Custom Search

By John Lee.

Foreign Minister Hoshyar Zebari held a meeting with the Ambassador of the Federal Republic of Russia, Mr. Ilya Murgunov, on 7th October.

During the meeting, they discussed strengthening relations between the two countries and the results of discussions with the Minister of Foreign Affairs of Russia, Mr. Sergei Lavrov, recently in New York during the meetings of the 68th session of the General Assembly of the United Nations.

The minister reviewed the implications of the issue of the Iraqi school in Moscow and the demand of Iraq for the Russian government to work to resolve this issue through respect for diplomatic immunities and judicial decisions.

They also discussed prospects of joint cooperation in a number of areas and the participation of the Federal Republic of Russia in the Baghdad International Fair.

(Source: MoFA)

By John Lee.

Energy-focused health and safety specialist Cresent has become the largest Control of Work (CoW) provider in Iraq after winning a contract worth $1.7 million with Russian oil company, LUKOIL Mid-East Ltd.

The contract will involve Aberdeen-based Cresent delivering an electronic version of its flagship CoW system WorkSafe® across the second phase of the West Qurna Field. The firm will supply the software in Arabic, English and Russian.

Cresent will also be tasked with delivering training for LUKOIL personnel in the run-up to the system going live in November this year. A support and maintenance contract for a three-year period following the system launch is in place.

The new project comes less than a year after Cresent rolled out a similar contract at the nearby Rumaila field. Managing director Tracie Watson (pictured) says Cresent’s previous experience in training Iraqi contractors will ensure that LUKOIL has a smooth transition onto the new system.

She adds:

"Our challenge in terms of Rumaila was to successfully manage a complete change of mind set in relation to the attitude towards Control of Work and therefore to encourage a safer working environment.

"We are confident that the implementation of the LUKOIL system will be as successful as previous contracts delivered in the region. This new contract builds on the package of work that we have already successfully delivered elsewhere in Iraq.

"However, the system that LUKOIL will be implementing does involve some additional functionality as it will require the integration of WorkSafe® into another software package and LUKOIL’s on-site CCTV system.

"While off the shelf versions are available, one of the most significant features of WorkSafe® is that it allows for bespoke versions to be created. This ensures that Cresent can respond to the needs of the client and their business objectives, regardless of location or the complexity of the operational need.

"This contract consolidates Cresent’s position as the largest CoW provider in Iraq. The Middle East market performed exceptionally well for Cresent over the past two years and we believe the region will continue to deliver significant results for the foreseeable future."

The launch of the pioneering WorkSafe® system, which is also available in a paper-based format, has been a key milestone in Cresent’s recent history. The CoW system, which enables operators to make significant safety improvements, has been translated into 10 different languages, and is used on both onshore and offshore assets around the globe.

(Source: Cresent)

By John Lee.

The Wall Street Journal and Reuters report that Iraq has shortlisted 12 international companies to build the new $18-billion oil export pipeline to Jordan, the country's first such pipeline in decades.

Iraq's oil ministry has chosen these companies from a list of more than 80 international firms which submitted their credentials to build a section of the 1,040-mile pipeline from Basra to Jordanian Red Sea port of Aqaba.

The short-listed companies and consortiums are:

• Lukoil (Russia);
• China National Petroleum Corporation (CNPC);
• Marubeni Corporation (Japan);
• Mitsui (Japan);
• Toyota Tsusho (Japan);
• Punj Lloyd (India) and Mass Global International (Iraq);
• Saipem (Italy);
• Daewoo International Corporation (Korea);
• Consolidated Contractors Company (CCC) (Greece);
• Go Gas (India), Larsen & Toubro (L&T) (India), and Fius Capital (Dubai);
• Petrofac (UK) and Stroygazconsulting (SGC) (Russia); and,
• Orascom (Egypt) and Petrojet (Egypt).

It is understood that the State Company for Oil Projects (SCOP) will invite the short-listed companies to receive the tender package, and then submit their offers by November or December.

Iraq and Jordan signed a preliminary agreement in April to build the section of the pipeline that would stretch from an Iraqi oil pumping station in Haditha, west of Iraq, to Aqaba. The rest of the pipeline, which is 680 kilometers long, linking a Basra pumping station with the one in Haditha would be built and financed by the Iraqi oil ministry.

Iraq hopes the pipeline will make it less dependent on Persian Gulf export terminals, providing an alternative route if Iran closes the Strait of Hormuz.

A third section of the pipeline, running to Syria's Banias port in the Mediterranean, has been postponed because of the conflict in the neighboring country. It would have a capacity of 1.25 million barrels a day.

(Sources: WSJ, Reuters)

British Peer Calls for UK Investment in Iraq before Multi-Billion Pound Market is Lost to Far East

Baroness Nicholson of Winterbourne, Executive Chairman of the Iraq Britain Business Council (IBBC), has called on UK businesses to invest in Iraq or face losing out to more aggressive competitors from the Far East.

Despite an upsurge in terrorist violence Iraq’s oil wealth is powering double digit growth making it one of the world’s fastest expanding economies with multi-billion pound contracts in construction and other sectors like health, education and telecoms up for grabs.

Speaking at the Offshore Europe Conference in Aberdeen tomorrow (September 4th 2013) Baroness Nicholson will tell hundreds of the world’s oil and gas executives:

"If the UK doesn’t fight for lucrative contracts - you can be sure other countries will - and are doing so already.

"I am deeply saddened and frustrated Britain is so slow off the mark and losing out to nations in the Far East like South Korea and China who are investing billions in Iraq.

"Baghdad is also pushing ahead with mega defence contracts with Russia and the Czech Republic – Britain has a major defence industry, but so far the UK has been squeezed out.

"And other European countries like the French and the Germans are making major assaults on the Iraqi market. Why not the UK?

"Britain on the other hand has closed down its consulate in Basrah – Iraq’s commercial capital.

"I urge the British Government to reverse that decision."

(Source: IBBC)

By John Lee.

Oil minister Abdul Kareem Luaibi [Elaibi] has confirmed that BP is interested in getting involved in the redevelopment of the giant Kirkuk oil field, which is suffering from falling output.

According to a report from the Wall Street Journal, production at the field has declined to 260,000 barrels a day from 900,000 bpd in the early 2000s, after years of injecting water and the dumping of unwanted crude and other oil products into the field's reservoir.

Mr. Luaibi also denied reports that Russian oil major LUKoil was interested in the field.

Separately, he said the government likely will approve the sale of ExxonMobil's stake in West Qurna-1.

(Source: WSJ)

Minister Falah Mustafa received Mr Sarbast Mustafa, Head of the Independent High Electoral Commission of Iraq (IHEC), and Mr Sokol Kondi, Head of UNAMI in Erbil today to discuss preparations for the upcoming elections.

Kurdistan Region is due to hold parliamentary and provincial elections this year in September and November respectively.

The meeting comes as part of the continued endeavour by the KRG to coordinate efforts with IHEC, UNAMI and foreign representatives in inviting international observers to monitor the elections and to prepare the ground.

In welcoming the delegation, Minister Mustafa said that the government is committed to holding elections in a transparent manner and on time. He said, “We have began a democratic process, and our aim is to share our experience with the rest of Iraq what can be achieved through democracy, partnership and inclusiveness.”

He added that a clear message has been conveyed to the foreign diplomatic community in Kurdistan calling for their support and to send as many observers as possible.

Speaking about the need to for international observers to participate in the process, Mr Sarbast Mustafa said: “Oversight continues to be one of the most important elements for the commission.” He also said that the commission includes members from the country’s rich diversity.

Mr Sokol Kondi, Head of UNAMI in Erbil, commended the working relationship between UNAMI and IHEC in preparations for the elections. He said, “We appreciate the strong commitment from the KRG to hold elections on time. This is important and we reaffirm our support to you and IHEC.”

The officials also touched on the ongoing discussions in organising coordination support teams to monitor the elections. Mr Kondi said that several countries have already committed to sending between one to four teams, including from USA, UK, Italy, Germany, NL, Turkey and possible from the Russian Federation.

The meeting was attended by Ms Gulshan Kamal, Director of IHEC Public Relations; Ms Tara, Head of IHEC Observers Coordination Committee; Mr Geoffrey Alan, UNAMI Political Advisor. The officials from DFR included Ms Siham Jabali, Assistant Head of DFR; Dr Saman Sorani, Advisor, as well as other Directors.

(Source: UNAMI)

By John Lee.

Iraq has selected five additional international oil companies to bid for the development of its $4.4-billion Nassiriya oil field and the construction of a new 300,000 bpd refinery, reports Reuters.

The companies added to the list are:

• France's Maurel et Prom;
• Russia's Rosneft;
• Essar UAE India;
• South Korea's GS Engineering & Construction Corp.; and,
• India's ONGC Bangalore.

The 45 firms already qualified from previous bidding rounds are eligible to bid, as are the seven companies shortlisted in March.

An auction for the contract is to be held on 19th December.

(Source: Reuters)

By John Lee.

Foreign Minister Hoshyar Zebari will meet with Secretary of State John Kerry on Thursday; the Daily Beast speculates that among his top requests will be for the White House to overcome objections in Congress to selling his country advanced Apache helicopters the Iraqis say they need to fight terrorists within their borders.

The U.S. government has notified Congress in recent weeks of its intention to sell Iraq $4.7 billion worth of military equipment, but none of those sales include the top item on Iraq’s shopping list, the Boeing AH-64 Apache helicopters. The House Foreign Affairs Committee and the Senate Foreign Relations Committee have refused to allow the sale of the helicopters to date.

Committee leaders are worried the Iraqi government will use the helicopters to go after their domestic enemies, not just suspected terrorists. Also lawmakers are convinced that Iraq still allows Iran to fly arms over Iraqi airspace to aid the Syrian regime.

The arms deals also could be a way to maintain dwindling U.S. influence in Iraq, which could purchase arms from U.S. competitors if Washington doesn’t come through.

“They want to buy Apaches from us, but they can also buy Russian helicopters, and we would have very little oversight over that,” the official said.

Iraq’s new ambassador to Washington, Lukman Faily, has been working the halls of Capitol Hill making the argument for the Apaches. In an interview last month, he denied that Iraq is allowing Iran to resupply the Syrian regime and said Iraq understood the back and forth between lawmakers and the administration over the Apache sales.

(Source: The Daily Beast)

Iraq's oil exports are stagnating compared with numbers from this time last year, and are set to fall sharply next month. This plateau in exports comes as major work is carried out in the vital southern export terminals, Reuters sources explained.

Infrastructure and security problems are at the heart of Iraq's struggle to keep pace with last year's rates, although Baghdad is confident of a big rise in production by the end of the year once the giant southern Majnoon oilfield begins producing.

Iraq's overall exports of 2.324 million barrels per day (bpd) in July were down a small fraction on June, Iraq's oil ministry spokesman Asim Jihad said on Wednesday. Southern Basra Light exports are expected to drop by 500,000 bpd in September while metering equipment is installed at the terminal.

Reuters is also reporting that Iraq's major customers say state oil marketer SOMO is suggesting cuts next month of 25 percent in liftings of the main Basra Light grade, which have been running at around 2.1 mln bpd. Due to a lack of storage capacity in the south, the export cut will force a decrease in production on nearly the same scale.

Output of crude oil in 2013 has averaged 2.9 million bpd, which is even with last year output, although flows climbed to 3.25 million bpd at the start of August.

"We expect output to rise by 400,000 bpd by the end of this year due to the start up of the Royal Dutch Shell-operated Majnoon oilfield in southern Iraq and other smaller sources," Jihad said.

The government has set a production target of 3.4 million bpd for end-2013, down from an initial 3.7 million bpd. If the Majnoon and other increases are realised, Iraq will exceed the reduced target rate by the end of the year.

"Production from the Majnoon oilfield should start in October," Jihad said while the oil minister had previously said that July would the start date.

To continue its production increases, Iraq will need to start up other southern fields apart from Majnoon, such as West Qurna-2, run by Russia's Lukoil. Garraf, also in the south, and Badra - farther north - will also contribute.

(Source: Reuters)

By John Lee.

Prime Minister Nouri al-Maliki has announced that scheduled non-stop flights between Baghdad and Moscow will resume in August.

Azzaman reports that the agreement comes amid reports that Iraq is keen to expand its traditional ties with Russia, which was the country’s main supplier of arms, adding that an arms deal, which was shelved on suspicion of corruption, is to be revived.

Direct air links, according to Maliki, were necessary to facilitate movement of entrepreneurs, industrialists and businessmen between the countries.

Russia’s oil majors are involved in oil development contracts in Iraq worth billions of dollars.

(Source: Azzaman)