Iraq approves $82.6 bln budget: Power Crisis & Corrupted Power Ministers

Attack shuts Iraq's largest oil refinery, kills 1
Pipeline restarts, Beiji suspects arrested
Iraqi officials have made more than two dozen arrests in the Beiji refinery bombing, fast-tracked repairs to the facility, and restarted the export pipeline attacked last week.


The Beiji refinery re-starts operation following a debilitating attack on Feb. 26. (STAFF/Iraq Oil Report)
By Ben Lando of Iraq Oil Report
Published March 15, 2011

Iraq is showing resilience following attacks against the oil sector, which provides more than 90 percent of state revenue. Oil exports Monday began flowing again to Turkey and security forces have arrested at least 27 people in connection with an attack on the country's largest refinery.

Two of those arrested work at Beiji refinery, according to an Iraqi official who works in oil sector security. The official requested anonymity because of the sensitivity of the issue.


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Al-Qaida blamed for Beiji refinery attack

A guard stands watch over Beiji Refinery on January 18, 2010.

(AYMAN OGHANNA/Iraq Oil Report)

By BEN LANDO

Published February 26, 2011

BAGHDAD - Iraq’s largest oil refinery was attacked by al-Qaida early Saturday morning, according to high-level oil and security officials, killing at least two people and taking the refinery off line for an unknown period of time.

“These people knew what they were doing,” said Ahmad al-Shamma, deputy oil minister for refining.

“They were targeting the crisis in the fuel, gasoline and kerosene. That’s where the damage was concentrated.”

“Beiji is not closed completely,” he added. “The north plant has been damaged by this act of terrorism. They are assessing the damage.”

Beiji, with a nameplate capacity of 310,000 barrels per day (bpd), had been operating at a reduced capacity of 200,000 bpd because one of the units was scheduled to be offline until at least May for extensive maintenance and repairs.

Without the units targeted in Saturday’s attacks, Beiji’s capacity has effectively been reduced to 90,000 bpd, Shamma said.

“Any oil that doesn’t go to Beiji will exported” through the pipeline to Turkey, he said.

A shootout and bombs were heard at around 4 a.m. Saturday, according to witnesses and sources at the refinery and within Iraq’s oil and security apparatus.

Depending on the extent of the damage, which is still being investigated amidst a refinery-wide lockdown of personnel, units that are vital to operating the facility and targeted in the daring raid could take months to repair.

The details are still being pieced together, but Iraq Oil Report has spoken to numerous sources independently, all of whom tell a similar story of gunmen bursting through the gates and targeting the refinery’s major units.

“We know that the damage seems to have been pretty severe to one of the processing units,” said a security source that deals with Beiji.

“It will probably take a few days to determine how severe it is.”

At least two refinery workers have been confirmed killed, with reports that as many as five are dead.

Al-Qaida in Iraq is responsible, said high-level Oil Ministry officials.

The terrorist organization has maintained a strong presence in Salahaddin province, where Beiji is located, as well as neighboring Diyala, Ninewa and Anbar provinces.
Officials have been quick to place blame on the infamous network.

Yet in Iraq, it is difficult to define the many factions collectively labeled al-Qaida, as well as their affiliates and benefactors.

Furthermore, the modus operandi of the attack wasn’t typical of al-Qaida, which brands itself by its willingness to create as much bloodshed as possible.

Many sources have pointed out that two units were specifically targeted, suggesting there could have been inside knowledge of the refinery and the attack.

In August 2010, gunmen attacked and robbed five refinery workers who were ferrying $390,000 cash from the Haditha refinery, in order to pay company salaries.
Iraqi officials then believed the stolen money would likely fund terrorist operations.

At that time, the head of Iraq’s Oil Police, Maj. Gen.

Hamid Abdullah Ibrahim, told Iraq Oil Report that intelligence reports indicated al-Qaida in Iraq was plotting attacks on energy infrastructure – a familiar al-Qaida tactic aimed at destabilizing the state.

The Beiji refinery itself was once a hotbed of smuggling whose revenues funded the insurgency, until former Director General Ali al-Obaidi leveraged the assistance of the U.S. military to combat corruption.
When the U.S. military handed over refinery security to Iraqi forces as part of the American troop-drawdown last year, Obaidi resigned.

It is unknown how the attackers got past the refinery’s security.

“Unknown armed men entered the refinery from the south gate, at 4 a.m.,” said one refinery worker, in one of the earliest reports.

“They then bombed two units, number six and number one.”

Unit Six is the hydrogen unit, responsible for sending hydrogen to the hydrocracker, which breaks down the molecules of the crude oil.

“You need it to run other units,” said another source based at the refinery.

“That’s going to be pretty nasty.”
Unit One is the north refinery atmospheric distillation unit, another key component.

Depending on the extent of the damage, “it could have the refinery down for quite a bit of time,” the source said.

“Several bombs went off and virtually shut down all production at the refinery,” said another source who is located at the refinery.

“The flare is still going but I’m not sure what units are operational.”

Security forces at the refinery now have complete control of the facility, sources said.

The attack comes as the country’s overall security – especially in the oil sector – has been improving. Nonetheless, the bombing represents a setback for Iraq, as it tries to cut its dependence on fuel imports and meet domestic demand, which will only rise as summer approaches.

In 2010 Iraq sent between 500,000 bpd and 700,000 bpd of crude oil to its refineries. Deputy Prime Minster for Energy Hussain al-Shahristani, the former oil minister, said last week that Iraq’s target oil production for 2011 is 2.75 million bpd.

Exports are to average 2.2 million bpd with 550,000 bpd for refining.

The Basra refinery is running at 140,000 bpd, which is maximum capacity. Daura, the second biggest refinery, is at 100,000 bpd of its 210,000 bpd installed capacity, due to a lack of crude oil feeding it.

http://www.iraqoilreport.com/security/energy-sector/al-qaida-attacks-beiji-refinery-5413/

A guard stands watch over Beiji Refinery on January 18, 2010. (AYMAN OGHANNA/Iraq Oil Report)
By Ben Lando
Published February 26, 2011
Iraq’s largest oil refinery was attacked by al-Qaida early Saturday morning, according to high-level oil and security officials, killing at least two people and taking the refinery off line for an unknown period of time.

“These people knew what they were doing,” said Ahmad al-Shamma, deputy oil minister for refining. “They were targeting the crisis in the fuel, gasoline and kerosene. That’s where the damage was concentrated.”
“Beiji is not closed completely,” he added. “The nor…


By SINAN SALAHEDDIN, Associated Press Sinan Salaheddin, Associated Press – 2 hrs 26 mins ago
BAGHDAD – Gunmen attacked Iraq's largest oil refinery before dawn Saturday, killing a guard and detonating bombs that sparked a fire and forced the facility to halt operations, officials said.

A few hours later, a small refinery in the south shut down after a technical failure sparked a fire in a storage unit, an official said.

If not fixed swiftly, the two shutdowns could translate into long lines at fuel stations and longer electricity outages. The dearth of reliable electricity — some Iraqis get just a few hours a day — was one of the leading complaints of protesters during violent anti-government protests across Iraq on Friday.

The attack on Iraq's largest refinery, Beiji, began at about 3:30 a.m. Assailants carrying pistols fitted with silencers attacked guards and planted bombs near some production units for benzene and kerosene, said the spokesman for Salahuddin province, Mohammed al-Asi.

One guard was killed and another wounded, al-Asi said.

Iraqi Oil Ministry spokesman Assem Jihad said an investigation would be launched and that he hoped operations could resume shortly.

The Beiji refinery, located about 155 miles (250 kilometers) north of Baghdad, has two sections. The attackers targeted the installation's North Refinery that handles 150,000 barrels a day. The second section, the Salahuddin Refinery, is under renovation. It used to process 70,000 barrels per day.

At the height of the insurgency from 2004 to late 2007, the Beiji refinery was under control of Sunni militants who used to siphon off crude and petroleum products to finance their operations.

Hours after the Beiji facility was attacked, a small refinery in Samawa, a city on the Euphrates River about 230 miles (370 kilometers) southeast of Baghdad, went offline due to a fire in the storage unit, according to a local official.

The official, who spoke on condition of anonymity as he was not authorized to release information, said the fire was caused by a technical failure, not foul play. He wouldn't say when work would resume at the plant which has the capacity of 30,000 barrels of a day.

Iraq's overall refining capacity is currently slightly over 500,000 barrels per day. Its three main oil refineries — Dora, Shuaiba and Beiji — process slightly over half of the 700,000 barrels-per-day capacity they had before the 2003 U.S. invasion.
Iraq sits on the world's third-largest known oil reserves with an estimated 115 billion barrels, but its production is far below its potential due to decades of war, U.N. sanctions, lack of foreign investment and insurgent attacks.

Iraq has been importing refined products since 2003 because of the dilapidated refining sector and booming local demand.

Saturday's closures could spell trouble for Iraqi consumers, especially at a time when the weather is just beginning to warm and more citizens will be relying on their air conditioning.

Also Saturday, health officials and police said two teens, ages 12 and 18, died of injuries sustained in the anti-government protests, bringing the death toll for the day to 14. The officials spoke on condition of anonymity because they were not authorized to release information.

On Friday, thousands marched on government buildings and clashed with security forces in cities across Iraq in an outpouring of anger, the largest and most violent anti-government protests in the country since political unrest began spreading in the Arab world weeks ago.

The protests, billed as a "Day of Rage, were fueled by anger over corruption, chronic unemployment and shoddy public services from the Shiite-dominated government.

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Associated Press writers, Hamid Ahmed in Baghdad and Yahya Barzanji in Sulaimaniyah contributed to this report.



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5 killed as Iraqis protest in 'Day of Rage'

EmailPrint.. AP – Protesters chant anti-Iraqi government slogans during a protest at Tahrir Square in Baghdad, Iraq, Friday, …
. Slideshow:Iraq .
By SINAN SALAHEDDIN, Associated Press Sinan Salaheddin, Associated Press – 1 hr 35 mins ago
BAGHDAD – Iraqi security forces trying to disperse crowds of demonstrators in northern Iraq killed 5 people Friday as thousands rallied in cities across the country during what has been billed as the "Day of Rage."

The Iraqi capital was virtually locked down, with soldiers deployed en masse across central Baghdad, searching protesters trying to enter Liberation Square and closing off the plaza and side streets with razor wire. The heavy security presence reflected the concern of Iraqi officials that demonstrations here could gain traction as they did in Egypt and Tunisia, then spiral out of control.

Iraqi army helicopters buzzed overhead, while Humvees and trucks took up posts throughout the square, where a group of about 2,000 flag-waving demonstrators shouted "No to unemployment," and "No to the liar al-Maliki," referring to Iraqi Prime Minister Nouri al-Maliki.

The protests stretched from the northern city of Mosul to the southern city of Basra, reflecting the widespread anger many Iraqis feel at the government's seeming inability to improve their lives.

A crowd of angry marchers in the northern city of Hawija, 150 miles (240 kilometers) north of Baghdad, tried to break into the city's municipal building, said the head of the local city council, Ali Hussein Salih. That prompted security forces to fire into the air.

"We had given our instructions to police guards who are responsible for protecting this governmental building not to open fire, only if the demonstrators broke into the building," he said.

Three demonstrators were killed and 15 people wounded, according to the Hawija police chief, Col. Fattah Yaseen.

In Mosul, hundreds of protesters gathered in front of the provincial council building, demanding jobs and better services, when guards opened fire, according to a police official. A police and hospital official said two protesters were killed and five people wounded. The officials spoke on condition of anonymity because they are not authorized to brief the media.

Black smoke could later be seen billowing from the building.

While in the south, a crowd of about 4,000 people demonstrated in front of the office of Gov. Sheltagh Aboud al-Mayahi in the port city of Basra, Iraq's second-largest city, 340 miles (550 kilometers) southeast of Baghdad. They knocked over one of the concrete barriers and demanded his resignation, saying he'd done nothing to improve city services.

مشادة كلامية بين رجال دين ووجهاء عشائر البصرة ومحافظها



دبي – الشرقية 24 فبراير: رد رجال دين ووجهاء عشائر البصرة على المحافظ شلتاغ عبود ورفضوا وصفه المتظاهرين المحتجين بالفاظ نابية وحصلت الشرقية على مشادة كلامية وقعت وجها لوجه بين رجال دين ووجهاء والمحافظ ، واليكم جزءا منها.




استقالة محافظ البصرة شلتاغ عبود



البصرة – الشرقية 25 فبراير : اعلن محافظ البصرة شلتاغ عبود استقالته من منصبه خلال تظاهر نحو خمسة الاف شخص اليوم الجمعة طالبوا بإقالته.

ورفع المتظاهرون الكتل الكونكريتية من امام مبنى المحافظة تمهيدا للدخول اليه وان القوة المكلفة بحمايته اطلقت النار بالهواء والقنابل الدخانية لتفريق المتظاهرين.
وكان الاف من شباب محافظة البصرة تظاهروا احتجاجا على سوء الخدمات، مطالبين بإقالة المحافظ وتوفير مفردات البطاقة التموينية والقضاء على البطالة والفساد، فيما طوقت القوى الأمينة مبنى المحافظة بحواجز اسمنتية لمنع المتظاهرين من الاقتراب منه

They appeared to get their wish when the commander of Basra military operations, Maj. Gen. Mohammad Jawad Hawaidi, told the crowd that the governor had resigned in response to the demonstrations. Iraqi state TV announced that the prime minister asked the governor to step down but made no mention of the protests.

Around 1,000 demonstrators also clashed with police in the western city of Fallujah 40 miles (65 kilometers) west of Baghdad clashed with authorities, witnesses said.

The demonstrations have been discussed for weeks on Facebook and in other Internet groups, inspired by the uprisings in Tunisia and Egypt. More people were expected to join after Friday prayers.

While demonstrations in other Middle Eastern countries have focused on overthrowing the government, the protests in Iraq have centered on corruption, the country's chronic unemployment and shoddy public services like electricity.

"We want a good life like human beings, not like animals," said one protester in Baghdad, 44-year-old Khalil Ibrahim. Like many Iraqis, he railed against a government that locks itself in the highly fortified Green Zone, home to the parliament and the U.S. Embassy, and is viewed by most of its citizens as more interested in personal gain than public service.

"The government of the Green Zone is terrified of the people's voice," he said.

Iraq has seen a number of small-scale protests across the country in recent weeks. While most have been peaceful, a few have turned violent and seven people have been killed. The biggest rallies have been in the northern Kurdish city of Sulaimaniyah, 160 miles (260 kilometers) northeast of Baghdad, against the government of the self-ruled region.

But Iraqi religious and government officials appeared nervous over the possibility of a massive turnout for Friday's rally, and have issued a steady stream of statements trying to dissuade people from taking part.

On the eve of the event, al-Maliki urged people to skip the rally, which he alleged was organized by Saddamists and al-Qaida — two of his favorite targets of blame for an array of Iraq's ills. He offered no evidence to support his claim.

The Baghdad Operations Command said terrorists wanting to infiltrate the demonstration may dress up as police or army troops.

Shiite religious leaders have also discouraged people from taking part, making it unlikely that much of the country's majority Shiite population would turn out.

In the Sunni enclave of Azamiyah, one of the residents said that people there did not want to attend because they feared being labeled Saddamists.

"The government has already convicted anyone who takes part in the demonstrations by accusing them of terrorism," said 41-year-old Ammar al-Azami.







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Iraq oil exports highest since Saddam: ministry
1 hour, 6 minutes ago

BAGHDAD (AFP) -

Iraq's oil exports and revenues from crude sales in January hit their highest levels since the 2003 US-led invasion which ousted Saddam Hussein, the oil ministry announced on Wednesday.

Iraq exported a total of 67 million barrels of oil last month, generating $6.082 billion in income at an average price of $90.78 a barrel, according to figures published by the ministry.

"It's the highest exports and revenues for Iraq since 2003, and this will cover the budget deficit if it continues," ministry spokesman Assem Jihad told AFP.

Jihad said production had increased to between 2.6 and 2.7 million barrels per day (bpd), and was projected to increase three million bpd by the end of the year.

Oil sales account for around 90 percent of government income.

The country's budget, approved last Sunday, factors in oil prices of $76.50 per barrel and average exports of 2.2 million bpd.

Most of the January increase in exports passed through the southern port of Basra, which already accounts for the vast majority of foreign sales, the ministry's figures showed.

A total of 54 million barrels of oil were exported from Basra, while the remainder passed through the Ceyhan oil pipeline connecting northern Iraq with Turkey

http://ca.topmodel.yahoo.com/s/afp/110223/world/iraq_energy_oil_exports
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BAGHDAD Feb 20 (Reuters) - Iraq's parliament gave final approval on Sunday to an $82.6 billion budget for 2011 based on an average oil price of $76.50 per barrel and 2.2 million barrels per day in crude exports.

The deficit was projected at $13.4 billion. About 95 percent of Iraq's government budget comes from oil revenue.

The budget allocated $25.7 billion for investments and $2.05 billion to pay oil firms' investment costs.

Passage of the budget was held up for months by political haggling.

Budget shortfalls challenge Iraq's ability to rebuild after years of conflict following the U.S.-led invasion in 2003. But officials have said the deficit could be wiped out if world oil prices stay high.

Violence has subsided in the last three years and the government has announced major projects to refurbish oilfields and infrastructure and to construct housing.

The OPEC producer has signed deals with global oil firms that could boost its output capacity to 8-12 million bpd, rivalling top producer Saudi Arabia, in about six time. Current production is 2.7 million bpd. ($1=1170 Iraqi dinar)

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15% of Budget to be given to Iraqi people in benefits
$900 Million to buy 18 x General Dynamics F-16 Fighing Falcons
"In order to ease public anger, the government cancelled an allocation of $900 million for the purchase of F-16 jet fighters and diverted it to a food-ration program. "They wanted to just please people," said Shorsh Rasool, a member of the finance committee and leader of the Kurdish Gorran Party"


$2 Billion to be given to Oil companies to pay costs

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Archive | Tenders
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Iraq to Issue Tender for New $388m Power PlantPosted on 09 March 2011. Tags: Electricity, Ninawa, Nineveh, Ninewa, tenders

Iraq is preparing to issue a tender for a $388.5 million power plant, according to a report from Bloomberg.

Ali Al-Dabbagh, a spokesman for the government, said on Tuesday that the Council of Ministers approved the plan to issue a tender for the plant in the Nineveh province, north of Baghdad.

The plant should be built within 21 months and generate 750 megawatts.

Iraq plans to almost triple power generation capacity to 17,000 megawatts by 2013, up from around 6,000 MW now, mostly through building new plants, an Electricity Ministry spokesman said in January.

Former Electricity Minister Karim Wahid quit in June amid violent street protests triggered by severe seasonal summer power shortages.


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A view of the Beiji refinery, Iraq's largest. Early on Friday morning, at least one bomb destroyed pipelines feeding the facility - the third attack on the refinery in four months.
By Ben Lando and Staff of Iraq Oil Report
Published June 24, 2011

At least one explosion damaged a gas pipeline feeding Iraq’s largest refinery on Friday morning, taking the facility off line — the third attack on the Beiji refinery in four months and the latest incident in an increasing campaign of sabotage against the oil sector.

It's not yet clear if the explosion was caused by bombs, but multiple government officials have characterized the incident as an attack.

The explosion happened at 2:30 a.m., according to a senior Interior Ministry official...

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URGENT / Curfew imposed on Beiji, Salah al-Din
6/25/2011 3:33 PM

SALAH AL-DIN / Aswat al-Iraq: Police forces in Beiji township of Iraq’s Salah al-Din province have imposed a curfew on the township on Saturday, after a clash between an Iraqi Rapid Response Force and a man, wanted for Article 4 – Terrorism, killing him and wounding 3 of the Force’s men in northern Tikrit, a Beiji police source reported.

“A Rapid Response Force was attempting to arrest Mohammed Abed Ismail, wanted for Article 4 – Terrorism in Beiji township, 40 km to the north of Tikrit.
Abed Ismail, along with a number of his tribe's men, resisted arrest leading to his death and the wounding of 3 men from the Rapid Reponse Force," the police source said.

He said that Baiji police had imposed a curfew on the township after the incident, adding that the detained man had been a police officer with lieutenant rank, who had left service 5 years ago and joined the armed groups.

Tikrit, the center of Salah al-Din Province, is 175 km to the north of Baghdad.

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Beiji online after quick fix
A soldier stands guard over the Beiji refinery. (AYMAN OGHANNA/Iraq Oil Report)
By Staff of Iraq Oil Report
Published June 28, 2011

Oil officials say a gas pipeline is now feeding the Beiji refinery after a Friday explosion, and the country's largest fuel-producing facility is back online.

Sources have said that a bomb hit a section of a gas pipeline outside of the refinery, but investigators have provided neither an explanation of the security breach or a technical account of the damage. Iraq's oil sector has recently suffered an intensifying wave of sabotage and attack.

"What happened a few days ago was just a fire i...

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Iraq signs contract with German company to build 5 power stations
7/7/2011 2:50 PM

BAGHDAD / Aswat al-Iraq: Iraq’s Ministry of Electricity has signed a contract on Thursday with the German MBH Company for the building of 5 fast-construction power stations, according to a ministerial statement.



“The Ministry had signed a contract with the German MBH company to build 5 power stations, each with 100 megawatt power and a total power of 55 megawatts, within one year from now,” the Ministry’s Spokesman, Musa’b al-Mudarris told Aswat al-Iraq news agency.



He said that the total cost of the contract is US$625 millions, whilst the payment would be on credit for 2 years after the completion of the works in the power stations, pointing out that the “stations would work with black fuel oil, and all stations would be set up in northern Iraq’s Ninewa Province.”

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Al-Iraqiya to interrogate Minister of Electricity over $1.7bn fraud claim
07/08/2011 16:57
Baghdad, Aug. 7 (AKnews) – The al-Iraqiya list led by Ayad Allawi said today that Electricity Minister Raad Shallal – an Iraqiya deputy – must be interrogated over reports that his ministry signed two contracts worth $1.7 billion with nonexistent companies.

List spokesman Shaker Kattab told AKnews that al-Iraqiya intend to interrogate all involved in the contracts, saying that any misconduct will be duly exposed.

Corruption has been a major problem in Iraq since the US-led invasion in 2003. In the Corruption Perceptions Index, conducted by Transparency International in Berlin and issued in May this year, Iraq came 160th out of the 163 countries polled.

The Electricity Ministry contracts to build power plants in Iraq were discovered to be fake by Iraq’s former Planning Minister Jawad Hashem after conducting his own investigation into the two companies involved.

On August 2 Hashem sent a letter to Prime Minister Nouri al-Maliki outlining the details of his findings.

The first contract - a $1.2bn deal signed between the Ministry of Electricity and Canadian firm Capgent in July – was discovered to be fraudulent when Hashem, a resident of Vancouver where the firm was allegedly based, went to visit its headquarters only to find that the company didn’t exist.

Further investigations uncovered that the German firm Maschinebau Halberstadt (MBH) with which the Ministry signed a $5 million, also in July, was declared bankrupt on January 11, six months before formalizing the Iraqi energy deal.

The ministry refuted all claims of corruption this morning, saying that both contracts were signed transparently, and according to the requests of parliament and the council of ministers.

Reported by Yazn al-Shemmari


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Iraqi PM sacks electricity minister for deals-source

07 Aug 2011 14:17

Source: reuters // Reuters

* Iraq orders electricity minister out - source

* Government cancels two contracts, reviews Korean deal (Adds reaction from electricity official)

By Waleed Ibrahim

BAGHDAD, Aug 7 (Reuters) - Iraqi Prime Minister Nuri al-Maliki has dismissed his electricity minister after the government said an investigation had uncovered irregularities in power contracts with two foreign companies, a source in Maliki's office said on Sunday.

The electricity ministry also said it had asked the cabinet to rule on a $2.76 billion power plant construction contract with a unit of South Korea's STX Group after saying the company risked missing a deadline to meet one of its contract terms.

The dismissal of Electricity Minister Raad Shallal, which under Iraqi law parliament has to approve, could complicate urgent government efforts to bring in investors to tackle chronic electricity shortages that infuriate Iraqis looking to rebuild their economy after years of war and sanctions.

"The prime minister has ordered his resignation and now the parliament should vote on it," the source in Maliki's office said.

A government ombudsman said on Saturday that Iraq had cancelled power plant contracts worth $1.7 billion with a Canadian and a German company after finding "manipulation and misleading information" about their finances or their ability to carry out the work.

"The electricity ministry ordered these contracts cancelled immediately. There was no financial loss because payments were over the long term," said the statement from the office of the inspector general, an ombudsman that oversees the ministry.

"Our investigation... discovered manipulated and misleading information in the documents that the two companies delivered about their legal and financial status and their technical capabilities," it said.

But a senior official in the electricity ministry defended the contracts as valid and said the companies had agreed to build with favourable conditions for Iraq, given that security worries kept some larger companies away for now.

"These contracts are well organised and have no risk to the Iraqi side... they are with staggered payments, the first is 45 percent after a year of the start of operating and 50 percent after two years," said the official who asked not to be named.

One of the contracts was with Canadian company CAPGENT to build 10 power stations and the other with a German company called MBH, said Musab al-Mudarres, a ministry spokesman.

A call to CAPGENT in Canada did not get through. MBH did not immediately respond to emails and telephone calls.

Dismissing the electricity minister could have a political fallout. Shallal belongs to the Sunni-backed Iraqiya faction which accuses Maliki of not living up to a power-sharing deal among Shi'ite, Sunni and Kurdish political blocs.

POWER DEALS

Investment in Iraq is growing as violence ebbs eight years after the U.S.-led invasion that toppled Saddam Hussein. But corruption, inefficiency and red tape from a still highly centralised state bureaucracy are often criticised by investors.

In May, STX Heavy Industries, part of South Korea's STX Group, signed a deal to build 25 power stations with a total capacity of 2,500 MW across Iraq, including Baghdad and Basra.

Electricity ministry spokesman Musab al-Mudarres said the South Korean company was running short of time to find a third party financial guarantor, a condition of its contract.

"We have put the contract before the cabinet and it will take a final decision regarding the contract, whether to cancel it or not," Mudarres said.

Mudarres said contracts with international companies allowed them three months to finalise all required documents, including finding a third-party guarantor. "Nothing has been officially confirmed yet," said an STX Group spokesman, without elaborating.

Iraq's war-battered national grid supplies less than half of the OPEC member's 15,000 MW peak demand during the summer when temperatures can exceed 50 degrees Celsius.

As a result, Iraqis receive only a few hours of power a day from the national grid and are forced to rely on private generators in their neighbourhoods and homes. The shortages were a major complaint at nationwide protests earlier this year. (Additional reporting by Ju-min Park in Seoul and Aseel Kami in Baghdad; Writing by Patrick Markey; Editing by David Stamp)

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Power deals could lead to minister's ouster
Electricity Minister Raad Shalal al-Ani (center right) stands beside Iranian Ambassador Hassan Danaie-Far (center left) at Thursday's signing of a $365 million pipeline contract at the Electricity Ministry in Baghdad. (Photo courtesy of the Electricity Ministry)
By Ben Lando and Staff of Iraq Oil Report
Published August 7, 2011

A proposed deal between Iraq's Electricity Ministry and German and Canadian companies may cost the minister his job, six months since taking office and as the August heat wave sears the power-starved country.

Iraqi Prime Minister Nouri al-Maliki and his deputy prime minister for energy affairs, Hussain al-Shahristani, have told state media that Minister of Electricity Ra'ad Shalal al-Ani has been removed over allegations of corruption involving two as yet unnamed firms.

Shahristani has sch...

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http://gulfanalysis.wordpress.com/2011/08/08/another-change-to-the-second-maliki-government-as-the-electricity-minister-is-sacked/

Another Change to the Second Maliki Government as the Electricity Minister Is Sacked
Posted by Reidar Visser on Monday, 8 August 2011 11:58

Late Saturday night Iraqi newswires began spreading the news: Prime Minister Nuri al-Maliki had sacked the electricity minister, Raad Shalal al-Ani, because of allegations of questionable deals with foreign companies and corruption. Most media commentators reported the act as a fait accompli(An accomplished, presumably irreversible deed or fact.) and began discussing possible successors to replace Ani.

But hold your horses for a moment: Can Maliki really do that? Sack a minister without consulting with anyone else? No, he can’t. Not without the consent of the parliament, as detailed in article 78 of the Iraqi constitution.

In other words, the sacking of the electricity minister must be confirmed by parliament in one of its sessions this week. It should be stressed that when Iraqiyya (the political bloc to which the sacked minister belongs) expressed a desire for a different procedure, namely, for the minister to appear before parliament to answer question before being relieved of his duties by way of an absolute-majority vote, they are not being entirely faithful to the constitution either. It is true that this kind of procedure exists as an option in the constitution, but it is mainly intended as an avenue for parliamentary initiatives to get rid of a minister. By way of contrast, the prime minister’s prerogative to sack a minister does not stipulate any hearing in parliament, and a simple majority will suffice to confirm the action of the PM.

Any permanent move by Shahristani to electricity would in turn affect the contentious balance between Maliki’s State of Law coalition and Iraqiyya in the current government.

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Date posted today 11:32
Subject The poisoned chalice....
Votes for this Posting Voted UP 2 times.
Message
While, not surprisingly, everyone is following the major indices and the potential threat of another global recession, and the ongoing saga of our ridiculously under-valued share price, we should not perhaps lose sight of what is happening politically in Iraq.

After all, perhaps more than anything else, this is what will ultimately affect the value assigned to GKP.

A few days ago, there was an announcement that the Minister of Electricity, Raad Shallal is about to be sacked by Maliki. Electricity Ministers don’t have a good track record in Iraq:

A former Iraqi Electricity Minister, Ayham Al-Samarrai, was convicted in October 2005 of corruption charges, but escaped prison in 2006.

http://news.bbc.co.uk/1/hi/6191561.stm

His replacement, in May 2006, appointed by Maliki in the previous Iraq government, was Karim Waheed. Mr Waheed resigned on 21 June 2010 resigned after the annual bout of massive public unrest and protests at the failure of the Iraqi government to address the problem of electricity shortages.

http://www.bbc.co.uk/news/10371581

His temporary replacement was none other than Hussein SHAHRISTANI, who took on the role of Minister of Electricity in the 6 months between then and Maliki forming the new Iraqi Government on 21 December 2010.

http://www.iraqoilreport.com/energy/electricity/shahristani-given-temporary-power-portfolio-4667/

Maliki then appointed Raad Shallal and, after a period of only about 7 months in office, it appears that Raad Shallal is on his way out. But, most importantly, it looks as though Shahristani is about to resume responsibility for that most unpopular and demanding role.

http://www.google.com/hostednews/afp/article/ALeqM5jwyLP6cnCPhSZvx1akZi-sOwG9-Q?docId=CNG.a240dc71eafb7daa752e7d17fdffe2aa.251

While taking on board Najork’s concerns (expressed yesterday), that Shahristani clearly remains a very influential figure in Iraq, I do wonder whether this could actually be the beginning of a bit of political jostling by Maliki... in which Shahristani is handed something akin to a poisoned chalice.(A cup for the consecrated wine of the Eucharist.)

We know that Maliki has been trying to streamline his Cabinet, and we know that the role of Deputy prime Minister for Energy was created specifically for Shahristani as it did not exist in the previous Government.

We also know that there is a great deal of pressure on whoever takes up the role of Electricity Minister, as evidenced in Danny Fortson’s article in the Times at the weekend:

Extract: “By midday on Tuesday, the temperature in central Baghdad had hit 51C. As sandstorms swept in from the desert, the Iraqi government went into meltdown. Unable to generate enough power to cool its buildings, the government closed down and sent ministers home.

About 190 miles to the north in Erbil, it was business as usual — and not because it was an autumnal 49C. The city — capital of the semi-autonomous region of Kurdistan — generates enough energy from locally produced gas to keep the power going for all but a few hours a day. Baghdad sometimes has electricity for as little as four. “

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Placate: To allay the anger of, especially by making concessions; appease.
So, what seems certain is that Shahristani will have his work cut out to placate the Iraqi masses in relation to their Electricity shortages during this very hot period. Meanwhile the Oil & Gas Law is, it seems, very close to being discussed in parliament, and Shahristani may have a much-reduced opportunity to interfere with its progress.

The final part of the article on Raad Shallal’s demise and Shahristani’s apparent adoption of the role of Electricity Minister also stood out for me:

http://www.google.com/hostednews/afp/article/ALeqM5jwyLP6cnCPhSZvx1akZi-sOwG9-Q?docId=CNG.a240dc71eafb7daa752e7d17fdffe2aa.251

Extract: < Another Iraqi official, who also did not want to be identified, said Iraq "contracted with these companies with the aim of quick success," as they claimed to have been able to set up power stations quickly. "The big international companies want guarantees for projects paid (after completion) from the parliament or the finance ministry, but parliament did not cooperate with the government in this regard," he said. "Therefore, the government was not able to convince major companies to come" invest in the sector.>

To me, this is actually the crux of the matter. The Iraqi government (and Shahristani in particular) continually want international companies to carry out energy infrastructure projects, or explore and develop oil fields (which provide 95% of the country’s revenue), on thier terms. But those companies want Guarantees too.

IMHO, the Oil & Gas Law is VERY high up the Iraqi agenda, and Shahristani may be kept out of the picture to some extent and forced to accept the 'majority' opinion.

GLA, scaramouche

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Electricity Ministry defiant as investigation begins
Iraqi deputy prime minister Hussein al-Shahristani speaks during a press conference in Baghdad on August 8, 2011 where he announced that the Iraqi government is cancelling allegedly improper contracts to expand power provision in Iraq with foreign firms. (ALI AL-SAADI/AFP/Getty Images)
Iraqi deputy prime minister Hussein al-Shahristani speaks during a press conference in Baghdad on August 8, 2011 where he announced that the Iraqi government is cancelling allegedly improper contracts to expand power provision in Iraq with foreign firms. (ALI AL-SAADI/AFP/Getty Images)
By Staff of Iraq Oil Report
Published August 9, 2011

The Electricity Ministry and its leader, Ra’ad Shalal al-Ani, have denied wrongdoing in a contracting scandal amidst an investigation for allegedly failing to detect egregious fraud in two power construction deals worth about $1.7 billion.

Contrary to widespread media reports, Ani has not been fired, though his job is clearly in danger. Deputy Prime Minister for Energy Hussain al-Shahristani blamed Ani’s ministry for signing two contracts without performing basic due diligence, which woul...


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PM Maliki, his Deputy Shahristany, charged by al-Iraqiya Coalition with signatures on electricity contracts
8/9/2011 10:18 AM



BAGHDAD / Aswat al-Iraq: A Legislature of al-Iraqiya Coalition, led by Iyad Allawi, has charged Iraq’s Prime Minister Nouri al-Maliki, his Deputy for Energy Affairs Hussein al-Shahristany and the sacked Electricity Minister, Raad Shallal, with having their signatures on the so-called ‘illusionary’ contracts made public recently.



“The electricity contracts that had created a fuss in the Iraqi mass media recently had carried the signatures of Prime Minister Nouri al-Maliki and his Deputy for Energy Affairs, Hussein al-Shahristany, along with the signature of the Electricity Minister,” Legislature Haider al-Mulla said in a statement, copy of which was received by Aswat al-Iraq news agency on Tuesday.



“If there had been any mistake in those contracts, they can’t be burdened by the Electricity Minister alone, because the mechanism of signing such contracts is discussed in the Energy Committee, led by Shahristany and after that they are signed by the Minister and then raised to the Council of Ministers, to be discussed and signed by the Prime Minister,” Mulla stressed.



“The first person, behind the electric power crisis in Iraq over the past few years has been Prime Minister, Nouri al-Maliki, and if we want to burden responsibility for the crisis, the first official would be Maliki himself,” Mulla said.



He pointed out that “al-Iraqiya Coalition refuses dealing with the electric power crisis in such a simple manner and that the Minister be sacked, according to a proposal by one of Maliki’s close associates.”



“Al-Iraqiya Coalition objects the statement, issued by Legislature Hassan al-Sunaid, about the sacking of the Electricity Minister and leans to the Constitutional mechanism for such measure, in the event of his failure,” Mulla added.



Mulla said that “the contracts, signed by Maliki with the South-Korean STX Company to build up power generators with 2,500 kg for US$3 billions (b) and 125 millions, provided that such contract be implemented within 10 months had also been ‘illusionary’ contacts.”



“Maliki wanted, through his announcement about the signing of the contracts to fool up the Iraqis that he was able to settle the electric power crisis, in order to suck-out the anger of the Iraqi street,” Mulla said, adding that “the South-Korean Company had announced its inability to implement the contracts, due to the mechanism of the postponed payment.”



He said that “over 2 months have already passed on the signing of the said contracts and not even a nail had been struck in those contacts, because they had been commercial and not manufacturing companies.”



Noteworthy is that Member of the Parliament’s Integrity Committee, Talal al-Zuba’e, has stated on Monday that “information had reached his Committee, confirming that the Canadian Company, charged with having signed ‘illusionary’ contracts with the Ministry of Electricity “had been steered by a high-level Iraqi official.”



“Urgent reports had reached the Integrity Committee, stating that the Canadian Company, charged with signing ‘illusionary’ contracts with the Electricity Ministry, is steered by a high-level Iraqi official carrying the Canadian Nationality as well,” he said, adding that “the Parliament’s Integrity Committee is holding a meeting nowadays to discuss the issue of the Electricity Ministry and the stealing of US$1.7 billions (b).”



Iraq’s Electricity Minister, Raad Shallal, is member of al-Hal (Solution) Block, belonging to al-Iraqiya Coalition, led by former Prime Minister, Iyad Allawi.



Noteworthy is that Iraq is suffering from an intensive electric power crisis, under high summer temperatures, exceeding 50 degrees Celsius, while power cuts reach 18 hours in most Iraqi provinces.


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Is Iraq a Third-World Country?

Posted on 10 August 2011



The big news this week is the sacking of the Iraqi electricity minister, following the revelation that two recently-announced power generation contracts were, let's say, 'questionable'.



While the idea that a government and civil service can be fooled by a website and a company presentation may seem far-fetched, bear in mind that in Iraq the business of government is often carried out through amateur-looking websites and Yahoo emails. If proper due diligence didn't follow, few would be surprised.



But this assumes that the officials involved made a naive or incompetent mistake; there is also a theory that the mistake was deliberate rather than incompetent.

In either case, it reflects very poorly on the administration.



If Iraq wants to be taken seriously, it must stop behaving like a third-world country.

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Iraq in $1 bln power deals with Chinese, Korean cos
http://www.reuters.com/article/2011/11/17/iraq-electricity-idUSL5E7MH20820111117


BAGHDAD | Thu Nov 17, 2011 7:17am EST
Nov 17 (Reuters) - Iraq has finalised a $1.08 billion contract with China's CMEC to build a 1,260-megawatt thermal power plant, a senior electricity ministry official said on Thursday.

"The signing will take place next week or the week after," Laith al-Mamury, the head of investments and contracts at the ministry, said at a ceremony in Baghdad.

At the ceremony, Iraq signed an $85 million contract with South Korea's LS Industrial Systems to install 35 power distribution substations.

Iraq is trying to ramp up electricity production as it rebuilds after years of war and international sanctions.

Intermittent power is one of Iraqis' chief complaints. Demand far exceeds supply.

China National Machinery & Equipment Import & Export Corporation (CMEC) will build the thermal plant, with two power units each providing 630 MW, in Salahuddin province north of Baghdad.

Mamury also said the ministry had signed a $1.044 billion contract recently with STX Heavy Industries, a unit of South Korea's STX Group, to build diesel power stations with a total capacity of 900 MW in three provinces.

The units are scheduled to be completed in July 2012. (Reporting by Aseel Kami; Writing by Jim Loney)

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June 09, 2010
Iraq’s Top Ten Salaries… And The Best Pension in The World, I guess

Iraqi journalist Sarmad Al Taie, from Al Alam Newspaper, published an article that reveals Iraq’s top government officials’ salaries.

The ten are: Iraqi President and both Vice Presidents, the Prime Minister and his two deputies, Speaker of the parliament and his two deputies and the head of the judicial council.

The salaries of Iraq’s top officials are not made public and there is no law that specifies their salaries.

Al Taie’s efforts with two of his colleagues resulted in obtaining some figures that he says, was conflicting due to the many allocations that are added to the salaries and can increase it dramatically. The extra allocations include hospitality allocations!! And other allocations like risk allocations. Therefore the numbers that you will see below are just the begining.

Iraqi president: About 700,000 USD a year

Iraqi Vice presidents: 600,000 USD a year but Iraqi news agencies said that Vice President Adel Abdul Mahdi said he receives a One Million USD a month, in total.

Prime Minister office said that Al Maliki receives 360,000 USD a year. But some official sources said that the Prime Minister’s salary is equal to the Iraqi President’s - so they should receive the same salary.

Head of the Judiciary council makes about 100,000 USD a month (not clear on allocations).

Deputy Prime Minister makes about 172,000 USD a year (extra allocations are not clear)

The hit is the pension salary:

80 percent of their last received pay check for the rest of their lives. Add to that if they served in another government post they can receive more than one salary and one pension!