BASRA, Iraq, July 19 (Reuters) - Iraq secured its $27 billion oil deal with France's TotalEnergies TTEF.PAlast week by offering quicker, less risky payback through greater revenue-sharing, a model it could replicate in the future to lure investors.
Foreign investment in Iraq's energy sector has fizzled out since a flurry of post U.S.-invasion deals over a decade ago, with Exxon Mobil XOM.N, Shell SHEL.L and BP BP.L all having scaled back their operations in recent years, contributing to a stagnation in the country's oil production.
Oil majors complained that the terms of Iraq's traditional oil service contracts, which paid a flat rate for every barrel of oil produced after reimbursing costs, meant they could not benefit from rising oil prices and lost out when production costs rose. They turned to other countries offering better terms.
The contract "differs from previous technical service agreements in as much as the generated risks and profit are shared between the state and the investors," Total told Reuters.
Besides raising production at Ratawi, the deal consists of a 1 GW solar power plant, a 600 million cubic feet a day gas processing facility, and a sea water supply project key to boosting Iraq's southern oil production.
This new type of deal was initially signed in 2021, but faced delays amid disputes between Iraqi politicians over the terms and finally closed in April, when Iraq agreed to take a smaller stake than the 40% it initially demanded.
In the end, Total took a 45% share while the state-owned Basra Oil Company took 30% and QatarEnergy 25%. Saudi Arabia's ACWA Power would participate in the solar farm, the statement last week said.
Revenues will be split according to those stakes, one of Iraq's senior oil officials said.
The so-called Gas Growth Integrated Project (GGIP) aims also to improve Iraq's electricity supply by recovering flared gas at three oilfields and using the gas to supply power plants, also helping to reduce Iraq's import bill.
Total said it would invest in all four projects simultaneously, with the solar plant expected to begin operation at the end of 2025 and the gas recovery aspect in 2027.
"Fundamentally the revenues of the Ratawi field allow us to finance the other projects," the Total statement said.
An Iraqi oil official and Total said the structure of the contract was based on Iraq's 2018 oil and gas licensing round which for the first time gave prospective contractors a share of revenues rather than a fixed fee per barrel.
In the hybrid revenue-sharing model, for each barrel of oil produced, 25% would go towards the Iraqi state as a royalty, while the remaining 75% would go towards reimbursing shareholders for capital and production costs and be distributed as revenues, the official said.
Iraq's oil officials said the model could be replicated in the future but that would be considered on a project-by-project basis.
(Reporting by Aref Mohammed in Basra, Timour Azhari in Baghdad and Silvia Aloisi in Paris; Writing by Timour Azhari; Editing by Elaine Hardcastle)
Shafaq News / The second deputy speaker of the House of Representatives, Shakhwan Abdullah, announced on Thursday the reactivation of the Article 140 constitutional committee to settle the files of those affected by the previous regime.
Abdullah said during a press conference held in the parliament building with the participation of members of the parliamentary committee on Article 140, and attended by the correspondent of Shafaq News Agency, that “the interim committee formed in the House of Representatives to follow up the work of the Article 140 committee of the Constitution, which was disabled for more than 10 years, was activated again after the political blocs agreed to do so.”
He pointed out that “there are thousands of transactions for those affected by the policies of the defunct regime under Article 140, and that we have noted through representatives of the provinces that there are many files and the truth is that the amount allocated for compensation by the government in the budget law of 2023 does not cover compensation.”
He pointed out that “the committee, Article 140, needs four trillion dinars, while the budget allocation is only 100 billion dinars, and after efforts, another 100 billion dinars were transferred to become 200 billion dinars, and a mechanism has been established to disburse compensation.”
Abdullah stressed that “there are weekly periodic meetings for the work of the Article 140 Committee to push for its real activation and completion of its tasks, including the development of the necessary legislation and the cancellation of the decisions of the Revolutionary Command Council that unfair to the rights of the sons of many governorates.”
Abdullah thanked the government for voting on the draft law to cancel the decisions of the Revolutionary Command Council.
He pointed out that “the first task of the Article 140 Committee will be to seek to receive the draft law from the government and approve it to ensure the restoration of the rights of farmers, and there will be a state committee in cooperation with the government committee to reach the entitlements of citizens in all governorates, including the southern governorates, which have not received compensation, in addition to the governorates of Kirkuk, Diyala and Nineveh.”
Article 140 provides for the abolition of the policies of demographic change pursued by the regime of Saddam Hussein in the disputed areas in favor of the Arabs at the expense of the Kurds, and then counting the population before the last step of holding a referendum under which the population determines, whether they wish to join the Kurdistan Region or remain under the administration of Baghdad.
The implementation phases of the article were scheduled to be completed until the end of 2007 but security and political problems prevented this.
The Federal Supreme Court ruled in 2019 that Article 140 of the Constitution of the Republic of Iraq shall remain in force, stressing that this continues until its requirements are implemented and the goal of its legislation is achieved.
The Central Bank Of Iraq Issued A Statement Regarding Depriving Some Iraqi Banks From Dealing In Dollars
July 20, 2023 Preventing Iraqi banks from dealing in dollars came against the backdrop of checking bank transfers for the past year (2022), before the application of the electronic platform, and before the formation of the current government as well. Banks that are deprived of dealing in US dollars enjoy full freedom in dealing in Iraqi dinars with various services within the Iraqi banking system, in addition to their right to deal internationally in currencies other than the US dollar.
The application of the electronic platform for external transfer ensures the safety and accuracy of transfer transactions from all aspects, in accordance with international standards and practices, and the law against money laundering and terrorist financing. with an accredited international auditor.
What the Central Bank of Iraq has achieved in expanding transfer channels and approved correspondent banks makes transfers available and secure, and that
the number of local banks that do this is able to cover all transfer requests, with the ability of the Central Bank of Iraq to cover them without restrictions or ceilings, as long as they involve Legitimate operations, noting that the banks banned from the dollar, their requests constitute only 8% of the total external transfers.
The announced exchange rate in the market is based on cash dollars granted by the Central Bank of Iraq to cover citizens’ requests for travel and other things, and
because of the citizen’s need for the national currency, some merchants and others withdraw dollars for trade or other purposes, away from the platform and away from the fundamental transfer contexts,
which It leads to raising the exchange rate on the black market, which is not a parallel market, as long as the source of the dollar is the central bank and not from within the market.
In order to address this phenomenon, we call on the esteemed government to establish a mechanism to link imports, and to prove the existence of a fundamental financial transfer corresponding to its value in order to prevent the use of illegal means to pay its values that constitute unjustified pressure on the cash dollar, and on the other hand, it helps in controlling manipulation and smuggling of imports..
With Names.. America Imposes Sanctions On 14 Iraqi Banks For Dealings With Iran In Dollars
Policy US Treasury US sanctions Iraqi banks 2023-07-19 Shafaq News/ On Wednesday, the US Treasury Department imposed sanctions on 14 Iraqi banks, in a crackdown on Iran's dealings in dollars.
The Wall Street Journal quoted US officials as saying that "the move came after the disclosure of information indicating that the
targeted banks were involved in money laundering and fraudulent transactions." The newspaper added,
"Some of these operations may relate to individuals subject to sanctions, which increases fears that Iran will benefit from them.
"
A senior US official told the newspaper:
"We have strong reason to suspect that some of these money laundering operations may benefit, either to individuals covered by US sanctions, or to persons who may be covered by sanctions."
"The main danger of sanctions in Iraq is definitely related to Iran," the US official added.
Shafaq News agency learned that the sanctions affected "banks (the
Islamic Advisor for Investment and Finance, the
Islamic Qartas for Investment and Finance, as well as the
Islamic Spectrum,
Elaf Bank,
Erbil Bank for Investment and Finance, the
International Islamic Bank,
Trans-Iraq Bank,
Mosul Bank for Development and Investment,
Al-Rajeh Bank,
Sumer Commercial Bank,
Trust International Islamic Bank, and
Ur Islamic Bank The
Islamic World Bank for Investment and Finance and
Zain Iraq Islamic Bank for Investment and Finance.
And the US Treasury Department prevented four other Iraqi banks from accessing the dollar last November, and also imposed, in cooperation with the Central Bank of Iraq, stricter controls on financial transfers in the country in general.
In the past weeks, the Central Bank of Iraq had excluded 4 private Iraqi banks from the currency sale auction (namely: Al-Ansari, Al-Sharq Al-Awsat, Al-Qabid, and Asia)
July 20, 2023 To enhance the ability of the Iraqi dinar against foreign currencies to circulate within the country, the following was decided:
1. Collection of all cash guarantees shall be in dinar currency exclusively for internal credits, bank guarantees and letters of guarantee issued to the benefit of the beneficiaries (governmental and private), even if they are in dollar currency and at the official exchange rate.
2. The payment of the sums of the letters of guarantee upon confiscation shall be exclusively in Iraqi dinars and at the official exchange rate.
We ask all authorized banks to take the necessary measures in accordance with the above
The Central Bank Of Iraq Organizes A Dialogue Workshop For Its Employees
July 20, 2023 The Development and Training Department of the Directorate of Human Resources Affairs at the Central Bank of Iraq organized a dialogue workshop for employees of other departments and departments.
It was delivered by the former advisor to the Minister of Education, Prof. Dr. Salah Al-Nuaimi, and lasted for two days.
On its first day, the workshop dealt with the definition of the true concept of loyalty and job commitment, and the importance of its reflection on the institution and the performance of employees, as well as achieving job satisfaction.
The second day witnessed a lecture on how to develop administrative thought and the development of strategic thought, based on the strategies of modern thought.