Iraq Oil Report

Plus:
*A recap of Iraq’s current and potential oil sector
*Petrel Resources gets Iraq oil extension, ready for bids
*Reliance Industries staying out
*Electricity Ministry demands more money to provide power
*Much, much more…

A coalition of U.S. veterans, unions and activists, who fear Iraq’s draft oil law is part of an orchestrated effort to turn Iraq’s oil reserves over to private international oil companies, said at a press conference in Washington Friday that such pressure should be kept up.

And they’re not alone. On Saturday there are similar actions to be taken around in England. Iraq’s tens of thousands strong oil unions, as well as other political parties and civil society organizations share their concern.

“Iraq oil is not war loot for the oil companies,” said Trina Zahller of Oil Change International. She said any oil law or long-term oil contracts made under occupation would be illegitimate.

“It seems like the oil industry is becoming ever more brazen” in entering the Iraq oil sector, she said, referring to statements made by top officials at Shell and ExxonMobil last week.

A draft law, stuck in Parliament, would pave the way, at least in part, to denationalizing Iraq’s oil sector, allowing international oil companies to sign long-term contracts. This is seen, by some, as a way to infuse the oil sector with much needed cash.
“Iraq needs more than anything is rule of law and will never get it under martial law,” said Adam Kokesh of Iraq Veterans Against the War, adding military and economic occupation is “inherently tied.”

Gene Bruskin of U.S. Labor Against the War, a coalition of U.S. unions with membership of around 3 million, said Iraq’s future success depends on Iraq keeping control of its oil resources and that to turn control over to oil companies and denationalize “is a total disaster.”

Halliburton was forced off a refinery project in 2003 by Iraq’s workers, who reformed their union despite still-valid Saddam Hussein-era laws preventing it. The company further irked Iraqis by bringing in foreign workers.

“Iraqi workers have been fighting for independence, the rights of union workers and against privatization ever since,” Bruskin said.
“We don’t propose to have the answer to it,” Zahller said during the march to a park in front of the White House, where activists rolled symbolic oil drums with “hands off Iraqi oil” written on the sides.

Zahller said Iraqis and their government should make the decision on how to govern the oil, but a sovereign decision can’t be made under occupation. “Whatever they determine is best, we’ll get behind that.”

At the same time, on the other side of the park, directly in front of the White House, about 30 Iraqis, mostly from Michigan, were waving Iraqi flags and carrying signs to “stop killing innocent Iraqis.”

The two protests were separate, one didn’t know of the other.

“We are American,” said Mustafa Alsaffi of the Global Voice of Peace Committee and the Samara Protest Committee. “Stop supplying Saudi Arabia,” he urged the U.S. government. “All the terrorists are coming from Saudi Arabia.”

The group blamed al-Qaida for bombing the holy mosques in Samara and instigating sectarian violence. The group was holding its fifth such protest since June ’07.

“They say they are Muslim,” Alsaffi said about al-Qaida, pointing out 15 of the 19 9/11 hijackers were Saudi, “but they are not.”

A primer on Iraq’s current and potential oil sector by CNN’s Erin Mclaughlin. While a quality quick read, one point of clarification are necessary:

The pending legislation is two pronged: the Oil and Investment Law and the Revenue Sharing Law. The Revenue Sharing Law, which will outline how the wealth will be divided between Sunnis, Shias and Kurds, is the more divisive of the two.

Actually, it’s four-pronged. There is a law that would reconstitute the Iraqi National Oil Company, presumably making it the lead quasi-government body to develop the Iraqi oil sector. And the law reorganizing the Ministry of Oil, moving it away from its current role in developing the oil and more to a regulatory role.

Lionel Beehner and Greg Bruno for the Council on Foreign Relations write a backgrounder on issues revolving around the Iraq oil law.

Ireland’s Petrel Resources has received a one-year extension on its Iraq oil project and has registered for future deals, the company said. The extension is in relation to the agreement to provide training and technology to Iraq’s Oil Ministry for the Marjan oil field, UPI reports. It is also moving forward on a project to assist the Iraqi State Co. for Oil Projects in developing the Subba & Luhais fields in southern Iraq. Petrel’s contract, signed in 2005, is a $197 million deal to help engineer, procure equipment and supervise construction of the fields’ expected oil and natural gas production.

More on Petrel from Jonathan Saul in Reuters and Thomson Financial.

India’s Reliance Industries did not pre-register for upcoming Iraqi oil bids, though deals with Iraqi Kurdistan may have disqualified it anyway, UPI reports. Iraq’s national Oil Ministry gave Feb. 18 as a deadline for oil companies interested in Iraqi oil tenders to pre-register. The world’s largest oil firms as well as an estimated more than 60 others did, according to unofficial tallies. “We analyzed the situation and decided not to make any further commitment in Iraq as of now,” a Reliance official told The Economic Times.

DNO, the Norwegian oil firm with assets in Iraqi Kurdistan, says it needs a route to send the oil if it’s to increase production.

“In 2008, DNO is targeting a substantial resource potential through an extensive exploration program and a step change in production could be achieved once export permit is in place in Kurdistan,” Managing Director Helge Eide said in a company statement, UPI reports. “During the last three months of 2007 we have delivered important operational results in Kurdistan. Re-testing of the Tawke-1 discovery well turned this well into the best producer to date and we revised the Tawke gross reserves by 130 percent. In addition we have re-commenced exploration activities in other areas of the PSAs in Kurdistan.”

A top European Commission energy adviser is in Baghdad to discuss an Iraq-EU “strategic partnership,” which the two sides announced earlier this month, UPI reports. Faouzi Bensarsa is building on joint energy cooperation plans, which include developing Iraqi natural gas for the Arab gas pipeline to feed European consumers. Ben Lando reported for UPI earlier this month on Europe’s hunger for Iraqi oil and gas.

Iraq’s Electricity Ministry is asking Baghdad to give it another $2.6 billion this year to repair and build new power stations, UPI reports. “Baghdad is getting only 1,000 megawatts,” Karim Wahid Hasan told a news conference in Baghdad, “instead of the 2,500 megawatts it needs as its power stations are not producing electricity because the eight oil and gas pipelines that supply them have been destroyed.”

More on the Minister’s plea for more funds by AFP.

Ukraine has imported its first ever shipment of Iraqi oil, a move due to a shortage of Russian crude, UPI reports. Ukrtatnafta, operator of the Kremenchug Oil Refinery, Ukraine’s largest, imported 586,400 barrels of Kirkuk oil this year, said Sergey Kuyun, executive director of the Ukraine energy consulting firm UPECO.

Iraq’s Kurds are moving towards taking control of the vital oil city of Kirkuk as one of the most explosive disputes bequeathed by Saddam Hussein nears a resolution, Damien McElroy reports for The Telegraph. It’s a good explanation of the situation in Kirkuk, minus the tone that it’s a foregone conclusion not only that there will be referendum to decide the disputed territory’s future, but that the choice will be simply to be or not to be part of the KRG.

Turkey’s mass invasion into northern Iraq is monumental for two reasons:

First, it’s the largest such move in more than a decade, Mark Bentley reports for Bloomberg News. Turkish troops brokered an end to violence between the Barzani and Talabani led factions of the Kurdish leadership. And it still maintains a base with troops in northern Iraq.

Second, Kurdish security forces, the Peshmerga, basically made the Turks look like punks for attempting to enter their territory. Leila Fadel and Yasseen Taha report for McClatchy Newspapers the Peshmerga stopped Turkish troops in tanks and armored vehicles, forced them back into their base, formed a perimeter around them, and threatened to start firing.

Turkey’s invasion into northern Iraq, despite being manhandled by the mightier Peshmerga, has set crude prices higher, Brian Baskin reports for The Wall Street Journal.

Iraq’s war widows struggle for financial survival, by Tony Perry and Tina Susman in The Los Angeles Times.

The rumor swept through this border town early in the morning, and soon several dozen women were clamoring outside a small government office.

The rumor proved false, as it had on many other days. There would be no distribution of pension payments for the Iraqi widows. Often, months pass between payments, with no provisions made for back payments and no explanations given for the gaps.

“I have nothing,” one widow cried to a government employee peeping out from a half-open door.

“My children need help,” cried another.

Of its unmet social needs, the central government’s failure to follow through on promises made to these widows is one of the most visible. Scenes like the one outside the Social Guardship Net office in Qaim are common.

“These protests are taking place in all the (18) provinces,” said Samira Musawi, a member of parliament and head of its committee on women and children. She has submitted legislation to provide housing, education and job training for widows and other low-income women, although it has yet to be acted on. …

The Iraq Press Roundup, a selection of Iraq’s editorial pages, by UPI’s Hiba Dawood.

As Iraq’s security situation deteriorates in the midst of resurgent violence, an increase in internal and external pressures facing the Awakening (Sahwa) Movement may jeopardize the prospects and goals set forth in the U.S. counter-insurgency strategy created by U.S. General David Petraeus, Ramzy Mardini writes in The Jamestown Foundation’s Terrorism Monitor.

Here in western Iraq on the border with Syria, there are signs of recovery amid wreckage left from the chaos brought by insurgents in Husaybah and such major battleground cities as Fallouja and Ramadi, Tony Perry reports for the Los Angeles Times. Although the central government in Baghdad and much of this war-torn nation is beset by sectarian and geographic rivalries, the U.S. government’s foreign-aid program efforts here are quietly showing what a little money can do. And, while still in their infancy, these efforts are catching on.

The Iraq Experience Project, part of the U.S. Institute of Peace’s Oral Histories Project on Stability Operations, which collects the full text of interviews with individuals involved in stability operations, to draw lessons learned and address the challenges of post-conflict intervention.
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