Russia


Iraq Considers Importing Wheat from Russia

By John Lee.

Iraq reportedly wants to allow Russian-origin wheat to be bought in its state tenders to supply the country’s massive food rationing programme.

According to Reuters, the Trade Ministry will send a delegation to Russia before the end of the year to study the suitability of its wheat for Iraq’s needs.

Iraq needs between 4.5 million and five million tonnes of wheat annually, of which about two million tonnes is imported.

(Source: Reuters)

Oil Production to Start at Block 10 in 2021

By John Lee.

Russia’s Lukoil will start production at Block 10 in 2021, according to a report from Platts.

The Chinese company Bohai has started to drill the 4th well at the block in southern Iraq.

In February 2017 Lukoil announced Iraq’s largest discovery of oil for twenty years at the Eridu field in Block 10, with recoverable reserves in excess of 2.5 billion barrels of crude.

(Source: Platts)

(Picture: Seismic Survey at Block 10)

Iraqi Airways carries 9,200 Passengers between Iraq, Russia

By John Lee.

Iraqi Airways has reportedly carried 9,200 passengers between Iraq and Russia in the first 12 months of operating flights.

According to rusaviainsider.com, this consisted of 5,200 inbound to Russia and 4,000 outbound.

The majority of those passengers flew between Moscow’s Vnukovo Airport and Baghdad, with the rest flying between Vnukovo and Basra.

(Source: rusaviainsider.com)

SNC-Lavalin awarded West Qurna 2 Contract

Canadian-based SNC-Lavalin (TSX:SNC) has announce that it has been awarded a framework agreement for project support services with LUKOIL Mid-East for the West Qurna phase 2 oil field in Iraq.

Christian Brown (pictured), President, Oil & Gas, SNC-Lavalin, said:

“We continue to build on our long-term relationship with LUKOIL and to help them realize their projects successfully.”

SNC-Lavalin’s scope will include the provision of engineering, design activities and project support services for the development of the Mishrif and Yamama formations of the West Qurna 2 oil field, as well as training and continued professional development for local Iraqi professionals.

The project will be executed in country at the West Qurna phase 2 oil field, as well as from the UAE.

The West Qurna Phase 2 oil field is located in the southern part of Iraq, 65 kilometers north-west of Basra, a major seaport city, and is one of the world’s largest fields. West Qurna Phase 2 is split into three main phases, two phases for the Mishrif formation and one for the Yamama formation.

The required surface facilities for Yamama and Mishrif include major elements such as well pads, oil gathering flowlines, headers and trunklines, a central processing facility and its associated utilities and offsites, oil/gas/liquid petroleum gas export pipelines, additional storage tanks at an existing facility, power plant, water intake and supply pipelines.

(Source: SNC Lavalin)

New Tenders for Development of West Qurna-2

By John Lee.

Russian oil company Lukoil has published tenders for two projects at its West Qurna-2 oilfield:

Interested companies have until 23rd July to apply for documents, and bids will be accepted until 23rd August.

(Source: Lukoil)

Rosneft, KRG sign Gas Development Agreement

As part of the XXII St. Petersburg International Economic Forum, Rosneft and the Kurdistan Regional Government of Iraq signed an agreement securing the intention of the Parties to make a detailed analysis of potential gas cooperation options.

The Parties ensure stepwise implementation of the arrangements following the Investment Agreement signed at the XXI St. Petersburg International Economic Forum.

Rosneft will focus its analysis on how to participate in the integrated gas business value chain in the region in order to extract maximum efficiency from investments and operations in such areas as exploration and production, transportation and trading with especial attention given to partnership and project (third party) financing options.

Under the Agreement the Parties will elaborate an integral plan to progress the gas business within the Kurdish Region of Iraq. One step in this plan is the conduct of a pre-FEED of Iraqi Kurdistan’s gas pipeline construction and operation.

This is a key project to the monetization of the exploration and production opportunities Rosneft has been evaluating since signing a Gas Cooperation Agreement with the Kurdistan Regional Government of Iraq at the 10th Eurasian Economic Forum in Verona on 19 October 2017.

Following the outcomes of the integral development plan in terms of the attractiveness and efficiency of the options, Rosneft will decide on how to participate in the regional gas business.

(Source: Rosneft)

Rosneft Discovers Oil at Block 12

By John Lee.

Bashneft, a subsidiary of Russia’s Rosneft, has found oil at its Salman-1 exploratory well at Block 12 in Iraq.

In a statement, the company said that an exploration well was successfully drilled to depth 4,277 metres; oil was found, “which gives grounds for expecting the discovery of industrial reserves“.

Rosneft said it views this discovery as an important milestone in the development of exploration and production projects abroad.

China-based company Zhongman Petroleum and Natural Gas Group (ZPEC) was previously announced as the general drilling contractor.

(Source: Rosneft)

New Development Plan for West Qurna-2

LUKOIL and the Basra Oil Company (BOC) signed a Development Plan for the West Qurna-2 field that provides for an oil production plateau of 800 thousand barrels per day.

According to the Plan, the oil production of 480 thousand barrels per day will be reached in 2020 and 800 thousand barrels per day is expected in 2025.

These indicators will be achieved as a result of drilling and commissioning of new production and injection wells, construction and launching of oil treatment, storage and transportation facilities and facilities for gas treatment and power generation.

The experience acquired by the Company in the region, the existing infrastructure and cost compensation within the project development from the current production will ensure maximum efficiency of the project implementation.

The parties noted that due to the agreements reached, LUKOIL will remain one of the largest investors and employers in Iraq in the coming years. ​

(Source: Lukoil)

Moscow’s Iraq Strategy: Make Lots of Friends

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

Moscow’s interest in the Middle East and the growing Russian presence in the region go beyond Russian involvement in the Syrian civil war. For several years Russia has been building partnerships with various regional powers, and Iraq — with parliamentary elections only days away — has been a priority.

The Soviet Union helped Iraq industrialize its economy and was the country’s largest weapons provider until the union collapsed in 1991. Iraq’s invasion of Kuwait and the subsequent Western sanctions against it interfered with the Russia-Iraq weapons relationship. Then, after the US-led coalition’s overthrow of Iraqi President Saddam Hussein in 2003, Iraq got most of its weapons from the United States.

Under President Vladimir Putin, Russia has been trying to gradually rebuild its ties with Iraq on numerous levels. Moscow sees Iraq’s May 12 parliamentary elections as an opportunity to breathe new life into relations to create a comprehensive partnership.

In 2014, as Islamic State militants neared Baghdad and the Iraqi government couldn’t immediately receive the arms it needed from the United States, Moscow jumped on the opportunity to provide “without delay” the weapons and equipment needed, including aircraft. Maxim Maximov, Russia’s ambassador in Iraq, later commented that the deliveries represented a long-term commitment.

“We have always said that we are ready to give this country various types of assistance in strengthening its army,” Maximov said in a February interview with Interfax. “The Russian military industry has already provided the Iraqi government with a massive installment of weapons that proved their efficiency in battles against [IS], including MI-35M and MI-28N helicopters, Su-25 jet aircraft, Kornet-E anti-tank guided missiles and other military products.”

Some vital 2017 contracts for T-90 tanks are now being filled. There have been reports that Iraq is going to buy Russian S-400 surface-to-air missile defense systems, but Iraq’s ambassador to Moscow, Haidar Hadi, has denied that possibility.

Russian energy companies operating in Iraq are another critical tool for Moscow. These companies had been in Iraq long before the United States invaded in 2003 and had bid on oil and gas projects. Currently, there are two companies developing such projects in Iraq: Gazprom Neft Middle East and Lukoil.

Business for Russia’s Rosneft corporation is still uncertain. The company had contracts in the Kirkuk oilfields with the Kurdistan Regional Government, but when Baghdad overtook Kirkuk last year, the Iraqi Oil Ministry renounced those deals. Negotiations are still possible according to Russian business media reports, but the company has not confirmed the news.

Iraq is important for Russia not only as an economic and trade partner, but also as a factor in influencing regional policy. Russia clearly understands that its possibilities in the country are limited, as Iran and the United States are the main foreign players with direct influence on Iraq. Saudi Arabia, which took a number of steps to reinforce its influence in the country in the past year, still lags behind.

China, Iraq’s key economic partner, keeps a rather low profile regarding Iraq’s domestic politics. What’s important for Russia is that Iran partially and cautiously supports Baghdad’s collaboration with Moscow and the United States doesn’t openly oppose it.

That said, it’s not quite accurate to think Tehran is the one inviting Moscow to Iraq, hoping to create a counterbalance to Washington. In recent years, Baghdad politicians have increased their ability to implement independent foreign policy, and relations with Russia have been important to Iraqi officials. Russia, in turn, doesn’t seek to intervene in Iraq’s internal matters and basically operates by building pragmatic relationships with any government looking for such an arrangement. This approach helps Russians forge important political and business contacts.

For its part, Baghdad supports strengthening Moscow’s positions in an exchange that creates a new point of influence in the country potentially able to balance both Iran and the United States. Iraq thus gets a broader space for maneuvering among all the interested parties.

Certain areas of cooperation that Russia and Iraq have been exploiting have tangible potential. Military sales and energy cooperation are the most obvious ones, but Moscow is also becoming what it sees as a “natural ally” of Iraq in the fight against terrorism.

Since Russia, Syria, Iran and Iraq formed an information-sharing group in 2015, Russia has sought to deepen this area of cooperation through joint operations against radical groups. Russian lawmaker Ziyad Sabsabi has coordinated activities within that group to rescue Russian children whose parents joined IS from Iraq and Syria.

The fight against IS will gradually shift from the front line to broader counterterrorist initiatives, and Russia will be there to experience new forms of engagement with Iraq.

Institutional interaction between Moscow and Baghdad is already rather comprehensive. In addition to the counterterrorism information center and the rescue group, there’s a Russian-Iraqi action group for cooperating in the power industry and a Russian-Iraqi commission on trade, economic and scientific cooperation — a key coordinating intergovernmental body.

Russia takes advantage of all of these formats to interact with Iraqi and Kurdish governments as well as with the highest-level political leaders and contacts among “unofficial players” in the region.

Based on Maximov’s recent meetings, one can see Moscow’s attempts to maintain contacts with virtually all important actors — from major politicians in Iraqi Kurdistan such as Massoud Barzani, Iraqi Secretary-General of the Council of Ministers Mahdi al-Alaq, Vice President Nouri al-Maliki and National Wisdom Movement leader Ammar al-Hakim, among many others.

Therefore, while Russia’s strategy in Iraq aims to develop of all kinds of relationships with Baghdad and stresses support of the country’s territorial integrity, it is also multifaceted, seeking to engage with virtually all players from the country’s leadership to the leaders of the Popular Mobilization Units.

This path is meant to provide the policy flexibility necessary to maintain and increase cooperation regardless of who holds power after the upcoming elections.