By John Lee.

Saudi Arabia’s King Salman has promised to build a football stadium in Iraq.

The news followed a friendly match between the two countries’ teams in Basra last week.

The Iraqi-Saudi Ministerial Coordination Council met on Monday to discuss the measures needed to improve cooperation in the economic, investment, cultural and other sectors.

(Sources: Asharq al-Awsat, Reuters)

By John Lee.

Saudi Basic Industries Corp (SABIC) is in talks to join Iraq’s Nebras petrochemical project, according to a report from Reuters.

An advisor to Prime Minister Haider al-Abadi told the news agency at the CWC Iraq Petroleum Conference in Berlin that talks are at advanced stage at ministerial level.

He said SABIC would enter as a fourth partner in the project, along with Shell and the Iraqi oil and agriculture ministries.

(Source: Reuters)

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Saleem al-Wazzan.

As Saudis Prepare To Open Basra Consulate, Iran Opens Border To Iraqis

Iraqis can now visit a special visa-free zone in neighbouring Iran, over the border from Basra. Some locals see the open border as a cynical economic and political move that helps Iran, but not Iraq.

An Iraqi passport is one of the most difficult in the world. Only a handful of countries will allow Iraqis to travel there without applying for a visa a long time in advance. But now, Iraq’s next-door neighbour, Iran, has opened some of the areas closest to Basra to Iraqis, that they may access without a visa.

The decision has been greeted with both enthusiasm and cynicism in Iraq. Locals in southern Iraq have often made pilgrimages into Iran for religious and medical reasons and they welcome the decision, even though it only applies to the areas of Khorramshahr and Abadan, which lie directly on the border. Meanwhile local businessmen say it’s a commercial decision that will mainly benefit Iran.

The decision has been made and now Iran is only waiting for the Iraqi government’s go-ahead, Ahmed Sayhaboush, head of mission at the Iranian consulate in Basra, said. He explained that the decision was made in the interests of encouraging friendly relations between the two countries.

Passports will still be stamped at the border, the head of communications at the Iranian consulate, Mohammed Ismail, explained. Iraqis will be able to stay in the visa-free border areas for up to a month and during that time, they can obtain a visa to travel further into Iran if they wish. There will be special crossing points in Khorramshahr and Abadan. Many Iraqis on religious pilgrimage like to go to the shrine of Imam Reza in the city of Mashhad, for example, but this is well out of the visa-free area.

The border authorities have decided to limit the entry times of Iraqis wishing to cross into the visa-free zones to between 6am and 5pm daily, Ali Yousef, a spokesperson for the Basra council, explained further.

“The Iranian move will increase the number of people moving between the two countries and this will benefit both nations” Jabbar al-Saedi, the head of the security committee on Basra’s provincial council, said. “We have however stressed the need to follow up on security controls to prevent any illegals crossing the border.”

One local from Basra, Mohammed Marhoun, believes that the visa-free zones will be good for business. He says he has already purchased a house and an apartment in Khorramshahr and says the process was relatively uncomplicated, compared to the bureaucracy he faced in Iraq. The number of visitors from Iraq into Iran means that there is more construction in border areas to accommodate visitors. The only problem, Marhoun said, was that one did have to have an Iranian name on the deed.

And he is not the only one utilising this opportunity, Marhoun points out. “Members of the provincial council and MPs from Basra have also invested in real estate in the visa-free zones,” he noted. “But they don’t want anybody to know about these investments, which are now being managed by Iranians.”

While businesspeople like Marhoun and investors in real estate might be pleased, there are some observers who are not so enthusiastic. They believe that the move will only benefit Iran in the long run.

It’s just another way to deplete Iraq’s currency reserves and to encourage more consumerism among Iraqis, says Nabil Jaafar Abdul Redha, a professor of economics in Basra. “Even if Iraq now allows Iranians to enter Iraqi cities without a visa nothing will change because there are no local products to be sold to them,” Abdul Redha argues. “So, the Iraqi economy is the loser in this process.”

“Iraqis might benefit from being able to go to Khorramshahr or Abadan and buying Iranian goods at slightly lower prices,” he concedes. “But overall, this does not benefit Iraq.” The main problem is that Iraq doesn’t produce much other than oil – it remains what is known as a rentier economy, one that is basically dependent on exporting oil to fuel its economy. Most manufactured goods are imported, in exchange for the money the oil raises.

“Our economy is not as diversified as Iran’s,” Abdul Redha tells NIQASH. “So, any commercial exchange with our neighbours – that includes Iran, Turkey or Saudi Arabia – tends to be one sided.”

There has been an influx of Iranians into Iraq in recent years for religious reasons. But that doesn’t outweigh the trade balance, he adds.

“The number of Iraqis entering Iran every day numbers between 2,000 and 3,000,” posits Abdel-Saheb Saleh, deputy head of an association for Basra’s businesses. “If we estimate that each of them will spend between US$100 and US$500 over there, that’s a good income for Iran.”

Saleh thinks the visa-free areas could be a positive for another reason. Iraq has been isolated for a long time due to security and political issues, Saleh says. This could be seen as a positive message to other regional governments who block the entry of Iraqis. “For example, a visa to visit Kuwait costs US$1,800 on the black market,” he complains.

Meanwhile local man, Ahmad Fadel, a civil society activist who recently visited what will be the visa-free zone, isn’t that impressed. For one thing, he says, the Iranian border guards treat the Iraqis crossing into their country badly. For another, there’s not much in Khorramshahr or Abadan that could really attract tourists. “The cities have poor infrastructure,” he notes.

And Fadel has another theory as to the reason behind the visa-free zones. He believes it may also be the Iranian reaction to Iraq’s new détente with Saudi Arabia, a country the Iranians tend to see as a geo-political rival. Saudi Arabia is about to reopen its consulate in new premises in Basra; it closed the original one way back in 1990.

By John Lee.

Saudi Arabia will reportedly re-open its consulate in Basra within two weeks.

Al Arabiya says that the consulate closed in 1990 during the second Gulf war.

(Source: Al Arabiya)

(Picture: Iraqi Prime Minister Haider Al-Abadi meeting Salman bin Abdulaziz Al Saud, King of Saudi Arabia, 19th June 2017)

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

The reconstruction of Iraq’s liberated Sunni areas will open new horizons for the country, as 400 companies worldwide are engaged in the Reconstruction Fund for Areas Affected by Terroristic Operations to restore life to areas freed of the Islamic State (IS). Iraq will need $100 billion from other countries for the project, according to Planning Minister Salman al-Jumaili.

Chief among those countries is Saudi Arabia, which will take this opportunity to stem what it sees as the rising tide of Iranian influence in Mesopotamia. Iraq looks to Saudi Arabia as one of the big players in this process and wants it to play a large role.

Iraqi Prime Minister Haider al-Abadi sent a letter Jan. 18 to Saudi King Salman bin Abdul-Aziz Al Saud asking for support. On the same day, Salman stressed Saudi Arabia’s willingness to help Iraq. He said Iraq is Saudi Arabia’s “brotherly” country — one that holds deep strategic importance for Saudi Arabia.

In another sign of Iraq’s outreach to Saudi Arabia, Iraqi parliament Speaker Salim alJabouri met Jan. 18 in Baghdad with Saudi Ambassador Abdul Aziz al-Shammari, who confirmed his country’s support for Iraq in this issue.

Saudi Arabia wants to strengthen its relationship with Iraq’s Sunnis but doesn’t want to distance itself from Iraq’s Shiites. Riyadh is working to return Iraq to a higher standing in the Arab world and reduce Tehran’s influence, which became entrenched after Saddam Hussein was toppled in 2003.

Salman al-Ansari, head of the US-based Saudi American Public Relation Affairs Committee, told Al-Monitor, “The size of Saudi Arabia’s participation in the reconstruction of the liberated areas is not bound by any financial ceiling. This will be proved during the Saudi participation in the conference of donor countries, which will be held in Kuwait between Feb. 14 and 16.”

Iraq expects 70 countries to take part in the donor conference, and Abadi has paved the way for the meeting by calling state leaders and explaining to them how much the reconstruction will cost.

Iraqi Planning Ministry spokesman Abdul-Zahra al-Hindawi told Al-Monitor the king has confirmed he will attend the conference but hasn’t disclosed how much Saudi Arabia plans to invest.

“Iraq is relying heavily on the role of Saudi Arabia in the reconstruction process because of Saudi Arabia’s economic and political clout in the region,” Hindawi said.

The political blocs of the liberated areas are on good terms with Saudi Arabia, which allows Riyadh to hit two birds with one stone: It can prove its good faith toward Iraq as a country and build the community base in those areas for pro-Saudi parties.

The two countries’ political relationship has seen progress in the past three years, and the Saudi support in restoring life to the liberated areas is expected to crown this rapprochement.

By John Lee.

Financial Times reports that Iraq will comply with OPEC-led efforts to restrict crude oil production, even as Saudi Arabia said it is striving to boost its export capacity.

It quotes Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] as saying that Iraq’s export capacity would reach 5m bpd by the end of this year, but adding that it will comply with OPEC declarations.

December output stood at 4.4 million bpd.

(Source: Financial Times)

By John Lee.

Saudi Arabia’s King Salman Bin Abdul Aziz received in Al Yamama Palace in Al Riyadh the Iraqi Planning/Trade Minister (acting) Dr. Salman Al Jumaily, Head of the Iraqi side in the Iraqi-Saudi Coordination Council, Dr. Sami R. Al Araji, Chairman of the National Investment Commission (NIC), Mr. Kadhim Mohamed Al Iqabi, Chairman of the Borders Crossings Commission, Engineer Adil Kereem, Vice Minister of Industry and Minerals and the Chargé d’affaires of the Iraqi Embassy to the Kingdom.

During the meeting, the importance of the council was emphasized in developing and enhancing the mutual cooperation between the two countries in various fields.

Prince Abdul Aziz Bin Saood Bin Naif Bin Abdul Aziz, Minister of Interior Affaires and Minister of Trade and Investment the head of the Saudi side in the Coordination Council both attended the reception.

(Source: NIC)

US-based Jacobs has signed a Memorandum of Understanding (MOU) with the Iraq Oil Company to explore mutual benefits of cooperation in the region of Basra, Iraq.

The vast majority of Iraqi oil production takes place in Basra. Iraq Oil Company is looking for business partners based in the Kingdom of Saudi Arabia to support economic and social development in the Basra region through investments in upstream, downstream, refining, and other sectors.

David Zelinski, Jacobs Petroleum and Chemicals Senior Vice President and General Manager Middle East, said:

Jacobs was selected as single engineering partner to sign this strategic non-binding agreement.

“We will explore possibilities to deliver our services in support of the Oil & Gas, Refining and Petrochemicals sectors in Iraq, from our Saudi Arabian office – where we have had a presence for more than 40 years – as this aligns well with the Kingdom’s Vision 2030 to increase the export of services.

The signage took place during a business event attended by HH Khalid Al Faleh, Minister of Energy, Industry and Mineral Resources of Saudi Arabia and Chairman of Saudi Aramco; Jabbar al-Luaibi, Iraq Minister of Oil; Asad Al Eidani, the Governor of Basra; and Abdulaziz Al Shammary, the Saudi Ambassador in Iraq.

The governments of Iraq and Saudi Arabia work closely together to establish a clear regulation and warrantees for potential investors in terms of protection, trading and financial transactions.

(Source: Jacobs)

By Alessandro Bacci.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Ministry of Oil has repeatedly said that it would like to renegotiate the terms of its service contracts with the international oil companies (IOCs) to link the fees the companies receive for developing the fields to the oil prices and to have them share the burden when oil prices decrease.

However, discussions between the federal government and the IOCs have been going on for the past two years with no tangible results until now. Companies affirm that they have submitted some recommendations, but then the process has not moved on.

At this point, it seems that to have a successful fifth licensing round, the federal government must produce in the coming months a new model contract (or at least an amended version of the present technical service contracts) capable of satisfying according to different price levels both the government and the IOCs.

Otherwise, it’s difficult for Iraq to reach the production target of 6 million bpd of crude oil by 2020, especially if other neighboring countries might soon offer better contractual terms.

Please click here to download the full report.

Alessandro Bacci is an independent energy consultant in relation to business strategy and corporate diplomacy (policy, government, and public affairs). Much of his activity is linked to the MENA region, an area where he lived for four years. Alessandro is now based in London, United Kingdom ( A multilingual professional, Alessandro holds a Bachelor of Laws and Master of Laws from the University of Florence (Italy), a Master in Public Affairs from Sciences Po (France), and a Master in Public Policy from the Lee Kuan Yew School of Public Policy (Singapore).    

By John Lee.

Saudi Arabian companies have signed 18 agreements with the Iraqi government to jointly develop several key projects in the energy sector.

The statement from the Iraqi Oil Ministry gave little detail, but quotes the Saudi Minister of Energy Khalid Al-Falih as saying that Saudi companies are keen to develop relations with Iraq, adding that several important Saudi companies will open their branches in Iraq to “achieve more bilateral cooperation and expand the size of investments in the sectors of oil, gas, industry, importing, infrastructure and [other sectors].”

According to Reuters, both petrochemical giant Saudi Basic Industries Corp (SABIC) and Saudi Arabia’s Industrialization & Energy Services Co (TAQA) are planning to open offices in Iraq.

(Sources: Iraqi Oil Ministry, Reuters)