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The tragedy of sectarian violence continues in Iraq, but the country still presses ahead with its development, and foreign companies continue to seize opportunities to contribute to the country’s growth and prosperity.

This week in our newsletter, we have details of a Russian company's first oil output at an Iraqi oilfield, a Danish company exploring for oil in Iraqi Kurdistan, and a Pakistani company re-opening its office in Baghdad.

And at a time when progress is being made in the dispute regarding the export of oil from Iraqi Kurdistan, there are many quesstions still to be answered. To help shed some light on consequences for the industry, Iraq Business News is delighted to be a Media Partner in the forthcoming conference to be held in Abu Dhabi. Hosted by Academy & Finance, "The Control of Energy in the Kurdistan Region of Iraq" will take place on 3rd and 4th March -- full details can be found here.

(Flag image via Shutterstock)

By Robert Tollast.

Robert Tollast is a consultant at Noorbridge, a Helsinki based consultancy with staff in London and Nasiriyah, Iraq. He has written extensively on security, politics and economic issues in Iraq for various publications, and is currently researching a modern history of Iraq with support from The Middle East Forum. email: [email protected] twitter: @roberttollast

As Iraqi troops continue to fight the Islamic State of Iraq and the Levant in Fallujah and Ramadi, a different kind of battle is brewing 350 miles to the southeast, one that could prove just as decisive for Iraq’s future. In Basra this year, the province has more cause for more hope than in previous years. Here’s why.

The dawn of strategy

At the end of 2012, Colin Freeman reported a story in The Telegraph that made for depressing reading: Britain was closing its consulate in Basra, just as the province was experiencing a surge in foreign investment from all over the world.

Last month I spoke to a former British diplomat and asked him why this was, and he remarked that security costs- around £6m per year, were the equivalent to several embassies. But that wasn’t the only thing keeping the British away.

Another factor that has often deterred foreign investors is of course bureaucracy and the difficulty of getting your business on the ground because of Iraq’s fondness for red tape. Discouraging contractual terms offered to investors have put a stop to many potential ventures, as someone with years of experience in the country recently told me, “Iraq is good at killing the goose before it lays the golden eggs.”

But things might be about to change. Last week, Freeman published another story in The Telegraph reporting that Basra governor Nasrawi had hired the British firm Aegis Defence Services to institutionalise the latest counter-terrorism practices for the province.

Governor Nasrawi (from the Islamic Supreme Council of Iraq) seems to understand what counter-terrorism involves, remarking in a recent al-Monitor interview that CT was not primarily a conventional military task. The fact that he has invited a British general who was involved in the invasion is certainly an interesting story.

But Nasrawi (elected last April) is also keen to make progress in other areas. He recently hired American firm Hill International on a long term contract to oversee strategic planning and contracts with foreign companies. As he asserted in the al-Monitor interview, Nasrawi appeared determined that Basra was going to beat corruption, short termism and develop a strategy. Out with four year plans, and in with long term goals.

By John Lee.

The Voice of Russia reports that 13 Russian Mi-28NE “Night Hunter” helicopters have arrived in Iraq.

The Alsumaria television channel said the helicopters would be used in the counter-terrorism operations in Anbar Province.

The shipment is part of a total deal for around 40 Mi-35 and Mi-28NE attack helicopters to be supplied by the end of the year, the first 15 of which arrived last month.

(Source: The Voice of Russia)

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

On Dec. 23, Iraqi Prime Minister Nouri al-Maliki announced the launch of a military operation against al-Qaeda near the Syrian border. The operation was dubbed “Avenging the Leader Mohammad.”

Many in Iraq are hoping that this operation will eradicate al-Qaeda. However, the fact remains that the Anbar battle is over military control of the area after al-Qaeda tried to establish a foundation to fuel its activities on both sides of the 600-kilometer (373-mile) Syrian-Iraqi border.

Considering the context, the operation seems to be a reaction to the killing of a number of senior Iraqi army officers, including Maj. Gen. Mohammad al-Rawi, the commander of the 7th Division, in an ambush in the Horan valley desert, near the town of Rabta in the far west of Iraq, on Dec. 21.

The announcement of the military operation seems to have been warmly and widely greeted, especially in Baghdad and southern Iraq. But many in the cities of Anbar, Mosul and Salahuddin fear its implications.

The operation was launched for several reasons.

First, in the past, the Iraqi army was not armed in a way consistent with the launching of major operations in large desert areas. But in recent months, the army has received helicopters, American and Russian fighter jets and monitoring equipment from an earlier deal, enabling the Iraqi army to support its ground troops. The Iraqi air force had been active in the Anbar desert for weeks before the military operation.

Rashid Fleih, a leader of the Anbar operations, told Al-Monitor that the Iraqi army had received US equipment and supplies to be used in the battle against groups affiliated with the Islamic State of Iraq and al-Sham (ISIS). The New York Times revealed Dec. 25 that Washington will supply Iraq with a map showing the locations and origins of al-Qaeda in Iraq, besides 75 Hellfire air-to-land missiles and 10 ScanEagle reconnaissance drones. This information was confirmed by the prime minister's spokesman, Ali al-Moussawi, in a statement released Dec. 27.

A Russian thinktank has predicted that China will be the fourth biggest buyer of weapons from Russia between 2013 and 2016, falling from the second place it held during the 2005 to 2013 period, according to a China Times.

The Center for Analysis of World Arms Trade stated in a report released on Dec. 13 that the top three countries buying arms from Russia for 2013-2016 are likely to be India, Iraq and Vietnam.

The projection forecast that India, Iraq and Vietnam will make arms purchases worth a combined 51.24% of Russia's total arms sales from 2013-2016, with India accounting for 32.75%, followed by Iraq at 9.87% and Vietnam at 8.92%.

Between 2005 to 2012, Iraq's share was 0.54%, while Vietnam's was 4.86%. Over the eight-year period, India, China and Algeria bought the highest percentage of arms from Russia, accounting for 56.42% of Russia's total arms sales.

A total of 69 countries bought weapons from Russia between 2005 and 2012. India, China and Algeria were followed by Venezuela, Vietnam, Syria, Iraq, Egypt, Azerbaijan and the United Arab Emirates. These latter seven countries accounted for 27.9% of the total, while 59 other countries made up a combined 15.68% of total exports.

(Source: Want Daily, China Times)

KRG Representative to Poland outlines Kurdistan’s oil resources at 8th Energy Forum

Ziyad Raoof, the Kurdistan Regional Government Representative to Poland, highlighted Kurdistan’s oil and gas potential at the 8th Energy Forum, a landmark annual international conference.

The Energy Forum is the biggest conference in Poland and one of the biggest in Europe devoted to the energy sector. The conference themes included the European Union’s energy policy, the gas market in Europe and global issues such as the future of shale gas.

The conference was opened by Poland’s Deputy Prime Minister Janusz Piechocinski and was attended by members of the Polish, Russian and Ukrainian parliaments, and Lithuania’s Minister of Energy, Janusz Niewierowicz. Leading energy companies from around the world also participated at the event which ran from December 16 to 18.

Mr Raoof spoke at a session titled Energy Potential: Non-European Perspective and focused on the investment opportunities and potential in the Kurdistan’s energy sector. He outlined the region’s oil and gas resources, current and future pipelines, the region’s oil and gas law and the opportunities for investors. Mr Raoof emphasised that the development of the energy industry is in line with the Iraqi constitution which enables the KRG to explore and export its own resources.

During the three-day conference, Mr Raoof met MPs from several countries, as well as representatives of ministries and energy groups. He held a meeting with Lithuania’s Minister of Energy, Jaroslaw Niewierowicz, who expressed an interest in developing Kurdish-Lithuanian cooperation.

Energy Forum takes place every year in Sopot. The organisers of this event are also responsible for the Economic Forum, an annual international conference in Krynica. Last year, Mr Raoof, along with KRG ministers Ali Sindi and Herish Muharram, participated.

(Source: KRG)

By John Lee.

Energy Global reports that the Turkish construction firm EID Insaat is to build a 120-km pipeline for ExxonMobil in Iraq.

The $90-million project is expected to take approximately one year to complete.

The company Chairman said that this was in addition to an 85-km long pipeline project currently under construction.

The Iraqi marker accounts for 70% of the business volume of EID Insaat, which has operations in the energy and construction sectors in the Middle East and Russia.

(Source: Energy Global)

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

On Dec. 8, the body of Yasser Faisal al-Jumaili, an Iraqi photojournalist who was executed by al-Qaeda in Syria, arrived in Fallujah. Only one day before the arrival of the body, dozens of journalists in Sulaimaniyah staged a sit-in to protest against the assassination of journalist Kawa Ahmed Germyani in Kalar at the hands of gunmen.

Speaking to Al-Monitor, Ziad al-Ajaili, the head of the Journalistic Freedoms Observatory in Iraq, said: “No blood money is paid to the families of murdered journalists, who are killed on a daily basis. In Mosul alone, 50 journalists have been killed since 2003.” According to Ajaili, most journalists fled the city after a hit list containing their names was recently published.

According to international statistics, working as a journalist in Iraq is considered to be one of the most dangerous professions in the world. This is true not only because of the persistent threats they receive, but because the Iraqi authorities are unable to protect them in the first place and fail to reveal the identity of those responsible for these killings.

On May 3, on the occasion of World Press Day, the International Committee to Protect Journalists classified Iraq as the worst country in terms of detecting the identity of the journalists' killers, stating that the Iraqi authorities are not doing their job to save journalists.

The index included other countries such as Nigeria, the Philippines, Somalia, Sri Lanka, Colombia, Afghanistan, Mexico, Pakistan, Brazil, India and Russia.

Ajaili, who had called upon the Iraqi government a few days ago to repatriate Jumaili's remains, said that the Turkish government waited an entire day before allowing the journalist’s remains to enter through the Bab al-Hawa crossing in Idlib, Syria, into Turkish territory.

By John Lee.

Korea Aerospace Industries (KAI) has signed a $1.1 billion contract with Iraq to export T-50 supersonic advanced jet trainer and light attack aircraft.

The deal for the 24 aircraft, which includes the training of Iraqi pilots, was signed today in Baghdad by KAI's President and CEO, Ha Sung-yong, Defense Acquisition Program Administration's Administrator, Lee Young-geol and the ROKAF deputy chief of staff, Kim Hyung-chol as well as Iraqi Prime Minister Nouri al-Maliki.

Following the contract, KAI will be entitled to supply its follow-on support to the Iraq Air Force for over two decades, bringing the total value to more than $2 billion.

The company says that it faced strong competition from the UK, Russia and the Czech Republic, with the BAE's Hawk-128, Yakovlev's Yak-130, and Aero's L-159 respectively.

(Sources: KAI, Office of the Iraqi Prime Minister)

By Ahmed Mousa Jiyad.

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

China and CNPC are Consolidating Further their Positions in Iraq Petroleum Sector

Four years after the first bid round took place, some international oil companes (IOCs) are consolidating their positions. while others are descending after good start, and some were even unable to make an entry. CNPC stands among the first group, while ExxonMobil exemplifies the second group, and companies such as Chevron, Repsol and Conoco Phillips fall into the third group.

In a previous paper I addressed how Russia has entrenched and solidified its role in the Iraqi petroleum sector. This paper is mainly about CNPC's path to consolidating its presence in this sector.

Please click here to read Ahmed Mousa Jiyad’s report.

Mr Jiyad is an independent development consultant, scholar and Associate with Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: [email protected], Skype ID: Ahmed Mousa Jiyad).