Iraqi governor puts oil wealth to good work

Iraqi governor puts oil wealth to good work




Source: Reuters - Mon, 28 Oct 2013 12:28 PM

Author: Reuters








* Maysan Governor restores, improves basic services

* Output from southern Halfaya, Maysan oilfields rises to 250,000 bpd

* Further 100,000 bpd increase from Halfaya in 2014

By Peg Mackey and Aref Mohammed

AMARA, Iraq, Oct 28 (Reuters) - The governor of Iraq's Maysan province is on the job six days a week in his suit of choice - blue workman's overalls.





For Ali Dawai, sweeping Amara's streets or supervising the construction of a luxury hotel is all in a day's work in this province straddling southern oilfields near the Iranian border.

In a country riven by violence and sectarian politics and rife with corruption, Dawai offers a rare example of how Iraq's vast oil resources can be put to good use.

"Amara used to be the city of the oppressed. Now there are good services and new projects for bridges and buildings will change the shape of our city," said Iraqi army officer Kadhim Mattar, sipping tea in a café along Amara's tree-lined corniche.

"I love Ali Dawai and the vast majority love him, too. He's done great work."

Prior to an oil expansion programme which began four years ago, Maysan's oilfields pumped a mere 70,000 barrels per day (bpd) and Amara, the provincial capital, was an impoverished village. Its people suffered during the 1980s Iran-Iraq War, when the Shi'ite province was on the frontline.

Drilling by Chinese oil giants has more than trebled production - boosting oil revenue and bringing a degree of prosperity to the million who live here.

Dawai moved swiftly to deliver basic services - Maysan now has 22-hours a day of electricity, far more than Baghdad - earning him enormous popular appeal.

"I have been wearing these overalls from day one so I can follow up on projects to discover what is hindering work and figure out quick solutions," Dawai, a supporter of Shi'ite cleric Moqtada al Sadr, said in an interview in his headquarters.

"This is the best uniform a man can wear for serving the people."

Iraq's oil-producing provinces are entitled to $1 for each barrel of crude pumped, so Maysan has a big cushion to help fund projects. The oil revenue is in addition to the region's budget of about $190 million provided by the central government.

And if all goes to plan, oil output by 2017 is due to reach nearly one million bpd.

After stagnating from decades of wars and sanctions, Iraq's oil development got underway in 2009 when it awarded a series of service contracts to foreign companies.

China snared both Maysan oil deals on offer in Baghdad's auctions - Petrochina won Halfaya and China National Offshore Oil Corp (CNOOC) secured the Maysan oilfields. China's dominance has offered huge benefits, said Dawai.

"The Chinese companies operating in Maysan's oilfields have achieved great, positive results - the most important is increasing the level of production, especially from Halfaya," he said. "And that has increased the income for the city."

Petrochina, along with partners Total and Petronas, has lifted flows from Halfaya, which was nearly untapped, above 100,000 bpd and output is expected to hit 200,000 bpd by next September.

Dawai, a university graduate with a degree in Islamic studies, has built Maysan almost from scratch - paving roads, installing sewage systems and providing electricity.

Then came schools, houses and the biggest cancer clinic in Iraq, which opened last week.

The next stage of building - by companies from Turkey, Lebanon and Italy - features a suspension bridge, commercial tower blocks, amusement parks, and an exclusive hotel that overlooks the Tigris.

"It seems the other provinces are putting money in the wrong places. It's not going into infrastructure and services. They choose the workers according to their political affiliation," he said.

SECURITY

In contrast to the Iraqi capital Baghdad, where car bombs are a daily occurrence, infrequent militant attacks and relative security have created the stability to develop Amara. Army tanks guard each corner of its busy streets.

Unlike most politicians in Iraq, Dawai, who hails from the ancient marshlands, shuns heavy personal security.

It hasn't always felt so peaceful here. The region was a battlefield for militias backed by Iran when U.S. troops were on the ground. Dawai says Maysan's aim is to cooperate with Iran.

While ordinary Iraqis see few benefits from their country's rank as OPEC's second biggest producer and are fed up with corruption, they single out Dawai as an honest official. Western diplomats generally share their perspective.

"Dawai is very tough. He doesn't take money and avoids corruption - and that way, he's getting more out of the province's resources," said a diplomat in Baghdad.

"There's a lot of inefficiency in the administration of projects throughout Iraq. There's an enormous pile of money coming in from oil sales and many Iraqi officials are still afraid to make decisions."

(Editing by Angus MacSwan)


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