Shell


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)

British Businesses Training and Educating in Iraq

By Ashley Goodall.

Is the UK overlooking a key USP for British International businesses?

Education and training footprint of British companies around the world has a significant and excellent impact on communities and economies and is often taken for granted.

As the UK ramps up its trade rhetoric and a ‘Global Britain’ emerges, one of the key benefits that British companies bring is being overlooked: Education and training…

The penny dropped for me as I attended a meeting of the Iraq Britain Business Council (IBBC) members to find that one after the other, each company was committed to the concept of a learning organisation that are locally integrated. Not only are British companies employing as many local people as possible, but also training them to deliver increasingly complex managerial and technical roles.

Oil and gas companies, Shell and BP in particular, deliver an extraordinary amount of training in Iraq alone. The effect on the local communities and national economies is a massive injection of know-how and a source of social stability, development, prosperity and economic progress, let alone the transformative power training confers on individuals, families and communities.

Not only are our companies a source of prosperity, but when partnered with UK Universities offer a double whammy for the delivery of global standards and expertise that  few countries can match in country and via external courses, such as delivered by Oxford Brooks and Northampton Universities.

Emerging economies appreciate this expertise, as it raises business operations to global standards and enables them to compete with the best, to encourage inward investment and generate employment opportunities in their regions.

Oil and Power companies in particular make a big social impact on their suppliers. Osama Kadhum Managing Director of Ratba’ contracting in Iraq says his staff received 3885 hours of training in Majnoon Oilfield from Shell alone, ensuring the highest technical and supervisory standards are applied.

GE power likewise employ over 90% of local staff, often sent for technical training in USA or x for 6-12 month stretches supporting local recruitment , diversity of employees, and women for increasingly leadership and supervisory roles. Shell in Iraq train over 7,900 local staff in Basra for whom they are delivering over 200,000 training days per year. BP and its Partners are developing the Rumaila field which is supported by a 93% Iraqi workforce.

Around 2,400,000 training hours have been delivered to staff in a variety of technical disciplines, core skills, leadership and safety.  And these figures do not include community initiatives such as an extensive community vocational training programme that has been running for 3 years, or 400 women from a remote community that have been trained in the Rumaila funded Qarmat Ali Women’s Training Centre.

In Baghdad Serco have set up an ATC Academy for Air traffic Controllers. Multiply this scale of training globally in just Iraq and you begin to see the scale and quality of training that British companies deliver among International, Emerging and Frontier markets.

More widely Rolls- Royce has committed an ambitious plan to reach 6 million people worldwide through their STEM (Science, Technology, Engineering & Maths) education programmes between 2014- 2020. This bold target will encourage a more creative and engaging outreach through the company’s supply chain, through the wider STEM sector and to inspire society to attract talented young people from around the world to the world of STEM.

Businesses are often castigated by the media, but the reality is that they are usually a force for good, prosperity and ultimately stronger communities. So let’s celebrate the important impact British companies’ commitment to education and training brings to millions of people and their ability to change the world.

Ashley Goodall is a martketing consultant to Iraq Britain Business Council (IBBC).

Ratba’a Contracting joins IBBC, seeks JVs with UK Firms

Ratba’a Contracting Company has just joined the Iraq Britain Business Council (IBBC).

Ratba’a is an Iraqi Company based in Basra and Baghdad and is owned by Haj Aboud Al Khlaidy & Sons Group.

The group works to deliver projects in key sectors such as oil and gas (currently Shell, Petronas and BP are major clients), infrastructure and distinctively, the agricultural technology market for greenhouses.

Ossama A. Kadum, Managing Director, explained on a visit to the IBBC Cumberland Lodge weekend retreat that:

“Ratba’a are on the look out to collaborate with British companies with strong design and planning expertise and IOC’s for whom Ratba’a can deliver high quality engineering contracts and build projects.”

Mr Kadhum’s staff has a high commitment to training, quality assurance and engineering expertise that has enabled the company to prosper and grow through a difficult macro environment.

Christophe Michels, MD of IBBC said:

“Ratba’s strength in Iraq is their scrupulous adherence to high standards of delivery, which distinguishes them from many local contractors. High standards are something IBBC expects and admires among and for our members. We are very pleased to welcome Ratba’a on board and the value they will add to our members.”

(Source: IBBC)

Experts discuss Future of Iraq’s Economy at IBBC Retreat

The Iraq Britain Business Council (IBBC) held its annual weekend retreat on 7-9 July at Cumberland Lodge, Windsor Park, a venue dedicated to the advancement of international societal issues through constructive dialogue.

Around 60 IBBC Members and guest speakers attended this unique event to discuss pressing issues on the future of Iraq’s economy, prospects and stability.

Friday afternoon featured an Oil & Gas Sector Table Meeting, with representatives from Shell, Constellis, Penspen and Amec Foster Wheeler amongst others. William Wakileh, President and CEO of GE Iraq and Levant, gave a detailed presentation of GE’s work in Iraq during the meeting.

This was followed by a meeting of the Education, Training & Heritage Sector Table. The meeting featured presentations by the Vice Chancellors of the universities of Brighton, Leicester, and the Dean of Academic Partnerships of Northampton University, showcasing the progressive initiatives of British universities to support educational and curricula development in Iraq. Shell gave a presentation on their current training and educational work and requirements in the country. The meeting was also attended by the newly appointed HR director of BP Iraq.

The evening events saw speeches from Baroness Nicholson of Winterbourne, Her Majesty’s Trade Envoy to Iraq, Azerbaijan and Turkmenistan, Canon Dr Edmund Newell, Principal, Cumberland Lodge and H.E. Dr Salih Husain Ali, Ambassador of the Republic of Iraq.

The day was concluded by a powerful speech, courtesy of Dr Barham Salih, former Deputy PM of Iraq, former PM of the Kurdistan Regional Government and Founder of the American University in Suleimani.

The Friday Evening Dinner was generously sponsored by IBBC Member Severn Glocon Group.

The second day of the Conference on Saturday 8 July, consisted of 5 Sessions of panel discussions to address the economic, social and political situation in Iraq from a variety of different angles.

Session 1Present Situation in Iraq’ was chaired by Neil Quilliam, Senior Research Fellow at Chatham House and featured speeches from Baroness Nicholson, Dr Barham Salih, Ambassador Jonathan Wilks and Dara Rasheed, Deputy Minister of Construction, Housing and Municipalities for the Government of Iraq.

Session 2 addressed ‘Iraq after ISIS/The Future of Governance in Iraq‘ and was chaired by Botan Osman, Managing Director of Restrata. The Panel featured representatives of Chatham House, Dr Renad Mansour, Academy Fellow and Dr Nussaibah Younis, Associate Fellow, who recently published the Atlantic Council Report of the Task Force on the Future of Iraq. Nicolas Pelham, Middle East Correspondent at The Economist completed the panel.

Session 3 of the day, ‘A New Approach to International Trade’ saw a more finance focused discussion and was chaired by John Curtin, Partner, Ernst & Young. The panel was made up of Martin Kent, Strategy Director at the Department for International Trade, Gordon Welsh, Head of Business Group at UK Export Finance, Rob Lally of the Infrastructure Leadership Team and the Department of International Trade and Andy Birch, Director of DIT in Iraq.

Session 4 on ‘International Financial Support, PPP and Debt Finance’, was chaired by Richard Cotton of the IBBC and featured presentations by Ammar Shubar of Management Partners and Christian Josz, Mission Chief to Iraq of the International Monetary Fund (IMF).

Session 5 closed the day’s events on ‘Future IBBC Events’ chaired by Vikas Handa, IBBC’s UAE Representative.

IBBC also held its bi-annual Council Meeting at the Lodge, prior to dinner on Saturday evening.

The Seminar concluded with an after dinner speech and discussion with Jonathon Wilks, Her Majesty’s Ambassador to Iraq (Designate).

(Source: IBBC)

Shell Veteran to be Genel Energy CFO

Genel Energy has announced that Esa Ikaheimonen has been appointed as Chief Financial Officer. He will be based in London and will join the Company on 3 July 2017.

Esa has over 25 years of oil and gas industry experience, most recently as Group CFO of leading publicly listed offshore drilling companies Transocean and Seadrill. Prior to that, he had a c.20 year career at Royal Dutch Shell, culminating in the role of Vice President Finance for Shell Africa E&P.

Esa currently serves as a non-executive director and Chairman of the Audit Committee at Vantage Drilling International.

Murat Özgül, CEO of Genel, said:

“I am delighted to welcome Esa to Genel. His extensive industry, commercial, and financial experience will be invaluable to Genel and its growth ambitions, particularly the development of our significant gas assets in the Kurdistan Region of Iraq. I look forward to working closely with him to unlock value for all our stakeholders.”

(Source: Genel Energy)

Enabling Children to Develop Skills and Remain Safe

Enabling children to grow, develop skills and remain safe

“Every day on my way home from school, my friends and I spend our afternoon playing at the playground,” said Mahdi, 11, from Al Nashwa sub-district of Basra, South of Iraq.

In 2015, and under the UNDP-Shell Partnership, four playgrounds were constructed between Basra’s sub-districts of Al Nashwa and Al Dair to provide children with a safe space to play.

After consultations with the local communities and stakeholders, the lack of safe spaces for children surfaced amongst the priorities listed that required improvement. Children’s safety was an ongoing issue amongst the communities of Al Nashwa and Al Dair.

“Our children were in danger because they were playing near the roads, which worried all the parents,” said Sa’ad, a resident in Al Nashwa.

The four fenced playgrounds provide a range of facilities such as a football pitch, swings, fitness equipment, lighting and a seated shaded area attracting both children and youth.

Balanced and active play is essential for children to thrive because it helps them to learn, grow, and develop important skills related to creativity, social connection, and leadership. In order to encourage play, it is important for children to have access to safe places within walking distance of their homes.

“We don’t have to use rocks anymore for goal posts or play in the dark on the rubble,” said Mahdi. “Playing inside the fence feels much better because we don’t have to worry about the ball rolling to the street.”

To sustain the playgrounds and promote cleanliness, the Partnership Programme also equipped the playgrounds with trash bins along with water tanks for the plants. The availability of play areas is critical to knitting communities together and helping children to interact with others, which was prevalent on the playgrounds in both sub-districts.

Iraq to Begin Snuffing Out Flares

Oil-producing countries yet to address their gas flaring may begin to feel there are no more excuses.

In a remarkable and bold decision, the government of Iraq recently endorsed the “Zero Routine Flaring by 2030” Initiative, (ZRF), which means the country has committed to not routinely flare associated gas in any new oil fields and will work to end routine flaring in existing oil fields as soon as possible and no later than 2030.

Launched in 2015 by UN Secretary-General Ban Ki-moon and World Bank President Jim Yong Kim, the ZRF Initiative is designed to end a 150-year-old oil industry practice that is responsible for emitting more than 300 million tons of CO2 into the atmosphere.

Gas flaring also wastes a valuable source of energy that could be put to productive use, particularly in countries where many people lack access to electricity.

Even in the most difficult circumstances we recognize that Iraq must ensure its resources are managed sustainably for future generations. Flaring is not only bad for the environment, it represents several billion dinars going up in smoke.
— Dr. Hamed Younis Saleh, Deputy Minister of Oil for Gas Affairs

The latest satellite data released by the US National Oceanic & Atmospheric Administration and the World Bank-led Global Gas Flaring Reduction Partnership (GGFR) shows that Iraq’s gas flaring has increased dramatically. Just four years ago the country was flaring about 12 bcm of gas annually. However, in 2015 the country flared close to 16 bcm, making it the second-largest gas flaring country in the world.

Back to the Future: The Restoration of Iraq, and British Expertise

By Ashley Goodall.

Back to the future.  The restoration of Iraq and British expertise.

Iraq has been in the news for a generation and our perceptions have been coloured by conflict and the near destruction of the Middle East’s most wealthy and civilised country. In the 1970’s Iraq was not only a secular and relatively harmonious multi-cultural society, but highly educated, enormously wealthy and a centre for cultural tourism.

While the media is focussed on the awful impact of IS, and the conflict in Mosul is still raging, it’s fair to say large swathes of the country, especially the South, have been free from conflict and are relatively peaceful. Indeed, the conduct and effectiveness of the Iraqi army has given hope to a peaceful aftermath in Mosul and Anbar province, with prospects for an end to IS and reconciliation with the Sunni groups in the west.

Today, similar conditions exist for a return to that wealth and civilisation- as the country comes together, Daesh are being seen off, the oil price is rising, the IMF and ISF are loaning the country $14bn for infrastructure, and educated expat entrepreneurs are beginning to return home with investment and know how.

Now that the UK is going global we should consider Iraq a strong business opportunity. Iraq is open for Investment, from the most basic Infrastructure: roads, rail, ports, airports and water, to new private housing, schools and universities, with Iraq’s abundant energy, oil, gas and petrochemical industries, to professional services and cultural tourism. Iraq is effectively virgin territory for investors, construction and professional and telco and cultural tourism services alike – in fact, all the things the UK excels in.

The picture for British industry is even stronger when we recognise British companies already play a leading role in the business ecology: Shell and BP are key players in the economy and offer an umbrella for British engineering companies; Eversheds, EY and PWC provide legal and accountancy services to our companies and Standard Chartered are there to service our finances.

The Iraq Britain Business Council (IBBC) with its long term and trusted relationships in senior government circles can also guide and assist members on political issues and through its extended membership there is a wealth of knowledge to assist new members in doing business in Iraq.

Tawfiq Tabbaa, Managing Partner of Eversheds Iraq, has seen a 25 percent increase in business, and the prospects of acceleration as international business moves back to Iraq, including a budegoning tech sector and a requirement for professional services to service international and local companies.

Alistair Kett, a Partner at PWC, observes:

“To the casual observer, any headlines relating to Iraq will be dominated by the ongoing defeat of Daesh and the associated albeit complex security picture. A closer look, however, reveals a country that has started a huge transformation. With significant financing available for huge infrastructure projects and many recognised organisations already embedded in their design and delivery the economic and commercial potential of this market is clearly shifting quickly.”

Mohammed Al Charchafchi, Chairman of Zain Iraq, indicates that:

The Iraqi economy is recovering and is projected to grow at 7 percent in the next few years, one of the highest growth rates in the world, this also applies on the GDP per capita and the contribution of non-oil revenue to the GDP of the country. The growth is mainly driven by the increased production of oil, inflow of FDI, structural reforms by the government and implementation of the IMF terms.

And IBBC new member GE has recently won a $1.4-billion contract to build new electric power stations. Frederic Ribieras, VP Global Growth says:

“GE just signed several new contracts worth a total of $1.4 billion with the Iraqi Ministry of Electricity to add a further 2,000 MW via gas turbines, that drastically increases supply to Iraq’s grid. Thanks to GE’s global reach and relationships with various financing institutions and export credit agencies, GE also has been able to set up some $2 billion in credit to support the projects. This will enable the Iraqi government to improve its power supply without short-circuiting its finances.”

As if that is not bright enough the Chinese intend to bring the New Silk road (OBOR) and its investment train through northern Iraq to provide access to China and the West, for Iraq’s petrochemical industries. And the Iraqis are surprisingly loyal to the UK.

So we see an immediate future where Iraq begins to re-take its place in the league of wealthier nations, keen to expand consumer and professional services, fuelled by oil and petrochemical wealth and servicing an educated and capable population with a government willing to reform and invest.

It’s time to go back to the future and back to Iraq with British expertise and investment.

Ashley Goodall is a consultant at the Iraq Britain Business Council (IBBC).

Oil Output to hit 5.4m bpd in 2022

By John Lee.

According to a report from Bloomberg, the International Energy Agency (IEA) has predicted that Iraq will retain its position as OPEC’s second-biggest oil producer, adding 700,000 barrels per day (bpd) to reach 5.4 million bpd by 2022.

Most of the increase will come from southern oilfields, such as the Shell‘s Majnoon project.

The Paris-based agency also forecasts that neighbouring Iran will increase its oil production capacity by 400,000 bpd to reach 4.15 million bpd by 2022.

(Source: Bloomberg)

US Firm in $210m Deal at Majnoon Field

By John Lee.

According to a report from Reuters, Anglo-Dutch Shell has signed a $210-million contract with US-based Halliburton to drill 30 wells at the Majnoon field over the next three years.

The contract is expected to raise output at the field from 220,000 barrels per day currently to about 400,000 bpd in three years.

(Source: Reuters)