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By John Lee.

Iraq signed the gas exploration contract with Pakistan Petroleum Ltd. (PPL) on Sunday for gas Block 8, which lies in the Diyala and Wassit provinces in the East of the country.

Meanwhile on Monday, a consortium led by Kuwait Energy signed the contract for oil Block 9, having bid fee of $6.24 a barrel in the fourth round energy auction at the end of May. Kuwait Energy will be the project’s operator, with a 40 percent share, while Turkiye Petrolleri and Dragon Oil will each have 30 percent.

Russia’s Lukoil and Japan's Inpex Corp. are due to sign an agreement on Tuesday for crude exploration rights in Block 10 in southern Iraq, for a fee of $5.99 a barrel. Lukoil will hold 60 percent, and Inpex the rest.

(Sources: Reuters, Bloomberg)

By John Lee.

"Is Iraq a failing state, or has it already failed", asks Peter Lavelle on Russia Today's Crosstalk programme.

Discussing the question are Robert Maginnis, Douglas Ollivant and John Glaser.

While some have criticised the political stagnation in Iraq, it has to be said that the Cabinet has been very active in hitting the road to promote the country on the international stage.

Just look at this sample of countries visited in the past two weeks:

• Iraqi Deputy PM Visits Azerbaijan
• Iraq Welcomes Singaporean Businesses
• Shahristani Invites Indonesian Companies to Invest in Iraq
• Water Minister Invites Portuguese Businessmen to Invest in Iraq
• Deputy PM Opens Doors to Russian Companies
• Al-Kindi Conference on Construction and Housing in Iraq

Lets hope their efforts continue to bring in the deals.

Meanwhile, here at Iraq Business News we are delighted to welcome Gary Sandiford of Olive Group, who will cover security issues, both in our weekly security update and in his new blog.

If Iraq is part of your plan, let Iraq Business News marketing services take your message to the decision makers.

Russian oil giant Bashneft has been award the rights to explore for oil in the south of the country after nearly one month of negotiations, a senior Baghdad official said on Sunday, according to a report from Bloomberg.

This brings the total number of Russian companies with oil deals in Iraq to three.

During Iraq's fourth energy bidding round at the end of May, Bashneft and Vietnam's PetroVietnam were part of a consortium led by UK's Premier bidding for the 8,000-square-kilometer (3,100-square-mile) Block 12, in the provinces of Muthanna and Najaf.

The consortium rejected the government's proposed fee of $5 per barrel of oil equivalent as too low and sought $9.85 for each barrel, but the deputy director of the Oil Ministry's contracts department, Sabah al-Saidi, reportedly said that the ministry reached a separate agreement with Bashneft last week after it accepted the $5 fee.

(Source: Bloomberg)

Iraq's Deputy Prime Minister, Roz Nouri Shawees [Rowsch N Shaways] (pictured), has praised relations between Iraq and Russia in all fields, but particularly in the oil and gas sectors.

In an interview with Russia Today TV, he said that "Iraqi doors are open to all Russian companies".

He pointed out that Iraqi oil bids are transparent, and stressed that Russian expertise is needed in oil, agriculture, dams, reservoirs and infrastructure projects.

(Source: Russia Today TV)

According to a report from AIN, the Iraqi Government has proposed the development of an 'Organization of Gas Producing Countries', similar to OPEC, which was founded in Baghdad in 1960 as an initiative from the Iraqi government.

The Deputy Prime Minister for Economic Affairs, Dr Rowsch N Shaways, said in his speech to the International Economic Forum in San Petersburg, Russia:

"Many things characterize the relations between our two countries as being the largest producing countries for energy especially oil and gas, besides, both States tend to draw the economic strategies towards liberalizing the economy from the domination of central bureaucracy control ... We attempt to turn our economy into a free economy that works according to the market mechanisms to be an efficient dynamic economy that seeks integrating into the global economy."

"We look forward to develop the bilateral cooperation between Iraq and Russia in fields of rehabilitating the Iraqi efficiencies and skills in various specializations," stresing the need to "cooperate in fields of science and technology to take advantage of the capabilities and expertise of the Russian scientific institutions such as universities, scientific institutes and scientific research centers which are urgently needed in Iraq."

Shawis mentioned that "The Iraqi Government is keen to re-activate the work of the mutual Iraqi-Russian Committee for Trade, Economic, scientific and Technical Cooperation that was conducted in 1993, August 5th so we look forward to coordinate and cooperate in this regard for the success of the meetings of its six round which are schedualed to be held in the last quarter of 2012."

(Source: AIN)

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In May, Turkey and Iraqi Kurdistan announced they would build pipelines taking oil and gas from Iraq into Turkey, then possibly Europe. But according to this article from NIQASH behind the energy dream, lurks a nightmare of militant Kurdish independence fighters and the spectres of energy giants, Iran and Russia.

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

To some it is a dream come true, others think it’s a nightmare that will never see the light of day. The May 2012 announcement by Ashti Hawrami, the Minister of Natural Resources in the semi-autonomous state of Iraqi Kurdistan that they would build new oil and gas pipelines to Turkey shook the Iraqi government in Baghdad.

The first phase of pipeline construction is supposed to be completed by October this year and the second phase is due to be finished by August 2013. Another pipeline is to be built by 2014.

Baghdad reacted unhappily to this announcement, saying – as they had done with other oil deals – that the Kurds were working outside of the national remit. National Deputy Prime Minister for Energy, Hussein al-Shahristani, was dismissive of the pipelines and local media were also rather negative about it.

Yet it appears that Baghdad feels that that the northern state of Iraqi Kurdistan is slipping out of its control. For the last five years Baghdad has been trying to reign in the Kurdish government, especially when it comes to oil and gas.

Shahristani has blacklisted oil companies operating in Iraqi Kurdistan and even ensured that, during the recent lacklustre fourth round of bidding to do oil work in Iraq, there was a new clause preventing any oil companies from going into Iraqi Kurdistan without Baghdad’s permission, as oil major Exxon Mobil did in November 2011.

KRG President Masoud Barzani met with the Special Representative of the Russian President for the Middle East and Deputy Foreign Minister Mikhail Bogdanov (pictured) in Salahaddin this week to discuss strengthening ties between Russia and the Kurdistan Region.

Deputy Foreign Minister Bogdanov said his government is keen to build on the historic ties and friendship between the peoples of Kurdistan and Russia. Russia wishes to develop existing relations to include cooperation in trade, the economy and energy, he said.

He delivered a letter from Russian Foreign Minister Sergey Lavrov inviting President Barzani to visit Moscow for further talks on strengthening relations.

Accepting the invitation, President Barzani said the Kurdistan Regional Government (KRG) is also eager to strengthen ties with Russia, adding that there are many areas of potential cooperation between the two sides.

The delegation also met Prime Minister Nechirvan Barzani during their two-day visit to the Region.

“We are pleased to have this opportunity to discuss further developing the ties between the Russian and Kurdish peoples,” the Prime Minister said, adding, “It is a symbol of our longstanding friendship that Russia was one of the first countries to establish a Consulate General in Erbil.”

The Deputy Minister said that he was impressed by Kurdistan’s security and stability, as well as the fast pace of development and progress. He said that he would like to see more Russian companies taking advantage of the opportunities available.

Iraq’s government signed deals for only three of the 12 oil and gas exploration blocks offered in its fourth energy auction, which ended on Thursday, reflecting reluctance of foreign bidders to risk money in unexplored areas.

Russia's LUKoil, along with partner Inpex Corp of Japan, won the deal for the 5,500-square-kilometer Block 10 in Muthanna and Dhi Qar provinces in the south of the country. The group will be paid $5.99 for each barrel of oil equivalent it finds.

A bid from Pakistan Petroleum also won gas Block 8 in Diyala and Wasit provinces in eastern Iraq. It will receive $5.38 per barrel of oil equivalent.

Four other blocks and two from the first day that were re-offered received no bids.

The second day of bidding followed a sluggish start to the auction Wednesday, when only one block was allocated.

Washington Post reports that Oil Ministry spokesman Assem Jihad said the government is not disheartened: "We do not consider three successful bids as a disappointing matter, taking into consideration that foreign companies in general do not like to take risks on unexplored areas."

(Sources: Bloomberg, Washington Post, NINA, RT)

The first day of Iraq's fourth energy auction resulted in just one successful bid, with four of the today's six exploration fields receiving no bids from the 47 pre-qualified bidders. The six blocks offered today were numbers 2, 9, 6, 12, 1 and 11.

A consortium of Kuwait Energy (40%), Turkey's TPAO (Turkiye Petrolleri AO) (30%) and the UAE's Dragon Oil (30%) won the rights to explore a 900-square-kilometer (350-square-mile) Block 9, near the Iranian border in the oil-rich southern Basra province. It will be paid $6.24 for each barrel of oil equivalent it finds.

An unsuccessful bid was made for the rights to the 8,000-square-kilometer (3,100-square-mile) Block-6 in the southern Anbar and Najaf provinces. A consortium led by UK's Premier, along with Vietnam's PetroVietnam and Russia's Bashneft, sought $9.85 for each barrel of oil equivalent, but the government offered to pay only $5 per barrel and withdrew the lot.

Four other blocks attracted no bidders. The bidding will continue on Thursday for the other six blocks, and for blocks 2 and 6 which will be offered again to give companies that weren’t present today a chance to bid. Seven of the 12 exploration blocks are believed to hold natural gas, and the rest both natural gas and oil.

The oil minister said that if Thursday's auction also attracts little interest, Iraqi companies would explore those lots, ruling out the possibility that contract terms would be revised.

(Sources: AKnews, AFP, Associated Press, Bloomberg)