[ltr]2023.05.28 - 16:24[/ltr]
Baghdad - Nas
Iran attributed the reduction in the quantities of gas it exports to Iraq to “technical reasons.” However, Iraqi officials say that Iran is seeking to “blackmail” Iraq, because it feels dissatisfied with the investment contracts that Iraq signed with Saudi Arabia last week, including an agreement with Aramco to produce more than On 400 million cubic feet of gas, to supply the national grid with the gas needed to generate electric power.
Observers say that Iraq, which has been subject to Iranian influence for nearly two decades, and has provided it with revenues of more than $20 billion annually, has not obtained investments from Iran to support its economy, and has remained captive to it in its needs for electricity and gas, while gas is being wasted in Iraqi oil fields.
Officials affiliated with the Popular Mobilization Forces say that the gas projects that Iraq is seeking to implement aim to harm Iran's interests, and that the Iraqi government has not done enough to pay off its accumulated debts to Iran.
A statement by the Iraqi Foreign Ministry stated that Minister Fuad Hussein asked his Iranian counterpart, Hussein Amir Abdullahian, about the reasons for Iran’s reduction of gas exports last week, which Hussein said “led to a decrease in electricity production and caused repercussions on daily life.” However, Abdullahian attributed the matter to the presence of “ technical problems,” and did not specify when they would be addressed. This prompted the government of Prime Minister Muhammad Shia' al-Sudani to decide to send a delegation headed by the Minister of Electricity to Iran next week to discuss the issue.
The supply cut amounted to 20 million cubic metres. Ahmed Musa, a spokesman for the Iraqi Ministry of Electricity, said that Iraq usually imports between 50 and 70 million cubic meters of gas.
Iraq imports electricity and gas from Iran equivalent to between 33 and 40 percent of its energy supplies, especially in the summer months when the temperature rises to 50 degrees Celsius, and energy consumption peaks.
Iraq pays the costs of these supplies in an account for Iran in an Iraqi bank, but the account is subject to the supervision of the US Federal Reserve Bank, which does not allow Iran to benefit from the funds except for humanitarian purposes. Iran's debt is estimated at about $11 billion. Iraqi officials say that it is the US sanctions that are obstructing the payment, and that the two countries need to find “creative ways” to settle parts of these debts.
And while Iraq spends nearly $4 billion annually on Iranian gas and energy imports, its oil fields burn huge amounts of natural gas as a by-product of the oil and gas sector.
Last April, Iraq concluded a huge $27 billion agreement with French energy giant Total Energies, which includes plans to collect and invest associated gas. However, it was Iraq's agreements with Saudi Arabia that most prompted Iranian officials and their allies in the Popular Mobilization Forces to feel anxious.
And the Saudi Minister of Investment, Engineer Khaled Al-Falih, announced last week about Saudi investments in Iraq amounting to $ 3 billion, including investments in banks such as the National Bank of Iraq, expressing the hope that “there will be Saudi banks in Iraq, and Iraqi banks and banks operating in the Kingdom, to facilitate Mutual trade, especially since there are major development initiatives.
And Saudi Arabia established the “Saudi-Iraqi Investment Company,” owned by the Saudi Investment Fund, with a capital of $3 billion. It specializes in strategic projects, reconstruction work, and financing exports and imports between the two countries.
Iraqi Oil Minister Hayan Abdul-Ghani said that it was agreed in the Saudi-Iraqi Coordination Council that Aramco should enter the development of an oil and gas field in order to produce more than 400 million cubic feet of gas to supply the national grid with the necessary gas for generating electricity. He announced that two rounds of licensing have been launched, the “fifth and sixth” rounds, and they aim to invest and develop a number of exploration fields and patches in the eastern and western regions of Iraq, especially since Iraq produces gas in quantities of up to 60 million cubic feet, which enables it to cover part of its gas needs. For Iran, however, it means that Iraq wants to pave the way so as not to remain captive in its energy needs for Iranian gas.
Miteb Al-Shathri, acting CEO of the Saudi-Iraqi Investment Company, said that the company will invest in areas including infrastructure, mining, agriculture, real estate development, and financial services.
The Saudi-Iraqi company is one of 5 new Saudi regional companies that aim to invest in Jordan, Bahrain, Sudan, Iraq and the Sultanate of Oman, after the launch of the Saudi-Egyptian investment company last August. The value of the targeted investments is $24 billion.
Observers say that it was the economic cooperation between Iraq and Saudi Arabia that prompted Tehran to establish a competing company under the name “Al-Muhandis Company” after the name of the executive vice president of the armed organization of the Iraqi Popular Mobilization, Abu Mahdi Al-Muhandis, who was killed with Qassem Soleimani in early 2020, in order to work in the field of “contracting and implementing projects.” A big building”, under the leadership of the Popular Mobilization Forces to increase its economic and military influence, in an effort to replicate the experience of the Iranian “Headquarters of the Final Prophets” organization, which has become the economic arm of the Revolutionary Guards in Iran.
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