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

After the Sairoon (On the Move) Alliance emerged victorious in the May 12 Iraqi elections, its leader, Muqtada al-Sadr, has been seeking meetings with the leaders of the other top-vote-getting alliances to discuss the possibility of forming the largest bloc in the new parliament and ultimately form the new Cabinet.

At a May 19 joint press conference after talks with Sadr, Prime Minister Haider al-Abadi, whose Al-Nasr (Victory) Alliance came in third, said, “During our meeting, we agreed to work together and with other parties to expedite the process of forming a new Iraqi government.”

A few days later, on May 22, Al-Nasr spokesman Hussein al-Adeli said Abadi had reached an agreement with Sadr on a map for forming a new government. Abadi himself, in his weekly press conference the same day, said his coalition was close to reaching an understanding with the Sairoon Alliance “to form a strong technocratic government.”

In a May 20 meeting with Hadi al-Amiri, leader of the second-place Fatah Alliance, consisting of the political wings of the pro-Iran militias of the Popular Mobilization Units, Sadr had said, “The process of government formation must be a national decision, and importantly, must include the participation of all the winning blocs along a national path.”

Sadr appeared to select the phrasing “national decision” and “national path” especially for Amiri, who had days earlier met in Baghdad with Qasem Soleimani, commander of Iran’s Quds Force, in an attempt to form a pro-Iranian parliamentary bloc.

Sadr also held talks with Ammar al-Hakim, leader of the Hikma Alliance, on May 21 and spoke of the importance of forming the upcoming government in a way that ensures “fixing the path of the political process to suit the aspirations of the Iraqi people who reject sectarianism and corruption.”

Sadr also met May 21 with Iyad al-Allawi, leader of the predominantly Sunni Al-Wataniyah Alliance, and two days earlier had received a letter from Kosrat Rasoul Ali, first deputy for the secretary-general of the Patriotic Union of Kurdistan, in line with discussions on potential alliances requiring Sunni and Kurdish participation alongside the Shiite majority to form a government.

After failing to assemble a parliamentary bloc under Iranian auspices consisting of the four largest Shiite lists — the State of Law Coalition and the Al-Nasr, Hikma and Fatah Alliances — Iranian Ambassador to Iraq Iraj Masjedi attempted to lure Sadr to his side to prevent the formation of an anti-Iran government. Masjedi told Iran’s Al-Alam TV May 21, “Iran has constructive relations with all parties, blocs and coalitions that won the majority of parliamentary seats in the fourth elections.”

Masjedi also denied rumors of a dispute between the Iranian leadership and Sadr, saying, “Iran’s relations with Sadr are historical and deep-seated. The country had close relations with the martyrs Mohammed Baqr and Mohammed Sadeq al-Sadr [Muqtada’s uncle and father, respectively].” Masjedi added, “Iranian officials’ relations with Sadr are friendly and brotherly, and many of them, including Soleimani, appreciate Sadr greatly.”

In fact, Sadr’s father and Iranian officials were not friendly at all. His representative in Iran, Jaafar al-Sadr, son of Mohammad Baqr, was arrested and his office shuttered in Qom in 1998. In addition, everything indicates that relations between Muqtada and Iran have gone downhill as well in recent years.

Sadr had made several statements critical of Iranian interference in Iraqi decision-making, and his alliance competed against the pro-Iran lists — Al-Fatah and the State of Law Coalition — in the elections. In the preceding years, Sadr’s supporters chanted slogans against Iran at protests calling for reform. Sadr, unlike his rivals Maliki and Amiri, has not met with Soleimani in recent years.

Sadr greeted a group of ambassadors from neighboring countries May 19 after his list’s victory was confirmed. In attendance were the ambassadors of Saudi Arabia, Jordan, Kuwait, Turkey and Syria. Official Iranian websites, including Al-Alam’s, criticized Sadr’s relations with Saudi Arabia and charged that Riyadh had been behind Iran’s exclusion from the meeting.

Sadr insists that the largest parliamentary bloc include all Iraqi components, which would be unprecedented if successful. The largest parliamentary bloc has always consisted solely of Shiite parties, which then negotiated with Kurdish and Sunni blocs over forming the government.

On May 21, Sadr tweeted, “I am Muqtada. I am Shiite, Sunni, Christian, Saebean, Yazidi, Islamist, civil, Arab, Kurdish, Assyrian, Turkmen, Chaldean and Shabak. I am Iraqi. Do not expect me to side with any sect against the other to renew enmities and lead to our demise. We are headed toward a comprehensive Iraqi alliance.”

Al-Hayat newspaper on May 21 cited Iraqi sources close to Sadr discussing efforts to bring together Abadi, Allawi, Kurdistan Democratic Party leader Massoud Barzani and Sunni Al-Qarar Alliance leader Khamis al-Khanjar to explore forming the leading parliamentary bloc with all their parties’ participation. If Sadr succeeds, Iraq might overcome sectarian quotas in forming a government, and Iranian influence would dwindle with its political allies, Al-Fatah and the State of Law Coalition, excluded from the bloc.

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

The Sairoon (On the Move) Alliance formed by Muqtada al-Sadr and the Iraqi Communist Party is ahead in the preliminary results of the Iraqi elections. More than 90% of the votes in all of Iraq’s provinces have been counted so far, with the exception of Dahuk and Kirkuk, where counting was postponed.

Sairoon has so far secured 54 out of a total of 329 parliamentary seats, while the Al-Fatah Alliance, formed by the Iranian-backed Popular Mobilization Units, has won 44 seats, followed by 39 seats for Prime Minister Haider al-Abadi’s Al-Nasr Alliance. The State of Law Coalition led by former Prime Minister Nouri al-Malik has secured 25 seats, and the Al-Wataniya Alliance of former Prime Minister Ayad Allawi has obtained 22 seats.

The results have raised the chances that the Sairoon Alliance will form the largest bloc in the next parliament, which will be tasked with appointing the prime minister and forming the next government. Sairoon leaders rushed to express their desire to put together the largest bloc and voiced their opinions on the next government’s shape and inclination.

“The door is open” for Sairoon to work with any of the rival blocs, said Dhia al-Asadi, head of the political bureau of the Sadrist Movement, on May 14 after the announcement of the preliminary results of the elections. “Sairoon has the right to claim the post of prime minister,” he said. On May 16, Sadr, the head of the Sadrist Movement, confirmed his wish to form a government of technocrats free of partisanship and sectarianism.

In a May 14 tweet, Sadr hinted at the alliances and broad nature he hopes will characterize the new government. Using a play on words derived from the meaning of various political entities’ names, he wrote: “We are Sairoon (On the Move) with Hikma (Wisdom) and Al-Wataniya (Patriotism) to make the people’s Iradah (Will) our demand, to build Jilan Jadidan (a New Generation), to witness Taghir (Change/Gorran) toward reform and for the Al-Qarar (Decision) to be Iraqi,” continuing the puns with, “So we raise the Bayariq (Banners) of Al-Nasr (Victory), and to make Baghdad, the capital, our Hawiyatuna (Baghdad is Our Identity) and our Hirakuna (Democratic Movement) move toward the formation of a paternal government from among technocratic Kawadur (Cadres) free of partisanship.”

Sadr used parenthesis in his tweet to denote various Iraqi political entities, including Abadi’s Al-Nasr, Ammar al-Hakim’s Hikma and Allawi’s Al-Wataniya alliances, and others — excluding the Iranian-supported militia Al-Fatah Alliance and Nouri al-Maliki’s State of Law Coalition.

If Sadr can achieve an alliance that includes the aforementioned forces, he would form the largest bloc and isolate his rivals, the Al-Fatah Alliance and the State of Law Coalition.

Arab powers opposing Iran, led by Saudi Arabia, welcomed Sadr’s victory and expressed hope that it will undermine Iran’s influence in Iraq. Thamer al-Sabhan, the minister of state for Arabian Gulf affairs at the Foreign Ministry and a former Saudi ambassador to Iraq, commented on Sadr’s tweet and retweeted, “You are really Sairoon (on the move) with Hikma (wisdom), Wataniya (patriotism) and Tadhamon (solidarity). You have taken Al-Qarar (decision), toward Taghyir (change) to have Iraq raise the Bayariq (banners) of Al-Nasr (victory), to [secure] independence, Arabism and identity. I congratulate Iraq for having you.”

Some Sunni Arab forces, including the Al-Qarar Alliance led by Khamis al-Khanjar, also welcomed Sairoon’s victory. Khanjar even voiced his desire to ally with it. Abadi congratulated Sadr on his victory, which could imply a desire to ally with him.

But this does not prevent Sadr’s rivals from seeking to sideline Sairoon by forming a larger bloc in a rival axis.

State of Law Coalition spokesman Abbas al-Musawi expressed skepticism May 16 that some electoral lists (in reference to Sairoon) will be able to form a government, stressing that “historic leaders” will be the key drivers in this matter. State of Law Coalition parliament member Mohamed Sahyoud said May 15 that efforts are near completion to form an alliance between the State of Law, Al-Fatah and Al-Nasr coalitions, which would secure more than 100 seats and account for the largest bloc in parliament. If this occurs and the bloc gets support from some Kurdish and Sunni forces loyal to Iran, the next government could be formed by the axis opposing Sadr.

Al-Monitor learned from sources who asked not to be named within the State of Law, Al-Fatah and Al-Nasr coalitions that the commander of Iran’s Quds Force, Qasem Soleimani, who has been in the Green Zone in Baghdad since May 14, is leading efforts to strike an alliance deal between the State of Law Coalition’s Maliki and Al-Fatah Coalition leader Hadi al-Amiri, and then to encourage Al-Nasr’s Abadi and Al-Hikma’s Hakim to join this alliance. If Soleimani succeeds, this could prevent Sadr from forming the largest bloc.

Soleimani was said to have proposed that these alliances refrain from nominating any of their leaders. Other names are being put forward as a consensus prime minister, including Muhammad Shayya al-Sudani, who is one of the Dawa Party leaders and the minister of labor and social affairs in Abadi’s government.

An earlier report by Al-Monitor indicated that negotiations by Soleimani in Erbil led to an agreement with the Kurdistan Democratic Party not to support Abadi as prime minister. Nechirvan Barzani, the prime minister of the Kurdistan Regional Government (KRG), revealed upcoming plans for a visit by a KRG delegation to Baghdad to participate in talks aimed at forming the next government.

Hisham al-Rekabi, who heads Maliki’s media office, said May 16 that all discussions to form the largest bloc “will be completed within the next 48 hours.” Dawa Party leader and parliament member Kamel al-Zaidi spoke of “semifinal” understandings between the State of Law and Al-Fatah coalitions, in addition to current attempts to include other [parliamentary] blocs in this larger bloc. Zaidi added, “There are ongoing contacts with the National Union Front and Barham Salih’s party, as well as with Sunni political authorities to form an alliance that guarantees a national political majority.”

On May 15, US State Department Spokeswoman Heather Nauert answered a question about Soleimani’s interference in the ongoing consultations to form the Iraqi government. “That is certainly always a concern of ours, but we have a great deal of trust and faith in the Iraqi people and whoever ends up governing, whatever the structure is, the governing of that country going forward,” she said.

Iran appears to be in a hurry to strike a deal between its loyalists for fear of Sadr’s success in dominating the next government, which would curb its influence in Iraq.

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on the Governor and a senior official of the Central Bank of Iran, an Iraq-based bank and its chairman, and a key Hizballah official, all of whom have moved millions of dollars on behalf of the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) to Hizballah.

They were designated as Specially Designated Global Terrorists (SDGTs) pursuant to Executive Order (E.O.) 13224, which targets terrorists and those providing support to terrorists or acts of terrorism.

“Iran’s Central Bank Governor covertly funneled millions of dollars on behalf of the IRGC-QF through Iraq-based al-Bilad Islamic Bank to enrich and support the violent and radical agenda of Hizballah.  It is appalling, but not surprising, that Iran’s senior-most banking official would conspire with the IRGC-QF to facilitate funding of terror groups like Hizballah, and it undermines any credibility he could claim in protecting the integrity of the institution as a central bank governor,” said Treasury Secretary Steven T. Mnuchin.

“The United States will not permit Iran’s increasingly brazen abuse of the international financial system.  The global community must remain vigilant against Iran’s deceptive efforts to provide financial support to its terrorist proxies.”

Today’s action cuts off Iran’s use of a critical banking network and follows last Thursday’s disruption of an IRGC-QF-associated currency exchange network procuring millions of dollars through the UAE.  Both actions seek to stifle Iran’s ability to abuse the U.S. and regional financial systems.  These actions continue the aggressive campaign against the IRGC and its proxies that the Treasury Department has led under this Administration.

These actions build upon President Trump’s May 8 decision to cease the United States’ participation in the Joint Comprehensive Plan of Action (JCPOA) and begin reimposing U.S. sanctions that had been lifted under the JCPOA, including against the Central Bank of Iran.

The IRGC-QF was designated pursuant to E.O. 13224 on October 25, 2007.  The IRGC-QF’s parent organization, the Islamic Revolutionary Guard Corps (IRGC) itself was also designated on October 13, 2017 pursuant to E.O. 13224 for its support to the IRGC-QF, and consistent with the Countering America’s Adversaries Through Sanctions Act.

Hizballah was designated by the Department of State as a Foreign Terrorist Organization in October 1997 and as an SDGT pursuant to E.O. 13224 in October 2001.  It was listed in January 1995 in the Annex to E.O. 12947, which targets terrorists who threaten to disrupt the Middle East peace process, and also designated in August 2012 pursuant to E.O. 13582, which targets the Government of Syria and its supporters.

Iran’s Central Bank Governor and a Senior Staff Officer

OFAC is designating Valiollah Seif, Iran’s Central Bank Governor, for assisting, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF.  Seif has conspired with the IRGC-QF to move millions of dollars through the international financial system in a variety of foreign currencies to allow the IRGC­QF to fund its activities abroad.  Seif has also supported the transfer of IRGC-QF-associated funds to al-Bilad Islamic Bank, an Iraq-based bank which is also being designated today.

OFAC also is designating Ali Tarzali, the assistant director of the International Department at the Central Bank of Iran, for assisting, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF.  Tarzali has worked with Hizballah and proposed that the terrorist group send funds through Iraq-based al-Bilad Islamic Bank.

As a result of today’s actions, Veifollah Seif and Ali Tarzali are subject to secondary sanctions pursuant to the Iranian Financial Sanctions Regulations (IFSR), which implement, among other authorities, the Comprehensive Iran Sanctions and Divestment Act of 2010 (CISADA).  Pursuant to the IFSR, OFAC can prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates a significant transaction for designated agents or affiliates of the IRGC or persons designated pursuant to E.O. 13224 in connection with Iran’s support for international terrorism or E.O. 13382 in connection with Iran’s proliferation of weapons of mass destruction and their means of delivery.

Today’s designations of Valiollah Seif, Iran’s Central Bank Governor, and Ali Tarzali, assistant director of the International Department at the Central Bank of Iran, do not extend to the Central Bank of Iran.  However, due to President Trump’s May 8, 2018 decision to cease the United States’ participation in the JCPOA, as of August 7, 2018, the United States Government will re-impose sanctions that extend to certain transactions with the Central Bank of Iran, including sanctions on the purchase or acquisition of U.S. dollars banknotes by the Government of Iran.  Furthermore, on November 5, 2018, additional sanctions will be re-imposed on persons knowingly engaging in certain significant transactions with the Central Bank of Iran.

Al-Bilad Islamic Bank and Its Chairman and Chief Executive

OFAC is designating Aras Habib, the Chairman and Chief Executive of Al-Bilad Islamic Bank, for assisting, sponsoring, or providing financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF.  Aras Habib enabled the IRGC-QF’s exploitation of Iraq’s banking sector to move funds from Tehran to Hizballah, jeopardizing the integrity of the Iraqi financial system.  Habib, who has a history of serving as a conduit for financial disbursements from the IRGC-QF to Iranian-backed Iraqi groups, has also helped provide IRGC-QF financial support to Lebanese Hizballah.  Al-Bilad Islamic Bank is being designated for being owned or controlled by Aras Habib.

As a result of today’s actions, Aras Habib and Al-Bilad Bank are subject to secondary sanctions pursuant to the IFSR, which implement, among other authorities, CISADA.  Pursuant to the IFSR, OFAC can prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates a significant transaction for designated agents or affiliates of the IRGC or persons designated pursuant to E.O. 13224 in connection with Iran’s support for international terrorism or E.O. 13382 in connection with Iran’s proliferation of weapons of mass destruction and their means of delivery.

Hizballah Official Working with IRGC-QF

OFAC is designating Muhammad Qasir (Qasir) for acting for or on behalf of Hizballah.  Qasir acted as a critical conduit for financial disbursements from the IRGC-QF to Hizballah.  Qasir has worked with the IRGC-QF to transfer funds.

Qasir is subject to secondary sanctions pursuant to the Hizballah Financial Sanctions Regulations, which implements the Hizballah International Financing Prevention Act of 2015.  Pursuant to this authority, OFAC can prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that knowingly facilitates a significant transaction for Hizballah, or a person acting on behalf of or at the direction of, or owned or controlled by, Hizballah.

Identifying information on the individuals and entities designated today.

(Source: U.S. Department of the Treasury)

By Omar al-Jaffal for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.

Saudi Arabia is considering investing in 2.5 million acres of agricultural land in Iraq’s western province of Anbar, which has suffered both economically and otherwise after the bitter war to regain control of the province from the Islamic State. If such an investment is made, it would be facilitated by the Saudi-Iraqi Coordination Council, which was formed in October.

The Iraqi Ministry of Commerce announced the potential investment in a brief statement to the press April 4, but did not disclose any further details on the matter.

Iraqi-Saudi relations have remarkably improved since mid-2017, particularly after Iraqi Prime Minister Haider al-Abadi visited Riyadh in October. During that visit, an announcement was made on establishing the Saudi-Iraqi Coordination Council, in the presence of Abadi, Saudi King Salman bin Abdul-Aziz Al Saud and then US Secretary of State Rex Tillerson.

The council aims to develop economic relations at all levels between Iraq and Saudi Arabia after nearly three decades of estrangement. It also seeks to open land borders, encourage investments, review the customs cooperation agreement and study the establishment of a trade zone.

The Ministry of Commerce’s media office declined to provide Al-Monitor with any details on the potential Saudi investment in Anbar.

However, Yahya al-Mohammadi, a member of the Anbar provincial council, told Al-Monitor that officials in Anbar were indeed in contact with the Saudi Embassy in Baghdad, adding, “Provincial officials have noticed a Saudi desire to broadly invest in Anbar.”

Meanwhile, Salman al-Ansari, chairman of the Washington-based Saudi American Public Relation Affairs Committee, told Al-Monitor that the investment project in Anbar “will be launched soon.”

A Iraqi political source told Al-Monitor on condition of anonymity about the nature of the investment project in Anbar, its economic feasibility, and all related security and political aspects.

The source said the prospective investment will largely be “in the area of Nukhayb, which lies on the borders of the province of Karbala and is also adjacent to the Saudi border.” The project “aims to build fields for breeding calves, as well as producing dairy products and drinking water.” Large dairy companies will likely be established, mimicking a number of successful projects in Saudi Arabia.

The source did not deny the security objectives behind the project. “This area is lacking in security,” he said. “It is located on Saudi Arabia’s border, and the two countries are trying to turn it into a labor-intensive business center, which brings stability to it rather than it posing a permanent threat to both countries.”

He said that, politically, “Saudi Arabia certainly seeks to expand in Iraq, but will not follow the Iranian example, which occupies the Iraqi market without employing the labor force in Iraq.” Saudi Arabia, he said, “seeks soft dominance in Iraq by creating jobs for Iraqis,” which will make its “presence and influence in the political scene acceptable within the Iraqi society.”

Nukhayb has long been a disputed area between Anbar and Karbala. Nukhayb is administratively affiliated with Anbar province, but Karbala demands that it be annexed to its administrative borders. Security tension is common there, but the area has been relatively stable for nearly two years now.

Mohammadi denied “an actual start of investment operations in Anbar.” He said, “Saudi Arabia and Iraq only discussed the projects put forward,” noting that “this is due to the security and political instability in Iraq.”

In fact, not many political forces and Shiite factions welcome the idea of Saudi Arabia coming to Iraq and establishing business operations there. This rejection was demonstrated in March, when the media reported an upcoming visit to Iraq by Saudi Crown Prince Mohammed bin Salman and, in response, Shiite factions and parties organized protests in a number of cities in Iraq.

Some Iraqi parliamentarians from Shiite blocs are seeking to pass a law similar to the American Justice Against Sponsors of Terrorism Act to sue Saudi Arabia for allegedly allowing its citizens to enter Iraq and commit acts of terrorism on its territory.

Mohammadi ruled out the possibility that this would intimidate Saudi Arabia and stop it from launching projects in Anbar. “The Iranian-Saudi conflict has a wide impact on the countries of the region,” he said, “but Iraq’s neutral policy has been boding well so far, and I hope it continues to achieve what is in the interest of Iraq.”

Addressing whether Saudi Arabia fears for its investments in Iraq from pro-Iranian factions, Ansari said, “Saudi Arabia does not fear anyone and is capable of protecting its interests by all means, be it in the region or anywhere in the world.”

Iraq needs a very balanced policy in dealing with its conflicting neighbors Iran and Saudi Arabia, a fact that ought to be taken into account when either of these two countries wants to invest in Iraq, especially since both Iran and Saudi Arabia believe that investments are also a gateway to influence Iraq’s political situation.

Aiding Iraq in Reconstruction Iran’s Priority after Daesh Defeat: Defense Minister

Iranian Defense Minister Brigadier General Amir Hatami said that following the defeat of the Daesh (ISIL or ISIS) terrorist group in Iraq, Iran’s priority in its cooperation with Iraq now is helping the Arab country in its reconstruction process.

In a meeting with Iraqi Interior Minister Qasim al-Araji in Baghdad on Thursday, Brigadier General Hatami hailed the victory over the terror group as an important achievement not only for Iraq but also for the security and stability of the entire region.

He highlighted Iran’s policy of support for the Iraqi people and government and said that after the defeat of Daesh, the Islamic Republic’s first priority now is helping with the reconstruction of the Arab country.

Al-Araji, for his part, thanked the Iranian government and people for their all-out support for his country.

He also called for the development of bilateral ties in the defense, law enforcement and security fields.

Heading a high-ranking delegation, Brigadier General Hatami arrived in Baghdad on Wednesday for talks on enhancing the defense ties with the Arab country.

Iraq has been facing the threat of terrorism in recent years, mainly posed by the Daesh (ISIL) terrorist group.

Amid tensions in Iraq, Iran has been known as the first country to help the Arab nation and has always voiced support for Iraq’s territorial integrity and prosperity.

(Source: Tasnim, under Creative Commons licence)

Iran’s Oil Ministry linked a 4-month delay in the implementation of an oil swap deal with Iraq to the Arab country’s unpreparedness and technical problems.

In a letter to the Tasnim News Agency in response to a recent report on the lengthy delay in implementation of the oil swap deal with Iraq, Iran’s Oil Ministry said the problem lies in the Arab country’s failure to remove the obstacles.

The slight delay in implementing the major deal on swapping the crude oil produced in northern Iraq is mainly because of unprepared infrastructures and some logistical deficiencies on Iraq’s part,” the letter read.

It said the oil swap operation will begin soon, dismissing reports on “oil diplomacy negligence” or secret issues being behind the delay.

In February 2017, Iraq’s Oil Ministry said it had signed a deal with Iran to carry out studies on the construction of a pipeline to export crude oil from the northern Iraqi fields of Kirkuk via Iran.

In December, the two neighbors finalized the agreement, according to which Iran would provide Iraq’s southern ports with oil of the same characteristics and in the same quantities as those it would receive from Kirkuk.

Between 30,000 and 60,000 bpd of Kirkuk crude will be delivered by tanker trucks to the border area of Kermanshah, where Iran has a refinery.

The two countries are planning to build a pipeline to carry the oil from Kirkuk, so as to avoid trucking the crude.

(Source: Tasnim, under Creative Commons licence)

By John Lee.

Iraq’s Ministry of Oil will hold a conference on Thursday 29th March to announce for a new licensing round to develop and rehabilitate 11 exploration zones on the borders of Iran and Kuwait, including one offshore zone on the Gulf.

The conference will be attended by 13 international companies which have purchased the data portfolios, in addition to two companies which intended to buy data portfolios.

These 15 companies will compete for the rights to develop and rehabilitate these exploration zones.

Assim Jihad, spokesman of the Ministry of Oil, said also that the form of the contract will be “service contract with a few modifications”.

(Source: Ministry of Oil)

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

The Islamic State (IS) appears to be staging a comeback in parts of Iraq, which could endanger the country’s oil deal with Iran.

Hamid Hosseini, the Iranian secretary-general of the Iran-Iraq Chamber of Commerce, warned in late February that the countries’ plan can’t be implemented fully because of security concerns. The countries signed a bilateral agreement in July 2017 to install a pipeline to transport Kirkuk’s crude oil to Iran to be refined. In the meantime, the oil is being transported by trucks, which are vulnerable to attacks.

The Kurdish military, or peshmerga forces, took control of Kirkuk in 2014 after Iraqi forces fled as IS swept through the area. But in October, Iraqi forces reclaimed the oil-rich territory from the Kurds.

IS has been blamed for numerous recent attacks in the area. On Feb. 19, IS fighters ambushed a convoy of the Baghdad government’s Shiite Popular Mobilization Units (PMU) in the Hawija district, southwest of Kirkuk, killing 27. On Feb. 27, gunmen had targeted the Turkmen Front with a rocket shell. Since Hosseini’s warning, security has deteriorated both in Kirkuk and Hawija. Local authorities have called for military enforcement.

Masrour Barzani, the head of Kurdistan security, stressed that the “IS offensive in Kirkuk province is not coming to an end anytime soon.”

These developments cast clouds of uncertainty over any investment attempts in Kirkuk city, particularly in the oil sector. Yet Rakan al Jibouri, Kirkuk’s Baghdad-appointed interim governor, doesn’t agree, though he acknowledges “there are unsecured areas.”

“This won’t obstruct the development of oil facilities and exportation projects, as the agreement signed by the [Iraqi] Ministry of Oil on Feb. 8 to construct a new refinery clearly demonstrates otherwise,” Jibouri told Al-Monitor.

Ministry spokesman Asim Jihad also told Al-Monitor the present security situation won’t affect Kirkuk oil investments. “The Iranian official’s [Hosseini’s] statement reflects his state’s point of view. The Iraqi side is committed to upholding the agreement as long as Iran is not backing down.”

Jihad said the contract provides for exporting 30,000-60,000 barrels of oil a day via trucks from Kirkuk fields to the border zone near Kermanshah, Iran.

“Work is still underway to install an oil pipeline to Iran with a capacity of over 250,000 barrels [per day],” Jihad added. “Moving forward, we are going to stop using trucks, which are more exposed, require more security measures and cost more.”

Moreover, one of the reasons behind the agreement was “Iran’s need of large amounts of Iraqi oil for refinement purposes, as well as for complementary industries in Iranian areas across [the border].” Jihad said Iraq will also benefit because it will be able to export oil abroad at lower costs.

All that said, however, Jihad noted the Oil Ministry has no authority to assess the security situation: “The ministry is only concerned with the technical end of things.”

Iskander Witwit, a member of the Iraqi parliament’s Security and Defense Committee, contradicted Hosseini’s evaluation. “We haven’t recorded any indications of oil investments in Kirkuk being too risky,” Witwit told Al-Monitor.

He said the Kurdish peshmerga wants “security anarchy so that the oil trade project between Iraq and Iran fails, because the [Kurdistan Regional Government (KRG)] wants oil to be transported through its soil.” The KRG, he said, “seeks to stop all oil and economic projects as long as Kirkuk is not under its control.”

Witwit also challenged a statement by Hosseini that security is at risk because Iran doesn’t have X-ray machines to inspect trucks coming from Iraq.

“This is an irrational reason,” Witwit said. “Truck security is both countries’ responsibility, and oil-transporting trucks are registered and take off from secured points to their designated destination. Therefore, they can’t possibly be used for any other purposes, considering the strict security measures in oil zones. Also, army and PMU troops are dispatched throughout the route used by the trucks.”

Meanwhile, it appears Iraq is moving ahead to expand its export options. Aziz Abdullah, the head of the Iraqi parliament’s Oil and Energy Committee, told Al-Monitor, “Talks between the [Iraqi] federal government and the [KRG] government on transporting oil via Ceyhan [Turkey] pipe have reached advanced stages.”

Ahmad al Askari, the head of the Energy Committee of the Kirkuk Provincial Council, believes those talks reflect Iraq’s “new direction not to solely rely on one window that could be shut on account of political disagreements.”

Speaking to Al-Monitor, Askari added, “Political and security concerns compelled Iraq to consider more than one means of exporting Kirkuk oil. Iraq started a pipeline to Turkey’s Ceyhan port that doesn’t go through the [Kurdish] region, besides the one that does go through the region. In addition, trucks have been moving to Iran since Iraqi forces took over Kirkuk.”

By John Lee.

A new report from the Washington Institute for Near East Policy says that Iraqi hydrocarbons “will either be exploited by Iran and its allies or used for Iraq’s own benefit, transforming the country into an energy export hub between the Gulf states, Turkey, and Europe. The United States has a strong strategic interest in promoting the latter outcome.

Authors James F. Jeffrey, a former US ambassador to Iraq and Turkey, and Michael Knights, who has worked extensively on energy projects inside Iraq, suggest that the US should put its weight behind a north-south energy corridor in which Iraq serves as an energy hub between ever-friendlier Gulf states and Turkey, ultimately forming an export bridge to Europe.

They add that Washington should also support the Basra-Haditha-Aqaba pipeline project to bring Iraqi oil and gas to Jordan.

The full paper can be read here.

(Source: The Washington Institute for Near East Policy)

By John Lee.

Iraq’s Minister of Electricity Qassim Mohammad al-Fahdawi has met with a visiting delegation from Tehran headed by Iran‘s Minister of Industry, Mine and Trade, Mohammad Shariatmadari.

They renewed for an additional year a contract under which Iran sells electricity to Iraq.

Through four major supply lines, Iran sends 1,000 megawatts of electricity to Iraq.

(Sources: Ministry of Electricity, Rudaw)