Iraq signs joint venture agreement for oil shipment and trade

Iraq signs joint venture agreement for oil shipment and trade

economy Since 2017-08-16 at 16:21 (Baghdad time)

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OPEC member Iraq signed a joint venture agreement with a shipping company owned by Arab countries to transport, store and trade crude oil and petroleum products, according to official documents and sources in the oil sector.
Oil producers in the Middle East have begun to buy and sell oil to boost their revenues. A sharp drop in crude oil prices since mid-2014 has pushed the sector to become more efficient and more focused on the trade side.
The joint venture, the Iraqi Company for Oil Transport and Trade (ESOT), will carry out a range of activities, including the trade in oil products and ship leasing, the establishment of oil terminals, the provision of various marine services and the supply of ships with fuel.
Isot is owned by the Iraqi state oil tanker company and the Arab Maritime Oil Transport Company, in which Arab oil exporters such as Saudi Arabia, the United Arab Emirates and Kuwait have stakes.
Iraqi oil tankers have a 22.5 percent stake in Isot, according to a 20-year contract signed by Reuters.
Isot said in a statement that its establishment was based on the vision of the Iraqi Ministry of Oil to strengthen the activities of the oil tankers and the Arabian Sea for the transfer of oil in the field of shipping, maritime services and oil trading, and is also one of the initiatives of the Ministry to upgrade national oil companies to international levels.
Weisut, which will soon begin supplying ships with fuel at the country's southern ports, is the second joint oil project recently established by Iraq.
Oil sources in the oil sector said Iraq's state oil marketing company (SOMO) and Russia's Litasco had established a trading company in Dubai to market crude and could expand its operations to include oil and petrochemical products.
"The new project will have exclusive rights to the transportation of crude and petroleum products," he said, adding that he will develop other projects, including trade with fuel oil and products, and may eventually be able to handle crude oil allocations.
He said Esot would be based in Dubai with plans to open offices in Singapore and other centers. The company currently has about 25 employees and plans to hire 50 employees in Dubai by the end of the year.
The company is in talks to build a storage facility for crude oil and oil products in Iraq over the next few years, the source said.
Isot says it is in a position to invest and gradually acquire a large fleet to transport most of Iraq's crude to end-users at competitive prices.
The company will also set up a naval academy to train Iraqis to eventually form up to 85 percent of its crew.


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