Sunday, February 26, 2012

Basra Sports City Construction Update

Baghdad Invest - 25/02/2012 23:22 G.M.T Baghdad.

Basra is the capital of Basra Governorate, in southern Iraq near Kuwait and Iran. Basra is Iraq's main port, although it does not have deep water access, which is handled at the port of Umm Qasr.
The city is part of the historic location of Sumer, the home of Sinbad the Sailor, and a proposed location of the Garden of Eden. Basra has an important role in early Islamic history, being built in 636 CE, or 14 AH. It is Iraq's second largest and most populous city after Baghdad.
Basra sports city is the largest sport city in the Middle East, located on the Shatt al-Basra.
The construction was started on 15 July 2009 and expected to be completed in 2012. The sports city is being funded by the government of Iraq with a budget spending of $550 million dollars, contributed to contain main stadium with capacity of 65,000 people, secondary stadium with capacity of 20,000, four Five Stars hotels and other sports related facilities.
The contract of this project was given to Abdullah Al-Jaburi, a major Iraqi construction contractor, two American companies, 360 architecture and Newport Global.
This project will play host to the 2013 Gulf Cup of Nations that will be held in Iraq.
A man-made lake in the shape of Iraq encircles the stadium.

Basra Sports City is not a pipe dream. Construction is already well underway, with completion expected by 2012. The Youth Ministry Undersecretary stressed recently that work in the sports city in Basra is moving smoothly according to its time table.

Isam al-Diwan, at a recent press conference, disclosed that 80 percent of the project was completed.

The project includes a number of play areas, in addition to Tennis and Bowling playgrounds, sports halls, housing complex and other services facilities.

But for Iraq's football-mad masses, at least there's the possibility of seeing some top-quality international games on home turf.

The project can restore the Iraqi people's sense of pride and national identity – much needed.
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Thursday, February 23, 2012

Northern Iraq Oil Reserves

Baghdad Invest - 23/02/2012 00:05 G.M.T: Baghdad.
"One more," says Eric Ailland, as he flicks a stone into the gleaming black pool.
It is sucked in without a splash, which is enough to reassure the French engineer that the dark stuff seeping to the surface in this field in Iraqi Kurdistan is oil.
For years Kurdish villagers have brought their sheep here to graze, sometimes also filling a jerrycan or two with oil. But this picturesque land of soft green and yellow hills edged by slate-blue mountains has now become the centre of a race for resources between the world's oil majors, which believe Iraqi Kurdistan could hold as much as Libya's 45 billion barrels of reserves in massive reservoirs like the Tawke field.
And this Kurdish region - politically and economically sidelined for decades by the Saddam Hussein government in Baghdad - is using its oil potential to assert its independence from the rest of Iraq.
"This type of field - it's once in a lifetime that you will see it," says Mr Ailland, who once drilled for Total in Yemen and Indonesia. "We thought it was a shallow reservoir. And then one year later … this one turned out to be a giant."
Satisfied with a final rock toss, he turns towards a work camp. It is a stroll through the grass and a short drive back to the complex of prefabricated trailers where he and 120 workers live. They wear neat blue jumpsuits and white hard hats, whether it is minus 8°C or 54°C.
Mr Ailland, the local production manager for DNO, a Norwegian explorer that is 42.8 per cent owned by the UAE's RAK Petroleum, is at the forefront of his company's push to double production to 200,000 barrels per day (bpd) and drill farther down into the Tawke field to layers dating from the Jurassic and Triassic periods.
Such work in Kurdistan was inconceivable a decade ago. Saddam Hussein was in power, the US was trying to determine whether Iraq had weapons of mass destruction, and the Kurdish region, crippled by the international sanctions against Iraq and attacks by Hussein's military forces, had only a handful of hospitals and a per capita GDP of US$375 (Dh1,377).
"This was a devastated wasteland," recalled Barham Salih, the prime minister of the Kurdistan Regional Government, in a speech last year.
In 2002, a year before the US invasion of Iraq, Kurdistan signed its first oil deal. More than 45 contracts with companies from 17 nations have followed.
The prospect of virgin fields in a relatively safe environment has attracted a steady stream of big-name players in spite of the threat of their being blacklisted from operating in the rest of Iraq by the federal government in Baghdad.
"There's been a huge amount of interest from the big majors," says an official with the Kurdistan government, asking not to be named. "This year we expect to see a number of significant new entrants to the market."
In September, Tony Hayward, the former chief executive of BP, bought into a Kurdish explorer through his investment vehicle, Vallares.
Two months later, ExxonMobil, the world's biggest international oil company, signed drilling deals for six areas. And this month, Christophe de Margerie, the chief executive of Total, which operates in southern Iraq, said the French major was looking at entering Kurdistan. Oil companies operating in Kurdistan earn an average $6.50 for every barrel they pump compared with the usual $1 elsewhere in the Middle East, according to Morgan Stanley research.
Kurdistan's welcoming of foreign partners has raised tensions between the semi-autonomous region's seat of power in Erbil and Baghdad. This month, the Iraqi oil ministry warned Total against signing any agreements with Kurdistan and barred ExxonMobil from a forthcoming auction of exploration licences.
Baghdad says the Kurdish contracts violate the 2005 constitution. Erbil cites what it sees as its history of persecution at the hands of Baghdad when justifying acting alone.
"The challenge is to turn oil from the curse it has been to the blessing we should have," says Mr Salih. "From the devastation and the destruction of the agonies of genocides, we can eye a future that is democratic and is prosperous - a future where Kurdistan will not be the case of genocide and the victim of ethnic cleansing, but where Kurdistan is a hub of stability."
The dispute between Erbil and Baghdad has also affected smaller independents such as DNO. In May 2009, the company completed a 42-kilometre pipeline from the Tawke field to Fishkabour, Kurdistan's juncture with Syria and Turkey. There, the pipeline feeds into another owned by the Iraqi government that funnels oil from the Kirkuk field in Iraq to Ceyhan on Turkey's Mediterranean coast. But five months into the pipeline's flow, Erbil stopped exports, saying Baghdad had not been paying the companies for the oil.
"The pipeline was ready, the oil was in the pipeline, everything was ready," recalls Mr Ailland.
Only last year, after more than a year during which DNO had to constrain production and mostly sell to the local market, did a compromise between the regional and federal governments allow exports to resume.
Now DNO is taking precautions, including building 140,000 barrels of storage capacity in case of another pipeline shutdown.
It is just across the street from the U-shaped pipe where Kurdish oil meets Kirkuk crude, and around the corner from the station where truckers unload cargoes from Kurdistan fields that have not yet been connected by pipe.
"They are always shutting down the facilities, so we need to adapt ourselves to the situation," says Mr Ailland, his voice barely audible above the machines sanding the sides of the massive oil storage tanks.
The entry of the supermajors into Kurdistan could transform a landscape that has long been the domain of small independents - a fact of which DNO is keenly aware.
"DNO is not a mega company, not at all," says Magne Normann,its chief operating officer. "But to do what we are doing, you don't need to be a very large Exxon company. It can, as a matter of fact, be a disadvantage if we are talking about something to move fast."
Like many other oil companies, DNO points to its practice of training local talent. Ninety per cent of its staff at Tawke come from the region, many of them brought on as trainees with the understanding that they will eventually leave DNO to serve Kurdistan in other roles.
"I see that as a benefit to the region," says Mr Normann. "We need to train more people."
Drive through Kurdistan today, and patriotism is not hard to find. Enormous busts of musicians known for singing separatist ballads anchor a major traffic circle in Zakho, the biggest town on the way to Tawke. At the entrance to DNO's facilities, the Kurdish flag - a golden sun in the middle of red, white and green bands - flies at the gate monitored by armed guards.
Ahmad Abdulkader Nuraddin, DNO's deputy general manager, recalls being recruited from the UNoil-for-food programme that bought Iraqi oil from Hussein's government under strict conditions. He says that before joining the company he was surprised to learn that DNO was in the oil business. "It was not even a dream to have oil companies," he says. "We never thought that one day we would control ourselves and have our own government, the Kurdistan government. I am optimistic. I think there will be something here. I think we'll continue developing, and we'll have a country one day."
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Sunday, February 19, 2012

Champagne and Crude in Kurdistan Iraq

Baghdad Invest - 19/02/2012 02:30 G.M.T: Baghdad.

Foreign endorsements are coming thick and fast in the city of Arbil in Iraqi Kurdistan--Genel Energy , the Kurdish region's largest oil producer, was snapped up last year by former BP chief executive Tony Hayward and financier Nat Rothschild.

Dusty, windswept and interspersed with military checkpoints, the city of Arbil in Iraqi Kurdistan is the Middle East’s unlikely latest investment hotspot. Only 400 kilometres and a border of disputed territories separate this semi-autonomous oasis of calm from the risk of suicide bombings and political instability that troubles Baghdad. Oil majors are mobilising to tap the estimated 40 billion barrels of crude reserves in the north, positioning Kurdistan for a major economic boom.
Foreign endorsements are coming thick and fast. Genel Energy , the Kurdish region’s largest oil producer, was snapped up last year by former BP chief executive Tony Hayward and financier Nat Rothschild. Exxon Mobil has signed a deal with the Kurdistan Regional Government. France’s Total has confirmed it is also weighing an entrance, in defiance of the central Iraq government, which receives all oil export revenues before sharing them out and deems illegal the contracts signed by the KRG.

Kurdistan is currently producing oil at just a fraction of its potential. But it already boasts of an 8 percent GDP growth rate. Wealth per capita is more than twice that of Egypt. Foreign financiers fill the bars of the city’s newest five-star hotels. Many still only travel beyond their luxury confines in armed-security conveys. Arbil’s less fearful growing clan of millionaires, meanwhile, host lavish parties, importing chefs, magnums of champagne, the finest seafood and mountains of strawberries. Like Arbil’s ambitions, the aptly titled “Dream City” residential area is vibrant — but only half built.

A model economy

Unusually for an oil-rich Middle Eastern economy, Kurdistan is embracing the private sector. Investors don’t need a local partner to start a business. They benefit from tax breaks and can freely transfer profits abroad. The government is a minority partner in oil projects, and its contracts are available to view online. At least when the internet works. The deals struck by the KRG offer oil majors long-term value of around $5 or $6 per barrel, compared to estimates of around $1 in Baghdad.

But it isn’t all an easy ride. Kurdistan has two international airports within a three hour drive, but it remains a cash economy without the tools of a sovereign state, like the ability to print money or issue banking licenses. Oil companies, predictably, do their business in dollars.

The command economy of the Baath regime has long gone in Kurdistan. But the KRG still can’t forge public-private partnerships to develop its industries because, under the federal system, it depends on Baghdad for its funding. Power cuts often plunge meetings into darkness, and it’s hard to tell whether the dimming of lights in the hotel bar is meant for aesthetic effect, or not.

Turkey holds the key

The KRG publicly supports a unified federal Iraq, but Kurdistan might be richer as an independent country. In the current system, if the region’s export capacity grows and political problems keep holding things back in the South, the KRG could become a net contributor to the Iraq budget.

In a perfect world, Kurdistan would export its oil directly to energy-hungry Turkey and avoid the bureaucratic black hole of Baghdad. Iraq would just be one of the troubled neighbours on its periphery — alongside Syria and Iran. Currently the KRG and Baghdad can’t agree on oil revenue sharing, resulting in delayed and irregular payment. Until the dispute is resolved, the KRG is placating its oil producers by effectively letting them profit more than they would otherwise for what they sell domestically.

Turkey doesn’t want to encourage its own restive Kurdish population but is heavily invested in Iraqi Kurdistan’s success. Relations between Ankara and Baghdad have weakened of late. Turkish Prime Minister Tayip Erdogan fears that his Iraqi counterpart Nuri al-Maliki, under the influence of Iran, might steer the rest of the country into sectarian conflict. Turkish national colours can be seen on construction sites in Arbil, and Turkish banks finance many of the projects.

The oil majors eyeing up small and mid-sized producers with operations in the North — like Gulf Keystone Petroleum and Norway’s DNO — bet that Turkey could eventually agree to buy Kurdish oil directly if Baghdad fails to agree on a revenue-sharing law soon. Due for completion in 2013, Genel Energy’s planned pipeline running from its Taq Taq field surrounded by snow-capped mountains up to the main Iraqi-controlled one could easily be extended by a few kilometres to reach the border.

Baghdad breaking point

Political pressures are growing but, for now, in Kurdistan, optimism rules. The Kurdish diaspora is returning to be part of the growth story. Arbil’s millionaires want to become billionaires. That can only happen if more of Kurdistan’s oil explorers turn into producers that can export their oil. Production capacity is already ramping up and is expected to reach 1 million barrels per day by 2018. The impasse requires a solution. With the stakes so high for all sides, investors wouldn’t look foolish to bet on an amicable and lucrative one. 

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Sunday, February 12, 2012

Dinar Currency of Iraq

Baghdad Invest - 12/02/2012 17:35 G.M.T: Baghdad.

When Michael Capps set foot in Iraq with Halliburton, Iraqi Freedom was well underway, but the buzz in the American bases had nothing to do with politics.
“The minute you hit the ground, there was hype,” said Capps.

Servicemembers were talking cash, Iraqi money called dinar.

“You couldn't almost walk into an American base without somebody mentioning the Iraqi dinar, the revaluation, the investment…we're going to become instant millionaires,” said Capps.

The idea? Buy dinar at the current low value, near worthless, and hope for appreciation.

When Capps bought his currency in Iraq, $14,000 worth, the dinar was valued around 1,500 to one dollar.
Best case scenario, the dinar would return to its pre-war value 3.5 to one, making Capps and many other investors instant millionaires.

“If it sounds too good to be true, come on wake up, it's too good to be true,” said Certified Financial Planner, Don Grant.

Grant is the first to steer potential investors away from the dinar. He starts with the dinar's valuation. Unlike the U-S dollar, the dinar isn't backed by a stable government.

“The dinar has been valuated initially by Saddam Hussein. He is the one who said, ‘This is what it's worth,” and it’s pretty much maintained that same value for the past decade,” said Grant.

According to online exchange site, today's value of the dinar is about 1,160 to every dollar. Back in 2005, it was around 1,500. That’s a seven year appreciation of about 30 cents.
Capps is well aware his investment might take time. He's well-aware it's nothing more than a gamble in the first place.

“I think there's definitely some potential for some real opportunity, but anybody that's got the view that it's a get rich quick overnight, it definitely isn't going to happen that way,” said Capps.

But Grant and many other advisors have one undeniable reason they don't see that potential. The Iraqi government may be the last one to want their currency to appreciate. They're in big debt. If their currency gains value, that just deepens their debt. In fact, many say Iraq would be far more likely to scrap the dinar altogether and create a brand new currency, making all that dinar sitting in American houses nothing more than pretty paper.

But say, the dinar stays put and it does appreciate. Here comes the next problem, says Grant. Where do you cash them in?

“I don't know of a place in America where I can go trade dinars other than some place that is perhaps illegal,” said Grant.

The currency is not regulated. To see for yourself, Grant offers a challenge to those thousands of Iraqi dinar dealers online.

“Present them the opportunity of buying some that you have. Tell them you'll sell them at a discount. I don’t think they'll buy it,” said Grant.

That's something both Capps and Grant agree on. It's the middle men you need to be wary of. With shipping and handling and commission charges, you end up paying two to three times the dinar's true value, making the dealers the ones who may be getting rich.

Yet the trend of dinar investment continues to grow and there's one reason for that; hope.
No one knows for sure if it will or won't pay off.

But even Capps offers this advice:

“The dinar as a whole is completely a risk. You know, one of the things people will tell you about any investment is, don't invest money you're not prepared to lose.”

Grant encourages anyone interested in foreign currency investment to get with a certified financial planner. Visit for more information.

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Thursday, February 2, 2012

Iraqi Dinar Scam - RV

                         I have been hearing about an RV “very soon” for years.
The dealers make some money on fulfillment costs (shipping and handling) but most of it comes from the spread. They are able to buy dinar at a much lower rate (about 20%) than they sell it for. A spread on investment products is normal but 20% is extreme. To give you some sense of perspective, if you were to buy the Euro through an FX dealer it would cost you about three ten-thousandths (.0003) of a penny per dollar of value. Even the hard currency dealers at the airport only charge a point or two.
The Iraqi dinar is the perfect storm of financial desperation, ignorance and the internet. It is heartbreaking to see so many people fall for the foolish claims of the pumpers and promoters.

A revaluation, as proposed by these people, has never happened in the history of the world. Germany after WWII and Kuwait after the Gulf War was not the least bit similar. But, of course, people don’t know that. They hear “revaluation” and figure they’re all the same. Currency exchange is a zero sum game. Wealth is neither created nor destroyed in the process, it is only transferred.

People that believe wealth will be transferred to them through a revaluation of the Iraqi dinar should ask themselves from whom the wealth is going to be transferred. For them to receive the wealth of an RV, someone (or something) else must give up their wealth. Who will that be? The Central Bank of Iraq? The government of Iraq? Why would they do that? Why would anybody? It makes no sense. It’s an absolutely foolish notion. The government of Iraq would not willingly and voluntarily relinquish the wealth of its nation. No country would. They may squander it through fraud, corruption and mismanagement, but they would not willingly transfer it.
Layman terms – as simple as counting from 1 to 10
A scenario that to me makes perfect sense in explaining how there is NO way that this could play out the way these “dream chasers” believe it will.
According to numbers I’ve seen from 2009, the “average hourly pay” for an Iraqi citizen is roughly US $2.10 per hour. That currently equates to ~2,500 Iraqi dinar, per hour. So let’s take an average early 20′s Iraqi boy that gets a job, say “moving rocks”. He goes out and puts in a hard 10 hour day worth of work. At the end of the day his supervisor approaches and hands him his fresh, crisp 25,000 dinar note.
The boy takes his note and heads for the convenience store. He proceeds to fill his car up with gas, grab a coke, a bag of chips and a candy bar, basically spending his entire days pay. He goes home and goes to sleep happy. The next day the boy gets up, goes to work, and again earns his 25,000 dinar. However, his car is full of gas and his belly is still full of sugar, so he takes this 25,000 dinar note home and puts it in a little tiny box under his bed.
Now, day 3 begins and low-and-behold, this is the day that this magical “RV” happens. This is the day that an Iraqi dinar transforms from being worth a fraction of a US dollar to being worth 3 US dollars. The Iraqi boys wakes up, sees the morning news, grabs his 25,000 dinar note from under his bed, and proceeds to go down to the local Mercedes dealership where he buys himself a brand new $75,000 Mercedes SLK 500.
If the U.S. government had a massive conspiracy to create a bunch of millionaires why wouldn’t they do it by “revaluing” the dollar rather than the dinar?
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