Sunday, November 11, 2007
KRG to announce two more oil deals
Oil, Kurdistan
(UPI) -- Iraq’s Kurdistan Regional Government will announce two more oil deals in coming days as it develops its oil sector with state-owned and private oil firms. There has been no response yet from Baghdad after the KRG’s announcement last Tuesday of another six production-sharing contracts it has signed. The KRG’s semiautonomous region in Iraq’s north has the geological makeup for major oil and natural gas deposits but has 0.5 percent of Iraq’s proven oil reserves.
Baghdad has called the KRG’s oil deals illegal, saying it needs to wait for a national oil law to be approved. That law is being held up for lack of agreement as to whether the federal government or regions and provinces have the authority to sign deals, among other reasons. KRG Natural Resources Minister Ashti Hawrami told United Press International in a telephone interview two additional oil deals, including at least one with “a Western company,” will be announced “in just a few days, maybe a week.” According to a KRG map of exploration blocks, it has 28 either open or pending contracts.
The KRG has signed deals with a number of smaller, more risk-taking firms, including Hunt Oil of Dallas. Larger firms fear blacklisting from Baghdad, which will likely have the say-so on the majority of Iraq’s oil deals. But Tuesday’s announcement of deals by the KRG shows the applicants for its deals are getting weightier. A subsidiary of MOL Hungarian Oil and Gas was part of two production-sharing contracts. India’s largest private oil company, Reliance Energy, and Central Europe powerhouse OMV, an Austrian firm, each signed two production-sharing contracts.
The KRG also awarded four “strategic blocks” to the Kurdistan Exploration and Production Co. and gave the discovered but not developed Khurmala oil field to the Kurdistan National Oil Co. Both KEPCO -- which will concentrate on exploration and production -- and KNOC -- an operator of discovered fields -- were newly formed under the KRG’s oil law but would send revenues to Baghdad to redistribute. Hawrami said the companies “answer to the Council of Ministers in Kurdistan and is monitored and regulated by the Ministry of Natural Resources in Kurdistan, and is recognized by the Parliament in Kurdistan.” KNOC will also build a 50,000 barrels per day refinery.
Labels: Hunt Oil Co., Khurmala oil field, Kurdistan, Kurdistan Exploration and Production Co., Kurdistan National Oil Co., MOL Hungarian Oil and Gas, oil, oil deals, OMV, PSCs, Reliance Energy
Tuesday, October 16, 2007
Oil prices hit new high as fears grow over Kurdish-Turkish conflict
Oil, Region
(The Guardian) - Oil prices burst through $86 a barrel to reach new highs yesterday on the back of growing energy demand forecasts and fears that escalating conflict between Turkey and Kurds in northern Iraq could hit supplies in the Mediterranean. Crude ended at a record level on Friday but has since gone on to hit even greater peaks of $86.13 as the Organisation of Petroleum Exporting Countries (Opec) said demand for its products would average 31.43m barrels a day in the fourth quarter of 2007, up 100,000 barrels a day on previous estimates.
"It now appears more likely that the US economy could weather the financial crisis without a sharp downturn in economic activity," said a report by Opec economists at the group's Vienna headquarters. Soaring oil prices helped push gold to a 28-year high yesterday as investors were attracted to precious metals because of global uncertainty and the falling dollar. Platinum also swept to record highs on concerns about supply as demand remains strong.
Expectations of higher oil demand have also fed into Opec's first quarter estimates with the organisation predicting there would be 120,000 more barrels needed a day than had been anticipated.
The new forecasts come amid rising fears that Turkey will take unilateral action against Kurdish rebels in northern Iraq. "The main risk to supplies is currently on an escalation of the Turkish army, Kurdish militia conflict, where we believe the risk for disruptions to the Mediterranean supplies would be real," said Olivier Jakob of Petromix in Switzerland.
The market is already jumpy because last week the International Energy Agency, adviser to 26 industrialised nations such as Britain and the US, predicted that demand would surge by 2.1m barrels a day during 2008. Opec insists "the current supply and demand forecasts predict that the market will be fundamentally balanced over the coming quarters".
"It now appears more likely that the US economy could weather the financial crisis without a sharp downturn in economic activity," said a report by Opec economists at the group's Vienna headquarters. Soaring oil prices helped push gold to a 28-year high yesterday as investors were attracted to precious metals because of global uncertainty and the falling dollar. Platinum also swept to record highs on concerns about supply as demand remains strong.
Expectations of higher oil demand have also fed into Opec's first quarter estimates with the organisation predicting there would be 120,000 more barrels needed a day than had been anticipated.
The new forecasts come amid rising fears that Turkey will take unilateral action against Kurdish rebels in northern Iraq. "The main risk to supplies is currently on an escalation of the Turkish army, Kurdish militia conflict, where we believe the risk for disruptions to the Mediterranean supplies would be real," said Olivier Jakob of Petromix in Switzerland.
The market is already jumpy because last week the International Energy Agency, adviser to 26 industrialised nations such as Britain and the US, predicted that demand would surge by 2.1m barrels a day during 2008. Opec insists "the current supply and demand forecasts predict that the market will be fundamentally balanced over the coming quarters".
Labels: Kurdistan, northern Iraq, oil, oil prices, OPEC, Petromix, PKK, Turkey
Thursday, September 20, 2007
LUKoil to have advatage in West Qurna-2 tender
Oil
(Bloomberg, AP) - LUKoil will have an advantage in a new tender for the West Qurna-2 field in Iraq, Iraqi Foreign Minister Hoshyar Zebari said, Interfax reported Wednesday. LUKoil's investments and work at the field will be taken into consideration should the oil producer bid, Zebari said, Interfax reported. The minister invited LUKoil chief executive Vagit Alekperov to Iraq, Interfax said.
LUKoil has been lobbying Iraq to recognize the West Qurna-2 contract that it signed with former dictator Saddam Hussein's government. LUKoil wants to develop the field with shareholder ConocoPhillips. LUKoil's 1997 contract to drill at West Qurna-2, which has an estimated reserve capacity of 4 billion barrels, has been hamstrung under the new authorities in Iraq. The Iraqi parliament is expected to pass a new law that will review previous oil contracts and open the way to a wave of tenders to tap Iraq's enormous oil wealth.
LUKoil has been lobbying Iraq to recognize the West Qurna-2 contract that it signed with former dictator Saddam Hussein's government. LUKoil wants to develop the field with shareholder ConocoPhillips. LUKoil's 1997 contract to drill at West Qurna-2, which has an estimated reserve capacity of 4 billion barrels, has been hamstrung under the new authorities in Iraq. The Iraqi parliament is expected to pass a new law that will review previous oil contracts and open the way to a wave of tenders to tap Iraq's enormous oil wealth.
Labels: ConocoPhillips, Hoshyar Zibari, LUKoil, oil, tender, Vagit Alekperov, West Qurna-2
Wednesday, September 19, 2007
Attack shuts down Kirkuk-Ceyhan pipeline
Oil
(UPI) - The international oil market will still have to rely on Basra to supply Iraq's oil exports as an apparent attack shuts down the Kirkuk-Ceyhan pipeline again. The pipeline is key to increasing Iraq exports, providing the capacity to increased production. The Bush administration, during benchmark stump speeches last week, held up the newly reopened pipeline as a success story.
Iraq produced just less than 2 million barrels per day last month, according to estimates by the global energy information firm Platts. The country usually exports slightly more than three-fourths of what it produces. Most of that is coming from export terminals in Basra, in south Iraq, since attacks on the pipeline feeding oil to a terminal in Ceyhan, Turkey, has rendered it virtually useless.
Media reports are quoting sources on the ground that a pre-dawn bomb ripped open the pipeline between Kirkuk and Baiji, sending oil into the Tigris River, forcing water pumps in Tikrit and Baiji to shut down and threatening the supply into Baghdad. Last month Iraq officials gave a hushed admission that the line had been repaired and oil was flowing to Turkey, most likely in test quantities, said Rochdi Younsi, Middle East analyst for the business risk firm Eurasia Group.
"They did say that they were completing a series of tests that appear to be promising, tests meaning that they were pumping a certain volume through the pipeline," Younsi said. "But frankly no one expected the Iraqi government to make an announcement because doing that usually leads to an attack." Iraq recently announced an Oct. 5 tender for shipments of oil from Ceyhan, a move that comes after enough oil had been shipped to storage tanks there.
"Yesterday a report came out saying basically that exports of oil through the Kirkuk-Ceyhan pipeline had been abruptly interrupted for the past six days, which basically implies that it was working before that," Younsi said. "And then this morning we heard about the explosions." Younsi said it is an added dynamic in the power struggle in Iraq. Kurds in the relatively safe and semi-autonomous northern region will be "growing impatient with the deterioration of security in that area," which the federal government controls.
Iraq produced just less than 2 million barrels per day last month, according to estimates by the global energy information firm Platts. The country usually exports slightly more than three-fourths of what it produces. Most of that is coming from export terminals in Basra, in south Iraq, since attacks on the pipeline feeding oil to a terminal in Ceyhan, Turkey, has rendered it virtually useless.
Media reports are quoting sources on the ground that a pre-dawn bomb ripped open the pipeline between Kirkuk and Baiji, sending oil into the Tigris River, forcing water pumps in Tikrit and Baiji to shut down and threatening the supply into Baghdad. Last month Iraq officials gave a hushed admission that the line had been repaired and oil was flowing to Turkey, most likely in test quantities, said Rochdi Younsi, Middle East analyst for the business risk firm Eurasia Group.
"They did say that they were completing a series of tests that appear to be promising, tests meaning that they were pumping a certain volume through the pipeline," Younsi said. "But frankly no one expected the Iraqi government to make an announcement because doing that usually leads to an attack." Iraq recently announced an Oct. 5 tender for shipments of oil from Ceyhan, a move that comes after enough oil had been shipped to storage tanks there.
"Yesterday a report came out saying basically that exports of oil through the Kirkuk-Ceyhan pipeline had been abruptly interrupted for the past six days, which basically implies that it was working before that," Younsi said. "And then this morning we heard about the explosions." Younsi said it is an added dynamic in the power struggle in Iraq. Kurds in the relatively safe and semi-autonomous northern region will be "growing impatient with the deterioration of security in that area," which the federal government controls.
Labels: attack, Basra, Kirkuk-Ceyhan pipeline, oil
Tuesday, September 18, 2007
Iraq incapable of protecting Shatt al-Arab
(Voices of Iraq) - Iraq has become incapable of protecting the Shatt al-Arab, despite having had the biggest naval force in the Arab Gulf, the commander of the Iraqi river protection force said on Monday, noting that smugglers, who are active off the Iraqi coast, have more weapons that the Iraqis. “The river protection force has only some boats with limited speed, compared to the armored and high speed boats that smugglers have,” Brigadier Abdul Hakim Jasem told the independent news agency Voices of Iraq (VOI).
“The smugglers’ boats have more advanced weapons than we have,” he added. Jasem’s statement came in response to comments made by some Iraqi parliamentarians who warned against the increase in the smuggling of crude oil through the Shatt al-Arab. “Iraqi naval forces had dominated the Arab Gulf, but now they are incapable of protecting our coast,” he also said, highlighting the need for more advanced and faster boats to face the smugglers.
“It is about 180 km in length, and needs more soldiers and equipment to protect it,” he explained. The brigadier blamed the shortage in oil which, according to him, “hampers our moves.” The Shatt al-Arab is a river in southwest Iraq, formed by the convergence of the Euphrates and the Tigris rivers at the town of al-Qurnah in Basra, southern Iraq.
“The smugglers’ boats have more advanced weapons than we have,” he added. Jasem’s statement came in response to comments made by some Iraqi parliamentarians who warned against the increase in the smuggling of crude oil through the Shatt al-Arab. “Iraqi naval forces had dominated the Arab Gulf, but now they are incapable of protecting our coast,” he also said, highlighting the need for more advanced and faster boats to face the smugglers.
“It is about 180 km in length, and needs more soldiers and equipment to protect it,” he explained. The brigadier blamed the shortage in oil which, according to him, “hampers our moves.” The Shatt al-Arab is a river in southwest Iraq, formed by the convergence of the Euphrates and the Tigris rivers at the town of al-Qurnah in Basra, southern Iraq.
Labels: Brigadier Abdul Hakim Jasem, oil, security, Shatt al-Arab, smugglers
Monday, September 17, 2007
Iraq: Energy profile
Iraq: Energy profile - A new Energy Profile of Iraq by Energy Publisher
Iraq has the world's third largest proven petroleum reserves and some of the lowest extraction costs, but security issues continue to hold back rehabilitation of Iraq’s energy sector.
Iraq has the world's third largest proven petroleum reserves and some of the lowest extraction costs, but security issues continue to hold back rehabilitation of Iraq’s energy sector.
According to the March 2007, review by the International Monetary Fund (IMF), in 2006, crude oil export revenues represented around 60 percent of GDP and 89 percent of government revenues. In 2006, the U.S Department of Energy’s Energy Information Administration (EIA) reported that Iraq was the world’s 15th biggest oil producer and Iraq meets approximately 94 percent of its energy needs with petroleum.
Iraq’s use of abundant natural gas resources and hydropower is limited. According to the findings of the December 2006, Iraq Study Group (ISG), led by former Secretary of State James A. Baker and former Congressman Lee H. Hamilton, the stabilization of Iraq is highly correlated with Iraq’s economic success or failure, which in the medium-term is highly dependent on its hydrocarbons industry.
Iraq’s use of abundant natural gas resources and hydropower is limited. According to the findings of the December 2006, Iraq Study Group (ISG), led by former Secretary of State James A. Baker and former Congressman Lee H. Hamilton, the stabilization of Iraq is highly correlated with Iraq’s economic success or failure, which in the medium-term is highly dependent on its hydrocarbons industry.
Labels: energy profile, Energy Publisher, Iraq, oil
Greenspan says Iraq invasion was driven by oil
(The Guardian) - Alan Greenspan, the consummate Washington insider and long-time head of the US central bank, has backed the position taken by many anti-war critics - that the invasion of Iraq was motivated by oil. His claim comes in his newly published autobiography, The Age of Turbulence, in which he also castigates George Bush's administration for making "grave mistakes" in economic policy.
Sounding more like an activist than a lifelong Republican who worked alongside six US presidents, Mr Greenspan, the former Federal Reserve chairman, said in an interview with the Guardian that the invasion of Iraq was aimed at protecting Middle East oil reserves: "I thought the issue of weapons of mass destruction as the excuse was utterly beside the point."
Mr Greenspan said it was clear to him that Saddam Hussein had wanted to control the Straits of Hormuz and so control Middle East oil shipments through the vital route out of the Gulf. He said that had Saddam been able to do that it would have been "devastating to the west" as the former Iraqi president could have just shut off 5m barrels a day and brought "the industrial world to its knees".
In the book Mr Greenspan writes: "Whatever their publicised angst over Saddam Hussain's 'weapons of mass destruction', American and British authorities were also concerned about violence in the area that harbours a resource indispensable for the functioning of the world economy. I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."
Asked to explain his remark, he said: "From a rational point of view, I cannot understand why we don't name what is evident and indeed a wholly defensible pre-emptive position." As longest-serving chairman of the Fed, Mr Greenspan was renowned for his cryptic statements about the economy. But in his memoir, which went on sale over the weekend, he uncharacteristically criticises the Bush administration, while praising Bill Clinton and his advisers. "Little value was placed on rigorous economic policy debate or the weighing of long-term development," he writes of the current administration.
The 81-year-old's attack will hurt a White House already suffering feeble approval ratings and a faltering economic background. Describing ballooning government deficits under President Bush, he condemns the way deficit spending was used to support the legislative agenda: "It was a struggle for me to accept that this had become the dominant ethos and economic policy of the Republican party."
Sounding more like an activist than a lifelong Republican who worked alongside six US presidents, Mr Greenspan, the former Federal Reserve chairman, said in an interview with the Guardian that the invasion of Iraq was aimed at protecting Middle East oil reserves: "I thought the issue of weapons of mass destruction as the excuse was utterly beside the point."
Mr Greenspan said it was clear to him that Saddam Hussein had wanted to control the Straits of Hormuz and so control Middle East oil shipments through the vital route out of the Gulf. He said that had Saddam been able to do that it would have been "devastating to the west" as the former Iraqi president could have just shut off 5m barrels a day and brought "the industrial world to its knees".
In the book Mr Greenspan writes: "Whatever their publicised angst over Saddam Hussain's 'weapons of mass destruction', American and British authorities were also concerned about violence in the area that harbours a resource indispensable for the functioning of the world economy. I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil."
Asked to explain his remark, he said: "From a rational point of view, I cannot understand why we don't name what is evident and indeed a wholly defensible pre-emptive position." As longest-serving chairman of the Fed, Mr Greenspan was renowned for his cryptic statements about the economy. But in his memoir, which went on sale over the weekend, he uncharacteristically criticises the Bush administration, while praising Bill Clinton and his advisers. "Little value was placed on rigorous economic policy debate or the weighing of long-term development," he writes of the current administration.
The 81-year-old's attack will hurt a White House already suffering feeble approval ratings and a faltering economic background. Describing ballooning government deficits under President Bush, he condemns the way deficit spending was used to support the legislative agenda: "It was a struggle for me to accept that this had become the dominant ethos and economic policy of the Republican party."
Labels: Alan Greenspan, Iraq invasion, oil, Straits of Hormuz, The Age of Turbulence
Tuesday, September 11, 2007
Iraqi oil minister says new U.S. - KRG oil deal is illegal
Oil, Kurdistan
(AP) -- An agreement announced this weekend between U.S.-based Hunt Oil Co. and the self-ruled Kurdish administration of northern Iraq to explore for oil is illegal, Iraq's oil minister Hussain al-Shahristani said Monday. Those comments underscore the central government's view that exploration contracts with foreign companies should be signed only after the adoption of a new national oil law, which has been stalled for months.
"Any oil deal has no standing as far as the government of Iraq is concerned," al-Shahristani said as he arrived for an OPEC meeting in Vienna. "All these contracts have to be approved by the Federal Authority before they are legal. This (contract) was not presented for approval. It has no standing."
Hunt Oil, a privately held independent oil company, and the Kurdish regional government said Saturday they had signed a production-sharing contract for petroleum exploration in the Kurdistan region of northern Iraq. Terms were not disclosed. Dallas, Texas-based Hunt declined to comment Monday. The deal is one of several the Kurds have signed with foreign oil companies in the past few years and the first since they put their own oil law into effect in August.
These deals have angered Baghdad, but the Kurdish region appears determined to advance oil exploration in the three-province area they govern in northern Iraq, as Iraq's long-delayed federal oil law remains hobbled by disagreements -- among others, about the control of revenues. Despite Iraq's vast oil reserves, major international companies have sat on the sidelines, not only for security reasons but because of the absence of legislation governing the industry and offering protection for investments.
"Any oil deal has no standing as far as the government of Iraq is concerned," al-Shahristani said as he arrived for an OPEC meeting in Vienna. "All these contracts have to be approved by the Federal Authority before they are legal. This (contract) was not presented for approval. It has no standing."
Hunt Oil, a privately held independent oil company, and the Kurdish regional government said Saturday they had signed a production-sharing contract for petroleum exploration in the Kurdistan region of northern Iraq. Terms were not disclosed. Dallas, Texas-based Hunt declined to comment Monday. The deal is one of several the Kurds have signed with foreign oil companies in the past few years and the first since they put their own oil law into effect in August.
These deals have angered Baghdad, but the Kurdish region appears determined to advance oil exploration in the three-province area they govern in northern Iraq, as Iraq's long-delayed federal oil law remains hobbled by disagreements -- among others, about the control of revenues. Despite Iraq's vast oil reserves, major international companies have sat on the sidelines, not only for security reasons but because of the absence of legislation governing the industry and offering protection for investments.
Labels: Hunt Oil Co., Hussain al-Shahristani, KRG, Kurdistan, oil, oil exploration, PSC
Friday, September 07, 2007
DNO says two Tawke wells confirm deposits
Oil
(IDP) - Norwegian independent oil producer DNO said two new wells at its Tawke field in northern Iraq have both confirmed oil deposits. "DNO is pleased to announce that Tawke No. 8 has confirmed oil in the central/down flank position of the field," DNO said in a statement on Wednesday. "Good reservoir properties have been confirmed, and so far the well has achieved a gross rate of more than 17,000 barrels of oil per day aggregated from four tests. A maximum of 8,000 bod was achieved from the most productive test interval." Tawke No. 5A has been drilled to its final depth, DNO said, and confirmed oil in the central area of the lower reservoir.
Labels: DNO, oil, Tawke field
Tribes sabotage Kirkuk pipelines
Oil, Tribal
(IWPR) - Despite the presence of special oil ministry units, pipelines around Kirkuk are destroyed and hundreds of tons of oil stolen every day by tribe members from surrounding villages, such as al-Milih, Wadi Zghetun, al-Muradiyya, al-Saduniyya, al-Kanaina and al-Safra. The "oil protection units" were deployed to guard the pipelines after the government cancelled previous failed agreements with tribal forces to protect them. But in spite of this, oil is stolen from pipelines stretching from the al-Riyadh sub-district, 55 km west of Kirkuk, to the al-Fatha area 90 km to the west.
Tribal sheikhs who profit from the stolen oil are likely to obstruct new measures planned by local authorities, including a special protection force, to stop the sabotage of the pipelines. Locals employed to protect the pipes are often from the same groups as those who are stealing the oil. In the first few years after the fall of former Iraqi president Saddam Hussein's government, Sunni insurgents - many of whom as former soldiers had guarded oil routes under the old regime - blew up the pipelines to wreak havoc.
Since then, insurgents have realized that stealing oil is also damaging, and is far more profitable than pure destruction. Today, Kirkuk's oil wealth is evaporating. Qais al-Mifraji, a 34-year-old farmer in the village of al-Safra, 63 km west of Kirkuk, describes how the pipelines are destroyed. "The insurgents usually come at night and plant a bomb to detonate the export pipeline," he said. "But if they want to steal, they just break it and fill their tankers. No one can stop them."
The riddled pipes partially explain why four years after the US invasion, Iraq has not been able to match its pre-war crude production level of 2.5 million barrels a day. In 2006, production averaged 2.1 million barrels per day, mostly from oil fields near Basra in the south, which have not suffered the non-stop sabotage taking place in the north. Kirkuk now produces just 180,000 barrels a day. It could produce at least 400,000 more a day which, at current market prices, would net Iraq seven billion US dollars in revenue per year.
Over the second half of last year, one stretch of pipeline connecting Kirkuk with the Turkish Mediterranean port of Ceyhan - the main outlet for Iraq's northern oil exports - pumped oil for only 43 days. The rest of the time, the pipeline lay idle, leaking crude through dozens of holes drilled along its 320-km run through the Iraqi desert. Another pipeline has been tapped into 39 times so far this year, according to the state-owned Northern Oil Company, NOC, which operates the Kirkuk field.
Qadir Omer Rahman, director of the oil products distribution department in Kirkuk, said that the 80km-long pipeline from Kirkuk to the refinery in Bayji suffered many attacks."Those who protect and guard the oil pipelines are recruited from the people of the villages through which the pipelines pass," he said. "They are the ones committing these acts of terror and smuggling, with the help of other groups." Unemployment and poor living conditions spurred Ayad Hamid al-Ubaidi from Hawdh village, who is in his thirties, to join the gangs who target pipelines and steal oil. "There is no one who can give us our rights," he said. "We have to use our own hands to obtain our rights."
Rahman estimated that three million liters of oil are lost every month because of sabotage, which he said severely affects the provision of petroleum products to Kirkuk and the Kurdistan region's three northern governorates. Each stage of oil production in the north is hampered by criminal activity. It is not only the oil and its products which are stolen by outsiders. Pumps, transformers, generators and other valuable machinery and spare parts are frequently looted.
Oil company workers are coming increasingly under fire from militias. Pipeline repair crews have been shot at and hit by roadside bombs. Sunni insurgents have been dropping leaflets in Kirkuk warning all government employees, including oil company workers, to quit or to face death. Last summer, Adi al-Qazaz, then NOC's director-general, went to Baghdad to visit the oil ministry. After his meeting, he was kidnapped by gunmen on the street, never to be seen again. While some NOC employees are threatened, others are suspected of cooperating in stealing both crude and refined oil.
Truck drivers, as well as managers of fuel stations, are taking their share of the illegal business, draining supplies for Iraqi citizens who struggle to find cooking oil and fuel. A source in the NOC, who spoke on condition of anonymity, said that there is a mafia-like group operating inside the company which smuggles large amounts of oil through pipelines, in cooperation with individuals inside the company. "When an explosion occurs in a pipeline and oil leaks from it, the people in charge neglect it, leaving the leak for several days until a large amount of oil has been taken from it," he said.
Much of the smuggled crude oil is sold to merchants in Erbil through local brokers. They meet to do their deals in a restaurant in the sub-district of al-Gwer, 40 km west of Erbil, according to Ahmed al-Jobouri, an oil tanker driver. At small domestic refineries, the crude is transformed into refined fuel and then sold on the black market. Some will then be smuggled across the border. According to the NOC source, "the revenue from oil smuggled into Turkey is used to support the Turkoman Front in Iraq, and revenue from oil smuggled to Syria is used to support the insurgent groups in Iraq".
Fuel is heavily subsidized in Iraq. Petrol stations receive limited supplies and citizens are given vouchers entitling them to buy a certain amount each week at the official low price. But because there is not enough subsidized fuel, most Iraqis end up buying oil products on the black market. A source in the Bayji refinery near Kirkuk, who spoke on condition of anonymity, told IWPR reporters that some officials from the General Company for Oil Products, which is in charge of issuing paperwork for the subsidies, sells authentic as well as false receipts to merchants.The stolen fuel is then smuggled and sold on the black market, either inside Iraq or across the border in Syria or Turkey.
There is also small-scale smuggling. Salah Ali, who has been working as a tanker driver for six months, said receipts are issued at the Bayji refinery for 36,000 liters per tanker, which is their official load. But they are then filled to their full capacity of 40,000 litres, and the additional 4,000 liters are sold on the black market for five times the price of regular fuel. Similar activities go on at the smaller refinery in Kirkuk, said Irfan Kirkukli, the deputy chief of security on the city council. "Several trucks carrying oil products smuggled from Kirkuk have been seized," he said. "Vehicles have been caught smuggling 160 canisters of cooking gas from Kirkuk to Erbil, for example."
Some petrol station owners, he said, sell their share of state-subsidized fuel to black market dealers. "Many such cases have occurred in Kirkuk and legal action was taken against [the culprits]," he said. "The filling stations weren't given [further] allotments and their owners were fined. "To protect the pipelines and prevent illegal smuggling of fuel, several measures are to be implemented. Kirkukli said a special protection force to guard the pipelines will be formed, consisting of members of the Iraqi army, oil protection forces and the tribes from the areas where the pipelines pass through.Officials in charge of particular pipeline sectors will have to pay fines if their stretches are damaged or oil is stolen. Kirkukli also said that funds have been allocated to support oil infrastructure and to build observation towers along the pipelines in western and southern Kirkuk.
Sami Amin Othman, the Kurdish chief of the oil protection force in Kirkuk, has recently hired 290 new security guards whom he plans to deploy along the pipelines. This, however, has already created unrest among the local Sunni Arab chiefs in the area. They seem to be afraid of losing power because the new guards will be paid directly by the government and not contracted through them. Because the people hired to protect the pipelines are often from the same groups that sabotage the pipes, and tribal bonds are often stronger than national loyalty, the illegal drilling is expected to continue. Sheikh Ziyad Hasan, who formerly served as a contractor protecting the pipelines, confirms that people from the area sabotage the pipelines and profit from the oil. Many locals, he said, lack the motivation to prevent thefts. "They believe that this oil serves the Americans and the new government, and that it does not benefit the people," he said.
Labels: Erbil, insurgents, Kirkuk, Northern Oil Company, oil, oil pipelines, sabotage, Sami Amin Othman, tribal leaders, tribes, Turkoman Front
Thursday, September 06, 2007
Iraqi security official denies militia infiltration in Basra oil industry
Oil, Politics
(UPI) -- A top Iraqi security official disagrees with allegations Basra’s political leadership’s militia has infiltrated the Basra Oil Protection Force. Issa Jaffar Jabir, director general of the Ministry of National Security Affairs, said at an Iraq energy conference there is no proof militias have infiltrated the force at the behest of the government in Basra.
Jabir, at the Iraq Oil, Gas, Petrochemical and Electricity Summit organized by the London-based Iraq Development Program, told reporters the “accusations” were “not fair.” The Fadhila Party is currently in control of Basra, Iraq’s oil capital, where most of Iraq’s 115 billion barrels of oil reserves are and nearly all the 1.6 million barrels per day are exported.
Since winning government in provincial elections the governor, Mohammed Waili, has been accused of stacking key leadership roles with his party members, including the police and the Oil Protection Force, which guards the oil infrastructure.“It’s true that the governor of Basra belongs to this party, but we cannot accuse an Iraqi official randomly,” Jabir said. He admitted some political parties, not just Fadhila, have been able to “penetrate” ministries of interior and defense, the security apparatus and facilities guards. “We started strongly to purge forces regardless of their parties and names,” he said.
Labels: Basra, Basra Oil Protection Force, Fadhila Party, Gas, Iraq Oil, Issa Jaffar Jabir, Mohammed Waili, oil, Petrochemical and Electricity Summit
Wednesday, September 05, 2007
Iraq resumes pumping of oil from Kirkuk to Ceyhan
Region
(AP) -- Iraq's oil minister said Tuesday that crude oil began to flow from his country's northern oil-rich Kirkuk to a Turkish export terminal last week - for the first time since Saddam Hussein was toppled in 2003. "We're pumping between 300,000 to 400,000 barrels a day of Kirkuk crude to the Turkish export terminal of Ceyhan," Hussain al-Shahristani told Dow Jones Newswires in a telephone interview from Baghdad.
The pipeline - Iraq's main export route from Kirkuk to the Turkish Mediterranean port of Ceyhan - has been mostly closed because of constant sabotage since the U.S.-led war. Two weeks ago, Iraq agreed with Syria to repair and subsequently reopen another key pipeline, a 550-mile-long link connecting Kirkuk and the Syrian port of Baniyas. Once the Baniyas line - built in the 1950s but bombed by U.S. forces during the invasion that ousted Saddam - is reopened, Iraq would be using two terminals on the Mediterranean Sea. Currently, Iraq exports nearly all its oil through the Persian Gulf.
Al-Shahristani told Dow Jones that Iraq's current production capacity from its northern oil fields stands at 700,000 barrels a day, of which about 300,000 barrels a day are destined for a refinery in the nearby northern industrial city of Beiji for domestic use. The remainder is for export.
Last week, Iraq's State Oil Marketing Organization announced a tender to sell 5 million barrels of Kirkuk crude through Turkey's Ceyhan port - the third tender of its kind this year. "As far as I know, we have over 5 million (barrels) of crude stocks in Ceyhan," al-Shahristani said.
He said he expected Iraq to maintain the same level of exports from its northern fields, citing new measures to prevent sabotage of pipelines. He said the measures include dispatching a security force, made up of tribesmen from the area and affiliated with his ministry, to guard the pipelines.
The pipeline - Iraq's main export route from Kirkuk to the Turkish Mediterranean port of Ceyhan - has been mostly closed because of constant sabotage since the U.S.-led war. Two weeks ago, Iraq agreed with Syria to repair and subsequently reopen another key pipeline, a 550-mile-long link connecting Kirkuk and the Syrian port of Baniyas. Once the Baniyas line - built in the 1950s but bombed by U.S. forces during the invasion that ousted Saddam - is reopened, Iraq would be using two terminals on the Mediterranean Sea. Currently, Iraq exports nearly all its oil through the Persian Gulf.
Al-Shahristani told Dow Jones that Iraq's current production capacity from its northern oil fields stands at 700,000 barrels a day, of which about 300,000 barrels a day are destined for a refinery in the nearby northern industrial city of Beiji for domestic use. The remainder is for export.
Last week, Iraq's State Oil Marketing Organization announced a tender to sell 5 million barrels of Kirkuk crude through Turkey's Ceyhan port - the third tender of its kind this year. "As far as I know, we have over 5 million (barrels) of crude stocks in Ceyhan," al-Shahristani said.
He said he expected Iraq to maintain the same level of exports from its northern fields, citing new measures to prevent sabotage of pipelines. He said the measures include dispatching a security force, made up of tribesmen from the area and affiliated with his ministry, to guard the pipelines.
Labels: Baniyas line, Ceyhan, Hussain al-Shahristani, Iraq, Kirkuk, oil, SOMO, Turkey
Friday, August 24, 2007
DNO rejects unsolicited $700 mn. bid
Oil
(AFX News Limited) - DNO ASA said it has rejected an unsolicited 700 mln US$ bid by 'a large international oil company' for its licenses in Kurdistan region (northern Iraq). The Norwegian oil minnow said it has 'reviewed the interest and decided not to pursue the matter further'. The suggested price, it said, was based on information available in the market as of early July 2007. 'No further comments can be given due to confidentiality requirements,' DNO added.
DNO ASA said it is expecting the first export of oil from its Tawke field in Kurdistan region (northern Iraq) in November this year, assuming it secures the relevant permission from authorities in the region. Speaking after the release of its second quarter results, DNO said it is aiming to begin the export of oil into Turkey via pipeline from November.
The Kurdistan Petroleum Law was ratified by the region's parliament in August, and DNO said it expects the federal law to be approved in September. According to this schedule, he said, exports could begin the following month. Due to the political situation in Iraq, DNO is currently being forced to sell its oil in the local market.
DNO ASA said it is expecting the first export of oil from its Tawke field in Kurdistan region (northern Iraq) in November this year, assuming it secures the relevant permission from authorities in the region. Speaking after the release of its second quarter results, DNO said it is aiming to begin the export of oil into Turkey via pipeline from November.
The Kurdistan Petroleum Law was ratified by the region's parliament in August, and DNO said it expects the federal law to be approved in September. According to this schedule, he said, exports could begin the following month. Due to the political situation in Iraq, DNO is currently being forced to sell its oil in the local market.
Labels: DNO, Kurdistan, oil, Tawke field, Turkey
Jordan to resume importation of Iraqi oil
Region
(AP) -- Jordan's energy minister said Thursday his country expects to resume Iraqi oil imports in the coming days, ending a four-year hiatus sparked by the U.S.-led war that toppled Saddam Hussein, the official Petra news agency reported. Khaled al-Shraydeh said the supply would eventually cover Jordan's daily need of 100,000 barrels and would be trucked across Jordan's desert border from northern oil fields in Kirkuk accompanied by Iraqi security.
"The Iraqi government said it was ready to start supplying us with oil, which we expect will happen within the next few days," al-Shraydeh was quoted by Petra as saying. Iraqi officials said the deal was in the works for a long time and awaited only the hiring of a security force to guard the trucks. Apparently until now they could find no one who would take the job.
Al-Shraydeh did not reveal the price Jordan would pay for the oil, but Jordanian Prime Minister Marouf al-Bakhit said in October that his country would receive preferential rates. Jordan and Iraq signed the deal last August when al-Bakhit made a surprise visit to Baghdad - the first by a top Arab government official.
Al-Shraydeh said Jordan would begin by importing 10,000 barrels per day and would eventually increase the amount to cover the required 100,000. Before the war started in 2003, Iraq covered all of Jordan's oil needs, delivering a portion for free and the rest at about one-third the world market price.
When the supply was halted at the outset of the war, Saudi Arabia, Kuwait and the United Arab Emirates stepped in for a year to provide the cash-strapped kingdom with oil at prices believed to have been below market levels. Saudi Arabia now provides Jordan with funding to help the country pay for its oil need.
"The Iraqi government said it was ready to start supplying us with oil, which we expect will happen within the next few days," al-Shraydeh was quoted by Petra as saying. Iraqi officials said the deal was in the works for a long time and awaited only the hiring of a security force to guard the trucks. Apparently until now they could find no one who would take the job.
Al-Shraydeh did not reveal the price Jordan would pay for the oil, but Jordanian Prime Minister Marouf al-Bakhit said in October that his country would receive preferential rates. Jordan and Iraq signed the deal last August when al-Bakhit made a surprise visit to Baghdad - the first by a top Arab government official.
Al-Shraydeh said Jordan would begin by importing 10,000 barrels per day and would eventually increase the amount to cover the required 100,000. Before the war started in 2003, Iraq covered all of Jordan's oil needs, delivering a portion for free and the rest at about one-third the world market price.
When the supply was halted at the outset of the war, Saudi Arabia, Kuwait and the United Arab Emirates stepped in for a year to provide the cash-strapped kingdom with oil at prices believed to have been below market levels. Saudi Arabia now provides Jordan with funding to help the country pay for its oil need.
Labels: Iraq, Jordan, Khaled al-Shraydeh, oil
Friday, August 17, 2007
Al Rubaie Gives Jordanians Option Of Kirkuk’s Or Basrah’s Oil
Regional
(Al Mowaten Newspaper) - 16 AUG - Yesterday, National Security Advisor, Dr. Muwaffaq Al Rubaie, held a press conference in Amman to explain the results of his visit to Jordan. At the beginning of the conference, Al Rubaie confirmed that his visit was serious and frank. He added that he discussed the reasons behind the violence and said, “The violence in Iraq is because regional interests [conflicts] are being dealt with in Iraq. There is no sectarian war in Iraq but it is a war between extremists of all sects. Both countries have agreed that they are in one boat to fight Al Qaida, extremists and sectarianism. The threats to Iraq’s national security are threats to Jordan’s national security as well. Jordan supports Iraq’s political process and [Al Maliki’s] government.”
Regarding Iraq’s delay in implementing the agreement that was approved during the Jordanian PM’s visit to Iraq a year ago concerning providing Jordan with 50,000 barrels of oil a day at special prices, Al Rubaie said, “The security situation is the reason for delaying this agreement and the oil pipe line to Jordan has been sabotaged. We have presented two options to the Jordanians. These are to receive oil from either Basrah’s or Kirkuk’s oil fields. Basrah’s oil contains ingredients that are not compatible with Jordan’s refineries. We have been promised by the Jordanians that they will respond to us after studying the two options.” Al Rubaie concluded his statement saying, “The brothers in Jordan offered to support us and have promised that they will offer as much as they can to the Iraqis who are living in Jordan.”
Regarding Iraq’s delay in implementing the agreement that was approved during the Jordanian PM’s visit to Iraq a year ago concerning providing Jordan with 50,000 barrels of oil a day at special prices, Al Rubaie said, “The security situation is the reason for delaying this agreement and the oil pipe line to Jordan has been sabotaged. We have presented two options to the Jordanians. These are to receive oil from either Basrah’s or Kirkuk’s oil fields. Basrah’s oil contains ingredients that are not compatible with Jordan’s refineries. We have been promised by the Jordanians that they will respond to us after studying the two options.” Al Rubaie concluded his statement saying, “The brothers in Jordan offered to support us and have promised that they will offer as much as they can to the Iraqis who are living in Jordan.”
Labels: Basrah, Jordan, Kirkuk, Muwaffaq al-Rubay'i, oil, oilfields
Monday, July 02, 2007
KRg to invite bids from foreign companies on 40 oil blocks
Oil, Kurdistan
(AME Info FZ LLC) - The Kurdish regional government in Iraq is to invite bids from foreign companies for 40 oil blocks with a view to the new national oil law being agreed shortly, reported Reuters. The authority is planning investor conferences in Erbil, London and possibly Houston and its Oil Minister Ashti Hawrami said firms which are in a position to 'organise themselves quickly' will be in pole position to win the tenders.
Labels: Ashti Hawrami, bids, foreign companies, investor conferences, KRG, oil
Wednesday, May 30, 2007
Iraq to set up national oil firm
Oil
(Al Alam News) - The Iraqi parliament will vote in weeks on founding the state-owned National Iraqi Oil Company, former Iraqi Oil Minister said on Tuesday. "The main goal of the new Iraqi oil and gas bill is founding a National Iraqi Oil Company which can regulate the oil and gas sectors which suffer from lack of coordination between several decision maker and administrative units" Ebrahim Bahr Al Uloum said in remarks to alalam TV.
(Al Alam News) - The Iraqi parliament will vote in weeks on founding the state-owned National Iraqi Oil Company, former Iraqi Oil Minister said on Tuesday. "The main goal of the new Iraqi oil and gas bill is founding a National Iraqi Oil Company which can regulate the oil and gas sectors which suffer from lack of coordination between several decision maker and administrative units" Ebrahim Bahr Al Uloum said in remarks to alalam TV.
He added that several Iraqi political groups see the oil and gas bill as a plan to distribute the income of oil exports, but insisted that the bill has 4 goals including reviving the National Iraqi Oil Company, setting a structure for the Oil Ministry, coordinating the government and oil producing provinces and specifying the position of foreign investors. Bahr Al Uloum described the oil as the main income of Iraqi nation and emphasized that giving the exclusive managment right of the National Iraqi Oil Company as well as controlling foreign investments could ensure a just sharing of wealth from Iraq's oil reserves between the whole Iraqi nation.
Labels: Ebrahim Bahr Al Uloum, Gas, Iraqi parliament, National Iraqi Oil Company, oil
Wednesday, May 23, 2007
Parliamentary committee fails to finalise agreement on amendment of constitution
Government
(Reuters) - An Iraqi parliamentary committee has failed to finalise an agreement on amending key articles in the constitution, one of the political benchmarks Washington says are important to end sectarian violence. After six months of talks, the constitutional reform committee had been expected to present parliament with a final draft of their recommendations on Tuesday.
Committee members said they would ask political leaders to deal with sensitive issues such as sharing Iraq's oil wealth more equitably and ending a ban on former members of Saddam Hussein's party members holding public office. "We have agreed on some articles but there are sensitive issues which need an agreement among the political leaders," said Saleem al-Jubouri, a member of the Accordance Front, the biggest Sunni political bloc in parliament.
The changes are aimed at bringing Sunni Arabs, who make up the backbone of the insurgency, more firmly into the political process. U.S. President George W. Bush, under pressure to show tangible progress in the four-year-old war, has pushed Iraqi leaders to agree power-sharing legislation. Jubouri said Sunni Arab and Shi'ite members of the committee disagreed with a Kurdish demand to allow regions to distribute oil income rather than the central government.
Some lawmakers from the ruling Shi'ite community, which was oppressed during Saddam's rule, are virulently opposed to former Baathists taking up government jobs. Non-Arab Kurds, also persecuted under Saddam's pan-Arab policies, resist wording on the Arab identity of Iraq. Sunni Arabs fear federalism will allow Kurds in the north and Shi'ites in the south, where Iraq's oil reserves lie, to break away into their own states. Sunni Arabs live mostly in central and western Iraq, which is poor in oil.
Jubouri said that one area of disagreement was the status of the ethnically mixed city of Kirkuk which sits atop one of the world's richest oilfields. The current constitution says Iraq should hold a referendum on the final status of Kirkuk this year. While Kurds claim Kirkuk as part of Kurdistan, Arabs oppose this. Another official in the committee said Arab members -- Shi'ites and Sunnis -- proposed making Kirkuk a separate region and dropping the idea of the referendum, which Kurds would anyway be likely to win.
Committee members said they would ask political leaders to deal with sensitive issues such as sharing Iraq's oil wealth more equitably and ending a ban on former members of Saddam Hussein's party members holding public office. "We have agreed on some articles but there are sensitive issues which need an agreement among the political leaders," said Saleem al-Jubouri, a member of the Accordance Front, the biggest Sunni political bloc in parliament.
The changes are aimed at bringing Sunni Arabs, who make up the backbone of the insurgency, more firmly into the political process. U.S. President George W. Bush, under pressure to show tangible progress in the four-year-old war, has pushed Iraqi leaders to agree power-sharing legislation. Jubouri said Sunni Arab and Shi'ite members of the committee disagreed with a Kurdish demand to allow regions to distribute oil income rather than the central government.
Some lawmakers from the ruling Shi'ite community, which was oppressed during Saddam's rule, are virulently opposed to former Baathists taking up government jobs. Non-Arab Kurds, also persecuted under Saddam's pan-Arab policies, resist wording on the Arab identity of Iraq. Sunni Arabs fear federalism will allow Kurds in the north and Shi'ites in the south, where Iraq's oil reserves lie, to break away into their own states. Sunni Arabs live mostly in central and western Iraq, which is poor in oil.
Jubouri said that one area of disagreement was the status of the ethnically mixed city of Kirkuk which sits atop one of the world's richest oilfields. The current constitution says Iraq should hold a referendum on the final status of Kirkuk this year. While Kurds claim Kirkuk as part of Kurdistan, Arabs oppose this. Another official in the committee said Arab members -- Shi'ites and Sunnis -- proposed making Kirkuk a separate region and dropping the idea of the referendum, which Kurds would anyway be likely to win.
Labels: Article 140, Baathists, constitutional reform committee, federalism, Iraqi constitution, Kirkuk, oil
Tuesday, May 15, 2007
Jordan to receive Iraqi oil at preferential prices
Oil
(Iraq Directory) - Iraqi Minister of Planning, Ali Baban, said that the oil agreement between Iraq and Jordan provides for the latter to provide oil at preferential prices, up to $18 per discount on the worldwide price of oil.
He added, during his presence in the fourth international exhibition for the reconstruction of Iraq held in Amman, that the problem is in the unstable security situation on the road between Beiji and the Iraqi border, which impede the implementation of the agreement signed in Baghdad, when the Jordanian Prime Minister, Maaroof Al-Bikheet visited it last year, and not in the relations between Iraq and Jordan. He stressed the needed of the two countries for pipeline between them, but such a pipeline has not been built despite the need for it.
He pointed out that after this period, the Jordanian government found the road unsafe for the transport of oil from Iraq, and we are still ready to implement this project if not for the security dilemmas that accompany the transport process. He said that there is a complex security situation, but this does not prevent us from the construction process.
(Iraq Directory) - Iraqi Minister of Planning, Ali Baban, said that the oil agreement between Iraq and Jordan provides for the latter to provide oil at preferential prices, up to $18 per discount on the worldwide price of oil.
He added, during his presence in the fourth international exhibition for the reconstruction of Iraq held in Amman, that the problem is in the unstable security situation on the road between Beiji and the Iraqi border, which impede the implementation of the agreement signed in Baghdad, when the Jordanian Prime Minister, Maaroof Al-Bikheet visited it last year, and not in the relations between Iraq and Jordan. He stressed the needed of the two countries for pipeline between them, but such a pipeline has not been built despite the need for it.
He pointed out that after this period, the Jordanian government found the road unsafe for the transport of oil from Iraq, and we are still ready to implement this project if not for the security dilemmas that accompany the transport process. He said that there is a complex security situation, but this does not prevent us from the construction process.
Labels: Beiji, Jordan, oil, Planning Minister Ali Baban
Monday, May 07, 2007
KRG signs oil well contract with Canadian company
Business, Oil, Kurdistan
(Al-Sabaah) - Kurdistan's regional government has signed a contract with Candia Company to dig an oil well in Kerman region, in Sulamina province over the beginning of the next year. In a press statement, the region's government said the delegation of Canadian Western Zargross's Company had made field tours in the Kerman region. The delegation offered a report to the vice-president of the region's government Omar Fatah in which the delegation expressed the company's readiness to start work on the first oil well at the beginning of the next year.
Labels: Candia Company, Kerman region, Kurdistan, oil, oil well, Omar Fatah, Zargross
