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By John Lee.

An investigation by Reuters has found that Iraq has purchased $195 million worth of small arms, ammunition and infantry kit from Iran, in addition to artillery ammunition.

The move will likely unnerve some observers in the US, but analysts are still divided over the extent of Iranian influence in Iraq.

Touted by an unnamed State Department spokesperson as a violation of the UN arms embargo against the Iraq's eastern neighbour, the purchase has not surprised some observers of improved ties between the two countries.

For some time now, Iran has been supplying adjacent Iraqi provinces with gas and electricity, and Iranian companies have won a number of contracts in Iraq from the energy sector to construction.

Iraq has not denied the validity of the claims however, and argues it is a necessary measure due to delays in US arms exports. Iraq continues to fight a robust and revived insurgency in the north and west of the country, and officials have claimed the purchase is an essential security measure.

The scale of the deal is likely to be more of political significance as much as tactical necessity. Iraq's recent arms purchases from the US and Russia have totalled billions of dollars. In 2013, Iraq signed a $1.1 billion deal with South Korea to buy FA-50 light fighter jets, following a similar $1 billion dollar deal with Czechoslovakia.

(Source: Reuters)

By John Lee.

Chinese Foreign Minister Wang Yi met his Iraqi counterpart Hoshyar Zebari in Baghdad in a rare Chinese high level diplomatic mission to Baghdad.

The two men discussed increased Sino-Iraqi cooperation in areas such as oil development and arms sales. Until recently, Iraq has been frustrated by slow deliveries of weapons systems from the US and turned to Russia for major arms contracts to combat terrorism and build conventional forces.

Iraq remains a country of major strategic importance for the major Asian oil consumer, but Baghdad is pursuing a diversified foreign policy in terms of relations with the major world powers.

(Source: Al Manar TV)

Russia's Gazprom Neft has increased its estimated costs for the Badra oil field to about US $3 billion, reports Bloomberg, citing a bond prospectus recently issued by its parent company.

The company had previously forecast costs at about $2 billion.

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%).

The group is planning to produce 170,000 bpd from the field by 2017, earning a fee of $5.50 a barrel over the 20-year span of the contract.

(Source: Bloomberg)

(Picture: Drilling at Badra -- Gazprom)

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

With hundred of thousands of barrels of its oil stuck in the Turkish Mediterranean port of Ceyhan, unable to be sold on the world market because of its continuing row with Baghdad, the Kurdistan Regional Government (KRG) is discovering just how landlocked and boxed in it is in terms of utilizing the vast oil reserves under its control.

Baghdad also has support from Washington, where administration officials fear the energy cooperation between Turkey and the KRG will increase the risk of splitting up Iraq — already in the throes of sectarian strife — and are consequently putting pressure on Ankara over its energy dealings with the Iraqi Kurds.

Iraq's constitution says oil revenues, regardless of where the reserves are located in the country, have to go through Baghdad and allocates the autonomous Kurdish region 17% of total revenues.

Nouri al-Maliki's government argues that the KRG can only export its oil after an agreement is reached between Erbil and Baghdad on how to proceed in this matter.

Baghdad has also threatened to cut the KRG out of its share of Iraq’s vast oil revenues, should it go ahead and sell its oil unilaterally.

Iraqi Oil Minister Abdul Kareem Luaibi told Reuters in January that the government would take legal action against Turkey and consider canceling all contracts with Turkish firms if Ankara enabled the exporting of KRG oil before an agreement between Erbil and Baghdad is reached.

Such an agreement, though, has been elusive because of Kurdish claims of sole ownership over oil reserves discovered in northern Iraq after the region gained political autonomy from Baghdad following the US invasion in 2003.

KRG officials are disappointed that a comprehensive package of agreements they signed with Turkey in November 2013 has not become fully operational yet.

By John Lee.

Intensive competition to supply China's oil demand has combined with slowing demand for oil globally, and this is putting downward pressure on oil prices in 2014, Reuters reports.

Iraq and Russia have positioned themselves to be long term suppliers of the Asian giant, squeezing out African and Latin American producers trying to improve their terms for the Asian market. This intensive competition means that oil on the market is surpassing demand.

In the case of Iraq, the strategy to increase exports to Asia will see exports rise to 882,000 bpd, an increase of 62%, according to Reuters data. China's slowing demand will still see a 7% rise in oil imports, but Iraqi and Russian exports will more than match this increase.

Iraq's rise to become one of China's main suppliers has been somewhat rapid, seeing the country become the 5th biggest supplier last year, overtaking Iran after cutting the price of its main crude, Basra Light.

(Source: Reuters)

(Tanker image via Shutterstock)

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

In a Feb. 4 interview with the semi-official Iranian Tasnim News Agency, Mohammed Majid al-Sheikh, Iraq’s ambassador to Iran, was reported to have revealed his country’s intention to strike a deal to buy weapons from Iran.

The agency quoted Sheikh as saying, “Some well-informed sources said that the Iranian-Iraqi talks came in light of the Iraqi Ministry of Defense’s vision of the need to supply the Iraqi army with Iranian-made military equipment, given their efficiency and importance.”

This style of statement is inconsistent with the ambassador’s official role, which is to present the official position of the Iraqi government, from official Iraqi sources, not from “well-informed sources.” This calls into question the validity of this supposed news, especially since it has not been confirmed by Iranian authorities or the Iraqi officials typically involved in such deals.

Mohammed Ugail, a member of the ruling coalition in Iraq, had declared in a Jan. 17 interview with a Russian website that the Iraqi government was seeking to strike arms deals with Egypt as well as Iran.

In addition, several newspapers and news websites have reported on an Iraqi purchase of Iranian weapons, giving the story additional impetus by claiming that the deal has already been sealed. They quote Sheikh as having said, “Iraq signed a memorandum of understanding with Iran to buy weapons and military equipment.”

Iraqi Defense Minister Saadoun al-Dulaimi had traveled to Iran on Sept. 23, it is thought to discuss ways to promote defense cooperation between the two countries. His visit followed that of Iraqi parliament speaker Osama al-Najafi, to offer condolences to the commander of the al-Quds Force, Qasem Soleimani, on the death of his mother.

By Ahmed Mousa Jiyad.

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

Many countries impose capital gain tax on individuals, companies and corporations when a profit realized from the sale of assets. National and state legislation often has a large array of fiscal obligations and regulations regarding capital gains, however, these fiscal obligations may vary from jurisdiction to jurisdiction.

In other words capital gain tax is a normal component of taxation systems on both national and international levels, and thus has a significant contribution to the state revenues and fiscal policies. Iraq is no different and should consider doing the same.

In Iraq the signed service contracts provide the IOCs with a possibility to assign (sell) wholly or partly their participating interests as specified by a common clause in the signed contract, “any Company shall have the right to assign any of its Participating Interest, shares, rights, privileges, duties or obligations under this Contract to an Affiliate.” Such right for assignment is subject to and governed by a set of provisions outlined in the signed contract.

Due to the long duration of the contracts (the Term) that extend beyond 20 years, and due to the usual practice of Merger and Acquisition (M&A) in the international petroleum business it is highly probable that IOCs might “farm in” and “farm out” by acquiring, selling or exchange participation interests in the related petroleum field.

The transfer of participation interests between IOCs involves financial transactions or transfer of “asset” ownership between the concerned parties: the buyer and the seller.  This assignment deal may (though highly likely) results in significant realized gain (profit) for the selling party compared to the actual cost (investment) it made as a consequence to its participation in the related upstream petroleum development project.

 This realized gain is known to be “capital gain” and in most countries it is taxable. The “Capital Gain Tax” is imposed on individuals, companies and corporations and in many countries it is imposed in addition to other direct taxes such as “Property/Wealth Tax” and “Income Tax” among others. The percentage of Capital Gain Tax differs according to the taxation systems and fiscal policies across the world. 

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

Reports about the military operations in the Anbar province suggest that the “decisive moment” remains elusive. There are battles involving Islamic State of Iraq and al-Sham (ISIS) militants, fighters from the province’s tribes and members of the regular military forces, with no clear winning team on the ground.

These conditions drive many politicians and security experts to believe that what is happening in the volatile province is a kind of a war of attrition that may widen and thus pave the way for a Syrian scenario in Iraq.

Since late December, Anbar has been witnessing large-scale military operations where various weapons are being used. These weapons include US and Russian arms that Iraq has started to import to fight armed groups.

Various Iraqi security and media sources from Anbar told Al-Monitor during the last days of January: “The conflicting parties take turns in gaining control of the province’s neighborhoods and streets. As soon as government SWAT forces took control of ISIS centers, ISIS fighters managed to localize themselves in other areas.”

These sources said: “The delayed decisiveness is due to the political split in the Sunni community, which affected the role of tribal militants in the military conflict. The fact is that some of these militants fight alongside the Iraqi army, while others fight against it.”

Consequently, in his weekly address on Jan. 29, Iraqi Prime Minister Nouri al-Maliki threatened to storm the city of Fallujah "to resolve the matter there.” He pointed out that “the battle will cost the army casualties but he has to do it.”

However, the implementation of military operations, especially in the city of Fallujah, seems a hard call because it is difficult to distinguish civilians from ISIS fighters. Moreover, many believe that the organization took advantage of the political divide, presenting itself as the defender of “Sunni’s interests” in Iraq.

Abu Dhabi's Bristol Vehicle Manufacturing Division (Bristol VMD) has announced it has rolled out seven new fire-fighting and emergency response vehicles as part of a multimillion-dollar contract with Russia's Gazprom Neft.

ConstructionWeekOnline reports that the new fleet of vehicles -- five oilfield fire-fighting vehicles, one rescuer and pollution-control vehicle, and a water and foam support trailer -- will be deployed at the Badra oilfield project.

Bristol VMD is a subsidiary of Concorde Corodex Group (CCG), which is itself part of the MH Al Mana Group of companies. Despite the fact that the contract was only penned in December 2013, the manufacturer’s senior executives have revealed that all seven vehicles have already been delivered to the Badra oilfield.

(Source: ConstructionWeekOnline)

The International Federation of Journalists (IFJ) has issued a renewed plea for Iraqi authorities to step up their efforts to protect the safety of journalists following the murder of reporter Firas Mohammed Attiyah today, Monday 20 January.

According to IFJ affiliate, the Iraqi Journalists' Syndicate (IJS), Attiyah, who worked for Fallujah TV, was killed in a bomb attack in the town of Khaldiyah, east of the Iraq's Anbar provincial capital, Ramadi. The blast occurred as Attiyah, his brother and Muayad Ibrahim, a reporter for Al-Anbar TV, were travelling in a car to report on fighting in the area. Ibrahim and Attiyah's brother were both wounded in the attack.

As violence in Iraq continues to escalate, the IFJ has reiterated its appeal for the Iraqi government to introduce genuine measures that will bring an end to the killing of innocent journalists and ensure that those who carry out acts of violence against the media face the full weight of justice.

Jim Boumelha, IFJ president, said:

"We are deeply saddened at the news that the journalists Firas Mohammed Atttiyah has lost his life and we send our deepest condolences to his family and colleagues during this incredibly difficult time.

"Standing in solidarity with our Iraqi affiliate, the IJS, we reiterate our call for the Iraqi government to set up a special task force with the resources to carry out a thorough and independent investigation into the murder of Attiyah and the many other journalists that have been brutally killed in Iraqi. Impunity must end and those responsible must answer for their crimes."

According to the IFJ's list of journalists and media staff killed in 2013, Iraq remains one of the deadliest countries in the world for journalists. Thirteen journalists were murdered in the country last year, with eleven of those murders occurring towards the end of the year.

Reacting to the desperate situation, the IFJ last October launched its End Impunity campaign which is calling on the governments of Iraq, Pakistan and Russia to investigate killings of journalists and bring their perpetrators to justice.

Jim Boumelha added:

"We are deeply concerned about the escalation of violence against the media in Iraq in recent months. Our End Impunity campaign is calling for an end to violence against journalists in the country where it is estimated that at least 300 journalists have been killed since the US invasion in 2003.

"Our message is clear: the slaughter of journalists in Iraq must end now.

"Such blatant and utterly appalling disregard for the lives of journalists quite simply cannot be tolerated."

(Source: National Union of Journalists)

(Journalism image via Shutterstock)