Implications of the Coronavirus for Iraq

By Aymen Al-Faisal, for the Al-Bayan Center for Planning and Studies. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

The Implications of the Coronavirus on the Overall Situation in Iraq

With the spread of the coronavirus globally, many countries around the world face several challenges in the absence of any looming solutions so far.

Economies are the most affected by this virus that led to restrict the movement and the freedom of travel between countries, limit the transport of goods by sea and land, and raise spending on precautionary measures to limit the virus spread.

Since the discovery of the virus in January, the stock market has not declined only in China, but it has impacted the Asian and the American markets as well.

Click here to read the full article.

Iraq Extends Curfew to 11th April

By John Lee.

The Cabinet held its regular weekly meeting in Baghdad on Thursday under the chairmanship of Deputy Prime Minister and Minister of Oil, Thamir Ghadhban.

It reviewed the impact of restrictions to contain covid-19, including curfews, on the health, financial and service sectors, and discussed measures to lessen the burden on Iraqis, receiving briefings from the Minister of Health, Dr. Jaafar Allawi and senior officials on current measures to contain the spread of the epidemic in Iraq.

The Cabinet urged all citizens to abide by curfew regulations and follow the advice of health professionals, including practicing social distancing and avoiding gathering for their own safety and that of all Iraqis.

The Cabinet discussed measures to ensure food security, continuation of essential services, transport of agricultural produce between provinces and requests from a number of Iraqi citizens abroad who wish to return home but are unable to do so because of current restrictions on air travel in several countries.

The Cabinet thanked the Crisis Cell for its role in mobilising national efforts to contain Covid-19, and expressed its gratitude to Iraqi health teams, security forces, volunteers and community leaders for their hard work and dedication at this difficult time.

The Cabinet decided to:

  • Extend the curfew to 11 April 2020 in all regions of Iraq, and for current exemptions to be maintained;
  • Direct all ministries, public bodies and local authorities to use their financial and other resources such as vehicles and equipment to support the Crisis Cell and the Ministry of Health
  • Authorise the Minister of Health to allow some health professionals who have reached retirement age to continue in their posts for the duration of the crisis.

(Source: Govt of Iraq)

SKA Energy Keeps Iraq’s Essential Fuels Flowing

Despite the combined pressures of a global pandemic, political deadlock, falling oil prices and continued violence against government forces and others, SKA has continued to deliver over 90% of Iraq's imported fuel requirements.

SKA's unique partnership with the Ministry of Oil's Oil Pipeline Company (OPC) and the close cooperation of Ministry of Transport's General Company for the Ports of Iraq (GCPI) have ensured that vital supplies of imported diesel and gasoline continue to flow.

SKA's CEO, Mr Mike Douglas said:

"This is what SKA does. We stand firm in the face of adversity and get the job done. These combined challenges just make us more determined to succeed. Fuel supplies are vital to industry, transport and power generation and we will keep them flowing.

"Of note, the vital dredging we just completed during the curfew, guarantees that the biggest cargos on LR2 vessels, are not stalled; before we started, that size of ship had never been seen in the river. The company was built on the motto of "doing difficult jobs in difficult places" and now, more than ever, that is true."

"We thank all our local and expatriate staff, and the Iraq Government, for their steadfast support and cooperation. We realize that it is not easy to be away from homes and families in these challenging times, but together we will continue to ensure that the Iraqi people get what they need to overcome these daily challenges. We hope and pray that SKA as a company and Iraq as a nation will emerge stronger at the end of all this".

SKA operates the only private Maritime Oil Storage and Distribution Terminal in Iraq. Combined with the joint operation of the oil import jetties in Khor Al Zubair Port, SKA is responsible to the importation of over 90% of Iraq's oil product import demand. SKA has ensured that this vital infrastructure is operated, maintained and enhanced during this difficult time.

SKA, in partnership with the Iraq Government, hopes to build on this success in the future with further enhancements to the import and export infrastructure. Mike Douglas said:

"We will overcome the current challenges and in the future build and operate more oil product storage in Khor Al Zubair. This will provide increased volumes for import and much needed cargo consolidation for export. It will also provide much needed employment for the local population. We have been in Iraq for 17 years and are here to stay."

(Source: IBBC)

US provides Aid to help Iraq fight Coronavirus

By Bryant Harris for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

US provides Aid to help Iraq fight Coronavirus

The US Embassy in Baghdad announced today that is providing $670,000 to help Iraq fight the novel coronavirus pandemic.

"Today's announcement shows the strength of the US and Iraqi partnership, and we are committed to fighting this pandemic alongside the Iraqi people," said US Ambassador to Iraq Matthew Tueller. "Support provided through the [World Health Organization] will directly enhance the country's ability to combat the spread of COVID-19."

Click here to read the full article.

IFC Invests in Hospital in Erbil

By John Lee.

IFC, a member of the World Bank Group, is investing over $26 million in a new 161-bed hospital in Erbil in the Kurdistan Region of Iraq.

The facility will increase the availability of quality healthcare services and help address gaps in the country's healthcare infrastructure. The $92 million Seema Hospital project is expected to open its doors in 2021. In addition to providing core health services, it will be one of the city's first private hospitals with oncology, radiotherapy, and burn units.

Treatment capacity in existing public and private healthcare facilities in Iraq is limited, with damages to the system estimated at $2.3 billion because of the conflict, according to a World Bank report. The hospital is owned by the Macrom Company for General Trading.

Yaseen Al Bazzaz, Chairman and Chief Executive Officer of Macrom Company for General Trading, said

"Since opening our first hospital in 2006, we have grown into a leading provider of specialized health care services ... Hundreds of patients are traveling desperately to neighboring countries for their medical needs. This will change once Seema Hospital opens and provides top-notch healthcare solutions."

IFC is also contributing technical expertise, advising on environmental and social best practices, and providing guidance on corporate governance. The project is part of the World Bank Group's strategy in Iraq to develop social infrastructure. Seema Hospital also will be one of the first buildings in Iraq to be certified by IFC EDGE, a platform that helps to determine the most cost-effective options for designing green buildings.

Tomasz Telma, IFC's Senior Director for Manufacturing, Agribusiness, and Services, said:

"Iraq is a priority country for IFC, and we are committed to supporting its economic growth and health infrastructure ... Investing in quality hospitals helps improve care, especially where there is often limited access to effective secondary and tertiary facilities, and introduce expertise, technology, and best practices to these markets."  

IFC has increased its investments in Iraq during the last decade. Its committed portfolio stands at about $254 million, up from $20 million in 2010.

As Iraq and other countries battle COVID-19, the World Bank Group, in response to the crisis, has announced $14 billion package of financing to help support  countries to strengthen health systems and improve disease surveillance worldwide.

(Source: IFC)

Genel Energy’s new Deputy Chairman Buys Shares

By John Lee.

Genel Energy's newly-appointed Senior Independent Non-Executive Director and Deputy Chairman has purchased shares in the company.

Former UK Minister for Defence Sir Michael Fallon bought 9,000 shares on Thursday at £1.0967 per share, for a total price of £9,870.30.

He was appointed to the board in early February.

(Source: Genel Energy)

Govt, Clerics Unite Against COVID-19

By Hassan Ali Ahmed for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

 Iraqi government officials, clerics unite against COVID-19

As the number of coronavirus cases grows rapidly in Iraq, the Shiite religious establishment is offering to help the government, campaigning against extremist groups that oppose health experts' recommendation to close holy shrines and mosques.

On March 24, Iraq reported a total of 316 coronavirus cases and 27 deaths, an increase of 50 new cases and four more deaths overnight, a substantial increase in number.

Click here to read the full article.

Coronavirus forces partial US Troop Drawdown

By Bryant Harris for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Coronavirus forces partial US troop drawdown in Iraq

The US-led global coalition to defeat the Islamic State announced today that the coronavirus pandemic has forced "temporary adjustments" in the mission against the terrorist group.

"The unprecedented challenges posed by the COVID-19 pandemic to the Iraqi and Syrian people, and to our mission, led to temporary adjustments to protect the force during this period, in full coordination with the Iraqi authorities," the coalition said in a joint statement today released by the US State Department.

Click here to read the full article.

CPECC wins $204m Contract at Majnoon

By John Lee.

The China Petroleum Engineering & Construction Corp (CPECC) has reportedly won a $203.5 million engineering contract to treat sour gas at the Majnoon oilfield in Iraq.

According to Reuters, the field is now producing around 240,000 barrels per day (bpd), with plans to boost output to 450,000 bpd in 2021.

Originally awarded to Shell (45%), Petronas (30%) and the Maysan Oil Company (25%) in 2009, the field was taken over by the state-owned Basra Oil Company (BOC) at the end of June 2018, with operations and maintenance contracted to Chinese company Anton Oilfield Services Group (Antonoil) and the US company KBR.

(Source: Reuters)

GKP Updates on Iraq Operations

Gulf Keystone Petroleum (GKP) has issued providing an operational and corporate update:

Jón Ferrier, Gulf Keystone's Chief Executive Officer, said:

 "In these challenging times, we remain focused on the safety of our people and have adapted our operations to ensure their continued welfare.  With the associated economic backdrop compounded by a delay in payments, we are taking a prudent approach to running our business with a sharp focus on financial discipline and maintaining liquidity.  While we were on track to deliver the expansion to 55,000 bopd in Q3 2020, flexibility is the order of the day and as such, beyond our existing commitments, we have suspended further expansion activity until conditions improve. 

 "Underpinning the Company's strong investment case is the quality and scale of the Shaikan Field, which continues to perform well with current production of c.38,000 bopd.  

"Given our strong balance sheet with cash of $154 million at 23 March 2020, no debt repayment until mid-2023, limited capital expenditure commitments and a low-cost structure, we are highly confident in our future ability to capture the significant value in Shaikan, for the benefit of all stakeholders."   

Operational

  • Production from the field continues in line with expectations at c.38,000 bopd, currently unaffected by the impact of COVID-19.
  • GKP was on track to achieve 55,000 bopd in Q3 2020, prior to the previously announced suspension of expansion activity.  
  • The Company remains committed to the elimination of routine gas flaring. Its gas management plan now envisages the export of sweet gas instead of gas reinjection. This follows the results of the SH-9 well, which did not encounter a gas cap. The well has been completed as an oil producer and is in the process of being tied into PF-1.
  • A revised Field Development Plan ("FDP") is currently expected to be submitted this year, reflecting the new gas management project. Upon FDP approval, planning will commence for FEED ("Front End Engineering and Design").

Outlook

  • GKP will maintain a conservative financial position with a clear focus on cost control and cash preservation. At current production levels, the Company covers all operating, general and administrative costs and interest payments with a Brent price of c.$35 per barrel.
  • In the absence of further expansion activity, 2020 capital expenditures, including expenditures incurred to date and remaining firm commitments, are estimated to be between $50 million and $60 million (gross).
  • The delay of further investment into Shaikan is expected to impact prior gross 2020 production guidance of 43,000-48,000 bopd and achieving 55,000 bopd in Q3 2020.
  • Given the macro uncertainty, the Board is suspending guidance until such time as the outlook becomes clearer.
  • The Board recognises the importance of distributions to shareholders and intends to consider the appropriateness and timing of the ordinary dividend and any share buyback - upon resumption of payments and when it has a clearer view of the scale and duration of the impact of COVID-19 and the macro-economic effects on the business.

(Source: GKP)