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A Russian firm has expressed interest in investing in the construction of the new industrial area east of Amara city.

“The firm is ready to execute the project according to credit payment system,” a local Iraqi source told Aswat al-Iraq news agency on Wednesday.

He explained that the new industrial area will be on the Amara-Msharah road.

(Source: Aswat al-Iraq)

• Ashti Hawrami says Iraq can fill Nabucco.

A day after Iraq said its proven oil reserves surged to world's third biggest, talks are on to extend the Nabucco pipeline to country's Kurdish region.

According to Richard Morningstar, the Special Envoy of the United States Secretary of State for Eurasian Energy, it is important that natural gas from the Kurdish region of Iraq reaches the Southern Corridor of European energy networks.

He said Washington considered Iraq's participation in the Nabucco pipeline integral to the project.

Europe aims to break the Russian grip on the European energy sector through the so-called Southern Corridor of transit networks that includes the Nabucco pipeline.

The Nabucco consortium in Vienna said it confirmed and ordered the engineering work for feeder lines from Georgia and Iraq to connect to the main artery in Turkey.

Energy deals in Iraq require mutual agreements between the central government in Baghdad and the regional Kurdish government in Erbil. Morningstar said he hoped both sides would agree to the Nabucco terms to move the project forward.

Meanwhile, Ashti Hawrami, the Natural Resources Minister of the Kurdistan Regional Government, said at the energy conference in Istanbul that Iraq's oil and gas fields contain 100 trillion to 200 trillion cubic feet of natural gas.

"This is more than adequate for internal use, the domestic supply of Turkey as well as to satisfy the requirements of Nabucco," Hawrami was quoted as saying by Turkish English-language newspaper Today's Zaman. "We are confident, if we can prove the full 200 trillion cubic feet, we can supply the entire needs of Nabucco."

(Sources: Commodity Online, UPI)

Dr Ashti Hawrami is Minister for Energy Resources for the KRG (Kurdistan Regional Government) and will be speaking alongside Foreign Office Minister Alistair Burt and Nadhim Zahawi MP at a fringe meeting on October 5th at the Conservative Party annual conference.

Iraq’s Kurds have a great and long-standing respect for Britain. In particular, we remember the role of Sir John Major in helping to establish the Kurdish safe haven in 1991 when millions were in grave danger. Now that the major British and American military role in Iraq has ended, Kurds want Britain to trade and engage with, not turn away from, Iraq’s emerging federal democratic state. We believe that Britain would benefit from a strategic political and economic partnership with Kurdistan and Iraq.

Our success will be your success. It will be vital for stability in the immediate neighborhood and could galvanise long overdue reform throughout the Middle East, whose potential is being wasted on a huge scale.

As Minister of Natural Resources in the Kurdistan Regional Government in Iraq, I will be at the Conservative party conference to discuss ways in which these goals can be met.

With trade the new focus of UK foreign policy, I believe that the Conservative-led coalition must strengthen Britain’s partnership with the Kurdistan Region and Iraq so that it can capitalize on our booming economy, energy resources and geostrategic importance, and so that it can maximise relations with its other allies in the region, such as Turkey.

Our message to British business is this:

One striking characteristic of business in Iraq is the extent of state-ownership of enterprise and assets. Mudher Kasim, a senior advisor to Iraq's Central Bank, claimed that “the problem in Iraq is that 90 percent of the wealth of the nation is in the hands of the government. So centralism always dominates the mindset everywhere”.

Last week an economist argued that the “best solution for the return of Iraq’s industrial activity” is to privatise all companies affiliated with the Ministry of Industry, and adjust the prices of their products to compete with imported products from industrial countries.

It is surely a coincidence that within days the Deputy Minister for Industry announced a plan to divest the Ministry of the 250 production facilities it currently owns, starting with “joint strategic partnerships on a 15-year production-sharing basis” for several businesses in the cement, petrochemical, steel and pharmaceutical sectors.

An initial agreement has been reached with a Russian company to invest in gas produced from the Missan oilfields, the Chairman of the local council’s energy committee said on Tuesday.

“The agreement will help to increase the revenues allocated to the province, and to meet the local demand, in addition to using the gas produced in operating the gas-fired al-Kahlaa power station,” Aamer Nasrallah told Aswat al-Iraq news agency.

As we reported on Monday, a Russian/Swiss group is also planning to build two power stations in Maysan.

(Source: Aswat al-Iraq)

The local administration in the province of Maysan [Missan] has reportedly agreed a deal with a Swiss-Russian firm to set up two power stations  in the city of al-Amara, according to Aswat al-Iraq.

“The Missan local government agreed today (Sept. 25) with Russia’s Wintercroft Capital to build two steam-operated power stations with capacities of 650 megawatt and another gas-operated plant with a capacity of 500 megawatt,” Amer Nasrallah, Missan provincial council’s energy committee chairman told the news agency.

“The two power plants, to be carried out by means of deferred payment over a period of 8-10 years, would solve many of the electricity-related problems in the province and with even provide a surplus of more than 650 megawatt,” added Nasrallah.

Missan’s actual power needs are estimated at more than 400 megawatt. It gets only 200 megawatt now from neighboring provinces through the transformer station 400 KV, set up in 2008 and lies near the al-Kahlaa power station.

A delegation from Wintercroft Capital arrived in Maysan on Wednesday (Sept. 22) to activate a memorandum of understanding signed with the Missan provincial council in April this year.

IBN has so far been unable to find any background information on this "Wintercroft Capital".

(Source: Aswat al-Iraq)

By Eugen Iladi.

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

The inability of Iraqi political elites to form a government more than six months after the March elections is hardly surprising given the fragmented poll results and deep divisions separating top leaders. All major parties and their representatives seem determined to hold onto power as a matter of political, economic and perhaps even physical survival.

The stalemate is aggravating the security and economic situation and threatens to drive the war-ravaged country further into political instability and massive unrest. An uptick in violence since March could signal renewed sectarian divides and a new impetus for the insurgency.

But things don’t have to escalate to that level and Baghdad need only look in its own backyard for models of a better arrangement.

Erbil, the capital of the autonomous region of Iraqi Kurdistan, has transformed itself into a haven of safety, functionality and prosperity by regional standards. The Kurdistan Regional Government, while not free of infighting and political maneuvering, is by far a more efficient administrator of local resources and services compared to the overall situation elsewhere in Iraq.

Instead of opposing further Kurdish autonomy and self-reliance, Baghdad could learn from the region and emulate some of its successes. Incorporating functional elements that work in Erbil would not only help the entire country move forward but could also foster a bond and a sense of shared values between the regions that form the emerging federal democracy of Iraq.

The two dominant political parties of Kurdistan, the Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP) have between them monopolized most aspects of life in Kurdistan based on their historical and heroic fight against Saddam Hussein’s regime. When a new challenging opposition movement, Gorran, gained the second highest number of seats in the 2009 local elections, none of the players resorted to overt violence to overcome their opponents. Instead, they expressed their differences and fought at the polls.

Another stark contrast between the thriving Kurdistan region and the rest of the country is its ability to provide basic services for the population. While Baghdad continues to be plagued by massive power shortages, Erbil enjoys a constant flow of electricity with only minor interruptions. In fact, Kurdistan consumers get an average of 20 hours of constant electricity per day and projections call for closing that gap by early next year when new power plants are due to come on line.

This is in large part due to investment programs and incentives that attracted foreign operators to build generating facilities in the autonomous region, taking advantage of its vast oil and gas resources. Kurdistan estimates its oil reserves at about 45 billion barrels and its natural gas reserves at 20 trillion cubic meters.

Erbil is also welcoming of investment from abroad. The German Chamber of Commerce chapter in Erbil promotes business ties and attracts major German companies to the region. Italian, French, Austrian, American, Russian Turkish and other Arab energy, construction, apparel, and manufacturing companies are also investing in the region at an accelerated pace. RWE, Rosneft and a slew of smaller but significant players clamor for a piece of the action in this most stable of all Iraqi regions. Turkey is emerging as the premier trading partner of Kurdistan with economic ties expected to push towards $10 billion by next year, a significant development given the uneasy historical relations between Ankara and Erbil.

Cultural and travel ties are also increasing with Erbil stealing the lime light from Baghdad. France maintains a cultural center in Erbil and the German School reopened its first location in the country earlier this month after its previous Baghdad school was closed down in 1990. Austrian Airlines has a direct Vienna-Erbil link and Lufthansa resumed its Erbil route this spring, after a two-decade hiatus, while postponing indefinitely the resumption of Baghdad flights.

The Erbil Stock Market is scheduled to start trading during the first quarter of 2011 with a startup capital of nearly $10 million. With an open attitude towards investment and a legislation to match it, the KRG is forging ahead with major oil and gas, commercial and residential construction projects worth several billion dollars.

The new Baghdad central government, when one is formed again, would be well served to learn from Erbil.

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

Egyptian private- and public-sector officials have criticized the Foreign Ministry's seeming disregard for demands by the Trade Ministry’s Trade Representation Agency for US$1.1billion in compensation to be paid out to Egyptian companies and workers in Iraq as part of the UN's longstanding Oil-for-Food Program, according to a report in Al-Masry Al-Youm.

Egyptian companies operating in Iraq are reportedly owed a total of nearly US$1.1 billion [1.3 trillion Iraqi dinars], not including deposits made in Iraqi banks before the 2003 US-led invasion of Iraq.

Following a report in Al-Masry Al-Youm on Friday that the reimbursement process was currently underway, a number of company officials contacted the paper to deny the report.

“The ministry has not budged since the Iraqi Council of Ministers issued a decision last June to reimburse companies and countries as part of the implementation of the Oil-for-Food program,” one company official said on condition of anonymity.

According to other corporate sources, Egyptian firms are second on the list of companies and workers to be compensated. Since the Iraqi government issued its decision on the matter, they say, only Russia has been reimbursed in full, while no action has yet been taken by the Egyptian Foreign Ministry to settle the issue.

Russia and Egypt are followed on the list by France, which is followed in turn by several Southeast Asian and European nations, the same sources say. The United Nations, they add, has maintained its refusal to release frozen Iraqi government assets amounting to US$100 billion, which the world body says it will release only following the settlement of debts owed to companies as part of the Oil-for-Food program.

The 30 Egyptian companies now waiting for reimbursement reportedly include the state-run Food Industries Holding Company and the Holding Company for Pharmaceuticals, along with a number of private-sector firms.

The United Nations initially launched its Oil-for-Food program in 1996 following the imposition of an international embargo on Iraq in the wake of the US-led Gulf War in 1991.

(Source: Al-Masry Al-Youm)

A group of Swiss and Russian firms have completed the designs of a civil airport in Amara city, Maysan province, according to a report in Aswat al-Iraq.

“The airport will be like others constructed by the group in Kazakhstan, Brazil, and Libya,” a source from the group told Aswat al-Iraq news agency on Thursday.

He explained that the designs were executed according to an agreement signed by the group in April, 2010.

The agency also reports that a delegation from a group of Russian, Swiss, and Ukrainian firms had a meeting in Amara city with the Missan Provincial Council, to discuss further investment projects in the province.

(Source: Aswat al-Iraq)

Rosneft, reportedly Russia's biggest oil producer, is discussing projects in Iraq, its newly appointed president said on Friday.

"We are discussing," Eduard Khudainatov told reporters on at the Sochi economic forum, without going into further details.

The company is planning for continued growth, and intends to hire of world-class specialists; it is expected to announce a new business plan in the coming weeks.

(Sources: Reuters, Businessweek, Rosneft)