November 4, 2008
*Proposed joint venture could expand beyond Basra
*Includes all gas, associated and non-associated, documents show
*Oil Ministry presses Parliament on oil law action
*Alive in Baghdad: Who would Iraqis vote for – McCain or Obama?
*Violence in Context
*Iraq Press Roundup
*USIP: Iraq’s Cultural Heritage: Preserving the Past for the Sake of the Future
A secret document obtained by United Press International reveals a planned joint venture company between Royal Dutch Shell and the Iraqi Oil Ministry would give the company a 25-year monopoly on the gas industry of southern Iraq, Ben Lando reports for United Press International.
Shell and the ministry are currently negotiating the terms of the joint venture company. On Sept. 22 the two signed what’s known as a "Heads of Agreement," basically a rough draft of the contract, a legal framework establishing the management team and the scope, purpose and other details of the company.
Though it’s non-binding, the confidential document is telling.
If the joint venture company is finalized as outlined in the HOA, it would give Shell the largest role in Iraq’s oil and gas sector since the 1960s, when the world’s Big Oil firms were kicked out after 40 years of virtual control of exploration, production, exports, and payments to the government.
The joint venture will be the "sole gas company engaged in business," as outlined in the HOA, "and providing gas for domestic and export markets and generating revenues from gas marketing activities."
At the time of the HOA signing, Shell and ministry officials pitched the future joint venture company’s role as utilizing for domestic needs the natural gas currently being wasted in Basra province. Iraq would own 51 percent and Shell 49 percent. …
The oil and gas sector is in need of new and modern investment, though there’s a dispute over how to proceed: rebuild the once prominent domestic oil and gas industry or allow foreign companies to re-enter the sector. …
According to the previously unseen HOA, "the joint venture will off-take and purchase all Raw Gas produced in the South of Iraq by either the South Oil Co. or any other producer." The HOA defines "South of Iraq" as the southernmost province — and oil and gas capital — of Basra, though a map appendix to the HOA shows the contract territory extending for an unknown distance into the Persian Gulf "and any other areas as may be agreed by (Shell and the Oil Ministry)."
The joint venture would not focus solely on gas currently being produced in the agreed upon area. As oil production increases, as expected by the ministry, so will the gas; most of Iraq’s gas production is what’s called "associated gas," found during oil production.
Iraq has the world’s 10th-largest proven gas reserves, according to the U.S. Energy Information Administration, most of it located in southern Iraq. Two to three times more reserves could be found when it is fully explored, and much more expected to be "non-associated" gas, reservoirs independent of the oil.
"The Parties acknowledge that access to non-associated gas is essential to ensure that the aims of the Joint Venture are met," the HOA states, adding one of the objectives of the company is to "pursue development of non-associated gas fields in southern Iraq according to respective rules and regulations for field development in Iraq."
There’s more if you read the entire story: Click Here.
Iraq’s Oil Ministry renews its calls on Parliament to make progress on the oil law, The Associated Press reports.
Iraq has corrected its budget in light of the oil price slump. Lionel Laurent reports for Forbes on what this all means.
Alive in Baghdad: Who would Iraqis elect, Obama or McCain?
With the United States Presidential election looming and Iraq coverage dwindling dramatically, we decided to combine the two topics. Correspondents Nabeel Kamal and Ali Al-Le’abiy hit the streets of Baghdad and interviewed several Iraqis as to their opinion of the candidates. Our sampling was done in a short timeframe and by no means represents a statistically accurate cross-section of the Iraqi public. However, we do feel that you will hear an array of different opinions, and begin to gain a little insight into how the Iraqi public views the American government and electorate, more than five and years after the invasion.