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ARINC Engineering Services, LLC today announced it has completed the procurement, integration, testing, and installation of new Air Traffic Control Tower (ATCT) systems and equipment for two bases of the Iraqi Air Force.

The new technology will allow Iraq’s Air Force to establish efficient operational control with modern equipment in the control towers at Tikrit and Taji Airbases, as part of the rebuilding of Iraq.

ARINC performed the work under a U.S. Air Force Foreign Military Sales (FMS) contract, awarded by the USAF Electronic Systems Center (ESC) Aerospace Management Systems Division.

ARINC completed the first equipment installation earlier this year at Tikrit Airbase, and the second installation at Taji was handed over to representatives of ITAM, the Iraq Training and Advisory Mission, in September. ARINC’s Charleston, SC-based installation and integration team completed both of the technology installations despite disruptions caused by construction delays and frequent brownouts.

“The team’s ability to improvise, adapt, and overcome was key to ARINC’s success on the ground in the dynamic environment of post-war Iraq,” stated Rivers Cleveland, ARINC Director. “The success of this project is a testament to the collaboration and teaming of the Electronic Systems Center, ITAM, and ARINC.”

ARINC’s work enables the U.S. government to deliver turnkey operational Air Traffic Control Towers to the Iraqi Air Force as part of the rebuilding of Iraq. It is a key step in helping them operate autonomously with modern facilities and equipment. The new equipment replaces outdated Russian systems and will allow Iraqi personnel to manage their airspace in accordance with modern FAA guidelines. This could open the door for more civilian overflights, and possibly the opportunity for increased revenue.

The U.S. Air Force FMS contract was managed by the ARINC Engineering Services Program Office in Charleston, SC. ARINC Engineering Services will continue to provide maintenance and logistics support services at Tikrit and Taji to maintain the equipment installed as part of this program.

ARINC Incorporated, a portfolio company of The Carlyle Group, provides communications, engineering and integration solutions for commercial, defense and government customers worldwide. Headquartered in Annapolis, Maryland with regional headquarters in London and Singapore, ARINC is ISO 9001:2008 certified.

(Source: ARINC)

The Provincial Council of Thi Qar [Dhi Qar] has announced that the ministry of electricity has approved the award of a contract to build a 500-megawatt power station to a local company.

Aswat al-Iraq reports that the council expects the work to start this month, after verifying the company's records and abilities.

The contract had previously been withdrawn after the resignation of ex-electricity minister Raad Shalal, as Deputy Premier for Energy Affairs Hussein Shahristani cancelled all contracts with Iraqi companies.

There are two power generation stations in Thi Qar. The first was built by a Russian company in 1978 and has a capacity of 800 megawatts, and the second is the gas powered station with 40 megawatt capacity.

(Source: Aswat al-Iraq)

Russia's RIA Novosti reports that the country's largest private oil firm, LUKoil, has started exploration drilling on the giant West Qurna-2 oilfield in Iraq.

Company head Vagit Alekperov said on Tuesday, "we have launched drilling, well borers are already there".

In 2009, a consortium comsisting of LUKoil and Norway's Statoil won a tender to develop one of the world's largest oilfields West Qurna-2, whose recoverable reserves are estimated at 12.9 billion barrels of oil.

(Source: RIA Novosti)

According to The Saudi Gazette, the Iraqi government has earmarked an estimated $50 billion for airport development projects in Iraq over the next few years.

Iraqi Airways is scheduled to add new 55 Boeing and Bombardier aircraft to its fleet soon.

The emerging markets of China, Russia, India, the Middle East, and Africa are forecast to be among the growth leaders in airport infrastructure development spending over the next few years.

Abdulmunaim M. Ismail and Ghaml Darweesh Al Isuozah, special advisors to Benkin Regane, Iraq's Deputy Minister for Technical Affairs with Ministry of Transport , will make a presentation on Iraqi government's plan to spend $150 billion for the infrastructure program related to airports, sea ports and railways. Special focus will be on ongoing and new transportation projects in Baghdad, Basra, Dohuk, Karbala, Salhaddin province etc. The Umm Qasr seaport expansion and country-wide railway network projects will also be highlighted.

"The presentations by Iraqi authorities will provide an overview of business opportunities available at the airports in Iraq, assesses challenges and obstacles with a view to mitigating them, leading to business opportunities for all," said Raj Menon, General Manager of Arabian Reach, the organizers of the conference. "We were happy to have them as our featured speakers and are even happier to note that EMASC 2011 is on the road to becoming one of the largest airport suppliers event ever held in the Middle East."

(Source: The Saudi Gazette)

According to a report from Reuters, with better regulation and the expected listing of the country's three main mobile phone firms, foreign investors are increasingly choosing Iraq's stock market as a lucrative investment.

Iraq's bourse is still tiny in comparison with other regional or international stock markets, but a drop in violence since the peak of sectarian fighting in 2006-2007 and the scope for quick growth is lifting interest.

Taha Abdulsalam, chief executive of the Iraq Stock Exchange (ISX), recently announced that the volume of shares traded through Sept. 30 this year was $495 million compared with $337 million in full-year 2010.

The ISX, which started operating in 2004 and currently has 86 listed firms, is one outpost of private investment outside of the oil industry in a country still dominated by state firms.

The number of shares foreign investors bought through to end-Sept. this year was 66 billion, valued at $110 million, Abdulsalam said. Foreign trading was almost non-existent a few years ago.

Russian-based 55 North Company is a bold example of foreign appetite in the ISX.

The firm plans to establish an investment fund worth $25 million, its managing director Paul Collison said, the maximum it can invest right now due to the low level of liquidity in Iraq's stock market.

"It is important to start early on... it is a fantastic opportunity for a small fund to get established," he said.

Panu Saukkonen, a senior partner at Finnish Virtus Capital Oy Company which started investing in the Iraqi bourse three years ago, said Iraq was a great choice to invest in as there is no serious competition and market values are still low.

The three mobile phone operators, Asiacell, Korek Telecom, and Zain Iraq, are required by the terms to their licences to list shares on the local bourse, and this could see the ISX's current market capitalisation of $4 billion double, Abdulsalam told Reuters last week. .

Oliver Emanuel, executive director of Middle East and North Africa sales and trading at Morgan Stanley, said the initial public offerings by Iraq's mobile phone firms would give a great boost to the local market.

"The upcoming telecom IPOs will no doubt act as a catalyst for the Iraq stock market precipitating greater focus by international and regional investors, helping improve liquidity," Emanuel said.

Investors said the implementation of some regulations such as custodian bank services and share trading settlement could further open the market for more foreign capital.

A share trading settlement would allow non-Iraqi investors up to two days to arrange their payment after making a trade, compared with currently having to pay before conducting a trade.

Saukkonen said having a custodian bank could boost its investment by at least 10 times within three years.

The head of the Iraqi Securities Commission (ISC), Abdulrazaq al-Saadi, said custodian regulation would be issued in November.

The ISX moved from manual to automated trading in 2009 and is open for trading for two hours a day, five days a week. Each trade takes around 8 seconds to process.

The banking sector is the largest on the bourse, which also lists industrial, insurance, hotel and agriculture firms.

Collison said he expected the ISX to grow quickly once an international bank takes on the custodian role but said the market would need to be closely monitored.

"The risk is you get a very quick bubble and it will lose 50 percent and that is exactly what happened in places like Russia," said Collison.

(Source: Reuters)

Dow Jones reports that Iraq has agreed with oil majors to build a multi-billion-dollar oil field water injection plant in the south of the country, after disagreement over costs that suspended the project for months.

The water injection project aims to provide water to maintain reservoir pressure to fields such as Rumaila, West Qurna Phase 1 and 2, and Zubair and Majnoon in southern Iraq.

ExxonMobil was picked on behalf of foreign oil firms to lead the mega water-injection project, needed to boost crude oil production rates from Iraq's southern oil fields.

Other international oil companies (IOCs) that have expressed willingness to set up the common water injection project include UK's BP, Russia's OAO Lukoil Holding, Italy's ENI and UK-Dutch oil major Shell, which is expected to join in later.

"The two (Iraq and oil firms) have advanced toward reaching agreement and we have passed the heads of agreement (phase) into the FEED (Front End Engineering and Design) phase," Thamer Ghadhban, the top energy advisor to the Iraqi Prime Minister said on the sideline of the Iraq Mega Projects conference in Istanbul.

Foreign companies had suggested the cost would be a little more than $3 billion to build the first stage of the project, which is designed to process 4 million barrels of water a day, Iraqi oil officials had said.

The Oil Ministry's figures were much lower than those estimated by the oil companies, Ghadhban said.

To overcome differences over costs, Iraq has suggested starting a FEED study aimed at establishing an accurate costs for the project, Ghadhban said.

"It has been decided that they (Iraq and foreign companies) will work together to build the project," he said.

Last month, Nihad Mous, head of the ministry's State Company for Oil Projects, said the main issue delaying the project was that BP wanted costs of the water injection project to be reimbursed when production in these fields reached a 10% increase over their base line before the development process. The ministry wants to start paying back when 20% increase in output was reached.

"Of course an oil company wants to be paid early and of course the oil ministry thinks otherwise. I do not at all see these as stumbling blocks," Ghadhban said.

(Source: Dow Jones)

By Chris Bowers, British Consul General in Erbil. This article was originally published by Rudaw, and is re-published with permission by Iraq Business News.

One of the pleasures of writing this column is that it gives me an opportunity to challenge a few myths. One of which is the view that UK businesses are lagging behind their competitors in Iraqi Kurdistan.

I don’t think that is true. Let me tell you why.

The merger between UK Company Vallares and Genel to create a London-listed company worth around $4.5billion probably represents the biggest investment by any company into Iraqi Kurdistan. It is also one of the top investments into the whole of Iraq in 2011.

UK companies now probably manage more hydrocarbon reserves in the KRG than any other country. UK companies Sterling, Heritage and Gulf Keystone have been working for several years here and the latter two have made very considerable discoveries.

By my calculation, Vallares, Afren and Gulf Keystone have in the last few months invested somewhere around $3billion into KR hydrocarbons exploration and production.

That is a huge vote of confidence in Iraqi Kurdistan. Most, if not all, of that money comes from London financial institutions and investors. So, it is vote of confidence by them, too. London investors are no pushovers. They do not put their money into Kurdistan because the British Government tells them to, and they do not do it as part of some grand conspiracy scheme to ‘control’ Kurdistan. They do it because they are convinced that the conditions are right for investment, there is significant potential and that they will get their money back with interest over time.

Only a year or so ago, there were many skeptics about the potential and significance of Kurdish oil and gas. With each pound of investment those doubts are being erased.

That is good for Iraq, good for UK and good for regional energy security.

Turkey's low-cost airliner Pegasus is expected to start operating flights to Erbil, Kurdistan Region's capital city, as it looks to open new routes.

Erbil International Airport manager Talar Fayaq told AKnews that the airport board is currently in talks with a number of airliners to seek possibilities of opening routes to the capital of the semi-autonomous region of Kurdistan.

"For the first time, Pegasus Airlines will start next month to operate flights from the Turkish capital Ankara to Erbil" Fayaq told AKnews.

Pegasus will offer direct flights from Ankara three times a week, or from Istanbul and Izmir via Ankara.

Flights, which launch on 24 October, will leave Ankara's Esenboga Airport for Erbil on Mondays, Thursdays and Saturdays at 20.55, returning on Tuesdays, Fridays and Sundays at 00.50. Tickets start at $99.99 including taxes and charges.

Established in 2005, Erbil International Airport operates some 60 flights per week to and from 25 countries worldwide. The airport was expanded in 2010 to accommodate new technologies. Its runway is said to be the longest in the Middle East and the fifth on the world level, after China, Russia, South Africa and the U.S.

(Sources: AKnews, Pegasus)

By Rickie Cole of SGS, in response to our Iraq Business News article on importation inspection:

On 1^st May 2011, the Central Organisation of Standardisation and Quality Control (COSQC) in Iraq implemented the Pre-Importation Inspection, Testing & Certification of Goods to Iraq (ICIGI) programme. This programme is designed to monitor the quality of regulated goods being imported into Iraq. SGS has been mandated by COSQC to provide inspection and certification services in line with this new programme.

In the months since the programme’s implementation, SGS has been working closely with the Iraq Commercial Attaché, the Arab-British Chamber of Commerce and the Joint Arab-Irish Chamber of Commerce to ensure that UK exporters are aware of the new requirements. SGS has already assisted many companies with ensuring that their exports comply with the programme. However, despite our efforts there is still a lot of confusion surrounding the programme.

Should you require any assistance in complying with the programme, please contact SGS on +44 (0) 1276 697 773 or email [email protected].

What is Product Conformity Assessment?

With the ever present threats and risks associated with the growing international trade of sub-standard and counterfeit goods, there is a growing need for international governments to ensure that imported goods are genuine and of a suitable quality.

Product Conformity Assessment (PCA) programmes assist governments worldwide in verifying the quality of imported goods and are already popular in the Middle East & North Africa with long standing programmes in place for countries such as Saudi Arabia, Algeria, Kuwait, Kenya, Nigeria and Syria.

PCA services provided by independent third party bodies such as SGS ensure the safety and overall performance of imported goods with a view to protecting the end-users’ health, safety and security. Some clear benefits of these programmes to the government and citizens in the importing country are:

• Increased ability to monitor the quality of goods entering the country
• Assistance in reducing the incoming flow of sub-standard and counterfeit goods
• Greater assurance that imported goods are not harmful to the public or environment

Why Choose SGS?

SGS is the world’s leading inspection, verification, testing and certification company. Recognized as the global benchmark for quality and integrity, we employ more than 64,000 people and operate a network of over 1,250 offices and laboratories around the world.

SGS is constantly looking beyond customers’ and society’s expectations in order to deliver market leading services wherever they are needed. As the leader in providing specialized business solutions that improve quality, safety and productivity and reduce risk, we help customers navigate an increasingly regulated world. Our independent services add significant value to our customers’ operations and ensure business sustainability.

SGS also provide inspection and certification services in line with PCA programmes in Algeria, Kenya, Kazakhstan, Kuwait, Nigeria, Russia, Saudi Arabia and Syria – for further information please contact SGS on +44 (0) 1276 697 773, email us [email protected] or visit our website www.uk.sgs.com.

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

The international Journal of Contemporary Iraqi Studies-IJCIS has just released it is special issue on “Oil in Iraq”.

Many prominent Iraqi and non-Iraqi scholars have contributed articles to this timely and important volume, which makes it an invaluable scholarly work to understanding the complexities of oil in Iraq.

The following is my introduction, as the guest editor of this special issue of IJCIS.

Three unprecedented and interrelated developments have taken place in the Iraqi petroleum sector since the 2003 invasion. Wide openness of all petroleum sub-sectors (upstream, midstream and downstream) for foreign investment; offering, through three bid rounds, the most prized oil and gas fields for an international auction resulting in contracting almost 60 per cent of the country’s proven petroleum reserves for at least 20–25 years; and finally, these contracts would expand oil production and export capacities by fivefold in less than seven years.

Such an opening could lend support to the notion that, ‘the invasion was all about oil’ and provoke legitimate questions on why a country, with incomplete sovereignty due to the presence of occupying forces and still under Chapter Seven of the UN Charter takes such unwarranted drastic actions; how it is going to manage such a massive undertaking; and what is it going to do with the influx of huge revenues, and mitigate the consequences.

Though many, and for variety of convincing reasons and powerful arguments, doubt very much the feasibility of attaining such production targets at such a fast pace under structural weaknesses and prevailing conditions in the country. However, even with half-success, this would, by all standards, be very significant indeed, and with far-reaching implications domestically, regionally and internationally.

Expanding production (and by logic, intentions and necessity) and export capacities would lead to a tremendous augmentation of the economic rent (or windfall) for the state due to expected higher oil prices, with or without the Peak Oil argument, in relation to the comparatively low production (or extraction) cost.

Domestically, such a huge influx of foreign exchange is bound to face three interrelated and theoretically enforcing hurdles: absorptive capacity limitations, Dutch disease and resource curse attacks. Each has its own dynamics and requires policy options to mitigate consequences. Thus, Iraq needs to devise sound development policy and modalities to mange effectively the plenty generated from its depleting natural resources.

In addition to the above macroeconomics structural difficulties, weak institutional capacities, ambiguous legal and constitutional frameworks, lack of suitable infrastructural facilities and fragmented political climate, all represent formidable domestic determinants.