Iraq’s Kurdistan works to establish 2 oil firms as Irbil-Baghdad tensions rise

Oil has fueled Kurdistan’s boldness and heightened tensions with Baghdad that have simmered for decades over land and identity. (AP)
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Updated 18 June 2022

Iraq’s Kurdistan works to establish 2 oil firms as Irbil-Baghdad tensions rise

  • Statement follows dispute between Irbil and Baghdad February, with federal court ruling that the legal foundations of the Kurdistan region’s oil and gas sector unconstitutional

IRBIL, Iraq: Iraq’s Kurdistan Regional Government is working to establish two oil firms, the latest move in the battle between Irbil and Baghdad to control the oil sector in the semi-autonomous region.

The KRG’s new oil firm KROC would specialize in oil exploration, while the second — KOMO — would focus on oil exports and marketing from the semi-autonomous region, a spokesperson said in a statement on Friday.

The regional government has presented the idea and discussed it with the federal government in Baghdad recently, the KRG spokesperson said in a statement.

The statement follows months of disputes between Irbil and Baghdad after a February federal court ruling that deemed the legal foundations of the Kurdistan region’s oil and gas sector unconstitutional.

The Oil Ministry in Baghdad has since made fresh attempts to control revenue from the Kurdistan region, including summoning seven firms operating there to a commercial court on May 19. The firms were Addax, DNO, Genel, Gulf Keystone, HKN, Shamaran and WesternZagros.

The commercial court sitting has been postponed twice as some of the representation for these international oil firms did not have power of attorney, several sources told Reuters. The court session is due to resume on June 20.

As well as announcing plans to establish its own oil company in the Kurdistan region, the Iraqi Oil Ministry has ordered international lead contractors and subcontractors through Basrah Oil and Iraq’s national oil firm to pledge not to work on contracts or projects there.

Through letters sent on June 7 and 12, the firms were given three months to terminate existing contracts or projects in the KRG oil sector or face being blacklisted, according to two sources familiar with the matter.

The Oil Ministry is using two law firms — Vincent and Elkins and Cleary Gottlieb Steen and Hamilton — to help with gaining control of the KRG oil sector, according to two sources. Both firms have declined to comment.

The KRG has repeatedly rejected the federal court ruling. On June 5, the KRG’s Ministry of Natural Resources filed a civil suit against the minister of oil in Baghdad, Ihsan Ismael, for sending emails and letters to intimidate oil firms operating in the Kurdistan region and for interfering with the contractual rights of these firms and the KRG, according to a June 13 statement. Also on June 5, the Irbil court of investigation ruled that the commercial court sessions against international oil firms must be brought to the Irbil court.

There have been years of attempts by the federal government to bring KRG revenues under its control, including local court rulings and threats of international arbitration.

The implications of the latest dispute are not fully clear as more than eight months since elections in Iraq, the formation of a government is still underway.


Turkish drone kills 4

In another development, a Turkish drone targeted a vehicle traveling in Iraq’s Kurdistan region on Friday, killing four Kurdish militants, Iraq’s Kurdistan’s counterterrorism service said. In a statement, it said the drone struck the jeep in the town of Kalar in the northern province of Sulaymaniyah. A fifth passenger was wounded and was being treated in hospital.

The militants were from the Kurdistan Workers Party, which is listed as a terrorist organization by Turkey, the US and the EU, and has led an insurgency in southeast Turkey since 1984 which has killed tens of thousands of people.

Turkey regularly carries out airstrikes into northern Iraq and has sent commandos to support its offensives. In April, it launched its latest offensive, named Operation Claw Lock in parts of northern Iraq — part of a series of cross-border operations which it started in 2019 to combat the outlawed PKK who are based in the mountainous regions of northern Iraq.

The Turkish Defense Ministry said in a tweet Friday that 6 PKK “terrorists” were neutralized in Iraq as part of an ongoing military campaign, but did not offer more details.


First-ever Saudi-Swiss CleanTech Forum highlights innovation and sustainability 

Updated 11 September 2023

First-ever Saudi-Swiss CleanTech Forum highlights innovation and sustainability 

RIYADH: Saudi Arabia hosted the inaugural Saudi-Swiss CleanTech Forum 2023, bringing together Swiss companies and small and medium enterprises showcasing innovative solutions to address global challenges, combat climate change, and promote sustainability. 

The event, a partnership between the Embassy of Switzerland in Saudi Arabia, the Research, Development and Innovation Authority, and King Abdulaziz City of Science and Technology, aimed to boost international trade and economic ties between the two nations. Discussions also revolved around the benefits of Saudi Arabia’s Vision 2030, striving to become a major industrial power and a global logistics hub. 

The forum’s keynote speech was delivered by Saudi Arabia’s Minister of Economy and Planning, Faisal bin Fadel Al-Ibrahim. “There are two reasons why this gathering is important. First, the challenges that face our environment are far from being resolved. Second, is the uniqueness of the partnership between Saudi Arabia and Switzerland,” he said.   

Al-Ibrahim stated that Saudi Arabia is a leading country in the Middle East for private sector investment, with around $5.5 billion invested in 2022.  

He also mentioned significant projects, including the NEOM green hydrogen projects and a carbon capture facility.  

“The NEOM green hydrogen projects, which can be commissioned in 2026, is another example, and it will be the world’s largest green energy facility and will be powered entirely by renewable energy.   

“We’re also building a CCUS (carbon capture, utilization, and storage) facility with the capacity to capture 9 million tons annually of carbon emissions and we are targeting a capacity of 44 million by 2035 using multiple facilities,” the minister added.   

Switzerland, known for its innovation, utilizes a “bottom-up” approach, with the government focusing on education and fundamental research to support companies. 

“That’s why we call ourselves a bottom-up country where the government is tasked to sort of, you know, do the strategic framework conditions right, make sure that also our companies have access to markets abroad such as Saudi Arabia,” Helene Budliger Artieda, Swiss State Secretary for Economic Affairs, told Arab News in an interview.   

Artieda explained that, in this model, the government's primary role is centered on funding a robust education system and supporting fundamental research at universities. 
She added, “Transitioning to a greener world is a key priority for both the Kingdom and Switzerland, and our companies have been working hard in recent years. So, I think we have many solutions that we can bring to Saudi Arabia.”  

She highlighted Switzerland’s expertise in areas such as railways and water treatment and management. 

“We're the water castle of Europe. So, from hydropower to wastewater treatment, wastewater management, or water management, I think that will be a key opportunity for us,” Artieda explained. 

She highlighted that there are various investment opportunities that Switzerland might be interested in, such as the Kingdom's vast areas, abundant solar parks, and green hydrogen initiatives. 

Artieda emphasized the presence of numerous niche opportunities in the Kingdom, including investments in sustainable Saudi fashion. She noted that Switzerland has a well-established textile industry. 

Furthermore, she expressed interest in the significant developments occurring in the global fashion industry, implying that Saudi Arabia is eager to align with global trends and standards, particularly those related to sustainability. 

“I’ve learned how much the Kingdom is investing in sustainable fashion. We are a country that many people may not know has a long-standing textile industry,” she commented.   

“The Kingdom is heavily investing in green hydrogen and then takes it to synthetic fuels. This is definitely something that we’re also interested in.”  

On Sunday, Artieda held a meeting with the minister of economy and planning to discuss ways to expand economic relationships, explore the potential for trade and investment collaboration between their respective countries, and review topics of mutual interest. 

“I think my job as a government representative will be to create that framework together with my counterparts here in Saudi Arabia, and I could really see that we are very much like-minded,” Artieda told Arab News.   

She emphasized the significance of establishing a robust framework to facilitate this cooperation.  

Moreover, she noted that Saudi Arabia and Switzerland have already made substantial progress in this regard, as evidenced by existing arrangements like the free trade agreement and the investment protection treaty. 

Furthermore, Saudi Arabia’s National Industrial Development and Logistics Program organized a Saudi-Swiss symposium in Riyadh, as reported by the Saudi Press Agency on Sunday.  

The event had several objectives, including shedding light on the Kingdom’s economic transformation and exploring investment opportunities between Saudi Arabia and Switzerland to unlock new capabilities and promising prospects. 

Additionally, it discussed the role played by NIDLP in facilitating interactions between investors, companies, and ministries in Saudi Arabia to mitigate investment risks and increase returns in a sustainable manner.  

Saudi Arabia’s non-oil exports to Switzerland are valued at around SR3.5 billion ($0.93 billion), while total imports from Switzerland into the Kingdom stand at approximately SR8 billion. 

Saudi Arabia’s domestic tourism remains strong despite return of international travel

Updated 21 May 2023

Saudi Arabia’s domestic tourism remains strong despite return of international travel

RIYADH: Despite the full resumption of international travel, domestic tourism continues to remain strong in Saudi Arabia, according to Almosafer, the Kingdom’s leading company in the sector.

The firm’s CEO made the comments to Arab News following the signing of a deal between the Saudi Tourism Authority and Almosafer, which is part of Seera Group, at Arabian Travel Market 2023 held in Dubai.

The deal aims to promote Saudi Arabia as one of the top travel destinations in the Gulf Cooperation Council. The agreement was signed between Munirah Abanomy, head of marketing partnerships for the Middle East and Africa at the STA, and Fahad Al-Obailan, chief tourism officer at Almosafer.

In an exclusive interview, Almosafer CEO Muzammil Ahussain reflected on a report published by his company that showed domestic bookings “made up 56 percent of all bookings so far this year, up from 47 percent for the same period before the pandemic in 2019.” 

He said that people are keen on traveling within the Kingdom even after the full resumption of international travel and the number of domestic tourists is steadily rising. 

As per the agreement signed at the industry event in Dubai, the travel company, through its Hajj and Umrah tour operator Mawasim and its destination management company Discover Saudi, will also help promote domestic tourism to its business customers in the Middle East and North Africa region. 

“Almosafer has several different segments that it serves. We have the consumer segment, which provides a B2C channel for customers,” Ahussain said. 

The CEO said: “We provide B2C products for people in Kuwait and the rest of the GCC. So, we provide them access to Saudi Arabia, for example, (tours to) Makkah and Madinah and other parts of the Kingdom.”

Ahussain said that Almosafer has partnered not only with the STA but also with Saudia’s Alfursan and Al Rajhi Bank’s Mokafaa loyalty programs to promote tourism in the Kingdom. 

However, the report showed that Saudis also continued to travel abroad, and since the resumption of travel to Turkiye in the summer of 2022, the destination has shot back to the top of the list for visitors from the Kingdom.

Other popular destinations include Dubai, Cairo, London, and Doha.

Pakistan, Egypt and other developing countries facing a debt crisis

Updated 06 April 2023

Pakistan, Egypt and other developing countries facing a debt crisis

  • Months of political turmoil, worsened by crippling floods last year and record inflation, put Pakistan in danger zone
  • Talks with IMF for a delayed $1.1 billion loan tranche, part of $6.5 billion bailout agreed in 2019, have dragged on

LONDON: The record number of developing nations at risk of a debt crisis will be high on the agenda next week when central bankers, finance ministers and political leaders convene for the World Bank Group and International Monetary Fund (IMF) spring meetings.

Ballooning inflation, escalating borrowing costs and a strong dollar have made repaying loans and raising money significantly more expensive for dozens of developing nations, pushing several into default last year.

Below is a look at countries that face a debt crunch or have already defaulted on international loans.

Months of political and economic turmoil, worsened by crippling floods last year and record inflation, put Pakistan in the danger zone.

China agreed to refinance $1.8 billion already credited to Pakistan’s central bank, and last month rolled over a $2 billion loan that had matured earlier in March, providing relief during Pakistan’s acute balance of payments crisis.

But talks with the IMF for a delayed $1.1 billion loan tranche, part of $6.5 billion bailout agreed in 2019, have dragged on and foreign exchange reserves have fallen to less than four weeks of imports.

Egypt’s tourism-dependent economy was hammered by the one-two punch of COVID-19 and soaring food and energy prices, leaving it short of dollars and struggling to pay rising debts.

Cairo secured a new $3 billion IMF package in December by committing to a flexible currency, a greater role for the private sector and a range of monetary and fiscal reforms.

Import and currency restrictions have weighed on economic activity, and a foreign currency shortage continues despite three sizable devaluations since March 2022 that halved the value of the pound. Inflation stands now at a more than five-year high above 30 percent.


El Salvador cleared a $600 million bond payment hurdle in January. The Central American country has roughly $6.4 billion in outstanding Eurobonds. While the next payment is not due until 2025, concerns about El Salvador’s high debt service costs and its financing plans and fiscal policies have pressed its bonds into deeply distressed territory.

The country’s move to make bitcoin legal tender in September 2021 effectively closed the doors to IMF financing. However, the risks over El Salvador’s embrace of bitcoin “have not materialized,” the IMF acknowledged.

Ghana is in its worst economic crisis in a generation, spending over 40 percent of government revenues on debt payments last year. In January, it became the fourth country to seek a rework under the Common Framework.

The West African country secured a $3 billion agreement with the IMF in December, though it still needs to get financing assurances from bilateral lenders to clinch the final sign-off. The cocoa, gold and oil producer has already reached a deal to write down domestic debt and last week kicked off formal debt talks with international bondholders.

Lebanon’s financial system began unraveling in 2019 after decades of mismanagement and corruption, and in early 2020 it defaulted. Lebanon has had neither a head of state nor a fully empowered cabinet since Oct. 31.

It reached a provisional $3 billion IMF agreement in April 2022, but the fund recently warned Lebanon was “in a very dangerous situation” due to delays on a range of reforms, including banking and exchange rate overhauls. Beirut devalued the official exchange rate for the first time in 25 years in February. Last month its central bank said it would begin selling unlimited amounts of US dollars to halt spiralling devaluation.

Malawi is grappling with foreign exchange shortages and a budget deficit of some 1.32 trillion kwacha ($1.30 billion), or 8.7 percent of GDP.

The donor-dependent southern African nation is trying to restructure its debt in order to secure more funding from the IMF, which approved emergency funds in November.

The tourism-dependant North African economy is in the throes of a punishing crisis that led to a shortage of basic food items.

A $1.9 billion IMF loan has been stalled for months as Tunisia’s president has shown little sign of action on key reforms. Most debt is internal but foreign loan repayments are due later this year. Credit ratings agencies have said Tunisia may default.

Sri Lanka defaulted on its international debt last year after economic mismanagement, exacerbated by the COVID-19 pandemic, sparked a political crisis and left it without dollars for even essential imports.

The IMF signing a $3 billion bailout package last month could help the South Asian island country secure additional support of nearly $4 billion from the World Bank, Asian Development Bank and other lenders.

Government officials aim to complete debt restructuring talks by September. Sri Lanka is also reworking part of its domestic debt and aims to finalize it by May.

Ukraine just received the first $2.7 billion tranche under a four-year, $15.6 billion IMF loan program. This is part of a bigger $115 billion global package of support.

The country suspended all debt payments last year in the wake of Russia’s invasion, and will need to restructure its borrowings if and when the situation stabilizes.

The IMF estimates Ukraine needs $3-$4 billion a month to keep the country running. Rebuilding Ukraine’s economy is now expected to cost $411 billion, a recent report by the World Bank and others found.

The first African country to default during the COVID-19 era in 2020, Zambia is seen as a litmus test for the G20’s Common Framework initiative set up during the pandemic to streamline debt restructurings. But talks have been remarkably slow, and external debt crept up to $18.6 billion.

Western officials have blamed China, its largest bilateral lender, for the hold-up, something that China disputes. There have been broad disagreements about how much debt the country can afford going forward.

Zambia’s currency, the kwacha , has fallen more than 10 percent against the US dollar this year, which the central bank has said is adding to inflation. It blamed the drop partly on debt restructuring delays.

Saudi privatization program now seeing investments topping $50bn, finance minister reveals

Updated 09 March 2023

Saudi privatization program now seeing investments topping $50bn, finance minister reveals

RIYADH: The pace of Saudi Arabia’s privatization program is accelerating with investments now exceeding $50 billion, the Minister of Finance and Chairman of the National Center for Privatization Projects Muhammad Al-Jadaan has revealed.

During his participation in the roundtable discussions with consortia of South Korean firms in Seoul, Al-Jadaan pointed out that the investments are being seen in 200 projects across 17 sectors. 

The program’s pipeline also includes another 300 projects currently under evaluation.

Even though the government started the journey of privatization and partnership between the public and private sectors recently, it has achieved significant goals during the short period of time, the minister noted.

This comes as the Kingdom’s privatization program – which is the largest and widest in the Middle East – has completed the privatization of 30 projects during the past five years, he said.

Al-Jadaan went on to demonstrate the depth of the relationship between Korean investors and the system of privatization and partnership projects between the public and private sectors in Saudi Arabia.   

"The Kingdom has adopted a modern framework for privatization and partnership projects between the public and private sectors that is flexible and based on international best practices," the finance minister explained.

The current projects across different sectors in the Kingdom and the privatization and partnership program in South Korea share some common areas in terms of providing investment opportunities that are proportionate with the firms’ expertise and capabilities.   

Saudi Arabia wants to attract more Korean companies in the Kingdom in order to benefit from their respective expertise and resources in the privatization and partnership program, as well as to consolidate strong and close relations between the two countries, he stressed.   

In November, Saudi Arabia and South Korea agreed to increase cooperation in the field of renewable energy, clean hydrogen, and electricity, according to the Saudi Press Agency. 

This came during a virtual meeting held between Saudi Minister of Energy Prince Abdulaziz Bin Salman and South Korean Minister of Trade, Industry and Energy Lee Chang-yang on Nov. 2.  

Climate ambitions should not be met at the expense of energy security: KAPSARC president

Updated 06 February 2023

Climate ambitions should not be met at the expense of energy security: KAPSARC president

RIYADH: The world should embrace a balanced approach where climate ambitions are met without compromising on energy security and affordability, a top official from the King Abdullah Petroleum Studies and Research Center has said.

In an exclusive interview with Arab News on the sidelines of the 44th conference of the International Association for Energy Economics, Fahad Alajlan, president of KAPSARC, said that Saudi Arabia is leading this balanced approach through programs like Saudi Green Initiative, clean energy investments, and decarbonization efforts. 

He also called for involving all stakeholders to find a solution to effectively fight climate change. 

According to Alajlan, climate change conferences like the UN’s COP should include oil and gas companies in their discussions as more than 50 percent of emissions are coming from the energy sector. 

The KAPSARC president said that Saudi Arabia is leapfrogging others in the carbon capture technology which will play a crucial role in the ongoing energy transition efforts. 

“In the past, oil and gas companies have been excluded from discussions. If we look at emissions today, more than 50 percent come from the energy sector, so it is very important that we involve oil and gas companies in this discussion, to become part of the solution rather than demonizing and excluding them,” said Alajlan. 

He added: “The COP 28 presidency in the UAE will be an inclusive COP. It will be a COP that brings everybody to be part of the solution. So, it is very important to get this inclusive approach.” 

Alajlan noted that carbon capture is not the only solution to reduce emissions, but it is a part of the solution which will ensure a sustainable future.

Carbon capture initiatives should be sufficiently complemented with renewables, hydrogen, and green efforts to get better sustainable results, he argued.

“It (carbon capture) is not the only solution; it is part of the solution. If we look today, there are about 50 commercial carbon capture projects globally. Saudi Arabia has one of the biggest with a capacity of 500,000 tons, but the ambition goes much bigger,” he said. 

Fahad Alajlan addressing the IAEE conference (Screenshot)

Saudi Arabian Oil Co.’s carbon capture and storage hub in the Kingdom is eyeing to have a storage capacity of up to 9 million tons of carbon dioxide a year by 2027, and 45 million tons by 2035, he further noted. 

According to Alajlan, the ongoing IAEE conference in Saudi Arabia is crucial, as it came at a time when the entire world is witnessing a new energy landscape post the invasion of Ukraine, which highlighted the vulnerabilities surrounding energy security. 

“There are many pathways to achieve climate ambition and energy transition. These pathways should ensure energy security, energy affordability, and climate change. The discussion here (IAEE conference) has focused on Saudi Arabia as an example of many pathways that exist. Saudi Arabia has pursued renewable energy, clean energy investment, and hydrogen,” he added.  

Alajlan also said that the issue of energy affordability is posing problems to energy transition even in the MENA region, and it should be seriously addressed. 

“We have a few countries that are struggling to meet their energy needs. The cost of energy has risen exceedingly in 2022. So, we need to make sure that this is being addressed. We cannot have winners and losers in this energy transition,” he added. 

According to Alajlan, energy financing is very much necessary for a smooth transition, as developed nations have agreed to invest hundreds of billions of dollars in developing economies for clean energy initiatives.  

“There are a lot of roles to be played by government and private sectors, but also global development institutions and multi-development institutions like the World Bank and the IMF (International Monetary Fund), and credit agencies, that would lend and finance these energy projects and make sure that energy is not only accessible but also affordable,” added Alajlan. 

He further noted that the $100 billion committed by developed economies for developing economies to catalyze energy transition is not sufficient, as it requires $3 trillion to $8 trillion annually. 

Talking about the importance of green financing in the energy sector, Alajlan said that the world should think about how green finance can be pushed into technologies like carbon capture, hydrogen, and ultimately energy transition. 

“We know the world is growing, energy demand is growing, and the issue of emissions is critical. So, we need to lower our emissions while growing the energy supply. We need more financing, whether that is in oil and gas, renewables and hydrogen,” he added. 

Alajlan asserted that the general public too should be aware of the necessity of energy transition so that they can also contribute their part to these efforts.