(Source: ICF)
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BHEL to supply Compressor to Baiji Refinery
By John Lee.
New Delhi-based Bharat Heavy Electricals Limited (BHEL) has won an order to supply a news compressor to Baiji Refinery in Iraq.
The order, placed by the North Refineries Company (NRC), envisages design, engineering, manufacturing and supply of electric motor driven Recycle Gas Centrifugal compressor and will be executed by BHEL’s International Operations Division along with its manufacturing units at Hyderabad and Bhopal.
The new compressor will replace the existing compressor, also supplied by BHEL in the year 2000, which was damaged due to the war in Iraq.
BHEL has previously supplied several Gas Turbine based Power Plants, including 4×157 MW Gas Turbine Generator (GTG) units for Baiji Power Station and 2×125 MW GTG units for Rumailla Power Station. BHEL has also executed a turnkey order for construction of 4×125 MW Gas Turbine based Sulaymaniyah Power Project in Iraq.
(Source: BHEL)
(Picture: a compressor previously installed by BHEL in Iraq)
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Russian Invasion of Ukraine, and Iraq’s Economy
By Salam Zidane for Al Monitor. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.
Russian invasion of Ukraine has sharp impact on Iraq’s economy
Russia’s invasion of Ukraine has caused shortages of food in Iraq and forced the government to pay more in gasoline subsidies, but the high price of crude oil plus sanctions on Russia has opened new opportunities for Iraq.
Click here to read the full article.
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Genel Energy outlines Payments to Govts for 2021
By John Lee.
Genel Energy has just published details of its payments to governments for the year 2021:
Introduction and basis for preparation
This report sets out details of the payments made to governments by Genel Energy plc and its subsidiary undertakings (‘Genel’) for the year ended 31 December 2021 as required under the Disclosure and Transparency Rules of the UK Financial Conduct Authority (the ‘DTRs’) and in accordance with our interpretation of the Industry Guidance issued for the UK’s Report on Payments to Governments Regulations 2014, as amended in December 2015 (‘the Regulations’). The DTRs require companies in the UK and operating in the extractives sector to publically disclose payments made to governments in the countries where they undertake exploration, prospection, development and extraction of oil and natural gas deposits or other materials.
Governments
All of the payments made in relation to licences in the Kurdistan Region of Iraq (‘KRI’) have been made to the Ministry of Natural Resources of the Kurdistan Regional Government (‘KRG’).
Production entitlements
Production entitlements are the host government’s share of production during the reporting period from projects operated by Genel. Production entitlements from projects that are not operated by Genel are not covered by this report. The figures reported have been produced on an entitlement basis rather than on a liftings basis. Production entitlements are paid in-kind and the monetary value disclosed is derived from management’s calculation of revenue from the field.
Royalties
Royalties represent royalties paid in-kind to governments during the year for the extraction of oil. The terms of the Royalties are described within our Production Sharing Contracts and can vary from project to project. Royalties have been calculated on the same barrels of oil equivalent basis as production entitlements.
Materiality threshold
Total payments below £86,000 made to a government are excluded from this report as permitted under the Regulations.
Payments to governments – 2021
| Country/Licence | KRI Total (1) | Taq Taq (2) |
| Production entitlement (bbls) | 1,234,564.87 | 1,234,564.87 |
| Royalties in kind (bbls) | 216,930.95 | 216,930.95 |
| Total (bbls) | 1,451,495.82 | 1,451,495.82 |
| Value of production entitlements ($ million) | 78.52 | 78.52 |
| Value of royalties ($ million) | 13.74 | 13.74 |
| Capacity building payments ($ million) (3) | 1.25 | 1.25 |
| Total ($ million) | 93.51 | 93.51 |
- Under the lifting arrangements implemented by the KRG, the KRG takes title to crude at the wellhead and then transports it to Ceyhan in Turkey by pipeline. The crude is then sold by the KRG into the international market. All proceeds of sale are received by or on behalf of the KRG, out of which the KRG then makes payment for cost and profit oil in accordance with the PSC to Genel, in exchange for the crude delivered to the KRG. Under these arrangements, payments are in fact made by or on behalf of the KRG to Genel, rather than by Genel to the KRG. For the purposes of the reporting requirements under the Regulations however, we are required to characterise the value of the KRG’s entitlement under the PSC (for which they receive payment directly from the market) as a payment made to the KRG. Therefore, estimated value in $millions is not paid to the KRG, and is calculated to meeting the reporting requirements under the regulations
- The amount reported for Taq Taq, is the gross payment made to the KRI by the operating company (TTOPCO), Genel’s share of these payments is equal to 55% (with the exception of capacity building payments)
- Capacity building payments reported are payments made by Genel directly to the KRI in cash as required by the PSC.
(Source: Genel Energy)
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Iraqi Drilling Company signs Partnership Contract with SOCAR
By John Lee.
The Iraqi Drilling Company (IDC) has signed a partnership contract with SOCAR, the the state-owned oil and gas company of Azerbaijan, for drilling and oil-field services.
The Director General of the company, Bassim Abdul Karim, said that the contract involves collaboration in the field of drilling and reclamation of oil wells, noting that the term of the contract is three years, and may be extended.
The agreement follows a visit by Iraq’s Oil Minister, Ihsan Abdul-Jabbar Ismail, to Azerbaijan in September, and a visit by the General Director of Iraqi Drilling Company (IDC), Basim Abdulkareem, to SOCAR’s headquarters in January.
(Source: Ministry of Oil)
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KRG “Remains Committed” to Oil and Gas Contracts
By John Lee.
The Prime Minister of the Kurdistan Regional Government (KRG) has assured the region’s partners in the oil and gas sector that the KRG “remains committed” to the contracts that have been signed with energy companies.
Masrour Barzani told the Global Energy Forum 2022 that the contracts are “in line with our oil and gas law and the Iraqi Constitution and they are a bedrock of our shared future“.
He added:
“The sanctity of the contracts are just as important to my government as they are to you …
“Investors in Kurdistan have the right to receive regular payments. Ensuring this happens is a core focus of my cabinet, which will clearly help secure future investment. We value the investment and partnership of all the energy companies who are in Kurdistan – I know you have maintained commitment through the challenges …
“We in Kurdistan have long sought mechanisms for the federal distribution of oil and gas revenues across all of Iraq. That’s what the Constitution calls for, and the only practical way forward for both Baghdad and us.“
His comments follow the recent Federal Supreme Court ruling that sales of oil and gas law by the KRG, independently of the central government in Baghdad, are unconstitutional.
Barzani described the ruling as “unconstitutional and blatantly political.“
(Source: KRG)
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Iraq to Resume Oil Exports to Jordan
By John Lee.
Iraq and Jordan have reportedly agreed to re-start the export of crude oil from Kirkuk to the refinery at Zarqa in Jordan.
The most recent deliveries to Jordan by truck were in January, and according to Jordan Times they are expected to resume in April.
Exports have previously been agreed at 10,000 barrels per day (bpd).
(Source: Jordan Times)
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IBBC meets with Saudi Iraqi Business Council in Riyadh
From the Iraq Britain Business Council (IBBC):
Baroness Nicholson and Christophe Michels led a 30-strong delegation of IBBC Members to Riyadh to meet with Members of the Saudi Iraqi Business Council.
The high profile meeting of Members of both Councils met under the auspices of the Saudi Minister of Commerce at the head quarters of the Saudi Chambers of Commerce.
Mr Mohammed Al Khorayef, Chairman of SIBC presided over a 3 hour seminar at which 10 different IBBC member companies presented and discussed challenges and opportunities in doing business in Iraq. Mr AlKhorayef and Baroness Nicholson gave opening addresses on behalf of their respective organisations and attendees also heard short presentations from the Saudi Foreign Investment Authority and the Export Finance Authority.
The seminar was followed by an extensive networking Lunch.
The Saudi Minister of Commerce hosted members of both councils for dinner at the Ritz Carlton Hotel. The dinner was attended by the Governor of the Saudi Investment Authority, the Chairman of the Saudi Chambers of Commerce and other senior Saudi officials.
Both sides voted this first meeting a huge success which allowed for ample business to business meetings and the exchange of valuable experiences and information. Baroness Nicholson highlighted the important role IBBC can play in a triangular relationship between Iraq, Saudi Arabia and Britain. Christophe Michels emphasised the depth and knowledge of IBBC and its members, having worked in Iraq since 2009 if not longer and the willingness of IBBC Members to do business with their Saudi Companies in Iraq, but also in Saudi Arabia.
The meeting concluded with an invitation to SIBC members to attend the IBBC Spring Conference at The Mansion House in London on 24th May.
Christophe Michels stated that this was a first historic visit to Saudi Arabia for IBBC and that he was confident that IBBC and SIBC will build on it to further strong cooperation between their members in Iraq, Saudi Arabia and the United Kingdom. He added that today in Iraq business to business relationships really mattered and would lead to substantial measurable outcomes.
The IBBC delegation included, Mr Zaid Elyaseri, President of BP Iraq, Mr Sardar Al Bebany, Chairman of Sardar Group, Mr Mohammed Delaimy, CEO of SCB Iraq, Mr Ismail Maraqa, Chairman of PWC Middle East, Mr Khalil Nezir, Director of UB Holding, Mrs Sarah Akbar, MD of Oilserv, Mr Stuart Mackay, Corporate Development Director at G4S Risk Management, Mr Jaber Aljaberi, CEO of AA Global Trading Company, Ms Hadeel Hasan, Managing Partner of Al Hadeel Al Hasan LLC; Mr Khalil Al Salem, Deputy CEO of Al Majal; Mr Anmar Al-Gharifi, Partner, Saudi Arabia of Eversheds Sutherland (International) LLP, Mr Amar Shubar, Partner of Management Partners, Mr Hamed Silmi of Martrade Shipping & Logistics, Mr Hal Miran, Founding CEO of MSELECT, Mr Yaser Al Abbadi, Head of Business at NB of Iraq, National Bank of Iraq / Capital Bank and Mr Zeid Barghouti, NBI- Head of Treasury, Invest & FI, National Bank of Iraq / Capital Bank, Mr Faisal AlTamimi, Senior Associate- Business Development, PwC, Ms Leena Zeyad, Group BOD Administration Manager of Sardar Trading Agencies, Mr Habib Bitar, CEO of TBI Saudi Arabia and Mr Hussam Chakouf, Senior Associate of Zaha Hadid Architects, and was joined by IBBCs GCC Representative Mr Vikas Handa, Mr Richard Cotton, Commercial Advisor and Professor Mohammed Al Uzri, Health and Education Advisor.
On Saturday 26th March, our hosts organised visits to Riyadh Fort, now fully refurbished to its original state, the site now designated as the place where the modern Saudi state began in 1902 and to the Saudi National Museum, which records in fabulous settings, the geology, the history of the country over centuries, and the large diversity of cultures across the country.
On the evening of Sunday 27th March, the Trade Bank of Iraq in Saudi CEO Habib Bitar kindly hosted a dinner for the IBBC delegates who were able to exchange ideas with senior bank officials and other distinguished Saudi guests.
(Source: IBBC)
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Iraq Finalises February Oil Exports
By John Lee.
Iraq’s Ministry of Oil has announced finalised oil exports for February of 92,790,173 barrels, giving an average for the month of 3.314 million barrels per day (bpd), up from the 3.203 million bpd exported in January.
The exports from the oilfields in central and southern Iraq amounted to approximately 91,314,828 barrels, while exports from the Kirkuk fields through the port of Ceyhan amounted to 1,475,345 barrels. Although not stated explicitly, this implies there were no exports to Jordan by truck.
Revenues for the month were $8.809 billion, at an average price of $94.936 per barrel.
January’s export figures can be found here.
(Source: Ministry of Oil)
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Latest Iraq COVID Travel Guidelines
The Iraqi Civil Aviation Authority (ICAA) has released its latest vaccination guidelines.
The guidelines state that, from 1st April, Iraqi and foreign travelers above the age of 12 who have received one dose of Johnson & Johnson or two doses of any other vaccine will no longer require evidence of a recent negative PCR test when traveling.
In cases where an individual cannot receive a vaccine, proof of a negative PCR test conducted in the previous 72 hours will be required.
(Source: KRG)
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