Direct Appeal to Federal Supreme Court against INOC Law

By Ahmed Mousa Jiyad.

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

Immediately after the Iraqi parliament voted the new INOC Law and after thorough and critical examination and analysis of the law it becomes apparently clear that the law is full of shortcomings, ambiguity, contradictions and above all it contrives the Constitution repeatedly and thus it is unconstitutional. Hence, an appeal to the Federal Supreme Court becomes urgent necessity to revoke this devastating law.

Due to the importance of the law and its highly likely damaging impacts on the petroleum sector and on the Iraqi economy at large, it is imperative and of vital necessity to adopt inclusive and participatory methodology for combating the law. For this purpose I adopted four phases AMTA approach: Awareness, Mobilization, Teaming-up and Action.

Awareness phase aims at highlighting what is seriously wrong with the law by, first, providing preliminary evaluation of the law. The evaluation, written in Arabic on 8 March, was posted on many websites, such as (http://www.akhbaar.org/home/2018/3/241534.html ) and disseminated among my very extensive network of contacts inside and outside Iraq (ca. 2000 contacts). Similarly, an English article was posted on 12 March on IBN website (http://www.iraq-businessnews.com/2018/03/12/inoc-law-dysfunctional-unconstitutional-and-disintegrative/ )

Further article in Arabic was shared, on 20 March, among my network and also published widely provides further specific and with economic evaluation on how this law could violate the constitution, weaken INOC itself and contribute to the disintegration of the country, (http://www.akhbaar.org/home/2018/3/242198.html)

 

Mobilization phase began by calling upon Iraqis, collectively or individually, to protest the law and file “open” appeal to the Federal Supreme Court; two articles in Arabic were shared and posted on 26 and 27 March respectively:  http://www.akhbaar.org/home/2018/3/242229.html   and http://www.akhbaar.org/home/2018/3/242284.html

The call aims at prompting the citizens to know their constitutional rights and empower them with the knowledge base to act as was enshrined in the constitutional article 93, which says the Federal Supreme Court shall have jurisdiction over the following, among others: “Overseeing the constitutionality of laws and regulations in effect” and “The law shall guarantee the right of direct appeal to the Court to the Council of Ministers, those concerned individuals, and others.”

Much of my writings were in comparative and structuralist methodology: by comparing this law with first, the constitution, second, with previous INOC laws, third, with other laws of direct relevance to the topic and fourth with lessons learned from INOC history and structural progression since its foundation in early sixties of the last century.

 

Team working phase began when many oil professionals, lawyers, civil society organization, politicians, parliamentarians and media sources among others supported the idea of appealing to FSC.

Three groups of Iraqi lawyers volunteered to provide legal support on substantive and procedural matters pertaining to the appeal before FSC and a small group of Iraqi oil professionals was assembled in Baghdad to maintain contacts with the lawyers and follow-up the matter inside the country especially with media sources and events organization. The discussion with the lawyers suggests that at this stage, two fundamental steps must be done: the first is to prepare a draft of detailed appeal against the law on article-by-article base and the second is to provide the lawyers with “Power of Attorney” by me and other plaintiffs.

A detailed appeal (in Arabic) was drafted and circulated, 4 April 2018, among the wider network and also posted on many websites such as,  http://www.akhbaar.org/home/2018/4/242627.html . The draft proves that INOC law contravenes ten constitutional articles in addition to other critical flaws; in total there are 29 identified cases for appeal against the law.

 

Action phase began with many different actions:

–          Many of the contacts in my professional network recirculated the articles above mentioned among their own networks;

–          One lawyer convened a big gathering in one of Baghdad known hotels attended by active parliamentarians;

–          A well-respected journal, Al-Thaqaf al-Jadeda,  convened, on 7 April, in Baghdad,  a roundtable debate on the law attended by known professionals on both side of the isle, my participation was in absentia and the PowerPoint was presented by one of the supporting group there;

–          A report on the debate was published on 8 April on Tareeq Al-Shaab Newspaper;

–          A group of Iraqis abroad launched on 4 April an online-campaign against the law (http://ehamalat.com/Ar/sign_petitions.aspx?pid=1002 )- the number of cite visitors exceeds 8000 (at 13 PM Norway time today 8 April 2018).

Copy of the “Power of Attorney” was circulated among “the  willing and like-minded” to authorize specified two lawyers to pursue the appeal once the law was published on the Official Gazettes- Al-Waqaee Al-Iraqiya. It is also available for anyone willing to pursue the appeal action. 

All components of the AMTA approach are ongoing and continue until this atrocious law is revoked.

Those willing to see the text of draft appeal in Arabic can access it freely through

تفاصيل الطعن المباشر بقانون شركة النفط الوطنية العراقية http://www.akhbaar.org/home/2018/4/242627.html

For endorsing our campaign against the law one can sign on the electronic appeal through

http://ehamalat.com/Ar/sign_petitions.aspx?pid=1002

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.

Oil Ministry, Rosneft discuss increasing Cooperation

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has met with Deder Kasemero, the vice president and the regional manager of Rosneft, to discuss the expansion of cooperation in the Iraqi oil and gas sector.

The Minister said he is open for international companies such as Rosneft to participate in investment projects to rehabilitate oil pipelines, develop oil fields, build refineries and invest in flare gas.

(Source: Ministry of Oil)

GE “Helps Najibiya Power Plant Reduce Downtime”

GE Power has installed its Advanced Gas Path (AGP) gas turbine upgrade solution at the Iraqi Ministry of Electricity’s (MOE’s) Najibiya Power Plant.

The solution is expected to enable the MOE to increase the duration between the maintenance inspections of the gas turbines. This will decrease the downtime of the turbines and improve the availability and performance of the plant, allowing each gas turbine to feed power into the national grid for longer periods, helping to meet the country’s growing energy needs. It will also help the MOE to lower annual operations and maintenance costs.

Mussab Almudaris, official spokesperson of the Iraqi Ministry of Electricity, said:

“We are focused on enhancing access to electricity for our people and one of the critical means to achieve this goal is to make the best possible use of existing power generation infrastructure. GE’s upgrade technology at the Najibiya Power Plant is helping us to do just that, supporting the delivery of electricity for longer periods of time from the same turbines. This was a much-needed solution, particularly with Ramadan, the month of fasting, and the hot summer months right around the corner.”

Operational since 2015, the Najibiya Power Plant is equipped with four GE 9E gas turbines, and runs primarily on heavy fuel oil (HFO) to generate a total of up to 500 megawatts (MW) of power that is fed into the national grid. The site is located in the southern governorate of Basra, close to the Iraq-Kuwait border – one of the hottest inhabited locations in the world, where temperatures often exceed 50 degrees Celsius.

The power generated at the facility is largely supplied to residents, businesses and industries in the area, and vital for the local population to cope with the extreme temperatures in Basra, helping to operate fans and air conditioners.

Joseph Anis, President & CEO of GE’s Power Services business in Africa, India and the Middle East, said:

“Access to uninterrupted electricity is a cornerstone of modern civilization and essential to a high quality of life … GE’s Advanced Gas Path solution can help each turbine at the Najibiya Power Plant run for up to an additional three months per year when the plant is powered by heavy fuel oil, substantially increasing the amount of electricity available for both domestic and commercial use.”

In addition to providing the AGP solution, GE Power has also signed a five-year agreement in 2015 for the supply of parts, repairs and services at the Najibiya Power Plant. Furthermore, GE Power is providing round-the-clock on-site monitoring services for the gas turbines at the facility, whereby parameters such as the units’ temperature, vibration, speed and other indicators are continuously tracked and any disturbances immediately reported so the underlying issue may be identified and fixed to prevent faults and unplanned downtime.

Najibiya Power Plant is one of 8 sites where GE is installing a total of 36 AGP units under the Power Up Plan II. To date, over 130 GE turbines have been installed across Iraq and GE-built technologies generate up to 50 percent of Iraq’s power. The company has supported the development of the energy, healthcare and transportation sectors in Iraq for over 40 years and employs up to 300 people in the country, more than 95 percent of whom are Iraqi nationals.

(Source: GE)

New Gas Treatment Station opened at Bazirgan Field

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has opened a gas treatment station at the Bazirgan field in Maysan [Missan] governorate.

The celebration was also attended the members of the parliament, the deputies of the ministry, the directors general and the responsible officials of the ministry, the local government and the governorate.

Mr. Al-Luiebi said that the gas investment is a real priority for the ministry of oil to stop wasting the oil wealth and to develop the gas industry in Iraq.

Mr. Al-Luiebi said in his speech during the celebration that the gas treatment project is designed to process two million standard cubic meters of associated gas which means (71) MSCF/ day. The processed quantities of gas will be used to operate the (44) megawatts Maysan power station, in order to operate the production units and facilities in the oil fields and supply the surplus to the national power stations with an average of (60) megawatts.

Mr. Al-Luiebi said also:

“We are standing today before and economic edifice and a new accomplishment achieved by the faithful sons of Iraq in general and Maysan in special, and this project is a part of the strategic significant plans of the ministry of oil to invest the associated gas and make use of it in the industry of liquid gas and condensed gas which has become a good economic source of outcome to the federal governmental budget, through the exportation which is being done since two years. In addition to the outcome of the crude oil exportation”.

Mr. Al-Luiebi referred to the accomplishments of the ministry in the sectors of production, exportation and gas industry, which was made through the investment projects by cooperation with the national effort and the international specialized companies. In “dear Maysan” there was many accomplishments, such as the elevation of the oil production to about (480) thousand barrels/ day which can be considered as a big achievement to the governorate within a record time of a few years.

The development projects are continuous in the fields of the company and it is expected to finish the third treatment station in Halfaya field within the end of this year with capacity of (200) thousand barrels/ day to elevate the production from the field to (400) thousand barrels, and elevate the production of the company.

The representative of the Chinese company Inpal said that the project was executed according to the international standards within 18 months and will ensure the investment of large gas quantities to be used in the power station turbines in the field and the national power network.

(Source: Ministry of Oil)

Expert Blog: How Procurement Influences Production

By Elena Kornienko.

In the previous blog post we have talked about Procurement’s role within organization and today I will share with you one more story when Procurement could’ve done a job of SuperMan but end up with selecting a wrong subcontractor and that choice made a tremendous impact on production.

At the beginning of 2018 Tesla’s share price fall 20% from last year’s all-time high. What is the story behind it and how we – people involved with Oil and Gas in Iraq – can related to it? In 2017 Tesla forecasted the production of 5,000 Model 3 sedans and in the last quarter it announced that it had made 2,500.  It was a “production hell” and one of the factors to it was Procurement’s fault for choosing a sub-contractor which did not perform. As a result, billions of dollars in stock value was lost.

What can we, procurement professionals in the oil and gas industry, learn from this story?

First of all, no matter how big or small a purchase order, it should be assessed against criticality for oil production. It might be a relatively small and standard valve, however if that is to be installed on a critical part of a pipeline, it could impact the operation of the whole line. This is where I see Procurement and Production/Operation teams working together as one team which is still unfortunately a rare case.

Another important question is the pre-qualification of contractors and suppliers. Not all IOC’s in Iraq perform pre-qualification as it should be done based on best industry practises. Some IOCs have a simple registration process which is based on data collection only, some IOCs run a bit more sophisticated process which is still have a room for improvement.

What is still not understood and appreciated in pre-qualification process is that based on selecting qualified bidders in a first place would improve the quality of tender submissions as well as create healthy price competition between companies which are of the same expertise level.

It is wrongly assumed that having more bidders in one tender would increase the chances of having more competitive offers. In reality un-qualified or even not capable bidders participate in tenders barely passing technical evaluation, getting a contract and trying to execute it, while qualified top performers were not even invited to bid.

Selection of technically capable contractors is another challenge which directly impact Production. It is related not only to pre-qualification process, but also to setting right technical evaluation criteria during tender exercise. In my years of experience in Procurement I have seen it in extreme angles – from being very formal to criteria set to being flexible in evaluation. Both approaches can bring harm in contactor selection if not used correctly and balanced.

One of the extreme examples which I witnessed myself just recently: all bidders were requested to provide a list of at least 3 projects of a similar nature performed in 2014-2017 and the Operator did not accept a list of projects from one bidders which were performed in 2012-2016, while that bidder still demonstrated their capabilities and expertise in this area.

These areas are just a top of an iceberg in Procurement world and we will be covering more of them in the blog posts. In a mean time I have two questions: Firstly, what if Tesla selected technically capable contractor and delivered on projected number of vehicles? The answer is straightforward – no loss in the value of shares. And what if IOCs in Iraq would always use the best international practises on contractor selection? The answer is also straightforward – more competitive costs of contracts and no delay or loss of oil production, which has a direct impact of Iraq’s budget.

Elena Kornienko has more than 15 years of professional experience in contracts, procurement and tendering in various roles from demand-identification to contract close-out. She has worked on major international oil and gas projects, including the Sakhalin-1 and Sakhalin-2 fields in Russia, and Iraq’s West Qurna-2. Now based in Dubai, she provides consultancy services to the oil and gas industry. Elena is a fluent English and Russian speaker, and a graduate of the Moscow State University of Commerce, holding a degree in Economics. She also graduated with distinction from the School of Business Administration at Portland State University and holds a CIPS diploma.

Baker Hughes to harness Flare Gas at Gharraf & Nassiriya

By John Lee.

Baker Hughes has signed a contract to harness 200 MMcf/d of natural gas from Iraq’s Nassiriya and Gharraf oil fields.

The Nassiriya field is operated by the state-run Dhi Qar Oil Company (DQOC) and currently producing around 70,000 barrels per day of crude oil, with a target of 150,000 bpd.

Gharraf is operated by Petronas and is producing around 88,000 bpd with a plateau production target of 250,000 bpd.

(Sources: Minister of Oil, Platts)

Al-Nukhba-OFS joins the IBBC

The Iraq Britain Business Council (IBBC) has announced that Al-Nukhba-OFS FZCO has become the latest member to join the Council.

Al-Nukhba OFS is one of Iraq’s preeminent organisations, involved in numerous sectors of the economy with many years of experience and has developed strong relationships with a host of international companies.

Al Nukhba OFS started its business in 2005 as an investor in the Basra area in the specialized fields and expanded business areas in water and wastewater treatment plants and pre-drilling oil field services, logistics & custom clearance and oil field services.

Al Nukhba OFS provides services such as end-to-end logistics solutions and services along with of value added services to customize your supply chain to meet your precise goals and requirements. Their dedicated teams select and apply the exact resources you need to improve your business’s performance and provide flexibility for a dynamic marketplace.

Al Nukhba OFS has relationships with major companies for energy projects and has a contract with the Ministry of Electricity, Iraq and hold an exclusive HCL distribution contract with the Ministry of Industry & Minerals for AL Furat Factory. Al Nukhba is cooperating with major power companies i.e. Ansaldo Energia to develop the power sectors in Iraq and have strong support from Wood Group P&W through their Iraq Agent for the development of power section as well.

Al-Nukhba OFS are associated with numerous notable companies, such as Baker Hughes, ENKA, Eni, Scania, Daewoo, Petromid, KOGAS, Techno Engineering, TAAZ, Oilserv. Al-Nukhba OFS have successfully completed a number of projects for them, including mobilization/maintenance of RIG, Logistics and other life support services, Surveillance, Fuel & Manpower supply, Distribution & Warehousing, Camp & Site Preparation/Maintenance besides 4PL logistics and other subcontracting jobs and provide immigration services too.

Al-Nukhba OFS currently act as an agent, supplier and distributor for:

  • Parker Trade Link International (A Supply Chain Management Company)
  • Chesterton
  • Bentonite, Calcium Carbonate and other minerals for all varieties
  • Power Generator
  • Nystrom Building Materials

(Source: IBBC)

235-MW Rumaila Power Station Opened

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has officially opened the Rumaila power station.

The construction of the 235 MW plant was supervised by the China Petroleum Engineering & Construction Corporation (CPECC), the engineering and construction subsidiary of the China National Petroleum Corporation (CNPC).

The Minister said the project is considered as one of the largest projects organized by the Rumaila Operating Organization (ROO), which includes Basrah Oil Company (BOC), BP and PetroChina.

(Source: Ministry of Oil)

Oil Exports Fall Slightly in March

By John Lee.

Iraq’s Ministry of Oil has announced preliminary oil exports for March of 107,050,000 barrels, giving an average for the month of 3.453 million barrels per day (bpd), a slight increase from the 3.426 bpd exported in February.

The exports were entirely from the southern terminals, with no exports registered from Kirkuk via Ceyhan.

Revenues for the month were  $6.418 billion at an average price of $59.954 per barrel.

February export figures can be found here.

(Source: Ministry of Oil)

Power-sharing deal could end dispute over Kirkuk Elections

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

For the first time since 2005, Kirkuk governorate in Iraq will hold elections Dec. 22 to select its local governing council. Parliament included the multiethnic province of the Kurds, Arabs and Turkmens in the provincial election law approved March 3.

The decision follows an agreement among the three groups’ representatives in parliament and was greatly welcomed by all segments, especially the Kurds, who for years have demanded that elections be held in Kirkuk. Khalid al-Mafraji, an Arab parliament member from Kirkuk, told Al-Monitor that negotiations took more than a year.

The agreement binds the Independent High Electoral Commission to review voters’ records in coordination with the ministries of Interior, Commerce, Planning and Health. If they aren’t able to review the records before the elections, the commission will be obliged to undertake an audit within six months after the elected council begins its work.

“The most important articles of the agreement relate to sharing power,” Mafraji said. The largest bloc in the election will appoint the governor, and the two deputy positions will go to the other two groups. Moreover, federal positions will be determined by the governorate’s residents, according to party size. The agreement also states that the constitution and the law take precedence over the governorate’s council, parliament and the federal government.

The electoral law will remain in effect for four years. Shakhawan Abdullah, who represents Kirkuk in the Kurdistan Democratic Party in parliament, told Al-Monitor, “The agreement between the three components of Kirkuk’s governorate will be effective for only one electoral round, and the elections will not be held in the same way in four years’ time.”

Abdullah believes the provincial election law presents a good opportunity to resolve conflicts in the governorate and give it more administrative powers, like other governorates. The governorate has gone without elections all these years for various reasons. Oil-rich Kirkuk is a disputed area claimed by both the central government in Baghdad and the Kurdish Regional Government (KRG) in Erbil. Its situation is also unique because of its ethnic diversity and disagreements among them.

The constitution stipulates the conflicts in the governorate must be normalized in three stages. The first stage is to allow the return of displaced Kurds and Arabs who emigrated during the regime of deposed Iraqi President Saddam Hussein.

The second stage is to carry out a population census, and the last stage is to hold a general referendum on whether Kirkuk should become a new region, like the autonomous Kurdistan Region, or be annexed to the Kurdistan Region.

All of those procedures were to be carried out before 2007, which wasn’t done. This caused political conflict, partly because of the disagreement between Baghdad and the KRG over having elected authorities with the right to control the governorate’s future.

The Kurdistan independence referendum in September, which included Kirkuk, ended in crisis, and the central government subsequently took over the governorate and cut the Kurds’ authority. The coming elections will give Baghdad and the KRG a chance to solve the current dispute over Kirkuk’s administration.

However, the most important problem that may affect holding elections in Kirkuk is the agreement on a unified record of voters, which may raise doubts about the election results. Iraq hasn’t conducted a census in decades. Ali Khalil, the Arab bloc member of the governorate council, told Al-Monitor that Arabs weren’t in favor of the agreement’s clause that allows an audit to be delayed until after the elections if records can’t be reviewed before then.

“How would we elect a new governorate council while doubting voters’ records at the same time?” Khalil asked.

The Kirkuk local elections will provide a chance to reduce tension in the governorate, a good way to determine the real size of each of the three ethnic groups and a way to form a more legitimate administration — but it could lead to negative results. If one segment is counted and found to have significantly fewer representatives than before, that segment might refuse to accept the election results.