Nineveh Takes Steps towards Energy Independence

By John Lee.

The Governor of Nineveh province, Atheel al Nujaifi (pictured), has told Reuters that Baghdad has focused on the giant southern oilfields and has paid little attention to developing resources in his province.

The province has started talks with oil companies, including Exxon Mobil, and is drafting terms to attract investment. Nujaifi added:

"We are not ready to wait for decades until the crude runs out from the south to start energy investment in Nineveh province ... We listened to [oil companies'] proposals about how to best invest in Nineveh, but we did not sign deals."

"We will start oil investments in the province with a priority to the downstream industry, and that could be followed by broader investments in the upstream sector ... When we have oil majors working, then definitely there will be social benefits, job opportunities and economic gains. Huge investments could create a better, stable environment."

Last month the provincial council of the predominantly Sunni Muslim governorate granted him the power to sign deals with foreign oil firms independently of Baghdad, which immediately rejected the move.

The governor has drafted regulations that could allow foreign investors to bid for an integrated project to build a 150,000 barrels per day (bpd) refinery and develop an oilfield to feed it.

Nujaifi said the province holds around 20 discovered but untapped oilfields and has the potential for huge resources that have yet to be discovered.

(Source: Reuters)

7 Responses to Nineveh Takes Steps towards Energy Independence

  1. Ahmed Mousa Jiyad 24th October 2013 at 15:07 #

    Rhetoric and Reality
    Few remarks worth making to add touch of reality to this matter taking into consideration the current prevailing legal and institutional governing frameworks.
    1- Two oilfields in Nineveh province were awarded and concluded during the second bid round held in 2010 by the Ministry of Oil. These are Najma and Qaiyara with combined proven reserves of 1.6 billion barrels and combined production at plateau production of 250,000 barrels per day when fully developed. The operator IOC is Sonangol has to spend, as minimum expenditure obligations in both fields a total of $250 million and eventually invest more than $3 billion to develop the two fields. But the work on these two oilfields did not progress well due to the deterioration of the security situation in the province; and the company is reportedly contemplating abandoning the two fields.
    The Nineveh governorate should first provide the security needed to keep Sonangol actively engaged in the already contracted oilfields in order to attract other investors!!
    2- The Nineveh governorate is surely entitled to conclude a deal pertaining to have new refinery. But this has to be within the legal boundaries of two existing laws: the Investment Law (and accordingly the National and Provincial Investment Commissions) and the Refinery Law. Moreover, this has also to be in coordination and harmonization with both the Integrated National Energy Strategy (INES) and the current National Development Plan-NDP 2013-2017. Also the current Provincial Law does not authorize Nineveh governorate to act independently and disregards these laws and plans!!
    3- The intention of Nineveh governorate for an integrated project comprising building 150,000 barrels per day (bpd) refinery and develop an oilfield to feed it would contravene the adopted and declared policies of the federal government. Under current legal frameworks and contracting modalities the upstream petroleum (development of an oilfield) is the prerogatives of the Ministry of Oil.
    Neither Investment Law nor Refinery Law nor Provincial Law authorizes the province to conclude, independently, any upstream petroleum development contract.
    4- Finally, the “one-man-show” does not work anymore, has no credibility and suspicious. Thus when Nineveh “provincial council granted the Governor the power to sign deals with foreign oil firms” it is in fact creating obvious and abundantly clear “corruption enabling” environment and condition, which contravene all transparency, disclosure, accountability and good governance measures and principles adopted by inter-governmental international and regional bodies such as the UN and the EU, and non-governmental organizations and entities such as EITI, NRC, GFI, RWI, IT among many others. The “one-man-show” is almost over even in Iraq, or most of it!!

    Ahmed Mousa Jiyad,
    Iraq/ Development Consultancy and Research
    [email protected]
    24 Oct 2013