By John Lee.

According to Miriam Malek, writing for S&P Global Platts, Iraq is again becoming a viable destination for energy investment after the final defeat of Islamic State and the election of a new government revived interest in the region’s second-largest oil producer.

The US, Qatar, Saudi Arabia and Iran are now vying for a share in the spoils.

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(Source: S&P Global Platts)

Saudi Arabia’s Industrialization and Energy Services Company (TAQA) has announced that its drilling subsidiary, Arabian Drilling Company (ADC), has agreed to acquire Schlumberger’s Middle East onshore drilling rigs business in Kuwait, Oman, Iraq and Pakistan for $415 million (SAR 1.56 billion).

According to a TAQA press release, the transaction transforms ADC into a regionaldrilling leader with one of the largest rig fleets, client portfolios and geographic footprints in the Middle East. ADC, a drilling rig partnership between TAQA and Schlumberger, was established in 1964 through a royal decree.

Through this expansion, ADC, Saudi Arabia’s current market leader and drilling national champion, will become an industry powerhouse, operating a superior fleet of 58 onshore rigs and 9 offshore rigs across the MENA region. The combined firm will have more than 5,900 employees and builds on ADC’s long-standing reputation of reliably serving national and international oil and gas companies for over 55 years.

The transaction will combine the outstanding track records of the parties with respect to operations, quality of service, health, safety and environment. It will also create economies of scale and cost synergies, making ADC a regional leader, encompassing a diversified, multi-country and multi-client offering.

For TAQA, the expansion represents a major step forward in its ongoing group-wide transformation and growth strategy. TAQA’s 2021 strategy is to become a leading regional oilfield services and equipment (OFSE) company and is based on three key pillars:

  1. creating value by strengthening the position and growth of its existing businesses and expanding into higher-tier services and new markets,
  2. sustaining value by providing differentiated, best-in-class client services and safety, using the latest technologies, and,
  3. realizing value and greater operational efficiencies by delivering more integrated client services that are safe, reliable and competitive.

“This acquisition is fully aligned with Saudi Vision 2030. It unlocks value and drives growth across our entire value chain through a more integrated regional approach, while positioning a leading Saudi company as a global player,” said TAQA chief executive officer Azzam Shalabi, who is also chairman of the ADC Board.

He said the transaction also follows on from ADC’s accelerated expansion activity in 2018 when 16 rigs were commissioned to support the growth of Saudi Aramco.

“This new combination clearly demonstrates that TAQA and ADC are delivering on their transformation and growth strategies, and further strengthens what is already a long-standing and trusted partnership between TAQA and Schlumberger. We look forward to supporting ADC in the next phase of its expansion and have full confidence that this will benefit all stakeholders, most notably our regional clients,” he added.

The transaction is expected to close in the second half of 2019, subject to regulatory approvals.

Moelis & Company acted as exclusive financial advisor to TAQA, and Rothschild & Co. acted as exclusive financial advisor to Schlumberger.

(Source: TAQA)

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.

Iraq struggles to distance itself from US-Iran tensions

Iraq is trying hard to dissociate itself from the rising hostilities between Iran and the United States, as it hopes to preserve its national interests without aligning with either axis in the conflict.

Following his recent visit to Iran, Iraqi Prime Minster Adel Abdul Mahdi announced April 9 that he will soon visit Saudi Arabia to sign economic and security agreements, as Iraq has done with Jordan and Iran.

A high-ranking Saudi delegation visited Iraq last week and signed several agreements, including ones involving electricity imports to Iraq and the construction of a large stadium.

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By John Lee.

Iraq and Saudi Arabia have signed 13 political and economic agreements during the visit by Prime Minister Adel Abdul Mahdi to the Saudi capital Riyadh.

According to Reuters, Iraqi Oil Minister Thamer Ghadhban has said that Saudi state-owned oil giant Saudi Aramco will help Iraq explore for gas in the western desert.

Saudi Arabia cut ties with Baghdad after it invaded Kuwait in 1990, but the new moves are seen as a sign of improving relations between the two countries.

(Sources: Office of the Iraqi Prime Minister, The National, Reuters)

By John Lee.

The state-owned Trade Bank of Iraq (TBI) will reportedly open its first operational branch outside Iraq on Thursday.

Chairman and President Faisal Al-Haimus told Arab News that the new branch in Saudi capital Riyadh will also be the only active Iraqi bank in the Kingdom.

(Source: Arab News)

Saudi Minister of Commerce and Investment, Dr. Majid Bin Abdullah Al-Qasabi, said that Iraq has offered Saudi companies and investors 186 investment opportunities.

Speaking at a joint press conference with Iraqi Deputy Prime Minister, Thamir Al-Ghadhban, Al-Qasabi said the two countries have decided to set up a joint Saudi-Iraqi business council to exchange investment opportunities.

He pointed out that the business council will be signed during Iraqi Prime Minister Adel Abdul Mahdi’s upcoming visit to Riyadh.

The two countries have also decided to establish a free trade zone.

For his part, Al-Ghadhban said “the Saudi-Iraqi Coordination Council has discussed a number of issues while the committees have completed preparing some files that will be signed in Riyadh.”

(Source: Middle East Monitor)

By John Lee.

Saudi Arabia’s King Salman has reportedly committed a grant of $1 billion to build a sports city in Iraq.

A high level Saudi delegation traveled to Baghdad on Wednesday for meetings with Iraqi officials on trade and investment.

(Sources: Arab News, Reuters)

By John Lee.

The General Company for Land Transport (GCLT) has held a meeting with its Saudi Arabian counterpart to discuss the opening of the Arar border crossing between the two countries.

According to a statement from Iraq’s Ministry of Transport, the participants stressed the importance of the new border facility for commercial trade and religious tourism.

A report this week from Asharq al-Awsat quotes the Chairman of Saudi Arabia’s General Customs Authority, Ahmed al-Hakbani, as saying that the new crossing will be equipped with state-of-the-art technology and meet international standards, adding that he expected it to become “the top global crossing in terms of technology.”

(Sources: Iraqi Ministry of Transport, Asharq al-Awsat)

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.

Riyadh woos Iraqis with security talks, economic projects

Falih al-Fayadh, head of the Popular Mobilization Units and Iraq’s national security adviser, visited Saudi Arabia Jan. 31 in a sign of the new and improved ties between the two countries.

As Fayadh is close to Iran and widely viewed as a pro-Iran candidate for interior minister in the government of Prime Minister Adel Abdul Mahdi, his visit aimed to reassure Riyadh that the PMU will target neither it nor its interests in Iraq.

A few days before Fayadh’s visit to Saudi Arabia, Riyadh renewed its support for Baghdad, especially in terms of security, in a Jan. 24 phone call between Saudi Crown Prince Mohammed bin Salman and Abdul Mahdi.

In light of the tension prevailing over the region, the phone call emphasized Riyadh’s desire to make up for the past and create a positive relationship with Iraq.

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

Saudi media group MBC announced in early February that it will launch a new TV channel — MBC Iraq — aimed at Iraqi viewers. Soon after the announcement, a number of angry responses emerged in the Iraqi media and among political figures, which led MBC to defend its plan.

The MBC group generally produces entertainment shows and social content, which will also be aired on MBC Iraq that is scheduled to launch on the evening of Feb. 17.

MBC’s television operations are funded by Saudi businessmen, many of whom are close to the Saudi royal family.

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