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.

Jiyad: Oil Market Collapse Damages the Iraqi Economy

By Ahmed Mousa Jiyad.

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

Oil Market Collapse, Damages the Iraqi Economy and Changes Oil Geopolitics

The collapse of the global oil market is undoubtedly unprecedented in its timing, magnitude, spread and devastating impacts across the globe. A strange and unpredicted association of a few, but major, factors had contributed to the current threat, causing much uncertainty and vulnerability on national and global levels.

The revised “OPEC+” production cut agreed on 12 April prompted initial minor improvement in oil price, but there remains very many serious concerns that such reduction is much below what is needed to bring stability to and balances a saturated global oil market.

This article aims at estimating the collapse in oil market on Iraq first then on both Russia and Saudi Arabia, as they are accused for “OPEC+” failure early last March that ignited the oil price war, and assesses the geopolitical and political economy consideration that contributed to and further complicate the impasse.  The article provides a summary of two articles written and published in Arabic recently and an update on recent deliberation by “OPEC+” and G20 Energy Ministers to rescue the situation and bring some stability to global oil market under  existing threat of Coronavirus to the world biosecurity.

My two articles attempt to provide comparative assessment of the impact of the collapse with particular focus on short-term horizon, i.e., the remaining nine months of this year under different Brent oil price scenarios on Iraq, first article , while the second focuses on Russia and Saudi Arabia.

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.

ACWA Power Signs MoU with Iraq Energy Institute

ACWA Power, a Saudi-based developer, owner, and operator of power generation and water desalination plants, has signed a Memorandum of Understanding (MoU) with Iraq Energy Institute (IEI), an independent non-profit policy institute, to collaborate on research development projects and enhance capacity building programs that will contribute to the optimum development of Iraq’s energy sector.

The MoU communicates the commitment of ACWA Power and IEI to partake in both parties’ events, workshops and activities and exchange expertise from consultants and senior management at organised events and forums.

The partnership will initiate professional dialogues and knowledge sharing that will bring about solutions which target challenges facing the region and elevate the private-public investor community in Iraq.

Demonstrating its role in nurturing young talent, ACWA Power will also take a leading role in IEI’s future scholarship programmes that will grant Iraqi students the chance to progress and excel in the energy and water fields in cooperation with other governmental and non-governmental partners.

The MoU was signed by Mr. Yesar al-Maleki, Managing Director of IEI, and Mohamed Fata Nahhas Business Development Manager at ACWA Power in the presence of Mohammad Abunayyan, Chairman of ACWA Power and Mr. Adnan Al Janabi, Vice Chairman of IEI.

ACWA Power Chairman, Mohammad Abunayyan said:

We are pleased to commence collaboration with Iraq Energy Institute and bring our expertise to the Iraqi market.

“The signing of the MoU will certainly bridge to further alliances between ACWA Power and Iraqi energy players and is a robust start of a mutually beneficial relationship built on knowledge and exchange of energy proficiency between the Kingdom of Saudi Arabia and Iraq – which we are proud to lead and are keen to further progress.

(Source: ACWA Power)

Iraq could surpass Saudi Arabia in Oil Production

By Padraig O’Hannelly.

A senior oil executive has predicted that Iraq could surpass Saudi Arabia as an oil producer.

Addressing delegates at CWC‘s Iraq Petroleum conference in London, Majid Jafar (pictured), CEO of Sharjah-based Crescent Petroleum, said:

“Iraq is hugely underexplored. We at Crescent know of 300 structures just in the Western Desert that have yet to be drilled, so I for one believe that Iraq has a lot of potential, and I wouldn’t be surprised if it becomes the largest producer in OPEC during my career.”

Crescent Petroleum has an interest in the Khor Mor field in the Kurdistan Region of Iraq, and has signed initial contracts to develop the oil fields of Gilabat-Qumar (in Diyala), Khashim Ahmer-Injana (in Diyala), and Khudher Al-Mai [Khider al-Mai] (in Basra and Muthana).

Iraq “becomes Energy Investment Hotspot”

By John Lee.

According to Miriam Malek, writing for S&P Global Platts, Iraq is again becoming a viable destination for energy investment after the final defeat of Islamic State and the election of a new government revived interest in the region’s second-largest oil producer.

The US, Qatar, Saudi Arabia and Iran are now vying for a share in the spoils.

Click here to read the full article.

(Source: S&P Global Platts)

Saudi Arabia looks to Expand its Footprint in Iraq

By Ali Mamouri for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Following Iraqi Prime Minister Haider al-Abadi’s two visits to Saudi Arabia last year, Saudi Crown Prince Mohammed bin Salman is set to visit Iraq soon, according to Iraqi parliamentarian Saadoun al-Dulaimi.

Although neither Riyadh nor Baghdad have officially announced the visit, Dulaimi said in a March 12 tweet that Prince Mohammed will spend two days in Iraq, first meeting with Abadi in Baghdad to “sign agreements,” followed by a visit to Najaf to meet religious leaders.

Saudi Arabia was scheduled to reopen its consulate in the oil-rich city of Basra, which is adjacent to Iran, in March, but this was delayed for administrative reasons. Some reports say that Mohammed may open the consulates in Basra and Najaf, the Shiite religious center that is home to top Shiite clerics, during his upcoming visit to Iraq.

Meanwhile, the Saudi Embassy in Iraq is in the process of setting up the consulate office at the Sheraton Hotel in Basra. The consulate was closed in 1990 in the wake of the Gulf crisis that erupted during the regime of Saddam Hussein, and remained closed as a result of tensions in Saudi-Iraqi relations.

The Saudi kingdom opened a consulate in Erbil, the capital of the semi-autonomous Kurdistan Region of Iraq, in early 2016.

The decisions to expand Saudi Arabia’s diplomatic representation in Iraq come as part of a broader framework to strengthen the official political relations between the two governments. Saudi Arabia is seeking to establish economic and social bridges between the two countries in various fields.

Abdul Rahman al-Shahri, head of the Saudi delegation responsible for the establishment of the consulate in Basra, said that these measures are carried out to “provide services and incentives to both religious pilgrims and economic delegations between the two countries.”

Abdul Aziz al-Shammari, Saudi ambassador to Iraq, said in a statement in January, “Saudi Arabia is mostly interested in developing relations between the two countries in all areas that serve their aspirations.”

In late February, a friendly soccer game was held between Saudi Arabia and Iraq in the city of Basra, the first between the two countries in three decades. The game was attended by Saudi delegations and a large crowd of Iraqi fans.

The media office of Abadi said in a statement March 5 that the prime minister had received a phone call from Saudi King Salman bin Abdulaziz Al Saud, in which the latter pledged to build a soccer stadium in Baghdad for 100,000 spectators. It was later announced that Saudi Arabia would increase the number of seats to 135,000.

The statement said that “King Salman expressed his readiness and commitment to expand the positive relations between Iraq and Saudi Arabia at the economic, commercial, popular and cultural levels, as well as all levels of interest to both countries.”

Saudi companies, most recently the Saudi Basic Industries Corporation, one of the world’s leading petrochemicals companies, have been opening offices in Baghdad and Basra to expand economic exchange between the two countries.

Saudi Arabia is focusing its attention on Basra because it is the richest city in Iraq with the country’s largest oil fields and gateway to the Persian Gulf. It is also the most populous city after Baghdad, is adjacent to the Iranian border and home to an overwhelming majority of Shiites who share the same tribal and ethnic origins with Saudi tribes. In addition, many Saudi and Basra families are linked through marriage.

Saudi Arabia is also receiving Shiite figures who are viewed as independent of Iran. These include Sadrist movement leader Muqtada al-Sadr, who visited Saudi Arabia last year and met with King Salman and Prince Mohammed. He was warmly received amid much fanfare.

Saudi news sites, most notably Al-Arabiya, are refraining from criticizing supreme Shiite cleric Ali al-Sistani, because his views are independent from those of Tehran and has broad influence among Iraqi Shiites.

All this has been a matter of concern for Iran, which has allegedly mobilized parties to raise banners in Basra condemning the opening of the Saudi Consulate and the various economic and sporting activities.

The State of Law Coalition led by former Prime Minister Nouri al-Maliki, who is close to Iran, opposes Saudi Arabia’s opening of a consulate in Najaf.

Iraq is seemingly determined to pursue rapprochement and cooperation with Saudi Arabia, and is organizing regular visits by political, economic and media delegations. These included Abadi’s visit to Saudi Arabia last October, during which the memorandum of establishment of the Saudi-Iraqi Coordination Council was signed to develop relations between the two countries.

Interior Minister Qasim al-Araji also visited Saudi Arabia last year, and Abadi insisted on receiving Saudi delegations even if they were not high level. In February, for instance, he received the Saudi media delegation that visited Iraq at the invitation of the Iraqi Journalists Union.

In October, Saudi Arabia resumed its flights to Iraq after 27 years, and it opened in October 2017 its border crossing in southern Iraq to expand economic travel and increase tourist and religious travel between the two sides.

The first initiatives to expand relations between the two countries were directly sponsored by the United States with Secretary of State Rex Tillerson attending the meeting of the establishment of the Saudi-Iraqi Coordination Council in Riyadh in October.

The Iraqi-Saudi rapprochement appears to take place in the context of the new US policy that followed the support garnered by President Donald Trump from the US allies in the region to form a united front to counter Iran’s rise in the Middle East.

Saudi Arabia has seemingly made great progress in achieving rapprochement with Iraq and expanding its areas of influence within the last year. Such rapprochement is likely to get stronger should Abadi manage to keep his seat for another term in the elections scheduled for May.

Saudi’s SABIC “in talks” to join Nebras Petchem Project

By John Lee.

Saudi Basic Industries Corp (SABIC) is in talks to join Iraq’s Nebras petrochemical project, according to a report from Reuters.

An advisor to Prime Minister Haider al-Abadi told the news agency at the CWC Iraq Petroleum Conference in Berlin that talks are at advanced stage at ministerial level.

He said SABIC would enter as a fourth partner in the project, along with Shell and the Iraqi oil and agriculture ministries.

(Source: Reuters)

Iraq to Comply with Opec Supply Cuts

By John Lee.

Financial Times reports that Iraq will comply with OPEC-led efforts to restrict crude oil production, even as Saudi Arabia said it is striving to boost its export capacity.

It quotes Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] as saying that Iraq’s export capacity would reach 5m bpd by the end of this year, but adding that it will comply with OPEC declarations.

December output stood at 4.4 million bpd.

(Source: Financial Times)

Iraq-Saudi Links Enhanced

By John Lee.

Saudi Arabia’s King Salman Bin Abdul Aziz received in Al Yamama Palace in Al Riyadh the Iraqi Planning/Trade Minister (acting) Dr. Salman Al Jumaily, Head of the Iraqi side in the Iraqi-Saudi Coordination Council, Dr. Sami R. Al Araji, Chairman of the National Investment Commission (NIC), Mr. Kadhim Mohamed Al Iqabi, Chairman of the Borders Crossings Commission, Engineer Adil Kereem, Vice Minister of Industry and Minerals and the Chargé d’affaires of the Iraqi Embassy to the Kingdom.

During the meeting, the importance of the council was emphasized in developing and enhancing the mutual cooperation between the two countries in various fields.

Prince Abdul Aziz Bin Saood Bin Naif Bin Abdul Aziz, Minister of Interior Affaires and Minister of Trade and Investment the head of the Saudi side in the Coordination Council both attended the reception.

(Source: NIC)

Jacobs signs MOU with Iraq Oil Company

US-based Jacobs has signed a Memorandum of Understanding (MOU) with the Iraq Oil Company to explore mutual benefits of cooperation in the region of Basra, Iraq.

The vast majority of Iraqi oil production takes place in Basra. Iraq Oil Company is looking for business partners based in the Kingdom of Saudi Arabia to support economic and social development in the Basra region through investments in upstream, downstream, refining, and other sectors.

David Zelinski, Jacobs Petroleum and Chemicals Senior Vice President and General Manager Middle East, said:

Jacobs was selected as single engineering partner to sign this strategic non-binding agreement.

“We will explore possibilities to deliver our services in support of the Oil & Gas, Refining and Petrochemicals sectors in Iraq, from our Saudi Arabian office – where we have had a presence for more than 40 years – as this aligns well with the Kingdom’s Vision 2030 to increase the export of services.

The signage took place during a business event attended by HH Khalid Al Faleh, Minister of Energy, Industry and Mineral Resources of Saudi Arabia and Chairman of Saudi Aramco; Jabbar al-Luaibi, Iraq Minister of Oil; Asad Al Eidani, the Governor of Basra; and Abdulaziz Al Shammary, the Saudi Ambassador in Iraq.

The governments of Iraq and Saudi Arabia work closely together to establish a clear regulation and warrantees for potential investors in terms of protection, trading and financial transactions.

(Source: Jacobs)