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On Tuesday, Basra Council discussed projects which will be implemented in 2011, according to a head of the reconstruction committee.

The projects are in several budgetary categories and have a total value of 286 billion Iraqi dinars ($240m).

“The council made a comprehensive assessments of all projects for 2011 in the areas of health, electricity, education, water and other services sectors, as part of the budget to develop the region,” Mustapha Attiya told Aswat al-Iraq news agency.

“The total cost of these projects is 286 billion Iraqi dinars,” he added, without giving more details.

(Source: Aswat al-Iraq)

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A source at the directorate of jewelry quality control in Erbil told AKnews on Sunday that 19 Kg of diamonds have been imported into the Kurdistan Region so far this year. A diamond dealer confirms that demand for diamonds has grown in the Region in recent months.

“We check diamonds and other jewelry imported into the Region before it is sold on the local market,” said Ismael Sabir, an official in the jewelry quality control. “The diamonds come along with gold and are used for decorative purposes.”

Najat Nemat, a jewelry store owner in the Kurdish capital of Erbil, said Czech diamonds are purer than other brands of Russian, German and Indian diamonds available in local markets.  The most expensive type of diamond in Kurdistan markets sells at $1,500 per karat (200 milligrams).

Diamonds are mostly imported into Iraq through Erbil International Airport, Nemat said, because custom tariffs for one kilogram of diamond and gold are only $10 in Erbil while in Baghdad the authorities charge $100 per kilogram.

(Source: AK News)

An official spokesman of Basra province said Sunday that a delegation from Russian energy company Neftegaz Export has arrived to the city to discuss investment projects with the governor.

Sheltagh Abboud received on Sunday the Deputy Director of Neftegaz Export, Vladimir Fumujev, and a delegation accompanying him, who were seeking a foothold in Iraq for the "friendly Russia", referring to the likelihood of Neftegaz Export obtaining contracts in local oil fields.

"The Russian company has expertise in a range of disciplines important to Iraq, especially in the areas of generating and distributing electricity, refining drinking water, and sewage water treatment, in addition to the implementation of oil projects in the fields of northern Rumaila, West Qurna and Al-lahis", spokesman Salem al-Taqi said.

Fumujev expressed the desire to invest in a number of projects in Basra, al-Taqi added.

Neftegaz maintains offices in many cities in the world with the main headquarters in the French capital Paris. It is ready to open an office in Basra in the coming days as well, according to the spokesman.

Basra, due to its strategic location, has been attracting foreign companies recently especially companies investing in the sectors of electricity, tourism, housing.

(Source: AK News)

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• Gazprom to Drill New Wells in Badrah
• Lukoil Allocates $5 Billion to West Qurna
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A group led by Gazprom Neft aims to start drilling in Iraq's Badrah oilfield next year as part of its plan to reach 15,000 barrels per day by the last quarter of 2013, a company executive said yesterday.

Gazprom and its partners plan to issue a tender this month to drill three to four new wells and could award a contract later in the year, said Alexander V Kolomatsky, project director Middle East at Gazprom Neft, the oil unit of Russia's Gazprom, according to a report from Reuters.

"We will call for several tenders for 3D seismic I think within a week, then for drilling... we will issue (drilling) tenders during this month," he told Reuters on the sidelines of a conference between international oil companies and the Oil Ministry in Baghdad.

In January, Iraq signed a deal with Gazprom, Turkey's TPAO, Korea's Kogas and Malaysia's Petronas to develop its eastern Badrah oilfield, which has estimated reserves of 100 million barrels of oil. The field is near Iraq's border with Iran.

Kolomatsky said initial expectations of total investment in Badrah were about $2 billion. The company was also in the "final stage" of negotiations with Iran to develop the Azar oilfield, a part of Iraq's Badrah field which lies across the border, he said.

"I think talks are going well... but it's difficult with sanctions," he said. The Russian company last year signed a memorandum of understanding with the National Iranian Oil Co (NIOC) to study the development of Azar and Shanguletwo oilfields in Iran.

Iran, a major oil exporter and holder of the world's second-largest gas reserves, has been hit by a new wave of international sanctions for its nuclear program and the United States has also stepped up its push to isolate Tehran economically.

Kolomatsky also said the Russian firm is looking for other opportunities to increase its activities in Iraq and could be interested in bidding for exploration and production rights in areas like the unexplored Western Desert along the border with Saudi Arabia and Jordan.

(Source: Reuters)

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Russia's Lukoil and Norway's Statoil have started issuing tenders for the multibillion project to develop Iraq's supergiant West Qurna Phase 2 oil field in southern Iraq, a person familiar with the plans said Sunday, as reported by Reuters.

The "first tender is a 3D seismic survey at the field", the person said. A second tender calls for drilling between 50 and 60 oil wells, the source said, adding that the drilling will be carried out in stages.

The first stage could be for the drilling of between seven to 10 wells in order to produce up to 120,000 barrels a day, which needs to be achieved by 2012, according to the deal Iraq signed with the two oil firms, the person added.

Lukoil will also issue a series of tenders for surface installations at the field, such as personnel camps, pipelines and production facilities.

Lukoil is said to expect to award these contracts to "big and well-known firms such as Halliburton, Weatherford International, Schlumberger and others."

These oil services companies are already involved in projects in southern Iraq. Operator Lukoil and Statoil were awarded a 20-year service contract for West Qurna Phase 2 in Iraq's second licensing round last December. Both promised to get the southern field pumping at a rate of 1.8 million barrels a day for payment of $1.15 per barrel. The development project is one of 11 that Iraq awarded in two licensing rounds last year. If all the companies deliver to the letter of their contracts, nearly 10 million barrels a day of capacity will be added to Iraq's existing 2.5 million barrels a day by 2017.

(Source: Dow Jones)

According to a report from Bloomberg, OAO Lukoil, Russia’s largest non- state oil producer, allocated $5 billion to finance the West Qurna-2 project in Iraq.

The funds were provided as a loan to its Lukoil Mid-East Ltd. unit exclusively for the Iraq project, spokesman Dmitry Dolgov said. The loan matures at the end of 2030, the company said in a regulatory filing.

Lukoil, which reportedly has the most overseas assets of all the Russian oil producers, has looked abroad for profit and expansion because of Russia’s tax burden and the preference given to state companies in gaining licenses to domestic deposits. The company said in March that it planned an initial investment of $3.7 billion in West Qurna-2, after which the project will use free cash flow to fund development.

With partner Statoil ASA, Lukoil won the rights to develop the second phase of Iraq’s “super giant” West Qurna deposit in December after agreeing to pump 1.8 million barrels a day for a fee of $1.15 per barrel. Lukoil holds 56.25 percent, Statoil has 18.75 percent, and Iraq’s North Oil Co. the rest.

The Bloomberg report quotes Deputy Chief Executive Officer, Leonid Fedun, as saying that drilling will begin next year, and that oil output may begin in 2013. The field has recoverable reserves of about 12.9 billion barrels. West Qurna may produce 95 million tons of crude a year, CEO Vagit Alekperov said in February.

Lukoil expects to book 8 million to 10 million metric tons of oil a year from the project, Fedun said June 2. “Over the next few years, Lukoil’s oil output increase will come because that compensation crude we get from West Qurna-2 will provide a stable cash flow and oil flows.”

(Source: Bloomberg, Businessweek)

The Kurdistan Region of Iraq’s international trade conference is proclaimed a success as potential investors welcome the strongest news yet on impending oil flows from the Region – and look to seize the wider investment opportunities available in other sectors.

The event on June 15th and 16th was hosted in the City of London by the Kurdistan Regional Government UK Representation with Prime Minister Barham Salih the keynote speaker, and attended by over 500 delegates including potential investors representing international businesses from 26 countries, and diplomats from 12 countries.

Prime Minister Salih declared that the fine detail on international oil contracts would soon be ironed out between the Kurdistan Regional Government and Baghdad, and oil revenues would start flowing into the country again on an increasingly large scale.

Minister for Natural Resources, Ashti Hawrami stated that the Region will have pipeline capacity to carry 100million barrels per day within 15months, will be a net exporter of oil within two years, and will actually be pumping 100million barrels per day out of the ground within four years.

British government ministers joined delegates in heralding the conference a success and welcoming the opportunities it has created.

Speaking at the conference, Alistair Burt, UK Foreign Office Minister for the Middle East, welcomed the “great opportunity for British businesses to build strong commercial links between the UK and the Kurdistan Region”.

Also speaking at the conference, UK Trade and Investment Minister Baroness Wilcox said: "The Iraqi Kurdistan region is a gateway for British companies looking to establish a foothold in Iraq. The Iraqi Kurdistan region offers huge potential across a range of sectors for British companies that want to secure a share of this emerging market."

Paul Brunet, Atlantic Oil Field Services, said: “We are already active in the Kurdistan Region, so we appreciate the stable and secure business environment it offers. News of progress in agreement between Baghdad and Erbil regarding oil revenue-sharing is to be warmly welcomed. This will surely be instrumental in stimulating the Region’s ongoing development.”

Chris Frost, Partner at PriceWaterhouseCoopers, said: “This event has presented great opportunities to renew existing relationships and build new ones. PriceWaterhouseCoopers are delighted to let people know about our office in Erbil, and we’re keen to help facilitate further investment in this exciting and dynamic Region.”

Stephan John, People 1st, said: “This conference has been tremendously successful in demonstrating the breadth of investment opportunities the Kurdistan Region has on offer – not just in the oil and natural gas sectors, but in areas as diverse as education, telecoms, agriculture and finance. We are working to develop higher and vocational education in the Region – something we see a fundamental to its long-term development. We have been extremely impressed by both the ambition of the Region, and the strides it has made so far.”

Pasquale Cataldo, Business Manager at New Holland Agriculture – part of the Fiat Group – said: “This conference has been a huge success, and made clear that the economic regeneration of the Kurdistan Region is no distant dream – rather, an exciting reality. The opportunities are expansive and the territory favourable. The Kurdistan Region has a promising economic future ahead.”

International companies represented a range of critical sectors at the event, including:

• Banking & finance: HSBC, Credit Suisse, the Trade Bank of Iraq, Standard Chartered Bank, Forbes & Manhattan
• Consumer: Pepsico
• Construction: Lafarge, Caterpillar
• Defence & aerospace: Aegis, BAE Systems, Lufthansa
• Oil & gas: Shell, GE International, Heritage Oil, Genel Enerji, Korea National Oil Corporation
• Professional services: PriceWaterhouseCoopers, Norton Rose, DLA Piper, YouGov
• Telecoms: Asiacell, Motorola, Korek Telecom

Representatives from the following Embassies attended:

• Czech Republic
• Germany
• Hungary
• Islamic Republic of Iran
• Kuwait
• Poland
• Spain
• Republic of Slovenia
• Republic of Turkey
• Russia
• USA
• Catalonia

About Kurdistan
The Kurdistan Region is an autonomous region in federal Iraq. It borders Syria to the west, Iran to the East and Turkey to the north. Iraq’s Constitution recognises the democratically elected Kurdistan Regional Government, the Kurdistan Parliament and the Peshmerga guard as the legitimate regional forces.

Economy
Iraq’s GDP was $112 billion in 2009 (this is the figure at purchasing power parity. GDP at the official exchange rate was $71 billion). Iraq’s economy is expected to grow by an estimated 7.3% in 2010, 7.9% in 2011 and at similar rates for the next few years. This is above the average projected growth for the Middle East.

General Investment
A liberal foreign investment law was ratified in 2006, with incentives for foreign investors such as the possibility of owning land, up to 10-year tax breaks and repatriation of profits.

Kurdistan has attracted more than 12 billion US dollars (8.3 billion pounds) from local and foreign investors in non-oil sectors over the last three-and-a-half years, mainly in housing, agriculture and banking.

Foreign companies have invested around $3.1 billion from August 2006 to April this year. The largest foreign investors in terms of money were from Kuwait and Lebanon.

Investment from Iraqi national companies was about $8.7 billion during the same period. Joint ventures accounted for around $664 million.

Top areas of investment since 2006 are: public and high-income housing (nearly $4.8 billion); banking ($2.29 billion); industry ($1.6 billion) and tourism ($1.3 billion).

Oil and Gas Investment
The investment figures above do not include the oil sector, where 35 oil and gas firms from 17 countries have struck production-sharing agreements. These include Austria’s OMV, the Korean National Oil Corporation, India’s Reliance, Channel Islands-based Heritage Oil, Canada’s Talisman and the US’s Hunt. Norway's DNO and Turkey's Genel Enerji are already producing oil from their discoveries.

The Kurdistan Region is also developing gas following the UAE consortium Dana Gas and Crescent Petroleum reappraisal of the Khor Mor gas field in 2008. The field, which is expected to produce 8.5 million cubic metres per day in later phases, now feeds two power plants that together produce 1,250 megawatts of electricity to meet Kurdistan’s growing power needs. The nearby field of Chemchemal may hold gas reserves of 6.2 billion cubic metres.

Case studies
There are 1,200 foreign companies working in Kurdistan including: Byblos bank of Lebanon; National Real Estate of Kuwait; Forbes & Manhattan of the United States – a privately funded investment company; Coca Cola; Pepsi Cola; ArcelorMittal; Lafarge; and Rotana.

The Organization of Petroleum Exporting Countries said Wednesday it wouldn't need to boost its supply after cutting demand forecasts for its crude and boosting supply estimates for rival producers, despite the impact of a U.S. oil spill.

In its monthly report for June, the organization also warned of likely downgrades in global consumption estimates in the second half, and slightly cut its annual forecast amid a slowing recovery.

OPEC cut 2010 demand estimates for its crude by 70,000 barrels a day and now sees a year-on-year decline of 175,000 barrels a day. "This would leave no room for additional crude oil supplies in the market," it said. OPEC's next meeting is not due until October.

The organization, which members currently produce over a third of the oil consumed worldwide, is loosing market share to non members, which include Russia and the U.S.

It boosted non-OPEC oil supply estimates by 110,000 barrels a day for 2010, making it an increase of 640,000 barrels a day.

The largest upgrade came from U.S. supply, despite OPEC warning production there could be affected by an extension of a Gulf of Mexico drilling moratorium and a hurricane season expected to be worse than usual.

The moratorium, which follows an explosion and a huge spill at BP's Macondo well on Apr. 20, is affecting 35 wells "which will have a heavy influence on production in 2010 and 2011," OPEC said.

The group also warned "an expected moderation in the pace of the economic recovery is likely to impact demand growth forecasts for the second half."

It cut its global oil demand forecast for the year by about 10,000 barrels a day to 85.37 million barrels a day, but kept consumption growth unchanged at about 950,000 barrels.

Despite the challenges they face in finding buyers for every new barrel they produce, OPEC members have been steadily increasing their output in the past twelve months.

In May, quota-bound members increased production by 19,600 barrels a day to 26.83 million barrels a day, despite agreeing to 4.2 million barrels a day in cuts late 2008.

Iraq, the only OPEC not subject to quotas, experienced the largest rise in the month, with 121,300 barrels a day.

Russia’s oil pipeline monopoly Transneft may support quotas on oil shipments through Turkey's straits to fill a pipeline to the Mediterranean.

Transneft may take up to a 50% stake in the $3 billion Samsun-Ceyhan pipeline project, co-led by Italy's Eni , that will link the Black Sea and the Mediterranean and advance Turkey's plan to turn its southern port of Ceyhan into a regional energy hub.

"There is an idea to give all the crude oil to Samsun-Ceyhan and leave only oil products and petrochemicals across the straits," Transneft president, Nikolai Tokarev told Reuters.

"Or we could introduce quotas for each trader, and ship the rest of the oil through the pipeline."

Istanbul's Bosphorus Strait and the Dardanelles Strait are the only navigable route for tankers carrying oil from Black Sea ports to international markets in the Mediterranean. The two straits are bottlenecks for the amount of traffic they already handle.

" The ecological conditions are critical here from the boat traffic point of view," Tokarev said.

Turkish energy ties with Russia have been strengthened recently by nuclear agreements and Russia signing the South Stream pipeline deal with Greece on Monday, a deal of which Turkey has been a great supporter.

( Upstreamonline.com )

A Russian company met with Basra's Governor, Shaltagh Abboud al-Mayah, on Thursday to discuss new investment projects in the oil sector, according to a report from Aswat Al Iraq.

“Talks addressed the rehabilitation and reconstruction of the oilfields,” the source said.

“The company presented a study on the Basra oilfields and ways to solve their problems, expressing readiness to cooperate with the Iraqi side,” he added.

(Source: Aswat Al Iraq )