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Daily Column
Iraq Moves Up Bids For Next Oil Fields
By DANIEL W. SMITH 07/03/2009 10:00 AM ET
Biden and oil made the news - not a lot of background information needed on those items. Also, another story about recently-released summaries of FBI interrogations of Saddam Hussein (both articles have been nice enough to point out that the interrogations took place before Hussein’s execution).

From Baghdad
In the New York Times, Sheryl Gay Stolberg and Timothy Williams write that Vice President Joseph R. Biden Jr. landed in Baghdad on Thursday, beginning a two-day diplomatic mission that he said was intended to “re-establish contact” with Iraqi leaders, intended to, as they say, “prod them toward settling internal disputes over oil revenues and political power-sharing.” Biden is called “a kind of unofficial envoy to the country.”
The trip is unusually long for such a high-level official; when Mr. Obama visited Iraq, he spent just a few hours here, and President George W. Bush did not spend more than a day. But Mr. Biden said Iraq was at a pivotal moment, “the moment where a lot of Iraqis cynically believed we’d never keep the agreement.” He said the White House wanted to send a message to Iraqi leaders that it was engaged at the highest levels.

In putting Mr. Biden in the role of unofficial envoy, Mr. Obama may have recognized that he needed to pay greater attention to Baghdad. Mr. Biden said the job was Mr. Obama’s idea: “The president said, ‘Joe, go do it.’ ”
The article also focuses on a deal recently reached between France and Iraq, in which the former will supply the latter with armaments, training, and reconstruction.

Jane Arraf of the Christian Science Monitor writes about the Biden visit, but from a more Iraqi perspective, interviewing Foreign Minister Hoyshar Zebari. "My message to them is ... you lost Afghanistan in 2001, 2002, and 2003 because you turned your attention to Iraq from Afghanistan – now you are redirecting your attentions of Afghanistan and if you disengage with Iraq, it could be another failure. The situation is not that solid," said Zebari.
Now that violence has declined in most of the country, reconciliation between the Shiite-led government and Sunni factions, between Kurds and Arabs, and among a wide range of extremists who could potentially be persuaded to disarm and join the political process is seen as the key to building on the country's fragile stability.
"Iraq is no longer a priority, definitely," says Zebari. "In a way it is a good thing that the situation is moving but in another sense the situation still needs more attention, more focus, more engagement."

Gina Chon, your go-to gal for Iraq oil stories in the Wall Street Journal, writes that the Iraqi oil ministry announced it will move up a second round of licensing bids for 11 oil and natural-gas fields. They were to happen at the end of the year, but with the coffers not quite as flush as had been expected after the bidding earlier this week. A date hasn’t been set yet, but it could be as early as a few months.

Unlike the first round this week, the oil fields on offer for the second round haven't yet been developed or are only partially developed. The new round could also include the five oil fields that were offered but not awarded this week. The oil ministry said the two natural-gas fields that were part of the first round won't be reoffered. Instead, they will be developed by a new national oil company the ministry intends to set up.

This week's round disappointed oil executives and many industry observers, who were surprised by the ministry's tough pricing. The oil ministry typically set a $2 per-barrel payout for any new production the oil companies were able to squeeze out of the fields beyond current levels.
Stateside
The New York Times’ Scott Shane writes about the summaries of 20 formal interviews and five additional “casual conversations,” an FBI interrogator held with Saddam Hussein, after his capture. It is about the same as the article in yesterday’s Washington Post, and a day later.

USA Today, Washington Post, no Iraq coverage.

Comments on the US Papers roundup are welcome at dwsmithemail@yahoo.com


Daily Column
Iraqis Celebrate US Troops' Pullback, Oil Companies Reject Iraq's Contract Terms
By DANIEL W. SMITH 07/01/2009 02:01 AM ET
As Iraqis celebrated, a bomb in Kirkuk killed 34 and oil bidding didn’t go as well as Iraq’s Oil Minister had hoped. Iran makes an appearance as well, in regard to claims of its support extremist groups Iraq.

The Big Day
With much material somewhat similar to yesterday’s papers about the US drawdown in Iraq cities and Iraqi public’s celebration/worry, the articles a little less in depth, but good reading all around. The main new additions were the bombing in Kirkuk and some official statements. Iraqi government and security forces are still patting themselves on the back.

Alissa J. Rubin of the New York Times points out that Prime Minister al-Maliki didn’t mention America in a nationally televised speech.
Mr. Maliki’s effort to capitalize on Iraq’s latent anti-Americanism and to extol the abilities of his troops is a risky strategy. If it turns out that Iraqi troops cannot control the violence, Mr. Maliki will be vulnerable to criticism from rivals — not only if he has to ask the Americans to return but also if he fails to enforce security without them.

Some American commanders have said they were taken aback by Mr. Maliki’s insistence on taking credit for all the security successes in Iraq. However, they also see the importance of having him and Iraqi troops appear strong, especially in the face of insurgent factions intent on destabilizing the government.
In Diyala, where 11 out of 18 bases have been closed, the formal transfer is reported to have been postponed, due to Iraqi complaints that at a camp near Baquba, the US military did not leave behind generators and air conditioners, as had been agreed upon.

Ernesto Londoño of the Washington Post focuses on attacks which killed Iraqis and Americans in the past few days of celebration, and hits the main points. He contrasts al-Maliki’s bombastic speeches with President Obama’s decidedly muted tone in comments about Iraq. Comments made on Tuesday by Gen. Odierno were summed up.
Odierno said he would carry out a 45-day assessment of the impact of the troop pullout and recommend adjustments as needed in August. In September and October and again after elections in January, he said, he will make further decisions on the pace of U.S. troop withdrawals. He said he expected an initial reduction to bring the force to about 120,000 in December before it drops to about 50,000 by September 2010.
The Christian Science Monitor’s Jane Arraf writes that of the same big issues, but starts from the bravado of a parade of Iraqi’s many brands of security forces with crisp uniforms as they marched past al-Maliki, near the Tomb of the Unknown Soldier in Baghdad.
American and Romanian tanks, armored vehicles, humvees, and firetrucks rolled past an audience of dignitaries that included US Gen. Ray Odierno, whose combat forces have now pulled out of Iraqi cities under a landmark security agreement. In the background, the crossed swords of Saddam Hussein's monument to the Iran-Iraq war – modeled after his own fists – rose over the parade ground.

It was a far cry from the massive parades highlighting dozens of tanks and missiles that the late Iraqi leader presided over before he was toppled in 2003 – but much more heartfelt. Behind the monument, as units of Iraqi forces grouped near immaculate vehicles waited their turn to enter the grounds, there was a backstage atmosphere.
"If I were to compare where we were today to where we were four, five years ago, the progress is undeniable and is very impressive. But we still have some very serious problems," says Deputy Prime Minister Barham Salah. "We really need to attend to the politics quickly, that's No. 1. No. 2 is, we really cannot be complacent, because this enemy that we are fighting is still tenacious, ruthless, and will stop at nothing to disrupt what we have gained."

In USA Today, Aamer Madhani and Nadeem Majeed write of some of al-Maliki’s, Obama’s and Odierno’s remarks, and wrote up a more succinct version.
The Iraqi government marked what it called National Sovereignty Day with a military parade inside Baghdad's heavily fortified Green Zone and placed flowers at the Tomb of the Unknown Soldier monument to honor Iraqi troops killed since the start of the 6-year-old war.

About 131,000 U.S. servicemembers are in Iraq, and a small number will remain inside the cities for advisory and training roles. U.S. troops are now prohibited from conducting combat missions, such as raids, inside cities without permission of the Iraqi government.
"Nobody wants to see foreign armies move on their streets and patrol in their cities," said Mohammed al-Askari, spokesman for the Iraqi Ministry of Defense. "We will do the mission ourselves"

Oil
Iraq going it alone happened in another less-expected way yesterday, as the much-hyped and nationally televised oil auction ended up with only one successful oil contract awarded to a foreign bidder. That contract, for the largest field offered, went to BP and the China National Petroleum Corporation. Oil Minister Hussain al-Shahristani had been expected to at least make great progress on awarding all eight contracts offered on Tuesday. Timothy Williams of the New York Times writes...
Throughout the day, clusters of men in dark suits spoke to each other in their common language: broken English, with Dutch, Chinese, Russian and Thai accents. A member of a Korean delegation wore a flak vest inside the hotel ballroom.

While the companies finally agreed to the government’s price, it was the only time all day that the usually wide gaps between what the government was willing to pay and what the companies said they needed to be paid were bridged.
Gina Chon at the Wall Street Journal reports that “The outcome raised questions about how quickly Iraq could rehabilitate its oil sector, which has suffered from years of war and neglect. The country relies on oil sales for more than 90% of government revenue.” She explains some of what happened.
The Iraqi oil ministry set aggressive pricing for the 20-year technical-service contracts in which companies will be paid a fee for boosting output. The oil ministry typically offered a maximum bonus for any output beyond current levels at $2 a barrel for several fields -- a figure that proved a dealbreaker, according to a number of oil executives. Company bids ranged from about twice that figure, in most cases, to more than 10 times the oil ministry amount.
"It's a losing proposition," one official at an Asian oil company said. "It's not worth it for us to pursue this."

Iran
Chon continues, reporting that ”some of the Iraqi Shiite extremist groups that the U.S. claims are backed by Iran say they are ratcheting up attacks in Iraq in tandem with Tehran's post-election crackdown on protesters.” She has quotes from a member of an extremist group who said that as the Iranian government became more aggressive with its own protesters, orders to Iranian-backed Iraqi groups have done so, as well. "We are coming back, and we have new missions now," said one. It is interesting reading.
Analysts and officials have suggested that grim images of the crackdown in Tehran may stall the ascendancy of Iranian influence across the Middle East, and that the unrest may push Tehran to act more aggressively to show it remains undaunted by domestic strife.

...Since the crackdown on protesters after Iran's June 12 elections, "our supporters are more determined now to have an influence in Iraq," said a cell leader for an Iraqi Shiite extremist group. This person said he receives orders from two Iraqi leaders who have been in Iran since seeking refuge there last year.
Comments on the US Papers roundup are welcome at dwsmithemail@yahoo.com


Daily Column
Shahrastani Faces an Uncertain Fate, Dozens of Iraqis Killed in Kirkuk
By AMER MOHSEN 06/30/2009 5:11 PM ET
Az-Zaman
Az-Zaman
Note from the author: After two and a half years of reporting on the Iraqi and Arab media for the readers of Iraq Slogger, this experience has come to a close. It has been an honor and a pleasure, and I hope that my daily column has been of help to our faithful readers. I also hope that, one day not too far, good news will finally start emanating from Iraq, this fascinating country that has been tormented beyond belief. Please stay in touch: amer@berkeley.edu

Iraqi papers are out today due to the national holiday announced for the occasion of US withdrawal from Iraqi cities and urban centers. However, the day that Maliki described as “a great victory,” calling for Iraqis “to be joyous” and celebrate, has been marred by dozens of victims who fell in a massive explosion in Kirkuk.

Al-Jazeera reports that at least 32 Iraqis were killed in the northern city when a car exploded in a busy market. According to the local correspondent of the news channel, the incident took place in a mixed area containing both Kurds and Arabs, and that the number of casualties is likely to rise as the search for victims continues.

Also on the day of US withdrawal, al-Jazeera reports that four US soldiers were killed in Baghdad in clashes. But the US Army has refused – so far – to reveal the circumstances of their death, contenting to state that an investigation into the incident is ongoing.

Another important piece of news pertains to the auction of Iraqi oil fields that began today in Baghdad, live on national television. Arab and international media agencies are reporting very bad news for the Oil Minister Husain al-Shahrastani: the auction was a failure.

According to early reports, the first day of the event (which will continue through tomorrow) did not witness the amount of interest and competition that was expected of the energy giants that attended and bid on several Iraqi oil and gas fields.

Only the Rumaila oil field in the south (the largest on offer) was successfully contracted to British Petroleum, which acceded to the government offer of $2 per barrel produced (above a minimum limit and over 20 years.) Some of the other fields did not receive any offers; and as for the rest, companies were unwilling to match the prices set by the government. In fact, the only bids that were made in some cases exceeded the price limit by several folds – companies cited security threats among others as factors that significantly raise the commercial risk of investing in Iraqi oil.

This uncertain beginning for the first round of oil contracts will put al-Shahrastani in a real bind. The Oil Minister – whose person is already opposed by powerful political forces – has been accused of mismanaging Iraq’s oil wealth and of failing to raise the levels of production. Al-Shahrastani used to point to the upcoming round as the cornerstone of his plan to expand output and investment. Critics will now point out that the Minister’s decision to refrain from offering smaller service contracts (that could have significantly improved the performance of existing fields) in favor of packaged, long-term, contracts was not a wise one. Comparisons will no doubt be made between the fate of Iraq’s largest oil fields – which still remain untapped – and the smaller oil fields of Kurdistan (such as Taq Taq and Tawqe) that have already begun production (through foreign contracts that were fiercely opposed by the Minister. )

In other news, pan-Arab al-Sharq al-Awsat published a report on the pro-US Sahwa militias, who stand to lose the most from the US withdrawal from Iraqi cities. As US patrols stop roaming Iraqi streets, Sahwa leaders exclaim: “we could pay a heavy price.” The Sunni militias find themselves now in direct contact with their nemesis, al-Qa'ida, which has vowed to wage an unrelenting war against these “collaborators.” Sahwa members told the paper that they felt confident near US units, knowing that al-Qa'ida would not dare wage attacks against them, “they knew who was the strongest,” an assurance that is now largely gone with the US Army concentrating its forces in five bases outside the major cities.

Other Sahwa fighters expressed fears that Shi'a militias will also “return” to target them. Worse yet, the Sunni militias face an uncertain fate with the Iraqi government that is now responsible for their equipment and salaries, and which views them with extreme suspicion. A Sahwa fighter standing at a checkpoint gazed at his antique machine gun and exclaimed: “if the terrorists return, they will surely kill us, how do you expect us to defend ourselves with this?”

Daily Column
New Kurdistan Constitution "A Bomb"!
By AMER MOHSEN 06/28/2009 5:40 PM ET
al-Bayyna al-Jadeeda
al-Bayyna al-Jadeeda
According to al-'Arabiya, a freak sandstorm that has enveloped Baghdad has apparently postponed the controversial tendering process for Iraqi oil and gas fields, which was supposed to be launched over two days, starting today, by the Iraqi Oil Ministry.

In the “first round” of contracts, whose launch is now postponed till tomorrow, several giant oil fields containing over 40 billion barrels of proved reserves will be given up for development by foreign companies. For the sake of comparison, that amount represents more than double the entire proved reserves of the US. And in an age where control over oil deposits is shifting away from private companies to sovereign states, the Iraq oil bounty has attracted most of the big names in the international energy industry.

The granting of these contracts is supposed to occur through a complex process – on live TV. The Oil Ministry is to open the envelopes containing the bids of the energy companies, announce a winner for a specific project, then allow the contenders to adjust their offers for the rest of the oil fields, including the possibility of making joint proposals, all within a span of 48 hours.

We have previously reported on the protests to Shahrastani’s plan, which are emanating from the Kurdistan Regional Government (which is opposing the tendering of oil fields situated in “contested territories”,) the Parliament and the Iraqi national oil companies. While multinational firms are salivating over the Iraqi contracts, these political questions, in addition to the well-known security risks, could endanger the contracts or transform them into a protracted legal battle. Unlike countries such as Lybia, Saudi Arabia or Saddam’s Iraq, where a contract granted by the supreme authority is sure to be enforced, political power in Iraq is currently fractionalized into several bodies, each of which are claiming authority over the national oil wealth. In addition to the Kurdish leaders, members of Parliament are already saying that the oil contracts may not be considered legal if they were not approved first by the legislature, which already casts doubts over the Oil Ministry’s tenders.

In other news, and two days prior to the date of US withdrawal from urban centers, Az-Zaman reports on a new deadly explosion that targeted a motorcycle market in Baghdad, killing 20 Iraqis and injuring 46.

The proliferation of these attacks has prompted the Iraqi Premier, Nuri al-Maliki, to renew his attacks against unnamed “Arab governments,” this time accusing neighboring states of “remaining silent” in the face of “excommunication fatwas” that he considered responsible for the attacks and suicide bombings targeting Iraqi civilians.

An interesting trend has been Maliki’s departure from accusing Syria and Iran of facilitating attacks (these two governments were the main target of Iraqi government criticisms, especially during the days of their intense feuds with the Bush administration) and his directing – thinly veiled – accusations at Saudi Arabia, which is the main exporter of extremist Wahhabi ideas and which hosts many of the extremist Sheikhs who openly advocate against shi'as as “infidels.”

In parallel, al-Bayyna al-Jadeeda (a Shi'a – openly – sectarian paper that specializes in attacking Saudi Arabia and Sunni Gulf states) devoted its front page to the latest conspiracy theory: allegedly, a “sectarian meeting” took place in Dubai, joining 'Izzat al-Duri (the highest ranking Ba'thi still at large) and Yunis al-Ahmad (the leader of a competing Ba'thi wing) and the anti-American cleric Harith al-Dhari. In this alleged meeting of personalities with radically different ideological convictions, an agreement was struck against the Shi'a! The conferees wrote a “secret” statement (that the paper published) calling for the “extermination” of the Shi'a in Iraq. To complete the circle, the paper alleged that personalities participating in the meeting were each handed two million dollars provided by the Saudis.

Lastly, Iraqi papers report that the new constitution of Kurdistan (which was approved last Wednesday) is causing broad protests among Iraqi Arabs. Az-Zaman and al-Bayyna al-Jadeeda quoted Iraqi politicians who described the new constitution as “unconstitutional,” “illegal” and “a bomb that will undermine the process of building the new Iraq.”

The most controversial parts of the constitution consist in announcing oil-rich Kirkuk, in addition to parts of the Nineveh and Diyala provinces, as inseparable parts of Kurdistan, an escalation that will take the conflict over “disputed territories” into a new dimension. In a first response, Az-Zaman reports that Iraqi MPs representing Mosul (the Nineveh province) published a strongly-worded statement rejecting any “encroachments” against their province’s territories, referring to Kurdish “expansionism” and “territorial ambitions” (an Arabic term usually employed in conflicts between states) and claiming that these constitutional articles represent a “provocation to the feelings of the province’s masses, and the entire people of Iraq.”

Daily Column
No Ban on Mine-Resistant Vehicles in Iraqi Cities, Oil Auction
By DANIEL W. SMITH 06/28/2009 02:00 AM ET
Well, just two days away from the 30th, and nary a single bombing story. We’re still figuring out what “leaving the cities” means, and oil contracts are imminent... again.

From Iraq
Rod Nordland of the New York Times has about the best a big-picture look to date at the nature of what US operations in Iraq are likely to resemble, come July 1. It begins with a telling and humorous “mistranslation” at a joint US/Iraqi press conference with Maj. Gen. Fadhil Jameel Birwari, commander of the Iraqi Special Forces’ First Brigade.
Come July 1, most American combat troops remaining in the cities will become trainers. In some cases that will be nothing more than a semantic dodge. For the most part, it really will be happening, and many Iraqi troops will indeed be on their own by Wednesday.

Except, that is, for their embedded trainers and advisers, who will be fairly numerous — at least 10,000 now, according to military estimates, rising to 35,000 to 50,000 by the high point, according to a Congressional Research Service report last month. In addition, each team will need force protection — that is, other American troops to guard the trainers, mostly from Iraqis they’re teamed with. They will number from 10 to 20 per team of trainers. The fear of fragging is so strong that most trainers live in compounds fortified against the people they’re training, a sort of American fort within the Iraqi fort.
“Fobbits,” or huge forward operating bases where many US soldiers will end up are explained, parallels with US trainers in Vietnam are mentioned, and Nordland calls Iran a gorilla. Read it!

Ernesto Londoño of the Washington Post irons out previous statements made by US military officials about a possible ban on GIs using the mine-resistant and comically large MRAP vehicles in Iraq’s cities. It turns out that we can still look forward to them causing traffic jams for months to come.
The Friday report quoted a lieutenant in Baghdad whose platoon lost two MRAPs last week in powerful roadside bombings. The lieutenant said he feared the attacks would have killed soldiers if they had been in Humvees. The Pentagon has spent billions of dollars on MRAPs since 2007. The vehicles are widely credited with helping reduce the number of U.S. casualties in Iraq.

The officers said the MRAP ban was one of several efforts by the military to assume a lower profile after Tuesday, the first deadline in a security pact between Iraq and the United States that charts out the withdrawal of U.S. troops.
Londoño and K.I. Ibrahim continue the Washington Post’s Iraq coverage with an oil story. Eight contracts for development of six Iraqi oil fields and two gas fields are set for Monday and Tuesday. Though international oil companies probably had their hopes up for a deal similar to the Anglo-Iranian Oil Company did in Iran (where they refused to even show the accounting books to the locals), they’re accepting the 20-year service contracts that are being offered, even with the $3 billion in loans the Iraqi government is demanding to the winning bidders. Any way to get your hands dirty with black gold (Texas tea to some) seems to be profitable. The normal barrel numbers are gone over, but so is potential fallout from the deals for al-Maliki.
The government, keenly aware of the potential for controversy and political fallout, has sought to portray the process as transparent. Bidders will submit sealed proposals that will be evaluated using a set formula during televised sessions.

The bidding process and its outcome could have political consequences for Prime Minister Nouri al-Maliki, who is expected to seek reelection in January. Many Iraqis still view Maliki as somewhat beholden to the U.S. government, and his rivals could use the oil issue to portray him as a sellout.
Christian Science Monitor, USA Today, Wall Street Journal, no Sunday Editions.

Comments on the US Papers roundup are welcome at ds@iraqslogger.com


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