maliki said Iraqi and U.S. forces killed the terror network’s two principal leaders in the country. “Iraq is probably the biggest opportunity, along with possibly Brazil, confronting the oil-services industry,” said James D. Crandell, an analyst at Barclays Capital in New York. “It’s a country that has a significantly higher capability of exporting crude oil, but it needs a lot of work done on its fields.”

Within five years, service providers may be competing for more than $5 billion annually in contracts, he said.

The four biggest oilfield contractors all rose 4 percent or more yesterday on the New York Stock Exchange. Schlumberger gained 17 cents to $68.02 today, and Halliburton fell 2 cents to $33.29. Baker Hughes climbed 60 cents to $50.89, and Weatherford dropped 59 cents to $16.62.

‘Surge’ coming

if anything, service companies are late in positioning themselves for the “upcoming surge” in oil contracts, said Nansen Saleri, CEO at Quantum Reservoir Impact in Houston and former reservoir-management chief at Saudi Arabia’s state oil company. “Iraq is pregnant for huge growth,” Saleri said yesterday.

The country has potential reserves of 200 billion to 300 billion barrels of oil, Saleri said, and “the early movers will be the big winners.”

“It presents a tremendous opportunity for the service companies,” Gene Shiels, a spokesman for Houston-based Baker Hughes, said yesterday.

All of the companies said investors shouldn’t be quick to judge results from their Iraq forays.

“It’s going to be a very expensive place to operate, at least initially, because you’ve got all your mobilization costs, you’ve got people you’ve hired, bases that you’ve built,” Shiels said. “It’s going to take some time.”

26 April 2010 - AME Info

This week, the National U.S.-Arab Chamber of Commerce (NUSACC) and Meridian International Center hosted H.E. Hussein Al-Uzri, Chairman of the Trade Bank of Iraq. The dialogue focused on 'Iraq's Economic Forecast Post-Election: Updates on the Banking Sector, Investment Trends, and Key Drivers of Growth in Iraq.'

Chairman Al-Uzri noted: "Iraq is an under-banked country, having only 550 bank branches for a population of approximately 30 million. We have to increase the number of banks and put more Iraqis back into the banking sector. American finance banks and finance institutions can help us. A legal and financial infrastructure has now been created to set up Iraq for investments."

He also discussed the establishment of the Trade Bank of Iraq by the Ministry of Finance in July 2003, stressing the independence of the bank from the Government of Iraq. The role of the United States in reducing Iraq's debt -- along with the Central Banking Law, Financial Management Law, and greater transparency in the government's budgets -- are all significant improvements in developing Iraq's banking sector.

The roundtable meeting included approximately 35 high-level representatives from key banking institutions, including the Overseas Private Investment Corporation (OPIC), the Export-Import Bank of the United States, the Multilateral Investment Guarantee Agency of The World Bank, the U.S. Departments of Commerce and Treasury, and J.P. Morgan -- all of which are playing a role in supporting the revival of the banking and investment sector in Iraq.

Also in attendance were representatives of such major U.S. companies as Boeing, FedEx, Motorola, ExxonMobil, Chevron, and a wide variety of service-based institutions, including non-governmental organizations. U.S. Government officials from the U.S. Department of State, U.S. Department of Commerce, and the National Security Council discussed Iraq's future in banking and investment promotion.

Ambassador Stuart Holliday, President & CEO of Meridian International said, "We see great opportunities for expanding investment, trade, and development in Iraq through a coordinated effort of public and private sector."

Curtis M. Silvers, NUSACC's Executive Vice President, highlighted opportunities for an increase in growth in Iraq's banking and investment sector, with special emphasis on private sector banking in Iraq. Hon. Bijan R. Kian, Director of the Export-Import Bank of the United States, offered remarks on methods of externalizing risk.

Baghdad, 20 April 2010 ( Reuters )

Exxon Mobil has been picked to lead a "multibillion-dollar" water-injection project on behalf of international oil companies that won contracts in southern Iraqi oilfields, an official said on Monday.

The cost of the project would be distributed among those majors that won development contracts for southern oilfields in the two auctions Iraq held last year, said Abdul-Mahdy al-Ameedi, director of the Oil Ministry's licensing office.