More Iraqi News Tuesday PM 8-24-21
More Iraqi News Tuesday PM 8-24-21
TLM724 Administrator BondLady’s Corner
From Petrodollar To Petroyuan: Iraq Between Two Funds
by Jafar Mohsen Hadi - 2021-07-06 210 The petrodollar is defined as the surplus of the dollar oil revenues of the oil-producing countries, that is, what is left of the oil sales funds after paying the costs of production.
The Ministry of Foreign Affairs later - to link the dollar with oil to maintain its market value, thus strengthening America's position as an unrivaled economic power.
The reason for the rise in oil prices at that time is the accumulation of funds in the producing countries;
Therefore, this project was the most important guarantor of the circulation of these sums from the producing countries to the consuming countries later, by pumping these funds into Western banks and markets once again “reversing the economic cycle.”
The development of the project was the core core of what is now known as “sovereign funds” through which Oil and gas producing countries invest their surplus revenues in the American and Western markets.
The most important of these funds are: the Qatar Investment Authority, the Saudi Investment Fund, and the Abu Dhabi Investment Authority.
Iraqi Petrodollars
It is a legal article “completely different from the international concept of the term and similar to it in the name. Its purpose was to finance the oil governorates with continuous funds and outside the budget allocations to support their development projects.”
It was included in the budget in 2010, according to which the Ministry of Finance commits to allocate $5 for each barrel produced or refined in the oil governorates.,
later it was adjusted to 5% of the price of a barrel, to be paid to the oil-producing governorates instead of $5.
This law turned into a means of attacking successive governments due to the reluctance of the Ministry of Finance to implement it under the pretext of the high rate of financial deficit and the lack of revenues from oil, in addition to the costs of the war on terrorism, which exhausted the financial and economic structure of Iraq;
Thus, the Iraqi petrodollar project has turned into a major obstacle to the wheel of age in those governorates - the southern ones in particular - through which it was intended to go, as the debt of the Ministry of Finance to those governorates until 2019 amounted to nearly 25 trillion Iraqi dinars, 15% of which is to the governorate Basra alone, which produces approximately 85% of Iraq's oil.
In order to avoid this repeated scenario, the House of Representatives introduced an amendment to this law in the current year’s budget (2021),
as MP Sadiq Al-Sulaiti, a member of the Parliament’s Energy Committee, announced to INA that “the 2021 budget established a new mechanism that differs from its predecessor, and this mechanism was imposed on the Ministry of Finance to establish Special funds for petrodollars” [1] .
China: the new variable in the Iraqi petrodollar
The rate of trade exchange between Iraq and China reached 30 billion dollars in 2020, and both Iraq and Saudi Arabia are competing for the first place of crude oil exporters to China within the “OPEC” organization.
In addition, there is a tangible desire for Chinese companies to work inside Iraq, as the Chinese ambassador in Baghdad said, “All Chinese companies in Iraq maintained their business during the Corona virus crisis”[2].
And the ambassador, in a statement carried by “Anatolia” agency, announced Beijing’s readiness to provide military support to Baghdad in the event the Americans withdrew,
and with all the pressures that Iraq was subjected to to reduce the momentum of the relationship with China, the Iraqi parliament had succeeded in including in the 2021 budget paragraphs of the Chinese agreement, the most important of which is a construction project “1000 schools” with Chinese companies In addition to financing Nasiriyah Airport and other projects,
it is important that the experience of US-Chinese friction on Iraqi soil constitute the beginning of drawing a balanced and reasonable course for the ruling class in Baghdad that ensures the continuation of political, security and development support for the country and keeps it away from entering into a conflict
This battle, which according to the outcomes of the G21 summit, the conflict between the Europeans and the Chinese is destined to escalate at a higher rate than before. https://www.bayancenter.org/2021/07/7185/
Sources:
https://www.alhurra.com/iraq/2020/06/13
https://www.bbc.com/arabic/world-57395429
https://baghdadtoday.news/news/96956
https://www.al-monitor.com/originals/2019/10
https://www.axios.com/trump-to-iraqi
https://ida2at.org/news/2020/01/06/4753
https://middle-east-online.com/
https://www.alhurra.com/iraq/2020/01/06
https://arabic.cnn.com/middle-east/article/
[1] https://www.ina.iq/123658-2021-.html
[2] https://www.aa.com.tr/ar/
Jafar Mohsen Hadi
Engineer in the Iraqi Ministry of Oil, South Refineries Company since 2014, holds a Bachelor’s degree in Chemical Engineering from Basra University - College of Engineering, holds a diploma in Refining Department from Basra Oil Institute, writer and editor in the field of oil and gas.
Foreign oil companies' departure: fear of a new reality looming on the horizon
Foreign oil companies' departure: fear of a new reality looming on the horizon Empty Foreign oil companies' departure: fear of a new reality looming on the horizon Today at 12:18 am
Foreign oil companies' departure: fear of a new reality looming on the horizon
Report oil 2021-08-23 08:58 Shafaq News / Foreign oil companies' threats to sell their shares in Iraq's main oil fields have raised the government and the Oil Ministry's concerns, in light of measures that may harm Iraq's oil production.
Those threats have also provoked an array of reactions among some oil industry professionals varying between content, rejection, and skepticism towards the move.
The explanations for this move ranged from reducing these companies to restructuring their operations in light of the COVID-19 pandemic and its effects on the oil industry, the disposal of fossil fuel assets, the trend of investment in clean energy under shareholders' pressure, or even a focus on gas like BP, security conditions, the investment climate that is not attractive to international companies according to the Iraqi Ministry of Oil, in addition to the increased Chinese influence in the oil sector.
Over the past decade, major international oil companies such as ExxonMobil, English-Dutch Shell, Russian Lukoil, and some Chinese state-backed companies have been asking to gain a foothold in Iraq and develop its fields.
During the first and second rounds of licenses put forward by the Oil Ministry in 2009 and 2010, these companies were able to obtain contracts to develop Iraq's largest oil fields and continued production from the country's main oil fields without any significant impact, until these companies began to think seriously in 2021 to exit these oil fields.
When hosted by the council of Representatives on July 4, Oil Minister Ihsan Abdul Jabbar attributed the intention of major companies, like Lukoil and ExxonMobil, to sell their shares in Iraq to the country's "unattractive investment environment".
This is not the first time that foreign oil companies have left Iraq, as Dutch-British Shell has already withdrawn its investments from Iraq and sold its stake in the Majnoon Oil Field in Basra, in 2018, to become an operator and producer of gas associated with Iraqi oil fields.
ExxonMobil, the giant West Qurna 1 Oil Field operator, wants to sell its 32.7% stake this year after eliminating its 32% stake in Basiqa's license in the Kurdistan Region.
ExxonMobil has filed an arbitration suit against the state-owned Basra Oil Company over the U.S. oil giant's attempt to sell its stake in the West Qurna 1 Oil field.
Furthermore, an ExxonMobil spokeswoman stated that the company agreed with third parties in January to sell its stake, while Iraq is seeking to acquire its stake the same way it did with Shell in the Majnoon Oil Field or sell it to a U.S. company.
Real investment with Western companies
"The real investment that produces real value for the country, develops society, and raises the level of work ethics, is what Western companies do," Iraqi Oil Minister Ihsan Abdul Jabbar told Shafaq News agency.
"Other companies are good at work, but they do not meet all these requirements," he said, adding,
"The ministry is trying to bring in the best companies capable of creating a social environment and good work, as well as implementing projects at the lowest prices and the highest return."
Expert: Illegal Operations
"The real reason oil companies are withdrawing from the oil fields is that the investment and operational costs are very high," oil expert Hamza al-Jawahiri told Shafaq News agency.
"Companies are putting their employees in Dubai, traveling in private jets and living in the most expensive hotels, in addition to bringing in consultant engineers, whom there is no need of, and they are paid up to 2,000 dollars per hour, stay for two to three months, gain millions of dollars without providing anything," al-Jawahiri said.
"Oil policy specialists follow the issue, object to the matter, and raise their voices in rejection, until the ministry started reducing expenses, from the time of former oil minister Jabbar Laibi to Minister Thamer al-Ghadhban, to the current minister, until it reached the prevention of any excess amounts that are spent," he added.
"These companies and the ministry cannot talk about these side costs because they would condemn themselves.
Therefore, the financial return on licensing contracts has become very small, nearly one dollar per barrel.
This money was doubling twice and three times through these illegal operations when they were exaggerating the operational cost," al-Jawahiri continued, pointing,
"These companies started considering what they get unrewarding; for example, gaining 250,000 dollars a day for a company like ExxonMobil, one of the largest oil companies in the world, means nothing."
"The exit of these companies from the licensing rounds does not mean that they will leave Iraq once and for all, as Shell is currently investing Basra gas, ExxonMobil is discussing the development of a petrochemical factory, and Total has signed contracts to develop six projects in addition to the development of the Zubair Oil Field. Also, Russian companies want to invest in gas," al-Jawahiri concluded.
Slowing the payment
"Sober companies such as ExxonMobil and BP have a certain economic model to which they are committed as long as Iraq is committed to paying its financial dues," Dr. Mohammed al-Saleh, a professor of oil engineering at Baghdad University, told Shafaq News agency, adding,
"Due to the delay in the payment of these dues over the past year, with the fall in oil prices and the outbreak of COVID-19, those companies can no longer complete their mission, similar to Shell, which has recently exited Majnoon Oil Field."
"Chinese companies are more flexible than other Western companies because they are new.
However, they lack sufficient experience and funds under their disposal, their costs are low, and most of their employees are beginners, so even if payment gets delayed, they would not be affected much," al-Saleh said.
The Iraqi Ministry of Oil expressed keenness to continue the work of foreign oil companies in Iraq, which seems to justify the latter's high technical competencies, advanced technological capabilities, its contribution to the stability of oil production, facilitates Iraq's access to various markets, in addition to maintaining political interests with major international powers.
For all of that, Iraqi Prime Minister Mustafa al-Kadhimi recently stated that he wanted another U.S. company to replace ExxonMobil if it left Iraq.
https://almasalah.com/ar/News/214099/الدولة-العراقية-مملكة-وجمهورية-وانقلابات-وحروب
The Iraqi State: A Kingdom, A Republic, Coups, And Wars
2021/08/23 20:29 number of readings 846 Section : Iraq Baghdad / Obelisk: A century has passed since the founding of the Iraqi state, and during that time, the country went through historical turning points:
1917 Britain occupies the states of Basra, Baghdad and Mosul.
1920 - The Iraqi clans revolted and entered into armed clashes with the British.
The Iraqi state was established in March 1921.
- Prince Faisal bin Al Hussein was inaugurated in Al Qishla Square in Baghdad, August 23, 1921, as King of Iraq.
Iraq declared its independence from the British Mandate on October 3, 1932.
- The rule of the first kings, Faisal I, and his rule lasted about 12 years.
The period of King Ghazi 1933, witnessed the unrest of the Sharifian officers.
Bakr Sidqi's coup in 1936.
- The last king is King Faisal II who became king after Ghazi was killed.
Faisal II was crowned and assumed his constitutional powers in 1953.
The Baghdad Pact of 1955.
King Faisal II was killed on July 14, 1958 in a coup led by Abdul Karim Qassem.
- With the death of Faisal II, the thirty-seven years of the Hashemite monarchy in Iraq ended, and the period of military rule and coups began.
- In 1963, a coup overthrew Abdel Karim Kassem.
1968: The Baath Party returns to power in a military coup.
1979 Saddam Hussein becomes president.
- Between 1980 - 1988, the Iran-Iraq war.
1990 Iraq invades Kuwait.
1991 Sanctions imposed on Iraq.
2003 A US-led coalition invades Iraq.
- December 18, 2011, the United States announced that its army had completed its withdrawal from Iraq.
- 2014 ISIS seized control of large areas of Iraq.
The military defeat of ISIS in Iraq at the end of 2017.
- In October 2019, protest demonstrations erupted in Baghdad and the rest of the southern cities.
Al-Kazemi’s government wins parliament’s confidence on May 5, 2020.
The United States promised to end its combat mission in Iraq in early 2021.
https://almasalah.com/ar/News/214099/الدولة-العراقية-مملكة-وجمهورية-وانقلابات-وحروب
A Government Advisor Talks About Alternative Energy In Iraq
Economie | 09:11 - 08/22/2021 Baghdad - Mawazine News The economic advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed, on Sunday, that it is time for Iraq to enter into the aspect of producing alternative or clean energy, which is solar energy, especially since we are a solar country, and this in itself is a gift from God that must be invested, indicating that the government’s orientation in this direction and we may notice results over the next five years.
Saleh said, according to the official newspaper, "We are a hot country in the summer, and turning to alternative energy to generate electricity is an important matter and reduces pressure on the national grid, and the world today is interested in this issue, and Iraq also entered this field strongly because of the problems of providing electrical energy, especially in The summer, in which electricity consumption doubles dramatically, and I believe that this energy produced by the sun will run in a parallel line with the energy of electricity by fuel and gas.”
He added: "In the past, the interest in energy produced by fuel, but today there is a correct trend towards clean energy, which is solar, and there is a tendency to support and support its technology, and in the next five years it will take a large space in the industry in Iraq, and it will be parallel and solve many problems," referring to "Iraq's contract With a French company to generate a large amount of energy, up to 10,000 megawatts of solar energy.
He continued: "Using this approach in villages and rural areas is important because solar energy cells can be applied to one house, and thus electricity can be provided to them individually, and working towards spreading the use of solar energy is very important, especially since there are devices that work on that energy and today there is Factories with which solar energy systems are established.
And Saleh stated that "There are two approaches to this side. The first approach is through the private sector, and there is a second orientation, which is the energy policy and the provision of alternative energy.”
Noting that "the energy policy in Iraq has changed fundamentally and clean energy will take a level equivalent to the energy produced by fuel, and these things are not easy and must be investment and take time, and it is possible to glimpse its final results between three to five years to come," stressing that "this trend reduces the burden is on the state.” https://www.mawazin.net/Details.aspx?jimare=164662
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