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Books on Iraq

Update No: 085 - (27/04/10)

Not-so-final results
The decision of the Iraqi appeals panel to order a recount of the votes cast in Baghdad, which could alter the result of the parliamentary elections. Allawi leads Maliki by just two seats (91 to 89) and Maliki requested a recount in the hope that his State of Law Coalition would emerge as the main party; this would mean that Maliki would have the first go at forming a ruling coalition as Prime Minister designate. However, many doubt that Maliki could assemble a coalition large enough even if had the first go at it. He is viewed by most political groups as a leader with authoritarian tendencies and he has made many enemies in the past few years, particularly among the other Shiite political factions, which he repeatedly confronted in order to recentralise state power. In particular the Sadrists are extremely hostile to Maliki and with their 40 seats they are necessary to the coalition-making effort. He also has little international support, included from Iran, which sees him as too independent and difficult to control. Allawi, the long-standing enemy, feels that Maliki is trying to gain in the courts what the ballots did not give him. He warns of the possibility of violence and sectarian conflict if nasty tricks are played. Maliki’s State of Law indeed also hopes that some of Allawi’s MPs might be disqualified because of the Baathist past. A coalition between State of Law and the Jafari-Sadrist coalition seem possible and would deliver a majority, but only if State of Law agrees to drop Maliki as its choice of Prime Minister in order to satisfy the Sadrists. Most of Maliki’s people seem more inclined towards this alliance, but he is personally trying to explore alternatives, including an alliance with Allawi’s group. He hopes that rather than sitting in opposition they would accept to sacrifice Allawi. The Kurdish coalition is also being courted by all factions. In this context the only good news for Maliki was the killing of three senior leaders of Al Qaida in Iraq, which allowed him to reclaim his image of security provider, but this is unlikely to impress the party leaders.

Despite all, the lure of oil is still there
Several foreign oil services companies are expanding operations in Iraq, in the expectation that more oil fields exploitation contracts will be signed soon and that the conditions granted by the Iraqi government will be more favourable. Companies like Schlumberger, Halliburton, Weatherford International and Baker Hughes are all involved, even if they do not expect to make a profit before 2011 at the earliest. They instead expect big developments once the political dust settles and all want to be well positioned once the real oil race starts. The rising oil prices, apart from stimulating the appetite of the oil firms, also mean that the Iraqi government can afford to offer more attractive conditions on the oil deals it offers to international investors. Now the conditions offered in Iraq are more competitive with those of other oil countries. Some of the contracts already stipulated are beginning to enter the operational phase and soon new wells will finally be drilled. The China National Petroleum Corp., which is developing the giant Rumaila oil field, has announced that it wants to boost production by 10% this year already; that alone would translate into a 5% increase in the national production of oil. Soon the Iraqi government will auction off the development of three gas fields, with combined proven gas reserves of over 7.5 trillion cubic feet (210 billion cubic metres). Even the dispute between Baghdad and the Kurdish regional authorities over the management of oil firms operating in Iraqi Kurdistan seems about to be resolved, no doubt thanks to the fact that all parties are keen to enlist Kurdish support to their coalition making efforts. There is still some concern that OPEC might impose quota constraints on Iraq, but investors seem increasingly reluctant to sit on the fence for much longer.


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