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Iraq: Building a Diversified and Modern Economy

IBBC Spring Conference 2018

Iraq: Building a diversified and modern economy 

Tuesday 24 April at Mansion House, London

IBBC’s Spring Conference returns on 24 April 2018, bringing to the heart of London the preeminent political and business figures involved in business and the economy of Iraq.

The theme for this years’ conference is Iraq: Building a diversified and modern economy. The conference aims to address the key challenges in building a diversified and modern economy, which will enable Iraq to build on the recent economic and social stability to progress into one of the Middle East’s major economies once again. Sessions will focus on Finance, Technology, Oil & Gas and Education.

The Government of Iraq has confirmed it is sending a high-level delegation of government representatives to the IBBC Spring Conference, which will be led by H.E. Dr Abdul Kariem Al Faisal, Chairman of the Iraq Prime Minister’s Advisory Commission (PMAC). The delegation will also include senior representatives from the Iraq Ministries of Oil and Industry.

The IBBC Spring Conference, held at the prestigious Mansion House, the home and office of the Lord Mayor of London, is traditionally IBBC’s flagship event, which attracts suppliers, investors, producers and buyers from Iraq, the UK and the wider international business community.

Prominent speakers include Baroness Nicholson of Winterbourne, President of IBBC and the Prime Minister’s Trade Envoy to Iraq, Azerbaijan, Turkmenistan and Kazakhstan, Alderman Sir Alan Yarrow, Lord Mayor, Locum Tenens, Ambassador Jonathon Wilks, Her Majesty’s Ambassador to the Republic of Iraq and Baroness Fairhead CBE, Minister of State for Trade and Export Promotion, Department for International Trade.

IBBC expects a high attendance at the conference and the new round tables are designed for close business interaction and the facilitation of in-depth discussion, where delegates can focus on particular sectors of interest and engage with speakers and industry experts on the issues that really matter.

With representatives from all major interested parties involved in Iraq expected to attend, as well as pre- and post- networking events, the IBBC Spring Conference 2018 will provide many opportunities for networking at the highest level, as well as providing exceptionally informative and experienced panels.

Sessions on the agenda include:

Finance: ‘Criteria and process for obtaining major project finance’ Chair: Mr Gavin Wishart, IBBC

IBBC has gathered several preeminent voices in the finance industry to discuss the challenges and opportunities Iraqi and international firms face in sourcing capital for major projects. Representatives from some of the largest international finance organisations, JP Morgan and Allan & Overy LLP, as well as representatives from UK Export Finance and GE will discuss in detail the criteria and process of obtaining finance for major projects in Iraq.

  • Mr Richard S. Wilkins, Executive Director – Export Finance, JP Morgan
  • Mr Tom Longmuir, Counsel, Allen & Overy LLP
  • Mr Guto Davies, Managing Director – Global ECA CoE Leader, GE Capital
  • Mr David Craig, Deputy Head of Civil Infrastructure and Energy Business, UK Export Finance

 

Technology: ‘Developing Iraq’s digital economy’ Chair: Mr Ashley Goodall, IBBC

The IBBC Tech Panel brings together the two leaders of the UK and Iraq e-government initiatives in addition to experts in FinTech and entrepreneurial hub development. The panel will address in detail how innovative new technology and the use of information and communication technologies (ICTs) can improve the activities in the public and private sectors to help Iraq’s economy and growth.

  • Mr Ahmed Elkady, Partner, Ernst & Young
  • Mr Ali Al Dahwi, Consultant, Management Partners
  • Mr Chris Fergusson, Director at The Cabinet Office (Government Digital Service)
  • Mr Mohammed Khudairi, Managing Partner, Khudairi Group

 

Oil & Gas: ‘Need for locally available products and services – how the sector can help diversification of Iraq’s economy’ Chair: Mr Vikas Handa, IBBC

This expert panel consists of representatives from the largest IOC’s in Iraq, Governmental representatives from the Iraq Ministries of Oil and Industry and an Oil & Gas expert from the Department of International Trade. The session will cover all key aspects of Iraq’s Oil & Gas sector for 2018, delivered by the preeminent experts in the field and will include a panel discussion and Q & A chaired by Vikas Handa, the head of IBBC’s Oil & Gas Sector Table and its GCC representative.

  • Dr Mark Wharton, Development Manager, Shell Iraq
  • Mr Mike Wenham, Commercial Manager, BP Iraq
  • Mr Bob Dastmalchi, Vice President, Business Development, Chevron
  • Mr Craig Jones, Deputy Director, Oil & Gas, Department for International Trade
  • Representative from the Ministry of Oil, Government of Iraq
  • Representative from the Ministry of Industry, Government of Iraq

 

Education and Training: ‘Developing human capital in Iraq’

The panel brings together leading representatives from academia and business to address the challenges of developing Iraq’s human capital to support its transition into a diversified, vibrant economy. Members of the panel have direct experience of challenges and advantages of delivering advanced education and training in-country.

Chair & Presentation: Professor Paul Boyle, President & Vice Chancellor, Leicester University

  • Mr Alex Haynes, Senior VP Business Development AMEA & Southern Europe, Wood
  • Mr Saadi Faraj Muthanna, Business Development Manager, Al Nukhba-OFS FZCO
  • Ms Christine van den Toorn, Institute of Regional and International Studies, American University of Iraq
  • Mr Will Follett, Director, Restrata

With a dedicated and well informed agenda, IBBC are bringing the experts and practitioners best placed to answer these questions, so the international business community can work towards framing the future and contributing to a modern and outward looking Iraq. Each session will emphasise the growing business opportunities for international companies.

For more information and tickets, please visit: http://www.webuildiraq.org/ibbc-conference/spring-conference-2018/ or email london@webuildiraq.org.

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Turkish Firm wins Contract at Garraf

Turkish oil and gas services company Ergil has been awarded a design, engineering, fabrication, and testing contract by China Petroleum Engineering & Construction Corporation ( CPECC), for Petronas‘ Garraf oil field.

The company says it has completed designing, manufacturing and supplying of 12 units 320-bar high-pressure pig receivers and launchers, 28 units pig signallers, 12 units manual pig jib crane and 8 units pig trolley.

The field is owned by Petronas (45%), Japex (30%) and the North Oil Company (25%).

(Source: Ergil)

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GKP Confirms Payment for January Sales

By John Lee.

Gulf Keystone Petroleum (GKP) has confirmed that a gross payment of $23.1 million ($17.8 million net to GKP) has been received from the Kurdistan Regional Government (KRG) for Shaikan crude oil sales during January 2018.

(Source: Gulf Keystone)

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Iraq Postpones Oil and Gas Auction

By John Lee.

Iraq’s Ministry of Oil has reportedly postponed its oil and gas bidding round for 11 new blocks to 25th April.

Abdul Mahdi al-Ameedi, director general of the Petroleum Contracts and Licensing Directorate (PCLD), told Reuters:

“The bidding process was rescheduled to be on April 25. It is just to give the companies a little bit more time to submit the bid bonds and be prepared for the bidding.”

However, Oil Ministry Spokesman Asim Jihad told Bloomberg he was unaware of any postponement in the auction, originally scheduled for 15th April.

Just two weeks ago, the ministry said it was changing to a new “hybrid” type of oil contract.

(Sources: Reuters, Bloomberg)

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5 Firms Shortlisted for Major Water-Injection Project

By John Lee.

According to a report from Platts, Iraq has shortlisted five international engineering companies to bid for the first phase of the Common Seawater Supply Project (CSSP), a major water-injection project that will help the country boost long-term production from its southern oil fields.

The project would take in around 5 million barrels per day (bpd) of water from the Persian Gulf, process it for field injection, and deliver it by pipeline to a half dozen fields in Basra province.

It has been under discussion for nearly a decade, and wsa priced at $12 billion when capacity was to be 10 million bpd of water.

More here.

(Source: Platts)

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GKP Shares Rise on Annual Results

Shares in Gulf Keystone Petroleum (GKP), operator of the Shaikan Field in the Kurdistan Region of Iraq, closed up more than 4 percent on Wednesday following the announcement of its results for the year ended 31 December 2017.

Highlights to 31 December 2017 and post reporting period

Operational

  • Strong safety performance during 2017; 3 million man-hours without a Lost Time Incident achieved.
  • Average gross production of 35,298 barrels of oil per day (“bopd”) – in the middle of 32,000-38,000 bopd guidance for the year.
  • Plant uptime of 99% in 2017.
  • Shaikan production for Q1 2018 averaged 31,588 bopd.
  • Gross production guidance for 2018 is set at 27,000-32,000 bopd. 

Financial

  • Signing of the Crude Oil Sales Agreement, which was announced in January 2018, represents a key milestone for the Company.
  • Moved to a more transparent invoicing mechanism with the MNR; payment now linked to international oil price and total production at Shaikan.
  • Profit for the first time since entry to Kurdistan – net profit of $14.1 million (2016: net loss of $17.4 million).
  • Revenue of $172 million (2016: $194 million).
  • The cash component of revenue increased by 28% to $157 million from $122 million in 2016.
  • Positive cash flow driven by steady operating activities, payments from KRG and limited investment.
  • 11 payments received during 2017 from the KRG amounting to $132 million net (2016: $114 million net to GKP).
  • Cash balance of $160 million as at 31 December 2017 (2016: $93 million).
  • Continued cost optimisation, with additional initiatives to lower costs achieved against stable production.
  • Reduction of operating costs per barrel year-on-year to $2.8/bbl (2016: $3.5/bbl).
  • Further reduction of G&A to $21.3 million from $25.5 million in 2016.
  • GKP has received payments in Q1 2018 from the KRG totalling $75.1 million gross ($59.3 million net).
  • Robust financial position as at 10 April 2018, with cash balance of $203 million against $100 million of debt.

Corporate developments

  • Jaap Huijskes assumes the role of Non-Executive Chairman, as of today.
  • Updated KPIs were introduced in 2017, as part of GKP’s continued efforts to achieve high standards of corporate governance.

Outlook

  • The Crude Oil Sales Agreement is an important commercial event and moves the business closer to finalising commercial negotiations with the MNR
  • Subject to finalising certain commercial and contractual matters, the Company is ready to resume investment into Shaikan in 2018.

Jón Ferrier, Gulf Keystone’s Chief Executive Officer, said: 

“We are pleased to have reported a net profit for the year of $14.1 million, compared with a net loss of $17.4 million in 2016.  We made considerable commercial progress during the year and into 2018, with the signing of the Shaikan Crude Oil Sales Agreement being a key milestone for the Company. 

“We were pleased to achieve average gross production of 35,298 bopd at Shaikan, in the middle of our target guidance of 32,000-38,000 bopd for 2017.  We are confident that once we are able to restart investment into Shaikan we will be able to lift production towards our near-term target of 55,000 bopd, a step towards the full field development.

“I would like to thank our shareholders for their support, our hosts the Kurdistan Region of Iraq, and all Gulf Keystone employees, for their commitment and professionalism during 2017.  I would also like to welcome our incoming new Chairman, Jaap Huijskes, and reiterate our thanks to his predecessor, Keith Lough.“

More here.

(Sources: GKP, Yahoo)

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Iran Oil Ministry: Iraq to Blame for Delay in Oil Swap

Iran’s Oil Ministry linked a 4-month delay in the implementation of an oil swap deal with Iraq to the Arab country’s unpreparedness and technical problems.

In a letter to the Tasnim News Agency in response to a recent report on the lengthy delay in implementation of the oil swap deal with Iraq, Iran’s Oil Ministry said the problem lies in the Arab country’s failure to remove the obstacles.

“The slight delay in implementing the major deal on swapping the crude oil produced in northern Iraq is mainly because of unprepared infrastructures and some logistical deficiencies on Iraq’s part,” the letter read.

It said the oil swap operation will begin soon, dismissing reports on “oil diplomacy negligence” or secret issues being behind the delay.

In February 2017, Iraq’s Oil Ministry said it had signed a deal with Iran to carry out studies on the construction of a pipeline to export crude oil from the northern Iraqi fields of Kirkuk via Iran.

In December, the two neighbors finalized the agreement, according to which Iran would provide Iraq’s southern ports with oil of the same characteristics and in the same quantities as those it would receive from Kirkuk.

Between 30,000 and 60,000 bpd of Kirkuk crude will be delivered by tanker trucks to the border area of Kermanshah, where Iran has a refinery.

The two countries are planning to build a pipeline to carry the oil from Kirkuk, so as to avoid trucking the crude.

(Source: Tasnim, under Creative Commons licence)

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Antonoil, Petrofac to take over Majnoon from Shell

By John Lee.

Oil executives have told Reuters that the Iraqi Oil Ministry has signed a two-year contract with China’s Anton Oilfield Services (Antonoil) and Petrofac to operate the giant Majnoon oilfield (pictured).

The companies will operate the oilfield on behalf of the state-owned Basra Oil Company (BOC), which will take over operations from Shell by the end of June.

(Source: Reuters)

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Southern Refineries to Increase Capacity by 33%

By John Lee.

Iraq plans to increase capacity at its southern refineries to 280,000 barrels per day by the end of 2018.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] made the announcement at the opening of the second phase of the fourth unit project in the south refineries in Basrah governorate.

The new project will have a capacity of 70,000 bpd, and will increase production from its current level of 210,000 bpd.

It is being implemented by the Czech company Techno Export, and includes the construction of two units for liquid gas production and water treatment.

(Source: Ministry of Oil)

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Million+ Households to Benefit from new Financial Programs

The World Bank Group approved the Emergency Social Stabilization and Resilience Project (ESSRP), a US$200 million project that aims to improve the livelihoods of over one million Iraqi in liberated areas through the provision of cash, short-term employment, and other means of social support, namely to the most vulnerable.

As the Government of Iraq (GoI) is moving quickly back into ISIS liberated areas, the ESSRP will support the Government of Iraq in providing social support to the existing populations and returnees within the overall Iraq Social Protection Strategic Roadmap.

It will increase short-term employment and livelihood opportunities, and thus provide 150,000 households with cash for work support, benefiting about 840,000 individuals, and generating about 15,000,000 work days. The project will also increase access to psychosocial services for more than 150,000 people who will receive mental health and gender based violence assistance services to mitigate the psychological impact of the conflict on the population and would strengthen the systems to expand the provision of social safety nets.

At the same time, ESSRP will support the medium-term development of resilient social safety nets and provision of livelihood support, through financing small and micro enterprises benefiting about 12,000 households

“This project is vital for ensuring that rebuilding Iraq is not only about rebuilding brick-and-mortar infrastructure, but also about improving the lives of Iraqis and bringing social stability,” said Saroj Kumar Jha, World Bank Mashreq Regional Director. “This project will support individuals and households to address the impact of the recent conflict and help communities to kick-start economic activity and create more jobs.”

The project will leverage existing social workers and payment methods and would also introduce robust social accountability, citizen engagement, and grievance redress mechanisms to build social cohesion, trust, and strengthen the relationship between the central and local governments.

These mechanisms will also consider gender aspects and support for vulnerable and marginalized groups, helping to address some of the root causes of violence. The project is part of a full World Bank package of support to the reconstruction and development process in the liberated areas which focus on both the infrastructure and social dimensions.

“The project will support poverty reduction and stabilization in the liberated areas,” said H.E. Mr. Mohammed Shayaa Al-Sudani, Minister of Labor and Social Affairs, “At the same time, income generating microfinance programs will allow households to restart business activities, and to create jobs in these areas.”

The project will also strengthen the resilience of social safety net programs to allow the GOI to assist poor/vulnerable groups and build resilience to shocks effectively and efficiently.

“One key component of this project is to ensure people can address existing and future shocks. This project will improve social safety net programs for 1.2 million households across Iraq. It will allow households to invest in health and education, to break the intergenerational transfer of poverty” said Ghassan Alkhoja, World Bank Senior Social Protection Specialist and Project Team Leader.

(Source: UN)