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Russia’s LUKoil has said it has cut its oil production plan in Iraq by almost a third, in line with the local government’s plans to increase the lifetime of its oilfields, reports Al Arabiya.

Andrei Kuzyayev, head of LUKoil Overseas, told Russian state TV channel Rossiya-24 that LUKoil is now looking for peak production at the West Qurna-2 oilfield of 1.2 million bpd, not 1.8 million bpd as previously envisaged.

He said the Iraqi government has decided to cut peak oil production in order to prop up oil prices and help its economy.

“That’s why Iraq’s leadership has decided to limit production in the whole country to 9 million bpd, not 12 million bpd,” he said.

“The Iraqis have analyzed the situation for the last three years, and they come to the conclusion they didn't need (sharp rises in) peak production,” Kuzyayev added. “That’s because the peak production will lead to creation of excessive infrastructure. And going forward, when production will start to sharply decline that would create an unstable macroeconomic situation in Iraq.

Iraq has signed a series of contracts with foreign companies that target total oil production capacity of 12 million bpd by 2017, but has been reviewing the target.

“In return (for cuts) we got a substantial increase in the lifetime of the plateau production. The plateau output has been envisaged to last 12-13 years, while now it has been revised to 19 years,” Kuzyayev said.

Any deep cut to Iraq’s overall target could mean the deals could need to be adjusted to accommodate lower production plateaus, or peak output levels, which would mean lower returns for oil companies in the short term.

(Sources: Al Arabiya, Aswat al Iraq)

By John Lee.

WesternZagros Resources has announced the appointment of Mr. William (Bill) Jack to the position of General Manager Kurdistan, to be resident in Iraqi Kurdistan, effective February 1, 2013.

This appointment follows the decision by Mr. Ian McIntosh, Vice President, Kurdistan Business Unit, to retire in January 2013 after three years of valuable service.

"Ian has been an important member of the Company's executive and has built our Kurdistan organization into a highly effective team. Among his many contributions, Ian was instrumental in quickly preparing the Sarqala-1 well for an extended well test. We wish Ian the very best," said Simon Hatfield, WesternZagros Chief Executive Officer. "We are, at the same time, delighted to welcome Bill to the WesternZagros team. His international experience is very well suited to our ambitious exploration and appraisal plans."

As General Manager Kurdistan, Mr. Jack will be a member of the Executive Management Team, and will assume responsibility for government liaison and in-country administration. Mr. Jack's extensive background encompasses more than 30 years of progressive leadership in international oil and gas roles, having spent the majority of his career with BP on projects in the United Kingdom, Middle East, Russia, Australia and North America. His most recent appointment was General and Country Manager, Tunisia for Petrofac. Mr. Jack holds a Bachelor of Science, Mechanical Engineering from University of Glasgow.

(Source: WesternZagros)

By John Lee.

Iraq made its first major move in years to boost its gold reserves, joining central banks from emerging market economies such as Brazil and Russia in diversifying its foreign reserves.

According to a report from the Lebanese Daily Star, central bank purchases have been one of the biggest drivers of gold's rally since 2010 - a year which saw central banks turning net buyers of the precious metal for the first time in two decades amid growing doubts about the stability of the dollar as the world's top reserve currency.

Over the course of three months between August and October this year, Iraq's gold holdings quadrupled to 31.07 tonnes, the International Monetary Fund's monthly statistics report showed on Thursday.

(Source: Lebanese Daily Star)

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

This month’s announcement of closer collaboration between Europe and Iraq, coupled with last month’s WISE 2012 summit in Qatar, provides a great starting point for exploring the role of the Middle East in driving global collaboration and knowledge-share in Education.

It is clear that oil wealth, coupled with the desire to build a knowledge economy, offers a powerful incentive for recycling natural resources into knowledge. For example, the Educate A Child project was launched at WISE as a global initiative, aiming to make high-quality education accessible to all.  Might Kurdistan’s difficult history provide equally fertile ground for facilitating a global paradigm shift in education? The enforced isolation of a generation might indeed help leapfrog ‘received wisdom’ in order to serve immediate regional needs.

Leading the Way...

• Plans for major engineering and infrastructure projects (i.e. around Water and Agriculture) have highlighted a significant skills gap. Kurdistan is therefore matching the outputs of the education and training system by 15% per annum to meet the needs of the labour market. This kind of initiative can be used as a model to be shared with other countries.

• There is a genuine desire for support and promotion of education in the international community in order to further develop social equity and economic opportunities.  With the help of the Dubai Financial Market for example, Kurdistan will be launching Iraq’s second stock market in the next six months.

... with a little help from some friends

• Development Banks see themselves as knowledge banks as well as funding sources. They are able to use a vast amount of expertise, research and ideas to apply the strategies that they consider to be of the greatest use. This is relevant because EU support, for example, is channeled via the World Bank. World Bank projects that have contributed to Iraq’s reconstruction efforts include the construction of 66 new schools, the rehabilitation of 133 schools and the financing of more than 82 million textbooks.

• NGO involvement is also important. Last August saw UNICEF sending a delegation to meet with the Kurdish region Minister of Education in order to discuss the development of schools in the region. With goals of an  80% literacy rate within 5 years laid out and confirmed by the Regional Government, there is certainly a challenge to be met. Leveraging international expertise will therefore be of great value.

Between August 2006 to February 2012, an estimated $426 million, US dollars, capital private investment has been made in the Education sector in Kurdistan. One thing is clear, it is not easy turning oil and gas profits into knowledge  – but Iraqi Kurdistan does seem to be committed to making his happen.

Madeleine White is Head of Marketing for Whizz Education.  A former teacher and mother of 3 she is passionate about education, communication and CSR and has written extensively around her experiences.

Since starting in 2004, Whizz Education’s mission has been to raise standards in Maths. Maths-Whizz is used by thousands of 5-13 year olds in 8 countries, with major growth coming from the USA, the Middle East and Russia. By mid-2013, Maths-Whizz is expected to have launched and rolled out into 10 markets. To support this model of sustained, positive growth, Maths-Whizz is supported by Whizz Education offices in London, Seattle and Dubai. Additional support is provided through authorised international partners.Whizz Education is looking forward to other international market entries in 2013 and always welcomes strong partner approaches to support further international expansion.

By John Lee.

An article from Seeking Alpha speculates that Iraq could provide solid opportunities to oil field services firms like Baker Hughes, but points out that there are significant risks and issues that need to be addressed before international firms can participate wholeheartedly in this promising market.

Baker Hughes has been making steady progress by bagging contracts in the Iraqi market. The company inked a deal with Russia’s Lukoil last year to drill in the West Qurna-2 oil fields; the firm also secured a $640 million contract for drilling 60 wells at Zubair.

However, the firms operations in the region have been slow to pick up. It has been experiencing high start-up costs relating to equipment movement and logistical issues, and the firm mentioned that at present Iraqi operations were a compression of the firms margins. A lack of clarity in rules and institutional inefficiencies have also slowed down the firms operations in the country.

The author gives a price estimate of $54 for Baker Hughes, representing a 28% premium to the current market price.

(Source: Seeking Alpha)

By John Lee.

Reuters reports that top oil trader Vitol has apologised to the Iraqi government for buying Kurdish oil that was exported via Turkey without Baghdad's permission.

Iraqi Oil Minister Abdul-Kareem Luaibi [Elaibi] said on in Vienna:

"In terms of Vitol, they have cancelled the Kurdish amount and they apologised officially ... As for LUKoil, there will be a meeting about this concern - maybe tomorrow or the day after."

He made no mention of Trafigura.

Kurdistan began selling oil into international markets in independent export deals in October, further challenging Baghdad's claim to full control over Iraqi oil after signing independent exploration deals with foreign oil majors last year.

(Source: Reuters)

By John Lee.

According to a report from NINA, the Iraqi government decided today (Thursday) to end the official contract for Ali al-Dabbagh as the Iraqi government Spokesman.

Dabbagh stated earlier:

"I'm the first one who alerted the Prime Minister Nuri al-Maliki to the possible existence of suspicions of corruption regarding arms deal with Russia."

The following day, the Prime Minister reportedly denied Dabbagh's statement and some media outlets reported Dabbagh's name "as one of the suspicious officials [with a] role in the Russian arms deal for Iraq worth of $4.2 billion".

(Source: NINA)

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)