Iraq is prepared to stump up for the cost of building one of the four refineries planned if investors can’t be found, the Deputy Oil Minister, Ahmed al-Shamma, has said, according to a report from Bloomberg.
The total value of the refinery-building program is variously stated as $9bn and $20bn, depending on the source.
The government may disburse annual payments from the state budget to pay for the construction of a refinery in the central city of Karbala, Shamma told reporters today during a conference in Basra, Iraq.
“The Karbala refinery is a priority,” as it is in central Iraq where consumption is very high, he said.
Iraq plans to build four refineries to almost double its capacity to process fuel and cut dependence on gasoline and other product imports.
The four refineries, designed to add capacity of around 750,000 barrels a day, will be based in Karbala, in the northern Kirkuk region, the eastern Maysan area, and Nassiriyah in the southeast.
Iraq has refineries in Baghdad’s Dora [Doura] district, in the southern region of Basra and in the northern city of Baiji [Bayji]. The three have a combined capacity of 700,000 barrels a day, but can only produce about 500,000 barrels a day because of wartime damage. The country also has about 30 smaller refineries that together have a total production capacity of 300,000 barrels a day.
Iraq, which generates most of its revenue from oil exports, needs to import about a quarter of all the refined products it consumes, according to data from the U.S. Energy Information Administration.
(Sources: Bloomberg, Reuters)