The country holds an estimated 111.9 trillion cubic feet of proven reserves, ranking it 11th largest worldwide, according to the BP statistical review of energy.

The Shell-led Basrah Gas Company (BGC), a joint venture between the South Gas Company (51 per cent), Shell (44 per cent) and Mitsubishi, was established in 2008, and will be responsible for the collection and processing of associated gas from the Rumaila, West Qurna-1 and Zubair oilfields.

Currently, the fields collectively flare up to 700 million cubic feet a day (cfd), a figure that will increase in line with rising oil production.

Yet Iraq’s natural gas activities this year have not been confined to the huge oilfields in the south.

In June 2005, the government inked a deal with a group headed by Kuwait Energy to develop the Siba gasfield, also in southern Iraq, with capacity expected to reach 100 million cfd. A consortium around Turkey’s national oil and gas company was contracted to develop the Mansuriya gasfield in the east of the country.

In the same month, the government initialled an agreement with South Korea’s Kogas for the development of the Akkas field in the western Anbar province.

Kogas will have sole responsibility for the project after the Kazakh company KazMunaiGas pulled out of the deal.

The government is also looking at the export market. Apart from the liquefied natural gas export plans mooted in the agreement with Shell, it is looking at exports through pipelines.

In May, Iraq entered into a strategic energy partnership with the EU, in which the government agreed to explore possible exports of natural gas to Europe in return for a guaranteed market for an anticipated surplus of natural gas in the coming decades.

Negotiations between the two sides are expected to start before the year is over.

Source: www.thenational.ae

On July 15, Harlow International, a British construction company, held a ribbon-cutting ceremony for the re-opening of the famous Al-Rasheed Hotel in Baghdad’s Green Zone.

The hotel, renovated with the help of a $65m budget, was made famous in the 1991 Gulf War as a base for television reporters and later became a favoured home of businessmen and diplomats alike.

But at the same time, just a matter of miles away, two car bombs killed seven people and an American soldier was shot dead by gunmen who had opened fire at an army headquarters.

Iraq “remains an extraordinarily dangerous place to work”, Stuart Bowen, the US Special Inspector General for Iraq Reconstruction, admitted in a recent report, adding that the country is less safe than it was a year ago due to unabated corruption and violence.

Unsurprisingly, when investors think of Iraq, they most probably think of risk. After two decades of conflict, to outsiders, the Middle Eastern country is perhaps not the most hospitable place to do business. But in reality, the rebuilding of Iraq – and the by-products that will spring from that process – could yet prove to be one of the biggest global investment opportunities to arise in the last half-century.

Source: www.telegraph.co.uk

The Iraqi government is hoping that a second major auction of oil and gas fields later this year will help revive a struggling oil industry where a first auction this week fell short, a government spokesman said.”We think that the first (bidding) round didn’t achieve the full objectives of the Ministry of Oil,” government spokesman Ali al-Dabbagh told Reuters on Saturday.

“At the same time, it was a good achievement especially in Rumaila oilfield … With that level of production, we have compensated for the less(er) achievement of the first round. Generally we are happy with what we achieved,” he said.

The auction last Tuesday, Iraq’s first major competitive energy tender in decades and one of the biggest in history, stunned industry insiders when a wide gap between the government and oil majors over payment terms resulted in the sale of just one of eight fields put on the block.

Oil Minister Hussain al-Shahristani brushed aside criticism it was a flop, saying the deal reached with a BP-led (BP.L) group for the country’s largest explored oilfield, Rumaila, would on its own provide a bigger production boost than they had been hoping for from the first round.

While plans to quickly increase output from 2.4 million barrels per day were dealt a blow, the government’s rejection of more pricy deals may play well among critics who oppose anything that could be seen as selling off Iraq’s prized asset cheaply.

“The Iraqi government is careful not to waste oil wealth, but at the same time there is a balance between this point and Iraq’s needs to develop the oil industry,” Dabbagh said earlier in a meeting with reporters.

After the auction Iraq said it would move up the date for the second round of tenders, expected to be more lucrative because the 11 fields to be offered are still undeveloped and could double current production.

“The Iraqi government and Oil Ministry is trying to make use of the results of the first round so that the second round would be more effective,” he said, adding a panel had been established to learn lessons from the first tender.

No decision has been made on the fields that were not awarded to foreign firms this week, Dabbagh said.

The government has said the fields may be included in the second bidding round, put out for bids again separately or perhaps developed by Iraq on its own once a new National Oil Company, which does not yet exist, is formed.

Dabbagh said the auction marked a turning point for China, eager to get a crack at the world’s third largest oil reserves no matter the cost. Chinese firms were included in groups competing for all seven oil and gas fields that received bids.

“China is decisive about entering this sector … even if not making profit … This opportunity for them in Iraq will never (occur) again in any place in the world,” he said.

Still unclear is what the auction’s results mean for Shahristani, a nuclear scientist who has staked his political future on boosting oil output and, thus, coming to the rescue of a government reliant on oil for over 95 percent of its income.

There have been suggestions Shahristani, who is already under pressure over low output and summoned to parliament to face criticism last month, may be pushed out of his job.

Dabbagh said it was up to parliament “to decide the performance of any minister. The government will definitely feel that this is part of their job, monitoring all the activities of the ministers.”

Source: Reuters.