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U.S. Ambassador to Iraq Douglas Silliman has announced that the U.S. government is providing $75 million in additional funding to help stabilize Iraq following its full liberation from ISIS.

The United States plans to provide a total of $150 million for stabilization efforts in 2018, which will bring the total U.S. contribution to $265.3 million since 2015.

Ambassador Silliman said:

“Our commitment to the Iraqi people does not end with the eradication of ISIS. Communities in the liberated areas now face the daunting challenge of rebuilding their lives and restoring their cultural heritage.  

"These funds will help restore basic services like water and electricity so that Iraqi families of all ethnic and religious backgrounds can return to their homes – safely, voluntarily, and with dignity.”

The funds will be provided through the U.S. Agency for International Development to the United Nations Development Program (UNDP).  The UNDP stabilization program is supported by 24 international donors and managed in close cooperation with the Government of Iraq at the federal and local levels.

Strengthened by this new funding, the stabilization program will continue to help the populations of liberated areas return to their homes and resume normal lives by restoring services such as water, electricity, health, and education.

The stabilization program also supports temporary cash-for-work employment and grants to small businesses to jump-start local economies.  Part of the additional U.S. funding announced today will address the needs of vulnerable ethnic and religious minorities, especially those who have been victims of ISIS atrocities.

(Source: US Embassy)

By Salam Zidane for Al Monitor. Any views expressed here are those of the author, and do not necessarily reflect the views of Iraq Business News. 

Iraq has much to gain from gas-supply pact with Kuwait

Kuwait will begin importing natural gas from neighboring Iraq this year, a development welcomed in Baghdad as it could improve Iraq's relations with the Gulf countries — relations that ruptured when Iraq invaded Kuwait in 1990.

Most of Iraq’s gas is associated petroleum gas, also known as flare gas. Associated petroleum gas is a byproduct of oil production, as opposed to natural gas that comes directly from gas reservoirs in the ground.

The Iraqi Ministry of Oil has decided to export associated petroleum gas from international oil companies operating in southern Iraq to Kuwait via a gas pipeline near Basra. Kuwait would then turn it into dry gas, condensates and liquid gas, among other types. According to the Ministry of Oil, Iraq flares 1.5 billion cubic feet of gas daily.

Ministry spokesman Assem Jihad told Al-Monitor, “Iraq will export to Kuwait the associated gas, part of which is flared on a daily basis. Processing natural gas is a complex and expensive industrial process that requires building plants through local and foreign companies.”

Jihad said, “Iraq is set to supply Kuwait with 50 million cubic feet of gas daily, which will gradually increase to 200 million cubic feet [depending on] international prices. The gas will be exported through the three-decade-old pipeline linking the two countries. The pipeline, however, needs maintenance. Iraq will take care of maintenance over the 30 kilometers [19 miles] of pipeline stretching within its territory, while Kuwait will handle its part of the pipeline.”

Iraq has lost billions of dollars annually as a result of wasteful gas flaring and its importation of diesel fuel for electricity. That's not to mention the low levels of energy efficiency because many Iraqi power stations run on dry gas, which is not produced locally.

What has compounded the problem is the reluctance of some oil companies to exploit associated gas despite the increase in Iraq's crude oil production from an average of about 1 million barrels per day in 2003 to roughly 4.3 million per day in December, which increased gas flaring from 700 million cubic feet to 1.5 billion cubic feet daily.

Kuwait will lay the pipeline to the neighboring Rumaila oil field, the largest in the world, under the supervision of the BP oil company. The agreement is likely to be implemented soon, since Kuwait has a demand for natural gas that exceeds its supply by an estimated 500 million cubic feet daily. Kuwait has been unable to curb this deficit in part because of tension among Gulf countries that has prevented Qatari gas from flowing into Kuwait via Saudi Arabia; Reuters reports that much of the shortfall is being covered by imports of liquefied natural gas.

The Iraq-Kuwait associated petroleum gas deal should help Iraq pay off the remaining reparations for the invasion of Kuwait, amounting to $4.5 billion.

Iraq's parliamentary Oil and Gas Committee criticized the government's energy policy for relying on the development of oil production and neglecting natural gas processing, which could put an end to the country's electricity crisis and launch petrochemical industries. Committee member Zaher al-Abadi told Al-Monitor, “Iraq is losing billions of dollars in flaring gas, while the Ministry of Oil is standing idly by.”

Oil expert Hamza al-Jawahiri, who is knowledgeable about the agreements between international oil companies and the Ministry of Oil, and between the ministry and various countries, said Kuwait will process the natural gas in Iraq and then transport it to its cities.

“As per the agreement, Kuwait will bear the expenses of building plants, processing and piping the gas,” he said. The gas will be processed in Iraq by separating impurities and non-methane hydrocarbons and fluids to produce dry natural gas.

Jawahiri added that Kuwait signed an agreement months ago with Basrah Gas Company, which is part of the latest gas export agreement, noting that other sources of gas will include rich oil and gas fields in southern Iraq. Basrah Gas is a consortium of three businesses including the majority shareholder South Gas Co., Shell and Mitsubishi. The consortium exploits gas from three oil fields.

Shaalan al-Daraji, Basrah Gas chief information officer, told Al-Monitor the company’s plan, which runs until 2021, aims to end the flaring of gas in the Zubair, Qurna 1 and Rumaila oil fields. “The company currently produces 700 million cubic feet of gas daily and has a strategic plan to stop gas flaring in oil fields," Daraji said.

Iraqi Prime Minister Haider al-Abadi expressed great support for the Kuwait agreement, which could end Iraq’s long-standing estrangement with the Gulf countries, as Kuwait has asked the United Nations Security Council to lift sanctions on Iraq.

The Iraq Britain Business Council (IBBC) has announced that one of Iraq’s most significant companies, Albilal Group, has joined the trade organization.

Not only is Albilal a major EPC to many IOCs in Iraq, but also to the ministries of Electricity, Oil & Gas, Water and Infrastructure.

ABG was established since 1993 with main offices in Iraq and branch offices in UAE, Jordan and Egypt. As a $309m turnover company, they are now one of the most trusted and largest local companies in Iraq. Akeel Abdul Razzak, President & CEO of Albilal explains:

“The key to our success is the quality and expertise of our core staff, with both expat managerial excellence and over 3000 local Iraqi project deliverers”.

Albilal believes in training and development of personnel and this has seen us through the last difficult years in Iraq, to emerge resilient, sustainable and more capable as an organization.

ABG’s network of clients and partners includes many international and national firms working across the country in numerous several sectors. Albilal has 13 years of experience working in the Oil & Gas sector, with base camps located in all major Oilfields in southern region of the country. in the Power sector, the group earned significant stripes constructing 14 power plants and 71 substations across the country.

ABG is considered a 1st degree civil, mechanical and electrical construction company classified by the Ministry of Planning and Chamber of Commerce, making them one of the top companies in Iraq that is licensed and that has the ability to conduct mid to large scale projects. Albilal Group has received numerous awards over the years, two of which being for Reliability, Quality of Service and High Safety, it’s also ISO certified (ISO 9001, 18001, and 14001).

The group is delighted to be working currently on various essential projects in Iraq, covering Oil & Gas and Power and are set for an expansive 2018 and remains at the forefront of development in the key growth market of Iraq.

Christophe Michels, MD of IBBC says:

“2017 has been an exceptional year for IBBC both in the volume and quality of attendees to our conferences in UK and Dubai, the very well attended and successful trade missions to Baghdad and Basrah and for the number of International and Iraqi companies that have joined our network”.

"Albilal joins new IBBC members Chevron, Al Burhan, Shamara and Ratba groups, Leicester and Northampton University, Serco, Rolls Royce, MenziesAviation and Xreach.

"All in all we are seeing confidence and opportunity return to Iraq, especially across the sectors of Infrastructure, Oil and Gas, Power and Education, with the promise of Tech and Professional services to follow in the coming year.”

(Source: IBBC)

The Government of Netherlands has contributed an additional USD 14.2 million (EUR 12 million) to UNDP’s Funding Facility for Stabilization (FFS), which finances fast-track initiatives to stabilize areas liberated from the Islamic State of Iraq and the Levant (ISIL).

The Netherlands is currently the fourth largest donor supporting stabilization work in Iraq, with a total contribution of over USD 42 million.

“Now that combat operations against ISIL are over, the highest priority in the country is stabilizing the areas that have been liberated,” said Lise Grande, UNDP Resident Representative for Iraq. “There are urgent needs everywhere. This contribution from the Netherlands means that we can accelerate progress in the most sensitive areas, including Mosul.”

“Today, in the Old City of Mosul, I have seen firsthand the devastating destruction that ISIL has left behind. But I have also seen how life in other areas is coming back, thanks to the courageous work of the Iraqi people and local authorities, supported by UNDP’s critical rehabilitation projects.” said H.E. Matthijs Wolters, the Ambassador of the Kingdom of the Netherlands to Iraq, who visited several areas in Nineveh Governorate last week accompanied by senior officials from the United Nations Development Programme’s (UNDP) Funding Facility for Stabilization in Iraq and the UN Mine Action Service (UNMAS), to assess progress achieved on stabilization efforts across the province, particularly in the areas of education and health.

“The Netherlands stood with Iraq in its war to uproot ISIL. Today, we also stand with Iraq in peace, as a focus country for Dutch development aid. We are proud to support UNDP’s impressive stabilization effort in Iraq.”

At the request of the Government of Iraq, UNDP established the Funding Facility for Stabilization (FFS) in June 2015 to facilitate the return of displaced Iraqis, lay the groundwork for reconstruction and recovery, and safeguard against the resurgence of violence and extremism.

The Facility currently has 1,500 projects underway in 23 liberated cities and districts, helping local authorities to quickly rehabilitate essential infrastructure. More than 95 percent of all stabilization projects are done by the local private sector employing local labour. In Mosul, FFS is implementing 548 projects; 105 electricity, water, sewage, health, education and livelihoods projects are already completed.

“I recall well my own mother’s stories of the devastation of her hometown of Rotterdam, during World War II,” said Ambassador Wolters to a group of graduate students whom he met as part of his visit to the Women’s Education Faculty in Mosul University, drawing parallels with the current destruction of Mosul. “Rotterdam has recovered, and today it is a vibrant city. In the years to come, I am hopeful that Mosul will follow in Rotterdam’s footsteps.”

(Source: UN)

The Government of the Federal Republic of Germany has contributed an additional US$ 94 million (€80 million) to two major UNDP programmes that are helping to stabilize newly liberated areas – the Funding Facility for Stabilization (FFS), which finances fast-track initiatives in areas liberated from the Islamic State of Iraq and the Levant (ISIL) and the Iraq Crisis Response and Resilience Programme (ICRRP), which promotes recovery and resilience-building.

This latest instalment brings Germany’s total contribution to both programmes to $263.2 million, making it the top supporter of UNDP’s work in this area.

UNDP Resident Representative for Iraq, Ms. Lise Grande, said:

“Nothing is more important right now in Iraq than stabilizing the areas which have been liberated from ISIL.

“The task is huge. Electricity grids need to be rehabilitated, water systems repaired, rubble removed and schools and hospitals opened. Germany’s support comes at just the right time. Three million Iraqis are still displaced. Helping to improve conditions in their home towns is the first step in giving people confidence in their future.”

Ambassador of the Federal Republic of Germany in Iraq, H.E. Dr. Cyrill Nunn, lauded UNDP’s stabilization programmes in Iraq as one of the most effective and efficient mechanisms in Iraq to lay the ground for the safe return of internally displaced persons, giving hope to those who strive for a normal life again.

“I am happy to see Iraqi youth today taking the lead in shaping the future of their country. Germany is committed to support recovery in Iraq, but we firmly believe that it is the people of Iraq who will ultimately determine how successful and sustainable that recovery will be,” stressed Ambassador Nunn on his first visit to Mosul, on 12 December 2017, to review progress of stabilization work in Mosul, especially focusing on health and education projects.

By John Lee.

Iraq has been ranked 168th out of 190 countries in the World Bank‘s recent Doing Business 2018 report, down from 165th place the previous year.

Despite the fall in the rankings, the report notes that over the previous year Iraq simplified the process of starting a business by combining multiple registration procedures and reducing the time to register a company, and it launched a new credit registry, improving access to credit information.

Top of the list were New Zealand, Singapore and Denmark, with last place going to Somalia, just behind Eritrea and Venezuela. Iran ranked 124th, with Libya 185th.

Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking.

(Source: World Bank)

By the end of the third quarter of 2017, UNDP’s Funding Facility for Stabilization (FFS) was undertaking 1,208 projects in 23 cities across five governorates in Iraq.

Over one quarter of the projects were being implemented in the city of Mosul, which was fully liberated in July 2017. The liberation of all of Mosul marked an important milestone in the battle against the Islamic State of Iraq and the Levant (ISIL), representing the biggest city to have been retaken by the Iraqi Security Forces as well as the most complex stabilization challenge to date.

Mosul’s road to recovery has only begun, especially in West Mosul where the destruction is unprecedented. Access to all portions of the city on the western side remains a challenge in some parts, especially the Old City which was almost completely destroyed.

The Funding Facility is working with the Government of Iraq to prioritize the response, focusing on restarting public services and setting the conditions for people to come home with dignity.

In a dozen cities where FFS is cleared to work, many basic services are now functioning. From Ramadi and Fallujah to Tikrit and Qayara, returnees have much improved access to water, health, and electricity services. Schools are being reopened and university campuses are bustling with students.

Whilst a colossal amount of work remains to be done, there is palpable progress being made. Nearly 900 projects completed or ongoing in FFS areas outside of Mosul are helping create the sense that there is momentum and the Government of Iraq is helping returnees.

Governorates that have been liberated for over a year are beginning to transition from immediate stabilization to expanded stabilization priorities. In Anbar, Salah al-Din, and Diyala, expanded stabilization projects that were being designed and procured are increasingly being implemented.

Twenty-four donors have contributed US$ 426,611,814 as of 30 September 2017, and approximately $300,000,000 in hard pledges are expected to be mobilized in the fourth quarter of 2017. This report provides an overview of all FFS activities underway during the third quarter, which encompasses 1 July – 30 September 2017.

Highlights

• In Mosul, 350 projects are being implemented or developed, 250 schools were assessed, and water has been restored to 300,000 residents in East Mosul
• In the Ninewah Plains, 45 schools were completed or being rehabilitated. Work on the Hamdaniyah Hospital, the first Expanded Stabilization project in the Ninewah Plains, is underway
• Two major bridges in Anbar were reopened, and another five are being implemented
• Housing rehabilitation in Fallujah and Ramadi targeted over 6,000 homes
• Five segments of the Tikrit Teaching Hospital are complete; the rehabilitation of the main building will begin soon

The full report can be downloaded here (7.6MB)

(Source: UNDP)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Every day new anti-corruption cases are announced in Iraq's new "war on corruption". Yet they achieve virtually nothing. This may well be a war that nobody in Iraq can win.

Last week the Iraqi prime minister, Haidar al-Abadi, said that now that the war against the extremist group known as the Islamic State had been won, that a new war should be fought – and this one would be against corruption.

Last year the advocacy organisation Transparency International says that Iraq was the 166th most corrupt country in the world out of 176. And corruption of all kinds has been a problem in the country for decades. It’s almost a way of life here. So this will be far from an easy fight. In fact, it may prove to be more difficult than the fight against the Islamic State group.

Iraqi politics functions according to a kind of unofficial sectarian quota system that was established after the 2003 US-led invasion of Iraq that toppled Saddam Hussein’s regime.  In order to avoid sectarian infighting among politicians, US administrators thought it best to split the most important positions in Iraq’s new Parliament between the three major ethnic and sectarian groups in the country; that is, the Sunni Muslims, Shiite Muslims and Iraqi Kurdish.

Over time though, many analysts believe this practice has come to hamper Iraqi democracy, with leaders being picked for their sect or ethnicity, rather than on merit.

And the system is far more problematic than that. In reality, it is based on two further principles: How much power each appointment gives to the person who gets the job, and therefore how much money the appointment can generate.

Every party in the Iraqi government today also has what is known as an “economics office”, a bureau tasked with raising funds for the political party using the government jobs held by the members themselves. According to insiders, who cannot be named for security reasons, these offices coordinate making deals and signing contracts behind the scenes so that investments and kickbacks are shared with the political party itself.

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Basra Oil, Gas & Infrastructure is held under the high patronage of the Basra Governorate, the Basra Council and Iraq’s Basra Oil Company from October 30 to 31 in Beirut, Lebanon. Government officials, project stakeholders and buyers and suppliers attend to explore the expanding energy projects in the South of Iraq.

Jereh Group made its debut in the panel discussion about investment. It displayed integrated solutions covering investment, financing, manufacturing, EPC to turnkey delivery under the Belt and Road Initiative. The solutions facilitate the development of local infrastructures and boost the economic growth.

Authoritative reports show that Iraq is OPEC's second-largest crude oil producer and holds the fifth-largest proved crude oil reserves in the world. And Iraq is developing its oil fields and expanding infrastructure capacity in the south to accommodate more production growth. Large-scale increases in oil production would also require large increases in electric power generation. Significant upgrades to the electricity sector would be needed. To achieve this, reliable partnership and excellent investment and financing solutions are needed.

Johnson Jiang, President of Jereh Mid-East Region, made a keynote speech in front of more than 200 participants representing Basra’s thriving industries. He shared Jereh's best practice in oil & gas, power and environment industry and what it can bring to the local industries, saying that:

"The China-proposed Belt and Road Initiative offers a unique opportunity for development and social progress among B&R countries. Jereh can provide flexible investment and financing mode to help Iraqi customers build a reliable and secure project. We also collaborate with global partners to provide customers with integrated solutions covering investment and financing, turnkey engineering, technical services and equipment manufacturing."

Jereh is a preferred partner for the energy industry. Based on technology-driven innovation, a deep understanding of customer requirements, and unique expertise, it is committed to offering customers the optimal solutions and project execution. Jereh has been working with industry-leading International Oil Companies (IOCs) and National Oil Companies (NOCs) on turnkey engineering, well service equipment manufacturing, oilfield services and environmental management.

The company has a large number of implementation cases in Iraq and Middle East area in fields such as natural gas boosting and storage, nitrogen pumping, cementing and coiled tubing for oil production, and oily waste treatment. It also has extensive experience in delivering projects worldwide, supported by its local teams and abundant partners in more than 60 countries and regions.

“With the support of Belt and Road Initiative, Jereh will leverage its experience to conduct more cooperation in a compliant way in Iraq and provide private-sector investment to assist in developing Basra to provide the infrastructure that’s vital to boost the economic growth,” said Johnson.

(Source: Jereh Group)

The Iraqi Ministry of Electricity (MoE) has signed an agreement worth over $400 million with GE Power (NYSE: GE) to develop 14 electric substations on a turnkey basis and supply critical equipment such as transformers, circuit breakers and other outdoor equipment to rehabilitate existing substations and bring much-needed power to areas facing significant electricity shortages across the country.

The project represents a strategic milestone for GE to develop electric substations in Iraq, and will also see the Company support the MoE to secure funding through various financial institutions, including export credit agencies and commercial banks.

Mussab al-Mudaris, spokesperson of the Iraqi Ministry of Electricity said:

“The agreement represents a major milestone in our efforts to strengthen Iraq’s power transmission sector, through a comprehensive grid project across the nation. Our focus remains on providing our people with the most reliable and advanced technology to meet their daily needs, and to accomplish this we need strong partners in this journey of development and reconstruction. GE has the technology, global capabilities and local presence to ensure the successful and sustainable execution of the project.”

GE will develop the substations to connect power plants spread across the governorates of Ninawa, Salah Al Din, Al Anbar, Karbala, Baghdad, Qadisiyyah and Basra to the national grid. Several of the locations, in conflict-affected areas, are continuing to recover and are in immediate need of reliable power infrastructure.

GE Power has previously provided power generation equipment for some of the power plants that the substations will be connected to, including the three gigawatt Basmaya Power Plant. The current agreement includes 4 substations critical to distributing power from the facility, which is also being equipped with eight of GE’s 9FA gas turbines, four GE C7 steam turbines and GE’s leading digital industrial applications.