Iraqi Cabinet Approves Loans from Saudi Arabia

By John Lee.

The Iraqi Cabinet held its weekly meeting on Tuesday under the chairmanship of Prime Minister Mustafa Al-Kadhimi, at which it agreed to:

  • Authorise the Ministry of Labour and Social Affairs to coordinate with the Ministry of Youth and Sports on the implementation of the National Project for Youth Employment
  • Approve the financial conditions of two loans from the Saudi Fund for Development, and to authorise a representative of the Ministry of Finance to sign the necessary contracts for the construction of a silo for wheat storage in Diwaniyah and the Saqlawiya Hospital in Anbar
  • Authorise the Director General of the Civil Aviation Authority to negotiate and sign a draft air transport agreement between the Republic of Iraq and the Kingdom of Bahrain, as amended by the State Council

(Source: Govt of Iraq)

The post Iraqi Cabinet Approves Loans from Saudi Arabia first appeared on Iraq Business News.

Iraq Relaxes Coronavirus Restrictions

By John Lee.

Iraq's Higher Committee for Health and National Safety held a meeting on Tuesday under the chairmanship of Prime Minister Mustafa Al-Kadhimi.

At the start of the meeting, the Prime Minister paid tribute to Iraq's medical and nursing professionals for being on the frontline during the Covid-19 pandemic.

In his briefing to the Committee, the Minister of Heath said that Iraq has increased its Covid-19 testing capabilities.

According to a statement from the Government of Iraq, the Director of the World Health Organization's Office in Iraq, Dr. Adham Rashad Ismail, praised the Iraqi government's efforts in response to the pandemic, and the measures taken by the Ministry of Health which contributed to a death-rate from of 2.9% which is lower than the global rate.

Following discussions, the Committee decided to:

  • Permit youth, sports activities and events in various fields (without the presence of spectators) while adhering to preventive health measures from 12/09/2020
  • Allow restaurants, event halls and tourist facilities at five-star hotels to reopen,  provided that health preventive measures are put in place as directed by the Ministry of Health
  • Allow all land border crossings to reopen to facilitate trade exchange only
  • Allow ministries and official public institutions to work at 50% capacity
  • Permit the Independent High Electoral Commission to open registration centres to allow voters to register for the biometric voting cards
  • Exempt staff of the Independent High Electoral Commission from curfew regulations

The Committee urged all Iraqis to continue to remain vigilant and to follow the official guidance of the Ministry of Health including adhering to preventive health and social distancing measures.

(Source: Govt of Iraq)

The post Iraq Relaxes Coronavirus Restrictions first appeared on Iraq Business News.

Detailed Assessment of INOC Law First Amendment

By Ahmed Mousa Jiyad.

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

The following is an executive summary of my detailed assessment of the INOC Law First Amendment, currently debated by the Council of Ministers:

  • The verdict by the Federal High Court-FHC regarding the appeal against INOC Law 4 of 2018 was historical and extremely significant. Briefly the Court refutes almost two-thirds articles of the said law and most of these articles have substantive importance for the good and proper implementation of the law;
  • It seems that the amendments proposed by the Ministry of Oil-MoO are either premised on inaccurate understanding of FHC verdict and its implications or deliberate attempt to undermine and circumvent that verdict;
  • On the other hand, opinion given by the Legal Directorate at the Council of Ministers are more mature, relevant and demonstrates good and accurate interpretation and understanding of the FHC verdict;
  • It is not clear why the urgency and what prompts the Ministry to stress for promulgating the amendment of the law at the current difficult conditions (in every aspects) which the country is facing. Moreover, the justifications presented by the Ministry are hardly convincing to say the least. It is more puzzling when the MoO calls for approving the amendments without going through the due legal process. Also, its reliance on a relatively old, personal and rather confused communication from the chairman of Energy and Oil Committee of the Council of Representative diminishes the strength of the Ministry' argument;
  • The disparities and divergence between the positions and opinions of Legal Directorate of the Council of Ministers and the proposed drafts of amendments by the MoO are very serious indeed with very different legal and operational implications. Hence, the "decision" by the Council of Ministers on the suggested amendments could create a "loop" that needs further and intensive efforts and probably long time to resolve and make them commensurate with the Constitution;
  • The timing causes concerns as the term of the current "caretaking" government and the current Council of Representatives is relatively short as the national election is officially scheduled for June 2021. The efforts and intentions to approve the proposed amendment is, ironically, a replica of passing the ill-fated Law 4 of 2018, i.e., passing unconstitutional law in a hurry while all are preoccupied with election!! They never learned even a lesson;
  • As for the amendments proposed by the Ministry of Oil they suffer from many serious flaws, ambiguities and lack of coherence and consistency; particularly when one look at the entire amended law. The details of the of the comprehensive assessment, in Arabic, of the proposed First Amendment of INOC Law is provided hereunder; it was circulated widely, emailed to all concerned high authorities and posted on many website.

Click here to download the detailed analysis (Arabic) 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.

The post Detailed Assessment of INOC Law First Amendment first appeared on Iraq Business News.

UNICEF aims to Train 30,000 Healthcare Workers

UNICEF aims to train 30,000 primary health care workers in Iraq in efforts to prevent and control Covid-19 infection

With numbers soaring since early June, as of the end of August Iraq has confirmed 231,177 cases of COVID-19 and 6959 deaths.

To stem the tide against the pandemic, UNICEF is supporting the training of an estimated 30,000 health care providers at the primary care level, with the aim of disseminating key information about COVID-19 infection, prevention and control, with a special focus on preventing infection among health providers.

Iraq is using a cascade approach for this massive exercise, with online training of 132 national officials from the Ministry of Health over four days in July, and over 580 personnel from the Primary Health Care departments at governorate- and district-level last week.

These subnational personnel will proceed to train primary care staff in person in coming weeks, thereby ensuring that their newly acquired knowledge is shared widely with other frontline health workers.

"Frontline health workers are the unsung heroes in Iraq's fight against COVID-19. Day after day, they continue to show up and provide critical services to those most in need, risking their lives," said Paula Bulancea, UNICEF's Deputy Representative in Iraq.

"This training will build on UNICEF's ongoing support to health workers and vulnerable communities in Iraq as we work together and with all of our partners in government, the World Health Organization, and in non-government organizations, to control this deadly virus," Dr. Bulancea added.

The cascade training will cover the needs of health workers providing immunization, maternal and neonatal care and nutrition services. It will also focus on water and sanitation in the primary health care setting in the context of COVID19.

"Simple acts such as washing your hands after seeing every patient, ensuring that you maintain social distancing with caregivers when vaccinating a child, and wearing a mask at all times will go a long way in ensuring that the safety of healthcare workers isn't compromised on the job," remarked Dr. Bulancea.

In addition to training health workers, UNICEF has:

  • Reached over 14 million people with risk communication and awareness in online and off-line awareness raising campaigns.
  • Distributed approximately 11,000 personal protective equipment (PPE) to front line health workers in the most affected governorates.
  • Partnered with the University of Karbala to produce 14,500 bottles of locally made hand sanitizers and 10,000 large bottles of disinfectants to disinfect surfaces, in partnership with the Karbala
  • Directorate of Health. These products were distributed in healthcare centers in Karbala and Baghdad.
  • Launched a satellite TV education channel to support 1.5 million learners in Kurdistan Region of Iraq.

(Source: UN)

The post UNICEF aims to Train 30,000 Healthcare Workers first appeared on Iraq Business News.

GKP Reports Loss for 1H 2020

By John Lee.

Shares in Gulf Keystone Petroleum (GKP) were trading largely unchanged at lunchtime on Thursday, after the company announced a loss for the half year ended 30 June 2020.

Company statement:

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

"We moved decisively to protect the business and preserve liquidity in response to COVID-19 and the decline in oil prices. We are actively managing the impact of COVID-19 and working to protect our staff. The Shaikan Field continues to perform well with production up more than 25% compared to H1 2019. 

"While waiting to resume the 55,000 bopd project, the Company has identified a number of simple, low-cost, high-impact investments that have the potential to increase the current base level of gross production by approximately 5,000 bopd and, subject to a satisfactory operating environment, could be implemented in the near-term.

"We continue to maintain a tight focus on cost control and further savings will be reflected in the full year results.

"With our current measures in place, we are pleased to provide 2020 gross production guidance of 35,000 to 36,000 bopd. With continued improvement in macro and operating conditions, we are well positioned to deliver the long-term potential of the Shaikan Field and look forward to resuming shareholder distributions over time."

Highlights to 30 June 2020 and post reporting period

Operational

  • Operations at Shaikan continue safely and reliably, with no Lost Time Incidents ("LTIs") reported during 2020.
  • The Shaikan reservoir continues to perform in line with expectations, with current gross production of c.36,000 bopd and average 2020 gross production to 1 September 2020 of 36,272 bopd.
  • At the time of suspension of investment plans in March 2020, key drilling and facilities activities were on track to achieve the 55,000 bopd target in Q3 2020.
  • GKP is preparing to return to production growth, and has identified a number of quick payback projects, which are expected to increase gross production by c.5,000 bopd for an aggregate gross cost of c.$3 million. Planning is ongoing and, subject to a satisfactory operating environment, could be implemented in the near-term.
  • The Company remains committed to operating sustainably. Throughout the pandemic, the Company has continued to actively support the communities around Shaikan and has donated essential equipment to nearby hospitals.

Financial

  • H1 2020 revenue of $49.9 million (H1 2019 - $95.6 million) and Adjusted EBITDA of $27.5 million (H1 2019 - $59.0 million) resulted from the decline in oil prices, partially offset by increased production. Such factors combined with increased depreciation, depletion and amortisation ("DD&A") due to production growth drove a loss after tax of $33.1 million (H1 2019 - $24.2 million profit).
  • Opex per barrel in H1 2020 was $2.6/bbl, below guidance of $2.7 - $3.1/bbl. Operating costs and general and administrative ("G&A") expenses savings of 12% contributed to expense reductions compared to H1 2019, and further savings are expected in H2 2020 with the significant reduction in activity and continuing focus on cost control.
  • Net capex in H1 2020 was $38.5 million. H2 2020 net capex is expected to be minimal, comprised principally of long-lead time deliveries that will expedite the eventual restart of growth activities. Full year net capex is expected to be within the original $40-48 million guidance range.
  • To protect cash flows, Gulf Keystone hedged c.70% of its H2 2020 net production at a floor price of $35/bbl while retaining full upside exposure.
  • In Q1 2020, the Company completed the second tranche of its share buyback programme bringing total 2019 and 2020 capital distributions to $99 million.
  • Since March 2020, the Kurdistan Regional Government ("KRG") has paid for the last five months of oil sales in the following month as per its commitment to international oil companies ("IOCs").
  • The Company has a strong balance sheet with $140 million of cash at 2 September 2020 and no debt repayment until mid-2023.

  Corporate

  • As previously announced, Jón Ferrier, CEO, has informed the Board of his intention to retire from the Company upon appointment of a successor and after a period of handover. The search process for a new CEO is underway.
  • The Company announced the re-appointment of Garrett Soden to the Board of GKP as a Non-Independent Non-Executive Director representing funds managed by Lansdowne Partners Austria GmbH.

Outlook

  • After successfully managing the impacts of COVID-19 over the last several months, the Company is pleased to provide 2020 gross production guidance of 35,000 bopd to 36,000 bopd.
  • GKP is well positioned to restart its drilling programme to achieve 55,000 bopd when circumstances permit.
  • In line with its stated growth strategy, GKP continues to progress growth opportunities at Shaikan and will also consider potential value accretive inorganic options on an opportunistic basis.
  • The Company remains in a constructive dialogue with the KRG and will continue to seek the timely settlement of the overdue November 2019 to February 2020 invoices totaling $73.3 million (net). The KRG has committed that with the continuing improvement in the price of dated Brent above $50/bbl outstanding arrears will be reviewed.
  • GKP remains committed to maintaining its strong financial position and, as conditions continue to improve, returning to a balance of production growth and shareholder distributions.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

More here and here.

(Sources: GKP, Yahoo!)

The post GKP Reports Loss for 1H 2020 first appeared on Iraq Business News.

Preliminary Oil Export Figures for August

By John Lee.

Iraq's Ministry of Oil has announced preliminary oil exports for August of 80,494,536 barrels, giving an average for the month of 2.597 million barrels per day (bpd), down from the 2.763 million bpd exported in July.

These exports from the oilfields in central and southern Iraq amounted to 77,505,136 barrels, while exports from Kirkuk amounted to 2,989,400 barrels.

Revenues for the month were $3.517 billion at an average price of $43.693 per barrel.

July's export figures can be found here.

(Source: Ministry of Oil)

The post Preliminary Oil Export Figures for August first appeared on Iraq Business News.

Oil Ministry Finalises Export Figures for July

By John Lee.

Iraq's Ministry of Oil has announced finalised oil exports for July of 85,663,290 barrels, giving an average for the month of 2.763 million barrels per day (bpd), down from the 2.816 million bpd exported in June.

These exports from the oilfields in central and southern Iraq amounted to 82,700,381 barrels, while exports from Kirkuk amounted to 2,701,015 barrels. Exports to Jordan were 261,894 barrels.

Revenues for the month were $3.492 billion at an average price of $40.762 per barrel.

June's export figures can be found here.

(Source: Ministry of Oil)

$8bn New Iraqi Energy Agreements with US Firms

The following commercial agreements worth as much as $8 billion were reached during a signing ceremony between U.S. energy companies and the Government of Iraq on August 19, 2020:

  • Honeywell and the Ministry of Oil agreed to advance the development of the Ar Ratawi [Artawi] gas project, which will further enable Iraq to capture, process, and utilize indigenous gas resources to meet domestic energy demand.
  • General Electric and the Ministry of Electricity committed to three agreements that will help increase reliable access to electricity in Iraq, including efforts related to GE's existing generation maintenance program, addition of combined cycle units at the Dhi Qar and Samawah power plants, and collaboration on strengthening Iraq's electricity grid and interconnection with neighboring countries.
  • Stellar Energy and the Ministry of Electricity concluded a front-end engineering and design agreement that will help advance deployment of turbine inlet air chilling technology on more than 30 turbines, which will increase power sector efficiency by as much as 30 percent.
  • Baker Hughes and the Ministry of Oil agreed to further collaboration on flare gas-to-power opportunities, and deployment of U.S. oil field services and equipment.
  • Chevron and the Iraqi Ministry of Oil outlined a framework for entering into exclusive negotiating on an exploration, development, and production contract in the Dhi Qar Province.

US Secretary of Energy Dan Brouillette (pictured) said:

"As two of the top oil producers in the world, the United States and Iraq share an appreciation for how energy shapes our economies and can strengthen our respective security.

"That is why I was thrilled to join Prime Minster Kadhimi, Minister Ismael, and Minister Hantoush today for an event featuring this prestigious Iraqi delegation and our great American energy companies. Together, we laid the groundwork for commercial partnerships worth up to $8 billion.

"These deals are key to Iraq's energy future, and I am confident that the same companies that have empowered the United States to become energy independent will deploy their deep expertise to help Iraq achieve its full potential in the energy sector."

(Source: US Dept of Energy)

Mousa Jiyad Questions Norwegian Tanker Deal

By John Lee.

Iraq Business News Expert Blogger, Ahmed Mousa Jiyad, has demanded an investigation into Iraq's reported contract to buy tankers from a Norwegian company.

The Ministry of Oil announced on 18th August that the Iraqi Oil Tankers Company (IOTC) had concluded a contract with Norway's Batservice Mandal [Båtservice Mandal AS] to build two oil tankers.

According to Mr Jiyad, the company has no experience in building ships of this sort, and filed for bankruptcy last year.

The full text of Mr Jiyad's statement (in Arabic) can be read below:

Iraqi Govt needs more Female Voices to Fight the Pandemic

By Hanar Marouf, for the Atlantic Council. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

Iraq's government needs more female voices to fight the pandemic

Iraq is in a precarious condition. It has faced major challenges on multiple fronts, including political instability, a drop in oil prices, and the economic fallout amid the coronavirus outbreak.

While the government deliberates protection measures, the capacity of hospitals and staff remain limited.

The rampant spread of the virus, with an average of 3,000 daily infections, has only been exacerbated by a lack of concrete emergency plans. Up to mid-August, Iraq had 150,000 cases and 5,400 deaths.

Click here to read the full story.