Category: Iraq Oil & Gas News

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The Geopolitics of Energy, and Impacts on Iraq’s Petroleum Sector

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

This is a summary of a PowerPoint presentation prepared for and to be delivered before the international “8th Turkey Energy Summit Congress”, held at Antalya, Turkey, 10-11 October 2017.

The presentation was formulated on two interrelated premises;

  1. Iraq is the only Arab country that is resource rich and “semi-landlocked”; has only narrow corridor to international waters with two close chokepoints: one at northern Arabian Gulf (with Kuwait and Iran) and the other is Strait of Hurmuz.
  2. Hence, geology, geography and oil-dependency make Iraq inevitably highly vulnerable to geopolitical risks; kleptocracy exacerbates such vulnerability.

It covers the following topics:

  1. Geology: resource richness and potential resource conflicts;
  2. Geography Governs: Semi Landlocked; Locational Rent (Economic & Political) & Expensive Strategy of Multiple Export Outlets;
  3. Oil Dependency, Vulnerability and Volatility;
  4. The Big-Push Strategy of a Game-Changer;
  5. Kleptocracy, Resource Curse & Major Policy Failures; and finally,
  6. Prospects: Iraq’ Geopolitical Vulnerability Continues.

Please click here to download the full report.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.

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Petrofac in Kurdistan Deal with Gazprom Neft

Petrofac has secured a three-year master services agreement (MSA) to support Gazprom Neft Middle East B.V. with the provision of engineering services on a call-off basis for the Garmian field in the Kurdistan region of Iraq.

The MSA was secured following a competitive tendering process and augments Petrofac’s extensive footprint in Iraq, where it has been providing engineering, operations, maintenance and training services since 2010.

Gazprom Neft has been Operator of the Garmian field since early 2016. Through the provision of engineering services Petrofac aims to support the planned brownfield works to debottleneck and expand the Central Processing Facility (CPF).

Steve Webber, Senior Vice President, Petrofac Engineering & Production Services, East said:

“We are delighted Gazprom Neft has selected Petrofac as one of its key suppliers in support of the Garmian field CPF upgrade project.

“We have been working with this key client in Iraq for more than three years and hope to take this opportunity to build on our relationship through the demonstration of Petrofac’s fit-for-purpose and value-driven engineering solutions in the Kurdistan region.”

(Source: Petrofac)

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Chevron, Total interested in Majnoon oilfield

By John Lee.

Iraqi Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] (pictured) has reportedly said that Chevron and Total have expressed interest in developing the Majnoon oilfield.

Oil giant Shell is trying to sell its stake in the field following a failure to reach agreement with Iraq’s Ministry of Oil.

Reuters quotes the Minister as saying that negotiations are continuing with Shell, that he hopes to reach a satisfactory deal for both parties, and that he has not started negotiations with other companies to take over Shell’s stake.

(Source: Reuters)

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Iraq to send Gas to Kuwait for Gulf War Compensation

By John Lee.

Kuwait’s Oil Minister, Essam Al-Marzouq, has said his government has agreed to receive natural gas from Iraq in part payment of it Gulf War reparations.

According to a report from BasNews, Iraq will initially send 50 million cubic meters of natural gas (per day?), later increasing to 200 million cubic meters; KUNA puts the figures at 50 million cubic feet (per day?), later increasing to 200 million cubic feet.

The Minister said the two sides are currently discussing the price details.

In November 2015, Kuwait postponed the final instalment of reparations — worth $4.6 billion — until 2017, following a requested by Iraq, to help alleviate the cash crisis in Baghdad caused by lower oil prices and war with the Islamic State group (IS, ISIS, ISIL, Daesh).

(Sources: BasNews, KUNA)

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Taq Taq September Production Below Average

By John Lee.

Genel Energy has announced that production at its Taq Taq field in Iraqi Kurdistan, in which it has a 44 percent working interest, averaged 13,475 barrels per day in September.

This is considerably below the 2017 year-to-date average of 19,398 barrels per day.

(Source: Genel Energy)

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Iran Bans Oil Products Shipment to Iraqi Kurdistan

Iran’s Ministry of Roads and Urban Development warned companies against shipment of oil products to and from the Iraqi Kurdistan “until further notice”.

The decision is in line with Tehran’s series of measures in response to a referendum held in the semi-autonomous region on possible secession from Iraq which has drawn international criticism.

“Given the recent developments in the region, it is suitable that international transportation companies and drivers active in this field avoid loading and carrying oil products to and from the Iraqi Kurdistan Region until further notice,” a directive by the ministry’s Road Maintenance and Transportation Organization said.

“It should be noted that the consequences of any action in this regard would befall the relevant company,” it added.

The transportation is mostly carried out by tanker trucks which take crude oil from the Iraqi Kurdistan to Iran and carry back refined products to the region.

The Iraqi Kurdistan Region went ahead with its plan to hold the referendum on Monday while Iraq’s neighbors and countries in the Middle East, including Iran and Turkey, had voiced opposition to such a move and supported the Baghdad central government.

On Monday night, thousands of Kurdish people in favor of KRG’s secession from Iraq took to the streets in Erbil, with some waving Israeli flags to celebrate.

No one in the region, except Israel’s Prime Minister Benjamin Netanyahu, endorsed the referendum, and all neighbors have warned that the secession plan would bring instability to the region and disintegrate Iraq.

Pressure has been building on officials in Erbil, Kurdistan’s regional capital, over the referendum, with regional carriers, including Turkish Airlines, Egypt Air and Lebanon’s Middle East Airlines submitting to Baghdad’s request to suspend their flights serving Iraqi Kurdistan.

(Source: Tasnim, under Creative Commons licence)

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Putin boxed in by Iran, Turkey on Iraqi Kurdish referendum

From Al Monitor. Any opinions here are those of the author, and do not necessarily reflect the views of Iraq Business News. 

Russian President Vladimir Putin had been banking on Iraqi Kurdistan Region President Massoud Barzani.

Over the past year, Russia has invested over $4 billion in the Kurdistan Region’s energy sector, overtaking the United States as the largest investor. By making such a commitment to northern Iraq, Putin was likely counting on both an eventual energy windfall and another card to play as a regional broker at the expense of the United States.

He could count on good, or at least working, relationships with Damascus, Tehran, Ankara, to some extent Baghdad and, with the massive oil and gas venture, Erbil.

What the Russian president had not banked on was that Barzani would go ahead with the independence referendum on Sept. 25 against widespread international and regional opposition. The Kremlin, of course, could not support ethnic separatism, and was probably hoping for a last-minute deal with Baghdad to stave off the vote.

As the prospects of a postponement collapsed, Barzani likely saw Russia’s investment as a hedge against the nearly unified international opposition to its referendum on independence.

Putin, of course, kept up appearances of being in control, but there was no denying the unusual nature of his visit to Ankara on Sept. 28 for consultations with Turkish President Recep Tayyip Erdogan, just three days after the referendum vote.

Erdogan’s position was predictable and blustery, including when he said, “No one has a right to throw our region into the fire,” as Yekaterina Chulkovskaya reports. But Putin sought to dial it down, and instead referred to the Russian Foreign Ministry’s statement, which included the phrase “Moscow respects the national aspirations of the Kurds” and the hope for a “constructive and respectful dialogue, with a view to devising a mutually acceptable formula of coexistence within a single Iraqi state,” as reported by Jasper Mortimer.

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Iraq seeks to collect KRG’s Oil Revenues

Iraqi Prime Minister Haider al-Abadi has hinted that his government wants to take control of revenue generated from Kurdish oil exports.

The measure is the latest of a set of actions taken by Baghdad against the Kurdistan Region for carrying out last week’s referendum that saw a 92-percent vote for independence, the first of which saw a ban in international flights to and from the Kurdish region.

Abadi said in a tweet that his government wanted to pay monthly salaries of KRG employees with money from Kurdish oil sales.  “Federal government control of oil revenues is in order to pay KR (Kurdistan Region) employee salaries in full and so that money will not go to the corrupt,” Abadi tweeted.

The Kurdistan Region has described the Iraqi-imposed flight ban, and other measures as “collective punishment,” that, among others, affect the wounded Kurdish Peshmerga who need medical treatment abroad, and Yezidi survivors of IS atrocities.

Amanj Rahim, the secretary of the Kurdistan Regional Government (KRG), told the Kurdish parliament on September 30 that the oil export through Turkey’s Ceyhan pipeline was going ahead as normal.

Separately, Prime Minister Haider al-Abadi reassured Kurdish citizens they will remain secure even as the government escalates its measure against their region’s government over the recent referendum on independence.

“You are citizens of the first degree, we will not allow any harm to you and we will share our loaf of bread together,” Iraqi Prime Minister Haider al-Abadi said, addressing Kurds via twitter on September 30. “To our people in the Kurdistan region: We defend our Kurdish citizens as we defend all Iraqis and will not allow any attack on them,” Abadi added.

(Source: GardaWorld)

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Oil Exports Up Slightly in September

By John Lee.

Iraq’s Ministry of Oil has announced preliminary oil exports for September of 97,204,267 barrels, giving an average for the month of 3.240 million barrels per day (bpd), slightly more than the 3.216 bpd exported in August.

The exports were entirely from the southern terminals, with no exports from Kirkuk via Ceyhan.

Revenues for the month were $4.882 billion at an average price of $50.225 per barrel.

August export figures can be found here.

(Source: Ministry of Oil)

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Post-Referendum Threats And Demands

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraqi Kurdish Politicians Talk About Post-Referendum Threats And Demands

While many uncertainties remain about Iraqi Kurdistan’s referendum on independence, there is one thing that seems clear to the people on the streets: On the day, the semi-autonomous region felt united in a way that it has not been for a long time.

Part of the reason Iraqi Kurdistan has remained an oasis of relative calm and security, while the rest of Iraq fell apart during the recent security crisis caused by the extremist group known as the Islamic State and earlier, is that the Kurdish people have always considered their ethnicity more important than the religious sect they belong to.

Ethnicity has trumped religion in their case and, despite infighting, has tended to unite locals in this area, with the long-term goal being to form their own nation.

In many other situations recently, the Kurdish have been divided – often between the two zones that basically make up the semi-autonomous northern region, which are run by the two major political parties, the Kurdistan Democratic Party, or KDP, and the Patriotic Union of Kurdistan, or PUK.

Up until the very last minute some of the region’s political parties remained opposed to the referendum. The KDP, the PUK and the Kurdistan Islamic Union had supported the referendum while the Change movement, also known as Goran, and the Islamic Group of Kurdistan wanted it postponed.

Just one day before the referendum though, when it became clear it was going ahead, the Islamic Group of Kurdistan relented and senior members said they would be voting “yes” in the poll.

Even the Change movement, a long-time opposition group in the region that formed on an anti-corruption platform, told members to follow their own consciences. Then the movement also told members they should vote, and that they should vote “yes”.