Friday, September 07, 2007
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
Wednesday, August 22, 2007
Syria, Iraq agree to rehabilitate oil pipelines
Region
(SANA) - Minister of Petroleum and Mineral Resources Sufian al-Alaw on Tuesday said Syria and Iraq agreed to take necessary procedures to rehabilitate a crude petroleum transport pipelines between Iraqi city of Kirkuk and Syrian coastal city of Banyas. "The two states agreed to develop the exchange of oil products to a maximum degree in the interest of both countries," Alaw said during a visit to a Gas station south Damascus along with Iraqi counterpart Hussein Shahrstani.
The Iraqi Minister expressed his country's readiness to cooperate with Syria and develop available capabilities in the interest to both peoples, pointing out to new opportunities and horizons of cooperation in the oil and gas fields. The two ministers listened to an explanation to the Arab Gas Pipelines project which stretches from north Egypt to the Syrian-Turkish borders through Jordan with 1231 KM length.
The Iraqi Minister expressed his country's readiness to cooperate with Syria and develop available capabilities in the interest to both peoples, pointing out to new opportunities and horizons of cooperation in the oil and gas fields. The two ministers listened to an explanation to the Arab Gas Pipelines project which stretches from north Egypt to the Syrian-Turkish borders through Jordan with 1231 KM length.
Labels: Arab Gas Pipelines project, Banyas, Iraq, Kirkuk, oil pipelines, Sufian al-Alaw, Syria
Tuesday, April 03, 2007
Al-Maliki to visit Japan
Politics, International
(AFP) - Japan will agree to help Iraq improve crude oil output and push for reconciliation in the war-torn country when Prime Minister Nuri al-Maliki visits next week, officials said Tuesday. Maliki will pay his maiden visit to the world's second-largest economy from Sunday to Wednesday and meet with Prime Minister Shinzo Abe and Emperor Akihito, Japan's foreign ministry said.
"Iraq boasts the world's third-largest crude oil reserves. It is important for Japan to build a long-term strategic partnership with Iraq," a ministry statement said.A Japanese foreign ministry official said Abe would also "encourage the Iraqi premier, who is a Shi'a leader, to further promote national reconciliation in Iraq," the official said.
The Iraqi premier is expected to sign a $700-million loan agreement with Japan to help the war-torn country improve crude oil output and power generation, an MP close to Maliki said earlier in Baghdad. The 40-year loan, part of financial assistance to Iraq announced by Tokyo in 2003, will go to build pipelines in the southern city of Basra and improve power transmission facilities across the nation, lawmaker Sami al-Askari said.
The Iraqi premier is expected to sign a $700-million loan agreement with Japan to help the war-torn country improve crude oil output and power generation, an MP close to Maliki said earlier in Baghdad. The 40-year loan, part of financial assistance to Iraq announced by Tokyo in 2003, will go to build pipelines in the southern city of Basra and improve power transmission facilities across the nation, lawmaker Sami al-Askari said.
Japanese officials had no immediate comment on the loan agreement. Japan has offered six billion dollars in debt waivers and $1,5-billion in aid grants to Baghdad, but much of the aid is on hold due to security concerns. Japan last year withdrew its 600 ground troops from Iraq following a reconstruction mission that marked the first time since World War II that Tokyo sent troops to a country where fighting was under way. Despite their withdrawal, Japan has maintained an air force mission, which includes some 210 personnel based in Kuwait in support of US-led forces. It decided last week to extend the mission by two years.
Labels: Basra, crude oil, Emperor Akihito, Japan, loan, Nouri Al-Maliki, oil pipelines, Prime Minister Shinzo Abe
Saturday, March 24, 2007
Two new pipelines planned to bypass Strait of Hormuz
Oil, Region
(AsiaNews) – Gulf governments are planning two oil pipelines that would bypass the Strait of Hormuz, aiming to avoid possible Iranian threats to global oil shipments. In reporting the news the Kuwait Times said that, if built, the two pipelines could move as much as 6.5 million barrels of oil a day around the strait, an amount equal to nearly 40 per cent of the daily exports currently shipped through the narrow channel at the entrance of the Gulf.
Construction of the first, smaller line is forecast to begin this year, the Dubai branch of Britain's Standard Chartered Bank announced this week. A second, more ambitious line carrying some 5 million barrels a day is still under discussion and could take a decade to build.
The attraction of the plan for oil traders is easy to understand. Around two-fifths of the world's traded oil is shipped by tanker through the Hormuz Strait. But the 54-km-wide passage is highly vulnerable to threats from neighbouring Iran. With tensions rising between Iran and the West over its nuclear programme, Iran's supreme leader Ayatollah Ali Khamenei warned last June that his country could disrupt the world's oil supply if it comes under attack.
Bypassing the Strait of Hormuz could also stabilise oil prices. The new pipelines would reassure traders over the stability of exports and knock down the few dollars per barrel they have to pay in “security premium.” The first, 360-km pipeline that Abu Dhabi's International Petroleum Investment Co is planning would carry only UAE oil to the emirate of Fujairah, located outside the strait on the Gulf of Oman. It would involve 1.5 million barrels per day of crude oil, about 55 per cent of the Emirates' production.
Construction of the first, smaller line is forecast to begin this year, the Dubai branch of Britain's Standard Chartered Bank announced this week. A second, more ambitious line carrying some 5 million barrels a day is still under discussion and could take a decade to build.
The attraction of the plan for oil traders is easy to understand. Around two-fifths of the world's traded oil is shipped by tanker through the Hormuz Strait. But the 54-km-wide passage is highly vulnerable to threats from neighbouring Iran. With tensions rising between Iran and the West over its nuclear programme, Iran's supreme leader Ayatollah Ali Khamenei warned last June that his country could disrupt the world's oil supply if it comes under attack.
Bypassing the Strait of Hormuz could also stabilise oil prices. The new pipelines would reassure traders over the stability of exports and knock down the few dollars per barrel they have to pay in “security premium.” The first, 360-km pipeline that Abu Dhabi's International Petroleum Investment Co is planning would carry only UAE oil to the emirate of Fujairah, located outside the strait on the Gulf of Oman. It would involve 1.5 million barrels per day of crude oil, about 55 per cent of the Emirates' production.
Labels: International Petroleum Investment Co, Iran, oil, oil pipelines, Strait of Hormuz
Thursday, March 15, 2007
Syria wants to rebuild pipeline in Iraq
Oil
(UPI) Syria wants to increase imports of Iraqi oil by rebuilding a pipeline, as well as become a main export route for Iraq to other markets. Abdallah al-Dardari, Syria's deputy prime minister for economic affairs, said it wants to be Iraq's main exporter via its Mediterranean terminal at Banias and also use the oil to fuel three new refineries, upstreamonline.com reports. "Linking the two oil and gas networks is in our mutual interest," Dardari said. "We are studying with the Iraqi side how Syria could become an important link to deliver Iraqi output to the world and to the Syrian market."
A pipeline pumped between 100,000 and 200,000 barrels per day of oil from Kirkuk, Iraq, to Banias in the two years before the 2003 invasion. U.S. fighters bombed the pipeline. Iraq's oil ministry said it plans to rebuild it, but wants the security situation to improve first. The minister also said Syria needs to do more to stop insurgents from crossing into Iraq from Syria. "Syria is the closest point for Iraq on the Mediterranean and it's in Iraq's interest to export crude efficiently," Dardari said. "We also have a stake in earning transit fees and using Iraqi crude to operate a group of refineries we plan to develop."
Labels: Abdallah al-Dardari, Banias, oil pipelines, Syria
Wednesday, February 21, 2007
Oil pipeline attacks force refineries to operate at 50% capacity
Security, Oil
(Azzaman) Iraq is losing up to 400,000 barrels of oil a day due to attacks targeting its oil infrastructure, a senior oil ministry official said. Assem Jihad, the ministry’s spokesman, said at current high prices on international markets the loss is massive as it amounts to billions of dollars a year. Jihad said there were 159 major attacks on oil installations in 2006, about one attack every other day. Most of the attacks targeted the country’s pipelines, he said.
There were 116 attacks on pipelines mainly those leading to refineries or export terminals in the north. “These attacks have forced the country’s refineries to operate at nearly 50% of capacity,” he said. There is no special force to guard the pipelines and the ministry relies on Iraqi security forces which have been engaged in ferocious city fighting against rebels. The government has earmarked $2.5 billion for the reconstruction of the oil sector this year.
There were 116 attacks on pipelines mainly those leading to refineries or export terminals in the north. “These attacks have forced the country’s refineries to operate at nearly 50% of capacity,” he said. There is no special force to guard the pipelines and the ministry relies on Iraqi security forces which have been engaged in ferocious city fighting against rebels. The government has earmarked $2.5 billion for the reconstruction of the oil sector this year.
Labels: attacks, oil pipelines
