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Iraq will supply crude to at least two Asian buyers at around 10 percent below contract volumes for June, possibly the first major cut in allocations by the OPEC producer this year, industry sources said on Wednesday.

The cut was on medium-heavy Basrah Light crude, they said.

It was not immediately known why Iraq cut the supply, but it might be related to production problems at its oilfield, the sources said.

Oil output and exports from Iraq fell last month due to repeated attacks against the Kirkuk-Ceyhan export oil pipeline and possible pumping problems in Basra fields.

A Reuters survey showed oil output in Iraq -- the only member of the 12-member OPEC producer group that does not have an agreed production limit -- fell to 2.28 million barrels per day (bpd) in April from 2.32 million bpd in March.

Iraq's oil exports fell slightly in April to 1.767 million bpd from 1.79 million bpd the month before, an Iraqi Oil Ministry official has said.

Iraq exported an average of 1.42 million bpd from the southern oil hub of Basra and 341,965 bpd from the northern oilfields around Kirkuk, including about 9,983 bpd by trucks to Jordan.

The fall in exports was due to bad weather in Basra and a brief halt of exports via the Kirkuk-Ceyhan pipeline after a bomb attack last month.

Term buyers of Iraqi crude have not been eager to take Basrah Light in the first quarter of this year due to increased supplies of other medium-heavy grades, such as from Saudi Arabia, Qatari al Shaheen crude and the new Russian ESPO Blend, traders have said.

Reflecting the weak demend, Iraq's State Oil Marketing Organisation (SOMO) made a rare offer of 3 million barrels of Basrah Light on the spot market for loading in March.

Demand for Basrah Light improved slightly last month, with some cargoes heard to have traded at premiums to the official selling price (OSP), trader said.

Iraq raised the OSP of its Basrah Light crude loading in June to customers in Asia by 10 cents to a discount of $1.05 to the average of Oman/Dubai quotes.

Top oil exporter Saudi Arabia earlier this week said it would supply full volumes to at least seven Asian clients in June, steady from May, as oil held within the kingdom's preferred range and Asia was expected to lead demand growth. (Additional reporting by Florence Tan, James Topham in TOKYO, Ahmed Rasheed in BAGHDAD and Alex Lawler in LONDON; Editing by Ramthan Hussain)

Doha, 10 May 2010 - Reuters

Iraq plans to boost power capacity to 27,000 megawatts in four years after opening its gas sector to foreign investment and sealing a gas capture deal with Royal Dutch Shell, a minister said on Sunday.

The OPEC member would need to invest at least $3 billion to $4 billion per year to reach that target, Iraq’s Electricity Minister Karim Waheed told Reuters on Sunday.

He did not say how Iraq plans to raise such funds. It has struggled to finance its previous power generation plans.

Reaching the ambitious power capacity target would depend mainly on finalising a venture with Shell to capture and use gas now being burned in the southern oilfields around Basra, and on output from three gas fields, which Iraq is auctioning off in September, Waheed said.

‘This depends on both the gas fields — the announcement for the third round — and on capturing the burned gas deal with Shell,’ he said in an interview on the sidelines of an energy conference in Qatar.

Waheed said if Iraq does not come to an agreement with Shell, the ministry will have to rethink its power plans.

Iraq is close to signing a final deal between its South Gas Company, Shell and Japan’s Mitsubishi, after it sent the final draft of the agreement to the cabinet for approval, Iraqi Oil Minister Hussain Al Shahristani said on Thursday.

Shahristani also said that Iraq will invite 45 international companies, which were prequalified for two oil auctions last year, to bid to develop Akkas gas field in Iraq’s western desert, Mansuriyah gas field in eastern Iraq and Siba in the southern oil hub of Basra.

Waheed said he expects the gas fields now being tendered to start producing in two to three years.

TENDERS

Iraq plans to issue new tenders next week for installing turbines as part of the ministry’s plans to boost electricity capacity, Waheed said.

In 2008, it said it had agreed a 1.5 billion euro ($2.03 billion) deal with Siemens for 16 gas turbines and a deal with General Electric worth $3 billion for 56 turbines. The turbines are expected to add nearly 9,000 megawatts of capacity over the next few years.

Iraq scrambled for ways to finance the purchase after a plunge in oil prices in 2008 deprived it of revenues and forced it to slash its 2009 budget three times. It had offered investors stakes in the electricity turbines it has ordered, and said it would repay investors from future electricity sales.

In March, the finance minister said Iraq raised $2.1 billion from local banks via a one-year treasury bond issue to fund electricity projects.

‘Next week, we will tender for bids for installing turbines at two more sites, at Baiji for six turbines of 160 MW and Kirkuk for one turbine of 260 MW,’ Waheed said.

‘Some 38 companies will participate and compete for the deals. Just to install the turbines, we’ve already bought the turbines.’

Waheed put Iraq’s available power capacity at 9,000 MW, and installed capacity at 11,000 to 12,000 MW. Demand is estimated to be at least 12,000 MW.

Frequent fuel shortages and constant maintenance are a main reason behind the shortfall in available power capacity in Iraq, where dilapidated infrastructure has been hit hard by years of war, insurgency attacks and underinvestment.

Seven years after the U.S.-led invasion, Iraq’s national grid still only supplies a few hours of power each day. Intermittent electricity is one of the public’s top complaints.

Baghdad, the capital, is expected to enjoy about eight hours of electricity a day when temperatures hit 50 degrees Celsius in the summer, Waheed said.

With the new power plans, Baghdad, with current 3,000 MW of power available, could finally have 24 hours a day of electricity in two years.

10 May 2010 - AME

Qatar Airways CEO Akbar al-Baker has said the airline has received approval to fly to Baghdad, Erbil, and Najaf in Iraq, The Kurdish Globe has reported.

"We are waiting for the arrival of more planes to our fleet before starting service to Iraq aggressively," he said.

FlyDubai’s chief executive CEO, Ghaith Al Ghaith, has said the airline is considering starting up services to Iraq."Iraq is definitely on our radar" and that the country is "currently underserved" he said.

The chief executive of Qatar Airways has also said it was looking at expanding to multiple cities in the war-scarred country.

If the airlines go ahead with the idea, they will be joining a growing number of carriers - including Germany's Lufthansa and Abu Dhabi's Etihad Airways - entering the Iraqi market as security improves and business picks up.

( Gulf News )

Qatar Telecommunications Co QTEL.QA (Qtel) announced on Wednesday that it more than doubled its first-quarter net profit, beating analysts' expectations.

They posted a first quarter net profit of 1.2 billion riyals ($329.8 million), compared with 593.7 million riyals a year-ago.

Analysts polled by Reuters expected a first quarter net profit of 644.7 million riyals.[nLDE63A03Y]

Expected competitive pressure in Qatar was offset by growth in other markets, particularly Tunisia, Iraq, Algeria and Oman, a Qtel spokesman said in an interview with Reuters.

"The growth that we saw came from markets outside Qatar. That is consistent with our strategy, as we've been prepared for competition (at home) for some time now," he said.

The company, which operates in 17 countries, has expanded rapidly to mitigate the loss of its monopoly after Britain's Vodafone (VOD.L) VFQS.QA entered the Qatari market.

Its focus has been on acquisitions in the Middle East and North African region, the Indian subcontinent as well as south east Asia.

"Qtel will be looking for acquisitions and organically growing their core operations this year," said NematAllah Choucri, analyst at HC Brokerage in Cairo.

"We expect healthy growth in the top line in 2010, but lower margins because of increased competition in three markets: Qatar, Tunisia and Kuwait," she said.

Vodafone Qatar VFQS.QA, the Qatari unit of British mobile operator Vodafone (VOD.L), broke Qtel's monopoly with its bid for Qatar's second mobile telephone license for $2.12 billion in 2007. In March, Vodafone was awarded the country's second fixed-line phone licence.

( Reuters )

Recovery in the world's biggest economies could be jeopardized if crude oil prices stay over $80 per barrel, the International Energy Agency said Tuesday.

The IEA also reported that OPEC posted the first "significant decline" in output in March in more than a year -- falling 190,000 barrels per day to 29 million barrels a day -- largely due to a near 10-percent drop in Iraqi output.

The agency, the energy arm of the Organization for Economic Cooperation and Development, a grouping of the world's richest nations, said concerns remain that global oil markets are "overheated," with crude around $85 per barrel.

"Ultimately, things might turn messy for producers if $80-100 (per barrel) is merely seen as the new $60-80 (per barrel), stunting economic recovery while prompting resurgent non-oil and non-OPEC supply investment" the Paris-based IEA said in its monthly oil market report.

Price subsidies that benefit consumers in non-OECD countries like China and India, and tighter credit than two years ago "could stall OECD economic recovery or render it more oil-less than we currently envisage," it said.

The IEA said that operational problems and weather-related export disruptions at its southern terminals drove down Iraqi output by 220,000 barrels per day last month. But the agency noted that Iraq's exports hit a two-decade high of 2.07 million barrels a day in February, and total exports in March were tallied at 1.79 million.

The IEA estimated global demand in 2010 would rise by 30,000 barrels a day in 2010 to 86.6 million barrels a day compared to last month's report. Demand for 2009 was revised down by 70,000 barrels to 84.9 million.

The agency said OPEC kept its output targets unchanged last month largely on expectations that global oil demand will pick up later this year to absorb above-target production.

Oil prices have been hovering around 18-month highs of $80-85 per barrel. The international oil cartel is not expected to meet again until Oct. 14 in Vienna.

Qatar's oil minister said last week that crude's recent rally is driven mainly by speculation, not a shortage of supply, and dismissed the likelihood that OPEC would hold a special meeting to re-evaluate current production.

( Associated Press )

Iraq's Majnoon oilfield is targeting production of 175,000 barrels of oil equivalent per day in 2012, a senior Royal Dutch Shell executive said on Monday.

Iraq's largest field is currently pumping at 45,000 boe/d, Shell's Mounir Bouaziz, Vice-President New Business LNG for the Middle East and North Africa, told an industry event.

Shell and Malaysia's Petronas signed a final contract earlier this year to develop the Majnoon oilfield, one of the world's biggest.

"We have already started work at Majnoon...we have already taken over operations," Bouaziz told Reuters on the sidelines.

"The effective (start) date was on March 1."

The eventual production target for the field is 1.8 million barrels per day (bpd).

Shell and Petronas won the rights in an auction held in Baghdad in December for the field in southern Iraq, estimated to hold 12.6 billion barrels of oil.

The 20-year development contract is one of several deals that Iraq has sealed to try to catapult the country to third place from 11th in the league of oil producing nations.

GAS

Shell has not yet reached a final agreement on a natural gas venture around the southern oil hub of Basra, Bouaziz said.

Earlier this month Iraq's oil minister Hussain al-Sharistani said the OPEC member had extended a memorandum of understanding with Shell on the venture, but a final deal would be left to the new government.

Iraq has been working to finalise a multi-billion-dollar joint venture between its South Gas Company, Shell and Mitsubishi, that would capture huge amounts of gas now being wasted and use it in the domestic market or for exports.

Bouaziz said that delays in capturing the flared gas was costing Iraq about $50 a second.

Iraq is losing 1 billion cubic feet per day (cfd) of gas through flaring, mostly from the south, Bouaziz said.

"What they are flaring now is sufficient to produce power generation for a country like Jordan, twice," Bouaziz said.

"People are getting an average of two hours of electricity a day, there are plans to add power generation but that needs fuel...gas is the natural solution."

Bouaziz said that the basic infrastructure was already in place to start capturing the gas being burned.

"But the task to really get it to work, to improve it, to upgrade it and increase the capacity is huge because of a legacy of many, many years of lack of maintenance and underdevelopment," he said.

Bouaziz said Iraq could start exporting gas "very very quickly".

Bouaziz said the construction of Shell's Pearl gas-to-liquids (GTL) project in Qatar is expected to be completed by the end of 2010, with a ramp up in production expected to start in 2011.

"This will take 12 months," he said.

Computer Data Networks (CDN ) - Iraq office, a regional Systems Integrator and ISP is pleased to announce that high speed Fiber Optic connection between Iraq and the rest of the world is now fully operational. In November, Iraq's ITPC and CDN announced signing of the contract under which CDN will operate and market southern portion of Iraq's new DWDM Fiber Optic Network which covers the entire country.  CDN is responsible for handling the southern portion which runs from Baghdad to Basrah and on to borders of Kuwait and Iran.

Following extensive testing and fine-tuning, the Network is now fully operational and is already handling customer traffic. Iraqi Ministry of Communications and CDN believe that the new fiber connection will allow regional operators, carriers and Internet Service Providers to exchange traffic with fast-growing user population of Iraq.

"This new addition to our branches across the region comes just at the right time and the right place" said Mr. Dejan Nikolin, Sr. VP of Sales & Marketing at CDN. "This marks a strategic milestone in CDN's expansion. We consider the opening of our Bahrain office as a step forward in our company's vision to more rapidly and affordably meet the needs of our clientele. We at CDN are confident that our clients will enjoy the quality of the services, products, and solutions we already provide in the other markets across the region."

Mr. Sadeq Shehab, who is in charge of CDN Bahrain  added "With significant experience, resources, and infrastructure, CDN  will offer solutions in the key areas of Data Processing, Telecommunications, Networking, and Security. The Manama office will heighten our profile within the Gulf region, where we foresee significant opportunities for further ICT investment and growth. "

CDN is a regional ICT Systems Integrator and Internet Service Provider headquartered in Kuwait, with offices in Iraq, UAE, Qatar and Bahrain. In addition to ICT solutions, CDN also provides a wide range of Physical Security solutions. 

CDN is a multi-discipline ICT and security company established in 1983 in Kuwait. CDN Bahrain is the latest addition to our network in the region which includes Dubai, Qatar, Iraq and our Head Office in Kuwait. Our expertise includes solutions and professional services in data networking, enterprise-wide IT integration, Telecommunications, Business Software, Voice/Data applications, Information Security, Outsourcing, Physical Security, Professional Services and Consulting. All our people are of high caliber. Our team is composed of software engineers, industry certified design and support engineers, project and program managers, customer relationship managers and domain specialists. With over 60 professionals onboard, CDN delivers effective cross domain ICT & Physical Security Solutions to over one thousand Government and Corporate clients across the region.

With the Iraq election completed, the oil and gas marketplace in Iraq is set to see explosive growth.  The plan is to raise production from c.2 million bbd to approaching 12 million bbd.  Infrastructure is in a parlous state with limited investment over 30 years. The current state owned infrastructure and the services sectors are unable to respond to existing demand and the previous regime’s systematic dismantling of the private sector leaves Iraq with no prospect of increasing capacity quickly. In this situation Iraq needs international private sector partners urgently. 

To bring costs of looking into this massive market into an acceptable range, Upper Quartile will run the second Oil and Gas Trade Mission to Basra and Baghdad between the 2nd and 7th May - " ....... this will reduce costs for individual companies yet allow for maximum exposure to decision makers within government ministries and the private sector, in a safe & secure environment" said Adrian Green today.

If Iraq signs all contracts now on offer, output may approach 12 million barrels per day and lift Iraq to second or third place among global oil producers.   

• Shell and BP have tenders out and further tenders on the way
• BP Rumaila site plan drawn up and about to be contracted
• Schlumberger are negotiating a significant sub contract
• Baker Hughes are having a site built in Rumaila
• Shell have tendered for a number of services in Majnoon
• ENI, Shell, BP, and other IOC planning team members are making weekly visits in and around Basra
• One IOC has office and accommodation base partly located in downtown Basra

Contracts on offer will push Iraq's oil services market to $8 billion by 2014.   Capital spending on oilfield services in 2011 alone is estimated to be five times that of Saudi Arabia, Bahrain, United Arab Emirates, Oman, Qatar and Kuwait combined. 

Contact Adrian Green on [email protected]

BEIJING, 05 March 2010 (Reuters)

China National Petroleum Company (CNPC) will start work on the Iraqi Halfaya project in the second half of this year, Jiang Jiemin, the chairman of CNPC's subsidiary PetroChina (0857.HK), said on Friday.

Jiang also said it would take a fairly long time to finalize the purchase agreement for a deal to buy 2 million tones of liquefied natural gas per year from Qatar, and that his company planned to put two Chinese LNG terminals into operation next year, in Dalian and Jiangsu.