Al Sudani struggles to maintain Iraq’s political stability
9 May 2024
Iraq’s Prime Minister Mohammed Al Sudani is now more than halfway through his term. While there have been some notable economic developments, such as the massive energy deal with TotalEnergies signed in July 2023, his main accomplishment may well be maintaining a fragile political settlement.
When he took office in late October 2022, it ended a year of tense political infighting following the 2021 election. The next national poll is expected in October 2025, but while the government itself may appear secure, Iraqi politics is as turbulent as ever.
The Council of Representatives has not had a permanent speaker since November, when Mohammed Al Halbousi was dismissed by the Federal Supreme Court and forced to step away from parliament. Mohsen Al Mandalawi was named acting speaker, but fierce debate continues over handing the job to anyone else on a more formal basis.
The latest figure to be proposed is Salem Al Issawi, who is backed by three Sunni blocs but opposed by the largest Sunni group, Al-Halbousi’s Taqaddum (Progress) party.
Under Iraq’s ‘muhasasa’ system of dividing the political spoils along religious and ethnic lines, the speaker’s job goes to a Sunni politician, while the federal presidency goes to a Kurd and the prime minister is Shia.
Al Sudani is now also facing a fresh challenge on the domestic front in the shape of a mooted return to the political scene by rival Shia leader Moqtada Al Sadr, who announced his retirement from frontline politics in August 2022. Earlier that year, he had pulled all his MPs from parliament, effectively handing power to Al Sudani’s Coordination Framework.
Al Sadr now looks set to change course. On 10 April, he renamed his organisation from the Sadrist Movement to the National Shiite Movement and further statements since then point to a possible return to the electoral battlefield. Given his past ability to mobilise large numbers of followers, he could have a significant impact on the next election and events leading up to it.
“Al Sadr maintains strong support from parts of the street, but it may prove difficult for him to reassert himself after ceding control over powerful institutions to the Coordination Framework,” said Winthrop Rodgers, an independent analyst focused on Iraq. “However, his return will certainly complicate dynamics within Shia politics.”
His likely return will also test Iranian influence on Baghdad. Tehran has been able to exert huge influence over Iraqi politics through its allied Shia politicians and militia groups, but Al Sadr has been the most prominent Shia figure to resist such ties in recent years.
Al Sudani has, though, been reaching out to other neighbours, too. In April, he hosted Turkish President Recep Tayyip Erdogan, who was making his first trip to the country since 2011. The visit resulted in more than 20 agreements and memoranda of understanding, including one covering the contentious issue of cross-border water resources, as well as security and trade. However, there was no sign of progress on re-opening an oil export pipeline from Iraqi Kurdistan to Turkey.
Trade route
Under Al Sudani, Baghdad and Ankara have also managed to get Abu Dhabi and Doha on board with the Development Road initiative, a $17bn plan to develop a 1,200km trade route from the Gulf through Iraq to Turkey and, from there, on to Europe. The UAE had previously thrown its weight behind the India-Middle East-Europe Economic Corridor initiative, launched in New Delhi in September – but that plan involves using Israeli ports.
“In light of the Gaza war, a trade route through Israel is unlikely to be something that many Gulf rulers want to be too closely associated with at the moment,” said one regional analyst.
For the Iraqi trade route to build up real momentum, the security situation around the country will need to improve further. While the Islamic State has been largely defeated, other pro-Iran groups continue to be active, including several that have banded together as the Islamic Resistance in Iraq (IRI).
Many of that umbrella group’s recent actions have been directed against Israel, including a cruise missile attack on 2 May, which targeted Tel Aviv. Such actions hold the potential for Iraq to be drawn into any expansion of the Israel-Hamas conflict, perhaps as a proxy battleground between Iran and Israel.
Other apparent IRI attacks have been directed at local targets, such as a drone attack on the Khor Mor gas field in the Kurdistan region in late April, which killed four Yemeni workers and forced UAE-based operator Dana Gas to suspend operations for several days.
Kurdistan election in doubt
Kurdistan, meanwhile, has other all-but-intractable political problems. Most recently, the Kurdistan Democratic Party (KDP) insisted it will not participate in the regional parliamentary election planned for 10 June – two years after it should have been held.
That stance was prompted by a Federal Supreme Court ruling in February that ended the practice of reserving 11 seats for minority groups including Turkmen, Christians and Armenians after ruling that the quota was “unconstitutional”. The MPs holding those seats had generally voted in step with the KDP – something that led its rival, the Patriotic Union of Kurdistan (PUK), and others to file a court case arguing that the communities were no longer properly represented.
The KDP has emerged as the largest party from every election in the region over the past two decades and its pledge to sit out this election creates a thorny issue for Baghdad, which is now in charge of the process – after the Supreme Court also ruled in February that oversight of the elections should be handed over from the Kurdish authorities to the federal Independent High Electoral Commission.
“If the KDP does not participate in the election, the Kurdistan Regional Government will effectively cease to function as a cohesive political entity; if Baghdad gives into the KDP’s gamesmanship, it sets a bad precedent that a single party can prevent an election if it feels it will be disadvantaged,” said Rodgers.
No solution has been found as yet. Kurdistan region president Nechirvan Barzani was in Tehran on 6 May, where he held talks with Iranian President Ebrahim Raisi and Supreme Leader Ali Khamenei, among others. Trade and cross-border security issues were at the top of the agenda, but some reports suggested Barzani had also tried to persuade Tehran to put pressure on the PUK to agree to a delay to the June poll.
On 8 May, a further element of chaos was leant to the proceedings when the High Electoral Commission suspended preparation for the Kurdish election in response to a lawsuit filed by the KDP over the distribution of constituencies.
Together, the prospect of a major rival Shia bloc returning to Baghdad politics ahead of the 2025 Iraqi parliamentary election and the risk of the breakdown of the political process in Kurdistan threaten to disrupt the relative political calm that Al Sudani has worked to cultivate. Handling the shifting political landscape will require astuteness.
Image: مكتب اعلامي لرئيس الوزراء, CC BY-SA 4.0, via Wikimedia Commons
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Abu Dhabi balances AI and net-zero with $9.8bn infra spend
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Abu Dhabi National Energy Company (Taqa) and Emirates Water & Electricity Company (Ewec) have officially confirmed the scale of the power generation and grid infrastructure being planned to support the UAE capital's artificial intelligence (AI) strategy.
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The strategy is projected to contribute AED24bn to Abu Dhabi’s GDP by 2027 while creating more than 5,000 jobs to support emiratisation efforts.
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The formation of a $25bn joint venture between Abu Dhabi's ADQ and US-headquartered Energy Capital Partners (ECP) to build data centres in the US preceded that meeting.
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Taqa and Ewec sign Dhafra OCGT and grid contracts
3 April 2025
Abu Dhabi National Energy Company (Taqa) and state utility and offtaker Emirates Water & Electricity Company (Ewec) have signed a 24-year power-purchase agreement (PPA) to build, own and operate an open-cycle gas turbine (OCGT) project in Abu Dhabi.
The Al-Dhafra OCGT project will have a capacity of 1,000MW.
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Australian firm wins Trojena dams subcontract
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Australian firm Glaass has won a subcontract from Italian contractor Webuild for the Trojena dams project in Neom, Saudi Arabia.
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> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
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> WATER: Saudi water contracts set another annual record
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Wood shares drop after financial warning
3 April 2025
Shares in the UK-based engineering company Wood Group dropped by 25% after it announced that accounting issues would delay the publication of its full-year results for 2024.
The company, which has numerous project contracts around the Middle East and North Africa, said it had identified “material weaknesses and failures” in its financial culture within its projects business unit, following an independent review conducted by financial services company Deloitte.
Wood said the failures included “inappropriate management pressure and override to maintain previously reported positions”, and led to instances of information withheld from Wood’s auditors.
It also said there was an inappropriate “over-optimism and/or lack of evidence in respect of accounting judgements”.
Wood has project contracts in Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, where the company opened its third office in Sharjah.
The firm’s regional projects pipeline includes pre-front-end engineering and design (pre-feed) work on Saudi Aramco’s Southern and Northern Areas project in Saudi Arabia.
It is also working on an integrated feed, detailed design, procurement support, and construction and commissioning assistance for TotalEnergies in Iraq.
In its latest statement, Wood said: “We are committed to implementing a detailed remediation plan, including necessary follow-on actions from the review, to continue to strengthen the group’s financial culture, governance and controls.
“This will include actions on culture, controls and organisational structure.”
As a result of the initial report from Deloitte, Wood said:
- A number of prior year adjustments are expected to be required for the income statement and balance sheet
- Issues identified in a limited number of contracts in the Projects Business Unit, particularly in relation to legacy lump-sum turnkey projects
- Issues with the application of relevant accounting standards, such as holding specific amounts on the projects balance sheet that should have been written off
- Gaps and deficiencies within the application of controls, which relate to the monitoring and reporting of project positions within the Projects Business Unit
- No material issues identified in our other business units (Consulting, Operations and Investment Services)
Extensive work is needed to conclude the audit, according to Wood.
The company has said that it is now expected to have to delay the publication of its full-year accounts and will not publish them for 2024 by 30 April 2025 as was previously expected.
It also said that if the publication of its results is delayed, the company’s shares will be suspended from trading from 30 April 2025 as work progresses towards completion of its FY24 accounts.
Commenting on its engagement with lenders, Wood said: “We remain in constructive dialogue with the group’s lenders regarding refinancing options and will engage with lenders in respect of the timing of our FY24 accounts, including putting in place appropriate pre-emptive waivers under our committed debt facilities.”
Last month, Wood said it had extended the deadline for talks regarding a possible takeover by Dubai-based Dar Al-Handasah Consultants Shair & Partners Holdings (Sidara).
The new deadline was set for 17 April.
In its latest statement, Wood said that it remains in discussions with Sidara about a possible cash offer for “the entire issued and to be issued share capital of the company”.
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