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By Ahmed Mousa Jiyad.

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

The Iraqi Ministry of Oil confirmed in late July that Russia’s Bashneft had accepted the ministry’s maximum acceptable remuneration fee (MARF) for exploration Block 12, which was offered in the fourth bid round that took place at the end of May (MEES, 4 June). This is in line with what I anticipated in my assessment of the results of the fourth bid round.

This ‘newcomer’ to Iraq post-2003 upstream petroleum would consolidate further the position of the Russian companies and strengthen their presence and role in the country’s oil production. This also manifests clearly a petroleum asset seeking strategy and demonstrates that there has been a learning curve from previous bid rounds.

The Russian position could be consolidated even further if the speculation about the possible entry of another Russian company, Rosneft, materializes – but Gazprom might rock the boat.

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]).

By John Lee.

The China National Petroleum Corporation (CNPC) is reported to be in talks with Russia's OAO Lukoil about joining the company’s West Qurna-2 project in Iraq.

Lukoil is seeking a partner for a 30 percent stake in the project following the exit of Norway's Statoil’s, Nefte Compass said, citing Andrei Kuzyaev (pictured), head of Lukoil Overseas.

(Source: Bloomberg)

By John Lee.

A Russian business delegation has visited the city of Ramadi to investigate investment opportunities in Anbar province.

Saadoun Obeid al-Shaalan, head of the provincial council, told NINA news agency:

"The delegation represents a group of leading Russian companies specialized in the manufacture of large power stations, the production and distribution of electricity, and the construction of vertical housing units."

The group promised to submit an action plan to the Investment Commission.

(Source: NINA)

By John Lee.

Reuters reports that Iraq's acting Minister for Defence,  Sadoun al-Dulaimi (Sadun al-Dulaymi) (pictured), has been in Russia to negotiate the purchase of air surveillance equipment.

Hakim al-Zamili, a member of the parlimantary security and defence committee, told the news agency:

"There is a delegation, headed by the minister of defence and the commander of the air force, that went to Russia to negotiate the supply of early warning systems, radars and some other civil defence apparatuses."

Iraqi officials say it will take years before they are able to defend their airspace again and the military has started building a new air force almost from scratch.

Iraq expects to take delivery of the first 24 of 36 F-16 fighter jets from the United States at the beginning of 2014.

(Source: Reuters)

By John Lee.

Heritage Oil, which has operations in Iraqi Kurdistan, has published its interim results for the six months ended 30 June 2012:

Operational Highlights

· Execution of an agreement to acquire a transformational major interest in OML 30 in Nigeria ("Proposed Acquisition"), which is subject to shareholder approval, and is expected to complete in the second half of this year

• Active work programme in the Kurdistan Region of Iraq ("Kurdistan") with two rigs operating:

-- The Miran West-3 well reached the primary target of the Jurassic gas reservoir and was successfully tested in May 2012

-- The Miran West-4 well commenced drilling on 22 June 2012 to further appraise the Upper Cretaceous oil reservoir

-- The Miran East-1 well is drilling ahead on prognosis and is currently evaluating the Lower Cretaceous reservoir before drilling ahead to the main Jurassic targets

• Planning and development studies on the Miran Field and conceptual design studies on a gas export pipeline are ongoing

• Tanzania work programme continues on the Kyela and Rukwa licences with the reprocessing of legacy 2D seismic data and completion of a high resolution gravity survey

• Net average daily production of 567 bopd in the first half 2012, an increase of 35% on the same period in the prior year. Production for the month of July 2012 averaged 711 bopd

By John Lee.

An un-named Iraqi security official has reportedly accused the president of the Kurdistan region, Massoud Barzani (pictured), of secretly buying a large supply of heavy munitions from a foreign country.

Iran's PressTV says the arms included anti-tank missiles and large quantities of heavy weapons.

The official said that Iraqi authorities have "all the documents" on the deal, stating that the move was a violation of Iraq's constitution.

AFP's sources say that the deal is for “weapons of a Russian type made in 2004".

Massud Barzani, the president of Iraq's autonomous Kurdistan, recently opposed the sale of F-16 warplanes to Iraq while Nouri al-Maliki is premier, as he fears they would be used against the region.

(Sources: AFP, PressTV)

By John Lee.

The second deputy speaker of the Iraqi parliament said Iraq needs to build and provide public services rather than buy heavy weapons, according to a report from AKnews.

Commenting on the visit of Iraq's Defense Minister Sadoun al-Dlemi [Sadoun al-Dulaimi, Sadun al-Dulaymi] to Russia to buy heavy weapons, Arf Taifur expressed his surprise at the timing of the visit because Iraq is witnessing sensitive and political problems.

He said the government must concentrate on providing more services and lift the burden on Iraqis by solving the electricity crisis, reducing unemployment, and looking after those affected by wars and terrorist attacks.

(Source: AKnews)

(Picture: M1A1 Abrams tank being delivered at Umm Qasr, August 2010)

By John Lee.

Iraq's Trade Minister, Khayrulla Hassan [Khayri-allah Babakir, Dr Khairallah Hassan Babiker] (pictured) has said that 100,000 tons more of wheat will be produced in Iraq than in 2011.

According to the report from AKnews, 1.75 million tons of wheat were produced last year, and this is expected to rise to 1.85 million tons this year, an increase of only 5.4 percent.

The minister said that reports claiming that wheat production has fallen are propaganda by businessmen to increase prices.

He said that in the Kurdistan Region wheat production has been low, but in the other Iraqi provinces it has been higher.

Regarding barley, he said that due to the price at which the government purchases barley from farmers, production "is low every year. Iraq needs 400,000 tons of barley but half of the demand is purchased from abroad."

The Ministry of Trade purchases each ton of local wheat at 720,000 IQD (approx. $576) and a ton of barely at 520,000 IQD ($416).

The minister said this year some 4 billion IQD ($3.2m) was allocated to purchasing the local wheat and barley and all the payments have been issued.

Bloomberg reports that Iraq bought 150,000 metric tons of Russian wheat in a recent tender.

(Sources: AKnews, Bloomberg)

By John Lee.

Eurasia Drilling (LSE: EDCL) has announced that it has acquired two onshore drilling rigs in Iraq, with a commitment to purchase a third.

All three rigs are currently under contract or being tendered to international customers. To ensure uninterrupted operations, EDC intends to retain the existing management and operational staff and support facilities.

Dr. Alexander Djaparidze (pictured), EDC’s Chief Executive Officer, commented:

“This acquisition is a strategic breakthrough for EDC as it marks our first move outside of Russia and the CIS and is an important step toward our goal of becoming a truly global drilling contractor. By acquiring rigs in Iraq EDC now has a platform for growth in the expanding Iraqi and Middle Eastern oilfield services markets.”

Wide Area Communications specialist Hermes Datacomms has announced the appointment of a key member of staff to the team in Iraq.

Vincent Davies (pictured) is the first British ex-pat to join the team and will take on the role of Technical Manager with the primary aims of improving in-country support and helping to build customer relationships.

With an eight-year military background – including time served in Iraq and Afghanistan – Vincent joined Hermes Datacomms six years ago and has worked on various projects in locations such as Algeria and Dubai.

Commenting on his new job, Vincent said:

“I am very excited about this role and relish the opportunity to use my experience to improve our support infrastructure and country relations with customers.

“My presence in Iraq will help to ensure that we continue to offer the best solutions and that we provide the technical support needed in such a critical environment.”

Hermes Datacomms Middle East CEO Kevin Thorley added: “Our aim is to ensure that all our Middle East customers are provided with in-depth, direct and extensive support, and a more dependable and secure service that not only keeps up with the growth in the region but also exceeds customer and industry expectations.”

Hermes Datacomms specialises in providing tailored Wide Area Communications to the upstream oil and gas industry worldwide including remote and challenging locations such as Algeria, Angola, Malaysia, Kazakhstan, Libya, the Middle East, Iraq, Russia and Turkmenistan.

The company has been operating in the Middle East for more than a decade and established its Dubai office in 2008 to answer growing demand in the region. Rapid expansion since that time has led to ongoing strategic planning initiatives looking at expansion plans for operational capabilities and planned additions to the current 25-strong workforce.

Hermes Datacomms was awarded a trading license for Iraq in late 2011 and, since that time, has been working with partners to delivery turnkey projects involving fibre and last mile access as well as VSAT services, fixed, mobile and microwave services.