Iraq Energy Forum 2019 provided attendees with an unparalleled level of access to the most important conversations in energy in Iraq and the wider region. On the first day alone, guests of honour included OPEC Secretary-General H.E. Mohammed Sanusi Barkindo, Iraq’s Deputy Prime Minister for Energy Affairs Minister of Oil Thamir Al-Ghadhban, BP Iraq CEO Zaid Elyaseri, President & CEO of Siemens Joe Kaeser, Chairman of the region’s leading renewable energy firm ACWA Power Mohammed Abunayyan and H.E. Sun Xiansheng, Secretary-General of the International Energy Forum.
Discussing the political economy of energy in Iraq and the region, day one also saw remarks from US Ambassador to Iraq Matthew H. Tueller, Spanish Ambassador Juan José Escobar Stemmann, French Ambassador to Iraq Bruno Aubert and Turkish Ambassador to Iraq Fatih Yildiz, as well as a host of expert commentary on oil and gas in Iraq.
With nearly 100 speakers and moderators, we could not cover all content here but rest assured we will do so in a full report that will be published soon.
This point was echoed later by IEF Secretary-General Sun Xiansheng. Citing growth in aviation fuel demand, shipping fuel and petrochemicals, Mr. Xiansheng pointed out that new innovations in energy “will help double global GDP by 2040 with the world population rising above 9 billion people, which will naturally increase oil demand.”
Noting how Iraq was particularly well placed to meet this rise in demand due to highly competitive extraction costs, Minister Ghadban outlined Iraq’s plans to revive historically important export routes, re-initiating the concept of a strategic pipeline from Basra to Ceyhan, via Kirkuk, in addition to the current plan for an export route through Aqaba, Jordan, again carrying oil from Basra, which was approved by Iraq’s cabinet in July.
Iraq Energy Institute board Vice Chairman Adnan Al-Janabi followed this important point by emphasizing how Iraq benefits from some of the lowest extraction costs in the world, noting,
“it could be on average in the region $4 a barrel if you compare different fields and various models. That is not close to the average in the Middle East, it is the lowest cost. With that immense potential, Iraq has to plan now on how to be competitive in the future. MoO must continue investing in new technology and new exploration across the country.”
For Iraq’s liberated provinces, the conference also saw Siemens and Egypt’s Orascom Construction herald the signing of a contract to rebuild power infrastructure in Baiji, northern Iraq, which will add 1600 MW to the power grid, in addition to constructing substations and infrastructure to maintain supply. A great many meetings were held by stakeholders across multiple sectors, all against a backdrop of dialogue for vital reform.
Much of the oil for this new infrastructure will come from Rumaila, among other southern giant fields, where BP plan to raise production to two million barrels per day. BP’s Zaid Elyaseri outlined the potential for this project in a presentation describing his organization’s current operations. Highlighting how far Iraq has come in recent years, Mr. Elyaseri emphasised that as BP work on raising Rumaila’s production to over 2 million barrels a day, “93 per cent of our workforce are Iraqis. So that obviously will help along with introducing technology, building those capabilities, will take us to the next phase of Rumaila.”
The theme of Iraq’s energy megaprojects tied in well with the theme of regional cooperation, which has been a cornerstone of Iraqi foreign policy in recent years and is now bearing fruit. A critically important speaker on this front was ACWA Power Chairman Mohammed Abunayyan. ACWA Power announced they are planning a number of strategic projects in Iraq with the backing of the government of Saudi Arabia and that his organization would engage with and support local communities in the process, as he remarked, “we can be sure we will deliver total solutions that are reliable, competitive, economic and socially sound because you really need to engage the society.”
ACWA Power’s ambitions in Iraq were praised by the heads of diplomatic missions speaking on the topic of economic cooperation for regional stabilization. On plans to diversify Iraq’s export outlets, Turkish Ambassador Fatih Yildiz spoke of his country’s new engagement with Iraq:
“Turkey is an important hub across all axes for the transit of energy and with enormous experience in this field in terms of pipelines, we should be a strategic partner for Iraq in terms of hydrocarbon resources.”
On regional cooperation, US Ambassador Matthew Tueller was highly optimistic regarding potential gains, noting how,
“fostering greater cooperation with gulf neighbours, Jordan and Turkey, and with partners in Europe and the Western hemisphere could be a strategic game changer for Iraq’s reconstruction. Such cooperation could include more investment in energy infrastructure which would improve the efficiency of Iraq’s power structure. It will help Iraq to leverage its critical natural gas assets that are currently going unused. An Iraqi agreement to build an interconnection with Jordan, Saudi Arabia and the GCCIA would be an important step towards making Iraq energy self-sufficient.”
With this goal in mind, day one closed with insights into Iraq’s growing gas utilization and commercialization. Jaafar Oklany, Commercial Director of the Basrah Gas Company, outlined the massive scale of Iraq’s gas utilization project, recalling how,
“Since we started the operation in 2013, we prevented about 70 million tons of C02 from going to the atmosphere. That is the equivalent emissions to an industrial country like Sweden. We have increased gas production from 300 mmscf/d to over 1 bcf. This has also increased LPG production to 70% of Iraq’s LPG. Iraq has now turned from an importer of LPG to a net exporter.”
Day 2
“Increased stability in southern Iraq this year proves that the government is on the right track.” This point was emphasized by Minister of Electricity Luay Al-Khatteeb, who stressed the importance of the private sector in increasing Iraq’s power supply:
“The private sector is working on new IPPs and have been vital to gains so far. The recent agreement on the expansion of Bismayah will create a huge boost to generation in the national network, which will also be a huge boost for Baghdad and its 8 million population, as a critical economic hub. Through working on the network, we are also sustaining new capacity, as part of a two-track strategy for production and distribution. By mobilizing the private sector, we aim to attract the very best quality companies and international best practices.”
Mr. Al Khatteeb also highlighted the historic agreement between the Ministry of Electricity and the GCCIA to sign a framework agreement to provide power to Basra via Kuwait within a 12-month timeline. The agreement was signed in a private meeting hall on the side-lines of IEF 2019 and witnessed by members of the media. Attendees included dignitaries from the Ministry of Electricity, the GCCIA and representatives of GCC embassies to Iraq.
Of this critical development, GCCIA CEO Ahmed Al Ebrahim remarked, “we have had fruitful talks on connecting the GCC supergrid to southern Iraq to enable the supply of 500 megawatts to Basra with the possibility to increase that to 1800 megawatts.”
Nafee Abdulsada, Deputy Minister of Electricity for Transmission, later elaborated on regional plans beyond the GCCIA arrangement. On interconnection with Jordan, he noted how “technical requirements and the route of the lines has been determined. It is expected that we will purchase 200 MW at peak supply, and the energy purchase formula and the final purchase agreement were recently agreed.” On interconnection with Turkey, Mr. Abdulsada spoke of another potentially historic development, noting how Iraq, “received proposals from Turkish companies to supply energy and we are reviewing this through a specialised committee, looking at purchasing 300-400 MW.”
Internally, Iraq is continuing to push for reform and subsidy reduction. National Investment Commission head Sami Al-Araji spoke of the importance of tariff rationalization to mobilize investment in the grid, remarking that, “in order for the nameplate capacity to maximise without losses, due to the ageing of the network, I believe that if we can give a good incentive to combine transmission and distribution and collection, and guarantee collection, we’ll achieve the goal we are looking for.”
William Wakileh, President and CEO of GE Iraq and the Levant followed up on this point, noting how the private sector was already operating in power generation in Iraq:
“Where we talk about policy, is there enough investment available? The country has taken significant steps with multiple IPPs. Many companies partner with us, using GE technology and products including MASS and Shamara Group, on a private basis. Once we figure out privatised distribution, that will be the key to move the entire sector forward.”
Later on the second day; delegates, members of the media, officials from the Ministry of Electricity and executives from GE and MASS Group signed a contract for the expansion of the 3000 MW Bismaya power plant to utilize GE’s combined cycle technology. Bismaya is a privately owned and operated IPP project located in Baghdad governorate. The signature ceremony involved Ahmed Ismail, President of MASS Group and John Rice, Chairman of GE Gas Power and was witnessed by Minister Khatteeb.
Speaking on the theme of changing the policy environment for more investment, Siemens Iraq Chief Executive Musab Al Kateeb remarked, “I don’t think this is a technology issue. Siemens is uniquely positioned to tackle the problems that exist in the power transmission, distribution and generation sectors. It is a policy and incentive issue.”
Later, Abdulhamzah H. Abboud, Senior Advisor to the Minister of Electricity, described some of the current efforts to rationalize tariffs and why this was important to maintain existing capacity:
“The Ministry is aiming to solve all problems faced with past investment opportunities and to encourage the open market of power that determines the tariff on the basis of demand as with international practice. In addition, we are encouraging rehabilitation of operation and maintenance of depreciated power plants through investment for a certain period, to help technical capacity building for Iraqi employees and to bring the required finance, to stem the degradation of these power plants resulting from a past lack of timely maintenance.”
Referring to the importance of maintenance under Iraq’s challenging conditions, URUK Engineering Chief Strategy Officer, Mashal al Nawab explained, “I am sure you are all aware, when we have a nameplate capacity, that refers to generation under ISO conditions, which is 60% humidity, and 15 degrees centigrade temperature at sea level. Iraq with its heat and the different environment, you lose about 25% of the nameplate capacity.”
The remainder of day two saw detailed presentations on renewable energy and its rise in the region and growth potential in Iraq, as well as the challenges of megaproject financing both in Iraq and internationally, which we will cover in full detail in our full post-event report.
Days 3 & 4
The remaining days of the conference broadly looked at the technological and human capacity of Iraq as the world enters the so-called 4th Industrial Revolution, looking at the enabling environment for internet connectivity and digital economies. The third day was opened by H.E. Ali Al-Khuwaildi, Director of the Communication and Multimedia Commission (CMC) of Iraq.
Additionally, reform in Iraq’s educational culture that would support the new generation of critically minded Iraqis, women’s empowerment and equality were discussed, along with reforms that will give young Iraqis the requisite skills to thrive in a rapidly changing world.
Of the telecom sector’s role in this transformation, Asiacell CEO Saman Bojan described Iraq’s extremely rapid progress:
“In the old days, we used to hear about explosions in Iraq. Nowadays we have a data explosion. We have a vast amount of data being consumed online and it is going up. Smartphone penetration is rising over 6% a year.”
Zain Iraq CEO Ali Zahid commented on the untapped potential of Iraq’s market, noting that foreign investment was now more secure than ever since, “Iraq is safer than Chicago, statistically.” He noted, “Smartphone penetration is 59%, bank account penetration is only 8% and credit card penetration is 1%. These are big challenges in Iraq but new businesses have been established and are pushing these services forward.”
One entrepreneur who has been at the forefront of technological change in Iraq is Mohammed Al-Hakim, Iraq CEO of ride-hailing app Careem. He explained the dramatic pace of change in only a short period and the potential this has to transform Iraq:
“Iraq has become the fastest-growing market for Careem in the history of the company. Looking at the question of whether we will see a digital economy or ecosystem in Iraq, it’s not a question of when or if. It’s already happening. We serve 600,000 people with 15,000 “captains.” These taxi drivers are now powered by the internet, they are paid through MasterCard, they withdraw cash, they save, they are even involved in financial institutions such as leasing.”
Another contributor to Iraq’s local digital economies was Mujahed Waisi, co-founder of Iraq’s first co-working space, The Station. Of the organization’s founding, he noted how,
“we wanted to create our own success story to prove to the youth that they can do it too, you can succeed in the private sector and you don’t need government help. And waiting will only lead to grey hair. So, we started with networking and building communities and this ended up with proposals for institutions including The Station, incubators for entrepreneurship to change the mentality and promote the private sector.”
Our Technology and Education Day saw participation by IEF 2019 supporting organisations UNDP and UNESCO. Additionally, H.E. Eric Strating, Dutch Ambassador spoke of his country’s efforts in supporting entrepreneurship in Iraq. Participants stressed the importance of having investors share risk with the tech sector, which they hope will become self-sustaining.
None of this progress can happen unless students are given the learning tools to develop creative, critical minds, so the conference turned to the issue of educational reform in Iraq. Michael Mulnix, Founding President of the American University of Baghdad (AUIB) eloquently summed up his institution’s view toward education when he explained how “a liberal arts education teaches students to learn how to learn.” AUIB is building a network with Iraq’s federal universities to strengthen teacher training capacity and collaborate on research.
For Steven Tierney, Executive Director for Modernizing Governance at Canada’s Institute on Governance, a key pathway for Iraq’s progress has to come through public sector reform, but crucially, the capacity building had to be as context-specific as possible, mixing “international best practices in adult learning and making adjustments. The result is a Made In Iraq model that will have wide applicability throughout the country.”
We had a stirring discussion on expanding the role of women in leadership positions in Iraq’s public and private sector, involving a speech by H.E. Paul Gibbard, Canadian Ambassador to Iraq on Canadian support to gender equality and women rights in Iraq and elsewhere. The women empowerment panel was chaired by our partner Institute on Governance (IOG)’s Gender Specialist, Awatef Rasheed.
Underrepresented in Iraq’s development at the national level has been the role of women, the focus of Plenary Session 12. On this central topic Sundus Abbas, Gender Adviser at UNDP explained her philosophy on the role of women in development:
“Women are a major player in development in different sectors. When we are trying to discuss empowerment, we need to think about different categories of women and different categories of empowerment. Do we mean political empowerment or economic and social empowerment? UNDP has always believed that empowering women in different categories is about how women’s needs should be taken into consideration across all programs and with all policies.”
Ghada Hameed Programme Manager at the EU Mission to Iraq, described how it was difficult to separate the concepts of capacity building, development and promoting the role of women, since the latter is so central to development, as she noted, “We have a 50 million EUR portfolio for general education, young girls are the core of what we are doing. We also have TVET portfolio, and within that, we are introducing comprehensive reform, tackling the qualification framework and curricula.”
Iraq Energy Award
Our 5th Iraq Energy Award, a prestigious award that has become Iraq’s premier token of recognition to be presented to individuals who contribute to the advancement of Iraq’s energy and economy was awarded this year to H.E. Dr. Fatih Birol, Executive Director of the International Energy Agency (IEA).
Under Dr. Birol’s leadership as both Chief Economist and Executive Director, the International Energy Agency (IEA) continues to work closely with Iraq’s government, private sector, national experts and the international community to devote research, advice and resources in support of Iraq’s aspirations towards greater energy security and accelerated economic growth. This is proven by two key in-depth analyses; the 2012 ‘Iraq Energy Outlook’ and the 2019 ‘Iraq’s Energy Sector: A roadmap to a brighter future’, the latter mapping technology adoption and policy reform pathways for practical action that will benefit the Iraqi people, especially in the power sector. Dr. Birol is the first non-Iraqi to receive this award, previous awardees include; Dr. Fadhil Al-Chalabi, OPEC’s former acting Secretary-General from 1983 to 1988, Jabbar Al-Luaibi, former Minister of Oil, Thamir Al-Ghadhban, Iraq’s current Deputy Prime Minister for Energy Affairs and Minister of Oil, in addition to Adnan Al-Janabi, former Chairman of Iraq’s Energy Parliamentary Committee.
Due to current oil market developments, Dr. Birol could not join the 5th Iraq Energy Forum and the award was received by Mr. Ali Al-Saffar, IEA’s Middle East and North Africa Programme Manager.
We would like to extend our appreciation to all entities and those who contributed to the success of our 5th Iraq Energy Forum (IEF 2019), starting with representatives of the Government of Iraq, our supporting organisations, partners, sponsors, and ending with Iraq Energy Institute (IEI)’s dedicated team.
