Shell to Exit Iraqi Oil Business

By John Lee.

Oil giant Shell is trying to sell its stake in the Majnoon oilfield (pictured) in southern Iraq, following a failure to reach agreement with Iraq’s Ministry of Oil.

A Shell spokesman told UAE-based newspaper The National:

“Following extensive discussions with the Ministry of Oil, the oil minister of Iraq formally endorsed a recent Shell proposal to pursue an amicable and mutually acceptable release of the Shell interest in Majnoon, with the timeline to be agreed in due course.”

Reuters quotes an oil official as confirming that the Ministry failed to reach an agreement with Shell over its Majnoon operations, including production plans and investments budgets. “We think it’s for the interest of all parties that Shell should withdraw,” he added.

A Shell spokesman told Reuters:

“In May 2017, the ministry of oil in Iraq applied the performance penalty and remuneration factor on the Shell operated venture, the Majnoon oil field, which had a significant impact on its commerciality.”

The company holds a 45-percent share in the project, with Malaysia’s Petronas holding 30 percent, and the Iraqi state-owned Maysan Oil Company having 25 percent.

Output from the field, which commenced production in 2014, is currently estimated at around 235,000 barrels per day (bpd), with a 400,000 bpd target by 2020.

Shell is also seeking to selling its stake in the ExxonMobil-operated West Qurna 1 oil field.

In addition to its oil interests in Iraq, Shell is a key player in the Basra Gas Company (BGC), a joint venture between the Iraq’s South Gas Company (SGC) (51%), Shell (44%) and Japan’s Mitsubishi (5%), which processes gas from the Rumaila, West Qurna and Zubair fields, which would otherwise be flared.

The National also quotes a Shell spokesman as saying that the company remains committed to this, and to its petrochemical project in Iraq:

“By leaving Majnoon, Shell will be in a stronger position to focus its efforts on the development and growth of the Basrah Gas Company and the Nebras Petrochemicals Project.

(Sources: Reuters, The National)

Study: Niche Markets and Growth Sectors in Northern Iraq

Iraq, and in particular northern Iraq, is rich in agricultural resources. Recent years, however, have seen an over-reliance on the oil sector to drive growth. In 2014, deteriorating security and conflict in Iraq, coupled with a dramatic fall in global oil prices, caused a severe economic recession in the country.

The Government of Iraq and the Kurdistan Regional Government faced severe fiscal crises whilst millions of displaced Iraqis and Syrians depended on humanitarian support.

Through the Iraq Crisis Response and Resilience Programme (ICRRP), the United Nations Development Programme (UNDP) is assisting in both crisis response and economic recovery, and is seeking to promote development by building a resilience framework.

With the security and economic crises affecting millions, livelihoods programmes can help to provide diverse and sustainable employment opportunities to promote economic growth. Agriculture programmes in particular have value-added opportunities to lead this growth. However, structural challenges remain an obstacle.

UNDP’s ICRRP evaluated the performance and potential of promising niche markets to map the value chains, identify activities that can be established or expanded locally and, finally, inform further tailored livelihood interventions to be undertaken within the selected sectors by partners, the private sector, and government bodies.

The analysis of niche markets provides valuable information in terms of the existing gaps, constraints and potential opportunities, including linking with existing initiatives and commercial interests. This will help to boost market performance either by establishing a new activity within the value chain that currently relies on imports, or by supporting and modernizing existing activities. This study has been made possible by the generous support of the Government of Japan.


  • Demand for fresh flowers, decorative plants and greening of urban areas has grown, especially in the Kurdistan Region of Iraq
  • Products originating from fruit, such as juice, dried/dehydrated fruits, canned fruits and jams are popular
  • The domestic fresh herb sector is small and fragmented, with the products mainly imported
  • Regarding all three niche markets, production tends to be small-scale, relies on conventional methods, and can be modernized to vastly improve productivity
  • All sectors offer employment potential for targeted populations: internally displaced people, refugees, host community members, youth and women

The full report can be downloaded here.

(Source: UNDP in Iraq)

Japanese Loan Boosts Output at Hartha Power Station

Unit No.4 of the Hartha Thermal Power Station has re-started operations and is supplying 200MW of electricity to the grid, following rehabilitation works funded with the Japanese ODA loan.

A completion ceremony was held on 7th September, attended by Mr. Adel Kadhim Jaryan, Deputy Minister of Electricity, Representatives of Basra Governorate, officials of Ministry of Electricity, H.E. Mr. Fumio Iwai (pictured), Japanese Ambassador to Iraq, and Mr. Yuho Hayakawa, Chief Representative, Japan International Cooperation Agency (JICA) Iraq Office.

JICA described the re-start as “well ahead of the original construction schedule, thanks to outstanding endeavours jointly made by Ministry of Electricity and the Contractor (Joint Venture of Mitsubishi-Hitachi Power Systems [MHPS] and [Turkish firm] GAMA).

The Hartha Thermal Power Station (HTPS), with four units of 200 megawatts (MW) each, was originally built to generate 800 MW in total. The power station, one of the largest in Basrah Governorate, was built in 1982 by the Japanese companies with Japan’s financial assistance. However, due to aging as well as serious damage during past conflicts, two of the four units have been inactive for several years.

The remaining two units — No. 1 and No. 4 — have continued in operation due to the maintenance efforts of the staff of Ministry of Electricity, in spite of huge deterioration in their generation capacities and frequent disruptions.

JICA signed an ODA loan agreement in the amount of 20,224 million yen ($194 million) with the Iraqi Government on 23rd February, 2015, to facilitate the rehabilitation of Unit No. 4, and has financially supported the project since then. The loan has an interest rate 0.8 percent per annum for the rehabilitation works, and 0.01% per annum for the consulting services, and its repayment period is 15 years including a grace period of 5 years.

The project increases the annual power generation of the Unit from 860 GWh to 1,489 GWh, which is equivalent to the total electricity consumption of 800,000 Iraqi people for one year; it also helps to stabilize electricity supply.

Assistance to the electricity sector is one of the pillars of JICA’s cooperation to Iraq. In addition to support for Unit No. 4, JICA also signed an ODA loan on August 5, 2017 for rehabilitation of Unit No. 1 of Hartha Thermal Power Station.

Since 2008, JICA has signed seven loan agreements for electricity projects in Iraq including the one signed on August 5, 2017, amounting to 196.648 billion Japanese yen (equivalent to approximately $1.8 billion) in total. These loans are used for the rehabilitation and development of four power plants, and transmission and distribution facilities, all over the country.

In addition to the financial cooperation, more than two thousand Iraqi officials have participated in the JICA’s training programs for capacity building of the electricity sector since 2003.

(Source: JICA)

Iraq signs $270m Loan from Japan

Iraq has signed for receiving a Japanese loan worth USD270 million according to a statement from the Japanese Embassy in Iraq.

The loan is designed to improve Iraq’s financial situation and to help the country proceed with reforms, the statement by the embassy said, noting that it comes as a second tranche of a USD500 million Japanese financial assistance commitment.

The statement said falling world oil prices and spending on defence and refugee relief portfolios had largely reduced the country’s budget resources. It also pointed to earlier assessments by the International Monetary Fund (IMF) which estimated Iraq’s budget deficit for 2016 by 14.1% and public debt for the same year by 6.99% of the GDP.

In February, Japan approved a loan of about $100 million to support humanitarian, counter-terrorism and infrastructure projects in Iraq.  In January, Japan agreed to lend Iraq up to 27.2 billion yen ($240 million) to rebuild damaged electricity infrastructures in areas recaptured from Islamic State militants.

(Source: GardaWorld)

$191m Japanese Financing for Power Plant

On August 5, the Japan International Cooperation Agency (JICA) under the Government of Japan signed a loan agreement with the Government of the Republic of Iraq in Baghdad to provide a Japanese ODA loan of up to 21.556 billion yen (equivalent to approximately USD 191 million[1]) for the Hartha Thermal Power Station Rehabilitation Project (Phase 2).

At the signing ceremony at the government palace in Baghdad, the loan agreement was signed between Dr. Maher Hammad Johan, Acting Deputy Minister of Finance and Mr. Yuho Hayakawa, Chief Representative of JICA Iraq office in the presence of H.E. Dr. Haider Al-Abadi, Prime Minster of Iraq, Mr. Kentaro Sonoura, Special Advisor to the Prime Minister of Japan, and H.E. Mr. Fumio Iwai, Japanese Ambassador to Iraq.

This concessional ODA loan, with the interest rate of JPY LIBOR +0.05% (variable) for the main portion and fixed 0.01% for the consulting services and with the repayment period of 15 years (including 5 year grace period), is provided based on the Exchange of Notes between Iraqi and Japanese Governments just signed on the same day.

The Hartha Thermal Power Station, with four units of 200 megawatts (MW) each, was originally built to generate 800 MW in total.  The power station was constructed as one of the largest power plants in Basrah Governorate by the Japanese companies with Japan’s financial assistance in 1982.

However, due to aging as well as serious damages during the wartimes in the past, operations of the two units, out of the total four units in the station, have been fully suspended for years.  The remaining two units, that is, Unit No. 1 and No. 4, have continued their operations by great maintenance efforts of the staff of Ministry of Electricity in spite of huge deterioration of their generation capacities and frequent disruptions of power production.

UNDP Improves Access to Safe Water in Sulaimaniyah

The United Nations Development Programme (UNDP) and Sulaimaniyah Governorate completed the rehabilitation of the main water network providing safe drinking water to hundreds of thousands of people.

UNDP’s Iraq Crisis Response and Resilience Programme (ICRRP) and Sulaimaniyah Governorate repaired key components of the main pipeline that transfers water from Dukan Lake to Sulaimaniyah Governorate. Pumping stations and a treatment plant were also rehabilitated to help alleviate water shortages and ensure an adequate supply of clean water to households in the Governorate.

At a ceremony on 5 July 2017 marking the completion of the project, Governor of Sulaimaniyah H.E. Omer Ahmed Amin, said:

“In Sulaimaniyah, one in every eight residents is an internally displaced person. The influx of displaced people is putting considerable pressure on public services, in particular water, electricity, health, and education. This project is providing a key service to all women, men and children in Sulaimaniyah.”

The Head of the Consular Office of Japan in Erbil, Mr. Moriyasu Katsumi, said:

“Japan is honoured to be a partner of this important project. We are delighted to see that all inhabitants of Sulaimaniyah, including internally displaced people and Syrian refugees, will equally benefit from improved access to the water supply.”

UNDP’s Programme Manager for ICRRP, Ms. Mizuho Yokoi, noted:

“Water is essential for life. We are glad we contributed to such an important basic service project focused on improving the well-being of vulnerable communities. We thank the Sulaimaniyah Governorate for their cooperation and the Government of Japan for the generous contribution which made this project possible.”

The first step to recovery, after a crisis, is ensuring people have access to basic services. UNDP’s ICRRP is supporting local authorities to deliver services that are fundamental to daily life. Over 2.4 million people in Iraq have access to improved basic services like water, electricity, health, education, sewerage and roads thanks to UNDP.

(Source: UNDP)

Displaced Iraqi Youth learn Job Skills

With support from UNDP and Toyota Iraq, displaced Iraqi youth learn job skills and regain hope for a better life

More than three million Iraqis are currently displaced as a result of the protracted conflict in Iraq.

The experience of displacement has been particularly difficult for young people, whose education and employment opportunities have been upended. Immediate support is urgently needed to provide these young people with income opportunities to help them restart their lives and rebuild their country.

The United Nations Development Programme (UNDP) and Toyota Iraq joined hands in 2016 to provide young displaced Iraqis with access to sustainable income opportunities. Under this flagship programme, UNDP’s Iraq Crisis Response and Resilience Programme (ICRRP) refers potential candidates to Toyota Iraq. The Toyota Iraq team provides top class vocational and on-the-job training whilst ICRRP facilitates job placement, if Toyota Iraq cannot recruit them, in local companies.

The first group of youth graduated in basic vehicle maintenance in January 2017, whilst the second group graduated in customer relationship management and automotive parts storekeeping in June 2017. A third group will begin in August 2017.

This programme also provides job opportunities for women affected by the crisis in Iraq, enabling them to go beyond their gendered role as caretakers. One of the women trainees, Taghrid Hassan, 29, from Mosul, said:

We thank you for this training; we have benefited so much from it. We have learned how to deal with different clients, and how to respond to their requests by phone and by email in a professional way. I am confident that the new skills I have acquired at Toyota Iraq will increase my chances of finding a job in the customer care field.

UNDP’s Assistant Administrator and Director of the Regional Bureau for Arab States, Mr. Mourad Wahba, visited Sumitomo Corporation, shareholder of Toyota Iraq, in Tokyo on 28 June 2017. He discussed with Mr. Naoki Hidaka, Executive Vice President of Sumitomo Corporation, the partnership between UNDP and Toyota Iraq.

Mr. Wahba said:

“Partnership between UNDP and leading private sector companies, such as Toyota Iraq, can play a key role in enhancing resilience of young people and empowering them as change makers in Iraq. UNDP is proud to work with Toyota Iraq in the implementation of this successful vocational training and job placement programme. It will help displaced Iraqi youth rebuild their lives.”

Mr. Hidaka said:

“Iraq is a special country for us, Sumitomo Corporation. We have been exporting Toyota and Hino products since the 1960s. We would like to contribute to a sound and sustainable development of the Iraqi society through our business activities. We continue to provide more education opportunities to Iraqi people together with UNDP.”

Some of the trainees who have successfully completed the vocational training programme have been recruited by Toyota Iraq, like Omar Hussein Ali, 27, from Ramadi. He said:

“I have a degree in mechanical engineering but had no working experience in this field. This programme helped me gain hands-on experience in vehicle maintenance. I am so glad I found a job at Toyota Iraq. With my steady salary, I can pay off my debts and provide for my twins and my wife.”

UNDP’s ICRRP and Toyota Iraq are committed to continuing this partnership to support Iraqi youth to create a brighter future.

(Source: UNDP)

UNIDO, Japan support Projects for Economic Recovery

UNIDO and Japan support two projects for economic recovery and social stabilization in Iraq

The United Nations Industrial Development Organization (UNIDO) and the Government of Japan have agreed to launch two projects in Iraq to lift the burden on the local communities affected by the influx of people who have had to flee their homes because of continuing violence and insecurity.

The projects respond to the United Nations Secretary-General’s appeal for more help to the people who have “suffered enormously and go on suffering”.

Japan’s financial contribution will enable integrated stabilization, economic recovery and reconstruction support for internally displaced persons (IDPs),  returnees and Syrian refugees in Iraq through vocational and agricultural skills training and concrete measures to develop small and medium enterprises.

The projects will assist the Government of Iraq in addressing the humanitarian and development challenges in the context of the military operations against the Islamic State of Iraq and the Levant (ISIL) in Mosul City. They will bring relief to the internally displaced people from Mosul City and their host communities in the Kurdistan region of Iraq.

According to the Iraqi authorities, around 669,000 people remain displaced from Mosul, some 460,000 of whom are from western Mosul. The United Nations Human Settlement Programme (UN-Habitat) confirms that the damage suffered by public and private infrastructure in western Mosul is two and a half times greater than in the eastern districts.

The first project has two components. One aims to promote resilience and economic stability by supporting micro-, small- and medium-sized enterprises in newly liberated areas and the corridor of the Ninewa (and/or in the Erbil, Kirkuk and Saladin Governorates), and strengthening the capacity of government institutions to facilitate vocational training programmes for IDPs, refugees and returnees.

The project is in line with the priorities and targets of the cluster for emergency livelihoods and social cohesion, and complies with the Humanitarian Response Plan for Iraq.

The second project will develop agro-based  industries in the Erbil Governorate, Kurdistan Region. It will promote and strengthen food and agro-processing enterprises starting at the farm- and household-level by engaging Syrian refugees, IDPs, host communities and the private sector.

The Ministry of Planning, the Ministry of Agriculture and Water Resources, as well as the Ministry of Industry of the Kurdistan region, are the government partners in this endeavour. The project will operate in Baharka, Shaqlawa and the Syrian refugee IDPs camps in the Erbil Governorate.

(Source: UN)

Japan give additional $16.7m to Stabilization in Iraq

Japan contributes additional US$16.7 million to stabilization and resilience in Iraq

The Government of Japan has contributed an additional US$16.7 million to UNDP’s Funding Facility for Stabilization (FFS) and Iraq Crisis Response and Resilience Programme (ICRRP) to promote stabilization, recovery, and resilience-building in areas liberated from the Islamic State of Iraq and the Levant (ISIL), and in areas with large displaced populations.

This new funding brings Japan’s total contribution to FFS and ICRRP close to $60 million since 2014.

Based on priorities identified by the Government of Iraq and local authorities, FFS helps quickly repair public infrastructure, provides grants to small businesses, boosts the capacity of local government, promotes civil engagement and community reconciliation, and provides short-term employment through public works schemes.

Japan’s additional contribution to FFS will support the rapid rehabilitation of key infrastructure and provide livelihood support in newly liberated areas, including in Mosul.

Japan’s contribution to ICRRP will support grants to small businesses, employment activities and the rehabilitation of infrastructure and housing in areas with large populations of displaced people as well as in newly liberated areas. Funding for ICRRP will also be used for community reconciliation and peace education amongst different ethnic and religious groups.

Japan Provides Support to Iraq’s Community Police Centers

The Government of Japan is continuing to support activities of UNOPS in the Middle East region, providing new funding of over USD 16 million, of which USD 3,122,500 are dedicated to those in Iraq.

The “Improving the Impact and Effectiveness of Community Police in the Newly Liberated Areas in Iraq” project will be implemented by the United Nations Office for Project Services (UNOPS), in partnership with the Government of Iraq and the Office of the High Commissioner for Human Rights in Iraq.

This project will support the community police centers in selected newly liberated areas of Iraq, in contribution to the stability in Iraq.

The project will support the construction of pre-fabricated caravans or rehabilitation of community police centers, procurement of necessary equipment and vehicles, and provision of training to improve the impact, effectiveness of new and existing police officers with improved sensitivity on human rights and gender.

H.E. Mr. Fumio Iwai, Ambassador of Japan to the Republic of Iraq, said, “Japan assists not only IDPs and refugees from humanitarian aspect but also those returning to the liberated areas for their stabilization through this project, in conjunction with demining projects to eradicate the threat of improvised explosive devices”, praising the responses by UNOPS to security challenge.

(Source: United Nations News Centre)