Iraq Economic News The most important economic and business news and
articles related to Iraq
A close agreement on oil and gas law
April 20th 2008
Iraqi Prime Minister, Nuri al-Maliki, said on Wednesday that Iraq is close from completing the oil and gas law, which is long awaited. He told a committee at the European Parliament in Brussels, during his there to discuss cooperation with the European Union on energy, "We are close to an agreement on a final version of the oil and gas law."
Vice president of the Iraqi parliament, Khaled al-Attiyah, warned on Tuesday that the Iraqi government and officials from Kurdistan region will resume talks soon to try to settle differences that hinder the passing of the bill. An Oil Ministry official said on Wednesday that the main reason for the delay is the contracts signed by the authorities of Kurdistan region.
Japan to build largest hospital in the city of Halabja
April 20th 2008
The Japanese ambassador of reconstruction projects in Iraq revealed on Wednesday that the Japanese government decided to build the largest hospital in the city of Halabja southeast of Sulaymaniyah and according to international standards.
Anu Sutee Karimato said, "This project is the first of its kind implemented by the Japanese government among its projects in Kurdistan region, and it would be announced of during the next week," without clarifying more details on the duration and cost of the project.
Imminent agreement on gas between Iraq and Europe
April 20th 2008
European Union says it is about to reach an agreement with Iraq over the next few weeks, according to which Iraq will provide the Union with gas and crude oil.
Iraqi Prime Minister, Nuri al-Maliki who is visiting Brussels, said that his country is about to issue a new law governing the oil-sector in Iraq and encouraging investment.
European officials said that Iraq would increase its production of oil, and promised to provide 5 billion cubic meters of natural gas to Europe as a sign of good faith. The European Union had announced last Monday that it has received promises to provide European countries with ten billion cubic meters of gas annually from next year.
It is noteworthy that Europe relies on Russian gas to satisfy only a quarter of its need of natural gas; it will also contribute in building a new pipeline to transport gas from the Turkish border. Europeans hope that the new pipeline (known as Nabucco) will transfer gas from Turkmenistan across Iraq and the Turkish territory to Europe; however, work on building Nabucco line will not begin before 2010, and it would convey only %5 of the European continent need for gas.
The gas which al-Maliki promised the Europeans will be extracted from the field (Ekas) in the western province of Anbar; Iraqi Oil Ministry had announced earlier that it was negotiating with Shell Company for oil to do the extraction tests on that field. On the other hand, al-Maliki demanded the Europeans to provide the necessary expertise to rebuild the productive and administrative bases for the oil sector in Iraq.
Opening the Fifth International Exhibition for Rebuilding Iraq amid an official Iraqi absence
April 19th 2008
The Fifth International Exhibition for Rebuilding Iraq opened in the Jordanian capital of Amman on Monday with the participation of more than 450 Arab and foreign companies amid the absence of Iraqi government representatives.
The opening ceremony was attended by the Jordanian Minister of Industry and Trade, Amir Al-Hadidi, who expressed his hope in the success of the exhibition, saying he expects that there will be considerable room for all companies to participate and contribute in the reconstruction of Iraq. He added that Jordan has and will continue to participate in the reconstruction of Iraq due to the close relationship between it and the Government and the Iraqi people.
In reply to a question on the impact of the absence of the Iraqi government, Al-Hadidi said that the private sector has a significant impact in the current economy of Iraq, pointing out that he did not know the reason for the absence of Iraqi ministers in concern in this exhibition. The security turmoil in Iraq have been the main obstacle facing investment in the country.
Iraq oil output to triple
November 10th 2007
Trade Arabia
Iraqi oil production should nearly triple in the next few years as it explores more areas and attracts investment, the former Iraqi oil minister said.
Thamir Ghadhban, who held the post from June 2004 to May 2005 and now advises Iraqi Prime Minister Nuri Al Maliki on oil and energy issues, said Iraq's government planned to increase production to six million barrels per day by 2015.
'Iraq is one of the least-explored countries among the major oil producers,' Ghadhban told an audience at Stanford University in California.
Iraqi oil production is currently 2.25 million barrels per day, slightly less than production during Saddam Hussein's rule. Exports are 1.7 million barrels per day.
Immediate objectives for increasing production included exploring the Kurdistan Federal Region, the western deserts and the Mesopotamian sedimentary basin, Ghadhban said.
Iraq also needed to develop single-buoy moorings in the Gulf and invite foreign investment, he added.
Iraq, a founding member of Opec, has the world's third-largest proven oil reserves at 112 billion barrels, with another 214 billion barrels of probable reserves.
Iraq’s 18 provinces get $30 million each
November 10th 2007
Azzaman
Iraq’s 18 provinces will get $30 million each to help reduce rampant unemployment in the country, according to the Minister of Labor and Social Affairs.
Mohammed al-Sheikh said the provinces were under obligation to use the money “solely for employment purposes.”
The money, Sheikh said, should only be disbursed for the start up of small businesses.
The project is hoped to eventually reduce the number of jobless in Iraq. At least 40 percent of Iraq’s working population is believed to be idle.
The ministry wants the money to be extended as part of soft loans and in a way that makes it easy for the beneficiaries to pay back.
Preferential treatment, according to the minister, will be given to unemployed university graduates and people who have lost businesses due to ongoing military operations in the country.
Employment centers have names of more than 1 million jobless Iraqis
November 10th 2007
Azzaman
Employment and training centers across the country have to deal with an army of jobless Iraqis whose numbers have recently shot to more than 1.2 million, a statement by the ministry of labor and social affairs said.
The massive jobless figure includes only those who have registered with these centers in the hope of finding a job.
Ministry officials estimate that the jobless figure maybe twice that number as many unemployed Iraqis simply do not bother to register with these centers.
The statement said only 101,890 names in the country’s bloating jobless books were women.
The figure also does not include the nearly two million Iraqi refugees almost all of them jobless who have fled to neighboring states.
ISX - Daily Analysis
November 10th 2007
Iraq Stock Exchange hold Fourth session for this month , the numbers of Traded Companies were (26)and still (24)companies are off Trading Floor because of their General Assembly meeting which they decided to Increase their Capital. ForToday the numbers of Traded Shares were (495) m/ shares and Trading volume (741) m / ID, the price Index was about 35.740 point .Bank sector Index was(36.350),Investment sector Index was(109.180),Services Sector Index was(77.320) , Industrial Sector Index was(11.361), Hotels sector Index (14.796). from the Bulletin we can see the Trading for (10) banks,(1) Investment,(4) Services Company,(9) Industrial companies, (2) Hotels company . Generally the shares prices were Increased in (2) Companies,Decrease in about (13) &stables in (11)
Baghdad International Airport business development opportunities expand with convention center, office suites
November 2th 2007
Business development opportunities will soon be expanded at the Baghdad International Airport complex.
The U.S. Army Corps of Engineers (USACE) is overseeing work to convert the two former domestic terminals into a modern convention center. In addition, an eight-story structure is being remodeled to offer 250 office spaces for lease.
"That convention center will have the capacity to handle gatherings up to 25,000 people," says USACE project engineer Matthew David. "It will include exhibition halls, offices, conference rooms, and a restaurant. We're putting in new plumbing, plastering, electrical, lighting, and air conditioning. It's located at the transportation hub of Iraq, a perfect location for such a facility." The two former terminals are both two-story structures, one measuring 53x138 meters, the other 31x150 meters. The $6.3 million renovation project is about 20 percent finished with a projected completion date of next spring.
Next door to the convention center is an eight-story 3,076-sq.-meter office structure. "Businesses will be able to come in and rent space as needed, from one office to several floors of offices. Work there includes new restrooms, electrical, fire protection with sprinklers, lighting, new ceilings, plastering, a new mechanical system including two 200-ton air conditioning chillers, office furniture, a lighted parking lot, and a cafeteria.
"Our Iraqi contractor is definitely interested in the mission of rebuilding Iraq and is taking extra steps to ensure that the office building will meet the needs of its customers," David said. Currently that $4 million project is about 30 percent finished with a projected completion date of April 2008.
Majed Michel, manager of the Baghdad Business Center located between the new Convention Center and the office building, says he is very encouraged by what these new facilities will offer Iraq.
"This will significantly enhance our economic development opportunities here. We're already planning our first trade show in the new convention center next spring that will focus on the oil industry. We're encouraging international companies to consider opening a satellite facility in the 'executive suites' office building here at the Baghdad International Airport. I'm very optimistic about Iraq's future," he continued.
"There are good people all over the world who I would like to encourage to visit Iraq and help us move forward. This is an historic opportunity. When you have cooperation among individuals, anything is possible." he added.
A fence between Saudi Arabia and Iraq
November 2th 2007
Documents obtained by Reuters showed that the two European companies E.A.D.S. and TALICE as well as the American company Raytheon are among the companies that submitted offers to build a border fence between Saudi Arabia and Iraq.
Saudi officials said last month that Saudi Arabia, the biggest oil exporter in the world, wants to build a fence of barbed wire of 900 km in length on its borders with Iraq and the installation of thermal imaging equipments and radar devices.
According to the list of companies obtained by Reuters, and was confirmed by three different sources, the groups comprising include 14 local and global companies made presentations at 28 of October for the implementation of the project.
The list also included Al-Seif Company for engineering and construction as well as Al-Arrab Contracting Company owned by Al-Rajihi Bank. There were also two companies made offers to implement the project and they are: the American company D.R.S. Technologies for defense equipments and the South Korean company L.G Electronics.
An official at Al-Seif Company, who asked not to be identified, said "There are several alternative options in the presentations because of the complex nature of the project. It is difficult to determine the value of the project." Two other contractors said that the project would cost about four billion riyals ( 1.07 billion dollars), and that it is part of a broader defense plan for securing the country's borders with the length of 5600 km.
Prince Nayef, the Interior Minister, said last year that the border fence has become a necessity because of the escalating violence in Iraq.
Saudi Arabia plans to enhance border security by adding hundreds of radar equipments, coastal monitoring stations, communication networks and reconnaissance planes in different parts of the country.
The cost of such a plan will be about 20 billion riyals (5.33 billion dollars), according to what was said by the magazine Middle East Economic Digest (MEED) last year.
Mubarrid' is participating in the exhibition of reconstructing Iraq
November 2th 2007
"Mubarrid" Company for transport announced its participation in the Exhibition of Reconstructing Iraq to be held from 4 to 7 next November on the ground of the international exhibitions in Musharraf under the auspices of His Highness the Crown Prince Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah.
The Company said that its participation in this exhibition will be through its expertise in the area of transportation which is one of the foundations of building infrastructure and economic progress; the company presents a system of integrated logistic services, including road transport services of all kinds through a fleet of the latest equipments and sophisticated modern transport services, as well as air and sea freight through the company National Express, as well as its manufacturing of all types of trailers and semi-trailers through Babtin factory for the manufacture of automobile structures owned by "Mubarrid" Company for transport.
T.A.T. Oil comes back to Iraq
November 2th 2007
Russian Company "T.A.T. Oil" which used to work in Iraq in the period before the war, is having the opportunity to return to this country in the framework of cooperation with the American company Hyperion.
The American company has proposed to the Russian company to unify efforts to invest in heavy oil fields. The company Hyperion is a private company often operating in North America. There is information that it had begun work in Iraq.
"T.A.T. Oil" has tried to work in Iraq under an agreement reached to work in a number of oil fields in Iraq in the nineties of the last century; however, international sanctions have prevented this. " T.A.T. Oil" is implementing a number of projects outside Russia, in Libya and Syria, and it is studying the possibility of working in Sudan, Venezuela and expands its work in Russia. The company gives top priority to the extraction of heavy oil.
According to expert Demetri Lutiagin of "Phyllis Capital", the Iraqi State under the new law will use local companies to produce oil, which means that " T.A.T. Oil" must enter in cooperation with an Iraqi company along with the American company Hyperion.
The expert Constantine Riley of the company "Finam" said that work in Iraq is still fraught with danger.
Iraq Pumps Daily 600 Thousand Barrels of Oil form Kirkuk
October 6th 2007
PUK Media
A source said that Iraq pumped 600.000 barrel/day of Kirkuk’s oil to Turkey. ”Pumping is continuous by an average of 25.000 barrel/hour or 500 to 600 thousand barrels/day.” Navigational sources mentioned that Iraq has resumed pumping the oil through the northern pipes line to Turkey after it has been stopped for 10 days. The terrorist attacks stopped pumping of oil from Kirkuk fields to Jehan Harbor for several times since March 2003, and the last attack was in Sept. 19th. The source added that there are 3.7 million barrels of oil in the containers of Jehan Harbor, and this amount is available after loading an Oiler with an amount of 1.1 million barrels. Iraq soled by auction an amount of 5 million barrels in Jehan Harbor, which must be loaded on stages of 1-2 million barrels till Oct. 22nd, and it has soled earlier an amount of 2.5 million barrels to be loaded by Oct. 5th. It’s worth mentioning that Iraq’s major dependence is on exporting oil from al-Basrah Harbor, where an amount of 1.5 million barrels are soled daily.
Oil security improves, Iraq chief predicts
October 6th 2007
Security of the oil infrastructure in Iraq is to be less of a priority than the economic factors, Iraq's national security adviser predicts.
"Probably the last two years, one and a half years, we were talking about security, security, security," Mowaffak al-Rubaie said Friday at the Center for Strategic & International Studies, a Washington think tank.
Rubaie, in a mostly optimistic speech and answers to reporters' questions, said the trend in Iraq is that the security situation is improving, along with help and partnership with the United States.
"If we can sustain this level of security until the end of the year, I can tell you next year is going to be about services, services, services. Economy, economy, economy," he said. "And then security."
Iraq's vast oil and natural gas reserves have been hit hard by decades of misuse by Saddam Hussein, stunted by U.N. sanctions, and have survived thus far in the post-invasion war zone. While they need tens of billions of dollars in investment, the hydrocarbons and electricity sectors need a break from the regular attacks that are keeping out investment and hurting repairs.
"We are going to have more capital investment for next year in 2008 in the oil sector," Rubaie said. Iraq has been unable to turn capital allocations into expenditures, another setback.
He said he met with U.S. Energy Secretary Samuel Bodman while in Washington this week, and from the meeting produced a list of small "quick fix projects Â… to try to increase the number of barrels every day we get out."
"Protection of the pipelines and the infrastructure, gas as well as oil pipelines, as well as the power lines, these are issues we prioritize for next year," he said.
Iraq currently produces about 2 million bpd, though its reserves could handle much more. A five-year strategic plan has Iraq producing more than 6 million bpd.
That sector is pivotal," Rubaie said, "it's like the jugular vein for us."
Iraq mobile market forecast at US$1.5 billion
October 6th 2007
Business Intelligence
Research firm Research and Markets has announced the addition of a new report 'Iraq Telecommunications Market Opportunities, Strategies, and Forecasts, 2007 to 2013' to its offering.
The number of mobile subscribers in Iraq for the three largest companies is at 9 million users at the end of 2006, representing a mobile penetration rate of approximately 33%.
The market added a total of 1.36 million subscribers over the quarter to end-2006, representing the strongest number of user additions since launching service in December 2003.
There are a large number of operators besides the top three, operating outside the registered spectrum. Many of these are using a voice over Internet Protocol (VoIP) wireless local loop or WiMAX equipment.
The addition of 9 million subscribers in a little over three years is a significant achievement given the state of security on the ground in the country. Nationwide competition has been a positive development in the Iraqi mobile market with Iraqna having begun 2006 with over 40% market share, and losing share in each quarter of the year, to end the period with a 32.8% share among the top three cellular providers.
Iraq telco services markets at US$1.19 billion in 2006 are anticipated to reach US$1.5 billion for cellular systems iin 2013 and US$2.26 billion for wireless local loop systems.
This is the 319th report in a series of market research reports that provide forecasts in communications, telecommunications, the internet, computer, software, and telephone equipment. The project leaders take direct responsibility for writing and preparing each report. They have significant experience preparing industry studies. Forecasts are based on primary research and proprietary data bases.
Forecasts reflect analysis of the market trends in the segment and related segments. Unit and dollar shipments are analysed through consideration of dollar volume of each market participation in the segment. Market share analysis includes conversations with key customers of products, industry segment leaders, marketing directors, distributors, leading market participants, and companies seeking to develop measurable market share. Over 200 in-depth interviews are conducted for each report with a broad range of key participants and opinion leaders in the market segment.
The research has been carried out by leading analysts Ellen Curtiss and Susan Eustis.
Ellen Curtiss conducts strategic and market assessments in technology-based industries. Previously she was a member of the staff of Arthur D Little, for 23 years, most recently as Vice President of Arthur D Little Decision Resources, specialising in strategic planning and market development services. She is a graduate of Boston University and the Programme for Management Development at Harvard Graduate School of Business Administration. She is the author of recent studies on worldwide telecommunications markets and the Top Ten Telecommunications market analysis and forecasts.
Susan Eustis, President has done research in communications and computer markets and applications. She holds several patents in microcomputing and parallel processing. She is the author of recent studies on Internet equipment, worldwide telecommunications equipment, digital loop carrier, web hosting, and application integration markets.
Companies cited in the report include: MTC Atheer, Orascom, AsiaCell, Mobi-Tel, Qatar Telecom, Iraqi Telecommunications and Post Company, Etisalat, Air Broadband Communications, Alvarion, Airspan, Alcatel/Lucent, Aperto Networks, D-Link, Fujitsu, Huawei Technologies and Intel.
Basrah Cluster Pump Stations Renovation Bringing Reliable Power
October 6th 2007
News Blaze
In one of the U.S. Army Corps of Engineers largest electricity projects in southern Iraq, cluster pump electrical substations are being renovated in a $76 million effort to help increase oil field production in the North Rumaylah Oil Field.
"The Basrah Cluster Pump Stations are 10 electrical substations in total. They are a part of the overall oil infrastructure and one of the biggest and most costly challenges," said Shawn Russell, deputy regional manager with the Gulf Region Division electricity sector.
The aim is to bring reliable power to the water injection facilities located within the North Rumaylah Oil Field and help increase Iraqi oil production, Russell said. "The projects are rehabilitated the existing substations which had been severely looted and damaged during the 1991 and 2003 wars."
Russell said that while these substations are important elements of the Rumaylah oil field infrastructure, they will also provide employment opportunities and further the economic development not only of the Basrah area but the entire country. "An important component of each project is the training of operations and maintenance personnel," he said. The training will develop individual's skills and increase the Iraqis' ability to sustain the facilities.
Army Maj. Rick Smith, operations officer with Basrah Oil Area Office, Gulf Region South district said the rehabilitation of the 10 cluster pump stations electrical systems is the biggest USACE electrical project in the Southern region of Iraq.
"USACE is working on various projects to ramp up oil production for Iraq and help improve its economy," he explained. "Right now Iraq has the world's second largest proven oil reserves. According to oil industry experts, new explorations could probably raise Iraq's reserves to 200+ billion barrels of high-grade crude, extraordinary cheap to produce."
Tom Eidson, chief of Engineering and Construction for the Gulf Region South district said,
"Improvements at these projects help in the recovery of oil infrastructure and contribute [ to the nationwide production capacity of ] 3 million barrels of crude per day.''
Work consisted of general maintenance, replacement of damaged transformers and switch gear, and building new control rooms, high voltage switch gear rooms and guard houses, he said.
Eidson explained that the main objectives of the rehabilitation projects are to create a strong and reliable source of income for Iraq, improve Iraqi living conditions and create new opportunities for employment. The project also hired local villagers which helped them make money for their families.
Smith said that "Iraq's economy is dominated by crude oil production and GRS has been working to improve the country's ability to enhance oil production through the renovations of key components of the oil infrastructure.
"Basrah is the second largest city in Iraq and Iraqi officials and oil experts believe that completing the reconstruction of oil infrastructure will put the province into competitive alignment with similar Middle East cities," he continued.
"We are making a big difference here in Iraq," Smith said "This country was war torn for more than 25 years and the people are tired of it. They want their freedom; they want to be self sufficient. We are putting the country back together to self govern."
Basra oil fuels fight to control Iraq's economic might
September 18th 2007
Christian Science Monitor
Basra, Iraq - It could be an "empire," says one Shiite militia leader. For the provincial governor, Basra's future is shimmering skyscrapers. He wants the Iraqi port city to be another Arab metropolis, perhaps the next Dubai.
Many Iraqis – businessmen, criminal bosses, militia commanders, political leaders – have designs on the city, that is vitally important to Iraq's national economy.
With its oil proceeds, Basra Province provided Baghdad nearly 90 percent of its budget of $40 million this year. And there is more money to come, if Iraq fully repairs and expands its war-ravaged oil infrastructure. Basra sits on some of the world's largest untapped reserves. In fact, the bulk of Iraq's estimated 200 billion barrels in potential deposits are here.
The fight for a stake in Basra's riches is often desperate and violent. Whoever comes out on top, they will hold great sway over the country, and much influence in the Middle East. Now that British forces have left Basra city, and are preparing for a full withdrawal from Basra Province by year-end, many Basrawis worry that this fight for control of Basra's petroleum wealth will further increase, perhaps growing into an all-out war.
Militias vie for control
At the entrance to the headquarters of the South Oil Company (SOC) in Basra, a sign dating from when Saddam Hussein nationalized the oil industry in 1972 reads: "Our oil is ours."
Inside, an exasperated senior official, who did not want to be identified for fear of retribution, describes the onslaught by parties and militias intent on controlling the company by forcing their loyalists into key management positions. Some are beholden to the Ministry of Oil in Baghdad, which is controlled by the United Iraqi Alliance (UIA), the dominant Shiite coalition to which Prime Minister Nouri al-Maliki belongs.
"There is an invasion by parties and militias … we are a mouthwatering prize," he says, adding that recently 8,000 people, most of them illiterate, were pushed on to the company's payrolls.
The power plays extend to Basra's ports, too, often contributing to anger and a sense of injustice among the province's estimated 3 million people. In the town of Abu Al-Khaseeb, south of the city, the newly rich are building palatial homes next to mud huts. The mansions often belong to those who have been able to cash in on the brisk business in the town's Abu Flous port, which is one the province's main four ports and is widely considered to be controlled by the mafialike family, Bayet Ashour, and certain militias.
"You can only work at the port if you join a militia. I thought about it, but then my two cousins who had joined were badly wounded in a clash. So now we just sit home and shut up," says resident Jalal Ali.
Last month, armed tribesmen forcefully brought oil production to a standstill at the Majnoon oil field, 38 miles north of Basra city, after the SOC refused to meet their demands for jobs in the area. An official at the company, which controls oil exploration and production throughout southern Iraq, confirmed the incident.
Many are also profiting off the oil by tapping right into the pipelines.
SOC's oil pipelines are regularly sabotaged and drilled into to steal crude and smuggle it outside Iraq, says the unnamed official at the company. Many in the province even accuse Gov. Muhammad Mosabeh Waeli's Fadhila Party, whose partisans dominate the oil protection force, of colluding with the smugglers. Mr. Waeli has vehemently denied the charges, calling them "a smear campaign orchestrated by pro-Iranian parties." $90 billion daily
SOC, which employs more than 30,000 people, is in charge of oil production and exploration in an area of about 45,000 acres in southern Iraq. By most estimates, potential Iraqi reserves account for nearly 16 to 20 percent of Middle East reserves. "Producing at full prewar capacity, Iraq can generate about $90 million a day through exports to support its own reconstruction," says a US Army Corps of Engineers slide presentation dated July 2004. "Immense potential exists to generate prosperity, employment, and economic stability for all Iraqis."
Production at the time the presentation was made was about 2.35 million barrels per day (b.p.d.). Exactly three years later, in July 2007, it stood at 2.1 million b.p.d., of which 1.8 million b.p.d. is from the south alone. About 1.6 million b.p.d. of this oil was exported exclusively via Basra terminals.
In order to regain the estimated 3.8 million b.p.d. reached in 1990, $2 billion to $3 billion of investment would be required over three years to rehabilitate existing oil fields and infrastructure, according to Muhammad-Ali Zainy, a senior oil economist and analyst at London's Center for Global Energy Studies.
Mr. Zainy blames the state of Iraq's oil industry on insecurity, corruption, government incompetence, and unfinished work by the US company KBR (formerly Kellogg Brown and Root), which was hired after the US-led invasion to do the engineering work to ramp up production.
He says the Ministry of Oil was allocated $4 billion last year, but spent perhaps only 3 percent of it on rehabilitation.
"There is chaos now in Basra. In this environment you cannot do real work. The [central] government itself run by religious parties is not going to be able to provide the proper environment for rehabilitation of the infrastructure, let alone investment," says Zainy, who is a native of the holy Shiite city of Najaf and was once a senior official at the Ministry of Oil before defecting in 1982 to escape Mr. Hussein's regime.
The southern branch of the General Oil Products Company, which is charged with refining and distributing oil products, is also said to be now under the sway of militias, according to several officials. But that tends to provide little protection from the militia's criminal rivals.
A few months ago, 90 fuel trucks, each with a capacity of 36,000 liters, pulled up at one of the company's depots. They filled up. But it turned out they were smugglers, not legitimate fuel distributors, according to a manager at an oil products transport company.
Zainy says Baghdad has its priorities upside down. It's making a mistake by "rushing" to approve a new oil law, which would open up the sector to foreign investors, as urged by Washington. Instead, he says, Baghdad should first focus on adding value to the sector by increasing production, stamping out corruption and theft, and re-creating the Iraqi National Oil Company, which was disbanded by Hussein in 1987 as an alternative to bureaucratic meddling by the Ministry of Oil.
"The timing is wrong … they are rushing to have the oil law ratified just in order to please the American administration," he says.
In what promises to be a major challenge for the controversial bill being debated in parliament, the industry's main labor union based in Basra says it will order a general strike should the oil law pass.
"We believe one of the main reasons America invaded is oil," says the union's head, Hassan Jumaa al-Assadi. "The law does not serve the people of Iraq but the US administration. History will not be merciful to those who vote for this law." Revitalization stalled
The struggle over power and resources – which extends to the halls of government in Baghdad – means that any prospect for Basra's riches being used to lift millions of Iraqis out of their misery and give jobs to disaffected youth remains a fiction.
"There is great deprivation and high unemployment. Plants are destroyed. The last 30 years for Basra have been 20 years of war followed by 10 years of economic deprivation," says Hamid al-Thalemi, a member of the local provincial council, who belongs to the secular party of former Iraqi premier Iyad Allawi.
Basra's infrastructure and economy suffered greatly from the impact of the devastating eight-year war between Iran and Iraq in the 1980s that was followed by the Gulf War in 1990.
"The government has no economic development strategy … the government is helpless … it's a catastrophe," adds Mr. Thalemi.
Agriculture and industry are in ruins, and many infrastructure projects such as water and sewerage repairs remain unrealized. Even the once-thriving date business is barely operational, although the province has the highest density of palm trees in Iraq, according to Thalemi.
Britain has pledged about $1.5 billion for reconstruction in Iraq with some of this money spent in Basra, where the last contingent of its troops is still stationed. They laid water pipes at a cost of $18 million and partially repaired electricity transmission
