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Despite objections from Baghdad, ExxonMobil already has personnel on the ground in Iraqi Kurdistan, according to Reuters.

Whiel the company has kept silent on its exploration agreement with the Kurdistan Regional Government (KRG), one central government regards as illegal, one Western industry source in Erbil told the news agency:

"They [Exxon] are definitely here and they are definitely assessing living and working accommodation ... There are around 10 individuals here at any one time looking at what it takes to fully mobilise here - office space, housing space, these types of things. No oil company comes in in a day."

Executives from Exxon reportedly met Ashti Hawrami, the region's Natural Resources Minister, last week, and are preparing to issue a tender for seismic work for at least some of the six exploration blocks acquired in October.

Exxon has been summoned to the oil ministry in Baghdad for final talks, but it is unclear whether the discussions would take place before the company's fourth quarter results on 31st January, when it is expected to publicly announce its Kurdistan investment.

In the meantime, however, it is business as usual at Exxon's West Qurna-1 field in the south of the country, where output has risen to about 390,000 barrels per day, and where Exxon continues to lead a multi-billion dollar water injection project that is crucial to boosting output in the area.

The KRG is in talks with other oil majors and further agreements are expected in the coming months. Sources say France's Total, which has a minority stake in the Halfaya oil field in southern Iraq, is keen to move into the north, possibly linking up with Anglo-French explorer Perenco in the Sindi-Amedi block along the Turkish border.

A Lukoil spokesman, on the other hand, dismissed the possibility of the Russian company heading north.

(Source: Reuters)

Iraq's cabinet announced that it had approved a $998 million oilfield service contract on Tuesday with a South Korean company for the West Qurna 2 oilfield, according to Reuters.

While the memo did not name the company, Samsung Engineering was the only South Korean company on the final shortlist.

Iraq and its partners, Russia's Lukoil and Norway's Statoil, had shortlisted five companies to compete for the West Qurna Phase Two oilfield development contract.

The other companies were Saipem, SNC Lavalin Group Inc, Punj Lloyd Ltd, Globalstroy Engineering and South Korea's Samsung Engineering, an oil official said.

The tenders announced were for the construction of an oil export pipeline, a tank farm at Tuba, a power distribution station and an associated gas processing plant, and also an oil gathering system, central processing facilities and a water supply system.

They are expected to help production at the field hit 150,000 barrels of oil per day (bpd) in January 2013, an Iraqi oil official said.

(Sources: Reuters, AKnews)

Iraq would be drastically affected should Iran block the Hormuz Strait. Most of the oil Iraq produces is exported via the Strait. The scenario is seeing Iraq, distinct because of its good relations with both the US and Iran, practice its new diplomacy again, according to this article from NIQASH.

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

Iran’s threats to block seagoing traffic in the Hormuz Strait, one of the most important waterways in the world, have caused strong reactions in Iran’s neighbour, Iraq, as well. Iran has made the threats in response to possible European and US economic sanctions. And despite the current internal political turmoil in Iraq, it has also led to another significant attempt by Iraq at international diplomacy.

Around one fifth of all crude oil passes through the narrow shipping channel, which lies between the Gulf of Oman and the Persian Gulf. Iraq is currently heading OPEC (the Organization of the Petroleum Exporting Countries) and as such, Iraq’s Minister of Oil Abdul-Kareem Luaibi announced that he would be travelling to Tehran this week in order to extract assurances from Iran that they wouldn’t block the Strait.

In terms of diplomacy, this is another notable attempt at mediation by Iraq. The most recent involved Iraq’s intervention between the Arab League and Syria, which continues this week with Iraq declaring further intentions to continue to assist in trying to defuse the Syrian crisis.

In terms of the Hormuz Strait issue, Iraq is really the only nation that can do this kind of thing, as it has good relationships with the US and Iran. Iraq also sits in the middle between the nations like Saudi Arabia who are friendly towards the US and nations that consider themselves resistant to US influence, such as Iran. It’s hard to say whether this diplomatic role will continue in the future – some believe that Iran’s influence will grow and lead Iraq into that country’s corner whereas others say that US influence will remain strong.

OAO Gazprom Neft started drilling a second appraisal well at the Badra oilfield, according to a report from Bloomberg.

The Russian producer, which started drilling the first such well at Badra in November, expects to complete the second well in spring, and plans to approve the field development plant in February 2013.

(Source: Bloomberg)

Russia’s Interfax news agency reports that OAO Bashneft is in talks to form a consortium to develop Iraqi oil fields.

The company, controlled by billionaire Vladimir Evtushenkov’s AFK Sistema, reportedly wants to be a junior partner in a consortium that will bid in the next round of tenders for Iraqi oil fields.

(Source: Bloomberg)

International learning and skills specialist Atlas has expanded the global footprint of facilities capable of delivering the groundbreaking new global training initiative IMIST for the oil and gas industry with the approval of the first centre in Iraq.

The accreditation of the Al Delma facility in Basra City demonstrates Iraq’s commitment to developing its energy industry and creating a workforce trained to the globally recognised basic safety standard, IMIST online.

It brings the total number of invigilation centre’s approved to deliver International Minimum Industry Safety Training (IMIST) around the world to 16, with facilities spanning Australia, Thailand, Singapore and the Philippines as well as the United Arab Emirates, Qatar, Nigeria and Russia among others.

The Al Delma centre will be capable of delivering the programme to up to 250 people every day.

Bilal Mahmood, CEO of Al Delma said:

“Long-term underinvestment in the development of our oil and gas personnel has meant considerable training is needed if we are to accomplish the goal of a safe and skilled workforce for the future.

“As one of the biggest training centres in Iraq we have built our reputation on being quick, smart and reliable and we are delighted to be the first to gain approval to deliver this new international training and be a model to others in the country.”

Developed by global oil and gas training standards body OPITO International, IMIST brings for the first time a standardised level of basic safety training to an estimated 1.5million oil and gas workers worldwide. The training assesses basic safety knowledge in nine subject areas including risk assessment, asset integrity, the use of hazardous substances, working at height and mechanical lifting among other subjects.

IMIST online, which was launched in the Middle East in July 2011, is delivered in partnership with Atlas via approved invigilation centres only.

By gaining Atlas approval to deliver the course, workers using the Al Delma centre will have their IMIST training accepted by employers all over the world. It will also reduce the burden of training costs for companies with both new entrants and experienced workers able to undergo a full range of mandatory and voluntary health and safety courses under one roof.

Atlas chief executive John Rowley said:

“This is a significant step forward for the oil and gas workforce in Iraq in terms of creating a safe, sustainable and profitable oil and gas industry for the country.

“It is also a major milestone in the adoption of a common industry standard for basic safety and competency in oil and gas around the world. The support which has been shown for this initiative is evident in the rapidly increasing footprint of centres which now spans across all four corners of the globe and is testament to the industry’s desire to improve safety at all levels.”

IMIST is being rolled out across 30 countries worldwide throughout Asia, Africa and the North America over the next two years. It will be delivered via e-learning and tailored to meet each region’s specific workforce, language and geographic needs.

Iraqi Foreign Minister Hoshyar Zebari has told the Trend news agency that his country was keen on taking part in the planned Nabucco natural gas pipeline.

"Iraq is able to propose its resources for this strategic project, which is of great importance for the country," he was quoted as saying.

UPI reports that Europe aims to break the Russian grip on the regional energy sector through a package of projects dubbed the 'Southern Corridor,' which includes the Nabucco pipeline.

Nabucco, however, has faced economic obstacles and hasn't received firm commitments from natural gas suppliers.

Azerbaijan is weighing proposals for resources from its Shah Deniz 2 gas field from pipeline groups involved in the Southern Corridor.

As there's not enough natural gas available from Azerbaijan to fill Nabucco's planned capacity, Nabucco said they would look at feeder lines, notably from Iraq, to provide additional supply.

Regarding disputes between the Kurdish and central governments in Iraq over natural resources, Zebari said both sides would "cooperate for the good of the population."

(Source: UPI)

A deal for US fighter jets and tanks will not be stopped by political instability, reports Al Jazeera.

The deal is reportedly for USD11bn-worth of weaponry. Since the US pulled out its remaining troops two weeks ago, violence has increased, arrest warrants have been issued against senior politicians opposing prime minister Nouri al-Maliki, and opposing factions have made demands for decentralising power to such an extent and in such a way that it would probably require amending the constitution.

Alexandre Vautravers, editor of Swiss Military Review, told Al Jazeera: "If the US did not sell weapons to Iraq, the weapons would still materialise, perhaps from Russia or China, or perhaps from Iran."

Although the weaponry is advanced, it is not cutting edge. "The types of weapons which have been sold, F-16s, M1 Abrams tanks, these vehicles, these aircrafts, have been designed 20 or 30 years ago."

According to Vautravers, the US accounts for nearly 60% of arms sales to the Middle East.

(Sources: Al Jazeera)

Bloomberg reports that Iraq bought 400,000 metric tons of wheat from Russia, Australia and Canada.

The amounts were:

• 150,000 tons from Canada;
• 150,000 tons from Russia; and,
• 100,000 tons from Australia,

Hassan Ismail Ibrahim, director general of the Grain Board, told Bloomberg by telephone. The deadline for the tender expired on 4th December.

Iraq plans to import 3 million tons of wheat next year, with tenders starting in January.

Iraq uses 4.5 million tons of wheat a year and the country’s wheat production for 2010-11 was 1.73 million tons.

(Source: Bloomberg)

Russian news agency RBC Daily reports that Lukoil, Russia’s second-largest oil producer, is looking to expand its business in Iraq through buying part of ExxonMobil's 60% stake in the West Qurna 1 field.

If the deal goes ahead Lukoil would hold 37.5% of the business. It is already in partnership with Norway's Statoil in the development of the West Qurna-2 oil field.

Vice CEO Leonid Fedun says Lukoil is interested in developing West Qurna-1.

The report quotes Alexey Kokin, analyst in Uralsib Capital, as saying “ExxonMobil is probably giving up the project, because its economics are not clear yet. It requires $15-20 billion to be invested in the next 20 years.”

Anglo-Dutch Shell is reportedly going to buy the rest of ExxonMobils’s share. The purchase would increase Shell’s share from 15 to 37,5%. The Iraqi state North Oil Company holds 25% of the project.

(Source: RBC Daily)