Iran unveils upgraded model for oil contracts

Associated Press Ali Akbar Dareini, Associated Press Iran's Oil Minister Bijan Zanganeh, center, Managing Director of National Iranian Oil Company, Roknoddin Javadi, right, head of parliament's energy committee Ali Marvi, left, and participants listen to Iran's national anthem during opening ceremony of Iran Petroleum Contracts Conference in Tehran, Iran, Saturday, Nov. 28, 2015. Iran has unveiled a new model of oil contracts aimed at attracting foreign investment once sanctions are lifted under a landmark nuclear deal reached earlier this year. (AP Photo/Vahid Salemi) syndication.ap.org Iran's Oil Minister Bijan Zanganeh, center, Managing Director of National Iranian Oil Company, Roknoddin Javadi, right, head of parliament's energy committee Ali Marvi, left, and participants listen to Iran's national anthem during opening ceremony of Iran Petroleum Contracts Conference in Tehran, Iran, Saturday, Nov. 28, 2015. Iran has unveiled a new model of oil contracts aimed at attracting foreign investment once sanctions are lifted under a landmark nuclear deal reached earlier this year. (AP Photo/Vahid Salemi) TEHRAN, Iran (AP) — Iran unveiled a new model of oil contracts Saturday aimed at attracting foreign investment once sanctions are lifted under a landmark nuclear deal reached earlier this year, and said U.S. companies would be welcome to participate. The new Iran Petroleum Contract replaces a previous buyback model, in which contractors paid to develop and operate an oil field before turning it over to Iranian authorities. Iran has sweetened the terms, hoping to bring in $30 billion in new investment. The new contracts last 15-20 years and allow for the full recovery of costs. The older contracts were shorter term, and investors complained of heavy risks and suffering losses. Investors who produced more than planned amounts received no compensation for the additional barrels. But under the new model, the more they produce, the more they will earn. Foreign investors will also have an option to extend contracts an additional five years, up to 25 years. Some 50 upstream oil, gas and petrochemical projects are being introduced during a two-day conference in Tehran that began Saturday. Iran will pay foreign oil companies larger fees under the new contracts to provide greater incentives to investors. Oil Minister Bijan Namdar Zanganeh told the conference that under the new contracts, foreign investors will be required to form a joint company with an Iranian partner to carry out exploration, development and production operations. "To continue to play the role (as a major oil supplier), we hope to enjoy working with reputable international oil companies under a win-win situation," he told the conference. Zanganeh welcomed U.S. investment in Iran's energy sector. "We have no objection to and problem with the participation of American companies. The way for the presence of these companies in Iran's oil industry is open," he said. Mahdi Hosseini, a senior official in charge of the new contracts, told the conference that the new model is an attempt to repair Iran's relations with the industrialized world. Iran is hoping to attract over $150 billion in foreign investment in five years to rebuild its energy industry. Iranian hardliners, however, condemned the new contracts as "unconstitutional", saying they will open the way for "infiltration" of the energy sector by Iran's enemies. "Zanganeh today unveiled contracts that effectively transfers the rights of exploration, extraction, exploitation and sale Iran's oil to foreign companies for 25 years," the conservative news website, rejanews.com, said. International sanctions on Iran's oil industry were tightened in 2012 over its controversial nuclear program. Western nations have long suspected Iran of secretly pursuing nuclear weapons, charges denied by Tehran, which insists the program is entirely peaceful. Under the agreement reached in July with the U.S., Britain, France, Germany, Russia and China, Iran will curb its nuclear activities in exchange for the lifting of sanctions. Oil Ministry officials said 137 foreign companies attended Saturday's conference, including Repsol, BP, Royal Dutch Shell, Total, Technip, Schlumberger, Eni, Enel, Rosneft, Lukoil, Gazprom, Inpex, Statoil and Daewoo. Iran, an OPEC member, currently exports 1.1 million barrels of crude oil per day and hopes to get back to its pre-sanctions level of 2.2 million, last reached in 2012. Iran's total production now stands at 3.1 million barrels per day. Iran is hoping to boost oil production to 5.7 million barrels a day by 2021. Zanganeh said last week that Iran will export an additional 500,000 barrels of oil a day after sanctions are lifted — likely in early 2016 — to reclaim its market share despite low prices. Iran plans to begin exporting an additional 500,000 barrels of oil a day six months later in order to double its crude exports. ======================= Fri Nov 20, 2015 | 9:56 AM EST India's Petronet near to winning better gas terms from Qatar-sources India's Petronet near to winning better gas terms...X By Oleg Vukmanovic and Nidhi Verma MILAN/NEW DELHI Nov 20 (Reuters) - India's biggest gas importer Petronet LNG is close to renegotiating a major deal with its Qatari supplier Rasgas, lowering the cost of gas shipments and avoiding a $1.5 billion penalty fee for lifting less gas than agreed, two sources said. The renegotiation is another sign of how falling oil prices and a global gas glut are bringing producing giants such as Qatar to the negotiating table. Petronet, which has a 25-year contract with Rasgas to annually buy 7.5 million tonnes of liquefied natural gas (LNG) has reduced purchases by about a third this year due to high prices -- even though it is only allowed to take 10 percent less, making it liable for a $1.5 billion penalty. Petronet and Rasgas opened renegotiation proceedings during Qatari Emir Sheikh Tamim bin Hamad Al-Thani's visit to New Delhi in March. If India manages to renegotiate a deal with Qatar it would be Prime Minister Narendra Modi's biggest diplomatic win in the energy sector since coming to power last year. Indian oil minister Dharmendra Pradhan reinforced the need to renegotiate prices and quantity under the long term deal with Qatar during his visit to Doha this month. According to the sources the two firms are exploring the possibility of altering the contract's pricing formula, in which the LNG is valued based on a 60-month average of a basket of Japanese crude oil prices. Instead, a 3-month average of Brent crude is being considered, which would be a major coup for Petronet by lowering its LNG costs in line with sharply lower crude oil prices. Petronet currently pays about $12-$13 per million British thermal units (mmBtu) for Qatari LNG under a deal that began in 2004, compared with around $7-$8 per mmBtu for LNG in the spot market. Petronet has been increasingly substituting costly Qatari LNG with spot shipments. But the proposed revision should allow it to step up Qatari imports as prices fall. Under the new deal, Rasgas will also grant relief to Petronet from paying a $1.5 billion penalty on the condition that the Indian firm lifts full volumes in subsequent years, said one of the sources. Rasgas was not immediately available for comment, while Petronet LNG's head of finance R. K. Garg did not respond to a request for comment. (Editing by William Hardy)

Shortage of petrol hits alarming levels Ahmad Fraz Khan Published about 7 hours ago

LAHORE: Prime Minister Muhammad Nawaz Sharif Saturday took strict notice of the fuel shortage in various parts of the country and suspended four officials concerned. After arriving from Saudi Arabia, the Prime Minister called a meeting at the airport and took decisions to improve the situation on immediate basis. The four immediately suspended officers responsible for the crisis included Secretary Petroleum Abid Saeed, Additional Secretary Petroleum Naeem Malik, DG Oil C.M. Azam and Managing Director Pakistan State Oil (PSO) Amjid Janjua, said a press release. The provincial governments were directed to check sale of petrol in black and expedite its supply and delivery. ============================ Petrol crisis: Oil companies, govt trade accusations of culpability KARACHI / ISLAMABAD: Oil companies and government officials continued to trade accusations on Friday, with neither side willing to accept culpability for the sudden crunch in petrol supplies in the northern half of the country. Both sides agree on one fact: there was an unprecedented surge in demand for petrol after the government decided to reduce prices. At a press conference on Friday night, Petroleum Minister Shahid Khaqan Abbasi said that demand had surged by 25% after the 27% drop in oil prices from their peak in June 2014. Both sides also agree that the oil companies did not have the legally required 20 days’ worth of inventory to help deal with supply disruptions. But that is where the agreement ends. Government officials claimed that the lack of inventory was the sole reason for the petrol shortage. Oil and Gas Regulatory Authority (Ogra) Chairman Saeed Ahmad Khan announced at a press conference on Friday that Ogra would be serving notices to oil companies for failing to meet the legally required levels of inventory. But industry officials point out that if inventory was the only issue, then there would also be a shortage of diesel and the shortages would be uniform across the country. “The industry cannot be blamed for this situation. There is no shortage of diesel anywhere and petrol is available at all the pumps in Sindh and Balochistan,” said Aftab Husain, CEO of Pakistan Refinery and head of the Oil Companies Advisory Council (OCAC), an industry group. Husain explained that one ship carrying 50,000 tons of oil products was delayed by a few days. “This, along with heavy fog in Punjab, hampered transportation and disrupted the supply chain,” he said. Diesel is transported through a cross-country pipeline originating at Port Qasim, whereas petrol is transported mostly through trucks going north from Karachi. Husain admitted that the oil industry often does not carry the full 20 days of required inventories, especially when prices are declining, but blamed government pricing policy for the situation. “Petroleum prices are revised once a month and whenever the price drops, we book a loss due to the reduced value of our petroleum stock,” he said. “Complete deregulation of prices is the answer. But whenever we talk about it everyone starts writing against us.” Ogra acknowledges the commercial difficulties faced by oil companies when prices are declining, but appears in no mood to accept this as an excuse for not complying with regulatory requirements, said the regulatory body’s chairman. However, even though he blamed the oil companies for the current crisis, Khan agreed with their stance that oil and liquefied petroleum gas (LPG) prices should be deregulated. “In the beginning it will not be pleasant, but it will be good in the long run due to market competition,” said the Ogra chairman. Yet even though everyone agrees that the oil price drop resulted in an unprecedented surge in demand, the government is planning on decreasing prices even further. The petroleum minister announced at his press conference that prices could be reduced by more than Rs5 per litre in February. Abbasi also appeared to insist that the privately owned oil marketing companies were more responsible for the supply crunch than the state-owned PSO, even though PSO has a 65% share in the petrol market. Sales of petrol tend to rise particularly sharply on the first day of a government-mandated price cut. “Petrol sales hit 40,000 tons on January 1,” admitted the petroleum minister. The current crisis appears to have been worsened by the fact that alternatives to petrol – specifically compressed natural gas (CNG) – have largely been absent from the market due to a shutdown of gas supply to CNG stations in Punjab. Abbasi said that if the weather did not turn too cold, the government might consider reopening some of the supply of natural gas to CNG stations. Natural gas is the primary heating fuel in most of the affluent parts of urban Pakistan. Meanwhile, at a hearing at the Senate finance committee on Friday, Federal Finance Secretary Waqar Masood suggested that the current shortage is just the tip of the iceberg and that the country could be facing a rough six weeks before the crisis is fully resolved. Masood’s timeline is far longer than the 10 to 12 days promised by cabinet members during their speeches in the National Assembly on the same day. The finance secretary pointed out that there is a 45 day lag between when an oil company opens a letter of credit (LC) with a bank for oil imports and when the petrol is actually delivered to petrol pumps across the country. The finance ministry has released Rs17 billion to the state-owned PSO to handle its LC requirements, but admits the company needs Rs27 billion for this month alone. Masood admitted that the inter-corporate circular debt in the energy industry, caused in large part by government entities refusing to make the full payments they owe power companies, was at least partially the cause of the crisis. PSO has defaulted on at least Rs110 billion in LCs owed to its foreign suppliers. The finance secretary claimed that the government had been making timely payments of the subsidies it owes to power companies, which in turn owe PSO money for the fuel they use to generate electricity. However, he admitted that the finance ministry refused to pay amount related to the cost of theft, meaning that the power companies still do not have enough money to pay PSO. When the power companies fail to pay PSO on time, PSO defaults on its payments due to foreign suppliers, who then refuse to supply more fuel without payments made upfront in cash. The finance ministry has paid out Rs222 billion power subsidies so far this fiscal year, said Masood. The finance ministry has been urging the water and power ministry to crack down on electricity theft so that the circular debt problem can end once and for all. Sources told The Express Tribune that another reason for the supply crunch was Finance Minister Ishaq Dar’s refusal to allow state-owned PSO to buy US dollars to make oil payments to its international supplies in December, because doing so would have reduced the country’s foreign exchange reserves below the $15 billion mark the minister was targeting. Despite hearing that the drop in oil prices was at least partially responsible for the sudden supply shortage, the Senate finance committee passed a resolution demanding that the government reduce domestic oil prices even further, to fully match the global price drop. Published in The Express Tribune, January 17th, 2015. ============== By Zafar Bhutta / Saad Hasan / Shahbaz Rana / Photo: Shahbaz Malik Published: January 17, 2015 Customers throng a filling station in Lahore amid severe dearth of petrol. PHOTO: SHAHBAZ MALIK/EXPRESS KARACHI / ISLAMABAD: Oil companies and government officials continued to trade accusations on Friday, with neither side willing to accept culpability for the sudden crunch in petrol supplies in the northern half of the country. Both sides agree on one fact: there was an unprecedented surge in demand for petrol after the government decided to reduce prices. At a press conference on Friday night, Petroleum Minister Shahid Khaqan Abbasi said that demand had surged by 25% after the 27% drop in oil prices from their peak in June 2014. Both sides also agree that the oil companies did not have the legally required 20 days’ worth of inventory to help deal with supply disruptions. But that is where the agreement ends. Government officials claimed that the lack of inventory was the sole reason for the petrol shortage. Oil and Gas Regulatory Authority (Ogra) Chairman Saeed Ahmad Khan announced at a press conference on Friday that Ogra would be serving notices to oil companies for failing to meet the legally required levels of inventory. But industry officials point out that if inventory was the only issue, then there would also be a shortage of diesel and the shortages would be uniform across the country. “The industry cannot be blamed for this situation. There is no shortage of diesel anywhere and petrol is available at all the pumps in Sindh and Balochistan,” said Aftab Husain, CEO of Pakistan Refinery and head of the Oil Companies Advisory Council (OCAC), an industry group. Husain explained that one ship carrying 50,000 tons of oil products was delayed by a few days. “This, along with heavy fog in Punjab, hampered transportation and disrupted the supply chain,” he said. Diesel is transported through a cross-country pipeline originating at Port Qasim, whereas petrol is transported mostly through trucks going north from Karachi. Husain admitted that the oil industry often does not carry the full 20 days of required inventories, especially when prices are declining, but blamed government pricing policy for the situation. “Petroleum prices are revised once a month and whenever the price drops, we book a loss due to the reduced value of our petroleum stock,” he said. “Complete deregulation of prices is the answer. But whenever we talk about it everyone starts writing against us.” Ogra acknowledges the commercial difficulties faced by oil companies when prices are declining, but appears in no mood to accept this as an excuse for not complying with regulatory requirements, said the regulatory body’s chairman. However, even though he blamed the oil companies for the current crisis, Khan agreed with their stance that oil and liquefied petroleum gas (LPG) prices should be deregulated. “In the beginning it will not be pleasant, but it will be good in the long run due to market competition,” said the Ogra chairman. Yet even though everyone agrees that the oil price drop resulted in an unprecedented surge in demand, the government is planning on decreasing prices even further. The petroleum minister announced at his press conference that prices could be reduced by more than Rs5 per litre in February. Abbasi also appeared to insist that the privately owned oil marketing companies were more responsible for the supply crunch than the state-owned PSO, even though PSO has a 65% share in the petrol market. Sales of petrol tend to rise particularly sharply on the first day of a government-mandated price cut. “Petrol sales hit 40,000 tons on January 1,” admitted the petroleum minister. The current crisis appears to have been worsened by the fact that alternatives to petrol – specifically compressed natural gas (CNG) – have largely been absent from the market due to a shutdown of gas supply to CNG stations in Punjab. Abbasi said that if the weather did not turn too cold, the government might consider reopening some of the supply of natural gas to CNG stations. Natural gas is the primary heating fuel in most of the affluent parts of urban Pakistan. Meanwhile, at a hearing at the Senate finance committee on Friday, Federal Finance Secretary Waqar Masood suggested that the current shortage is just the tip of the iceberg and that the country could be facing a rough six weeks before the crisis is fully resolved. Masood’s timeline is far longer than the 10 to 12 days promised by cabinet members during their speeches in the National Assembly on the same day. The finance secretary pointed out that there is a 45 day lag between when an oil company opens a letter of credit (LC) with a bank for oil imports and when the petrol is actually delivered to petrol pumps across the country. The finance ministry has released Rs17 billion to the state-owned PSO to handle its LC requirements, but admits the company needs Rs27 billion for this month alone. Masood admitted that the inter-corporate circular debt in the energy industry, caused in large part by government entities refusing to make the full payments they owe power companies, was at least partially the cause of the crisis. PSO has defaulted on at least Rs110 billion in LCs owed to its foreign suppliers. The finance secretary claimed that the government had been making timely payments of the subsidies it owes to power companies, which in turn owe PSO money for the fuel they use to generate electricity. However, he admitted that the finance ministry refused to pay amount related to the cost of theft, meaning that the power companies still do not have enough money to pay PSO. When the power companies fail to pay PSO on time, PSO defaults on its payments due to foreign suppliers, who then refuse to supply more fuel without payments made upfront in cash. The finance ministry has paid out Rs222 billion power subsidies so far this fiscal year, said Masood. The finance ministry has been urging the water and power ministry to crack down on electricity theft so that the circular debt problem can end once and for all. Sources told The Express Tribune that another reason for the supply crunch was Finance Minister Ishaq Dar’s refusal to allow state-owned PSO to buy US dollars to make oil payments to its international supplies in December, because doing so would have reduced the country’s foreign exchange reserves below the $15 billion mark the minister was targeting. Despite hearing that the drop in oil prices was at least partially responsible for the sudden supply shortage, the Senate finance committee passed a resolution demanding that the government reduce domestic oil prices even further, to fully match the global price drop. Published in The Express Tribune, January 17th, 2015. ================== Schlumberger To Lay Off 9,000 Workers January 16, 2015 Oilfield services giant Schlumberger plans to cut 9,000 jobs as the global collapse in crude oil prices crimps production in 2015 and perhaps even longer. The cuts — nearly 8% of Schlumberger's 120,000 workers, were announced Thursday "to better align with anticipated activity levels for 2015,'' the company said. With production surging and waning growth, the world is awash with oil. That's led to a collapse in prices that's taken benchmark crude price down more than 50% since last June. Thursday, West Texas Intermediate fell 4.6% to $46.22 a barrel, while Brent crude slipped 2% to $47.67. Yet many forecasters say crude isn't close to bottoming. "In this uncertain environment, we continue to focus on what we can control,'' said CEO Paal Kibsgaard. "We have already taken a number of actions to restructure and resize our organization that have led us to record a number of charges in the fourth quarter. We are convinced that performance must now be driven by an accelerated change in the way we work through our transformation program." The layoffs come despite a relatively solid fourth-quarter earnings report in which the Houston-based Schlumberger increased revenue 6% to $12.6 billion and boosted earnings 11% to $1.94 billion. Schlumberger is also boosting its stock dividend 25%. Houston-based energy explorer Apache Corp. began laying off about 5% of its workers earlier this week. .. Read more: http://www.drillingahead.com/page/schlumberger-to-lay-off-9-000-workers?xgs=1&xg_source=msg_share_page#ixzz3P4ZZEWC6 =========================== Ahmad Fraz Khan Published about 7 hours ago A petrol pump seen deserted due to the shortage petrol.— Online/File A petrol pump seen deserted due to the shortage petrol.— Online/File LAHORE: The country is left with oil stock of less than three days and its import has totally dried up as the Pakistan State Oil defaults on its payments and says it will need at least Rs100 billion and eight weeks’ time to retrieve the situation. According to PSO officials, no oil consignment has arrived at any port in the country for the past two weeks, whereas usually six to eight ships, each carrying 65,000 tons of oil, come to the country in a fortnight. “The company has exhausted all its overdraft (OD) facilities over the past few weeks. All its LCs (letters of credit) lines have been choked as its total receivables now run over Rs215bn,” a PSO official said, adding that the power sector owed Rs190bn and PIA Rs12.5bn. PSO defaults on its payments, needs Rs100 billion to retrieve situation The company’s default on its payments to a few local banks has made all others cautious; no bank is now ready to underwrite PSO’s LCs. Exporters are also not ready to trust the PSO with their commodity without hard cash or bank guarantees. “The piecemeal payments being made by the government cannot provide any relief to PSO given the size of default. On Thursday, the government released Rs17bn, but like all such previous payments, it went into retiring overdue drafts, making no impact on fresh imports. Also read: Petrol shortage continues for third consecutive day “The company needs at least Rs100bn immediately to set things right. Even if it gets the required money, it will need another two months to line up imports and re­store the supply line,” the official said. “Apart from the financial crisis, it is ad hocism at the top that has landed the PSO into this ditch,” said another official. “With the acting managing director sitting at the top of the company and being more interested in import of liquefied natural gas (LNG) — a new pastime of the PML-N — PSO has been sliding deep into crisis,” he said. “No one really knows how a bankrupt PSO will import LNG. Why has it not stopped supplies to the defaulting companies, be it IPPs (independent power producers) or the PIA? “Why did the PSO remain content on small payments of a few billion rupees over the past year or so, which made no difference to the import? “Why did other oil marketing companies (Shell, Total, Caltex), which are duty bound to keep stocks of at least two weeks, fail in their essential business obligation?” the official wondered. All these questions, he added, needed to be answered and should be made part of an investigation into how the company had stumbled into the current crisis. “The government is pressing local refineries to supply oil to the PSO on credit. If this happens, there may be some temporary relief in supplies in the days to come. But the situation will not improve in the long run unless the government arranges Rs100bn, and makes sure that the company gets regular payments from all its buyers,” the official said. Published in Dawn, January 17th, 2015 On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play

Baker Hughes Declares Force Majeure in Iraq

Angry Shi'ites storm Schlumberger camp at Iraq's Rumaila oilfield Mon, Nov 11 18:53 PM EST By Aref Mohammed BASRA, Iraq (Reuters) - Dozens of angry Shi'ite Muslim workers and tribesmen stormed a Schlumberger Ltd camp at one of Iraq's main oilfields and wrecked offices early on Monday after accusing a foreign security adviser of insulting their religion, police and employees at the field said. Oil officials and workers at the Schlumberger drilling site in Rumaila North said the problem started when a security adviser they identified as British asked Iraqi workers to take down a flag and banners depicting a figure revered by Shi'ites. Schlumberger was not immediately available for comment late on Monday. According to workers and officials, when the workers refused to remove the banners, the security adviser went to do so himself and tore one portraying Imam Hussein, whose death more than 1,000 years ago is currently being commemorated by Shi'ites across the world in rituals known as Ashura. In the ensuing row, the security adviser pulled out a gun and fired several shots, wounding an Iraqi worker and drawing dozens of people from a nearby village to join the workers in storming the Schlumberger drilling camp. Officials of the state-run Southern Oil Company said production from the field was not affected by the incident, but oil officials said Schlumberger had suspended its operations in response, not only in Rumaila but at the other oilfields in Basra province. "We received an order from the main administration to stop work until further notice," said an Iraqi engineer working at a Schlumberger project in Zubair oilfield in the south. The protestors smashed up offices and severely beat the foreign security adviser, oil officials and workers said. A photograph taken by a worker at the scene showed a man with blood streaming down his face. He said it was the adviser. Security officials said the man was taken to hospital with serious injuries. Police and the army intervened to restore order and expelled the protesters from the site. "We advised the British security contractor to step back and leave this issue as it is very sensitive for the workers, but instead ... he went himself and removed the banners and tore one of Imam Hussein," said an Iraqi worker, who witnessed the incident. "Workers were provoked and squabbled with the British guy, but he suddenly pulled out a pistol and started shooting, and wounded one Iraqi worker," the man said. On Saturday, an Egyptian worker hired by Baker Hughes Inc to work at a drilling rig in Rumaila removed and tore a flag also depicting a holy Shi'ite figure, prompting Iraqi authorities to terminate his residency and expel him from the country, oil officials said. The workhorse of Iraq's oil industry, Rumaila is operated by BP with China National Petroleum Corp (CNPC) [CNPET.UL}. It has estimated reserves of 17 billion barrels and currently produces around 1.4 million bpd, more than a third of Iraq's total output of over 3 million bpd. "The workers and villagers went on a rampage. It was a fatal mistake from the foreign security guy to provoke local workers," said an oil ministry official, who spoke on condition of anonymity. "When you operate in a mainly Shi'ite community you have to respect their traditions and norms: it's the A B C of how to work in any environment." (Additional reporting and Writing by Ahmed Rasheed; Editing by Isabel Coles, Toni Reinhold) ======================== HOUSTON, Nov. 11, 2013 /PRNewswire/ -- Baker Hughes Incorporated (NYSE: BHI) today announced that a protest incident by local residents occurred last Saturday at a subsidiary's facility near Basrah, Iraq. No injuries were suffered and the facility was secured. The incident is currently under investigation. Due to the significant disruption of business, Baker Hughes has suspended operations in Iraq, and has issued force majeure notices to its customers. "Baker Hughes supports the Iraqi oil industry," commented Martin Craighead, Chairman and Chief Executive Officer of Baker Hughes. "And the safety and welfare of our employees are our top priorities. While we investigate this incident, and until the work environment has stabilized, we are halting activities in Iraq. We hope to resolve this issue in a timely manner, and resume operations in support of our customers and the country of Iraq, as soon as it is safe to do so." Baker Hughes is a leading supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas industry. The company's 60,000-plus employees today work in more than 80 countries helping customers find, evaluate, drill, produce, transport and process hydrocarbon resources. For more information on Baker Hughes' century-long history, visit: www.bakerhughes.com. CONTACTS: Media Relations: Christine Mathers, +1.713.439.8738, christine.mathers@bakerhughes.com Investor Relations: Trey Clark, +1.713.439.8039, trey.clark@bakerhughes.com Eric Holcomb, +1.713.439.8822, eric.s.holcomb@bakerhughes.com SOURCE Baker Hughes Incorporated ======================================= Foreigners flee Iraq oil flare-ups: Workers leave after Shia fury erupts 1 / 1he giant Rumaila oilfield, near Basra, produces a third of Iraq's oil output. The British security man allegedly at the centre of religious unrest works at a camp run by oil services group Schlumberger AP At a time of tremendous religious significance for the Shia, the insensitive actions of a British security man appear to have sparked a major crisis Patrick Cockburn Author Biography Thursday 14 November 2013 63 Print Your friend's email address Your email address Note: We do not store your email address(es) but your IP address will be logged to prevent abuse of this feature. Please read our Legal Terms & Policies A A A Email Ads by Google British Expat In Qatar? £100k+ In UK Pensions? Download A Free Guide To QROPS & Expert Advice Your.QROPSchoices.com/HMRC-listedInvest in Student Rooms Prime Location in Canterbury, UK 9% NET p.a. Assured for 5 years. buystudentaccommodation.orgUSA, Detroit Investment Pre-tenanted Houses from $24K, 22% - 28% NET Yields, Finance Avl. Detroit-Property.co.uk/bmv-houses/Hundreds of foreign workers are being hurriedly evacuated from Basra in southern Iraq following violent protests by Iraqi oil workers and villagers over two incidents. In one of them, a British security man tore down a poster or flag bearing the image of Imam Hussein, a figure highly revered by Shia Muslims. The violence may make international oil companies more nervous about operating in Iraq, which is at the centre of the largest oil development boom in the world. The fighting started on Monday when oil workers refused to remove Shia banners and flags when asked to do so by a British security adviser who then took them down himself – by one account, tearing a poster of Imam Hussein. This happened just before Ashura, the Shia day of mourning for the death of Imam Hussein, the grandson of the Prophet Mohammed, who was killed by the Caliph Yazid at the battle of Kerbala in 680, the anniversary of which falls today. An Iraqi witness was reported as saying: “Workers were provoked and squabbled with the British guy, but he suddenly pulled a pistol and started shooting and wounded one Iraqi worker.” The man was later removed to hospital bleeding heavily. The Iraqi Prime Minister, Nouri al-Maliki, has called for the deportation of the unnamed British security man. Iraqi officials in Basra said he worked for the security firm G4S at a camp run by Schlumberger, the world’s largest oilfield services company. The camp is near the giant Rumaila field, close to the border with Kuwait, which produces a third of Iraq’s oil output. BP and China’s CNPC have been seeking rapidly to raise production at the field. Accounts differ on exactly what happened, but there appear to have been at least two incidents when Shia oil workers and people living in nearby villages believed that images of their most venerated religious figures had been desecrated. “A British employee took down a flag for Hussein and a picture of Imam Ali from the cars of the security company, and tore them down with a knife,” Ali Shaddad, a member of Basra’s provincial council, told Agence France-Presse. “This provoked a group of workers and they went and hit him repeatedly.” At least part of this incident was caught on a video uploaded to YouTube, It shows a man in a flak jacket being dragged from a white vehicle and hit repeatedly by men in dark blue T-shirts, who carry long sticks and spades. He falls occasionally but generally manages to stay on his feet before he is rescued by Iraqi soldiers. In the background is the wall of a Schlumberger camp, topped with barbed wire. An Iraqi field engineer employed by Schlumberger describes the incident, saying it started at 10am on Monday when an Iraqi driver working for the security team attached a Shia holy flag to the antenna of one of the vehicles. He was asked to remove it by the head of security and refused, so “the team leader jumped up on the car and he tear up [sic] which made the Iraqi driver and his colleagues [all Shia] to be angry”. They reportedly called in protesters from outside the company to join the attack. The days leading up to Ashura are always a particularly sensitive time in Iraq, with millions of Shia involved in the mourning ceremonies. The Iraqi Oil Report website said that BP, the main operator at Rumaila, was scaling back its workforce and that employees of Baker Hughes and Schlumberger “were massed at Basra airport”. There were conflicting reports about whether the oil services companies were shutting down their operations. In an earlier incident affecting Baker Hughes, an Egyptian worker had removed the flags commemorating Imam Ali and Imam Hussein from company vehicles. Protests prompted Iraqi authorities to arrest the Egyptian on charges of insulting a religion, while Baker Hughes suspended its operations in the country and declared force majeure because of “a significant disruption of business”. In general, the international oil companies that have poured into Iraq in recent years are barely affected by the violence which is killing about 1,000 civilians a month. Most are Shia caught by blasts from car bombs and suicide bombers driving vehicles packed with explosives. The number of incidents and casualties has reached a level not seen since 2008, at the end of the last round of the Shia-Sunni civil war in which tens of thousands were killed. The deaths are mostly in the cities and towns of central and northern Iraq, while the oil companies are developing fields around Basra in the far south. Their foreign workers live in fortified camps, protected by security companies, and move in well-protected convoys. At this time of year, Shia-dominated districts in Iraq are a forest of banners and flags, and walls are covered with portraits of revered religious leaders past and present. Some 41 people, mostly Shia pilgrims, have been killed so far during the Ashura festival by bombings that bear the hallmarks of al-Qa’ida. In one attack, 17 pilgrims died and 65 were wounded by a suicide bomber who targeted a procession of pilgrims north of Baquba, near Baghdad, in a mixed Sunni-Shia province notorious for its violence. Two million Shia are expected to make pilgrimage to the shrine of Imam Hussein in Kerbala today, protected by 35,000 soldiers. As part of the ritual, the mourners beat and cut their heads and chests and whip themselves with chains to emphasise their grief and as a sign of remorse for failing to defend Imam Hussein. The quality of security firms in Iraq varies enormously. Some are highly disciplined and discreet, while others have been trigger-happy – making them extremely unpopular. ============================== Hi manu19, hope all is well with you. You wrote that I have not posted for some time "because of the banality, emptiness,shallowness, and macho sad point scoring of the last few months", where as,. I have actually posted a few times. My last post was on Friday though it was on an O/T subject and in response to a post by TRINDERM. You say ,"after today's RNS re the December 13 court hearing it is IMO important to have your opinions on what may happen re the appeal and the time scales." . I believe earlier Hub also made a similar request of me and or SK. As you and others know, I have been posting on this bb for a long time and tried to help others with any legal opinions, explanations relevant to the Excalibur case. Indeed I was very active whilst the trial was in progress. I have also posted generally on GKP and participated in OT discussions when the bb was quiet. What distinguishes me from most other posters, is that I post on this www under my own real name and am easily identified. I made this decision when I first joined the iii forum, because I wanted people to know, that what i wrote was always genuiune, that I have nothing to hide and I would never be personally / gratuitously offensive in any of my responses to anyone. The fact that I could be identified helped me to focus on the wording of everything I wrote, so that I would never regret my statements. Equally I expected others to respect that in their responses to me in my real name they would be a litle more sensitive in their choice of words. However, after Friday I decided I would never post on the GKP bb again although I did not originally intend to say anything about it. I simply decided that I would not post again. My only reason for giving my reasons now is because you have specifically asked me. With the constant, bickering, personally offensive atacks, etc the quality of this bb has sadly deteriorated to a level beyond recognition. You are right,that it has driven off many good posters, and the bb has now been successfully hijacked by many negative and offensive individuals who either deliberately set out to disrupt and stifle good discussion / debate or through their short sighted offensive responses to others have contributed to this bb's downfall. I had been toying with the idea of giving up with this bb for some time but what finally made up my mind was a personally offensive (to me) post by Zoso75 titled "The Prize" on Friday, at 10.11. It was obviously a source of some amusement to 4 others including mrgreystone, The Bully, geejay13, and The Golden vision who voted it up. The view that I take, is that whilst I am willing to help others in any way I can, I do not expect to be subjected to offensive language using my real name with which to do so. There are many inadequate and bitter people hiding behind their keyboards using pseudonymes who dont mind trading insults with each other. In real life I wouldn't give any of them the time of day, so I'll be dam ned, if I help them out here with my legal opinion. And in case anyone suggests that my position is a bit harsh on other genuine posters, let me say that whilst doubless there are still many genuine people posting and reading this bb, there was not even ONE single poster who spoke out (on my behalf) against the offensive nature of the post. Everyone bears some degree of responsibility for the deterioration and inevitable eventual downfall of this bb even if that responibility is merely passive. This is the reason why I have spoken out against others like pilchard9, Trinderm etc for using offensive language. However, quite clearly my view is not shared. I have herefore decided that I will henceforth not contribute any further to this bb. My genuine best wishes to all decent readers and posters. Elikkos =============== After alleged offenses against Shiite religious observances, two separate mob attacks at the Rumaila field left a British contractor hospitalized and forced Baker Hughes and Schlumberger to shut down operations. Turmoil in Basra oil sector after violent religious controversy Flares burn at the Rumaila oil field. (REUTERS/Atef Hassan) By Ali Abu Iraq, Ben Lando and Staff of Iraq Oil Report Published Wednesday, November 13th, 2013Two international oil services companies have suspended operations in southern Iraq following two different altercations between western contractors and Iraqi workers at the Rumaila oil field.Iraqi Prime Minister Nouri al-Maliki has issued stern warnings to both oil sector contractors and Iraqi workers, who came into conflict when foreigners working for Baker Hughes and security officers working for Schlumberger allegedly tore down posters and iconography of Imam Hussein, an act considered i... =============== Oil expats evacuate Basra, lasting impact of unrest unclear Flares burn at the Rumaila oil field. (BEN VAN HEUVELEN/Iraq Oil Report/Metrography) By Ali Abu Iraq, Ben Lando and Staff of Iraq Oil Report Published Thursday, November 14th, 2013Hundreds of expatriate workers were evacuating Basra on chartered flights Wednesday and Thursday following violent protests that sent one British national to the hospital.Rumaila operator BP has begun temporarily scaling down its foreign workforce, and expatriate workers of at least two oil service and drilling firms, Baker Hughes and Schlumberger, were massed at the Basra airport."Baker and Schlumberger are evacuating and will shut down operations for the time being, declaring force maj... =============== BP extends olive branch to Kirkuk over field development Iraqi Oil Minister Abdel Karim Luaibi (second from right) introduces Kirkuk province governor Najmaldin Karim (right) to BP CEO Bob Dudley (left) before a meeting on Nov. 6, 2013. (MARWAN IBRAHIM/AFP/Getty Images) By Kamaran al-Najar and Ben Lando of Iraq Oil Report Published Thursday, November 7th, 2013BP CEO Bob Dudley met with the Kirkuk governor on Wednesday in an attempt to remove local opposition to developing the field that has been a key flashpoint of Iraq's territorial disputes.Dudley and Oil Minister Abdul Karim Luaibi met with Governor Najmaldin Karim and other Kirkuk provincial government officials in Kirkuk, and went to the state-run North Oil Company's (NOC) headquarters for a briefing on Kirkuk field development plans. The delegation then traveled to Baghdad to meet with Prim... ============ Nassiriya project bid postponed to Jan. 23 The Nassiriya oil field in Dhi Qar province. (STAFF/Iraq Oil Report) By Ben Lando of Iraq Oil Report Published Friday, November 22nd, 2013Iraq has pushed back its joint oil field and refinery bidding round for Nassiriya to Jan. 23 - a month-long delay to give the Oil Ministry time to create improved contract terms in response to investors' demands. ============== UPDATE: Exxon splits West Qurna 1 stake with CNPC and Pertamina A worker adjusts the valve of an oil pipe at the West Qurna 1 oilfield in Basra on Nov. 28, 2010. (ATEF HASSAN/Reuters) By Ben Lando and Staff of Iraq Oil Report Published Thursday, November 28th, 2013ExxonMobil has reduced its stake in the 9.1 billion barrel West Qurna 1 field from 60 percent to 25 percent – but will still be the operator – following a signing ceremony in Baghdad on Thursday.The move is part of ExxonMobil's plan to de-risk its Iraq assets."The final process … has been completed and the agreement has been signed," said Assem Jihad, the Oil Ministry spokesperson.PetroChina, the China National Petroleum Corp. (CNPC) subsidiary, now has 25 percent. Indonesia's ... ================ So, here's what I got up to during my first day in Erbil, Iraq. Firstly, I'm in Erbil to attend the Kurdistan Oil and Gas conference, and to meet with potential clients. I have some contacts here already, through a local services supplier (Oilserv) but also from work we have done globally, and in the UAE. I flew in on the Qatar airways flight from Doha, landing at about 15.00. I struck up a conversation with the late 20's gent sat next to me. As with everybody I have met thus far, he was delighted to openly and honestly tell me his story. He was a Kurd who has lived many years in North London. The fates conspired to have him give up his job in The City, gather some investment and open a machine shop in Erbil, about 3 or 4 years ago. The first 18 months were tough, as they worked to build their brand and reputation, with a mix of marketing and adherence to quality regulations. They supply light to medium machining and repairs to the drilling sector, and their level of operations is directly related to drilling activity - so a steady rise. They struggle to meet demand. I've been in that situation (and still am now) and I mentioned that the challenge is growth whilst maintaining quality and on time delivery. He noted that the labour market here is tough, as the locals lack the skills required and so he has many migrant workers from India and Pakistan. There's a lot of expense in that with flights, housing, visas, etc. He has a training program in place now, and is taking on local people. He says that this is looked on favourably by the KRG, but the benefits are not that tangible just yet. The youth here are keen to have an education, and to learn vocations, but the work ethic doesn't match western expectations. He's a great contact to have, offered his help, if needed. He has the sort of business, and attitude, that my company may well need in the future. As Kurdistan in visa on arrival, once off the flight I went to the window market "Visas" but one of the staff saw my UK passport and told me I could go directly to the passport control window. There my passport was given the usual once over, but no perticular interest, was stamped and handed back. In. No drama, no fuss, and free. I had arranged a car from the Rotana Hotel to pick me up at the airport. The Rotana has a large desk at the exit from customs, and I was met by a friendly young chap with a handshake and a smile. He drove me to the hotel. He's a Syrian Kurd, and on hearing I'm Scottish he made some comparisons and contrasts with the Scottish vote on independence, and the Syrian Kurdish desire for separation. These were, of course, more contrasts than comparisons. He's studying English, as he sees it as an essential skill to have. He's right. He speak Arabic and Kurdish, too. At the hotel, my bags went through an airport type scanner, and I had to walk through a metal detector. The car park had a few big (I think) Cadillac hotel cars and a bunch of Land Cruisers kitted out for off road use. There was the usual mix of oilfield guys, business types and security folk dandering about. I checked in ($235 per night, room only - higher from Sunday as the conference is on) and was told that wifi is $30 extra per day. I wasn't having any of that, as for my stay it would be $210 extra, so I asked what local sim cards were available. I'll get back to that. After checking in, I headed up to the 7th floor, which it turns out I'm sharing with the UK embassy. There's a desk as you come out of the lifts, and you can't go right, unless you wish to mess with the jeans and t-shirt wearing Brits sat there shooting the breeze. You can figure out who they might be. Room is like any other 4/5 star business hotel: Immaculate, everything you need. European sockets were a surprise, as most of the region takes UK plugs. So, I decide I need to go get myself some data. The concierge arranged a local cab for me, as the hotel cars are silly money. I'm told that I should pay no more than 5000 for the trip (it's about 1000 Dinars = £1). The driver (in Arabic) declares it'll be 7000 as it's Friday. That much I understood, but I don't speak Arabic. I know "sabbah" is 7, though. I have a laugh and say that makes me feel at home, which is translated by one of the hotel staff. He grins, but shrugs in a a "that's the deal, mate" sort of way. Anyhoo, I jump in and off we go. I'm not sure what the taxi was, but it had a Volvo steering wheel. It wasn't no Volvo. I'll pay more attention next time, as I was busier looking out the windows. Rather than describe the streets (reminded me of Romania) I'll take some pics. You can see on Google, in any case. What initially seemed like a driving free for all, does seem to have some rules. I don't know what they are, but somebody seems to. The scariest thing are all the central gaps in the 3/4 lane main roads through the town. These are all made use of, and it's a "nudge out until you're so in the way someone slams on the brakes" system. We were hurtling along at, maybe, 60mph, but it felt like 90 in whatever this shaky jalopy was. Terrifying, but I sort of got used to it. It's not as aggressive as Qatar driving, anyway. So, I get to the Family Mall, where people seem to be arriving from work. There's a queue to get in, as people go through 2 metal detectors. Once in, there's all the familiar names, such as Nokia, Timberland, Merrel, Mothercare, Carrefour (French origin supermarket - popular in the middle east) and I think I saw a Baskin Robins. There are some little local concessions, too. The biggest surprise were a Hublot store, right opposite a Vertu shop. These are high Dollar items. My mission, however, was data. I had a wander around, and noticed that there were a mix of Arabs and Kurds and a few others, too. Predominantly men, with a few ladies, too. The local women are beautiful: dark and fierce looking, very Turkish. The men are also dark, with a bit of menace (but that's solely from my perspective, though: they are the friendliest bunch). After trying to find the "Fast Link" Chinese made wifi dongle in a couple of electronic stores, I was pointed to a local shop, next to Nokia. There, the 2 staff were great. They talked me through how it worked (sim card goes into a 4G enabled bit of hardware, which then converts the data into a wifi signal for your laptop/iphone/whatever. It's about the size of a cell phone; I use one in Doha, too) and one of them nipped round to the exchange place round the corner, to change my Dollars, as they don't take cards. They took a scan of my passport, and filled in a form for the network provider. Instead of noting down my Qatar phone number, he just laughed and made one up for the form. So, in about 3 minutes, I had 30gig of data, and a nice 4G router for about $150, versus the £210 on offer from the hotel for one week of data - only in the hotel. This means I'll have wifi when at the conference - so can make immediate updates if anything groovy happens. I celebrated with a coffee at a cafe in the mall. It cost me about $5 (i did think it was £6.50, but I had my sums wrong). In any case, I thought I was getting the special tourist rate, but no, it really was more expensive than London. I then headed back to the hotel with another local driver. Same thing: I offer "Hamsa", and he counters with "Sabbah". Hey ho. So, I get back to the hotel, check mail, etc, an notice I'm hungry. I've been hearing chatter about the German Bar from some Oilserv folks, so I jump in another car, and head there. This time my driver is a 21 yr old local guy, and he speaks English. This, he want s to improve, as he sees it as a route into one of the multinationals moving into town, be it a hotel, or any other business. He's friendly, and smart enough. He drops me at the place, and I'm taken with it immediately. It's a basic one story building, enclosed by a wall, with some trees, creating a courtyard out front. Everyone is sitting outside - about 60 folks, same sort of mix as the hotel - and there's a pallet burning on a big iron grate built between some long, German style tables. There's a stage to one side and, worryingly, a big, brightly lit Jaegermiester machine sat on the bar. As I'm only in a shirt and light sweater, I grab a seat near the fire (my hair is a bit smoky this morning) and order a draft beer (as good as you'll get anywhere) and a decent steak with mashed potatoes. I'm joined at the table by a long haired fellow from Syria, and we get chatting. We talk about all sorts, including the state of Syria, but many about globalisation and his views that humanity are cannon fodder for a very select few. Tough to argue with, to be fair. He's here building a hotel, and hopes to set up a jazz bar. He reckons that weapons and the like are too prevalent here to risk setting up a nightclub, as having that along with young, drunk people packed in together is asking for trouble. He says he sees fights over women every weekend, and they get nasty. He asks who I work for, and when I tell him says "no effing way!" It turns out he knows one of our UK engineers who's based in Abu Dhabi, and was at his wedding, recently. Sure enough, there's photos of the two goons grinning away. I think I need to get used to this sort of thing. We are joined by two of his friends. One is a local to Erbil, who has had a few failed start up restaurants, but who's main business is oilfield logistics (yes, I'll be grilling him about trucks) and the other is a Syrian studying Petroleum Engineering in Kirkuk (not as much "ook" sound as I've been making). Good guys, and we got into rounds of drinks - mainly beer, with the odd Glenfiddich (choice sorely lacking). It didn't get out of hand,as these guys had a 6am start. I also met a couple of Brits there towards the end, one of whom gave me his card. I noticed that they had their logo on a banner at the stage. I was given a lift back to the hotel in a gangster issue AudiA4. I fancied one more before bed, so mooched into the hotel bar. I took a seat there with a beer, and was almost immediately invited to join 2 young ladies and a burly local chap, who were drinking wine. The chap was very quiet, and I took him to be their minder. They were both Swedish Kurds, with looks to match (man, this place is cool) working in film. One is the producer of a new, local, TV show. They are doing the first Kurdish soap opera, and say it needs to be pretty "sexy" to be successful. They were passionate, outspoken (a little scary, but utterly superb with it) and proud. I was belly laughing for about an hour, until the bar closed. Hugs and goodbyes, and I hit the sack. It's foggy this morning. I'm heading to the citadel, and looking forward to the day. Later, Rob. PS. I don't read all the iii threads, so if you'd like to know something (like the chap who asked about Cassandra recycling) then do so on this thread. Also, I've had a load of requests to add people on facebook. Don't be upset if I don't. I just had a cull, and also I don't know which of you are people I don't much like on iii. I'll respond to messages, though. ================ Author Rcmacf View Profile Add to favourites Ignore Date posted Saturday 14:40 Subject Rob in Erbil - Day 2 Votes for this Posting Voted 134 times. Message Day 2. Underwear: Black So, the morning was a slow start, following the late evening. There must have been a change in the wind last night, as not only was it foggy, but there was the unmistakable scent of oil town in the air as I woke up. It's a dull smell of oil mixed with the faint pong of eggs, from the h2s. This comes in from the oilfields and Doha, Ploeisti, Cabinda, Taft, Fiere all smell the same when it does. I checked my mails, and pinged off a few to those who's cards I acquired. I skipped breakfast, and instead went round the corner to the Costa-Rica coffee joint. This was originally set up as an actual Costa branch, but the Baghdad govt removed the permission for the folk here to use the actual Costa name (for whatever reason, but jealousy is touted) and so the would-be franchisees slapped on the "-rica" bit on the end.I ordered a latte and an orange juice. The orange came from one of those machines that lops the oranges in half, then squeezes out the juice. I happily took it outside for a seat in the sun (next to a 6 lane road). The latte arrived, but was tea. Due to my accent the "tte" part was heard more then the "lat" part, and so tea it was. No biggie, life all good. I finished up and walked the few hundred yards back to the hotel. The taxi drivers at the front of the hotel are usually the same guys, so they recognised me. One agreed to take me to the citadel, or "Qalat" (which makes me think of Caliphet) for "Hamsa", which is only 5000 Dinars, as it was no longer Friday. Ha. So, off we went. It turns out that these drivers had had a pow-wow, and decided that I am, in fact, Italian. I accepted the compliment, but pointed out the error. It must be my shoes. Shoes are of great importance in Erbil, I was to see. Erbil has a system of roads running in rings around it, as seconds on google maps will show you. Unfortunately, the spokes aren't as good as the wheel, if you get me, so the routes can be circuitous. I try to put my misplaced fears aside as we drive down little back streets that look remarkably like something out of Black Hawk Down. I remind myself I'm safe, and that in any case I don't have my Leatherman with me. Not sure what I'd do with it, probably just hurt myself. I see the citadel up ahead, but the direct route goes through some sort of govt complex, hence the detour. There are a few AK-47 wielding dudes in army fatigues, and big steel barrier preventing entry onto the direct route to the citadel. The extra time gives the driver a chance to make a deal. Now, as I've already told these guys I'm Scottish, yet they reckon I'm Italian, I know there's a communication gap. The driver was offering me one of the following, but I can't be sure which... Either he was offering me his watch for $2, he was offering me $2 for my watch, or he was offering me his watch and $2 for my watch. In any case, I'm wearing an Oris, so it was no dice. As we came into the centre of town, I heard the call to prayer, and then I swear I heard jingle bells from some place. We arrive at the road which immediately encircles the Qalat, and I get out. If north is midday, I get out at about 10 o'clock, and start an anti-clockwise walk around the entire structure. It's dilapidated, and interesting, but my attention is more taken with the sprawling market on the Qalat ring road, and the back streets. Where I start it is mainly shops selling suits, shirts, menswear and leather bags. There are some money changing guys with odd perspex boxes full of notes. I see one of them has 100 x fake $100 bills for sale. I think about it, but then consider the consequences if stopped in Doha. I think they are sort of funny, and would use them to wrap xmas gifts or something, but Qataris may not see it that way... at all. The markets cover about 3/4 of the circumference of the citadel, and go fairly deep into the surrounds. If you can't buy it there, well, you just can't buy it. It felt like it was predominantly men there, but I came across the textile selling area, and that was full of women. Everywhere, and I mean everywhere, there were shoes. If you were on a street with no shoes for sale, then you could have them repaired, or shined. I took a seat at a (sort of) cafe, which consisted of a bench, some little tables, and a stove, and had some Iraqi style tea - super strong and super sweet. Cost me 12p - that won't get you much mall coffee. As I sat there, a chap of about 10 walked past with a single pair of men's shoes, and offered them for sale to me, and all the others there. It's worth noting that nobody paid any great attention to me more than anyone else, and this kid didn't try to push his wares on me any harder. Certainly different to my experiences elsewhere, such as India or Greece. I put this down to the same looks that get me taken for Italian. I sort of blend in. Ok, I'm dressed like a European, but then the local guys have a sense of style, and if they can't find what they need at the souk, they have it fitted, or made for not much money. There's no excuse for not looking good in Erbil. So, shoes all over the place. Nobody took these from the kid. After my tea I wandered further into the markets. There were quite a few Arabic sweet stalls, and some spice shops. In one of these there was a kid cutting hair. Yep, in the spice shop. Dangling from the ceiling of many of the sweet shops were long, black ropes of shiny, plasticky somethings. I asked one chap what they were and he pointed to a bag of walnuts, and a bag of raisins. He sliced one open and gave me some to taste. They are walnuts coated with congealed raisin juice, I think. Tasted ok, not too sweet, but not my sort of thing. Each of the sweet shops have Turkish delight in them, but it is of a much firmer consistency than we would recognise, and comes in some pretty big lumps. I took some photos, but it's not a touristy place, and I didn't want people thinking that their lives are just a show for me, so I was careful with where and who I photographed. Not out of a sense of fear, just out of respect, and the understanding that I don't know how my actions would be perceived. The market wouldn't be considered clean in western terms, and I didn't feel all that comfy eating from some of the stalls, and I'm usually right into it. The hangover held me back. There are quite a few restaurants there - very basic, and I would be happy to eat at those, but they were all packed out. One thing I don't understand about the market dynamics here is how 6 stalls who all sell water pumps, of the same brand and model, and not much else, can all be next to each other and all be successful. It's a model you see throughout the middle east, and I've never really managed to get it. No matter. So, as you move round to about 3pm the shops become more hardware and building supplies, and eventually become carpentry workshops and the like. By this point the English has dropped off the shop signs, and things are a bit more falling apart. Just before I get round full circle I pass a private school, going by the signs, and a few govt buildings. It's round at about North that there is a road leading up to the citadel itself, and the Ahmady gate. I walk up, and see there's a lot of restoration and construction work going on, so it's not possible to get to the walls, and walk all the way around. I take a brief stroll inside, but there's not a great deal I can see besides some ruined walls and old buildings. The restoration is in full flow, though. I take some snaps of the big flag and pole in the centre, and head on back down. Keeping pace with me are some local kids. One is about 14, and has a big cigar in his fingers. Styling. I put a bunch of photos in the same dropbox folder as this. Hope it works: http://dl.dropboxusercontent.com/u/62680872/Erbil/2013-11-30%2014.38.56.jpg At the bottom of the road I took up to the citadel, I found a guy with a kart of pastries. I bought one from him for about 80p (deffo skinned me). I started by asking him for one in Arabic. He broke into English, and we had a short chat about his wares - he had a queue so i didn't want to take too long. There's a photo of him wrapping a pastry for me. He couldn't really explain what was inside it, and having eaten it, I can't either. It was like filo pastry, dripping in sugary water and filled with a marshmallow/cream hybrid - but not Turkish delight. It weighed in somewhere between 6 and 8 million calories. I ate up, and went looking for a cab. One last thing on the citadel, as I walked down the hill, I noticed I was looking into a school courtyard below. The kids were in the courtyard, and a bell went to call them into the class. It was a jingle bells doorbell chime, played over the tannoy. Sanity restored, kinda. Nothing there today that's going to have much effect on our investment, but I'll tell you this much, if we need water pumps, we're sorted. I've got an early start tomorrow morning, so if there's anything to report from this evening, it'll be later in the day. That's also why today's stuff is being posted now. ================ UPDATE 1-Chevron lifts force majeure at Angolan oil platform Thu, Nov 29 13:30 PM EST * Follows major disruptions to exports in W. Africa * Kuito loadings resume after repair work GENEVA, Nov 29 (Reuters) - U.S. oil major Chevron's Angolan subsidiary Cabinda Gulf Oil Company lifted a month-long force majeure at the Kuito offshore oil terminal on Nov. 27, Chevron said on Thursday The end of force majeure will likely come as a relief to oil traders active in the west African market where theft and flooding in Nigeria has also caused disruptions to exports. A Chevron spokesman added that there was no impact on production at Kuito as the necessary repair work on a mooring line coincided with planned maintenance. Still, the repairs affected oil loadings at the terminal over the past month, although these resumed this week, Chevron added. Angola is Africa's second largest oil producer after Nigeria and the Kuito platform typically loads two 920,000 barrel tankers a month. Shell also lifted the last of three force majeures on its Nigerian oil and gas exports on Thursday, declaring production restored for Forcados crude. But force majeures, a clause that allows companies to suspend contractual obligations in the face of unexpected events, on Nigerian grades operated by Exxon Mobil and Eni remain in place. =================

UPDATE 4-Schlumberger sees hit from fracking price pressures

Mon, Mar 26 15:23 PM EDT

* N.America liquids basins start seeing price pressure in Q1

* Schlumberger shares down 1.2 pct, Baker Hughes off 1.6 pct

* Market leader Halliburton rises, seen as better placed

By Braden Reddall

NEW ORLEANS, March 26 (Reuters) - Schlumberger Ltd, the world's largest oilfield services company, said profits would be hurt by downward pricing pressure for hydraulic fracturing services, which had now reached North American liquids-producing basins as well.

Chief Executive Paal Kibsgaard said that on top of the price squeeze, already widely seen in natural gas areas due to weak gas prices, the shift of pressure pumping equipment to liquids-rich basins was reducing utilization while also adding to costs.

"Together these factors will have an impact on our results both in North America, and overall, in this and in the coming quarters,"

Kibsgaard said in a speech to kick off the Howard Weil Energy Conference in New Orleans on Monday.

The use of hydraulic fracturing, or fracking, around the many U.S. shale basins has boosted natural gas production while stemming (To make headway against: )a decades-long trend of falling U.S. oil production.

"There is some slackening of demand in the gas plays and there has been migration to liquids plays. So there's more supply coming online and it is normal that pricing would come down," said David Vaucher, an analyst with IHS-Cambridge Energy Research Associates in Houston.
Vaucher highlighted the challenge of getting all those materials to so many wells. "Looking at just pressure pumping is a little myopic," he said. "There is upward pressure for all other things that are still required for fracking jobs."


But other supplies remain scarce in general, from rigs to frack crews, water, sand and synthetic proppants used to keep cracks in shale rock open to get the hydrocarbons out.



HALLIBURTON UP

Shares of Schlumberger, which makes most of its money outside North America, fell 1.2 percent to $72.28, while rival Baker Hughes Inc dropped 1.6 percent to $43.03.

Baker Hughes gave a profit warning last week, in addition to a warning in January, about the impact of disruptions from its fracking crew relocations and supply shortages.

But shares of Halliburton, the market leader in North American pressure pumping, rose 0.8 percent on Monday.

"We believe (Halliburton) has a much better developed supply-chain network, and while not immune to near-term frictions, will likely post much better margins than its peers in North America," Sterne Agee Analyst Stephen Gengaro wrote on Monday as he cut profit estimates for Baker Hughes.

Nabors Industries Ltd, the No. 6 in North American pressure pumping, sees an increasingly competitive market in 2012 and a U.S. land rig count "flat to slightly down" in the second half of 2012. But the company said that with 72 percent of its 2012 operating income under contract, the downside was limited.

Nabors also spelled out plans to sell its helicopter business and well service rigs in Canada, some of its offshore rigs, as well as its oil and gas properties. Dahlman Rose's James Crandell expects those sales to raise about $1 billion.

Outside North America, Schlumberger saw steady growth from deepwater activity and exploration, as well as key land markets.

"The medium-term outlook for the oil and gas industry remains positive, driven by the narrow cushion of spare oil capacity and the growing demand for natural gas," Kibsgaard said in his first presentation to the conference after taking over as CEO from Andrew Gould last August.

Barclays believes international growth could offset the near-term weakness in North America. "We think this softness is largely due to transitory issues and some pricing pressure in pressure pumping," analysts at the bank wrote on Monday.

Bernard Duroc-Danner, an economics Ph.D. who runs oilfield services company Weatherford International Ltd , said the pressure pumping market may get even tougher as a result of building decisions made three months ago in response to what were then healthy margins.

"Beyond the 'gas very bad, oil very very good' phenomenon, pressure pumping has dynamics of its own insofar as there is a quite sizeable amount of capacity just waiting to come on the market," Duroc-Danner told the conference.

The industry has attempted to rein in this expansion. Superior Energy Services Inc, for one, cut its pressure pumping capacity growth plan this year by about one-quarter.

This follows the huge ramp-up in the past few years. Dan Pickering, of Tudor, Pickering, Holt, sees available hydraulic horsepower by year-end at 19 million horsepower, or 2-1/2 times more than in 2009. A typical frack job uses up about 50,000 hp. === Jul. 22, 2012 6:44 PM ET Experts: Some fracking critics use bad science By KEVIN BEGOS, Associated Press AIM Share FILE - In this file photo from Nov. 3, 2010, documentary filmmaker Josh Fox speaks at a rally of protestors against Marcellus Shale drilling and hydraulic fracturing in Pittsburgh. Researchers say the claim that fracking has been linked to increased cancer rates in Texas is simply wrong. Fox, an Oscar-nominated filmmaker who uses the claim in a new film, declined to acknowledge the error when told of researchers who say he's doing a disservice to people with cancer by misrepresenting health data. (AP Photo/Keith Srakocic, File) More News Video APNewsBreak: EPA reviews part of power plant rule Jul. 20, 20125:32 PM ET Judge slaps mining company with $2 million penalty Jul. 20, 20123:44 PM ET NM fuel spill threatens Albuquerque water supply Jul. 20, 20126:31 AM ET US insurer won't cover gas drill fracking exposure Jul. 12, 201210:12 PM ET Electric rates not falling along with fuel costs Jul. 11, 20122:54 PM ET PITTSBURGH (AP) — In the debate over natural gas drilling, the companies are often the ones accused of twisting the facts. But scientists say opponents sometimes mislead the public, too. Critics of fracking often raise alarms about groundwater pollution, air pollution, and cancer risks, and there are still many uncertainties. But some of the claims have little — or nothing— to back them. For example, reports that breast cancer rates rose in a region with heavy gas drilling are false, researchers told The Associated Press. Fears that natural radioactivity in drilling waste could contaminate drinking water aren't being confirmed by monitoring, either. And concerns about air pollution from the industry often don't acknowledge that natural gas is a far cleaner burning fuel than coal. "The debate is becoming very emotional. And basically not using science" on either side, said Avner Vengosh, a Duke University professor studying groundwater contamination who has been praised and criticized by both sides. Shale gas drilling has attracted national attention because advances in technology have unlocked billions of dollars of gas reserves, leading to a boom in production, jobs, and profits, as well as concerns about pollution and public health. Shale is a gas-rich rock formation thousands of feet underground, and the gas is freed through a process called hydraulic fracturing, or fracking, in which large volumes of water, plus sand and chemicals, are injected to break the rock apart. The Marcellus Shale covers large parts of Pennsylvania, New York, Ohio and West Virginia, while the Barnett Shale is in north Texas. Many other shale deposits have been discovered. One of the clearest examples of a misleading claim comes from north Texas, where gas drilling began in the Barnett Shale about 10 years ago. Opponents of fracking say breast cancer rates have spiked exactly where intensive drilling is taking place — and nowhere else in the state. The claim is used in a letter that was sent to New York's Gov. Andrew Cuomo by environmental groups and by Josh Fox, the Oscar-nominated director of "Gasland," a film that criticizes the industry. Fox, who lives in Brooklyn, has a new short film called "The Sky is Pink." But researchers haven't seen a spike in breast cancer rates in the area, said Simon Craddock Lee, a professor of medical anthropology at the University of Texas Southwestern Medical Center in Dallas. David Risser, an epidemiologist with the Texas Cancer Registry, said in an email that researchers checked state health data and found no evidence of an increase in the counties where the spike supposedly occurred. And Susan G. Komen for the Cure, a major cancer advocacy group based in Dallas, said it sees no evidence of a spike, either. "We don't," said Chandini Portteus, Komen's vice president of research, adding that they sympathize with people's fears and concerns, but "what we do know is a little bit, and what we don't know is a lot" about breast cancer and the environment. Yet Fox tells viewers in an ominous voice that "In Texas, as throughout the United States, cancer rates fell — except in one place— in the Barnett Shale." Lee called the claims of an increase "a classic case of the ecological fallacy" because they falsely suggest that breast cancer is linked to just one factor. In fact, diet, lifestyle and access to health care also play key roles. Fox responded to questions by citing a press release from the Centers for Disease Control and Prevention that doesn't support his claim, and a newspaper story that Risser said is "not based on a careful statistical analysis of the data." When Fox was told that Texas cancer researchers said rates didn't increase, he replied in an email that the claim of unusually high breast cancer rates was "widely reported" and said there is "more than enough evidence to warrant much deeper study." Another instance where fears haven't been confirmed by science is the concern that radioactivity in drilling fluids could threaten drinking water supplies. Critics of fracking note the deep underground water that comes up along with gas has high levels of natural radioactivity. Since much of that water, called flowback, was once being discharged into municipal sewage treatment plants and then rivers in Pennsylvania, there was concern about public water supplies. But in western Pennsylvania, the Pittsburgh Water and Sewer Authority did extensive tests and didn't find a problem in area rivers. State environmental officials said monitoring at public water supply intakes across the state showed non-detectable levels of radiation, and the two cases that showed anything were at background levels. Concerns about the potential problem also led to regulatory changes. An analysis by The Associated Press of data from Pennsylvania found that of the 10.1 million barrels of shale wastewater generated in the last half of 2011, about 97 percent was either recycled, sent to deep-injection wells, or sent to a treatment plant that doesn't discharge into waterways. Critics of fracking also repeat claims of extreme air pollution threats, even as evidence mounts that the natural gas boom is in some ways contributing to cleaner air. Marcellus air pollution "will cause a massive public health crisis," claims a section of the Marcellus Shale Protest website. Yet data from the U.S. Energy Information Administration show that the shale gas boom is helping to turn many large power plants away from coal, which emits far more pollution. And the U.S. Environmental Protection Agency passed new rules to force drillers to limit releases of methane from wells and pumping stations. Some environmental groups now say that natural gas is having a positive effect on air quality. Earlier this year, the group PennFuture said gas is a much cleaner burning fuel, and it called gas-fired power plants "orders of magnitude cleaner" than coal plants. Marcellus Shale Protest said in response to a question about its claims that "any possible benefit in electric generation must be weighed against the direct harm from the industrial processes of gas extraction." One expert said there's an actual psychological process at work that sometimes blinds people to science, on the fracking debate and many others. "You can literally put facts in front of people, and they will just ignore them," said Mark Lubell, the director of the Center for Environmental Policy and Behavior at the University of California, Davis. Lubell said the situation, which happens on both sides of a debate, is called "motivated reasoning." Rational people insist on believing things that aren't true, in part because of feedback from other people who share their views, he said. Vengosh noted the problem of spinning science isn't new, or limited to one side in the gas drilling controversy. For example, industry supporters have claimed that drilling never pollutes water wells, when state regulators have confirmed cases where it has. He says the key point is that science is slow, and research into gas drilling's many possible effects are in the early stages, and much more work remains to be done. "Everyone takes what they want to see," Vengosh said, adding that he hopes that the fracking debate will become more civilized as scientists obtain more hard data. Associated Press ============

BP's Iraq contract leads way as Petrofac...

SpikeyDT


BP's Iraq contract leads way as Petrofac reveals £1.3bn deals
Published Date: 01 July 2011
By Dominic Jeff
http://business.scotsman.com/business/BP39s-Iraq-contract-leads-way.6793976.jpG


ENERGY services group Petrofac said it has gained $2.1 billion (£1.3bn) in orders in the first six months of the year, including a contract with BP in Iraq announced this week.
The London-listed firm - which has a large operations base in Aberdeen and a training centre in Montrose - said in a trading update yesterday that it had a backlog of work of about $11.4bn, which it predicted would remain stable for the rest of the year.

Chief executive Ayman Asfari said: "We continue to deliver good operational performance across our portfolio of projects, including on the South Yoloten project in Turkmenistan, and we are well on course to deliver like-for-like net profit growth in 2011 of at least 15 per cent, in line with our previous guidance."

Petrofac's new one-year deal with BP is its second in Iraq and marks a further expansion in the war-torn oil producer. The $90 million inspection, maintenance and repair contract for the Rumaila oil field in southern Iraq will be shared with a Chinese joint venture partner but will be led by Petrofac's offshore engineering and operations business and is worth $63m to the group.

Petrofac also announced that its long-standing chief financial officer, Keith Roberts, will retire from the group at the end of the year.

Roberts, 54, joined the firm in early 2002 and played a leading role in its 2005 flotation.

He will be replaced by Cable & Wireless Worldwide director Tim Weller.

Tony Shepard, analyst at Charles Stanley, said he was surprised by the change but added that Roberts was leaving the group in "excellent health".

"It has a strong order book which gives excellent revenue visibility and the balance sheet is strong," he said.

Despite being impressed by the figures, which suggest it could double its recurring 2010 earnings by 2015, Charles Stanley rated Petrofac a "hold" in the short term, noting that shares were already "up with events". Petrofac teams up with Schlumberger for big projects Thu, Jan 05 03:00 AM EST * Says tie-up will enable it to work on larger scale projects LONDON, JAN 5 - British energy services firm Petrofac said it will team up with Schlumberger, the world's largest oilfield services company, to enable it to bid for bigger projects with national oil companies and other firms. ===================== Special Report: Iran’s Oil Smuggling Network in Iraq Posted on February 7, 2012 by dancingczars | Leave a comment 1 Votes Stratfor Global Intelligence http://dancingczars.wordpress.com/2012/02/07/special-report-irans-oil-smuggling-network-in-iraq/ Commentary by Jim Campbell Readers at this site will recall that I’ve mentioned on several occasions, Obama’s ill advise departure from Iraq would lead to Iran making a move on the Rumilia Oil fields. For the moment shall we say I was both right ans wrong. Never underestimate bribes, smuggling to and immediate solution to the problem. I have no doubt when Iran feels the time is right the will make their run on Iraq’s liquid gold. US and coalition forces work on while guarding Iraq’s Oil production What could stop them, more special operations sabotage, and continued assassinations. That’s my story and I’m sticking to it, I’m J.C. and I approve this message. Summary After years of war-induced economic stagnation, Iraq is showing the potential to dramatically increase its capacity to export oil in anticipation of higher oil production. With much of this oil and infrastructure development taking place in Iraq’s Shiite-concentrated south, the biggest external beneficiary of Iraq’s increased oil output would be Iran. Through a web of alliances including Iraqi politicians, unions, oil syndicates and militias, Iran is already well-positioned to extract oil revenues from southern Iraq via informal channels. This allows Iran to draw from a large stash of resources to maintain its regional influence while insulating itself against an intensifying sanctions campaign targeting Iranian oil exports. Analysis Over the past couple of years, oil production in Iraq’s Shiite-majority southern region has been steadily rising because of production in the Rumaila, West Qurna Stage 1 and Zubayr supergiant oil fields that were auctioned off to foreign companies in 2009. Sitting on 115 billion barrels of proven oil reserves, more than 80 percent of which is concentrated in the south, Iraq has the potential to rival Saudi Arabia’s production rate of roughly 10 million barrels per day (bpd) within the decade. Iran is especially interested in the prospect of increased oil production in southern Iraq. Tehran has built a complex oil smuggling network that allows it to bring in significant revenues from southern Iraq’s oil production. These funds enable Iran to maintain its influence in the region while preparing to defend itself against more stringent sanctions against its oil exports. SOUTHERN IRAQ’S OIL EXPANSION PLANS Most of Iraq’s oil lies in large and shallow oil fields very close to the coast on transit lines that do not cross population centers. This makes the oil relatively easy and inexpensive to extract and thus highly profitable. But years of sanctions, war and insurgency have dilapidated the country’s energy infrastructure. According to oil-pricing agency Platts, Iraqi oil production rose to an average 2.653 million bpd in 2011, a 12 percent increase from 2010′s average of 2.364 million bpd. Iraqi Oil Ministry data indicates that the country has a production capacity of around 2.9 million bpd, with ongoing efforts to meet a production target of 3.4 million bpd by year’s end. The problem is that Iraq has not completed the critical upgrades to its export and storage infrastructure necessary to cope with a significant rise in production. Southern Iraq’s oil production is thus largely limited to what it can export, which is roughly 1.89 million bpd. To alleviate this bottleneck, Iraq is planning an ambitious project to expand the export capacity of Basra’s oil terminals to about 4.8 million bpd by 2014. Four single-point mooring facilities, each expected to add another 850,000-900,000 bpd in export capacity, are to be completed by 2014. The project has encountered repeated delays: An inauguration ceremony for the first terminal scheduled for Jan. 25 has been postponed for a third time, though a member of Iraq’s southern export expansion team told Reuters that the terminal would be ready to receive crude vessels in February after pipeline connections and testing were completed. The second terminal is scheduled to be ready within six months, the third by the end of 2012 and the fourth by the end of 2013. IRAN’S STAKE IN IRAQ’S OIL Though it is unlikely that Iraq will be able to meet all its production targets and project deadlines, there is no doubt that it has a chance to significantly elevate its energy status in a relatively short time. Because much of this energy activity is taking place in Iraq’s mostly Shiite-populated south, in close proximity to the Persian Gulf, the country most focused on Iraq’s energy prospects is Iran. When the United States completed its military withdrawal from Iraq at the end of 2011, it left the door open for Iran to consolidate its influence in an energy-rich country at the heart of the Arab world. The influence of Iran, a predominantly Shiite state itself, is most entrenched in Iraq’s Shiite-majority south. Though many Shiite Iraqi politicians are opposed, Iran’s geopolitical ambition is to make southern Iraq an extension of itself, thereby allowing Iran to vastly, albeit indirectly, increase its share in the global energy market. With the U.S. sanctions campaign against Iran intensifying, this is an especially critical goal for Tehran. Iran is well-positioned to reap the benefits of increased Iraqi oil production. According to Stratfor sources, roughly 10 percent of Basra’s oil production is smuggled, most of which ends up in Iran for export. The market value of the oil that is stolen each day is roughly $20 million, providing a significant source of funds from which Iran can draw to protect itself against sanctions. THE IRAQ-IRAN SMUGGLING ROUTE The main smuggling route from Iraq to Iran begins at the Khor al-Zubayr oil terminal, where the bulk of Iraq’s southern oil converges. Smugglers will drill holes in the pipeline at the oil terminal and load containers of oil into small boats. The boats are manufactured locally in Basra and typically carry between 70 and 120 barrels of crude. From there, the boats take the crude down the Khor al-Zubayr waterway out to the Persian Gulf, where it is loaded onto tankers bound for Iran. Thefts also occur farther down the smuggling route near al-Faw Peninsula, where smugglers make holes in underground pipelines, using hydraulic perforation equipment to avoid fires. Much of the oil leaks into artificial lakes in the area, where tankers come and load it. From the al-Rasas island near al-Faw Peninsula, crude can travel by boat up the Bahmanshir River (a tributary of the Karun River) to the Abadan refinery in Iran for processing and export. Oil smuggling along the river known as the Shatt al-Arab also occurs, though it is much less common due to the hazardous nature of the waterway and increased monitoring along the route. High-speed Iraqi boats are used to travel along the Shatt al-Arab to Iranian territorial waters to unload their cargo, but the route is costly due to the number of bribes that need to be paid along the way. Rampant smuggling has long been a characteristic of Iraqi oil production, so it makes sense that current infrastructure and business practices in southern Iraq allow ample room for oil theft. Metering systems to gauge oil flow and detect disruptions are more prevalent in the Basra and Khor al-Zubayr ports but are largely absent along the rest of the oil transit route. Many of the meters are damaged and deliberately not repaired to facilitate smuggling. Moreover, Basra oil officials involved in the illicit oil trade are known to play a role in delaying repairs to holes in pipelines to give the smugglers more time to operate. IRAN’S OIL SMUGGLING NETWORK IN IRAQ Iran has an extensive network of politicians, oil unions and cartels, and militias that it uses to reap the benefits of Iraq’s southern oil production. The multiple players and complex ideologies that make up Iraq’s Shiite landscape require Iran to devote a lot of time and resources to managing the various stakeholders in Iraq’s southern oil industry. This variety also allows Iran to play the different sides off one another to preserve its control over the oil smuggling network. Political Groups Ideally, Iran would like to see southern Iraq evolve into a single, Shiite-dominated state within an Iraqi federation that would serve as an Iranian satellite. Theoretically, such a state would allow Iran to carve out a more defined sphere of influence among the Iraqi Shia to help manage important tasks such as distributing revenues from the oil smuggling network. Iran’s desire for a distinct Shiite state in Iraq may explain why Iran’s closest political ally, the Islamic Supreme Council of Iraq, has been the Iraqi parliament’s strongest proponent for establishing a single Shiite region in the south. However, the majority of the Shiite groups in the south, such as the Dawa Party, the Sadrite movement and the al-Fadhila party, have opposed the idea. These groups work closely with the Iranians but are more nationalist and still see a need to preserve political autonomy from Iran. Al-Fadhila is the most entrenched in Iraq’s oil smuggling business. Basra residents are even known to refer to al-Fadhila, which means “virtue” in Arabic, as the “Islamic Oil Party.” The party is firmly Iraqi nationalist and has been highly resistant to Baghdad’s attempts to bring more foreign energy expertise to the south for fear of seeing its regional clout undermined, but its leader, Sheikh Mohammad Yaqubi, is friendly with Iran. Al-Fadhila has a significant presence in the Southern Oil Company of Iraq and maintains a strong relationship with the trade union of workers in the Basra oil industry. The party will typically pay Southern Oil Company employees who collaborate with it in oil theft around $5,000-$10,000 per 1,000-barrel shipment. Al-Fadhila is also the leader in southern Iraq when it comes to using oil revenues to buy the allegiance of local political groups, gangs and the Basra police force. Militias Iran plays a significant role in managing the various militias involved in oil smuggling in southern Iraq. In return for protecting Iran’s energy interests and eliminating resistance to the Iranian-run oil smuggling networks, the militias get a significant cut of the profits. When one militia grows too powerful, Iran will typically find ways to dilute its strength by developing competing splinter groups and integrating militia members into the security apparatus and sometimes even the political process. Iran’s strategy of managing Iraq is to alter the key Shiite leaders it deals with, which ensures that no one becomes strong enough to consider abandoning or turning against Iran. This dynamic is illustrated in Iran’s handling of Iraqi nationalist Shiite leader Muqtada al-Sadr and his Mehdi Army, Asaib Ahl al Haq (which splintered from the Sadrites with Iranian backing) and the rise of the Hezbollah Brigades in the Iranian oil smuggling network. Al-Sadr and his following have traditionally been vehemently nationalist and have taken care to distance themselves from Iran. When Qais al-Khazali, who studied under al-Sadr’s father, Grand Ayatollah Mohammed Sadiq al-Sadr, split from the group in 2004 to form his own faction, Iran developed a tight relationship with Khazali’s group. Khazali eventually formed his own militia, Asaib al-Haq (League of the Righteous), with heavy Iranian financial and military assistance. In 2007, al-Sadr fled to Iran in the face of threats from the U.S. military and his own Shiite rivals. Al-Sadr announced that he was deactivating the Mehdi Army in 2008 in exchange for entry into the Iraqi government. The Sadrites now hold 40 seats, a majority of the ruling Shiite coalition’s seats in parliament, and control seven ministries, though al-Sadr remains under Iran’s influence. Whereas at the beginning of the decade, the Sadrite movement enjoyed more autonomy in southern Iraqi affairs, the Promised Day Brigade, which evolved out of the Mehdi Army, now sits well within the Iranian sphere of influence. While the clout of the Sadrites waned in the south and rose in the central government, Asaib Ahl al-Haq became the primary militia Iran would rely on to run its business in Basra. The militia has proved particularly effective in containing tribal resistance to Iran’s operations in Basra, most of which came from Sheikh Kazim al-Unayzan, who leads the south clan council and whose following is said to exceed 3 million Shia. An illustration of Asaib Ahl al-Haq’s utility to Iran was witnessed when tribal Sheikh Mohammad al-Bahadli, chief of the council of liberation and construction, formed his own militia called Asad Allah al Ghalib. This militia, according to a Stratfor source in the region, was quickly put down by Asaib Ahl al-Haq. Asaib Ahl al-Haq also has a reputation of liquidating Iran’s rivals in the south, including clan leaders, officials at Basra and Umm Qasr ports, and employees of the Southern Oil Company of Iraq who refuse to cooperate in Iran’s oil smuggling network. In line with previous tactics, Iran appears ready again to diversify its militia assets and has played a key role in pressuring the Iraqi central government to welcome Khazali and Asaib Ahl al-Haq into the political process. In early January, the Iraqi government announced that Asaib Ahl al-Haq has not turned in its weapons but that it has agreed to lay them down and plans to participate in the next parliamentary elections under a new name. With Asaib Ahl al-Haq entering the political arena, Iran has already prepped another key Shiite militant patron — the Hezbollah Brigades — to backfill Asaib Ahl al-Haq’s role in protecting the oil smuggling business. The Hezbollah Brigades have not expressed any interest in entering the political process and have stressed the need to play a leading militant role in the south. Marginal groups that have an Islamist orientation and that have politically accommodated themselves to Iran in exchange for oil dividends include Harakat Sayyid al Shuada, Hizb Tha’r Allah al Islami, Shuhada al Mihrab, and the March 17 Party of Sheikh Abdullah al Ishmain. Iran’s Oil Syndicate The main Iranian figure who manages the Basra oil syndicates is Gen. Qassem Suleimani, the commander of the Quds Force of the Islamic Revolutionary Guard Corps (IRGC). Suleimani plays a key role in buying patronage in Basra and the rest of the south using the revenues from stolen oil. Most of the money is deposited in branches of IRGC-owned banks in Iraq. Suleimani’s network covers the tasks of arms smuggling, oil smuggling to Iran, the collection and dissemination of oil revenues, and the abduction (and sometimes assassination) of anti-Iranian figures in southern Iraq. TEHRAN’S LEVERAGE OVER BAGHDAD Iran’s control over oil smuggling in Basra is institutionalized and well beyond the ability of the central government in Baghdad to control. Though Iran is in the process of consolidating Shiite influence in Iraq, it has no desire to see a strong central authority in Baghdad that could try to undermine its already well-entrenched leverage in the south. As a result, Iran has quietly but firmly resisted Iraqi Prime Minister Nouri al-Maliki’s attempts to wield exclusive control over the government and his efforts to augment his military and political strength in the south. In fact, Iran’s most effective way of ensuring its influence over the political authorities in Baghdad is by maintaining a strong grip over its oil smuggling operations in the south. Iran uses its energy clout in Iraq to ensure that Iraqi government authorities, including al-Maliki, get a hefty share of monthly revenues from the oil theft — amounting to millions of dollars — giving Baghdad less inclination to protest Iranian interference in Iraqi affairs. Iran’s significant and growing influence over Iraq’s oil industry cuts to the heart of the U.S. challenge in trying to contain Iran in Iraq. When it comes to critical policy decisions on extending the U.S. troop presence in Iraq or in accepting major military assistance from the United States, Iran has ample financial might from the oil revenues it earns through smuggling to influence the minds of Iraqi decision-makers. Likewise, U.S.-led efforts to tighten sanctions and cut into Iran’s bottom line fail to take into account the millions of dollars Iran is able to bring in daily through its shadowy channels throughout Basra. ========================= Iraq picks Petrofac for $95 mln contract-source Mon, Jun 18 08:32 AM EDT * Petrofac to win service contract for offshore terminals * Selected for 12-month extendable contract BAGHDAD, June 18 (Reuters) - Iraq has picked British oil services firm Petrofac for a $95 million contract to carry out maintenance work for its new offshore terminals and sub-sea pipelines at the Gulf, an Iraqi oil official said on Monday. Under the contract, Petrofac should conduct maintenance work to ensure there are no leakages in the pipelines or any faults at the two new single point mooring (SPM) terminals that may delay the loading of crude, the official said. Three companies were short-listed by the state-run South Oil Company to bid for the project, including Italy's Saipem and Australian construction firm Leighton Holdings . "Petrofac's offer was picked up for the service contract and the one year extendable contract has been referred to the oil minister for final approval," the oil official, who declined to be named, said. Iraq has planned for four new SPM terminals which are being built by Leighton and are expected to help it in doubling crude output in the next few years. The opening of two SPM terminals this year has eased export constraints and boosted oil exports significantly. Baghdad has signed a series of contracts with foreign oil companies that target total oil production capacity of 12 million barrels per day (bpd) by 2017 - up from about 3 million bpd. Most analysts see 6 million to 7 million bpd as a more realistic goal. OPEC-member Iraq is expected to be a major source for future oil supplies. =====