The International Energy Agency’s executive director Fatih Birol says Iraq can end gas flaring, which is sapping its economy of billions of dollars a year, within six to twelve months, if the political will is there.
"If there is determined action, it can be as quickly as six months to one year," Dr Birol said in an exclusive interview with The National.
“It cannot be completely finished but we can have achieved a lot of progress there.”
Dr Birol stressed the need to end gas flaring, which is costing Iraq both financially and environmentally.
The World Bank estimates that about 16 billion cubic metres of gas from Iraqi fields was flared in 2015, costing the economy billions in lost revenue.
A 2018 study by Siemens said Iraq could save about $5.2 billion (Dh19.1bn) over four years by reducing the amount of gas flared from its fields.
“We need to stop gas flaring to generate electricity and Iraq needs to diversify its economy from oil and to develop its industry,” Dr Birol said.
“Gas can be used to feed the industry sector, it can be food processing, ceramics or other types of sectors which create jobs and diversify the economy ... this is not rocket science. It has been proven and can be easily done.”
Ending flaring would also be in line with the World Bank's global 'Zero Routine Flaring by 2030' initiative, which seeks to end the burning of about 140 billion cubic metres of natural gas annually, which contributes to climate change and causes more than 300 million tonnes of carbon dioxide to be emitted into the atmosphere.
In addition to Iraq’s dysfunctional gas sector, it is also vulnerable as a result of its reliance on gas imports from neighbouring Iran that are more expensive than market rates and add to its financial woes.
Iran exports 1,200 to 1,500 megawatts of electricity to Iraq daily, in addition to 38 million cubic metres of natural gas, according to the Iran-Iraq Joint Chamber of Commerce. Last June, Iraq signed a two-year contract to continue the imports – despite US sanctions.
Ending gas flaring in Iraq was a topic of discussion at a virtual meeting held last week by the IEA and Iraq’s government, along with the chronic electricity shortages that plague the country 17 years after Saddam Hussein was deposed.
“I have initiated this meeting because I believe that Iraq is, once again, at a very critical time in its economic and political history,” Dr Birol said.
“In fact, ... [Iraq’s Deputy Prime Minister and Minister of Finance] Ali Allawi said ‘the window of opportunity for Iraq is shrinking’.”
“What we need here is for the government to take the decision and many companies have said they are ready to come and fix this problem, as they have done in other countries,” he said.
While ministers from Iraq, the US and the UK attended the virtual meeting, its significance was elevated by the participation of the private sector, with executives from Siemens, GE, Total, Eni, BP, Bechtel and Crescent Petroleum in attendance.
The main message from the private sector was “please do not delay decision making, because every day of delay costs money”, Dr Birol said.
Iraq’s government was represented by Mr Allawi, Minister of Oil Ihsan Ismaeel, Minister of Electricity Majid Hantoush and Suha Najjar, an adviser to the prime minister.
The roundtable also heard from US energy secretary Dan Brouillette and the UK’s Minister of State for Business, Energy and Clean Growth Kwasi Kwarteng and secretary general of France’s Ministry of Europe and Foreign Affairs Francois Delattre.
While the meeting was closed to the media, a press release from the IEA quoted Mr Allawi as saying: “Iraq reforming its economy is not a matter for debate. It is essential, and it is vital that reforms are comprehensive and timely.”
The promise of reform is not new and successive Iraqi governments have made similar pledges.
Dr Birol is, however, hopeful. He believes there are reformers in the government of Prime Minister Mustafa Al Kadhimi.
“I have worked with Iraqi governments for almost a decade. Despite the fact that the conditions are extremely difficult now, after talking with the PM and Mr Allawi, I am hopeful about the future of Iraq, although the challenges and risks are tremendous and multifaceted,” he said.
The agency’s most salient point is that “Iraq needs deep and urgent structural reforms”. In the absence of that, the economic crisis will worsen.
“We believe a stable, secure and prosperous Iraq is in the interest of everybody in the region and the world, but more importantly, the Iraqi people, after years of suffering, deserve to have much better life,” Dr Birol said.
Iraq has previously estimated it needs as much as $100bn to overhaul its essential infrastructure, including its struggling power grid, which has led to widespread social discord and bloodshed.
The “most acute challenge facing Iraq is the need for investment. This is the most important one,” Dr Birol said.
“Iraq’s economy is unfortunately almost exclusively relying on oil revenue and according to our numbers, [with the] current oil prices, all the revenue Iraq gets are enough to pay less than half of the employees in the government, leave aside the other half and the expenses for health, electricity, schools, infrastructure, etc. Therefore, government doesn’t have the means to make investments alone.”
The country needs $10bn in investment over a four-year period to stop gas and electricity imports from Iran, according to S&P Global.
With an economy teetering on the brink of collapse, the only way Iraq can hope to secure the needed funds is from foreign investors or the private sector. But in the absence of a stable investment environment, capital is a coward, as the saying goes.
Companies that attended last week’s meeting “are ready to invest because they know that there is a very important opportunity for them to make good business but ... they have to be reassured that there is an investment framework”, Dr Birol said.
That means having a legal structure to make the country attractive for investors, which includes honouring contracts, issuing visas and allowing entry into the country.
“These are not huge issues; they can be done easily. The issue is if they face political resistance inside of Iraq. This is the main issue. It is the reason we have this meeting, to help the hands of the reformists like Mr Ali Allawi,” Dr Birol said.
With the advancement of technology and rise of the shale industry, the landscape makes it more difficult for Iraq to compete.
“To extract Iraq’s oil is easy, from a technical point of view, but the investment and security conditions are not easy,” Dr Birol said.
“If the government of Iraq wants to really get private investment, it has to make sure it is attractive enough for investors ... if energy companies come in and make investments, it will increase the confidence of investors in other parts of the economy.”
On the country’s chronic electricity shortages, Dr Birol said Iraq needs to leverage its existing capacity in an efficient manner and introduce tariff reforms.
The Iraqi government is currently working on a white paper for energy sector reform, which is due to be released in three weeks, followed by a roadmap for implementation.
“It is up to the Iraqi government how they will implement those reforms. There are so many low-hanging fruits. With firm and down-to-earth policymaking, we can get very quick results within six months’ time and some of the issues can be easily dealt with,” Dr Birol said.
“We cannot solve all the problems but we may well see the first good results of the good intentions of the government and this will not only increase confidence of Iraqi people but also that of the international community and investors around the world.”
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
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More on animal trafficking
Asia Cup 2018 final
Who: India v Bangladesh
When: Friday, 3.30pm, Dubai International Stadium
Watch: Live on OSN Cricket HD
The five pillars of Islam
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
ELECTION%20RESULTS
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Company%C2%A0profile
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Tips for SMEs to cope
- Adapt your business model. Make changes that are future-proof to the new normal
- Make sure you have an online presence
- Open communication with suppliers, especially if they are international. Look for local suppliers to avoid delivery delays
- Open communication with customers to see how they are coping and be flexible about extending terms, etc
Courtesy: Craig Moore, founder and CEO of Beehive, which provides term finance and working capital finance to SMEs. Only SMEs that have been trading for two years are eligible for funding from Beehive.
Points classification after Stage 4
1. Arnaud Demare (France / FDJ) 124
2. Marcel Kittel (Germany / Quick-Step) 81
3. Michael Matthews (Australia / Sunweb) 66
4. Andre Greipel (Germany / Lotto) 63
5. Alexander Kristoff (Norway / Katusha) 43
The biog
Hobbies: Writing and running
Favourite sport: beach volleyball
Favourite holiday destinations: Turkey and Puerto Rico
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets
heading
Iran has sent five planeloads of food to Qatar, which is suffering shortages amid a regional blockade.
A number of nations, including Iran's major rival Saudi Arabia, last week cut ties with Qatar, accusing it of funding terrorism, charges it denies.
The land border with Saudi Arabia, through which 40% of Qatar's food comes, has been closed.
Meanwhile, mediators Kuwait said that Qatar was ready to listen to the "qualms" of its neighbours.
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
Race card
4pm Al Bastakiya Listed US$300,000 (Dirt) 1,900m
4.35pm Mahab Al Shimaal Group 3 $350,000 (D) 1,200m
5.10pm Nad Al Sheba Turf Group 3 $350,000 (Turf) 1,200m
5.45pm Burj Nahaar Group 3 $350,000 (D) 1,600m
6.20pm Jebel Hatta Group 1 $400,000 (T) 1,800m
6.55pm Al Maktoum Challenge Round-3 Group 1 $600,000 (D) 2,000m
7.30pm Dubai City Of Gold Group 2 $350,000 (T) 2,410m
The National selections:
4pm Zabardast
4.35pm Ibn Malik
5.10pm Space Blues
5.45pm Kimbear
6.20pm Barney Roy
6.55pm Matterhorn
7.30pm Defoe
RACE CARD
5pm: Maiden (PA) Dh80,000 1,400m
5.30pm: Maiden (PA) Dh80,000 1,200m
6pm: Arabian Triple Crown Round-1 (PA) Listed Dh230,000 1,600m
6.30pm: HH The President’s Cup (PA) Group 1 Dh2.5million 2,200m
7pm: HH The President’s Cup (TB) Listed Dh380,000 1,400m
7.30pm: Wathba Stallions Cup (PA) Handicap Dh70,000 1,200m.
Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
Veil (Object Lessons)
Rafia Zakaria
Bloomsbury Academic
Company%20profile%20
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KILLING OF QASSEM SULEIMANI
Killing of Qassem Suleimani
Read more about the coronavirus
THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
Kandahar%20
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MORE ON TURKEY'S SYRIA OFFENCE
DUBAI%20BLING%3A%20EPISODE%201
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Water waste
In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.
Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.
A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.
The Emirates is the world’s third largest per capita water consumer after the US and Canada.
