Plus:
*Lukoil blames Shahristani for West Qurna deal
*March deadline for first bids on oil and gas fields
*December date for announcing second round
*Oil and Electricity ministries combine forces on Mussaib topping plant
* Alive in Baghdad: Baghdad Security Plan Burdens Residents
* Turkey and the PKK, SOFA and more
Recurrent violence in oil-rich parts of Nigeria may provide a sobering lesson for oil companies hoping to work in Iraq - a place that is much more dangerous despite the fact that attacks are at their lowest level in more than four years, Sebastian Abbot writes for The Associated Press.
Abbot compares violence and its effects on oil production in Nigeria to Iraq, however, the ability for international oil companies to work peacefully in Iraq is more nuanced than the Nigeria story.
If the local communities in Nigeria would have seen more of a benefit from hydrocarbon exploration and production (jobs, overall investment, no pollution, etc.), the likelihood of armed groups forming and growing is greatly reduced. Instead companies became complicit and enabling of government corruption. Thus Nigeria oil and gas taken offline.
In Iraq, however, there are many more factors to be taken into consideration – though the Nigeria experience will be a lesson learned or lost. Iraq’s domestic oil sector – though badly damaged in human and infrastructure capacity due to decades of mismanagement and war – is still a source of pride for Iraqis in general and the workers in that sector specifically. Peaceful investment in Iraq’s oil and gas sectors must account for this powerful grassroots factor.
The current facts on the ground are also important factors, namely: internal disputes over how the hydrocarbons sector should be managed (political and ethnic disputes over the future of Iraq) have delayed the first post-Saddam legal guidelines for investment; political parties, ministries and individuals of various levels have not overcome the corruption issue; militias of varying connections to political parties, individuals and black market industries are not going to be cut out of the deal without a fight.
The head of Russia’s Lukoil says Iraq Oil Minister Hussain al-Shahristani is to blame for the company being kept from a deal to develop the West Qurna oil field, Richard Mably and Robin Paxton report for Reuters. CEO Vagit Alekperov said Russia’s waving of nearly $12 billion in Saddam-era debt should have paved the road for the deal.
“We have offered our expertise and, if there are political aspects, to remove them. Unfortunately the (Iraqi) Energy Ministry has taken no steps,” said Alekperov.
Lukoil says the 1997 deal is still valid and that international sanctions forced it to be stalled in 2002. Shahristani has maintained the Iraq government line that the previous regime’s Oil Ministry canceled the deal.
Iraq has set a March 2009 deadline for companies to bid on the first round of oil and gas fields that will officially be put to tender next Monday, Mariam Karouny reports for Reuters. Details of the second round of oil and gas fields put up for international investment will take place in December.
The Ministries of Electricity and Oil have agreed to a joint project to run a refinery located at the Mussaib power plant, which will provide fuel to keep the plant generating electricity. The USAID-funded Tatweer project says the plant generates electricity to 10 percent of the country.
When the Ministry of Electricity first installed the plant in 2004, not only did it not have the proper training and personnel to operate the plant, but it irked the Ministry of Oil, under whose domain oil refineries fall. Both Ministries have been at odds over the energy situation in Iraq, with one blaming the other for not generating necessary power to operate the oil infrastructure, and the other claiming it doesn’t receive enough fuel. Now the two Ministries will cooperate on training and operation of the plant.
The Ministry of Electricity announced that the country’s need of energy is estimated at 11 thousand megawatts to reach self-sufficiency, and what is produced now in power plants over five thousand megawatts, Iraq Directory reports.
Alive in Baghdad: Baghdad Security Plan Burdens Residents
The ongoing fighting in Baghdad pushed the Iraqi and US forces to establish checkpoints all over the city to secure the roads and neighborhoods. Controlling the cars inside the city and preventing them from distributing weapons or bombs was the first aim of these checkpoints.
In the early hours of October 7, Turkish warplanes struck at suspected positions of the Kurdistan Workers Party (PKK) in northern Iraq for the third day in row as Turkey continued to reel from the October 3 PKK attack on a military outpost in the village of Aktutun on the country’s border with Iraq, Gareth Jenkins writes in the Eurasia Daily Monitor.Fears that the Turkish authorities are failing to defeat the PKK have been further fueled by photographs of the inhabitants of Aktutun carrying their belongings on their backs as they abandon the village to seek refuge with relatives in a nearby town. During the PKK’s first insurgency from 1984 to 1999, more than 3,500 villages in southeastern Turkey were abandoned. Most of their inhabitants were driven from their homes by the Turkish military as part of scorched earth policy to deny the PKK access to food and shelter. In recent years, the Turkish government has been attempting, usually unsuccessfully, to persuade people to return. On the same day as the inhabitants of Aktutun abandoned their village, Justice Minister Mehmet Ali Sahin announced that the TGS and the Gendarmerie had asked the government for an increase in their legal powers and the re-imposition of restrictions on the rights of detainees.
The US and Iraq are “very close” to a deal on US troops staying in Iraq after 2008, Iraq’s foreign minister has said after talks with a top US envoy, the BBC reports. But speaking at a joint news conference with John Negroponte, Hoshyar Zebari warned that “hectic political meetings” remained before it could be finalized.
A top Iranian military official on Tuesday urged Iraq to reject a proposed U.S.-Iraqi security deal, calling the agreement a “disgrace,” Ali Akbar Dareini reports for the AP. Gen. Masoud Jazayeri’s comments came as Iraq’s parliamentary speaker arrived in Tehran to discuss the deal and as Iraq’s foreign minister told reporters in Baghdad that Iraq and the U.S. were close to reaching an agreement, though obstacles remain. Iran, which is close to Shiite parties who dominate Iraq’s government, has repeatedly expressed its opposition to any security deal that allows American forces to remain in neighboring Iraq. Tehran contends that the American presence is the cause of instability in Iraq and the region.
The Arab League dispatched an ambassador to Baghdad on Monday, the latest sign of progress in the Iraqi and US effort to ease the country’s diplomatic isolation, Mary Beth Sheridan reports for the Financial Times. Hani Khilaf arrived a day after the first visit by an Egyptian foreign minister in 18 years. The previous envoy of the 22-member Arab League quit in January 2007, blasting Arab countries for not doing more to ease Iraqi suffering.
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