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By John Lee.

Russia's Gazprom Neft, the operator of the Badra oil field (pictured) in Iraq, has announced that first oil from the field is now being delivered to Iraq’s main pipeline system for transfer to the export terminal in Basra, on the Persian Gulf.

Current deliveries from Badra to the pipeline stand at over 15,000 barrels of oil per day and this level should be maintained until the end of 2014.

According to the service contract with the Government of Iraq, the consortium of investor companies will begin receiving a share of the oil produced at the field after a period of 90 days following launch of commercial supply.

All of the oil produced in southern Iraq, including at Badra, is Basrah Light oil. The Iraqi State Oil Marketing Organization (SOMO) is responsible for oil sales and each quarter will be delivering a share of oil to the investor companies to reimburse their initial project costs.

Once these project costs have been covered, the investor companies will receive remuneration in kind for ongoing development at the rate of $5.5 of oil per barrel produced. Each investor company will be selling their share of oil independently.

First oil from the Badra field was produced in December 2013. Final commissioning at the field and testing of production and transportation infrastructure began in May 2014. Two wells are currently in production at the field and a further three wells are being drilled under a contract with the Chinese company ZPEC. According to the service contract production at the field will achieve 170,000 barrels of oil per day.

Alexander Dyukov, Chairman of the Management Board of Gazprom Neft, said:

"Over the period of just a few years, a consortium of companies led by Gazprom Neft has fully prepared Badra, one of the most complex geological field structures in Iraq, for full-scale commercial development.

"This is the first major international project in upstream the company has implemented from scratch. The unique experience gained during this project will contribute to our development of future projects both in Russia and internationally".

The field is being developed by Gazprom as lead partner (30% stake), along with Korea’s KOGAS (22.5%), Malaysia’s Petronas (15%), Turkey’s TPAO (7.5%), and Iraq (25%).

(Sources: Gazprom Neft, KOGAS)

By John Lee.

China expert Simone Van Nieuwenhuizen has written an opinion piece for The Diplomat, a foreign affairs journal that covers events in Asia. She argues that it would be in China's interests to do more for Iraq.

In the piece, Van Niewenhuizen notes that not only has China been threatened by the Islamic State of Iraq and the Levant (ISIL) but also supports a UN Resolution condemning terror groups in Iraq and Syria and imports a significant amount of Iraq's oil.

But despite China's involvement in investment and reconstruction in Iraq, the Asian giant has so far avoided any counter-terror commitments currently being pursued by both NATO and Russia, among other countries with interests in the Middle East.

Van Nieuwenhuizen argues this situation may soon change if China wishes to safeguard her MENA region interests. Read the full piece here.

(Source: The Diplomat)

By John Lee.

Meeting an extended deadline, Iraqi President Fouad Massoum has nominated a PM from the State of Law bloc, the largest coalition which therefore has the constitutional right to name the next Iraqi PM.

But it was not Nouri-al-Maliki. Observers are now waiting to see what action, if any, Maliki might take to hold onto power. So far, MPs loyal to Maliki have alleged that the nomination of Haider al-Abadi (pictured) amounts to betrayal, and there has been talk of taking legal action.

Critically, The Washington Post has reported that it may have been Maliki's fiery speech on Sunday night which turned what was an increasing defection against the PM into a full scale political rebellion.

However, this may not be the last of it. Rumours have circulated that Maliki has attempted to secure key government infrastructure with loyalist Iraqi forces, although former foreign minister Hoshyar Zebari and US officials have indicated they are not expecting anything resembling a coup d'etat.

Maliki has faced what appears to have been a slowly building political rebellion over his handling of the recent crisis (and to many, the culmination of his confrontational style in recent years). He  is now experiencing what amounts to an informal vote of no confidence.

In his place is Haider al-Abadi, a politician who received his doctorate in electronic engineering at Manchester University, England. As expected, he is from Maliki's Dawa party and has a long service in the new Iraqi government behind him, having been an adviser to Maliki, the head of the parliamentary finance committee and the deputy speaker of parliament.

Abadi is an interesting choice, and has spoken in more moderate terms on a number of issues when compared to Maliki, conveying a more conciliatory tone towards both Sunnis (during the prolonged protests) and Kurds (regarding the oil dispute).

He also has extensive business experience garnered during his time with the Iraqi opposition in London, and has gone on record a number of times to speak about challenges facing Iraq including sectarianism and increasing the role of the private sector.

Crucially for Iraq at the current time, if Abadi can counter worsening sectarian relations and assure "fence sitting" Sunnis who have not yet joined the insurgency, the US may feel more confident extending military support to Iraq, something which could be of vital importance in defending critical infrastructure.

In foreign relations, Abadi will likely pursue a similar path to Maliki, keeping bridges with both Iran and the West, China and Russia.

However, Abadi faces two quite significant challenges, firstly putting together a new Iraqi cabinet in an increasingly fractured political scene, and secondly building national unity to fight the ongoing ISIS onslaught.

(Source: Various news agencies) 

By Patrick M Schmidt.

The Russian state-owned oil company, Gazprom, is expected to launch exploration operations in Halabja province before the end of the year.

The province is located in the region of the Kurdistan Regional Government (KRG) and lays close to the Iran-Iraq border.

If they find enough oil reserves, the company will begin normal drilling operations.

In exchange for drilling in the region, Gazprom would have to provide a number of social services to locals as well as offer opportunities for local students to study energy related disciplines in Russia each year.

(Source: Basnews)

Itar-Tass reports that Russia’s Defense Minister, Sergei Shoigu (pictured), intends to expand military-technical cooperation with Iraq.

The Minister is quoted as saying:

“Military-technical cooperation between our countries develops successfully. The intergovernmental agreement proves its efficiency.

“We’re meeting with the Iraqi officials when the country faces difficulties.

“We support your efforts in fighting terrorism.

“We seek to relations with Iraq. This is our strategic priority."

Iraqi Defense Minister Saadun Al-Dulaimi said:

“It is not a secret that now Iraq is facing difficulties. We’re fighting terrorism.

“Counter-terrorism is the priority of the world community. When we fight terrorism on our territory, we feel like we protect the world community.

“Now the Iraqi army needs weapons for continuing the fight."

(Source: ITAR-TASS)

By Patrick M Schmidt.

The Iraqi Ministry of Oil has announced that Gazprom Neft, a division of the Russian state-owned Gazprom, had begun production at Badra oilfield in the eastern province of Wasit.

"Oil flow from Badra has started on Monday to fill the oilfield storages in preparing to feed the export," said Ministry of Oil spokesman Asim Jihad.

Badra is expected to average 15,000 barrels of oil per day in the short term, but experts suggest its production figures could rise to 170,000 barrels of oil per day by 2017.

(Source: Reuters)

By John Lee.

The Iranian Fars News reports that Iranian Deputy Foreign Minister Hossein Amir Abdollahian (pictured) has dismissed suggestions that his country had dispatched Sukhoi fighter jets to Iraq.

In an interview with the Iran-based Arabic-language Al-Alam on Sunday he said:

"The Iraqis have not yet made any demands from the Islamic Republic of Iran for arms shipments; of course if they ask for it, we will certainly consider their request positively ... but the Islamic Republic of Iran has not sent any weapons or fighter jets to Iraq".

He also dismissed claims that Commander of Iran's Islamic Revolution Guards Corps (IRGC) Quds Force General, Qassem Soleimani, is in Iraq to help the country in its war on terrorists, but he confirmed that Iran is providing Iraqi officials with consultations on fighting terrorism, but through diplomatic channels.

While waiting for delivery of US-made F-16 fighter jets, Iraq has bought Russian Sukhoi jets, some of which have already arrived in Baghdad, and have flown at least two missions last week, according to the Sunday Times.

(Sources: Fars News, Sunday Times)

By John Lee.

Citing Russian state media, IHS Jane's 360 reports that Iraq has taken delivery of its first three Mil Mi-28NE 'Havoc' (Night Hunter) attack helicopters, as well as additional four Mil Mi-35M 'Hind' assault helicopters (pictured).

The helicopters arrived aboard Antonov An-124 'Condor' transport aircraft and were delivered in a combat configuration, with full night-vision capability.

The arrival of the Mi-28NEs and additional Mi-35Ms will provide an added boost to the Iraqi government's efforts to combat the Islamic State.

(Source: IHS Jane's 360)

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

CNN's Phil Black gives us a look around the Su-25 warplane, the model that Iraq has bought from Russia.

By John Lee.

Iraq has received the first batch of fighter jets from Russia to help it repel the offensive by Sunni rebels.

The defence ministry said five Sukhoi SU-25 attack aircraft would enter service in "three to four days".

Prime minister Nouri al-Maliki told the BBC last week that his government had signed a deal with Russia and Belarus to supply jet fighters.

The deals are reportedly worth up to $500 million.

(Source: BBC News, Ministry of Defense)