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Iraq's State Company for Oil Projects (SCOP) will offer the construction of the Kirkuk oil refinery to international companies on a build, operate and own (BOO) basis in December 2012, according to a report from Steel Guru.

The report quotes Mr Salar Ameen, deputy chairman of the National Investment Commission (NIC) as saying that "feasibility studies are ongoing with two Italian and American advisers. The Iraqi oil ministry will make public the specifications before the end of the year. The refinery will cost approximately of USD 6 billion with a capacity of more than 150,000 barrels per day of oil".

Mr Ameen said that companies from the US, China, Korea, Saudi Arabia and the UAE have expressed interest in bidding for the project. Construction is expected to be completed by the end of 2016.

The Kirkuk refinery project is part of the oil ministry's plan to build several refineries across the country to meet increasing domestic demand. These refineries will have a total capacity of 740,000 barrels per day at an estimated cost, according to the report, of $20 billion.

(Source: Steel Guru)

(Photo: Najaf Refinery)

In May, Turkey and Iraqi Kurdistan announced they would build pipelines taking oil and gas from Iraq into Turkey, then possibly Europe. But according to this article from NIQASH behind the energy dream, lurks a nightmare of militant Kurdish independence fighters and the spectres of energy giants, Iran and Russia.

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

To some it is a dream come true, others think it’s a nightmare that will never see the light of day. The May 2012 announcement by Ashti Hawrami, the Minister of Natural Resources in the semi-autonomous state of Iraqi Kurdistan that they would build new oil and gas pipelines to Turkey shook the Iraqi government in Baghdad.

The first phase of pipeline construction is supposed to be completed by October this year and the second phase is due to be finished by August 2013. Another pipeline is to be built by 2014.

Baghdad reacted unhappily to this announcement, saying – as they had done with other oil deals – that the Kurds were working outside of the national remit. National Deputy Prime Minister for Energy, Hussein al-Shahristani, was dismissive of the pipelines and local media were also rather negative about it.

Yet it appears that Baghdad feels that that the northern state of Iraqi Kurdistan is slipping out of its control. For the last five years Baghdad has been trying to reign in the Kurdish government, especially when it comes to oil and gas.

Shahristani has blacklisted oil companies operating in Iraqi Kurdistan and even ensured that, during the recent lacklustre fourth round of bidding to do oil work in Iraq, there was a new clause preventing any oil companies from going into Iraqi Kurdistan without Baghdad’s permission, as oil major Exxon Mobil did in November 2011.

Iraq has named Thamer Ghadhban as its candidate for the position of head of OPEC, and some analysts believe he could be an acceptable compromise candidate.

Based on current differences, "I don’t believe it can be an Iranian or a Saudi," said Neil Atkinson, an energy analysis director at UK research firm Datamonitor, who notes that the decision must be unanimous.

He added, "the Iraqi could be an acceptable candidate. OPEC has come up with a compromise candidate before."

The fact that the Iranians and Saudis are both vying for the job "could create frictions," said an OPEC delegate from an African country. For that reason, the delegate said it was likely the group would pick either the Iraqi or the Ecuadorian. “We will choose a neutral candidate,” he said.

Iraq is gradually shifting towards a more high-profile role within the group. The country is currently still exempt from the OPEC quota system, although Iraq’s reinstatement is seen as more imminent than it was previously.

Iraq’s approach is two-pronged. It wants an Iraqi official installed in high office in the group, and has suggested that it will be willing to submit to output-restraint disciplines.

(Source: Gulf Times)

The chief executive of the Iraq Stock Exchange (ISX), Taha Abdulsalam, believes secondary listings for local companies on bourses in London and New York would eventually attract extra liquidity and boost trade.

"That is the long-term strategy. It's not going to happen overnight, but the plan is to aim to develop the same standard of bourses and companies outside."

Although companies have already adopted International Financial Reporting Standards (IFRS), he said Iraqi companies need to improve their disclosures, including timing, and their level of corporate governance, especially with regard to insiders.

Mr Abdulsalam said the market had the potential to grow once Iraq eased its reliance on the oil sector for growth.

"Iraq's stock market has the potential to grow to the size of Saudi Arabia, it has the oil, a huge population and very diversified sectors," said Anastasios Dalgiannakis, the head of institutional trading at Mubasher Financial Services in Dubai, which last year signed an agreement to offer live prices for the exchange.

"But many investors are waiting for a foreign custodian to operate in Iraq," Mr Dalgiannakis said. "Investors are willing to take the risk and invest in Iraq, but not to take additional counter-party risk."

In March, the ISX mandated that any bank, foreign or local, could apply to a custodian of investor assets. The exchange is in talks with two international investment banks, and expects a resolution in the next four months, Mr Abdulsalam said. He declined to name the banks.

Mobile operators in Iraq have been under pressure from the government to list their shares under the terms of the licence bought in 2007. If the main telecommunications companies listed on the exchange, Abdulsalam said, the market's capitalisation would double overnight from its current level of $4 billion.

"Until now, they have not given any request to list on the stock exchange," he said.

(Source: The National)

Preparations are being made for a fourth auction of oil and natural gas exploration zones. This will be in line with the country's aim to rival Saudi Arabia as one of the world’s leading oil producers.

Iraq’s official statistics reveal that oil reserves are pegged at 143.1 billion barrels, the fourth largest in the world.  However the former oil minister who is now deputy prime minister Hussain al-Shahristani says the country has potential reserves of over 214 billion barrels.

Iraq’s Oil Ministry revealed that 12 new exploration zones will be auctioned off on Wednesday May 30^{th –} Thursday 31^st May 2012. All of the exploration zones are in remote areas which in turn makes them vulnerable to insurgent attacks.

The zones are mainly situated in Western and Central Iraq and companies who win the licenses will have to be able to commit to spending $90 million – 200 million.

Analysts state that Shahristani (Pictured) initially aimed to boost production to 10 million – 12 million bpd by 2017, this will not occur due to the underdeveloped infrastructure, the boost in production has been pushed back to 2020. “While the government’s most ambitious targets suggest 12 million – 13 million bpd by 2020 is theoretically possible, an output plateau of around 6 million – 7 million appears more likely” according to Oxford Analytica. Even this would earn the Iraqi Government $1 billion per day to fund on-going national reconstruction.

(Source: UPI)

Iraq’s oil exports have reached the highest records in decades. Crude oil exports averaged 2.508 million bpd in April 2012 due to the opening of two new floating terminals, easing export constraints. The Iraq Petroleum 2012 Conference will address this recent increase in crude oil exports, in a key session titled ‘Positioning Iraq on the World Energy Map’ led by members of the Iraqi Government, including: H.E. Thamir Ghadban; H.E. Dr Ali Al Dabagh; and H.E. Dr Adnan Janabi.

The Conference receives support from leading industry experts and government officials, as shown by the participation of its distinguished speakers over the years. Speakers for 2012 include: H.E. Dr Rowsch N. Shaways, the Deputy Prime Minister of Iraq; H.E. Thamir Ghadhban, Chairman of the Advisory Commission to the PM of Iraq; H.E. Dr Selahattin Cimen, Deputy Energy Minister of Turkey; H.E. Dr Ali Al Dabagh, Minister of State and Iraqi Government Spokesman; H.E. Dr Adnan Janabi, Chairmen of the Oil & Gas Committee, Iraqi Government.

Iraq Petroleum is an internationally renowned Conference and provides a platform for key government officials and senior executives to network, discuss current issues and promote innovative ideas surrounding Iraq’s oil and gas sector. Taking place 18-20 June 2012 at the Intercontinental Hotel, Park Lane, London, the Conference is considered the annual meeting place for the industry and is an opportunity for national and foreign companies to strategically engage with key stakeholders.

“Iraq Petroleum 2011 was an excellent opportunity to meet and hear the main players in the Iraqi oil sector” Yazdi Merchant from Saudi Aramco

Supported by the industry, sponsors for the event include; Shell, Lukoil, Total, Genel Energy, Gulf Keystone Petroleum, Occidental, Aspect Holdings; General Exploration Partners, Technology Partners, Clyde & Co, Crescent Petroleum, Motorola and Mubadala.

The output of OPEC in April hit its highest point since 2008 as extra crude from countries such as Libya, Saudi Arabia, and Iraq more than compensated from the loss of Iranian crude supply.

Analysts found that the 12 member countries making up OPEC averaged 31.75 million barrels per day (mbpd). In April it was found that the biggest increase in crude export was from Iraq, this was due to a second export facility coming online, which in turn provided a boost to the countries export capacity.

(Source: Oil and Gas News)

Harris Corporation, the international communications and information technology company, has been awarded a contract to provide a back-up air traffic control system for Baghdad International Airport in Iraq.

Harris will supply a back-up Liberty-STAR™ Voice Communication and Control System (VCCS) to the primary Liberty-STAR™ VCCS previously installed by Harris. Featuring a modular architecture, open-platform software and commercial-off-the-shelf hardware, the Liberty STARTM delivers a reliable, scalable communications solution for ATC towers, airline and area control dispatch, flight service stations, and mobile shelters.

The back-up system at Baghdad International will be equipped with touch-screen operator positions, radio interfaces, telephone interfaces, and a System Maintenance, Administration and Reconfiguration Terminal (SMART) POSITION™. Harris' in-country contractor will install the system and provide operation and maintenance training for Iraqi air traffic controllers and technical staff.

"This latest award expands the company's presence in the rebuilding nation and provides Baghdad International with another mission-critical service," said John O'Sullivan, vice president, Harris Mission Critical Networks. "The Liberty-STAR provides ATC personnel with a powerful, cost-effective back-up solution that they are familiar with, enabling them to concentrate on maintaining safe and secure airways in and around Baghdad."

Harris has extensive experience developing mission-critical solutions that support civil and military air traffic control operations worldwide, including more than 200 customers in 50 countries. In addition to Baghdad, Harris has supplied ATC communications systems to other cities in Iraq including Basra, Taji and Tikrit. Regionally, Harris has provided systems to other countries, including Afghanistan, Oman, Yemen, and Saudi Arabia.

(Source: Harris)

Starwood Hotels and Resorts Worldwide has signed an agreement with BCD Co. to manage a new-build Sheraton hotel in Erbil, Iraq. Scheduled to open in 2015, the Sheraton Erbil Hotel will mark the re-entry of Starwood in the country after 20 years.

Located in the new part of the city, approximately 10 minutes from Erbil International Airport, the Sheraton Erbil Hotel is situated along the new ring road offering guests easy access to the city and its key attractions such as the historic Citadel, Sami Abdul Rahman Park, the largest green area in the region, and downtown Erbil.

“We are delighted to partner with BCD as we re-introduce Starwood to Iraq with Sheraton, our most iconic brand,” said Roeland Vos, President, Starwood Hotels & Resorts, Europe, Africa and Middle East. “The opening of the new Sheraton Erbil Hotel further underlines Starwood’s commitment to growth and expansion in the region.”

Mr. Saad Aldoski, Partner, BCD Co. commented: “We are excited to work with Starwood and the Sheraton brand on our first hotel development in Erbil. We believe that our partnership with a globally recognised hotel operator such as Starwood will set new hospitality milestones in Iraq and that Sheraton’s strong reputation will assist in further supporting Erbil as the country’s commercial hub.”

Iraq's improved relations with its neighbours have been particularly evident in recent times.

Following Prime Minister Nouri al-Maliki's two-day visit to Kuwait in March, Iraq agreed to go ahead with the Iraq-Kuwait Boundary Maintenance Project, and to transfer its share of funds allocated for the completion of this project to the UN.

The two governments also agreed during the visit to hold a second high-level meeting later this month to review all pending issues between the two countries, including Iraq's outstanding obligations under Chapter VII.

The relationship was no doubt helped by the attendance of the Emir of Kuwait, His Highness Sheikh Sabah al-Ahmed al-Sabah, at the Arab League Summit in Baghdad, an event described by UN Special Representative Martin Kobler as marking "Iraq's re-emergence as a major actor in the region".

Meanwhile, its relations with Saudi Arabia also continue to improve, with Riyadh's appointment of an envoy to Iraq, and discussions on the opening of the Ar Ar border post between the two countries.

With external relations strenthening, it is all the more disappointing that internal relations within the country are deteriorating. Tensions between the political blocks are impeding progress, while the stand-off between the Kurdistan Region and the Baghdad government causes much uncertainty.

All parties need to apply the same level of commitment to resolving these problems as they have to bolstering international relations, for the sake of their common futures.