DrDinar Blog

Chapter VII Removal Was On Agenda For Maliki’s Cairo Summit Trip

Amidst the controversies that Iraqi Prime Minister Nuril al-Maliki is currently facing, the Prime Minister still pursued his way to the Cairo Summit where there were lots of Arab leaders who participated including the Emir of Kuwait Sheikh Sabah Al-Ahmad Al-Sabah and the President of the Republic of Turkey Abdullah Gul. Is the Prime Minister taking the right move?

There were a lot of discussions including the matters to resolve the issues between the two countries in their stand to fight against the extremism in the Islam world. The consolidation talk that happened last February 5, 2013 might help both countries to develop stronger ties than before.  Maliki even told the press during the long meeting, “We discussed all issues in common with Kuwait, and we insisted on faith common to solve, problems inherited from the time of the former regime and including file Airways and navigation in the Khawr Abd Allah, maintenance and installation of stents border – was positive of the two countries.” Iraqi Prime Minister and obelisk morning also tackled about the possible ways to remove the Chapter VII so that the country can move its way to a higher ground.

Luckily, the Information Office of the Prime Minister just announced that Iraqi Prime Minister will meet Emir and the President of Republic of Turkey, Abdullah Gul in the Conference of the Organization of Islamic Cooperation.

There was also a statement pointing that, “The conferees stressed the importance of the unity of the situation in the coming negotiations with the Russian Federation on bilateral relations between the Arab countries and Russia and discussed the Syrian crisis and mechanisms to achieve the political transition process and the solution according to the mechanism of the Geneva Act and ways to activate and move the implementation mechanisms of the international agreement to tackle the Syrian crisis and ensure the unity, security and peace Syria and the achievement of the legitimate aspirations of the Syrian people for freedom and democracy.“ Will the Russian Federation become a great contribution to the rebuilding oil industry of Iraq? Won’t this cause commotion between other foreign investors who have already handed down their money for the construction of the unfinished oil fields in the land?

Furthermore, a US newspaper “The Washington Times” just released their report that, “The increase in US oil production in Iraq could determine the future of world oil prices in the coming years, especially after the Iraq increased the size of its production last year to reach in December to 3.4 million barrels per day. Iraq may be the only country in the world which still contains large amounts of crude oil which does not require expensive equipment to extract”

As a matter of fact, the country successfully exported crude oil from the ports of Khor al-Amaya on the Arabian Guld and the Turkish port on the areas of Mediterranean Sea. At about 90 percent of oil production were gained during the operation while the remaining concerns where left in the north of the country, oil fields Kirkuk.

How come these events coincide together for the building up of the Iraqi economy? Although there are still great challenges that Iraq should face including the horrible incident in Fallujah, Iraq seems determined to get its place in the world wide chart of oil producers in the world. Attending the Cairo Summit to straighten up some curves of the past is not such a bad move, isn’t it? How far would the Iraqi leader go amidst the controversies waiting for him in his own soil? Will all the people understand his ways?

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Iraq To Build Medical City In Its Capital

Amidst the pressure for the upcoming vote in the Parliament for the final budget for 2013 and the ambitious goal of Iraq to double its current crude oil production in the year 2020, the country has never forgotten one of the major needs of its citizens – reliable medical assistance.

Just last January 23, 2013 the Government of Iraq announced that Iraq started the construction of the integrated modern medical city. This project is worth 350 million US dollars – fair enough to accommodate more than 1000 patients.

As Secretary General of the Iraqi Cabinet Ali al-Allaq told Al-Shorfa, “The new 1,200-bed medical city will be built on an area of 100,000 square metres in central Baghdad, near the Tigris River on the site of the former al-Rasheed hospital.”

He continued, “The medical city will feature a variety of specialisations that the country still lacks, including cancers, neurological disorders and spinal cord problems; blood and cardiovascular diseases; bones, fractures, epidemics and contagious diseases; and others. Construction is slated to be completed within three years under the supervision of local and European companies.”

Furthermore, on the same day the Iraqi Government also announced that all victims of terrorist strikes in the country should receive treatment and other needed psychiatric care which would be shouldered of by the state. This can be stressed by the statement released by Ali al-Musawi, Government media advisor: “The government will provide treatment to people suffering from psychiatric conditions and shock due to terrorist attacks, whether the treatment is administered inside or outside the country, and regardless of the length of the treatment.”

This is a great initiative lead by the Government as this will greatly help the citizens in recovering from traumas and other psychological challenges. As a matter of fact, the Government allotted 150 billion of Iraqi dinars to help their citizens to get treatment (especially children and women). Even the Deputy Prime Minister Saleh al-Mutlaq said, “The wave of terror that affected tens of thousands of innocent Iraqis resulted in people suffering from psychological disorders, which will inevitably lead to problems within Iraqi society.”

Swift treatment – that is what the Iraqi Government is heading right now because if these victims won’t be treated at the shortest period of time they might hurt those living with them or themselves.

Saleh added, “According to Health Ministry Undersecretary Dr. Khamees al-Saad, a medical committee will meet every Tuesday and Thursday at ministry headquarters in Baghdad to examine victims and suggest appropriate treatment. The committee will decide if a patient needs treatment outside the country, or whether he or she can be treated inside Iraq at the hands of local physicians and at the expense of the state.” Iraq seems to be saying to everybody that they are not just a country of oil but also a nation with real people who need each other’s help. Besides, what is the use of hitting their ambitious goals if their people are suffering?

Iraqi Education Minister Mohammed Tamim also released his statement regarding the psychological treatment operation by the Iraqi Government, “This plan includes posting a psychiatrist to every school — a measure taken in collaboration with the United Nations mission in Iraq, increasing extracurricular activities such as painting and sports and reinstating trips and camping in order to help these suffering children and encourage them to engage in life again with their peers.”

Iraq just nailed it and by building a medical city, they surely will take a great leap in proclaiming to the whole world that they too are a nation of people who can be united among the war they had experienced.

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Iraq’s First Ever Oil Find In Decades

Not everyone is aware about the undiscovered oil reserves in Iraq and not even Iraqi people themselves. However, January of 2013 just opened the eyes of the world when an unexpected oil reserve was found just hiding beneath the corridors of the south-eastern province.

CNN just released their latest report on Baghdad Iraq last January 21, 2013. They noted that an Iraqi state-owned oil company has just discovered oil in more than 30 years since its exploration of oil began. Even Assim Jihad the spokesman of Iraqi Oil Ministry had his say, “The company found at least a billion barrels of crude under the ground in a south-eastern province near the border with Iran.. The discovery in Maysan, about 350 kilometers (215 miles) south of Baghdad, is a ‘significant achievement’ for the country. Despite vast reserves and reliance on oil for government income, exploration in Iraq has been hindered by decades of conflict.”

Come to think of it. Iraq is today’s fourth largest oil reserves in the world and its economy (that includes their government) relies mainly on their crude oil production which makes Iraq 90% dependent on oil. It has just discovered oil that will help them achieve their ambitious goals for the next 10 years or so. Will not this bring a greater change to their current state? If being the fourth largest oil producer in the world gives about 3.2 million barrels of oil a day, how much more if they can build up solid infrastructure to support and make use of the newly discovered oil?

New oil find was discovered seven months right after the exploration company began their drilling. What makes this fascinating is the location where it was found. No one expected that the south-eastern part of Iraq still has some gems to hide because even from 2010, Iraqi officials mainly get the oil source in the southern oil fields. Way back 2010, Iraqi officials had an estimate of 143 billion barrels of extractable oil. This means a great breakthrough not just for Iraq but most importantly to their investors.

How’s the exploration in reviving the economy? Well, to add it up the Chairman of the Securities d. Abdul Razza al-Saadi had his addition “The Iraqi Stock Exchange will witness a remarkable development during the year 2013 and for the inclusion of mobile phone companies in the market updated to Mttlaptha the transformation into joint-stock companies…a large cash chunky block and frozen citizens will enter the Iraqi market and will work to achieve the goals of major development in the country through the creation of an investment environment that was their tools cash chunky block houses, noting that near the trading of shares of company Asiacell in the stock market early February after completion conditions Listing and included converted into joint-stock companies.”

So, what’s the point in all of this? Simple – even nature wants to say that there is more in Iraq than foreign investments and Iraqi dinar trading. There is more that the world needs to see before speculators could spread out rumor or guru wannabes could share hearsay.

“Year 2013 will witness the presence of 10 adherents of the Authority and the Iraqi
market to attend the annual conference of the U.S. Securities Commission next April and this review will contribute to building capabilities to the members of the delegation and see the evolution in the global market activities.” Saadi continued.

Let us wrap it up, first oil find in 30 years, chunky block and frozen citizens working out together to revive the economy. Do these events give insignificant values to the Iraqi dinar notes that most of us have been holding for more than a year? Let the events speak for themselves.

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Iraq Approves Samsung Multi-million Oil Field Contract

Taking a leap on attracting foreign investors is no joke. Big companies may always have the means to invest to any country but not everyone of them got the resources to catch the attention of any big company like Samsung. However, in the case of Iraq attracting an internationally known company like Samsung, it seems that it is the other way around.

Multi-million investments from Samsung Engineering

Last January 16 of 2013 Reuters, released a report telling that the Iraqi Cabinet approved a multi-million oil field service contract with international company Samsung Engineering for the rebuilding of Badra oil field. The amount agreed was 879 million US dollars which will cover up the necessary expenses for the development of the said project. This means that this project will be the first established oil field in the region of Badra. As a town located in the south eastern part of the country, this is quite an opportunity to lower the number of unemployed citizens and create a tradable market for its town people.

What’s in the contract?

Under the agreed contract, Samsung will help build a facility that will speed up the process of crude oil production from the field which has a forecasted output to be about 170,000 barrels per day expected to be reached in the next four years. This target was predetermined by the Iraqi Oil Ministry.

This also supports the on-going efforts from Japanese Bilateral Relations in their way to strengthen the economic interests. Doesn’t this sound good when a powerful country and a big company are ready to help? Even the Deputy Prime Minister noted, “..that Iraq’s President called for the intensification of efforts between Iraqi and Japanese sides for cooperation in the fields of agriculture, industry, health and environment and other service areas.”

How serious are the Japanese in teaming up with Iraq? Noted by the Agency News, “The algalnbine, discussed the political situation in the region and their implications for inside Iraq and that Iraqi parties agree to overcome problems and unite to build a secure, unified homeland. The Japanese Ambassador reiterated his country’s keenness to develop relations with Iraq showing confidence exceeded all crises and obstacles facing it, noting: the desire of Japanese companies on the development of economic activities in Iraq.” How would this gradually affect the currency of Iraq?

Who are ready to help Iraq build its ambitious goal?

Furthermore, Turkey’s TPAO, Petronas, South Korea’s KOGAS and Gazprom Neft are teaming up with each other to build the field near the border of Iran. This is because the Iran border got estimated oil reserves of about 100 million barrels of oil. Gazprom Neft (A Russion company) now expects to start the big production in August of 2013 for 15,000 barrels of oil in a day.

We could actually make use of simple arithmetic here in counting all the involved companies or countries that are exerting efforts to leap up the oil production of Iraq. Counting from Japan, US, South Korea and Russia we could actually have four countries in a row. Wouldn’t these countries make a great difference in how Iraq deals with nature’s gift? How wise is Iraq in handling investments from countries that are more influential and powerful?

Long term goal of Iraq is 12 million barrels per day in the next three years. Well, people may think that the aim is quite out of reach given that Iraq is still under political controversy but Iraq is still continuing to take a greater leap to become one of the world’s biggest crude oil suppliers for the years to come.

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Iraq Bank To Boost Their Gold Reserves

Just what an Iraqi economic analyst Majid al-Suwari once said, “Gold is the first shelter for countries in times of crisis.” So, is Iraq hitting for Gold right now? What’s the agenda for this one and how would this affect our Iraqi Dinar investments?

Iraqi locals might still be oblivious to what the media has been trying to deliver but, sooner or later everyone may participate on the country’s efforts to make some more gold reserves this 2013. According to the International Monetary Fund statistics, there has been an increase of more than 4 times from the original gold holdings of the country for only 3 months – from August to October of 2012.

What’s the result for the exerted effort? The country has approximately 31 tons of gold which is the first to happen in years in the history of modern Iraq. What makes gold very enticing is the fact that its value has continually increasing not like any other country’s currency. Its value and its influence for more than a hundred years now have continued to uphold even against the US dollar exchange rate.

So, what is Iraq up to? Iraq banks (and even some other powerful countries) perceive that gold has long-lasting value which is amazingly not affected by the rapid economic changes in the world. In other words, Gold can be a good substitute or a way of compensating any insufficient cash reserves whenever there are political or economic struggles. With this information, Iraqi leaders know that above everyone else, Iraq needs it the most.

Even the member of Parliamentary Economic and Investment Committee Abdul Abass Shiyah had his say, “it is normal for the public not to read between the lines of sharp increases in gold reserves. The Iraqi dinar exchange rate is based on the amount of cash reserves, which include not only money but gold as well.”

He stressed that, “Gold is the most stable component of official reserves. It will result in the stability and possibly the improvement of dinar exchange rates. The public will sense indirectly the impact of the increase in gold reserves. When the value of imported goods decreases following the increase in the value of the dinar, which directly correlates to the increase of cash reserves, the public will remember the steps the state took to boost gold reserves.”

Why would Iraq boost such effort for gold holdings? Well, the country needs security more than ever. Last August of 2012, the Central Bank of Iraq announced that its cash reserves reached at about 67 billion US dollars which was brought about mainly by its oil exports. Although the country has multiple reserve components like US dollars, Euros and Pounds, still the Central Bank need a lot more to fund major governmental projects and other important governmental activities.

Shiyah continued, “The Iraqi reserve is figuratively described as ‘cash,’ but in fact it has multiple components. Iraq owns U.S. dollars, euros, pounds, gold and different types of securities.” Since the year 2003 when the Saddam Hussein issue broke up, the country got insignificant cash reserve but according to another economic analyst Majid Suwari, “Iraq’s reserves amounted to $39 billion in 1979; however, Saddam’s policies squandered that fortune.”

So, how does this connect with the current issue on our Iraqi dinar? Suwari got his answer: “The central bank pursues the policy of increasing gold reserves amid the government’s spending tendencies. The Iraqi government needs the dinar to cover its huge expenses. The central bank provides it with the necessary Iraqi dinars in exchange for U.S. dollars obtained through the oil trade. Afterwards, the central bank converts dollars to gold.”

Iraq has gotten wiser to take financial advisers and statistics outside from its premises. Even if they can’t deny the fact that it still has a huge amount of debt that already reached 125 billion US dollars. However, Iraq seems to not to care about stopping the Baghdad Gold rush no matter what the cost.  We rate this as a good move the the long term value of the Iraqi Dinar.

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Annual Iraqi Energy Forum Review

When Iraq Energy Institute held the annual energy forum in Baghdad last December 11 to 13 of 2012 speculators have raised a lot of questions regarding the current Iraqi oil market and the real-time oil reserve the country has. This time, we’ll take a closer look on what really happened on the 3-day forum that will affect 2013.

In collaboration with the members of the Iraqi Council of Representatives and 220+ participants from the House of Representatives with former ministers, politicians, diplomats, UN representatives and significant individuals who are expert in the oil industry – a very organized Annual Energy Forum was held in Baghdad.  It gained astounding results because of the platform provided by specialists who contributed much to the discussion regarding the most important issue – Iraqi economy with numerous logistical challenges.

Day 1 (December 11, 2012)

First day included 3 workshops and presentations with awarding of the Iraq Energy Award in the annual institute. 3 workshops were as follows:

a)      Business Administration (Hosted by Ernst & Young).

b)      Operations / Electricity Sector Contracts (Hosted Maxwell Stamp).

c)       Discussion on Oil and Petroleum Policies.

From a marketer’s point of view, any platform or business framework needs to have a well-organized terms and conditions that would guide the implementation of the framework. Simply put, Iraq did it so well when they took the Discussion on Oil and Petroleum Policies right on the first day of the event.

Day 2 (December 12, 2012)

Focused discussion on the efforts needed to improve and develop the oil and petroleum industry with the presence of the invited bodies. Petroleum policies presented on the first day was reviewed thoroughly and developmental ways to support large projects and water injection plans in oil wells were given the attention considering the needed mechanisms to lessen risks. In short, business framework to rebuild the oil industry was the main point of the discussion.

Day 3 (December 13, 2012)

Hosted by Schlumberger, taken as the last day of the annual forum the discussion was focused more on the infrastructure and renewable energy sources to accommodate the needed training and organization for a more effective workforce.

With the 3-day focused group discussion that tackled the greatest issue circling around Iraq, we can smell real seriousness. Take it from Dr. Adnan al-Janabi, head of the Oil and Energy Committee in the Iraqi parliament when he said, “The forum provides a unique platform for experts reflects the debate vocational prevailing in Iraq for energy policies in the framework of the law and the Constitution, which is a very important topic occupies the Commission on oil and energy, and contribute to the enrichment of the discussions within the Commission on a range of topics vital task applicable legislation such as post revenue laws and the laws that govern hydrocarbons. ”

Mr. Ali Al Sayegh, Chairman of the Iraq Institute for Energy also had his say: “We seek to encourage constructive and frank dialogue on sensitive political issues that occupy Baghdad; desire to reach the goal of the president, which protect the vital interests of the people and the Iraqi government.”

Sounds like the great minds of Iraq and neighboring countries have taken action to brainstorm on what should be the right actions to rebuild the empire. The problem really lies on how to rebuild the oil industry to uplift the economy. So, will numerous heads beat a single problem?

However, there has not been a final presentation and business framework to follow for an implementation because they still need to officially present it to the Iraqi Government and Parliament and wait for their approval.

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Iraq Gets Multibillion Investment From Britain

2012 now history has been a year full of surprises for Iraq.

• Hosting the Arab League Summit
• Invited by the IMF conference
• Maliki met by President Obama
• Kuwait-Iraq relations getting better and reaching the highest oil revenue

Are there any more surprises when Iraq just made it surprisingly? It might not be a really big deal if a British investor wants to invest on Iraq but just last December 30 2012, not just any investor but a British millionaire named George Soros is surely something to keep an eye on.

According to Shwan Taha, who once worked for hedge fund billionaire George Soros “He now owns Iraq’s biggest independent brokerage.” Even Rabee Securities said that “He had seen interest from Britain increase by “more than” three times in 2012.

Currently, Mr. Taha is attracting overseas investment in Asiacell, which according to him, has raised $1.3bn (£800m) in the Middle East’s making it the biggest flotation in 4 years. So, what would be the connection between this telecommunication groups to Iraq? The telecommunications group, which has nearly 10 million subscribers, noted by Mr. Taha will represent one-fifth of the value of the entire Baghdad-based Iraq Stock Exchange. How’s that for a partnership?

Mr. Taha even continued, “UK-based funds are looking at Iraq,” said Mr Taha. “When I started going out to the international markets in 2008 I went through my Rolodex for hedge fund friends in New York and London and they would talk to me just because they were interested in why I would look at Iraq. Now I’m cold called on a daily basis by international institutions, about one-third of which are from the UK. What Iraq needs is international investment.”

We’ll let’s take a look at how many companies have rested their faith on Iraq for the year 2012. Actually, there have been approximately 2000 foreign companies who have been participating in the Iraqi market for securities and 80 thousand local companies bearing capitals of about 2 billion dollars.

Noted TheCurrencyNewshound, “That the Securities Commission proposed reducing the excise tax on corporations for the purpose of encouraging them to enter into the market. Some lawmakers refused to do so and put proposals to develop state-owned enterprises through privatization or work in partnership with the private sector to become companies with sector mixed to enter strongly into the market.”

In actuality, this is not the first time that Iraq has attracted a multi-millionaire. The first who was noted to buy trillions of Iraqi Dinar was Donald Trump. Now, Britain is catching up with the United States in investing to Iraqi Stock Exchange.

There have been a lot of views and expectations from this shift of investments but Mr. Taha has his expectations that for the next 5 years, 25 per cent of all the institutional investment in Iraq will be from UK funds. If this will continue to go well, the needed 600 billion US dollars to bring back the whole economy to life might as well be brought up to reality in the shortest time possible. Although the country has vast oil reserves but, not all of their reserves could garner the needed funds in 10 years. Right now, Rabee Securities stand as the sole adviser arranging the deal on Asiacell’s flotation although HSBC and Morgan Stanley were originally supposed to take the deal.

How will a multi-billion investment affect the 2013 of Iraq? How is this for welcome news for the Iraqi citizens and Dinar speculators? Does Shwan Taha, Rabee Securities CEO, got his point and took the right deal? Will this not deteriorate his long been harnessed experience and reputation by taking the risk of promoting Iraq for foreign investment?

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Iraq And Kuwait Recovering Relations After Hard Times

Will it be possible for two enemies to become two best of friends for a common purpose for a short period of time? For the common good of the citizens, will Kuwait give Iraq the chance to collaborate with them after the tragic damage it had brought?

Take it from the Secretary General of the UN, Ban Ki-moon when he confirmed, “For Iraq and Kuwait opportunity to announce a new collaboration.”

Just last December 16 of 2012, it was reported that according to UN, year 2015 will be a year of closure of the file on Baghdad’s obligations towards Kuwait and greater compensation is at stake. In other words, Iraq has the full support of the United Nations in normalizing and coordinating their relations.

Stressed by Moon during a report in the Security Council dated December 14, 2012, “The next few months are ‘confidence-building period’ for Iraq and Kuwait to settle outstanding issues… the next six months that the two sides depends on the full support of the United Nations for normalization and coordination relations.” Does this mean that UN just got a new declaration of cooperation and full support to normalize the relations and coordination between the two countries? Will UN be a great influence to settle issued all at once?

Let’s take it from the Kuwaiti Prime Minister when asked about the issue, “I am honoured to visit Iraq this month, and will send the visit an important message that Kuwait did not have any problems with the Iraqi people, but was with the former regime has gone…should forget the past and embark on a wide space, and our duty to forget the past and look to the future, and there is no other way but to join forces between the two countries and the two peoples brothers.” If the Prime Minister of Kuwait released these words, therefore Iraq had shown sincere intentions in relation to the issue of missing persons. Is Iraq driving their efforts to the right course or are they driving some of their efforts to things that are less important?

Moon even continued, “The Board of Directors of the Compensation Committee of the UN noted Iraq’s commitment to fulfilling its obligations.. that appreciation continued to the Government of Iraq and the Committee of Financial Experts Iraqi for their continued cooperation with the Compensation Committee.”

When Iraq allotted approximately 9 trillion of dinars to pay its foreign obligations to Kuwait and made efforts to show good relations, will the country expect a long lasting good relations? Or, is this the right time to be busy on building up better international relations when Iraqi President Jalal Talabani suffers a stroke and was moved to a ventilator? Given that there has been struggle in their leader’s health, will a country stand and fight against the challenges with the on-going dilemma of who’s going to be the heir of the position?

London-based daily Al-Hayat reported that there has been a fear felt by a lot of Iraqis due to an anticipated political void and collapse of the Iraqi President’s efforts to solve the crisis among the Kurdish region against the ruling coalition. Worst case scenario, who could take the place after Talabani? Speculations have raised that it will be either Kurdish politician Barham Salih, or Sunni politicians trusted by the Shiite Prime Minister Maliki.

However, no one actually knows where is this collaboration between Kuwait is heading given that there is already a slight political hardships because of the President’s condition. Some people even said, like A-Sharq Al-Awsat, that even President Jalal Talabani’s wife could be a candidate to take his position if needed.  With the former regime gone in Iraq, and coalition forces gone home from Iraq, Kuwait and Iraq are now on a level playing field to sew the remaining threads of a stronger relationship including paying off all debt from the war.

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One Of The Top Crude Oil Producers

Given the fact that non-OPEC supplies are performing so well, will this not become a threat to the country’s current crude oil exports? Given the current trend which, most people think would continue for the next 10 years or so, will Iraq be able to accommodate the outpacing market demand for crude supply without compromising its current production capacity?

Well, the Minister of Oild of Iraq got all the answers to all our questions regarding Iraq’s position being recognized as one of the top crude oil producers by OPEC. Delivered on December 13, 2012 by HE Abdul-Kareem Luaibi Bahedh, Minister of Oil of Iraq and President of the Conference, during the 162^ndMeeting of the OPEC Conference:

“Excellencies, ladies and gentlemen,

Welcome to Vienna for the 162nd Meeting of the OPEC Conference.

I should like to extend a special welcome to His Excellency Dr Abdel Bari Ali Al-Arousi, the Minister of Oil and Gas of Libya, who is attending the Conference for the first time as Head of his Country’s Delegation. Let me also thank his predecessor, His Excellency Eng Abdurahman Benyezza, for his contributions to the Conference during his time in office.

As we approach the end of the year, we are faced with a period of continuing uncertainty about the oil market outlook. To a great extent, this reflects the lack of a clear vision on the economic front. The global economy has experienced a persistent deceleration since the beginning of the year. The combination of an austerity-driven Euro-zone, the weakening recovery in Japan and clear signs of a slowdown in major emerging economies has provided the main factors behind this development. In the light of this, world oil demand growth forecasts for this year have been revised down frequently. At the same time, non-OPEC supply and OPEC natural gas liquid output have continued to perform well, outpacing demand growth. This trend is not expected to change in the coming year, with the market continuing to see high volumes of crude supply and increasing production capacity.

Turning to oil prices, while these have strengthened in the six months since the Conference last met, there have been continuing fluctuations. In June, at around the time of the Conference, prices were at their lowest daily levels for the year, with the Reference Basket price below US $100 a barrel throughout the month. It even fell below $90/b for three days. However, the Basket price then rallied strongly past $110/b in the middle of August. But after that, for most of the time since mid-September, it has been several dollars a barrel beneath this mark. This drop has reflected mounting concern about the global economic slowdown, the pessimistic future demand outlook and significant stockbuilds of crude in the United States of America. Such downward pressures have outweighed supply concern arising from geopolitical factors.

For its part, OPEC continues to do what it can to achieve and maintain a stable oil market. A key aspect of this is to ensure that the market remains well supplied with crude at all times, with fair and reasonable prices. For this to happen, there must be clear planning for the future, with sound investment strategies ensuring the necessary levels of production capacity in the years ahead. But the drawing-up of such strategies is impeded by uncertainties on both the demand and the supply fronts, as well as by high levels of price volatility. Clearly there are many doubts about the market outlook today. Without market stability – that is, sustainable market stability – all parties will suffer, producers and consumers alike.

At today’s meeting, therefore, we shall be examining the market outlook for next year and further into the future. Our focus will be on enhancing market stability in the interests of all parties, as well as in support of steady world economic growth. However, this is not the responsibility of OPEC alone. If we all wish to benefit from a more orderly oil market, then we should all be prepared to contribute to it. This includes consumers, non-OPEC producers, oil companies and investors, in the true spirit of dialogue and cooperation.”

Taking the leap as one of the main producers of crude oil in the market and being recognized by OPEC is so great a responsibility that Iraq is now facing. We all could see the seriousness on the speech taken by the President of the Conference. However, will Iraq continue to hit the mark and meet the outpacing market demand?

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