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The Qatar Fuel Company (Woqod) is entering the UAE and Iraqi markets with its automotive lubricants.

“We are launching our lubricants within the region and to other markets such as Africa and Asia and the CIS countries,” said Mohamed Turki al-Sobai, vice chairman and managing director of Woqod, after appointing distributors to the UAE and Iraq markets.

The lubricants business unit has well-planned and aggressive growth targets to be the market leader in Qatar and also to expand internationally, he said, adding the company has launched its full range of quality lubricants including synthetics, semi-synthetics and mineral oil for gasoline and diesel vehicles.

The distributor agreement for Iraq was signed with Allied United Group, a large, well established distributor of tyres, batteries and associated services with a distribution network across Iraq.

“It is part of the growth plans for our company to aggressively grow the lubricants market and the range of products Woqod offers is perfect for our customers,” said Muthanna al-Halo, general manager of the group.

(Source: Gulf Daily News)

The Central Bank of Iraq has instructed private banks to raise at least $7 billion in fresh capital over the next three years to be able to handle an expected oil-fueled construction boom, according to the Wall Street Journal.

Ahmed Ibraihi, Vice Governor of the Central Bank of Iraq, told the newspaper on Wednesday that these banks, numbering 32, now have a minimum capital requirement of 50 billion dinars each.

"We are taking these measures in order that companies which are implementing big projects in Iraq, including oil contracts, would start to deal with our banks," Mr. Ibraihi said.

[Click here to read Mark DeWeaver's take on the banks' new capital requirements.]

Iraq has clinched some 11 multi-billion dollar deals over the last 11 months with international oil companies to raise its crude-oil production capacity to 12 million barrels a day from the current 2.4 million barrels a day.

Mr. Ibraihi was in Istanbul to reassure the more than 20 international oil and gas companies who won these mega projects that they can deal with local banks to help them implement their projects in Iraq.

The Arab Advisors Group analyzed the ADSL rates in nineteen Arab countries. Iraq and Lebanon have the highest ADSL fees, while Morocco and Egypt have the lowest fees. When rates are analyzed in relation to GDP per capita in each country, the GCC countries and Morocco lead the pack.

ADSL remains the prevailing Internet broadband technology in the Arab World. Uptake is strong in most countries especially as ISPs launch promotions and reduce their rates. The Arab Advisors Group has analyzed the ADSL service provision and rates in the following nineteen Arab countries: Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, UAE and Yemen.

The Arab Advisors Group’s analysis revealed that the 1024 Kbps speed is the most common speed offered in the Arab region. The average total annual cost for the 1024 Kbps residential ADSL service in the Arab region stands at US$ 736.4 per year. Rates are lowest in Morocco followed by Tunisia, Egypt, Algeria, Jordan, Yemen, Palestine, Kuwait, Oman, Mauritania, Syria, Qatar, KSA, Libya, Bahrain, UAE, Sudan, Lebanon, while Iraq offers the highest rate. Libya does not have the 1024 Kbps ADSL speed; however, the Arab Advisors Group’s ranking for the country is based on extrapolating from its rates of other speeds. The research also revealed that ISPs tend to waive ADSL connection fees as part of their ongoing promotions.

The Iraqi Minister of Communications has called on international companies to do business in the country's telecoms sector.

Speaking at Telecoms World Middle East, Farook Abdul-Rahman revealed: "As you are all aware, we are not short of resources and finance and what we are really looking for from you is the transfer of the latest technology for the development of Iraq."

Included in possibly as many as 15 companies competing for the fourth mobile telephone licence are: France Telecom SA, Qatar Telecom, Verizon Communications Inc., Emirates Telecommunications Co., Vodafone Group Plc, Turkcell Iletisim Hizmetleri AS and MTN Group.

A decision is expected within the next six months.

(Sources: AME Info, Bloomberg)

On the occasion of International Literacy Day, UNESCO calls on national institutions and civil society to join forces to promote literacy for all as a tool for inclusive and sustainable development in Iraq.

“I take this occasion to call upon governments, international organizations, civil society and the private sector to scale up their support to literacy,” stressed Irina Bokova, Director General of UNESCO, in her message for the Day. “Literacy and women’s empowerment” is the theme for this year celebrations, which focus on the importance of literacy and gender equality as one of the global strategic priorities for sustainable development.

UNESCO Iraq Office will seize this opportunity to organize events throughout Iraq together with the Ministry of Education and National NGOs to ensure participation of all Iraqi citizens and invites them to express their views towards the development of a national literacy strategy in Iraq. Activities will take place during last week of September due to celebration of the Muslim holiday of Ramadan and will include: Roundtables and conferences with Members of Parliament, community leaders, literacy practitioners and coordinators to discuss policy options to reduce illiteracy in Iraq; organizing community plays about literacy and women’s empowerment in national theaters; dissemination of awareness raising material on best literacy stories; and screening of TV spots in the UNESCO supported educational TV among others.

“Literacy is the necessary tool for social development and peace building,” said Mohammed Djelid, Director of the UNESCO Iraq Office, adding that “the achievement of the Literacy goal of reducing illiteracy by 50% by 2015 relies on the development of an effective strategy and implementation of inclusive policies for literacy.”

National illiteracy rates are estimated at 20% in Iraq. Women are particularly affected by illiteracy, especially in rural areas, where close to 50% of women aged between 15 and 24 are illiterate, compared to 28%-20% of women living in urban and metropolitan areas. The Government of Iraq (GoI) has responded to the literacy gap with the development of new literacy textbooks, the introduction of accelerated learning programs, and the opening of new literacy centres. However, equal access and attendance remain obstacles to progress on literacy in Iraq.

To address these challenges, the UNESCO Iraq Office in 2010 launched the Literacy Initiative for Empowerment (LIFE) for Iraq with funding from the Office of Her Highness Sheikha Moza bint Nasser Al-Missned, First Lady of Qatar and UNESCO’s Special Envoy for Basic and Higher Education. LIFE, which is a 4 year project with a budget of US$ 6,300,000, will contribute to strengthening the capacity of the Iraqi Government and civil society to deliver sustainable and empowering literacy for all.

For Further Information Please Contact:

Alberto Biancoli, Education Project Manager, UNESCO Iraq Office [email protected]

Tel: +962 59 02 340

Last month, Central Bank of Iraq governor Al-Shibibi told AFP he was hoping foreign banks would play a bigger role in developing Iraq’s financial system. From the banks’ point of view, he said, “the prospects are good, except for security.”

But the foreign institutions that have already entered the Iraqi market through investments in local banks don’t yet seem to be finding all that many good opportunities to grow their lending businesses. In fact, their loan-deposit ratios tend to be even lower than those of their wholly locally owned counterparts.

Consider the 13 ISX-listed banks in the chart, for example, of which the following five (the starred ones) have foreign investors: BMNS (National Bank of Qatar holds 23%), BBOB (Burgan Bank, 50.6%), BCOI (Ahli United Bank, 49%), BNOI (Capital Bank, 59.2%), and BDSI (HSBC, 70.1%). As of the end of last year, the last four of these had the lowest loan/deposit ratios in the sample. Only one of the five had a ratio above 20%, while the subsidiary of global giant HSBC ranked last with a ratio of just 4%. (The ratios are computed by dividing the “monetary credit” by the “current and deposit accounts” balance sheet items given in the companies’ 2009 annual reports.)

And while capital adequacy might be a constraint on lending even for banks with large deposit bases, this doesn’t appear to be the explanation for the poor showing of the foreign-invested banks as they don’t tend to have less capital. In fact, from the chart you could only conclude that capitalization and the L-D ratio are completely unrelated.

So why aren’t the foreign-invested banks lending? Presumably security is not the primary issue for banks that have already entered the market. More likely reasons can be found in the responses of executives polled by the Economist Intelligence Unit last July, 64% of whom said they would not invest in Iraq. In addition to violence and lack of infrastructure, they were deterred by “corruption, the bureaucracy, inadequate contract protection, and credit risks.” (See Joel Wing’s August 30 “Musings on Iraq” post at http://musingsoniraq.blogspot.com for more on the EIU survey.)

If these are the main obstacles to bank lending as well, the real problem is not the security situation but the weakness of the Iraqi state. Until there is some improvement on this front, it would not be surprising if lending remained anemic at private-sector banks in general, whether foreign-invested or wholly locally owned.

AAIB View

William Wakeham, Managing Director at A.A.I.B. Insurance Brokers, a company specialising in Iraq commented; the apparent conservative lending policies of the private sector banks may well be influenced by the perceived problems in the wider environment such as corruption, bureaucracy, contract protection rights, credit risks etc – all important elements to consider, but there are also other forces at play here.

It’s acknowledged that banks can play an important role in recycling savings deposits into productive loans, however the Iraqi private banks are small by international standards and are still in a market that is evolving and is emerging from years of conflict.

At this stage of market maturity it may well be the case that the lending opportunities available to them are now too limited, or that those opportunities that do exist do not meet with the lending criteria that have been drawn up – the potential rewards of advancing funds are simply not worth the risks to which the banks would be exposed to.

It will also be the case that some potential borrowers will be better served by other financial institutions, such as development banks or micro finance schemes and so the banks will avoid them, whilst some other potential borrowers will not stand up to scrutiny – a poor track record of the borrower, unacceptable amount, terms, or use of the requested loan, insufficient collateral used as backing, the high risk of potential for default etc.

A proper balance needs to be struck between playing a positive role in helping to revitalise the private sector, or help meet public borrowing needs, versus productively managing the assets of the bank and safeguarding the interests of its shareholders.

The banks themselves are competing for capital. Investors will assess the respective risks, prospects and potential returns before investing in banks, and banks also will consider their lending opportunities and how these fare against their risk assessment criteria.

Prudent lending policies and (low bad debt provisions or loan write offs) will help deliver the assurance to investors that capital is being well managed and productively applied rather than eroded.

Across the world banks are increasingly under pressure from regulators to bolster capital adequacy and improve capital management and to improve internal risk management standards - and lending policy and practices play a key part of this. Over the last two years we have seen in Europe the Middle East and elsewhere a tightening up of credit availability and a constrained ability to finance lending to commercial customers and to private customers.

The banks are there for the long term. They have branch networks to operate, payment services to deliver, credit management duties etc – banks of all types play a central role in an economy. Fundamentally commercial banks exist to generate adequate returns to shareholders, commensurate with the risks taken. Finally, at the core of any banking system is a need for trust and confidence in the regulation, institutions, management and the policies that they follow. If conservative lending practices help create and maintain these things, then they are to be applauded.

Iraq, 1980. The Iranian F15s swooped around the partially constructed Ishtar Sheraton, followed the Tigris river beside Abu Nawas Street and launched their missiles at Al Dora refinery. Thirty years of war and unrest had begun. I know because I was there – I was the project quantity surveyor then, working for the State Organisation of Tourism. On the other side of the table, and working for the contractors was my future business partner, Evan Anderson, so our firm is truly founded on its Iraq experience.

Now it is 2010 and we all hope that a new, peaceful phase for the Iraqi people can start. The US army is leaving, and democratic elections have been held. The conditions of working and security are not yet ideal but those of us who have affection for Iraq and perhaps a long strategic vision mixed with optimism must try to be positive and provide support wherever we can.

Of course, commercial benefit is the driver, but there is also an element of goodwill that motivates me to participate. Iraq has been good to me, financially and professionally. Maybe soon I can return some of the debt owed. I hope so.

So, my blog starts, but it will quickly develop and convert to the blog of my company, Blair-Anderson Iraq. But first then a bit more history of how we got here.

My name is Stewart Blair. I am the joint owner of the Blair-Anderson Group, www.blair-anderson.com who have many years experience in the construction industry in what is known as the Middle East. We have provided cost management services to clients from the UAE to Saudi Arabia, Bahrain, Qatar, Kuwait and Egypt. We have been established for almost 25 years in this field.

In 2003 our company joined forces with an Iraqi civil engineer with whom we had worked in Dubai on several projects successfully, and a business bond had been created. We decided then that the combination of our international experience, including a credible Iraq and Haider’s enthusiasm to become involved in his native Iraq would demonstrate our ability to handle assignments in Iraq. Haider Al-Ali is the managing director of the company.

This blog will try to track our business development efforts and also try to impart and share some construction cost and risk knowledge as we discover it.

Let us start with a construction oriented look at the Iraq market. Why Iraq? Well, the projects I was on, such as the Ishtar, Palestine and Babylon hotels, the Rashid hotel, Taji Island and Baghdad University were probably the last to benefit from modern peaceful technology. The highest of these was 22 floors, perhaps 75 metres. We have now completed several towers in the UAE exceeding 75 floors!

The ambitions of Iraq need to be serviced by modern technology therefore. In our opinion, every urban facility and service is needed. For construction, the best way to view the market is as an island, where everything needs to be imported. Of course there will be local materials and skilled labour and workforce, but a lot has to be done to catch up so that proper construction and maintenance can be achieved.

The first conclusion then is that it will be expensive. We will explore all the various cost heads as our blog progresses, but we are also cautious as all development needs a return, and until the economy can afford to provide that by an accelerated increase in earnings per capita and so GDP, we suspect private development will not be as fast as may be expected or hoped for.

Even now, we are experiencing a significant level of difficulty. As our services tend to be at the front end of the procurement process, we notice a lack of confidence in government agencies in their own buying processes. We understand that there will be a certain nervousness – why not, no significant purchases of international services have been made for years, and the “I will not be ripped off “ syndrome is strong.

The construction and development procurement process is in our view then a priority. Therein lies our conflict of interest though, so until others take up this issue there is not much, that service providers like us can do. This blog may reach such others then, and that is our hope, so they can assess the value of our services without the pressure of a sales pitch. We look forward to sharing our experiences, and perhaps success with our readers over the coming months.

Stewart Blair is founder and director of Blair-Anderson Holdings, specialising in project reviews, management and control systems feasibility/viability studies, cost planning and the management and settlement of disputes on major international projects. He has been involved in sensitive dispute management assignments both in the Middle East and Internationally. He has also been responsible for successful cost planning and cost control on several major projects comprising high rise, commercial, hotel and touristic developments.

Saudi industrial and energy services company Taqa (TAQA.AD) is considering investing $1.6 billion in pipelines and $133 million in offshore platforms in Qatar and Iraq, an Arabic newspaper said on Friday.

Officials from Taqa told the Saudi-owned daily Asharq al-Awsat they were considering investing in the gas industry in Qatar and the oil industry in Iraq by building platforms and pipelines for companies already working in the two countries. Taqa, 40 percent owned by the Saudi government, said it has already invested 500 million riyals ($133.3 million) in offshore oil and gas platforms in Saudi Arabia.

Officials said interest has increased since one of the company's main partners, the Italian oilfields services company Saipem (SPMI.MI), won a $10 billion contract to develop fields in southern Iraq.

Taqa has recently been on the acquisition trail, buying a 40% stake in Oman's Sohar Aluminium for $400m, and some of Suncor Energy’s assets in Canada for C$285 million.

(Source: Reuters, BusinessWeek)

By end of June 2010, 26 out of 55 operators licensed to offer WiMAX offered the service. WiMAX is commercially available in Algeria, Bahrain, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Saudi Arabia, Tunisia and the UAE. Moreover, Yemen and Oman are slated to WiMAX services in the second half of 2010.

WiMAX stands for World Interoperability for Microwave Access. WiMAX/IEEE 802.16 is a global standard-based technology for Broadband Wireless Access. WiMAX is a broadband wireless technology that is largely supported by the computer and the telecom industry. Its guarantee is that it is engineered to deliver ever-present fixed and mobile services such as VoIP, Information Technology and Video at relatively low cost. Furthermore, WiMAX vendors state that WiMAX systems are able to cover a large geographical area (up to 50 km) and to deliver significant bandwidth to end-users at up to 40 Mbps. WiMAX technology can be deployed as a Point Multi-Point in last mile connection and as part of the backhaul to the PSTN and Internet access points.

The first commercial deployment of WiMAX in the Arab World was in Algeria in 2007. Moreover, by end of June 2010, a total of 26 service providers in 11 countries (including Algeria) in the MENA region offered WiMAX. The Arab Advisors Group expects an increase of 3 operators, at least, by end of 2010. A new report, “WiMAX in the Arab World 2010” was released to the Arab Advisors Group’s Telecoms Strategic Research Service subscribers on June 19^th, 2010. This report can be purchased from the Arab Advisors Group for only US$ 950. The 37-page report, which has 51 detailed exhibits, investigates the availability of WiMAX regulations in 18 Arab countries, the frequencies used, entities that have tested WiMAX or pre-WiMAX services, and vendors for equipment. The report covers the following Arab countries: Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Syria, Tunisia, UAE, and Yemen. Any investment in this report will count towards an annual Strategic Research Service subscription should the service be acquired within three months from purchasing the report.  Please contact the Arab Advisors Group to get a copy of the report’s Table of Contents. “There are still no detailed regulations specific to WiMAX in some Arab countries. Still, a few have specified the type of license that needs to be obtained to provide WiMAX service. For example, in Algeria, the company should have a VoIP authorization and the regulator’s specified band for WiMAX. In Jordan, the company should have an individual license needed to use the frequency (a scarce resource) as well as win the spectrum auction for WiMAX.” Alaa Numair, Research Analyst at Arab Advisors Group noted in the report.

The top three frequencies allocated to operators in the Arab world are 3.5 GHz, 3.6 GHz and 2.6 MHz. The 3.5 GHz band, allocated to 19 out of 55 licensed operators to provide WiMAX, is the most common allocated frequency in the Arab countries. 3.6 MHz and 2.6 MHz followed with 8 and 7 licensed operators, respectively. Tareq Masarweh, Research Analyst at Arab Advisors Group added. The Arab Advisors Group’s team of analysts in the region has already produced over close to 1,920 reports on the Arab World’s communications and media markets. The reports can be purchased individually or received through an annual subscription to Arab Advisors Group’s (www.arabadvisors.com) Strategic Research Services (Media and Telecom).  To date, Arab Advisors Group has served over 600 global and regional companies by providing reliable research analysis and forecasts of Arab communications markets to these clients.

Business Monitor International (BMI) forecasts that Iraq will account for 9.00% of Middle East (ME) regional oil demand by 2014, while providing 11.08% of supply. Regional oil use of 7.47mn barrels per day (b/d) in 2001 rose to an estimated 10.64mn b/d in 2009. It should average 10.98mn b/d in 2010 and then rise to around 11.95mn b/d by 2014. Regional oil production was 22.83mn b/d in 2001 and averaged an estimated 24.66mn b/d in 2009. It is set to rise to 27.18mn b/d by 2014. Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average 15.36mn b/d. This total had eased to an estimated 14.02mn b/d in 2009 and is forecast to reach 15.23mn b/d by 2014. Iraq has the greatest production growth potential, followed by Qatar.

In terms of natural gas, the region consumed an estimated 367.6bn cubic metres (bcm) in 2009, with demand of 492.5bcm targeted for 2014, representing 28.7% growth. Estimated production of 429.9bcm in 2009 should reach 657.8bcm in 2014 (+39.8%), which implies net exports rising to 165.0bcm by the end of the period. In 2009, Iraq consumed an estimated 1.36% of the region’s gas, with its market share forecast at 1.47% by 2014. It contributed 1.86% to estimated 2009 regional gas production and by 2014 could account for 3.04% of supply.

We are sticking with our forecast that the OPEC basket of crudes will average US$83.00/bbl in 2010. Wide variations in crude differentials so far in 2010 make forecasting tricky for Brent, West Texas Intermediate (WTI) and Urals, but we believe the three benchmarks will average around US$85.11, US$88.22 and US$83.62/bbl respectively, with Dubai coming in at US$83.14. By 2011, there should be further growth in oil consumption and more room for OPEC to regain market share and reduce surplus capacity through higher production quotas. We are assuming a further increase in the OPEC basket price to an average US$85.00/bbl. For 2012 and beyond, we continue to use a central case forecast of US$90.00/bbl for the OPEC basket.

The BMI assumption for premium unleaded gasoline in 2010 is an average global price of US$96.83/bbl. The year-on-year (y-o-y) rise in 2010 gasoline prices is put at 38%. Gasoil is expected to average US$92.45/bbl in 2010, with the full-year outturn representing a 37% increase from the 2009 level. For jet fuel in 2010, the annual level is forecast to be US$95.58/bbl. This compares with US$70.66/bbl in 2009. BMI puts the 2010 average naphtha price at US$82.46/bbl, up 39% from the previous year’s level. BMI is assuming a 3.9% rise in Iraq’s real GDP in 2009, which will be followed by forecast growth of 4.5% in 2010. We are assuming average annual growth of 6.0% in 2010-2014. We expect estimated oil demand of 780,000b/d in 2009 to rise to 1.08mn b/d in 2014, depending on investment in infrastructure and the development of domestic production. International oil companies (IOCs) are signing production sharing agreements (PSAs) with the state, which should help accelerate the growth in oil output. Based on the efforts of national oil industry bodies, we are forecasting average oil production of 2.49mn b/d in 2010. March 2010 production was 2.25mn b/d, with 1.79mn b/d of exports. Further field reactivation work and the initial IOC efforts point to output of an estimated 3.01mn b/d in 2014. The government has much more ambitious targets, aiming for 0.5mn b/d annual output expansion and a long-term goal of 6.0mn b/d. However, there are major risks involving attacks on oil installations, Iraq’s OPEC entitlement and the success of new energy policy in stimulating IOC investment.

Between 2010 and 2019, we are forecasting an increase in Iraqi oil production of 73.0%, with crude volumes rising steadily to 4.30mn b/d by the end of the 10-year forecast period. Oil consumption between 2010 and 2019 is set to increase by 61.4%, with growth slowing to an assumed 5.0% per annum towards the end of the period and the country using 1.37mn b/d by 2019. Gas production is expected to climb to 37bcm by the end of the period. With 2010-2019 demand growth of 133.9%, export potential should rise to 25bcm by 2019. Details of the BMI 10-year forecasts can be found in the appendix to this report.

Iraq ranks fourth, just ahead of Iran, in BMI’s composite Business Environment Ratings (BERs) table, which combines Upstream and Downstream scores. It still occupies a respectable third place in BMI’s updated Upstream Business Environment Ratings, but is now four points behind the UAE and lacks the immediate potential to move higher. The country’s score benefits from exceptional oil and gas output growth potential, a substantial hydrocarbons reserves base and the region’s highest reserves-to-productionratio (RPR). Government control of the upstream industry and a high level of country-specific riskprevent Iraq from achieving a better overall score. Iraq is still at the bottom of the league table in BMI’s

Downstream Business Environment Ratings, with few high scores and near-term progress up the rankings unlikely. It is ranked just below Kuwait, thanks largely to country risk factors that outweigh a reasonable showing in terms of oil demand, oil and gas demand growth and likely refining capacity expansion.

The full report runs to 88 pages, and is available at a price of £590 directly from Business Monitor International.