VZCZCXRO5929
RR RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHAM #2459/01 2341542
ZNR UUUUU ZZH
R 211542Z AUG 08
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 3386
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS SECTION 01 OF 02 AMMAN 002459 
 
SENSITIVE 
SIPDIS 
 
FOR NEA/ELA, NEA/I, AND EEB 
 
E.O. 12958: N/A 
TAGS: PREL EINV ENRG IZ JA JO
SUBJECT: JAPANESE EMBASSY IN JORDAN ORGANIZED FORUM ON 
INVESTMENT IN IRAQ WITH FOCUS ON OIL INDUSTRY 
 
Sensitive but unclassified.  Not for internet distribution. 
 
¶1.  (SBU) Summary: The Japanese Embassy in Jordan organized 
the "First Japan-Iraq Business Forum" in Amman in early July. 
 Iraqi Vice President Tariq Al-Hashmi attended the event and 
urged Japanese companies to "invest in Iraq today" in order 
to secure future Iraqi oil supplies.  The Iraqi Deputy Oil 
Minister described plans for exploration and expansion of 
existing oil storage and transportation facilities, and 
reported Iraq was planning to expand gas exploration in the 
Akkaz field in Anbar over the next three to four years. 
Iraqi businessmen did not seem optimistic about future 
business with Japan, and Japanese oil industry executives 
expressed only mild interest in investment in Iraq.  End 
summary. 
 
Japan-Iraq Business Forum In Amman 
---------------------------------- 
 
¶2.  (U) The Japanese Embassy, in cooperation with the 
National Iraqi Investment Commission and Iraqi Vice President 
Tariq Al-Hashmi, held the "First Japan-Iraq Business Forum" 
July 2-3, in Amman.  The Japanese Embassy reported 200 
participants including the Japanese Senior Vice Minister of 
Economy, Japanese Vice Minister of Foreign Affairs, Iraqi 
Minister of Industry and Minerals Fawzi Hariri, senior 
Japanese executives from the oil industry, as well as 
representatives from the Kurdistan Regional Government.  VP 
Hashmi addressed the forum and urged Japanese companies to 
undertake more first-hand involvement in Iraq, saying if 
Japan wants to secure Iraqi oil in the future, it had to 
"invest in rebuilding Iraq today."  He also called for more 
grants, MOUs, and technical cooperation.  Hariri noted the 
GOI was transforming its economy from a centralized, heavily 
subsidized system into a free market one, and was planning 
free trade and special economic zones. 
 
Iraqi Deputy Oil Minister Outlines Current Oil Policy 
--------------------------------------------- -------- 
 
¶3. (U)  Iraqi Deputy Oil Minister Ahmad Al-Shamma delivered a 
presentation on Iraq's Oil Policy through 2017, describing 
GOI goals to confirm the existence of an estimated 40 billion 
barrels of probable oil reserves and 60 Trillion Cubic Feet 
(TCF) of probable gas reserves, and to increase oil 
production to 6 million barrels per day by 2015, sustaining 
that output until 2017.  He further outlined plans for 
expansion of existing facilities for crude oil storage and 
export transportation, which would lead to an increase in gas 
production from the present 1,500 thousand (M) Standard Cubic 
Feet per Day (MSCFD) to 6,900 MSCFD. 
 
¶4.  (SBU) Al-Shamma later told EconOffs that over the next 
three to four years the GOI intended to expand exploration in 
the Akkaz field to secure gas reserves for an electrical 
generating station in Anbar, with subsequent plans to 
establish long-range pipelines for gas exports to Europe. 
 
Conditions in Iraq Better, But Still Difficult 
--------------------------------------------- - 
 
¶5. (SBU)  Several Iraqi business executives said they did not 
expect business between Iraq and Japan to expand dramatically 
in the near-term because of GOI bureaucracy and corruption. 
They reported favoritism by the Iraqi Ministry of Finance in 
awarding contracts and expediting payments to 
politically-connected -- and allegedly Iranian -- 
businessmen. 
 
¶6. (SBU)  Other Iraqis remarked that the security situation 
had dramatically improved in Baghdad, and businesses were 
returning, however the government was still not able to 
provide basic services.  One businessman reported the 
electrical generators at his offices still had to run 
approximately 17 hours per day because electrical production 
was so sporadic.  On the positive side, he noted that when 
his office first opened in Baghdad in 2004, he paid his 
engineers about USD 500 per month; now, because the market 
had so improved, he needed to offer prospective employees 
over USD 3,000 per month in order to remain competitive. 
 
¶7. (SBU)  Comment.  Japan, an active player in Iraq, has 
several on-going investment projects underway.  For example, 
the Japan Bank for International Cooperation (JBIC) is 
preparing to disburse approximately $2.4 billion in 
concessionary loans for improvements in a range of 
infrastructure projects, including rehabilitation of 
refineries and a crude oil export facility.  From the private 
sector, Japanese petroleum companies JAPEX, INPEX, ENEOS, and 
 
AMMAN 00002459  002 OF 002 
 
 
Mitsubishi have qualified to participate in a first licensing 
round that should occur before the end of the calendar year 
to expand production at Iraq's oil and natural gas fields. 
This well attended conference highlighted the Japanese-Iraqi 
relationship as well as the possibility of enhanced trade 
activities between Japan, Iraq, and Jordan, and Iraq's desire 
to develop the oil industry.  Most attendees confirmed that 
security and economic conditions have been improving in Iraq, 
but expressed the view that it will still be awhile before 
doing business in Iraq will be considered completely normal. 
 
¶8. (U) This message has been coordinated with Embassy Baghdad. 
 
Visit Amman's Classified Website at: 
http://www.state.sgov.gov/p/nea/amman 
Beecroft