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Pakistan’s Lucky Cement Enters JV in Iraq

by admin ~ October 29th, 2012

Lucky Cement, which claims to be the largest manufacturer of cement in Pakistan, has entered into a joint venture for a cement grinding plant in Iraq, according the The News.

“The contract for the supply of plant and machinery for this project has been signed and the project team, as well as civil contractors, have been mobilised at the project site,” the company told the Karachi Stock Exchange.

The company may also export cement to nearby countries such as Qatar and other GCC countries.

(Source: The News)

(Picture: Lucky Cement plant in Pakistan)


Dispute Between Baghdad And Kurdistan Cooling Down

by admin ~ October 29th, 2012

Iraq has one of the largest oil reserves in the world, but it hasn’t reached its full exportation potential yet due to a number of reasons. It’s not the fact that the Middle Eastern country lacks foreign investors, since it already has an abundance of oil companies bidding for every contract it offers.

Iraqi Dinar news reports say that the problem can be traced backed to an internal conflict between the Kurdistan Regional Government (KRG) and federal authorities in Baghdad. Both sides are in disagreement over who holds control over the oil and gas within the northern area of the country nearby Turkey.

Due to the ongoing arguments, Iraq’s full exportation capacity was hampered, leaving a large portion of reserves within Kurdistan, which basically leads to lost income that’s badly needed to reinvigorate its battered economy.

Nevertheless, Baghdad has recently started to realize the impacts its export restrictions placed on Kurdistan had on all of Iraq. To help remedy the situation, Iraq’s federal government has finally agreed to increase oil exportation within the region. Moreover, it authorized the release of payments that were due to oil companies operating in the Kurdistan area.

After such, oil exportation from Kurdistan through the Middle Eastern country’s federally owned pipelines partially resumed. This move by the KRG was also intended to help collect $1.5 billion worth of payments that the federal oil ministry owed the region.

In an FT Global Energy Conference in London last month, Ashti Hawrami, minister of natural resources for KRG, said that the deal could give way for oil exportation through the federally own pipelines, which could reach up to 200,000 barrels a day by the end of 2012, and increase to 250,000 barrels a day by 2013.

To help end disputes between Baghdad and Kurdistan, both sides have agreed to select a high-committee to sort draft oil laws, thereby settling issues on license-to-operate legitimacy, as well as revenue-sharing contracts between the Iraqi provinces.

With heat “apparently” cooling down between Baghdad and Kurdistan, western oil companies have decided to strike deals with the latter, regardless of recent barring placed by the former on KRG in regards to oil exportation.

Moreover, Dinar news reports quote Hawrami recently announcing plans of creating a new pipeline from their border going all the way to turkey, which is said to be capable of transporting a million barrels of oil upon completion.

Iraq Welcomes New Polish Ambassador

by admin ~ October 27th, 2012

Many Iraqi Dinar news reports today are centered on topics wherein the Middle Eastern country openly welcomes private and government organizations that’d like to do business, or discuss the possibility of new governmental policies which would benefit Iraq.

According to reporters, Lech Stefaniak, the new Polish Ambassador, recently met with Iraqi Foreign Minister Hoshyar Zebari last Sunday. The latter welcomed the former with open arms as Stefaniak submitted his credentials to Hoshyar.

The Ambassador from Poland has an impressively long list of information pertaining to his years as a man of the military. From his humble beginnings as a cadet during the years 1973-1977, it didn’t take long for officers to see the potential he had, especially after attending the Academy of Armored Forces, for better serving his country if given a chance.

This cadet then quickly rose through the ranks, eventually becoming deputy commander of Regiment Tank 28, From there, he was transferred to 60 Medium Tank Regiment, wherein he acted as commander. Throughout his entire military career, he was relocated to several other divisions where he took on significant positions, and even received nominations for Brigadier General by Poland’s President Aleksander Kwasniewski back in 2001.

Leaving the reserves by 2007, Stefaniak is now living a more peaceful lifestyle and profession as ambassador to Iraq. Just as it was for this highly-decorated individual during his days serving within the arm forces, the relative significance of the position he carries today is unquestionably high, considering how he’s officially representing the government of Poland.

Given Stefaniak’s credentials, achievements during his days safeguarding his country, and the integrity his character clearly reflects, it’s not surprising that his visit to Iraq’s Foreign Minister, in an attempt to strengthen ties between their countries, was successful.

The Minister enthusiastically praised the good intentions behind Stefaniak’s visit, and emphasized the importance of maintaining friendly relations between Poland and Iraq throughout their initial meeting’s entire duration.

In addition, Hoshyar also brought up discussions on his Ministry’s willingness, as well as readiness, to provide any assistance their guest may need to ensure the success of his mission. Stefaniak’s response to the Minister’s kind gesture was positive as well, thanking them for their offer to render help in any possible way they can.

According to Dinar reports, other officials were present during the preliminary meeting, wherein the most notable ones were the Head of Europe Deparment, as well as the Ministry’s undersecretary.

Saipem Negotiating $1bn Iraq Contract

by admin ~ October 26th, 2012

The Chief Executive Officer of Italy’s Saipem has said that the company is negotiating a contract worth around $1 billion in Iraq.

According to Reuters, Pietro Franco Tali (pictured) said on a conference call that the negotiations could be finalised by the end of the year.

Iraq Business News believes the contract being discussed is a 1,500 megawatt power plant in western Iraq.


2013 Budget Spending Up 18%

by admin ~ October 25th, 2012

The Iraqi Council of Ministers has approved a draft budget of 138 trillion dinars ($115 billion) for 2013, an 18 percent increase on this year’s spending programme.

The figures are based on expected average oil prices of $90 per barrel, and exports of 2.9 million barrels of oil per day, of which 250 thousand bpd are planned from the Kurdistan region, Ali Al Dabbagh said in a statement.

Forty percent of the proposed budget is allocated for capital investments, with the rest set for the payment of salaries and other government operations.

The main priorities of the spending programme are electricity and security, which account for 21 percent and 14 percent of the proposed budget respectively.


Iraq Awards $125m Contract for Najaf Airport

by admin ~ October 24th, 2012

A joint bid by Baghdad-based Fourth Dimension and British company Copperchase has reportedly won a $125m contract to develop and expand Najaf International Airport.

According to Zawya, the airport currently handles 20 flights a day servicing Iran, Jordan, Lebanon, Turkey, Kuwait, India and Bahrain; this number can rise to 45 on religious occasions, as Najaf receives millions of pilgrims.

“The project is a 20-year build, operate and transfer agreement and will includes updating equipment, expanding the apron, construction of a new runway and improving mechanisms for dealing with more traffic,” detailed an anonymous member of the Najaf Provincial Council (NPC).

The official added that the NPC expects the expanded airport to generate annual profits of up to $17m, of which 65 percent will be kept by the contractor, with the NPC receiving the rest.

Najaf’s airport was built by Kuwait-based Aqeeq Aviation in 2006, under a five-year contract valued at $50m to operate the airport. Aqeeq also bid for the expansion.

Fourth Dimension and Copperchase have previously teamed up to build the Al Ghadeer Village in Najaf, a low-cost housing project with 3,000 residential units.



Iraq Oil Exportation Need To Be Kept Realistic

by admin ~ October 23rd, 2012

Since Iraq’s economy is highly dependent on exporting oil from its massive reserves, seeing a bundle of new Iraqi Dinar news reports on oil companies expanding their operations to other regions of the country, or even new corporations joining the game, isn’t surprising at all.

When this Middle Eastern country engaged oil and gas licensing during 2009 to 2010, the criteria for awarding contracts included several elements, such as plateau production capacity for each field in line for development.

Due to this criterion, oil companies had to set the stated rate as the maximum possible, regardless of Iraq’s needs, current status of the international oil market, and most importantly, the overwhelming challenges groups would have to tackle in order to reach the capacities to begin with.

With the abundance of giant oil enterprises placing bids for almost every contract the Iraqi government put up for grabs, it was only natural for leaders to be overly excited with the hefty revenues to be generated from their business.

Distracted with the huge profits to be made, which could place its economy in a commendable condition, Iraq made a statement that it’d be producing more than 12 million barrels a day (mbd) by the year 2017.

Considering the magnitude of this daily targeted output, and how it’d entail a “wholesale” of 66% of all reserves to western oil companies, while depriving the roles played by local corporations, it wasn’t surprising that even Iraqi experts immediately became concerned, and urged leaders to revise their game  plans.

To reach an output rate this big by 2017, Iraq needs to build more than 6,000 wells, enormous surface facilities, innumerable pipelines, as well as 6,000 square kilometers of 2D and 3D seismic surveys. Keeping this in mind, and taking a look at Iraq’s current logistics and manpower, the task would be tremendously difficult to carry out.

Moreover, demand for oil in the world market today is only 89.5 mbd, and is predicted to only increase to 95 mbd by 2017. That’d mean an oversupply of merchandise, wherein most of these excess would only stay idle. In addition to this, the excess supplies would negatively impact the selling price per barrel, therefore, working against the interests of all oil companies.

Fortunately, Dinar news reports say that the Ministry of Oil in Iraq recently revised their target output to 9 mbd by 2020.

Iraq’s Oil Exports Head for Another Record

by admin ~ October 23rd, 2012

Reuters reports that Iraq’s crude oil exports from its southern ports have risen by 120,000 bpd so far in October compared to last month, suggesting the country is on course to reach its highest export rate in decades.

According to shipping data, exports from Basra have averaged 2.30 million bpd in the first 18 days of October, up from 2.18 million bpd in September. Shipments in August of 2.25 million bpd were the highest since before the 2003 invasion.

With around 400,000 bpd from the northern oil fields, Iraq looks on course to export more in October than September’s level of 2.6 million bpd, which was its highest total exports in more than 30 years.

The country is aiming to boost shipments to over 2.8 million bpd this month, an Iraqi oil official said last week; this would require exports to increase even more in the coming days.

[Iraq has] the production and the export capacity, so they are ramping up,” said a source at a Western oil company which buys Iraqi oil. “And for once, Iraq is having smooth export programs and operations.


Gulf Keystone Fundraising Project For Development Of Shaikan

by admin ~ October 20th, 2012

Gulf Keystone Petroleum Limited (GKP) is a notable oil plus gas exploration and production company with operations in specified areas of Iraq. While one of this giant oil company’s latest projects is the Shaikan block within the Kurdistan area, the corporation is still in need of additional funding for exploring and harvesting resources.

In recent news, GKP made a special offering of senior unsecured convertible bonds due October 17 in a principal amount of USD200 million, (over 232 billion when converted to Iraqi currency using current Dinar exchange rate.)

Moreover, the principal amount could increase even higher should the company decide to exercise its increase option of up to USD25 million (over 29 billion in Iraqi Dinar currency.)

To insure the success of its fundraising program, GKP is granting an overallotment option of up to USD25 million, which is fully exercisable up to the close of business this October 16, 2012. According to reports, this offering is to be made through a Reg. S. Institutional Private Placement.

Not only with the raised funds contribute to their goal of improving their liquidity position, but it’ll also help jumpstart GKP’s plans to significantly increase their operations within Shaikan block to a large-scale level. The gathered amounts will also be utilized for exploring and appraising three adjacent blocks nearby, as experts believe a great deal of untapped oil is yet to be discovered.

In addition to their funds raked in from their fundraiser, Gulf Keystone will also be utilizing its cash reserves to accomplish a number of other tasks related to their oil extraction scheme for Shaikan, which initially includes the completion and submission of field development plans before the end of January, 2013.

They’ll also use the money to set up all facilities required to operate at full-scale by 2013, and eventually produce 150,000 barrels of oil every day by 2015.

Their financial resources will also be used for finalizing two early production facilities known as PF-1 and PF-2. These two structures are what’ll help GKP to process crude oil to reach strict quality demands for exportation. Additionally, the facilities will allow the corporation to produce roughly 40,000 barrels of oil daily sometime within 2013.

Lastly, acquired funds are to be utilized for exploring Shaikan’s undrilled areas, target deeper Triassic sectors of the block, and explore plus appraise neighboring Sheikh Adi, Akri-Bijeel, and Ber Bahr blocks to further company operations for succeeding years.

Eight Recommendations Made By Iraq Finance 2012

by admin ~ October 19th, 2012

After being beaten black and blue, Iraq’s finance advisers had to come up with new strategies for rehabilitating its economy. Such a task isn’t easy, considering the magnitude of damage dealt to the country’s financial sector.

Regardless, recent Iraqi Dinar news reports say that Iraq is slowly travelling down the road towards recovery. To expedite this process, strategists have come up with eight recommendations for reinvigorating the economy, with the first one stating that the Iraqi government should openly welcome ongoing reforms in relation to restructuring state-owned banks, and transforming them into independently funded corporations.

In addition, economists say that these state-owned banks should gradually become capable of operating without external intervention from other governmental organizations.

Second suggestion made by professional analysts is to remove restrictions on government-related entities in regards to dealings made with private banking institutions – a move that should ideally attract more investors.

Third recommendation is to further enhance the accounting and financial management sectors of the government. To do this, hiring more certified and highly-trained accountants who comply with International Financial Reporting Standards will be necessary.

Fourth is to reduce delays pertaining to the registration of new companies – this encompasses the simplification of corporate registration, keeping requirements for recognition at the bare minimum, as well as unifying company laws.

Fifth recommendation is centered on the formation of a national investment fund, wherein funding will be used to support multiple-use developments throughout different areas of Iraq. Moreover, funds are to be utilized for supporting joint projects between public and private entities.

Sixth recommended course of action for the government to take is to create a legislative and regulatory framework that’ll accommodate Islamic banking within Iraq – this should in turn be able to pave the way for a banking and financial sector in line with that of the conventional model.

Seventh suggestion is to urge government officials to focus on strengthening the private sector, wherein the main strategy here is to establish provincial and regional developmental banks to help render financial support.

Eighth and last proposal made by advisers is directed to the Central Bank: experts urge this organization to remove market distortions through careful inspection of relevant financial transactions and intermediations.

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