Current Events

For the Week Ending in 1/13/2012

1.    Western oil firms remain in Iraq even as the US exits.  Iraq has a goal of raising its oil production capacity to 12m barrels per day by 2017, which would place it in the top echelon of global producers.  Recently, BP and CNPC finalized the first new oil contract issued by Baghdad for the largest oil field in the country, the 17 billion barrel super giant Rumaila field.  ExxonMobil, with junior partner Royal Dutch Shell, won a bidding war against Russia's Lukoil (and junior partner ConocoPhillips) for the 8.7 billion barrel West Qurna Phase 1 project. Italy's Eni SpA, with California's Occidental Petroleum and the Korea Gas Corp, was awarded Iraq's Zubair oil field with estimated reserves of 4.4 billion barrels. Shell was the lead partner with Malaysia's Petroliam Nasional Bhd., or Petronas, winning a contract for the super-giant Majnoon field, one of the largest in the world, with estimated reserves of up to 25 billion.

2.    Iraq: Panetta and Army Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, told the panel that the U.S. military will continue limited counterterrorism training with Iraqi forces at up to 10 camps around the country beyond the end of the year.  Panetta left open the possibility for continued negotiations with Baghdad over a force presence there.  The Pentagon chief also pointed out that the United States has some 40,000 troops in the region, including in Kuwait, Bahrain, the United Arab Emirates and Qatar.

3.    Iran:  Iran has begun uranium enrichment at a new underground site built to withstand possible airstrikes.  One of the scientists working in the uranium enrichment project Mostafa Ahmadi Roshan Behdast, was also assassinated this week in a car blast.  These recent events, along with the positioning of a new aircraft carrier strike group in the Arabian Sea (and another on the way to the region) continues to increase the tension in the region.  

4.    A rotor-wing UAV makes its debut in Afghanistan.  The U.S. military is testing a revolutionary new drone for its arsenal, a pilotless helicopter intended to fly cargo missions to remote outposts where frequent roadside bombs threaten access by road convoys. The craft have flown 20 transport missions since the inaugural flight on Dec. 17.  They have delivered nearly 18 tons of cargo, mainly thousands of Meals Ready to Eat and spare parts needed at the forward operating bases.

5.    The popularity of the unmanned aircraft continues to soar, and its relevance is only predicted to continue to grow.  UAV missions in the military already include deploying missiles and bombs, performing intelligence, surveillance and reconnaissance tasks, making cargo drops and more.  Combat air patrols by UAVs grew 660 percent from 2004 to 2009, according to the Air Force.  When President Obama rolled out his new military strategy earlier this month, he proposed more emphasis and resources on UAVs.

6.    China’s Pipelines in Myanmar In order to meet energy demands in its resource-crunched eastern, southern and central parts, China is constructing oil and gas pipelines in Myanmar, almost reaching to the seashores of Bay of Bengal. Currently, the CNPC, in agreement with the Myanmar Oil and Gas Enterprise (MOGE) and the Myanmar state security forces, is engaged in laying a 982 km (620 miles) long crude oil pipeline from Kyaukpyu Port on the western coast of Arakan State linking Kunming after entering the border city of Ruili in Yunnan Province of China at a cost of US $2.5 billion. Concurrently, they are also constructing another gas pipeline, capable of delivering 12 bn cm of natural gas per year, from Shwe Gas off the Arakan coast up to Kunming. At the same time, a deep underwater crude oil unloading port and oil storage facility is being constructed at Maday Island (Arakan Coast) to serve as terminus for the tankers coming from West Asia and Africa.

7.    US Military to Help Build South Sudan.  The United States military is joining efforts to help build the newly independent nation of South Sudan.  U.S. Defense officials say they are dispatching five officers from the Army, Air Force, Navy, and the Marines starting January 13 on the orders of President Barack Obama.  The United States has been boosting its military assistance to Africa in recent months. In October, Obama announced the deployment of about 100 troops to Uganda and other parts of Central Africa to help armies in the region battle the Lord’s Resistance Army guerrilla group.

8.    The Marine Corps is slowly increasing its mission objectives in the African continent.  The 180 members of Special Purpose Marine Air-Ground Task Force 12 (SPMAGTF-12) are serving in the Trans-Sahel region of Africa, stretches across the center of the continent’s north along the Sahara Desert. The unit has also deployed farther east, in countries such as Djibouti.  SPMAGTF-12 will rotate out of Italy in the spring, and 3rd Force Recon will take over the command element. Rotations for fiscal 2013 “are being sourced,” Winnacker added.  While not expected grow to the level of a 2,300-member Marine expeditionary unit, the SPMAGTF could add Marines in order to be “as relevant as possible.”
 

It has been an interesting month of December.  For 2012, GovPartners will be releasing bi-weekly news updates from around the world which may be of interest to current (and potential) government contractors.  Below is a top-ten list of the news-worthy material which have dominated the headlines for the month of December:

10.          NATO vows to continue to carry out nighttime raids that target suspected insurgents.  The partnership with Afghan forces will also continue to increase as well, with Afghan special forces now take part in nearly all night raids.

9.            U.S. increasingly reliant on the three transit routes which snake through Central Asia, Russia and the Caucasus to ship non-military supplies and fuel into Afghanistan as the relationship between Washington and Pakistan continues to deteriorate.

8.            General John Allen reiterated that “the continued work beyond ’14 in terms of development of economic capability and governance will continue.  We will also see, probably, a U.S. military capability beyond ’14.”

7.            The U.S. military may have withdrawn from Iraq, but international companies continue to pour into the oil-rich country.  Earlier this month, Royal Dutch Shell PLC and Mitsubishi Corp. signed a final $17.2 billion, 25-year contract with the country.  Some $12.8 billion would be spent on infrastructure and $4.4 billon on construction of a liquefied natural gas facility.

6.            Iraq cabinet okays 2012 budget at $100 billion.  The new budget forecasts total government expenditures at $68 billion, including $31.6 billion set for investment spending in 2012.

5.            U.S. Defense Secretary Leon Panetta and General Carter Ham, commander of the U.S. Africa Command, paid a visit to the country in mid-December and expressed their confidence and support in Libya’s transition to democracy.

4.            Afghanistan's government signed a deal with China's state-owned National Petroleum Corporation, allowing it to become the first foreign company to exploit the country's oil and natural gas reserves.  The deal, initially valued at $700 million, could end up being more than ten times this amount if more reserves are discovered and developed.

3.            The Department of Defense’s $662 billion budget for 2012 was approved by the U.S. Congress.  The lawmakers agreed on $518 billion for Pentagon operations and about $115 billion to cover the wars in Afghanistan and Iraq.

2.            Kim Jong-Il passes away, names his 27-28 (depending on source) year old son, Kim Jong-un as his successor.

1.            Iran threatens to close the Strait of Hormuz, a vital route in the Gulf where more than 1/3^rd of the world’s ship-borne oil passes. 

Out go all the U.S. troops by year’s end, President Obama said Friday about Iraq. And in go the contractors, along with some familiar contracting problems, say other government officials and independent experts.

As the United States pulls out its remaining 50,000 or so troops after a decade of conflict costing around $1 trillion, many of the soldiers’ non-fighting functions will be pursued by a force of State Department-funded government contractors expected to near 15,000.

That preliminary estimate, now being circulated by the administration among lawmakers on Capitol Hill, would represent an overwhelming share of the official remaining U.S. presence in the unsettled country. But even after wide publicity about past contracting abuses and waste, new scandals may trail behind this persistent deployment, according to a commission created by Congress to study the missteps so far.

“After a decade of war, the government remains unable to ensure that taxpayers and warfighters are getting good value for contract dollars spent,” Dov S. Zakheim, a former Pentagon comptroller and a member of the congressionally-created Commission on Wartime Contracting, told the Senate Armed Services committee a day before Obama’s announcement.

In an August report, prepared after a three-year study of contracting in Iraq and Afghanistan, the commission estimated that between $30 billion and $60 billion has been lost to waste and fraud so far in those conflicts, representing 15 to 30 percent of all that Washington has spent on contractor-provided security, civil reconstruction, training, and other nation-building work. Read Full Article

On June 15, 2009, the U.S. Department of State awarded DynCorp International (NYSE:DCP) a task order to provide aviation and aviation support services in Iraq. This task order is under the Worldwide Personal Protective Services (WPPS) contract with the U.S. Department of State Bureau of Diplomatic Security to provide protective security for U.S. diplomatic personnel. The task order is awarded for a base year plus four one-year options, and has a total potential value of $915 million if all options are exercised.

Under the task order, DynCorp International will provide personnel, ground and flight operations, basing and maintenance of rotary wing and fixed air assets. The award is effective June 15, 2009, with a transition period and then full in-country performance beginning September 4, 2009.

“This award is a tremendously important opportunity for DynCorp International to support the safety and security of U.S. diplomatic personnel serving in Iraq,” said DynCorp International CEO William L. Ballhaus. “It’s an honor to contribute to our government’s efforts to promote peace and stability in Iraq, for us as a company and for every person who serves with us."

About DynCorp International
DynCorp International is a provider of specialized mission-critical services to civilian and military government agencies worldwide, and operates major programs in law enforcement training and support, security services, base operations, aviation services, contingency operations, and logistics support. DynCorp International is headquartered in Falls Church, Va. For more information, visit www.dyn-intl.com .