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By John Lee.

Reuters reports that LUKoil, Russian’s biggest non-state oil producer, which is believed to be considering buying ExxonMobil's stake in the West Qurna-1 oil field, has bought oil from Kurdistan in defiance of Baghdad.

Baghdad has long insisted it has the sole right to export oil, but LUKoil's Geneva-based trading arm Litasco has become the third company to buy Kurdish condensate (very light oil), five industry sources have told the news agency.

The other companies to have bought directly from Kurdistan are Trafigura and Vitol; Swiss trader Vitol has just signed a deal to sell gasoil to Iraq.

Those earlier deals provoked an angry response from the Iraqi central government, which said it had the right to "legally pursue all those who participate in smuggling", but according to Reuters Baghdad seems to be turning a blind eye on this occasion.

"After checking with concerned parties, we got confirmation that LUKoil has not purchased any kind of crude for the benefit of the KRG," said an official from Iraq's State Oil Marketing Organisation (SOMO). Iraqi government officials declined to comment.

Industry sources told Reuters that Litasco had chartered the tanker Cielo di Napoli to load around 19,000 tonnes of the Kurdish condensate from the port of Toros at Ceyhan in Turkey; The tanker sailed on 21st November.

Litasco won the tender at a $3.00 discount to naphtha prices, beating competing bids from Trafigura and Socar, one participant said, and bought the condensate through the intermediary Powertrans in a public tender.

(Source: Reuters)

By John Lee.

Russian’s LUKoil is said to be studying documents on Iraq’s West Qurna-1 oil field, with a view to possibly taking over ExxonMobil's stake.

Bloomberg quotes Chief Executive Officer Vagit Alekperov (pictured) as saying that the company will make a decision on possible participation in the project by the end of the year.

It already holds 75 percent of the adjacent but separate West Qurna-2 "super giant".

“We are looking at the main issue now, synergy,” Alekperov told reporters today in Moscow. “What economic synergies the company will get if these two projects work together.”

In a separate report, LUKoil is said to have bought oil from Kurdistan in defiance of Baghdad.

(Source: Bloomberg)

By John Lee.

Iraq’s state grains board has purchased a total of 350,000 tons of wheat from Australia, Russia and Canada in a tender for a nominal 50,000 tons which closed last week:

• 200,000 tons of Australian wheat purchased from Glencore at $404.89 cif;
• 50,000 tons of Russian wheat, also from Glencore, at $399 a tonne cif;
• 100,000 tons of Canadian wheat  purchased from Viterra at $409.89 a ton cif.

Lower offers of Romanian wheat in the tender were rejected, traders said.

Another trader commented that Australian and Canadian wheat were offered aggressively to Iraq both in terms of prices and volumes.

Offers for a total 400,000 tons of Australian wheat were reportedly made to Iraq along with offers of 300,000 tons of Canadian wheat.

(Source: Reuters)

By Madeleine White, former teacher and educational writer and Head of Marketing, Whizz Education.

Several years ago, I was working as an English Literature Teacher in at a typical state secondary school in the UK. I remember sitting in a classroom of 16 year old boys, who really didn’t want to be there. They wanted to earn money and didn’t see how a class on Dylan Thomas could help prepare them for this immediate working future. Essentially they couldn’t see the point.

Creating this ‘point of engagement’ has been something that has followed me through my career into educational marketing and interestingly is very much on the global agenda also.

I was recently on a trade mission organised by the KRG to Erbil and was lucky enough to meet Kurdistan’s President Barzani. He reiterated his desire to ensure that extraction of the region’s natural resources was matched by a commitment to supporting the human resource. It made me realise that finding this point of engagement was very much on his agenda also.

This is why:

• Kurdistan wants to build upon the natural resources to leverage their human resources.
• In order to do this they need the right structures in place that will encourage the growth and development they are looking for, within the economy as a whole
• They also need to address region specific needs, such as rebuilding agriculture, serving water needs and indeed supporting the infrastructure needed to facilitate the development of the region’s natural resources.

By Amir Hassan Fayad.

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq and Russia have been getting cosy lately with high ranking visitors and multi-billion dollar arms deals. Is this friendship just a business opportunity? Related to events in Syria or Iran? Or something more sinister?

Iraqi Prime Minister Nouri al-Maliki’s visit to Russia as well as the making, then breaking, of a multi-billion dollar arms deal with Russia has led to plenty of questions. These include questions on the state of the Russian-Iraqi friendship, its importance to both partners and its significance in geo-political terms.

Over the past century, the relationship between Iraq and Russia may best be described as inconsistent. Or possibly as similar to the kind of relationship that a small business might have with a big, multi-national business. It makes no sense for the big business – Russia – to sacrifice its interests and alliances with other big businesses – for instance, in the West – just to make deals with the small business.

Meanwhile inside Iraq, it feels like since the 2003 US-led invasion that toppled the regime of former Iraqi leader Saddam Hussein there hasn’t been much of a cohesive, federal foreign policy. At least, not a unified one. We hear plenty of diverse opinions from the various political blocs but there is really no single spokesperson or national policy.

The recent debacle of the Russian arms deal is an excellent example. Different parties have said different things about the deal and it’s hard to know who is correct. Firstly, the Prime Minister’s office revealed there were allegations of corruption that needed to be investigated before the deal could be concluded. Other MPs accused the Iraqi deal makers of taking almost 10 percent off the total amount of the contract and profiting from it.

By John Lee.

Iraqi government spokesman Ali al-Dabbagh (pictured) has announced that the country is to renegotiate the recent $4.2-billion weapons deal with Russia: "It will renegotiate with Russia to put an end to suspicions of corruption in the weapons deal", he said.

The turnaround follows the ouster of Russia's defense minister earlier this week, and allegations by Iraqi lawmakers and local media that the deal is tainted by corruption.

It wasn't clear whether the alleged graft was by Russian executives or by Iraqis, according to UPI, which also reports suspicions that the move may be a ploy by the Iraqi government to secure a more favorable deal, and the possibility that Washington has leaned on Maliki.

Russian media said the deliveries covered 30 Mi-28 attack helicopters and 42 Pantsir-S1 surface-to-air missile systems. Discussions were also said to be under way for Iraq's eventual acquisition of a large batch of MiG-29 fighters and helicopters, along with heavy weaponry.

(Sources: Associated Press, UPI, AFP)

By Abdul-Khaleq Dosky.

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The tension between Iraqi Kurdistan and the leadership in Baghdad doesn’t seem to have diminished lately. NIQASH asked the Iraqi Kurdish why the Russians and Exxon Mobil are making things worse and why the planned national reconciliation conference won't work.

For some time now, the important Kurdish bloc in the Iraqi Parliament has been at loggerheads with the current Prime Minister Nouri al-Maliki’s bloc.

Al-Maliki has been accused of consolidating power at the expense of other parties and not sticking to promises made when he formed his government in 2010. In fact, because of this, various political groups, including the Iraqi Kurds, came together earlier this year to make plans to oust him. These failed however and the most recent aim was to hold a conference for national reconciliation that would unite all political groups and get the country moving forward.

Over the course of the past year, Kurdish politicians have gone from demanding that the PM be removed from power to being the prime movers behind conciliation.

NIQASH talked to Muayad al-Tayeb, Baghdad-based spokesperson for the Kurdish voting bloc in Iraq's federal parliament, about recent events that appear to have worsened the relationship between Iraq’s Kurds and the current Prime Minister recently.

 By John Lee.

The Iraqi Government has reportedly told Gazprom Neft, the oil arm of Russian gas export monopoly Gazprom, to abandon oil deals in Kurdistan or face losing the lucrative Badra oilfield contract.

The field, which is estimated to have reserves of 100 million barrels, is being developed by Gazprom (30%), Korea’s KOGAS (22.5%), Malaysia’s Petronas (15%), Turkey’s TPAO (7.5%), and Iraq (25%).

Faisal Abdullah, a spokesman for Deputy Prime Minister for Energy Hussain Shahristani, confirmed on Friday that a letter had been sent to Gazprom last week warning the company, which acquired interests in two blocks with the Kurdistan Regional Government (KRG) in August.

According to Reuters, Gazprom Neft Chief Operating Officer Alexander Dyukov (pictured) declined to comment. The company reportedly denied freezing contracts in Kurdistan in October.

(Sources: BBC, Reuters)

By John Lee.

Exxon Mobil has informed the Iraqi government that it wants to pull out of the $50-billion West Qurna-1 oilfield project, according to a report from Reuters.

Abdul Mahdi Al Ameedi, director of the oil ministry’s Petroleum Contracts and Licensing Directorate (PCLD), said:

"Exxon has stated in its letter that it has started discussions with some international oil companies to sell its stake."

Another oil official said that Baghdad plans to reply to the letter from Exxon by Sunday, but it was unclear who would replace Exxon at the 400,000-bpd oilfield, which it works with minority partner Shell.

Some sources have suggested that Baghdad wants to replace Exxon with companies from Russia or China; Russia's LUKoil and Gazprom Neft are already working in Iraq, and LUKoil, which already runs a project to develop West Qurna-2, has said that it lacks the resources to take on a project like West Qurna-1 for the moment.

Earlier today, LUKoil signed the contract for the exploration of Block 10.

(Source: Reuters)

Iraq has signed a deal with Russia's LUKoil, and Inpex Corp of Japan, to explore the 5,500-square-kilometer (2,100 square mile) Block 10 in Muthanna and Dhi Qar province.

Under the contract, the two firms must invest at least $100 million and will be paid $5.99 for each barrel of oil equivalent it finds.

"This contract represents the resumption of exploration work which stopped in the 1970s," said Abdul Mahdi Al Ameedi, director of the oil ministry’s Petroleum Contracts and Licensing Directorate (PCLD). "We hope it will result in added reserves of oil, which is important for Iraq."

Lukoil and Inpex won the contract in the 4th round energy auction held in May.

(Sources: Middle East Online, NINA)