Construction & Engineering In Iraq

Genel Energy Shares Up Sharply on AGM Statement

By John Lee.

Shares in Genel Energy were trading up 8 percent on Thursday morning after the company announced a big jump in cash reserves and positive developments at Peshkabir:

Stephen Whyte (pictured), Chairman of GenelEnergy plc gave the following update at the company’s Annual General Meeting this morning:

“After a landmark 2017, Genel is continuing to build momentum and generate significant amounts of cash, successfully progressing our strategy as we strive to create value for shareholders. Payments from the Kurdistan Regional Government (‘KRG’) have remained regular in 2018, and Genel has received over $100 million in the year so far. We are now approaching three years of consistent payments from the KRG.

“Our firm focus on capital discipline and identifying the best route to shareholder value creation has converted a material portion of these revenues into free cash flow, and our cash continues to grow at pace. This has led to a material improvement in our financial strength: as at 1 May 2018, unrestricted cash balances stood at $208 million ($162 million at 31 December 2017), with IFRS net debt at $89 million, a reduction of $46 million in the first four months of the year.

“Our disciplined capital allocation strategy targets those opportunities that can create maximum value for shareholders. Given the potential and performance of the Peshkabir field, this is the focus of our capital expenditure in the first half of 2018, as the field offers exciting near-term production upside.

“The first three of the six wells planned at Peshkabir have progressed on time and on budget. The Peshkabir-4 well is set to begin testing imminently, Peshkabir-5 has reached target depth and will be testing shortly, and Peshkabir-6 is drilling ahead.

“As the operator DNO has stated, production of 30,000 bopd is being targeted by the summer, doubling the 15,000 bopd from the field in the year to date – with the potential for more to follow. As Peshkabir cash flows benefit from the Receivable Settlement Agreement, and the oil price is continuing to show strength, this increase in production promises a further increase in cash flow from the Tawke PSC.

“Away from Peshkabir, the Tawke-48 well was brought onstream in April at more than 5,000 bopd, and additional development wells will follow in 2018 following mobilisation of a fourth rig. At Taq Taq, current gross production is just under 13,000 bopd, ahead of the resumption of drilling in the second half of the year.

“Our existing portfolio offers material growth potential, with Peshkabir the first of many opportunities, and we have the flexibility to move forward with those opportunities that can create the most value. Bina Bawi and Miran retain transformational potential, both in terms of gas and oil. The upstream part of the gas project has been materially de-risked and light oil at Bina Bawi offers an exciting opportunity, the progression of which is a key focus.

“As work continues to generate value from our current assets, we also have the financial strength to add assets that build on the strengths of our portfolio. Governed by strict investment criteria prioritising areas with low to moderate political risk while retaining a focus on significant cash generation, Genel has the potential to develop a rich funnel of opportunities and in turn fulfil our strategic ambition of being a world-class independent E&P creator of shareholder value.

“We have a clear strategy, material growth opportunities, and the right management team to deliver on that strategy.”

Genel will announce results for the six months ending 30 June 2018 on Tuesday 7 August 2018.

(Sources: Genel Energy, Yahoo!)

DNO Contemplates New Bond Issue

DNO ASA, the Norwegian oil and gas company with operations in Iraqi Kurdistan, is contemplating the issuance of a new, five-year senior unsecured bond with a minimum size of USD 400 million through a private placement.

The coupon rate and the issue size will be determined during the accelerated book building commencing today.

The net proceeds from the contemplated bond issue will be used towards the refinancing of DNO’s existing DNO01 bond (ISIN NO 0010740392) and for general corporate purposes.

Existing DNO01 bondholders that participate in the contemplated new bond issue will be given the opportunity to offer part or all of their DNO01 bonds at 103.25 percent of par plus accrued interest at settlement of the contemplated new bond issue.

Pareto Securities AS is acting as lead manager and bookrunner with Danske Bank and SpareBank 1 Markets AS acting as co-managers and bookrunners.

(Source: DNO)

Australia Increases Support to Stabilization in Iraq

Australia Substantially Increases Support to Stabilization in Iraq

The Government of Australia has contributed an additional USD 13.5 million (AUD 18 million) to the UNDP Funding Facility for Stabilization (FFS), which finances fast-track initiatives in areas of Iraq liberated from the Islamic State of Iraq and the Levant (ISIL). This brings Australia’s total contribution since 2015 to USD 16.5 million (AUD 22 million).

UNDP Resident Representative for Iraq, Ms. Marta Ruedas, said:

The progress being made is clearly visible across the country. Roads are being repaired, hospitals are reopening, electricity is being restored and people are returning to work. More than 60 percent of the almost 6 million people who fled during the conflict have returned home.

“UNDP deeply appreciates the timely and flexible funding provided by the Government of Australia, and while there remains a great deal of work to do, this generous contribution will help liberated areas get back on their feet.

The Australian Ambassador to Iraq, H.E. Dr. Joanne Loundes, said:

Australia is committed to the stabilisation and redevelopment of Iraq.  On top of restoring essential public services and rehabilitating critical infrastructure in liberated areas, the FFS prioritises projects that meet the needs of the most vulnerable, including women.  

“Gender equality and women’s empowerment is a core part of Australia’s foreign policy, economic diplomacy and development work and I welcome the opportunity to support work that directly contributes to this objective.

At the request of the Government of Iraq, UNDP established the Funding Facility for Stabilization in June 2015 to facilitate the return of displaced Iraqis, lay the groundwork for reconstruction and recovery, and safeguard against the resurgence of violence and extremism.

The Facility currently has more than 2,000 projects underway in 31 liberated cities and districts, helping local authorities to quickly rehabilitate essential infrastructure. Over 95 percent of all stabilization projects are carried out by local private sector companies, providing a key source of employment for local people.

(Source: UNDP)

Video: Corruption Watchdog says $320bn Stolen

From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

The parliamentary transparency commission in Iraq says $320 billion has gone missing in the past 15 years, because of government c.

It’s one of many big issues weighing on the minds of Iraqis as they prepare to vote for a new parliament on Saturday.

Al Jazeera‘s Imran Khan reports from Baghdad, Iraq.

Qatar Supports WFP’s Food Program in Iraq

Qatar Fund For Development Supports WFP’s Food Assistance Program in Iraq

The Qatar Fund For Development (QFFD) has made a contribution of US$3 million to the United Nations World Food Programme to provide assistance for displaced people in Iraq. The funding will support more than 22,000 Iraqis living in camps.

“The Qatar Fund For Development is committed to supporting displaced people in Iraq, providing them with their basic human needs, and giving them hope for a better future,” said QFD Executive Director of Corporate Strategy, Ali Abdulla Al-Dabbagh after signing the contribution agreement in London.

In urban areas with functioning markets, families will receive cash, allowing them to buy the food they need in line with their dietary requirements and preferences. In areas where local markets are not well established, WFP provides assistance through e-vouchers, which can be used in selected shops.

“We welcome this donation from the Qatar Fund For Development,” said Francis Mwanza, head of WFP’s London office. “Although some Iraqis have returned to their homes, others have lost all their possessions and face security threats, these people remain in camps and continue to need our support.”

WFP currently assists 570,000 displaced Iraqis in camps each month with food rations and cash-based assistance.

(Source: WFP)

Safe Drinking Water for 33,000 in Erbil Governorate

Access to safe drinking water is ensured for over 33,000 people in the Governorate of Erbil

The United Nations Development Programme (UNDP) and Erbil Governorate completed the rehabilitation of the main water treatment plant in Rawanduz sub-district, which provided safe drinking water to over 33,000 people, including 2,000 internally displaced people (IDPs).

With support from the Government of Germany, UNDP’s Iraq Crisis Response and Resilience Programme (ICRRP) and Erbil Governorate upgraded key components of the treatment plant, including construction of a pumping station, main transmission pipeline and water treatment unit.

The upgrade of the water treatment plant will help alleviate chronic shortages, ensure adequate supply of clean water and improve health conditions for the local population.

At a ceremony marking the completion of the project, the Minister of Municipalities and Tourism (MOMAT) for the Kurdistan Regional Government, H.E. Mrs.  Newroz Mawlood Amin, said:

“I feel very lucky to be here today to open the Bekhal-Rawanduz water plant. The project is delivering potable water in line with international standards, benefiting people living in Rawanduz district and surrounding villages.”

The Governor of Erbil, H.E Mr. Nawzad Hadi, said:

“This project has addressed a surge in demand for basic services caused by the influx of IDPs in many villages. We thank the residents of Rawanduz for their generosity in welcoming IDPs and we praise both host communities and IDPs for living peacefully in this area.”

The Mayor of Rawanduz, Mrs. Kwestan Qadir, added:

“Because of the poor quality of water, local communities, especially children, were suffering from waterborne diseases. This project will increase the supply of drinking water to households from 1.5 hours over two days to 24 hours a day/seven days a week. This is a remarkable achievement. We are confident that the improved access to safe water will prevent potential future outbreaks of water-related diseases.”

UNDP’s Programme Manager for ICRRP, Mr. Ashley Carl, noted:

“One of the first steps to recovery after a crisis is ensuring people have access to basic services. ICRRP is strengthening access to basic services and improving the life of vulnerable communities throughout Iraq. With donor support ICRRP has launched more than 30 new infrastructure projects across the country. We are glad to have contributed to such an important project focused on supporting local authorities in meeting the increased demands for essential services to at risk communities.”

UNDP’s Iraq Crisis Response and Resilience Programme (ICRRP) promotes the recovery and resilience of communities vulnerable to multi-dimensional shocks associated with large-scale returns and protracted displacement of Iraqis and Syrian refugees.

This is achieved through a medium-term, 24-36 month period of programming integrating crisis management capacity building, rehabilitating basic service infrastructure, livelihood recovery and social cohesion.

(Source: UNDP)

Kuwait’s Bu Khamseen Group to Develop Religious Sites

Mr. Jawad Ahmed Bu Khamseen, Chairman of the Kuwaiti Bu Khamseen Holding Group, said that Iraq represents a great gateway to religious tourism, which is an important pillar for Muslims in most parts of the world.

This important tourism sector has not been invested properly during the past periods of Iraq’s history where millions of visitors wish to carry out these holy rites annually. He added in his speech during the Iraq investment and reconstruction forum, held on April 26th  in Baghdad and after signing three memorandums of understanding with the National Investment Commission to set up hotels and shopping centers (Baghdad, Karbala, Samarra) that Iraq is a promising country and has the potential and huge economic resources that provide a fertile environment for successful investment and that the country has been exposed to successive wars, political and economic problems which contributed to the decline. Iraqi people and its political and economic leadership and management will overcome these issues.

He pointed out that the group was able, despite the difficulties and obstacles encountered during the past years represented by the security conditions and ISIS entry into Iraq and economic potential of the country being exhausted and wasted, to continue and move forward in projects represented by this grand edifice to serve visitors to the holy shrines in Iraq where The Grand Commercial Complex will be opened with two hotels (five stars) and operating in Najaf province at the end of this year.

He called on all investors to enter Iraq and participate in their investments according to their specialization especially after all obstacles and difficulties were removed and after Iraq has become a safe and stable investment environment.

(Source: NIC)

Japan Supports Development of Water Supply and Irrigation

JICA to Support Reconstruction through Development and Rehabilitation of Water Supply and Irrigation Facilities:

On 3 May, 2018, the Japan International Cooperation Agency (JICA) and the Iraqi Government signed two loan agreements at Ministry of Finance in Baghdad.

These two ODA (Official Development Assistance) loans, amounting to JPY 34,880 million (approximately USD 329 million) in total, will be used for Basrah Water Supply Improvement Project (II) and Irrigation Sector Loan (Phase 2).

The loan agreements were signed by Dr. Maher Hammad Johan, Acting Deputy Minister of Finance and Masayuki Hirosawa, Chief Representative of JICA Iraq Office, in the presence of H.E. Mr. Fumio Iwai, Japanese Ambassador to Iraq.  These concessional ODA loans aim to contribute to economic and social reconstruction of Iraq by supporting the Government of Iraq and Iraqi people in efforts to reconstruct and develop further the basic infrastructures for utilization of water resources.

The first loan, Basrah Water Supply Improvement Project (II) amounting to JPY 19,415 million (approx. USD 183 million), is the second tranche loan for Basrah Water Supply Improvement Project.  The entire project is intended to develop water supply facilities and to improve quantity and quality of water supplied in Basrah city and Hartha city.

A new treatment plant with a reverse osmosis plant and transmission system, including a reservoir and a pumping station, are under construction with the finance of the first tranche, the amount of which is JPY 42,969 million (approx. USD 350 million).  The second tranche will be utilized mainly for construction of transmission lines.  After the completion, approximately 600, 000 residents and businesses in the two cities are expected to have access to clean and reliable water.

The second loan, Irrigation Sector Loan (Phase 2) amounting to JPY 15,465 million (approx. USD 146 million), aims to improve agricultural productivity by construction and rehabilitation of irrigation/drainage facilities and restoration of farmland mainly in the Tigris and Euphrates river basin.

While agriculture is the main source of employment and livelihoods for rural population in Iraq, its productivity remains low due to drought in summer seasons, aged irrigation and drainage systems, and rising salinity level of soil and water, and reduced river inflow from the upstream countries. Following the previous first phase project in similar nature assisted by JICA, this second phase project is expected to contribute to increased agricultural production, reduced soil degradation, more job opportunities, and alleviation of poverty in rural areas.

These loans are very concessional with the low interest rates and long repayment periods: the interest rate of 1% and the repayment period of 20 years including 6-year grace period for Basrah Water Supply Improvement Project (II), and the interest rate of JPY 6-month LIBOR+0.15% and the repayment period of 25 years including 7-year grace period for Irrigation Sector Loan (Phase 2).

(Source: JICA)

$234m Resort to be built in Basra

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] (pictured) has announced the construction of a tourism and entertainment resort in Basra, to “honor and appreciate its role to support the national economy as a generous oil governorate.

The $234-million Muftiya City project has been awarded to an international holding company he named as Daiko.

The land to be used for the project is owned by the oil products distribution company.

According to information previously released by the Ministry of Oil, the 38-acre water city will included a waterpark, a leisure resort for families, and an aquarium. There will also be a zoo over 52 acres, a closed football stadium, Olympic swimming pool, sports and entertainment facilities, and restaurants.

(Source: Ministry of Oil)

Lucky Cement to Invest $109m in Samawah

By John Lee.

Pakistan’s Lucky Cement has announced a plan to build a greenfield clinker production facility in Samawah.

The plant will have a capacity of 1.2 million tons per annum, and will be set up as a joint venture project with the company’s existing local partner.

The company already has a cement grinding unit in Basra, which Iraq Business News understands is a 50/50 joint venture with the Al-Shawy family.

The project cost is estimated at $109 million and is subject to all regulatory/statutory approvals required under the law.

The project aims to start commercial production from the last quarter of calendar year 2019.

(Source: Lucky Cement)

(Picture: Muhammad Ali Tabba, CEO of Lucky Cement)