By Ali Al-Saffar, Middle East and North Africa Programme Manager at the International Energy Agency (IEA), for 1001 Iraqi Thoughts. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Powering Iraq: Why Electricity is key to Peace, Stability and Prosperity

It does not have to be this way. Iraq’s chronic electricity shortages should not be this bad. The country has allocated around $20 billion to capital investments in the sector since 2012, increasing generating capacity by 13 gigawatts (GW) in the process.

And yet the gap between the electricity supplied and what is needed continues to grow, resulting in poorer service provision and a rising cacophony of legitimate public anger.

Why is Iraq’s electricity sector underperforming? What can be done to remedy the most immediate shortages? And what can be done to give Iraq the electricity sector the country needs and its people deserve?

Click here to read the full article.

By Adam Lucente for Al Monitor. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Iraqis face record-breaking heat, electricity cuts

Iraqis are contending with record-breaking temperatures and a poorly functioning electricity system as a heat wave sweeps across the country.

On Tuesday, the Iraqi capital, Baghdad, recorded an all-time high temperature of 125 degrees Fahrenheit (51.7 Celsius), according to the weather forecasting service AccuWeather.

Click here to read the full story.

By Ali Al-Makhzomy, for The Station. Re-published with permission by Iraq Business News.

Five One Labs recently hosted an online Start-up Showcase to celebrate the graduation of their first-ever Arabic incubator program in c.

Over 90 attendees joined the event from Iraq, Germany, USA and other places.

Ten of the entrepreneurs gave brief overviews of their businesses, and then answered audience questions. At the end of the event, Five One Labs announced that three startups would receive seed funding:

  1. Al-Ruaa for CNC, a company providing services, workshops, maintenance, installation and providing spare parts for the CNC machines, came in first place and won $15,000;
  2. For second place, EcoLift, a company providing an alternative power system (potential energy recovery system) to power elevators instead of using electricity, was awarded $10,000;
  3. And finally, Mosul Solar, a company providing and installing solar cells for houses, was awarded $5000.

Second former Unaoil executive sentenced for bribery in post-occupation Iraq

Stephen Whiteley, Unaoil‘s former territory manager for Iraq, has today become the second Unaoil executive to be sentenced for paying over $500,000 in bribes to secure a $55m contract to supply offshore mooring buoys. He was sentenced by HHJ Beddoe to 3 years’ imprisonment.

This follows the sentencing of his co-conspirator Ziad Akle on 23 July 2020, another former Iraq territory manager for Unaoil, upon whom HHJ Beddoe imposed a sentence of five years’ imprisonment.

The two men conspired with others to pay considerable bribes to public officials at the South Oil Company to secure contracts for Unaoil and its clients to construct offshore mooring buoys in the Persian Gulf. The new buoys formed part of a series of state-run projects designed by the government of post-occupation Iraq to boost its economy by rebuilding the country’s oil industry and thereby expanding its oil export capacity.

A jury at Southwark Crown Court found Stephen Whiteley guilty on one count of conspiracy to give corrupt payments. In the same trial, his co-conspirator, Ziad Akle, was found guilty on two counts of conspiracy to give corrupt payments.

SFO Director Lisa Osofsky said:

Faced with a country in desperate need of reconstruction following years of military occupation, Stephen Whiteley, Ziad Akle and their co-conspirators saw an opportunity to swindle the fledgling state for their own ends.

“The flagrant greed and callous criminality exhibited by these men undermines the reputation and integrity of British business on the international stage. We will not cease in our mission to bring such people to justice.

The convictions followed the guilty pleas of co-conspirator Basil Al Jarah who, in July 2019, admitted five offences of conspiracy to give corrupt payments. Al Jarah, who admitted to paying bribes totalling over $6million to secure contracts worth $800m for the supply of oil pipelines and offshore mooring buoys, is due to be sentenced at Southwark Crown Court on 8 October 2020.

(Source: UK SFO)

Advertising Feature

Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 30th July 2020).

Please click here to view a table of listed companies and their associated ticker codes.

Note: ISX will be closed starting from Jul. 30, 2020 to Aug. 9, 2020 due to the religious holiday of Eid Al-Adha. The next trading session will be held on Monday (Aug. 10, 2020). 

The RSISX index ended the week at IQD627 (-1.5%) / $656 (-1.5%) (weekly change) (-4.8% and -6.4% YTD change, respectively). The number of week traded shares was 2.4 bn and the weekly trading volume was IQD1.4 bn ($1.2mn).

ISX Company Announcements

  • Iraq Stock Exchange (ISX) organized two more investor Zoom conference calls with ISX-listed companies for them to disclose their financial results and reply to participants’ questions related to financial results, operations, and future plans. The fifth Zoom online meeting was held with Ready-Made Clothes (IRMC) on July 24 (Friday) (Please CLICK HERE for the record of IRMC meeting provided by the ISX). The sixth Zoom online meeting was held with Ashur International Bank for Investment (BASH) on July 25 (Saturday) (Please CLICK HERE for the record of BASH meeting provided by the ISX).
  • According to Ooredoo’s financial results, Asiacell’s (TASC) revenues decreased 10% y/y to QAR1.9 bn ($527.1 mn) in 6M20. EBITDA decreased by 15% y/y to QAR828 mn ($226.1 mn) in 6M20, while EBITDA margin decreased from 45% to 43%. Asiacell continued to manage costs to absorb the impact of revenue declines by optimizing operational efficiency and controlling its marketing expenditures. Asiacell’s customer base decreased 4% y/y to 13.3 mn as end of 6M20. The company is continuing to prepare for the launch of 4G as the Government committed to allow operators to launch LTE services in 2021. (Iraq Business News)
  • The CBI decided, on Monday, to postpone the payment of the installments due to government and private banks for the IQD5.0 trln and IQD1.0 trln initiatives, for an additional three months, attributing this to the continued exceptional circumstances in the country due to the Corona pandemic. (CBI)
  • Iraqi Date Processing and Marketing (IIDP) will hold a GA on Aug. 24, 2020 to elect 5 original and 5 alternative private sector representatives. The company has been suspended from trading since Jul. 8, 2020 due to not disclosing the annual financial statements for the ending year Aug. 31, 2019.
  • ISX will suspend trading of National Islamic Bank (BNAI) starting Aug. 16, 2020 due to the AGM that will be held on Aug. 19, 2020 to discuss and approve 2018 annual financial statements.
  • Trans Iraq Bank for Investment (BTRI) will resume trading on Aug. 10, 2020 after being suspended for its AGM in which they discussed and approved 2019 annual financial statements and decided to distribute 0.758% cash dividends (IQD0.00758 dividend per share, 1.1% dividend yield). The opening price will be IQD0.690 with +/-10% change.
  • Al-Rebas for Poultry and Feed (AREB) with a capital of IQD30 bn will start trading on Aug. 10, 2020. The opening price will be free for the first three sessions, and then will have +/-20% price change limit.
  • Baghdad Soft Drinks (IBSD) resumed trading on Jul. 27, 2020 after being suspended for its AGM in which they discussed and approved 2019 annual financial statements and decided to distribute 15% cash dividends (IQD0.15 dividend per share, 5.6% dividend yield).
  • Iraqi for Tufted Carpets (IITC) resumed trading on Jul. 27, 2020 after being suspended for its AGM in which they discussed and approved 2019 annual financial statements and decided to distribute 70% cash dividends for the year 2019 (IQD0.70 dividend per share, 7.3% dividend yield).

By Omar Sattar for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Iraqi government not giving up on early elections

Despite the fact that most political parties in Iraq agreed to hold elections as soon as possible, and the government of Prime Minister Mustafa al-Kadhimi announced that such elections are among the priorities of the government, several conditions will seemingly prevent such goal from being achieved before the current legislative session comes to an end in 2022.

Click here to read the full story.

DNO ASA, the Norwegian oil and gas operator, today reported stepped up investments across its portfolio on the back of higher production and significantly improved liquidity outlook as the Company recovers from the oil market turmoil that upended the second quarter of 2020.

Operated production in July at the Company’s flagship Tawke license in the Kurdistan region of Iraq is up 15,000 barrels of oil per day (bopd) month-on-month to 115,000 bopd following a well intervention campaign fast tracked in June with the stabilization of oil prices and improved export payment terms.

In the North Sea segment, DNO projects receipt of USD 215 million in tax refunds in the second half of the year, including USD 70 million from the recently announced temporary changes to petroleum taxation in Norway.

“The worst of the coronavirus pandemic hit to our business is behind us and DNO is back identifying and capturing opportunities,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman. “Still, we are prepared to act quickly, as we did in March, if a strong second wave comes,” he added.

Second quarter Company Working Interest (CWI) production stood at 89,700 barrels of oil equivalent per day (boepd) of which Kurdistan contributed 71,900 bopd and the North Sea 17,800 boepd.

Gross operated Tawke license production averaged 102,000 bopd, including 58,100 bopd from the Tawke field and 43,900 bopd from the Peshkabir field, together down 11 percent from the first quarter as development activity dropped off to preserve cash at a time of historically low and uncertain oil prices.

Second quarter revenues slid to USD 72 million and operating losses climbed to USD 81 million, both driven by weak commodity prices across the portfolio and lower cargo liftings of produced oil in the North Sea.

At the Baeshiqa license in Kurdistan, DNO continued drilling the third exploration well on a second structure (Zartik) some 15 kilometers southeast of the Baeshiqa-2 discovery well. The rig has been released and testing will commence in August in Lower Jurassic and Upper Triassic zones intersected by the well and expected to last three months. Evaluation of the Baeshiqa-2 results is ongoing to determine commerciality.

During the first half of 2020 DNO received a total of USD 224 million in payments from the Kurdistan Regional Government. In addition, the Company received a USD 23 million June entitlement payment after the end of the reporting period. Discussions are ongoing to reach an agreement on acceptable terms and timing of payment of arrears totaling USD 240 million due to DNO for the November 2019-February 2020 entitlements and November 2019-June 2020 override payments.

Notwithstanding the interruption of these payments and DNO’s repayment of the remaining USD 138.5 million of the DNO01 bond at maturity on 18 June 2020, the Company exited the first half of 2020 with a strong cash balance of USD 427 million. Net debt at the end of the second quarter stood at USD 537 million, down from USD 559 million at the end of the first quarter.

Last month, DNO commissioned the Peshkabir-to-Tawke gas reinjection project, the first enhanced oil recovery project in Kurdistan, to unlock additional oil volumes at Tawke while significantly reducing gas flaring and CO2 discharges at Peshkabir.

Prompted by the tax changes in Norway, the Company is working with partners to accelerate infill drilling at the Ula, Tambar and Brage producing fields, revisit development options for the Brasse field and actively evaluate the Iris/Hades, Fogelberg and Trym South discoveries.

DNO will remain an active explorer in the North Sea, targeting 4-6 wildcat wells a year.

(Source: DNO)

The number of cases of COVID-19-infected persons is also rapidly increasing in Iraq. The peak of the disease is expected in autumn. At least four new hospitals are to be built in the country’s largest cities by then.

KfW is financing the construction on behalf of the German government with an initial amount of EUR 15 million. The contract was signed 23 July 2020.

At the end of April lockdown and corona restrictions were lifted in Iraq. Since then the number of cases has risen sharply. A peak in infections is expected in autumn, which will overburden the infrastructure of the health care facilities.

By then, almost 50,000 beds in hospitals, including 12,000 intensive care beds, will be needed for the treatment of COVID-19 patients alone. In Iraq, however, there are only just under 50,000 hospital beds at all, including about 700 intensive care beds.

To support the Iraqi health system KfW is financing the construction of at least four hospitals on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) with an initial EUR 15 million. It is being examined whether further hospitals can be financed in a further phase.

A simulation of the course of infection according to a WHO model showed that the conurbations will suffer the highest case numbers. Therefore, four hospitals are planned in the major cities of Baghdad, Basra, Niniveh and Süleymaniye.

They will initially be built as temporary hospitals in modular prefabricated construction, but in the long term they can serve as regular hospitals. Each hospital will have 100 beds, including 40 intensive care beds. In the short term, more than 7,000 patients will benefit directly. But the separate treatment of COVID-19 patients in separate facilities is beneficial for all patients in the country, because otherwise isolation could not be guaranteed.

“This is a quick and lean response to the pandemic in Iraq, but we have to win the race against time and build the hospitals before case numbers continue to escalate,” stresses KfW portfolio manager Moritz Remé. After many years of armed conflict the need for reconstruction in Iraq is particularly high. Income from the oil business has fallen due to the sharp drop in prices in recent months. Help from Germany is therefore urgently needed in Iraq.

(Source: KfW)

By Al-Monitor staff. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq’s coronavirus cases top 100,000 as Baghdad airport reopens

Iraq is instituting a “total curfew” for the upcoming Eid al-Adha holiday.

The curfew will be in place from July 30 until Aug. 9, according to a statement today from the Iraqi government.

Past total curfew orders in Iraq have mandated a ban on non-essential movement and business, meaning people could only go to local supermarkets and pharmacies.

Click here to read the full story.

Ziad Akle, Unaoil‘s territory manager for Iraq, has been sentenced to five years’ imprisonment for paying over $500,000 in bribes to secure a $55m contract to supply offshore mooring buoys.

The new buoys formed part of the post-occupation Iraqi government’s “Master Plan” to rebuild Iraq’s oil industry and thereby expand the country’s oil export capacity. To ensure Unaoil benefitted from these state-run projects, Akle, conspiring with Stephen Whiteley and others, bribed public officials at the South Oil Company to secure contracts for Unaoil and its clients.

In his sentencing, HHJ Beddoe said:

“The offences were committed across borders at a time of serious need for the government of Iraq to rebuild after years of sanctions and the devastation of war. They were utterly exploitative at a time when the economic and political situation in Iraq was extremely fragile.”

A jury at Southwark Crown Court found Akle guilty on two counts of conspiracy to give corrupt payments. Another individual, Stephen Whiteley, was found guilty of one count of conspiracy to give corrupt payments in relation to the same crime. He will be sentenced on a date to be determined.

SFO Director Lisa Osofsky said:

Ziad Akle and his co-conspirators exploited a country reeling from years of dictatorship and military occupation to line his own pockets and win business. It is this combination of greed and heartless avarice that led to these convictions.

“Today’s sentencing sends a clear message that the United Kingdom and the SFO will not tolerate criminal activity that undermines the fairness and integrity of international business.

The convictions followed the guilty pleas of co-conspirator Basil Al Jarah who, in July 2019, admitted five offences of conspiracy to give corrupt payments. Al Jarah, who admitted to paying bribes totalling over $6million to secure contracts worth $800m for the supply of oil pipelines and offshore mooring buoys, is due to be sentenced at Southwark Crown Court on 8 October 2020.

(Source: SFO)