Economic Diversification and Energy Transition in Iraq and the Gulf

From The Middle East Institute. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

Economic Diversification and Energy Transition in Iraq and the Gulf

Iraq is in the midst of an unprecedented economic crisis as it grapples with a volatile post-election political environment and continued social unrest. The onset of the pandemic two years ago combined with the subsequent decline in oil prices to create added economic pressures for a state that remains highly oil-dependent and a society that is overwhelmingly dependent on the public sector for employment.

The country's inability to provide jobs and services for its predominantly young population has sparked a protest movement that has added urgency to the need for major reforms. Meanwhile, the growing threat of climate change and climate-induced socio-economic challenges have raised the specter of an existential crisis, one that could potentially be hastened by Russia's invasion of Ukraine and the resulting impact on food security.

And while other Gulf oil exporters are reaping the benefit of a windfall in revenues by spring 2022, disputes over revenue sharing and the ability to catalyze domestic spending and investment continue to weaken recovery prospects for all of Iraq.

To identify pathways to deal with demands for economic reform and volatility in resource revenue, in November 2021 the Middle East Institute (MEI) and Iraq Policy Group (IPG) convened a high-level workshop on the side-lines of the American University of Kurdistan's annual Middle East Peace and Security Forum, bringing together decision-makers in Baghdad, Erbil, and the wider region, as well as practitioners, scholars, and the private sector to examine the country's prospects for addressing its short- and long-term economic challenges as Baghdad and Erbil embark on ambitious reform agendas.

This included discussions and debates on plans to diversify their economies away from fossil fuel dependency, the progress of reforms, regional policy goals on net zero at 2050, and the wider lessons that Erbil and Baghdad could draw from the Gulf region.

This report provides the insights and analyses of a select group of participants, and forms part of a series of forthcoming Iraq- and Gulf-focused reports and initiatives that MEI and IPG will be convening.

Click here to read the full article.

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Video: Workers Risk Health in Iraq’s Gold Smelters

From Al Jazeera. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Iraq's smelters: Workers risk their health for gold and silver

Decades of instability and corruption in Iraq have led to high unemployment.

That is forcing some people to resort to dangerous work to make a living - including panning for precious metals in wastewater.

Al Jazeera's Mahmoud Abdelwahed reports from the Iraqi capital Baghdad:

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PM announces new Ministry of Electricity and Alternative Energy

By John Lee.

The Iraqi Prime Minister has announced that the Ministry of Electricity is to be renamed the "Ministry of Electricity and Alternative Energy".

At a press conference in Baghdad, Mustafa al-Kadhimi (pictured) said it is unreasonable to build gas power stations when there is not enough gas available, so the new ministry will actively seek alternative power sources.

In the past, he said, power stations were built, "in an absurd manner, without planning and without knowledge."

He also referred to the country's electrical interconnection projects with the Gulf states, Saudi Arabia, Turkey, Jordan and Egypt, which will provide power until Iraq reaches self-sufficiency.

Addressing the annual shortage of electricity during the very hot summer season, he said that last year's production of 21,000 MW will not be achieved this year, due to the reduction in gas supply from Iran.

(Source: Govt of Iraq)

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Saudi Arabia and Iraqi discuss Connecting Electricity Grids

By John Lee.

Iraq's Minister of Oil, Ihsan Abdul-Jabbar Ismail, has met with the Saudi Minister of Energy, HRH Abdulaziz bin Salman, to discuss connecting their respective electricity grids.

They also discussed enhanced energy cooperation between the two countries, and the work of the Saudi-Iraqi Coordination Council.

Iraq and Saudi Arabia signed a memorandum of understanding (MoU) in January to link their power grids.

(Source: Saudi Ministry of Energy)

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Iran Reduces Gas Supply to Iraq, as Iraq Misses Payment

By John Lee.

Iran has reduced its gas supply to Iraq by 5 million cubic meters per day, causing a reduction in electricity production, according to a statement on Wednesday from Iraq's Ministry of Electricity.

The Iranian government had demanded payment of debts relating to gas supply, which AFP says totals $1.6 billion and dates from 2020, by the end of May. 

The Ministry blames the non-payment on the delay in approving the general budget, and "the search for an alternative solution to the Food Security Law."

Iraq exported a record $11.436-billion worth of oil in May.

(Sources: Ministry of Electricity, AFP)

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IBBC hosts largest ever Spring Conference

The Iraq Britain Business Council (IBBC) hosted the largest attendance for their Spring conference at the Mansion house on 24th May, with just under 300 attendees, half of whom came from Iraq.

Widely considered a success, the overall theme was 'sustaining economic growth in Iraq', There were multiple panels and roundtable sessions; including four panels focused on Finance and Energy, and additional themes of Education and Skills, Future Tech, Privatisation and a Kurdish ministerial roundtable with full attendance at all.

The conference was opened by Baroness Nicholson, president of IBBC.

Notable speakers included the Governor of the central bank H.E Mr. Mustafa Ghalib Mukheef, the Governor of Kirkuk, H.E. Mr Rakan Aljoubouri, the Chairman of the Trade Bank of Iraq, Dr Salem Chalabi and H.E. Dr Dara Rasheed, Minister of Planning, Kurdish Regional Government, and Mr Louis Taylor, CEO of UKEF, while Lord Howell gave an insightful and powerful speech on energy provision and the continuing importance of oil and gas distribution and production, especially in the light of Russian aggression. Professor Frank Gunter offered his paper for privatisation to a packed room. Dr Luay Al Khateeb, Distinguished Fellow Columbia University, chaired the Energy Transition session alongside with panellist from BP, Shell, GE and Oilserv.

The Rasmi AL Jabri award to the most outstanding, well run, professional Iraqi company engaged with the UK and international business from Iraq, was awarded to The Sardar Group and accepted by Mr Sardar Al Bebany from Rasmi's son and Baroness Nicholson.

Delegates came from all regions of Iraq, including KRI, Basra and Baghdad, with chambers of commerce, leading Iraqi businesses, and private investors and business- people engaged and supplying IBBC corporate members.

Principal sponsors included the Iraq private banking league, who brought 20 banking members, gold sponsors - The Sardar Group and Hydro C and Bronze sponsors - GE.

The Conference was also made available online and a recording of the Tech forum is available here.

(Source: IBBC)

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AirSada Medevac: Keeping your People Safe in Iraq

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Meet Top Iraqi Officials at IBBC Conference

Hear Iraq's principal ministers and financiers share their vision and policies for Energy, Finance and Educational sectors at IBBC's Mansion House conference on 24th May.

Iraq is on the cusp of forming a new Government and is benefitting from high oil revenues and stability. The IBBC Spring conference is ideally timed for a potential new Government announcement with key players in both oil and finance speaking and sharing their vision of what policies and the future landscape lies in store for Iraq and the private sector.

Iraq is clearly open for business, and we can expect to hear strong indicators of where the economy and investment will be directed and how banks and government expect to achieve this.

Addressing the new government agenda of reforms, we have a panel dedicated to the Iraqi Government White paper, led by Dr Alaa, the executive director or the Prime Minister's reform unit.

It is also expected that the Minister of Oil will announce several investment opportunities that will be discussed in a separate session after the energy panel during the afternoon

This is your opportunity to meet these confirmed speakers: the Minister of Oil H.E. Ihsan Abdul Jabbar Ismaael, the Governor of the Central Bank of Iraq, H.E Mr. Mustafa Ghalib Mukheef, Ms Taif Sami, Deputy Minister of finance, the Minister of youth and sport H.E. Adnan Darjal Motar Al-Rubaye, and higher education, as well as a Dr Salem Chalabi, President & Chairman of the Trade Bank of Iraq and a delegation of Iraqi private banks. In addition, key IBBC members including BP country director Zaid Elysari, Shell, Total, GE, Siemens, KBR, SKA, Serco, Petronor and Petrofac, PWC, EY, Standard Chartered Bank, JP Morgan, TBI, SAP, Barclays, City and Guilds among many, and from the UK Government Mr Louis Taylor, director of UKEF are attending.

The overall theme will examine how Iraq can sustain economic growth going forward, through the significant speaker energy, finance and Insurance panels who will discuss this at length.

New topics include privatisation of state-owned enterprises at a round table discussion led by Prof. Frank Gunter with the participation of the Prime Minister's Office, additionally, a special paper on the subject written by members of the IBBC Advisory Council will be launched on the day and form the backdrop of the discussion.

Panels on project finance and energy transition are included during the day.

Beyond these topics many companies will find ample opportunity to meet the key speakers, as well as network with large businesses in Iraq and UK during the conference and in separate sessions. IBBC constantly advocates for the opportunity of private business to change economies and this conference confirms the benefits business brings to Iraq.

Economic sustainability is not just confined to energy and finance sectors as the knock-on effect of an expanding economy is creating big demand for skilled employees across all sectors, an issue that will be addressed by the educational panel including MSelect, who's Iraq employment report has shed great light on the unprecedented nature of skills and sectoral requirements and how they might be addressed.

IBBC are very proud to be holding, possibly our best conference and we hope those companies' operating in Iraq and considering joining our council, will attend at this time of opportunity and evolution for Iraq's economy to meet the people who are shaping its future.

Click here to register.

(Source: IBBC)

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US Law Firm Awarded for Iraq Advisory Role

By John Lee.

New York-based law firm Cleary Gottlieb Steen & Hamilton LLP has won the Infrastructure and Energy Projects Team of the Year award at Law.com International's Middle East Legal Awards 2022.

According to a press release from the firm, it "was recognized for advising on Iraq's gas growth integrated project, one of the largest projects ever in Iraq."

The firm represented the Iraqi Ministry of Oil and two Iraqi state-owned companies, Basra Oil Company (BOC) and South Gas Company (SGC), in the major $27-billion investment project with France's TotalEnergies.

Cleary partner Andrew Bernstein and associate Jad Nasr were mentioned as part of the team advising the Iraqi government in a Law.com International article about the deal.

The firm had previously advised Iraq's oil ministry on a $17.2 billion deal with Shell and Mitsubishi to develop the infrastructure required to process natural gas in the southern part of Iraq.

(Source: Cleary Gottlieb)

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AirSada wins Medevac Contract with Hyundai in Basra

By John Lee.

The Turkish-based private jet charter company AirSada has won a second contract to supply medical evacuation (medevac) services, this time to South Korea's Hyundai Engineering and Construction in Iraq.

The contract with AirSada, which runs to September 2025, includes air ambulance and medical treatment services.

It was signed by Mr Tolga Urcu, CEO of AirSada, and Mr Joonhwi Lee, Project Manager for Hyundai in Basra.

Earlier this year, the company won a similar contract with Japan's JGC Corporation.

(Source: AirSada)

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