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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)

By John Lee.

Forty companies are reported to be bidding for contracts to build and finance the new pipeline from Haditha to Jordan’s Red Sea port of Aqaba (pictured).

Nateq Balasem Khalaf, deputy director general of the state State Company for Oil Projects (SCOP), told Bloomberg that Citibank is among the bidders, adding that other interested banks and companies are from Russia, South Korea, Japan, Italy, China, Egypt, Jordan, and Germany.

The new crude pipeline would carry 1 million barrels a day, including 150,000 barrels a day for Jordan’s domestic consumption, and the rest for export, while the gas pipeline would transport 252 million cubic feet a day, of which 100 million cubic feet would be exported to Jordan.

SNC-Lavalin Group (SNC) is advising the government on ways to build new routes to export oil currently shipped via pipeline to Turkey and by sea through the Persian Gulf.

Khalaf said that the government plans to build and finance a separate section of the network itself to Haditha from Basra, for which it will ask for bids from pipeline suppliers by the end of the year.

Citigroup, a U.S. lender scaling back in some emerging markets, plans to open offices and branches in Iraq to benefit from an estimated $1 trillion of infrastructure spending there, Mayank Malik, the bank’s chief executive officer for Jordan, Iraq, Syria and the Palestinian territories, said in a June 27 interview.

Iraq will start operating its third offshore export facility for crude by the end of the year and plans to upgrade its two onshore terminals at Basra and Khor al-Amaya, Khalaf said. The government is building 16 crude-storage tanks in the southern port of al-Faw, each with a capacity of 58,000 cubic feet. Four are operational, another four are to be completed by the end of July and the rest by year-end, he said.

Iraq is on track to increase crude exports to 3.5 million barrels a day by the end of 2013, Khalaf said. The country produced 3.15 million barrels a day to 3.2 million barrels a day on average in June, according to an e-mailed Oil Ministry statement on June 29.

(Source: Bloomberg)

By John Lee.

Russian oil company LUKoil has announced that its President, Vagit Alekperov (pictured), held talks in Moscow on Sunday with Iraqi Prime Minister, Nouri al-Maliki, and Iraqi Oil Minister, Abdul Karim Luaibi [Elaibi].

The parties discussed the progress of the West Qurna-2 development project, the company’s plans to develop Block-10, and other possible projects in which the company may participate.

In a statement, the company added:

"As was noted by the representatives of the Iraqi leadership, LUKOIL strictly abides by all its commitment as regards the West Qurna-2 project. They expressed confidence that the company would be able to expand its presence in Iraq."

(Source: LUKoil)

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

The Trade Promotion Organization of Iran (TPOI) said on Monday, June 24, 2013, that 72% of Iran’s exports go to Iraq, and revealed that Iraq's imported goods from Iran increased by nearly 15% this year.

The Iranian Fars News Agency quoted TPOI deputy Kiumars Fathallah Kermanshahi as saying that “Iraq receives 72% of the total volume of Iran's foreign trade, and is ranked first as the biggest importer of Iranian goods.”

For years, the UN and Western countries have imposed a series of sanctions against Iran, which is accused of seeking to develop nuclear weapons, under cover of an alleged civil program. Yet, Tehran denies these accusations.

In the most recent round of sanctions against Tehran, US media quoted on Wednesday, June 26, White House spokesman Jay Carney as saying that US President Barack Obama gave the green light to the imposition of sanctions on foreign institutions that purchase or sell significant amounts in Iranian rials, and those who hold amounts in rials in bank accounts outside Iran.

The Iranian rial fell to its lowest level because of international sanctions. The new set of US sanctions included Iran’s automotive manufacturing sector. Iraq is the largest external market for Iranian cars.

Iraqi political analyst Ihsan al-Shammari said, “Iran is convinced that Iraq is currently its only economic lung, and it is normal that Iraq receives the majority of Iranian exports.”

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

On June 18, an Iraqi military source confirmed that the air force command will receive “Alligator” combat helicopters from Russia in the coming period.

In a statement to Al-Monitor, the source, a senior Iraqi army officer, said that "the aircraft will be of the Ka-52 [pictured] and Mi-28NE models from the French Le Bourget Air Show.”

The source, who spoke on condition of anonymity, explained, “The Iraqi air force command will get a new source of strength with the acquisition of this model of helicopter.”

The source continued, saying, “The new Russian aircraft, especially the Ka-52, are distinguished by their ability to lead a squadron of helicopters and play the role of the command post, which defines and assigns the goals of the squadron’s helicopters.”

The source added that the Ka-52 “does not have less technical and combat characteristics than the US AH-64 Apache helicopters.”

This statement came one day after a Russian news agency published information on the completion of a purchase agreement between the Iraqi Ministry of Defense and the Russian government, dating back to 2011.

Iraqi Prime Minister Nouri al-Maliki had visited Moscow to hold negotiations for an arms deal. Yet, it was immediately halted after suspicions of corruption against officials close to Maliki.

By John Lee.

Gazprom has said that it is interested in working further in the oil and gas sector in Iraqi Kurdistan.

Following a meeting in St. Petersburg between the Russian company's Chairman, Alexei Miller [Alexey Miller] (pictured), and KRG President Massoud Barzani, Gazprom issued a statement saying, "in particular, the parties discussed the progress with interaction in oil and gas field exploration, development and operation".

Gazprom Neft, the oil subsidiary of Gazprom, is in the process of exploration activity in the Garmian and Shakal blocks in the southern regions of the Kurdish territories.

(Source: UPI)

Erbil Governorate has compiled and published a list of the top oil companies in Kurdistan [Note: This list was originally compiled and published by Marcopolis - Ed.].

Please click here to see a list of oil companies with licences granted by the Ministry of Oil in Baghdad.

[NEW: An updated list can now be found by clicking here - Ed.]

Listing them by country:

USA

• Exxon Mobil
• Chevron
• Aspect Energy
• Marathon Oil Corporation
• Hillwood International Energy
• Hunt Oil
• Prime Oil
• Murphy Oil
• Hess Corporation
• HKN Energy
• Viking International

Canada

• Forbes and Manhattan
• Western Zagros Resources
• Talisman Energy Inc
• NIKO Resources
• Ground Star
• Shamaran

By John Lee.

UPI reports that Russia has started fulfilling a contract to send attack helicopters and short-range air defense systems to Iraq.

Sergei Chemezov (pictured), Chief Executive Officer of Russian Technologies (Rostec), was quoted by state news agency RIA Novosti as saying:

"The contract is being implemented, the production (of ordered equipment) has started."

Iraq cancelled a $4.2-billion contract with Russia in 2012 following allegations of corruption, though the terms of the deal were renegotiated in early 2013.

Russia's weapons trade has come under scrutiny because of an ongoing relationship with the Syrian military.

(Sources: UPI, RIA Novosti)

The Iraqi Grain Board has reportedly bought 250,000 tons of wheat from Russia.

Aswat Al Iraq says the purchase was made following a bid to buy 500,000 tons of wheat, which was closed last week.

According to Russia Today News Agency, the shipments will be made between 1st and 31st July, 2013, and delivered in August-September.

Iraq bought the wheat in four shipments from four trading companies, at costs of $318.82, $319.69, $325.15 and $328 per ton, including shipping.

Iraq is expected to lose 25-30% of its wheat production this year due to heavy rains in south of the country.

(Source: Aswat Al Iraq)