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According to this report from NIQASH, many believe the original Garden of Eden, as described in both the Koran and Bible, is located in Basra. Increasingly though climate change, water shortages and urban sprawl mean Basra’s farmers are coming to doubt that story.

War and conflict have led to the loss of many farms and crops in the northern state of Basra. Increasingly saline water supplies and drought have added to agricultural woes here, and have transformed what might once have been a Garden of Eden into an arid desert and an urban sprawl.

The agricultural adviser to the governor of Basra, Muhsen Abdel-Hay Disher, firmly believes that climate change has played a part in the decline in agriculture in the area. According to official statistics, 70 percent of what was arable land in the 1970s is no longer useable. Other records indicate that average rainfall has fallen to one sixth of what it used to be in the 1970s. Additionally Disher told NIQASH that in northern Basra, a quarter less land was planted with wheat in 2010 compared to the previous year. Due to drought the total area planted was only 44,000 dunums (4,400 hectares as each dunum equals 2,500 square metres).

The politics of water as played out by neighbouring Middle Eastern countries have also had a devastating effect on Basra. To the east, Iran has built dams on rivers that bring fresh water into the Shatt al-Arab waterway. The less fresh water flowing into the Shatt al-Arab, the saltier – and less useable - the water gets on Basra’s farms.

“The saline levels in the Shatt al-Arab water increases when the fresh water levels decrease,” explained Abed Mahdi, the owner of a palm farm in the Faw district. “Which leads in turn to increased salt in the streams that irrigate the palms.”

According to a report in the Financial Times, investors are turning their attention to Iraq’s debt.

In 2004, after the US invasion of Iraq, the 'Paris Club' of 19 western creditors agreed to forgive roughly 80% of the $37.2bn owed to them.

This deal was used as a template for resolutions with other creditors and prevented the Iraqi government from favouring other countries outside the group.

The paper quotes Gabriel Sterne, senior economist a illiquid debt specialists Exotix, as saying that Iraq’s public and external debt is heading towards a “firmly sustainable footing”, and he forecasts that Iraq’s debt-to-GDP ratio will be less than 40 per cent by the end of 2011, compared with 552 per cent before the Paris Club agreement.

“With oil revenues buoyant and production volumes set to increase, we still think the risk-reward trade-off is acceptable on the eurobonds,” Mr Sterne wrote in a recent note.

Waleed Eedi, a director-general at the central bank of Iraq, put Iraq’s total debt at about $40bn compared with $135bn eight years ago, and said Iraq may sell its first bonds since 2006 next year.

However, Daniel Broby, chief investment officer at London-based Silk Invest, said the yield of about 6.7% just isn’t attractive enough.

There is also the vexed issue of bilateral Arab debt, owed mainly to Kuwait and Saudi Arabia. Mr Sterne says this debt is not being serviced but, equally, neither is it being enforced by the two Arab neighbours.

The economic outlook is based on plans to increase oil production to 12m barrels a day within six years, from the present 2.6m bpd, but many analysts are sceptical that this will be achieved.

The IMF estimates Iraq’s economy will grow 9.6 per cent this year and 12.6 per cent in 2012 as oil production rises. Inflation is forecast at 5 per cent for the next two years.

"It’s a matter of security and once that is solved, really the sky’s the limit in terms of the growth potential for Iraq, in terms of the demographics and the supply-demand issue,” says Sherif Salem, portfolio manager at Invest AD. “It’s going to be a bumpy road in the short term but in the longer term, given Iraq’s importance, it is in people’s interests that Iraq gets through this."

(Source: Financial Times)

While prospects that Iraq could reach its ambitious oil production targets are fading, political instability in a number of oil-producing countries are having adverse effects on OPEC production and spare capacity, according to a new study by the Baker Institute.

The report says that the international community is very likely to be reliant on Iraq and Saudi Arabia to bring more oil to international markets over the coming years if the world is to avert another supply crunch like that which occurred in 2008.

The study, by Meghan O'Sullivan, concludes that Iraq and Saudi Arabia may have difficulty meeting rising demand for oil in the near term.

Please click here to download the full report.

The fifth annual Iraq Petroleum conference took place at the Landmark Hotel, London on the on the 12-14 July 2011, focusing on the next phase of Iraq’s oil and gas resource development as well as current and future upstream opportunities.

As Rt Lord Howell of Guildford, Minister of State for the UK Foreign and Commonwealth Office stated during the opening session of Iraq Petroleum 2011. “Iraq has the world’s third largest proven oil reserves. Iraq is the only country, besides Saudi Arabia, with the potential to massively increase conventional oil production. It currently produces nearly 3 million barrels per day and the government has ambitious plans to increase production to 12 million barrels over the next decade”

The conference brought together a global network of over 300 senior level professionals from 29 countries in over 15 sectors of the oil and gas industry and provided a meeting place for industry experts, connecting delegates and new players in the Iraqi oil and gas marketplace.

The conference highlighted the tremendous potential for opportunities and the need for international expertise in the development of Iraq’s oil and gas industry. With the conference room full until the end of the last session, delegates showed enthusiasm in discussing the future opportunities in the industry.

H.E Ali Al Dabagh assured the conference that the Iraqi Government shall be the guarantor of all contracts that were awarded to the IOCs and shall support their efforts and cooperate with them through their respective JMCs to ensure that they succeed and achieve the objectives of each contract and to pay them back their investments and profits as and when they become due in accordance with the terms of their respective contracts.

Industry support for the conference included Upstream Principal Sponsor: Crescent Petroleum, Service Principal Sponsor: Baker Hughes and conference sponsors ExxonMobil, Statoil, Shell, Total, Oxy, ENI, Jawar Al Khaleej Shipping L.L.C, Oil Serv, Huawei, IAG, Olive Group, Mott MacDonald, Mubadala, Standard Chartered, Technology Partners, SKA Group, and OIEC.

For further information visit: http://www.cwciraqpetroleum.com/

Foreign Office Minister Lord Howell said that Iraq's natural resources have the potential to help tackle the world's energy challenge when he spoke at the Iraq Petroleum Conference.

Ladies and Gentlemen

I am delighted to be back at the Iraq petroleum conference addressing such a distinguished audience, and I would like to thank Dr. Alirio Parra and CWC Group for the opportunity to be here today.

Rising energy prices and the Arab Spring have raised important questions across the Middle East and presented challenges for the world. Today I would like to share with you some thoughts about Iraq’s potential to help meet these challenges through leadership in the Middle East, and how it can be a game-changer in energy markets. I foresee this and similar conferences playing a part in developing this potential and in catalysing investment and decisions about investment in Iraq.

The geopolitical challenge

At the end of May I visited a number of Gulf States, where oil prices and energy security were high on the agenda. In a region which contains the planet’s largest oil reserves, the Arab Spring in a variety of forms has become interlinked with energy issues.

Few could deny the legitimacy of a people seeking freedom – seeking a voice to steer their future.  But few could have predicted the pace of change we have seen brought by the so-called Arab Spring. At a time of fast-moving events, it must also be a time for wise reflection on how best to meet the aspirations of the Arab people. There are no simple answers. Those who offer simple answers are misleading us,as there are many ways for nations to achieve and maintain legitimacy, through their own pattern of participation and consent.

But governments that use violence to try and extinguish the legitimate aspirations of their peoples are destined to fail. The lasting answer to the challenges and instabilities of the Arab Spring is through reform, not repression. We have no doubt about that at all.

A former U.S. Army major has admitted that he took $250,000 in bribes from two companies that wanted contracts to supply the military with bottled water in Iraq and Afghanistan, according to Westlaw Journals.

Derrick L. Shoemake, aged 49, admitted accepting the bribes while serving as a contracting officer’s representative in Kuwait between October 2004 and August 2006, the Justice Department said in June 13 statement.

Shoemake entered his plea to bribery charges before Judge Dolly M. Gee in the U.S. District Court for the Central District of California.

Prosecutors said in an April 2010 criminal information that while stationed at Camp Arifjan in Kuwait, Shoemake was responsible for setting up deliveries of bottled water to be used by U.S. troops in Iraq.

The charges said Shoemake began accepting payments in August 2005 from an employee of an unidentified Saudi company that sought to supply water to the troops.

The employee paid Shoemake U.S. cash in frequent installments ranging between $10,000 and $15,000, the Justice Department said.

In addition, one of the principals of the Saudi company traveled to Los Angeles in 2006 in order to give Shoemake’s wife some of the illicit payments, according to prosecutors.

The Justice Department said the Saudi firm paid Shoemake a total of $215,000 for the contract.

The charges also say an unidentified Indian company paid Shoemake $35,000 in the summer of 2005 in order to win a bottled water supply contract in Afghanistan. Prosecutors said Shoemake accepted a total of $250,000 from both companies.

As part of his guilty plea, Shoemake agreed to return the money to the government, the Justice Department said. He faces a significant prison term and fine, according to prosecutors.

(Source: Westlaw Journals)

The FMG Iraq Fund has grown by + 25% since it began in May 2010. Year to Date the fund is up + 10% and in the month of June it was up by an estimated + 4.1%.

The Fund invests mainly in stocks listed on the Iraq Stock Exchange (ISX) and to a lesser degree in off shore listed shares that derive a significant part of their business from Iraq.

Johan Kahm, founder of FMG, who visited Iraq in June 2011 and said upon his return:

“Iraq is turning the corner for the better. We are looking at a unique investment opportunity where we hope to make outsized returns over the next 5-10 years. Our decision to launch the Iraq Fund a year ago seems to have been well timed. Iraq sits as the third largest proven oil reserves in the world and has the potential to overtake Saudi Arabia as the world’s largest oil producer.”

Henrik Kahm, who is managing the Iraq Fund, said:

“Over the last year there has been a strong performance of the Iraq Fund thanks to the successful efforts to stabilise and rebuilt Iraq. The Fund offers investors an easy way to participate in the Iraqi growth story and is positioned to take advantage of the growth derived from post-war reconstruction and massive oil production expansion.”

The following facts are supporting the investment opportunities in the Iraq:

• Iraq is currently producing 2.7 million barrels of oil per day planning for 12 million by 2015.

• A country with 143 billion barrels of Proven Reserves - only 20% of Iraq has been explored for oil.

• Iraq has $46bn in Cash Reserves and growing.

• The Economy is expected to double (from $75bn to $150bn) by 2015. The new democracy is standing up well to its reconstruction challenges. $186 billion infrastructure spending plan. Should the price of oil be over $100 per barrel, then the infrastructure spending can be expected to increase significantly.

• Expected GDP growth of some 7% in 2011 (IMF).

• The current market cap of the Iraq Stock Exchange (ISX)­ is less than USD 4bn, compared to its neighbour Saudi Arabia, that has a market cap 85 times larger despite only 1.9 times more oil reserves.

• In 1995 FMG launched one of the very first Russia Funds and the early investors have now made 2000% returns. Today a similar opportunity has unfolded. Iraq is emerging as a very exciting frontier market.

Although usually only open to larger institutional type investors, FMG provides investors with the opportunity to invest with a minimum investment of US $10,000. (£6,000)

Investment into the Iraq Fund is an attractive proposition for UK investors, as gains will be taxed as capital gains at 28% and not as income tax rate at 50% as the fund has Her Majesties Revenue and Customs “Reporting Status”.

Previously called the FMG Special Opportunity Fund it has now been renamed due to the nature of the investments as the FMG Iraq Fund.

(Source: FMG)

The passing of control of the Development Fund for Iraq (DFI) to the Iraqi government may make the assets vulnerable to seizure.

A lawyer for Kuwait Airways told Bloomberg in an interview that “the class of assets against which we can seek enforcement has expanded.”

Christopher Gooding (pictured), a partner at London-based Fasken Martineau, said:

“Despite pleas to the contrary, Iraq is an extremely rich country ... Its trading assets are available worldwide, and it remains our intention to seize Iraqi assets whenever and wherever they are available.”

Iraq amassed about $130 billion in debt under Hussein; it owes Kuwait about $21 billion and carries a significant debt to Qatar and Saudi Arabia. It continues to pay into the UN compensation fund.

“For anyone with unpaid debts with Iraq, this is a very significant development,” Stephen Fietta, a solicitor at Volterra Fietta in London, said in an interview.

Most legal jurisdictions recognize the ability of creditors to seize debtors’ assets as a means of debt enforcement. A sophisticated creditor may be able to track Iraqi cargo and try to seize it as it enters a port, or upon its discharge, he said.

“The risk might be minimized if the legal title was transferred by the Iraqi government before the oil was shipped,” Fietta said. “So there are ways around this, but the constant risk of seizure and enforcement can become a real headache for sovereign debtors, just as for private ones.”

(Sources: Bloomberg, UPI)

Iraq will be one of the main revenue contributors to Schlumberger's Middle East operations and will be bigger than most of the company's other markets in the region with the exception of Saudi Arabia, Chief Executive Andrew Gould (pictured) told the Financial Times on Tuesday.

"Next year Iraq will be really big", said Gould.

The company has five rigs actively drilling, for BP and ExxonMobil among others, and will have 10 in operation by early next year. It has 450 employees on the ground and expects the number to rise to 900 by the end of the year.

(Source: Financial Times)

Petrel Resources has announced its preliminary results for the year ended 31st December 2010:

Highlights:

• The Subba and Luhais oil field development contract in Iraq is virtually completed.
• Petrel has received all US$7 million due from the sale of the Company's shareholding in Subba and Luhais. Petrel maintains a 10% profit interest.
• Petrel has applied to participate in the 4^th Oil Licencing Round in Iraq.
• The Company await parliament approval on the Tano 2A licence block in Ghana where Petrel holds a 30% interest.
• Reprocessing of over 760 kilometres of seismic lines on Tano 2A has identified a number of promising areas.
• Petrel has submitted applications for blocks in the Porcupine Basin area offshore Ireland.
• The company has over US$6 million in cash.

John Teeling, Chairman, commented:

"Waiting is frustrating for shareholders, management and employees. We are waiting for necessary approvals in Ghana on the Tano 2A block. We are waiting for a hydrocarbon law in Iraq to clarify our position on the Western Desert block 6. We are an applicant in the current licencing round in Iraq, but that too will take time. We have gone back to our 1980s origins by using our extensive Irish offshore database to apply for blocks in the new licencing round. We are well funded and ready to move once necessary approvals are obtained."

Statement Accompanying the Preliminary Results:

Petrel has been in existence for almost 30 years. This will undoubtedly come as a surprise to many shareholders who know only of our Iraqi activities. It was set up in 1982 to explore for oil offshore Ireland - but that venture failed. Following an abortive and expensive incursion into US oil and gas, the company value was virtually written off. David Horgan, currently the Managing Director, bought the shell in the mid 1990s and financed it, initially for African exploration in Namibia and Uganda. Then an opportunity opened in 1999 to go into Iraq, which was and is the best hydrocarbon province in the world. We exited Africa.

In Iraq we worked with the Ministry of Oil under the Saddam regime. Since 2003 operating in Iraq has become more difficult, complicated and dangerous. In the last eight years Iraqi oil development has languished with production levels only now getting back to pre-war levels. There is no clear set of rules, there is no new Hydrocarbon Law. We had an early success getting access to a 10,000 sq km block in the Western Desert and a very substantial success in 2005 with the award of the Subba and Luhais US$197 million (Engineering Procurement and Supervision of Construction) development contract to a Petrel/Makman partnership. But repeated changes in rules and personnel made it difficult to operate. Nevertheless we obtained two further Technical Cooperation Agreements in Iraq, to produce evaluators of both the Merjan and Dhurfiya fields. The world's supermajors have rushed in and accepted service contracts on sub-economic terms.