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From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

The Iraqi prime minister has accused Qatar and Saudi Arabia of effectively declaring war on his country.

He says they're funding Sunni fighters in Anbar province, an area the Iraqi government is struggling to bring under control.

Al Jazeera's Imran Khan reports on the comments made as at least 47 people were killed by a suicide bomber in the city of Hilla. Al Jazeera also speaks to Nasser Bin Hamad Al Khalifa, Qatar's former ambassador to the United Nations and the United States:

By John Lee.

Iraq is now among the biggest spenders in the Middle East when it comes to planned or under-way infrastructure projects, rivalling the expenditure of Saudi Arabia and the UAE, according to the MEED's Gulf Project's Index.

Iraq's southern neighbours are spending $1.o5 trillion and $713bn respectively,but Iraq's rising expenditure on energy projects will be the subject of the forthcoming "Iraq Energy Projects 2014" conference hosted by MEED Events on the 25th of February in Dubai.

Among the many delegates speaking at the event, Iraq's Minister of Electricity, Karim Aftan al-Jumaili and the UAE's Energy Minister Suhail Mohammed al Mazrouei will discuss Iraq-UAE collaboration on infrastructure projects.

By John Lee.

Iraq and Iran, which together hold more oil reserves than Saudi Arabia, are planning to challenge Saudi Arabia's grip on OPEC and its status as the "swing producer" in the cartel, according to a report from The Telegraph.

With Iraq poised to triple its capacity to 9 million bpd by 2020,  the result could be a dramatic fall in oil prices.

Hussain al-Shahristani (pictured), Deputy Prime Minister for Energy, said:

"We feel the world needs to be assured of fuel for economic growth ... It's very difficult to predict actual world (oil) demand by 2020 because the world economy is unpredictable ... Iran has been in touch with us; they want to share our contracts model and experience."

This news that Baghdad is working with Iran to help it attract investment ahead of the possible lifting of sanctions could be seen as a challenge to Saudi Arabia. Oil companies are understood to be queuing up to win Iranian oil deals.

The report speculates that, even if Iraq is able to achieve its target of boost production capacity as planned, it is unlikely to be able to put in place sufficient pipeline and port infrastructure to export the additional crude; the main export terminal near Basra will require billions of pounds worth of improvements in addition to the refurbishment of its pipeline network.

Currently, crude oil exports account for 93 percent of Iraqi government revenue.

(Source: The Telegraph)

The US government has filed a complaint against Kellogg, Brown & Root Services Inc. (KBR) and Kuwaiti companies La Nouvelle General Trading & Contracting Co. (La Nouvelle) and First Kuwaiti Trading Co. (First Kuwaiti) for submitting false claims in connection with KBR’s contract with the Army to provide logistical support in Iraq, the Department of Justice announced. KBR is an engineering, construction and services firm headquartered in Houston, Texas. Kuwait-based La Nouvelle and First Kuwaiti provided transportation, maintenance and other services in support of KBR’s contract with the Army.

“We depend on companies like KBR and its subcontractors to provide valuable services to our military,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will en sure that contractors do not engage in corrupt practices at the expense of our troops abroad, while profiting at the expense of taxpayers at home.”

Allegedly, KBR made claims to the government, knowing them to be false, under a contract with the Army to provide wartime logistical support, known as the Logistics Civil Augmentation Program (LOGCAP) III. The award of LOGCAP III paved the way for the company to become a critical source for logistical support services in Iraq, which included transportation, maintenance, food, shelter and facilities management. KBR performed many of these services through subcontracts awarded to foreign companies local to the region, such as La Nouvelle and First Kuwaiti.

In its complaint, filed in federal court in Rock Island, Ill., the government alleged that, in 2003 and 2004, KBR employees took kickbacks from La Nouvelle and First Kuwaiti in connection with the award and oversight of subcontracts awarded to these companies. KBR then claimed reimbursement from the government for costs it incurred under the subcontracts that allegedly were inflated, excessive or for goods and services that were grossly deficient or not provided.

For example, KBR allegedly awarded La Nouvelle a subcontract to supply fuel tankers for more than three times the tankers’ value. La Nouvelle later rewarded the KBR employee who awarded the subcontract with a $1 million bank draft. As another example, KBR allegedly continued to make monthly lease payments to First Kuwaiti for trucks KBR had already returned to the subcontractor. KBR billed the government for the costs of both of these subcontracts. The lawsuit also alleges that KBR used refrigerated trailers to transport ice for consumption by the troops that had previously been used as temporary morgues without first sanitizing them.

By Mustafa al-Kadhimi for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Our Steadfast Anbar initiative, launched Jan. 11 by Ammar al-Hakim (pictured), leader of the Islamic Supreme Council, to resolve the Anbar crisis is an important step because it moves Iraq's security situation back into the political realm in trying to establish a broad base from which to combat terrorism.

Hakim has proposed a package of political, administrative, economic and social measures to normalize the situation in Anbar, which has been restive for the past two weeks and preceded by protests that lasted about a year. Among the initiative’s proposals is to spend $4 billion dollars over four years to rebuild Anbar’s cities, create jobs and form a provincial council of elders, influential tribal leaders, in addition to Anbar self-defense units, which in fact already exist through the Sahwa councils.

Some assert that Hakim’s initiative has electoral motives attached. Yet the initiative provides, for the first time, a vision toward resolving the Iraqi crisis, not just mere slogans as with most previous initiatives. The local and foreign responses to the initiative indicate that there is a general trend to interpret the crisis the way it actually should be understood.

Some Iraqi parties are trying to characterize the country's broader crises — ongoing for years and including the recent crisis in Anbar — as “security crises” that can only be resolved through security measures. This characterization assumes that the fight in Iraq is between the government and its supporters on the one hand and terrorism and its supporters on the other, and therefore does not take into consideration the root causes of the conflicts.

By John Lee.

Aljazira Capital has raised its rating on Astra Industrial Group to overweight from neutral after the Saudi industrial conglomerate started a new steel millin Iraq.

The Jeddah-based investment bank was initially expecting the melt shop of 450,000 metric tons/year of billet and mill of 300,000 mt/y of rebar to begin operations in the second half of next year.

It said that the proximity of the Al Amna facility in Khor Al-Zubair to the Basra port, combined with the abundance of scrap in Iraq, will help cut logistics and raw material costs.

In 2010, Astra paid $61 million for a 51 percent stake in Jordan-based Al Tanmiya for Steel Industries, which is the owner of Al Amna.

(Sources: Fortune Best, Aljazira Capital)

(Steel image via Shutterstock)

By Ayser Jabbar for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq’s aspirations to increase its oil exports to close to 7 million barrels per day by 2017 drew criticism from the Iranian Ministry of Petroleum. Iranian Petroleum Minister Bijan Namdar Zangeneh regarded the move, which seeks to make up for the lack of oil exports from his country as a result of sanctions, as “absolutely unfriendly.”

The Iranian Embassy in Baghdad concurred with the opinion of the petroleum minister.

“Iraq’s oil policies will be harmful to the interests of Iran, especially given its aspirations to increase its crude oil exports to compete on the market and to establish a place for itself on the international scene,” Iranian Deputy Ambassador to Iraq Aziz Salihi explained to Al-Monitor. “Iran’s oil exports have gone down due to sanctions from 2.5 million barrels to 1.2 million barrels per day.”

“Iran enjoys good and solid relations with Iraq, and we do not anticipate for this to be compromised because of oil policies,” he continued, pointing out, “We can hold a dialogue with concerned Iraqi parties to establish some sort of understanding in this regard.”

Amid this criticism and fear of increased Iraqi oil exports, the Iranian nuclear deal with the major Western powers has emerged as a promising step toward a powerful economic revival that will be witnessed by the Gulf. It will also spark competition between oil-producing countries in a way that may lead to disputes over shares, granting facilitations and preferences to consuming countries, especially in East Asian countries.

Oil expert Hazem al-Fartousi explained to Al-Monitor that the results of the agreement will have two trajectories. One will be toward quelling the markets from the geopolitical conditions related to the Iranian nuclear file, including the instability in prices it caused. The other will have to do with the return of Iranian [oil] exports, thus increasing the amount of oil available on the market in a way that would bring relative oil stability in Iran. This will also decrease Iranian fears of increased oil exports from Iraq that Tehran spoke of not long ago.

By Andrew Scarre.

Iraq’s oil exports have increased in October to 2.25 million barrels per day, an increase of 0.18 million barrels per day in comparison to September’s figures. Over the course of October, Iraq exported 69.8 million barrels of oil over the course of October, creating US$7.160 of revenue. The ministry confirmed that the price of oil per barrel over the course of the month was US$102.579.

Exports Increase Despite Sabotage

This increase in exports came in spite of the ongoing maintenance work in the southern terminals. In addition to this, a statement released by the ministry confirmed that at separate points during the month, pumping of oil in the Kirkuk-Ceyhan had to be ceased due to sabotage. From where this sabotage stemmed is currently unclear. However, on 2nd November, the pipeline was attacked once more by insurgents who bombed the pipeline and disabled it.

Overall, during the course of the month, Iraq exported 63.8 million barrels through the southern port of Basra, and 621,000 barrels via Turkey's port of Ceyhan on the Mediterranean Sea.

The news of increasing oil exports will come as a welcome boost to the Iraqi economy due to its dependence on oil exports. At present, oil exports account for nearly 95 percent of its budget and a fall in such revenues would have a drastic impact on the economy as a whole.

Increasing Productivity

This, however, is not the only good news for Iraq of late and, after 2010’s announcement that oil reserves in the country were actually almost 30 billion barrels greater than original estimates; oil production has continued to thrive.

By Tom Walker, Director, Assaye Risk

COUNTRY OVERVIEW

Little has changed in Iraq this week as al Qaeda (AQ) and Sunni insurgent groups have continued to press home a series of devastating attacks across the northern and central belts of the country.  The security situation in northern Syria and northern Iraq remains febrile and fluid as AQ and its affiliates, most notably the Islamic State in Iraq and Levant (ISIL) continue to battle moderate rebel groups and Kurdish militias in Syria with inevitable implications over the border in Iraq.

As groups freely move between Iraq and Syria the northwest of the country has seen a clear rise in activity during the past few weeks.  The ISIL has seen record numbers of fighters flock to its ranks in recent weeks as success against more moderate rebel groups continue to increase its operational and ideological attractiveness, which will only help the group sustain operations across a wider battles space, including Iraq. Last Thursday the ISIL captured a northwestern Syrian town, Atimiyah, after ousting moderate rebel fighters from the islamist group Suqur al-islam.  Geographically, this action poses little of a threat to Iraq and its security situation but the increasing influence of the ISIL remains a potent threat.  The rise of AQ and ISIL has changed the regional and international diplomatic calculus significantly and has tempered the calls of regional power brokers who desire the removal of the Assad regime. In the long term the possibility of hardline islamist groups gaining strong footholds in large parts of Syria poses its own dilemma, raising serious questions about the potential transnational influences that groups like the ISIL could have on Iraq’s security situation.  In the short to medium term the combat experience and increase in capacity and capability the ISIL has seen will continue to pose serious challenges for the Iraqi security forces (ISF) as ISIL fighters migrate freely between operations in Iraq and Syria.

Thursday also saw an Iraqi Shia militia group, reportedly backed by Iran, fire a salvo of mortars into Saudi Arabia in  an attempt to attack a Saudi border crossing point, with little physical damage reported.  In a statement to the press Wathiq al-Batat, commander of Iraq's al-Mukhtar Army militia said, "The goal was to send a warning message to Saudis to tell them that their border stations and patrol are within our range of fire," a comment that was linked to calls by the same group for Riyadh to stop meddling in the affairs of Iraq.  Just how potent a threat this is remains to be seen but government temperance will most likely ensure that it does not develop into anything of scale.  It is most likely in response to calls by Baghdad for closer ties to Saudi Arabia, where Iraq has not had an ambassador since before the 1990s Gulf crisis.  Shia groups harbor multiple suspicions against Sunni Saudi Arabia and Kuwait, both of who have been supporting Sunni rebel groups in Syria and this action is more likely linked to a spill over of aggravated Sunni-Shia antagonisms.

The latter part of the week saw significant insurgent activity along the Tigris River valley and into Baghdad.  A car bomb in the busy market town of Sadiya, some 65km north of Baghdad, killed at least 25 people and wounded over 50.  Further south in Taji, 20km from Baghdad, a suicide bomber attacked a police checkpoint (one of many attacks specifically targeting the ISF) and killed 4 police officers and wounded 8.  Later in the day the final round of high impact attacks killed 7 and wounded 18 as 3 separate bombs exploded in the western Baghdad district of Amiriya.  Altogether over 45 people were killed across the country on Thursday as northern cities and Baghdad continue to suffer from almost daily attacks, predominantly around religious sites, public social areas and ISF facilities.

By John Lee.

Oil Review Middle East reports that the Kuwait-based Safwan Petroleum Technologies Company (SPETCO) has said that it is looking to expand its upstream oil and gas services in Iraq and Saudi Arabia.

Anish Abraham, the company's manager of OFS/BD, told ORME that its specific attention in terms of marketing and distribution was towards Erbil in Iraq and Saudi Arabia.

The company provides upstream services ranging from well testing services, artificial lift systems, production facilities, tubular services.

Currently, SPETCO operates in Kuwait and the UAE and has set up a branch in Erbil.

(Source: Oil Review Middle East)