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Dana Gas Resumes $600m Expansion in Iraq

Dana Gas and its partner Crescent Petroleum have announced the full resumption of the expansion project at the Khor Mor field in the Kurdistan Region of Iraq (KRI), which the companies jointly operate on behalf of the Pearl Petroleum consortium.

The KM250 expansion involves further investment of US$600 million to add 250 million cubic feet per day of much-needed additional gas production to supply the local power stations. The project construction work had been put on hold due to the COVID pandemic but is now on track for a new target start date of April 2023, after agreement to lift the force majeure with both the Kurdistan Regional Government (KRG) and the contractor [Exterran].

Under a Gas Sales agreement signed in March 2019 with the KRG Ministry of Natural Resources, Pearl Petroleum will sell the additional quantities of gas to supply the power stations with affordable and environmentally cleaner fuel, and further enhance electricity supplies. Today over 80% of the KRI’s electricity generation is enabled by the gas produced by the companies.

Current production at the Khor Mor field is 440 million cubic feet per day of natural gas as well as 15,700 barrels per day of condensate and 1,020 tonnes of liquified petroleum gas (LPG), or a total of 110,400 barrels of oil equivalent (boe) per day, making it the largest overall producer in the KRI and the largest private sector upstream gas operation in Iraq. After the KM250 train, there are plans to add a further KM500 train which would take production to almost 1 billion cubic feet per day by 2024.

Total investment to date exceeds US$2 billion with total cumulative production of over 332 million barrels of oil equivalent (boe), which has resulted in significant fuel cost savings and economic benefits for the Kurdistan Region and Iraq as a whole. In addition 43 million tonnes of CO2 emissions have been eliminated by displacing liquid fuels, which in turn has made a positive contribution to tackling global climate change as well as reducing local air pollution.

Mr. Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, commented:

“After a year of delay due to the COVID pandemic, we are pleased to fully resume the KM250 expansion project to invest US$600 million and grow the gas production almost 60% within 2 years from now, supporting the local electricity provision even further. Despite the challenges the whole world has faced over the past year we have kept our operations safe and managed to grow production and we are grateful to all our staff and to the KRG for its support.”

Dr. Patrick Allman-Ward, CEO of Dana Gas, added:

“With our partners in Pearl Petroleum we are proud to be investing further in the gas sector of the Kurdistan Region of Iraq, delivering a reliable source of cleaner energy, and supporting local economic development. The continuing receipt of payments in a timely manner gives confidence for our continued investment commitment as we enter the next exciting phase of growth with the Khor Mor expansion, which will be carried out under strict health protocols to ensure the safety of our staff and service providers.”

(Source: Dana Gas)

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Fire Kills 82 at Baghdad Hospital

By John Lee.

A fire at a Baghdad hospital treating COVID-19 patients has killed at least 82 people, and left more than 100 injured.

The blaze, at the Ibn Khatib Hospital, was caused on Saturday night when an oxygen tank is said to have exploded.

Prime Minister Mustafa al-Kadhimi has suspended the Minister of Health, the Governor of Baghdad, and the Director General of Rusafa Health Department, pending investigations, which are to be concluded within five days.

(Sources: Govt of Iraq, BBC, Reuters)

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COVID-19 hits Iraqi Labour Market, Enterprises

COVID-19 Dealt Heavy Blows to Iraqi Labour Market, Enterprises in 2020: IOM, FAO, ITC Study

In early April, Iraq surpassed 900,000 COVID-19 cases.

Necessary efforts to contain the spread of the virus throughout 2020 led to a reduction in economic activity; compounded by pre-existing economic challenges, drops in oil prices and the public health COVID-19 crisis, it is estimated that Iraq’s economy contracted by 9.5 per cent in 2020.

To measure losses and investigate how small- and medium-sized enterprises (SMEs) in Iraq are coping with the economic impact of COVID-19, the International Organization for Migration (IOM), the Food and Agriculture Organization (FAO), and the International Trade Center (ITC) conducted a panel study in 2020 on 893 SMEs representing 16 sectors in 15 governorates in Iraq.

The study focused on the food and agriculture sector in order to determine variance in outcomes and effects on these firms when compared to non-agricultural businesses. The primary data used in this study was collected using ITC’s COVID-19 corporate survey.

The new report Panel Study: Impact of COVID-19 on Small- and Medium-Sized Enterprises in Iraq showcases the main findings from three rounds of data collection, covering the effect of border closures and lockdowns on revenue, production, and employment; accessibility of resources or ability to sell products; and mechanisms adopted to cope with the crisis.

Almost all firms in the study reported a decline in production or sales between February 2020, the pre-COVID-19 period, and the end of the year. Firms suffered large losses in revenue early on (an average decline of 67% by June).

Although revenue partially recovered between July and October, it did not reach pre-pandemic levels (firms reported a revenue drop on average of 23% between February and November). SMEs also reported incurring new debt over the year due to the pandemic, primarily through informal means such as borrowing from friends and family.

The labour market also suffered due to COVID-19. On average the number of employees in SMEs reduced by 27 per cent between February and June. By August, employment numbers began to recover but remained below pre-pandemic levels by the end of 2020, with the number of male and female employees, including full- and part-time, decreasing on average by seven per cent between February and November.

Furthermore, the reduction in employment temporarily widened the gender gap in the labour market. In February, there was 1 woman for every 15 men working in the surveyed SMEs. The gap reached 1 woman for every 19 men by August, but then decreased to 1 for 13 in November 2020.

Over the course of the study period, the mechanisms SMEs adopted to cope with the financial difficulties of the pandemic changed. Initially, SMEs laid off employees. Later, requesting leniency in repaying financial responsibilities and increasing marketing efforts emerged as the dominant strategies. In June, more than half of SMEs’ reported being at risk of shutting down permanently (65%). By December, those reporting this risk reduced to less than a third (31%).

The same 893 SMEs were surveyed three times in 2020: 22 June to 7 July, 9 to 18 September, and 29 November to 15 December.

The study was funded by the U.S. Department of State’s Bureau of Population, Refugees, and Migration (PRM) and the European Union.

(Source: UN)

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Chinese Company to Develop Iraq’s Mansuriyah Gas Field

By John Lee.

The Chinese company Sinopec (China Petroleum & Chemical Corporation) has won a contract to develop the Mansuriyah gas field in Diyala.

The field, near the Iranian border, is expected to produce 300 million standard cubic feet (Mmscf) per day of gas, which will be used for electricity generation.

In 2010, an agreement had been signed for the field to be developed by Turkish Petroleum (TPAO) (37.5%), Iraqi Oil Exploration Company (25%), Kuwait Energy (KEC) (22.5%), and Kogas (15%). This consortium stopped development in 2014 due to security concerns, and the agreement was reportedly cancelled in 2020.

Under the new 25-year deal agreed on Tuesday, Sinopec will have a 49-percent interest in the field, with Iraq’s state-owned Midland [Middle, Central] Oil Company having 51 percent.

The contract may be extended for an additional five years.

According to the Ministry of Oil, Sinopec’s bid was he lowest submitted.

(Source: Ministry of Oil)

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UK’s $4m support for Iraq’s fight against COVID-19

By John Lee.

The United Kingdom has committed GBP 3 million (approximately US$ 4.1 million) to support the Government of Iraq’s response to the coronavirus disease (COVID-19) pandemic, in partnership with the United Nations Development Programme (UNDP).

With this contribution, the United Kingdom joins 12 international partners in supporting UNDP’s COVID-19 rapid health emergency response in Iraq. UNDP’s response aims to strengthen Iraq’s health sector in response to the pandemic, improve access to isolation wards and medical equipment, increase public awareness of COVID-19 symptoms and prevention measures, and provide  personal protective equipment to healthcare workers.

Since launching its response in March 2020, UNDP has established 13 purpose-built COVID-19 isolation wards in Anbar (Fallujah and Ramadi), Babil, Basra, Dhi Qar, Diyala, Dohuk, Karbala, Kirkuk, Missan, Najaf, Ninewa and Salah al-Din governorates. Additional wards are being built in Diwaniya, Erbil, Muthanna and Wasit, bringing the total number of supported medical facilities  to 17.

UNDP Resident Representative Zena Ali Ahmad, said:

“Containing the coronavirus outbreak is the Government of Iraq’s top priority, particularly with the second wave of infections country-wide. UNDP is on the front line, supporting Iraq’s national healthcare system to tackle the outbreak. The United Kingdom’s generous contribution enables us to boost our support even further as we collectively fight this pandemic.”

Her Majesty’s Ambassador Stephen Hickey (pictured) said:

“The United Kingdom supports the Government of Iraq in its fight against COVID-19, which continues to cause such challenges in both of our countries. We are pleased to make available this  unding through UNDP to strengthen Iraq’s national health response and help manage the ongoing outbreak.“

The United Kingdom joins Austria, Belgium, Canada, Denmark, Finland, France, Germany, Japan, the Netherlands, Sweden and the United States of America in supporting UNDP’s response to the COVID-19 pandemic in Iraq.

(Source: UN)

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Axens to support Basrah Refinery Upgrading Project

By John Lee.

French-based Axens — part of the IFP Energies Nouvelles group — has said it is pleased to continue working with JGC Corporation on the Basrah Refinery Upgrading Project.

Earlier this month, Prime Minister Mustafa Al-Kadhimi laid the foundation stone for the $4bn-project.

In a statement, the company said:

Part of Iraq’s Ministry of Oil, the state-owned South Refineries Company (SRC) executed the upgrading of its refinery located in Basrah, Iraq by implementing a new refining plant adjacent to the existing refinery facility. The Basrah Upgrading Project is now reaching the engineering, procurement and construction (EPC) phase carried out by JGC Corporation (JGC).

Axens is pleased to continue being involved in this important Iraqi project, which will increase the gasoline and diesel production along with other oil products, reducing the national refined products imports. The Basrah Upgrading Project will also improve oil refinery efficiency of the complete facility.

Different Axens’ technologies were selected and will be used:

  • a Diesel hydrotreatment unit (Prime-DTM)
  • a VGO Hydrotreating unit
  • a VGO FCC unit
  • an oligomerization unit (PolynaphthaTM)

Thus, an integrated scheme around the FCC unit is implemented thanks to Axens’ unique position for a complete FCC suite of technologies from pre-treatment to post-treatment. The PolynaphthaTM technology downstream the FCC unit for oligomerization of light olefins aims at maximizing gasoline production.

With this award, another reference is added to the long list of more than 300 FCC projects. Industrial successes in this domain keep the FCC Alliance as a global leader with a track record of 4 new grassroots FCC units started up in the past 4 years.

In addition, Axens will provide catalysts & adsorbents, key technology features such as proprietary equipment, trainings and technical services.

Jacques Rault, Conversion & clean fuels Business Line Director, Process Licensing at Axens, said:

“The Basrah refinery is expanding its operations by increasing its gasoline and diesel production while improving the fuels quality. This will help to solve one of the main challenges to lower national petroleum products imports revitalizing the Iraqi refining sector damaged by war and deterioration. South Refineries Company selected Axens for its wide and proven experience in refining as a partner to supply technologies but also to support throughout the whole project.“

Ibraheem Al-Salihi, FCC Project Manager, South Refineries Company, said:

“The Iraqi Ministry of Oil and the Southern Refineries Company with the support of the Japanese government represented by the JICA Organization are doing great work to complete the Basrah Refinery Development / FCC Project by adopting the latest technologies and designs provided by Axens. With the construction contract signed with the Japanese company JGC on October 1, 2020 and then activated on February 15, 2021, the project activities started according to the agreed schedule. Among other developments, we are pleased to complete this vital and important project that supports the production of oil derivatives meeting international standards and environmental requirements adopted in this field and relieves the burden of oil products imports.”

(Source: Axens)

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IBBC Webinar: Causes and Cures for Iraqi Corruption

Corruption Worse Than ISIS: Causes and Cures for Iraqi Corruption

The Iraq Britain Business Council (IBBC) is delighted to invite you to the public launch of Professor Frank Gunther’s new paper on corruption in Iraq on Monday 26th of April from 1pm – 2pm BST.

Following the presentation of the paper there will be comments from Dr Renad Masour, Chatham House, and Maya Gebeily, AFP. The ensuing discussion will be moderated by Shwan Aziz Ahmed from the IBBC Advisory Council.

Read the paper here

Register Here

Speakers:

Frank R. Gunter is a Professor of Economics, a Senior Fellow at the Foreign Policy Research Institute, and a retired U.S. Marine Colonel. After receiving his Doctorate in Political Economy from Johns Hopkins University in 1985, Frank joined the faculty of Lehigh University where he teaches Principles of Economics, Economic Development, and the Political Economy of Iraq. He has won four major and multiple minor awards for teaching excellence. Based on his two years in Iraq as an economic advisor to the US Government, Frank wrote The Political Economy of Iraq: Restoring Balance in a Post-Conflict Society (Edward Elgar Publishing, 2013). This book was published in both English and Arabic and was selected as an “Outstanding Academic Title” by Choice magazine. His most recent work, “Immunizing Iraq Against al Qaeda 3.0” (Orbis, 2018, Vol. 62, No. 3, pp. 389-408), discusses the possible economic causes of political instability in Iraq. Frank is married with three children and his family shares their Pennsylvania home with over 4,000 books.

Ms Maya Gebeily is a reporter with Agence-France Presse based in Baghdad, where she covers Iraqi politics, security, economics, and societal developments. Before this posting, Maya spent three years at AFP’s Beirut bureau covering the Syrian conflict. She covered Lebanon and Syria at local Lebanese news website NOW News, and have reported as a freelancer out of Beirut, Istanbul, and the Kurdish region of Iraq in recent years.

Dr Renad Mansour is a senior research fellow and project director of the Iraq Initiative at Chatham House. He is also a senior research fellow at the American University of Iraq, Sulaimani, and a research fellow at the Cambridge Security Initiative based at Cambridge University. Renad was previously a lecturer at the London School of Economics and Political Science (LSE), where he taught the international relations of the Middle East and, from 2013, he held positions as lecturer of international studies and supervisor at the Faculty of Politics, also at Cambridge.

Moderator:

Abdul Aziz (Shwan) A. Ahmed, is the immediate past Chief of Staff to Deputy Prime Minister Dr Fuad Hussain and before him Deputy Prime Minister Dr Rowsch Nouri Shaways. As Chief of Staff he oversaw an office of 70 including 5 Director Generals,  covering the portfolios of Politics, Economics, International Partnerships, Media & Public Relations and Finance & Administration. In this position he has been at the heart of the Iraqi Government for the past 10 years actively participating in the work of several administrations. From 1997 to 2009 Shwan had a distinguished career at UNDP in several countries with his last posting being the Head of UNDP office in Puntland/Somalia from 2006 to 2009. He managed his own engineering business in Iraq from 1993 to 1997 and worked for the Ministry of Industry from 1987 to 1993. He graduated from the University of Technology in Baghdad in as Systems and Control Engineering in 1983. Shwan is happily married with three adult children. He is of Baghdadi Kurdish and Finish origin and is fully fluent in Arabic, Kurdish and English.

Media Partner:

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Australia provides $1.6m for Women in Iraq

Australia provides AUD 2 million to UNFPA-women and girls interventions in Iraq

The Australian Government Department of Foreign Affairs and Trade (DFAT) renewed its commitment to reproductive health and rights of women and girls, and prevention and response to gender-based violence in humanitarian settings. The project will support the work carried out by UNFPA with a AUD 2 million [USD 1.6 million] contribution.

Women and girls, including individuals with disabilities and survivors of gender-based violence; and men and boys, as allies of the prevention and response to gender-based issues, will benefit from awareness and integrated gender-based violence and sexual and reproductive health services.

Ms Paula Ganly (pictured), the Australian Ambassador to Iraq, said:

“Australia is pleased to continue our important partnership with UNFPA Iraq … Providing assistance for reproductive health needs and rights of women and girls and protection from gender-based violence is essential to ensuring their full and equal participation in society.“

Acknowledging the new funding, Dr Rita Columbia, UNFPA Representative to Iraq, said:

“I extend our sincere gratitude to the longstanding partnership with DFAT. This generous contribution will help women and girls to have easier access to quality gender-based violence and sexual and reproductive health services, especially to women and girls with disabilities.

“Today, due to the uncertainty environment caused by the COVID-19 pandemic, it is more important than ever to work hand-in-hand to help the most vulnerable people stay healthy and live in a violence-free environment.“

Australia is a strong advocate for women and girls’ protection and reproductive rights. Since 2014, Australia has contributed AUD 18.2 million to UNFPA programming in Iraq, helping refugees, internally displaced people, people with disabilities, host communities and returnees.

(Source: UN)

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Jiyad: Iraq, and the China-Iran Cooperation Program

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq and the China-Iran Comprehensive Cooperation Program

The China-Iran Comprehensive Cooperation Program (CICCP) was signed on 27 March 2021; two days later the CICCP’s direct impacts on Iraq began emerging and one of such impacts seems to benefits both Iraq and Iran!!

A few days ago I completed a detailed preliminary assessment of CICCP document. The assessment was written in Arabic entitled “China-Iran Comprehensive Cooperation Program: Tactically Important Strategically Impacting if Implemented”, it was circulated widely and posted on many websites.

The assessment uses composite methodology of three researches approaches (Text analysis, SCOR (Strength, Challenges; Opportunities and Requirements) and facts/evidence based) and comprises an introduction, three parts and concluding remarks. Part one provide brief review of CICCP document structure: preamble, articles, annexes, effective date and term of the deal, coordinating and supervising authorities. Part two, provides detailed assessment of eight fundamental topics/ areas of cooperation, from the perspectives of the political economy of bilateral relations and geopolitical considerations. Part three provides the direct official reactions to CICCP from Iraq, USA, Arab Gulf States/Saudi Arabia and Russia.

The political economy perspectives are related to the following basic issues: The first relates to the nature of bilateral relations in terms of sovereign independence or dependency and hegemony; the second is whether the principle of “mutually beneficial” is also equitable; the third concerns the structuring of the Iranian economy on whether the deal will eventually deepens the dependence on the export of raw materials, oil and gas, or introduces the required and desirable structural changes horizontal, vertical and knowledge-based levels; and the fourth is about the financial and banking independence, monetary and currency issues pertaining to funding investments and trade exchange.

The geopolitical considerations were addressed at four levels, starting from the domestic (national for both countries), continental (Asian from China to Syria), regional (West Asia / Middle East) and international levels.

The assessment argues that the timing of signing and announcing CICCP is tactically motivated and important, while its proper and timely implementation could be a game-changer and thus strategically impacting; but, as usual, reality seldom coincides with expectations.

This brief intervention focuses on the direct current evidenced impacts on Iraq. Interested readers are kindly invited to read the Arabic version of my detailed initial assessment through the web-links mentioned at the end of this article.

In a remarkable speed and substance CICCP has already prompted both Iraq and the US to react!

First; after the current prime minister, Mustafa al-Kadhimi, denied, rather harshly, in a press conference on November 18, 2020, the existence of an Iraq-China agreement by saying, ‘You know there is no China agreement, why are you promoting these lies?’, he returned to authorize, on March 30 – that is, only three days after the signing of CICCP, “to start implementing the Chinese agreement”!!

While I do not find it necessary, now, to discuss what has happened between Iraq and China since the government of Haider al-Abadi, I find it useful to remember the statement by the Prime Minister’s Financial Affairs Adviser, Dr. Modhir Muhammad Saleh, on March 29, 2021, that the “Iraq-China agreement” became effective on October 18, 2020, and then he affirmed the “cooperation framework agreement … and the final accounting and oil annexes were signed on September 23, 2019.” So why has not been published to this day any official document on this agreement / cooperation framework agreement, nor any of its annexes or memoranda of cooperation/ understanding related to it!!??

But there is a document at the Ministry of Finance entitled “Export Credit Insurance Cooperation Framework” between the China Export & Credit  Insurance Corporation and the Iraqi Ministry of Finance) dating back to May 11, 2018 (that is, before the date of the agreement signed by former Prime Minister Adel Abdul Mahdi) !!!!

It is worth mentioning that 2021 State Budget Law includes a few infrastructure projects worth 1.803 trillion Iraq Dinnar to be funded, presumably by the above mentioned 2018 framework; since there is no new framework agreement officially published by the Ministry of Finance, nor approved by the Council of Ministers, nor legislated by the House of Representatives/ the Parliament. Moreover, even if such agreement is ratified and activated it utilization will be differed to future state budget for 2022 or even 2023 because of the national election scheduled for October this year.

Apparently, CICCP was a wakeup call for the Iraqi government but it is in reality too late for 2021 budget funding.

But on the other hand, the Iraqi Premier rushed for quick visits to Saudi Arabia and the UAE, immediately after signing CICCP; is there a relationship between the two events? Time will only tell!!!!

Second, among direct reactions by the US administration and as far as Iraq is concerned relates to Iraq-Iran interests. Just two days after signing the CICCP the U.S. renewed and extended the Iraqi exemption from the practices of maximum US pressure on Iran from 45 to 120 days; a waiver to avoid penalties for buying natural gas and electricity from Iran. This exception entails two positive consequences for both Iraq and Iran: the first is to ensure the continued supply of Iranian gas to generates electricity; this what the Iraqis suffer from its shortages especially the heated summer is on the doorstep, and the second is that Iraq pays Iran’s accumulated dues for importing gas and electric power (which constitutes about a third Iraq’s production of electricity) as the total of those receivables were mentioned in the 2021 budget, about 1688 billion Iraqi dinars.

Third, another important reaction by the US administration was its quick decision to hold a new round of strategic dialogue with Iraq; the discussions began on April 7, and mainly relate to the issue of US forces remaining in Iraq and the Strategic Framework Agreement signed in December 2008. (This agreement and related matters face strong opposition and many important, influential, legal and judicial challenges, especially after the Trump administration assassinated two leading heavy weight individuals, Abu Mahdi Al-Muhandis (Iraq) and General Qassem Soleimani (Iran), on January 3, 2021 near Baghdad airport).

It is worth noting that energy cooperation is one of the eight topics included in the said strategic framework agreement. Evidence suggests that the previous round of the Iraqi-American Committee for the Coordination of Cooperation in the Field of Energy, which was held, virtually remotely, on January 18 of this year was brief and did not include any important issues or noticeable impacts or new achievements. Hence, it did not attract attention from domestic or external media. Even the two ministries, i.e, Oil and Electricity, that should be directly involved, hardly mentioned anything on their websites on that latest meeting. Will CICCP invigorate Iraqi-American cooperation for the benefit of the energy sector in Iraq?? Who knows, will see!!!

Click here to download the full report in pdf format.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.

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