Saudi Arabia looks to Expand its Footprint in Iraq

By Ali Mamouri for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Following Iraqi Prime Minister Haider al-Abadi’s two visits to Saudi Arabia last year, Saudi Crown Prince Mohammed bin Salman is set to visit Iraq soon, according to Iraqi parliamentarian Saadoun al-Dulaimi.

Although neither Riyadh nor Baghdad have officially announced the visit, Dulaimi said in a March 12 tweet that Prince Mohammed will spend two days in Iraq, first meeting with Abadi in Baghdad to “sign agreements,” followed by a visit to Najaf to meet religious leaders.

Saudi Arabia was scheduled to reopen its consulate in the oil-rich city of Basra, which is adjacent to Iran, in March, but this was delayed for administrative reasons. Some reports say that Mohammed may open the consulates in Basra and Najaf, the Shiite religious center that is home to top Shiite clerics, during his upcoming visit to Iraq.

Meanwhile, the Saudi Embassy in Iraq is in the process of setting up the consulate office at the Sheraton Hotel in Basra. The consulate was closed in 1990 in the wake of the Gulf crisis that erupted during the regime of Saddam Hussein, and remained closed as a result of tensions in Saudi-Iraqi relations.

The Saudi kingdom opened a consulate in Erbil, the capital of the semi-autonomous Kurdistan Region of Iraq, in early 2016.

The decisions to expand Saudi Arabia’s diplomatic representation in Iraq come as part of a broader framework to strengthen the official political relations between the two governments. Saudi Arabia is seeking to establish economic and social bridges between the two countries in various fields.

Abdul Rahman al-Shahri, head of the Saudi delegation responsible for the establishment of the consulate in Basra, said that these measures are carried out to “provide services and incentives to both religious pilgrims and economic delegations between the two countries.”

Abdul Aziz al-Shammari, Saudi ambassador to Iraq, said in a statement in January, “Saudi Arabia is mostly interested in developing relations between the two countries in all areas that serve their aspirations.”

In late February, a friendly soccer game was held between Saudi Arabia and Iraq in the city of Basra, the first between the two countries in three decades. The game was attended by Saudi delegations and a large crowd of Iraqi fans.

The media office of Abadi said in a statement March 5 that the prime minister had received a phone call from Saudi King Salman bin Abdulaziz Al Saud, in which the latter pledged to build a soccer stadium in Baghdad for 100,000 spectators. It was later announced that Saudi Arabia would increase the number of seats to 135,000.

The statement said that “King Salman expressed his readiness and commitment to expand the positive relations between Iraq and Saudi Arabia at the economic, commercial, popular and cultural levels, as well as all levels of interest to both countries.”

Saudi companies, most recently the Saudi Basic Industries Corporation, one of the world’s leading petrochemicals companies, have been opening offices in Baghdad and Basra to expand economic exchange between the two countries.

Saudi Arabia is focusing its attention on Basra because it is the richest city in Iraq with the country’s largest oil fields and gateway to the Persian Gulf. It is also the most populous city after Baghdad, is adjacent to the Iranian border and home to an overwhelming majority of Shiites who share the same tribal and ethnic origins with Saudi tribes. In addition, many Saudi and Basra families are linked through marriage.

Saudi Arabia is also receiving Shiite figures who are viewed as independent of Iran. These include Sadrist movement leader Muqtada al-Sadr, who visited Saudi Arabia last year and met with King Salman and Prince Mohammed. He was warmly received amid much fanfare.

Saudi news sites, most notably Al-Arabiya, are refraining from criticizing supreme Shiite cleric Ali al-Sistani, because his views are independent from those of Tehran and has broad influence among Iraqi Shiites.

All this has been a matter of concern for Iran, which has allegedly mobilized parties to raise banners in Basra condemning the opening of the Saudi Consulate and the various economic and sporting activities.

The State of Law Coalition led by former Prime Minister Nouri al-Maliki, who is close to Iran, opposes Saudi Arabia’s opening of a consulate in Najaf.

Iraq is seemingly determined to pursue rapprochement and cooperation with Saudi Arabia, and is organizing regular visits by political, economic and media delegations. These included Abadi’s visit to Saudi Arabia last October, during which the memorandum of establishment of the Saudi-Iraqi Coordination Council was signed to develop relations between the two countries.

Interior Minister Qasim al-Araji also visited Saudi Arabia last year, and Abadi insisted on receiving Saudi delegations even if they were not high level. In February, for instance, he received the Saudi media delegation that visited Iraq at the invitation of the Iraqi Journalists Union.

In October, Saudi Arabia resumed its flights to Iraq after 27 years, and it opened in October 2017 its border crossing in southern Iraq to expand economic travel and increase tourist and religious travel between the two sides.

The first initiatives to expand relations between the two countries were directly sponsored by the United States with Secretary of State Rex Tillerson attending the meeting of the establishment of the Saudi-Iraqi Coordination Council in Riyadh in October.

The Iraqi-Saudi rapprochement appears to take place in the context of the new US policy that followed the support garnered by President Donald Trump from the US allies in the region to form a united front to counter Iran’s rise in the Middle East.

Saudi Arabia has seemingly made great progress in achieving rapprochement with Iraq and expanding its areas of influence within the last year. Such rapprochement is likely to get stronger should Abadi manage to keep his seat for another term in the elections scheduled for May.

Jacobs signs MOU with Iraq Oil Company

US-based Jacobs has signed a Memorandum of Understanding (MOU) with the Iraq Oil Company to explore mutual benefits of cooperation in the region of Basra, Iraq.

The vast majority of Iraqi oil production takes place in Basra. Iraq Oil Company is looking for business partners based in the Kingdom of Saudi Arabia to support economic and social development in the Basra region through investments in upstream, downstream, refining, and other sectors.

David Zelinski, Jacobs Petroleum and Chemicals Senior Vice President and General Manager Middle East, said:

Jacobs was selected as single engineering partner to sign this strategic non-binding agreement.

“We will explore possibilities to deliver our services in support of the Oil & Gas, Refining and Petrochemicals sectors in Iraq, from our Saudi Arabian office – where we have had a presence for more than 40 years – as this aligns well with the Kingdom’s Vision 2030 to increase the export of services.

The signage took place during a business event attended by HH Khalid Al Faleh, Minister of Energy, Industry and Mineral Resources of Saudi Arabia and Chairman of Saudi Aramco; Jabbar al-Luaibi, Iraq Minister of Oil; Asad Al Eidani, the Governor of Basra; and Abdulaziz Al Shammary, the Saudi Ambassador in Iraq.

The governments of Iraq and Saudi Arabia work closely together to establish a clear regulation and warrantees for potential investors in terms of protection, trading and financial transactions.

(Source: Jacobs)

Jereh Enters Iraqi Oil Market with Integrated Solutions

Advertising Feature

Basra Oil, Gas & Infrastructure is held under the high patronage of the Basra Governorate, the Basra Council and Iraq’s Basra Oil Company from October 30 to 31 in Beirut, Lebanon. Government officials, project stakeholders and buyers and suppliers attend to explore the expanding energy projects in the South of Iraq.

Jereh Group made its debut in the panel discussion about investment. It displayed integrated solutions covering investment, financing, manufacturing, EPC to turnkey delivery under the Belt and Road Initiative. The solutions facilitate the development of local infrastructures and boost the economic growth.

Authoritative reports show that Iraq is OPEC’s second-largest crude oil producer and holds the fifth-largest proved crude oil reserves in the world. And Iraq is developing its oil fields and expanding infrastructure capacity in the south to accommodate more production growth. Large-scale increases in oil production would also require large increases in electric power generation. Significant upgrades to the electricity sector would be needed. To achieve this, reliable partnership and excellent investment and financing solutions are needed.

Johnson Jiang, President of Jereh Mid-East Region, made a keynote speech in front of more than 200 participants representing Basra’s thriving industries. He shared Jereh’s best practice in oil & gas, power and environment industry and what it can bring to the local industries, saying that:

“The China-proposed Belt and Road Initiative offers a unique opportunity for development and social progress among B&R countries. Jereh can provide flexible investment and financing mode to help Iraqi customers build a reliable and secure project. We also collaborate with global partners to provide customers with integrated solutions covering investment and financing, turnkey engineering, technical services and equipment manufacturing.”

Jereh is a preferred partner for the energy industry. Based on technology-driven innovation, a deep understanding of customer requirements, and unique expertise, it is committed to offering customers the optimal solutions and project execution. Jereh has been working with industry-leading International Oil Companies (IOCs) and National Oil Companies (NOCs) on turnkey engineering, well service equipment manufacturing, oilfield services and environmental management.

The company has a large number of implementation cases in Iraq and Middle East area in fields such as natural gas boosting and storage, nitrogen pumping, cementing and coiled tubing for oil production, and oily waste treatment. It also has extensive experience in delivering projects worldwide, supported by its local teams and abundant partners in more than 60 countries and regions.

With the support of Belt and Road Initiative, Jereh will leverage its experience to conduct more cooperation in a compliant way in Iraq and provide private-sector investment to assist in developing Basra to provide the infrastructure that’s vital to boost the economic growth,” said Johnson.

(Source: Jereh Group)

Three-year Strategic Plan for Basra Oil and Gas

Provincial Council of Basra formulates strategic plan to contribute to effective management of the oil and gas sector

The southern Governorate of Iraq, Basra, now has a three-year strategic plan for oil and gas.

As a key pillar of Basra’s economy, this industry is supposed to employ thousands of workers and generate billions of dollars of revenue each year. Unfortunately, the industry is falling short of its expected developmental goals.

It has been assessed that the industry’s performance can be boosted through sound management and improved capacity and expertise. The Provincial Council of Basra is seeking to address this issue, in part, with its Committee for Oil and Gas.

Highlights

  • Starting November 2016, UNDP worked closely with the Committee for Oil and Gas to develop the strategic plan
  • Amongst objectives of the plan is to generate employment, whilst considering related social and environmental impacts
  • The industry’s performance can be boosted through sound management and improved capacity and expertise

To this end, the Committee has formulated a strategic plan with the support of the United Nations Development Programme (UNDP). This support was channeled under the Basra Compact agreement signed between UNDP and the Governorate of Basra in 2015 to provide the Governorate with technical assistance in major thematic areas, including strategic planning.

Starting November 2016, UNDP worked closely with the Committee for Oil and Gas to develop the strategic plan. In July 2017, the Provincial Council of Basra endorsed the first draft, and approved the final version for printing in September 2017. Hundreds of copies were distributed to relevant stakeholders in October 2017.

Chairman of the Committee for Oil and Gas, Mr. Ali Shaddad Al Fares, said:

“We believe in the importance of strategic planning to achieve comprehensive, sustainable development in all aspects of life. Given that oil and gas are the most important sources of Iraq’s national wealth at the present time, the Committee for Oil and Gas had to follow a scientific methodology in planning for the future of Basra.”

Data Portfolios Available for Basra Refinery

The Ministry of Oil has announced the availability of data portfoliso to develop the Basrah refinery.

The closing date of selling data portfolios is at the end of the work hours of Sunday the 19th of November 2017, and the receipt of the documents from the companies which would like to fund and execute the above mentioned project must be to the end of the work hours of Thursday the 4th of January 2018.

More details here.

The presentation of the documents should be to the studies, planning & follow-up directorate directly or via the Emails:   studies.oil@oil.go.iq    or   studies@oil.gov.iq

(Source: Ministry of Oil)