Iraq Oil Report

PLUS:
*Status of Baiji after fire
*Lukoil in Iraq
*Political dealing from Baghdad to Irbil
*Yahia Said: “Genuine progress on national reconciliation, economic reconstruction and the sharing of oil wealth requires the replacement of these discredited politicians with local and parliamentary leaders.”

A technical glitch with our host has seriously delayed alerts to subscribers of Iraq Oil Report’s excellent update on Tuesday, which includes:
*Explosion, fire at largest refinery Baiji
*Shiite/Sunni/Kurd deal-making and fighting over oil, Kirkuk
*Basra dismisses 1,000 police
*From Mothers to Martyrs
Click HERE to read it.

Iraq’s largest oil refinery, in Baiji, has rebounded from Monday’s fire and is handling 200,000 barrels per day, Bloomberg reports. It’s capacity is 310,000 bpd.

More by Ahmed Rasheed for Reuters.

Reliance Industries will register with Iraq’s Oil Ministry, a move necessary to win any deals in Iraq’s oil sector, Reuters reports. However, Iraq’s Oil Ministry says any company which has signed a separate oil deal with Iraq’s Kurdistan Regional Government will be blacklisted from Iraq.
Reliance signed with the KRG in November, and has already been warned by Shahristani.

Here’s more on the deadline imposed on all prospective firms wanting into Iraq’s vast reserves.

The word is being spread with the help of the U.S. Commerce Department’s Iraq Investment and Reconstruction Task Force.

The IIRTF’s press release included links to pre-registration forms:

The Oil Ministry of Iraq has begun pre-registration for its upcoming tendering of upstream licensing production-sharing agreements (PSAs) and possibly technical service agreements (TSAs), to begin later this year. Comprehensive, detailed information on the necessary documents for pre-registration can be found in the official notice from the Ministry of Oil. Please note the English portion begins on page 9 of the pdf. The deadline is January 31, 2008.

Faleh al-Khayat of Platts has more.

Lukoil Out at of Iraq’s West Qurna, For Now, Pavel Romanov writes in Energy Tribune.

Although Lukoil appears to be out of the bidding, it still holds some valuable cards: the geological information it collected on West Qurna during the 1980s. And it also appears to have the backing of the Putin government, which has reportedly threatened to withhold agreement on Iraq’s debt relief package unless Iraq ratifies the Lukoil deal. The Iraq oil ministry is planning to offer new oil tenders this year. That may be the best opportunity for ConocoPhillips and Lukoil to regain a share of West Qurna.

Security, Society & Politics

Iraq needs a ‘political surge’, the Revenue Watch Institute’s Middle East director, Yahia Said, writes in The Times.

…But even as quiet corners of Iraq spring back to life, decision-makers in Baghdad’s fortified Green Zone remain trapped in sectarian squabbling that threatens to derail these precious gains.
Genuine progress on national reconciliation, economic reconstruction and the sharing of oil wealth requires the replacement of these discredited politicians with local and parliamentary leaders. Overdue provincial elections under U.S. protection and UN supervision can pave the way. …

The stalled progress of Iraq’s oil law is another example of the factionalism that blocks crucial decisions on reconstruction. Two years of painstaking work produced a genuine dialogue among Iraqis on how to manage and share the country’s wealth. Compromises were achieved, which offered the central government more power over the management of the industry in exchange for a transparent revenue-distribution formula.
A final agreement would have paved the way for a power-sharing arrangement, and increased both domestic and foreign investment. But the deal collapsed when it arrived in front of the political leaders in Baghdad and Erbil. Meanwhile, oil output has barely returned to pre-war levels. …

Worse yet, by choosing personal political survival over core national interests, Iraqi leaders could intensify separatist forces, as demonstrated by Kurdistan’s recent oil adventures. Impatient with the slow pace of negotiations on the oil law, Kurdish leaders independently signed a dozen exploration and development contracts in a process that was neither transparent nor competitive. Many Iraqi oil experts have condemned the deal, whose terms exemplify the kind of free-for-all that hurts not only Iraq’s economic interests but its integrity as a nation. …

By settling for enough security to extract wealth and shore up the current leadership, the United States lowers the bar on what is expected from those leaders, while betraying the hopes for a nation that is rebuilt, and not simply pacified.

A joint pact document adopted by several political parties might be announced this week, the Alsumaria TV network reports.The pact includes joint political agreements on major issues such as Kirkuk and Constitution Article 140 in addition to a timetable for multinational forces withdrawal from Iraq in addition to the abstention of signing security agreements with the US.

Iraqi Kurdistan’s political leadership have apparently made a deal on who will be leading various key posts in the coming years, Ilnur Cevik reports for The New Anatolian.
The two leading political parties – the Kurdistan Democratic Party, led by the Barzani family, and the Patriotic Union of Kurdistan, led by the Talabani family – had agreed to split the top positions for the past few years.
Massoud Barzani – President of the KRG
Nechirvan Barzani – Prime Minister of the KRG
Meanwhile the PUK had taken a commanding role in the national government, with Jalal Talabani President of Iraq, Barham Salih Deputy Prime Minister of Iraq.

The two leaders decided to keep Nechirvan Barzani as prime minister for another term and also allow Adnan Mufti who is the regional parliament speaker from the PUK to remain in office.
According to the original arrangement Nechirvan Barzani was supposed to be replaced by a PUK member and Adnan Mufti by a KDP official.

The PUK is also running the KRG’s Washington office, with Talabani’s son, Qubad, as its leader. There were rumors of a major switching of power positions but it appears to have been at least delayed.

All eyes on the Iraqi army: Training efforts continue amid U.S. hopes that the security forces will be able to maintain gains cited in security. But the troops have had a mixed track record, Tina Susman reports for the Los Angeles Times.

Killer of U.S. Soldiers Becomes a Hero: The recent killing of two U.S. soldiers by their Iraqi colleague has raised disturbing questions about U.S. military relations with the Iraqis they work with, Ali al-Fadhily and Dahr Jamail report for the Inter Press Service news agency.

Iraq’s Economy

Parts of Iraq are in the grip of a drought, adding to woes of farmers already battling security problems, poor power supplies, saline soils and lack of machinery, AFP reports.

U.S. Deputy Under Secretary of Defense for Business Transformation Paul Brinkley will be keynote speaker at the Iraq Development Program’s Iraq Defense, Security & Communications Summit next month in Dubai.

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