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ScreenHunter_5685 Mar. 30 11.25

Intra-Kurdish Rivalries Spill Into Iraqi Oil Trade

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.

Who owns Kirkuk, the major northern city with the major oil resources? The authorities in Iraqi Kurdistan have always considered it part of their semi-autonomous region which meant that the question was long a subject of debate between the Kurdish and the federal government in Baghdad.

Thanks to the security crisis caused by the extremist group known as the Islamic State, the Kurdish appear to have got their way, as their troops are now protecting the Kirkuk area, which has a big Kurdish population.

But now that Kirkuk appears as good as in Kurdish hands, it is clear there are also internal tensions between the Kurds themselves. The rivalry between the region’s two major political parties over Kirkuk was recently highlighted when, on March 2, armed men entered the headquarters of the Iraqi oil company, North Oil, in Kirkuk.

The office is in charge of sending the oil produced in Iraqi Kurdistan to Turkey through the Ceyhan pipeline, from where it is exported to the rest of the world.

And the armed group stopped the oil from being transported for several hours, saying that they would remain until a dispute between Iraqi Kurdistan and the Iraqi Ministry of Oil in Baghdad was resolved. Shortly after noon, pumping of oil resumed.

A few days later, it appeared the situation had been resolved, with the Iraqi government agreeing to address the armed men’s issues.

On the surface, it seemed that it was the same old gripe, with Iraqi Kurdistan saying that Baghdad was not giving them enough return on oil produced in the northern region. But in reality this was also about an old gripe between the region’s two largest political parties, who basically share power in the region, splitting territory, military forces and parliamentary powers between them: the Patriotic Union of Kurdistan, or PUK, and the Kurdistan Democratic Party, or KDP.

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Bai Hassan oil field

Bombs target Bai Hassan Oil Pipeline

By John Lee.

Reuters reports that four bombs caused damage and fire on Saturday near a minor pipeline that delivers crude oil from the Bai Hassan oilfield to a degassing station in Kirkuk.

Sources at the state-run North Oil Company (NOC) told the news agency that pumping had already been halted at the time of the blasts due to for maintenance.

(Source: Reuters)

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Bai Hassan oil field

3 Killed in blast at Bai Hassan Oilfield

By John Lee.

At least three people have been killed while seven others were injured when an oil tank exploded at the Bai Hassan oilfield on Monday.

A spokesman for the North Oil Company (NOC) said the blast occurred during a welding operation.

(Source: TBP)

Posted in Iraq Oil & Gas News 2 Comments

Ceyhan_Pipeline Marine_Terminal

New Oil Deal Still Under Discussion

By Simon Kent.

Kurdish and Iraqi officials are still thrashing out details of a more sustainable and far reaching oil revenue and exports deal, following the resumption of federal oil exports into the Kurdish pipeline from Kirkuk.

Last week, 100,000 bpd of Kirkuk crude from Baba Gorgor, Jambour and Khabbaz, three fields in the giant Kirkuk formation, were pumped into the Kurdish export pipeline, on the orders of Baghdad.

Previously, the federal North Oil Company (NOC) had re-injected the oil but there were growing fears this would damage reservoirs. At the moment, both sides are working on revenue arrangements for this oil, which will be exported from Ceyhan in Turkey (pictured).

While the NOC still has three fields in the Kirkuk formation, the Kurdish Peshmerga control fields occupied in June 2014, including Bai Hassan and Avana. A longer lasting deal therefore, may be politically difficult for both sides, since many Kurds also blame Baghdad for cutting off their budget share, which the Maliki government did in early 2014.

(Source: Bloomberg.)

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Bai Hassan oil field

IS Attacks Energy Infrastructure

By John Lee.

Militants from the Islamic State group (IS, ISIS, ISIL, Daesh) have reportedly attacked two energy facilities in northern Iraq on Sunday.

Reuters reports that four men stormed the 'AB2' gas compressor station, about 15 km northwest of Kirkuk, shooting dead four employees, wounding others, and setting off around five explosions.

Counter-terrorism forces regained control of the facility, but he attackers are believed to have escaped to the Bai Hassan oil station, 25 km further northwest, where they launched a similar attack, detonating explosive vests and destroying an oil storage tank. One engineer was killed, as were all of the assailants.

It was not clear when operations at the station, which had been pumping 55,000 bpd to Iraqi Kurdistan, would return to normal.

(Sources: Reuters, AFP)

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ScreenHunter_2768 Jan. 29 14.02

Kirkuk Oil Flowing, but Locals Never See Any Money

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.

Where Are The Petrodollars? Kirkuk Oil Flowing Fast, But Locals Never See Any Money

The province of Kirkuk exports millions of barrels of oil per month. But nobody knows where the money is going - and as a result, local protesters say they will try to stop oil exports soon.

The northern city of Kirkuk and its surrounds are well known for their oil producing abilities. And locals know that thousands of barrels of oil are being extracted and exported from their area. But nobody seems to be seeing any kind of revenues from that oil.

The Kirkuk authorities say they have received none of Iraq’s “petrodollars” for almost two and a half years.

This is how the system should work: An agreement between Baghdad and the semi-autonomous northern region of Iraqi Kurdistan says that the Kurdish should send their oil, and the oil from Kirkuk, through the Kirkuk-Ceyhan pipeline, which transports crude from Iraqi Kurdistan to Turkey.

Revenues from these exports are supposed to go to Iraq's central State Organization for Marketing of Oil, or SOMO, and from there it should be distributed back to Iraqi Kurdistan and other provinces, as a portion of the federal budget. In Iraqi Kurdistan’s case it is supposed to be 17 percent of the federal budget.

However this has not been happening in the agreed upon way for some time now.

“Kirkuk isn’t receiving its fair share because of the ongoing conflicts between Erbil and Baghdad,” says Ahmed al-Askari, a Kurdish member of the provincial council in Kirkuk who also heads the council’s oil and gas committee.

“We are not happy about this or about the Iraqi Kurdish policies on this. We don’t know how much oil is being exported and we know that Baghdad isn’t giving Kirkuk its rightful share of the federal budget. For some of 2013 and all of 2014 Baghdad didn’t send us any money. In 2015 Kirkuk’s oil was sold directly by the Iraqi Kurdish government. Neither group of authorities is telling us who has our oil money,” he complains.

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ScreenHunter_2637 Jan. 15 10.59

Can Exporting Natural Gas Save Iraqi Kurdistan?

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.

A Pipeline In The Pipeline: Can Exporting Natural Gas Save Iraqi Kurdistan?

Beginning 2016 Iraqi Kurdistan will begin to build a new natural gas pipeline to Turkey. But analysts say if they use the same policies they do for oil, the pipeline will make things worse, not better.

Thanks to recent geo-political conflicts, the oil pipeline between the semi-autonomous region of Iraqi Kurdistan and the region's neighbour, Turkey, is becoming more important than ever. And this in turn has apparently made both Turkey and Iraqi Kurdistan decide to build a gas pipeline too.

Officials from the two capitals, Ankara and Erbil, have been discussing building such a pipeline to bring gas from Iraqi Kurdistan to Turkey, and then from there, onto Europe, for some time.

Turkey is increasingly concerned that the Russians will stop supplying them with gas, given the latest conflicts between them after Turkey shot down a Russian fighter jet in a disputed area. And Iraqi Kurdistan continues to labour under Iraq's financial crisis; the region desperately needs new sources of income.

The Iraqi Kurdish Ministry of Natural Resources note that their region contains around 3 percent of the world's reserves of natural gas. If the Kirkuk region, currently under the control of Iraqi Kurdish military thanks to the security crisis, is eventually annexed to the Iraqi Kurdish region too, then that number jumps to 6 percent. Given this huge amount of natural gas and the current political and economic crises, a gas pipeline looks like an increasingly useful and lucrative project for both parties.

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Weekly Security Update, 08 - 14 July 2014

By Anne-Laure Barbosa at Constellis Consulting

Security IncidentsOn 15 July, Iraqi MPs took the first formal step toward forming a new government, by electing Salim al-Juburi, a Sunni lawmaker, as the new speaker of parliament. Negotiations between the main parliamentary blocs had been in gridlock since the April elections failed to produce a majority, with sessions adjourned or boycotted by the main protagonists. This vote comes as central authorities face mounting pressure from the international community to form a government capable of addressing the root causes of the ISIS insurgency. Despite these movements, the nomination of a parliament speaker is tempered by the fact that the designation of a new Prime Minister, who concentrates most decision-making powers, is unlikely to bring a similar consensus among the competing factions. The participation of the Kurdish factions in the electoral process also demonstrates that the Kurdish leadership remains cautious and currently seems determined to exploit opportunities available within the existing political framework. The next step toward forming a government is the election of the President, expected to be a Kurd, and which should ensure the continued involvement of Kurdish blocs in the Iraqi political process. Meanwhile, the KRG continued to take steps toward economic autonomy. On 11 June, Peshmerga forces seized control of production facilities at the Kirkuk and Bai Hassan oil fields, expelling Iraqi employees. The nomination of Juburi hardly reflected progress on the ground however, with the ISF counter-offensive launched in the North in a bid to re-take Tikrit failing to produce the expected results. Tribal alliances on the ground have the potential to shift rapidly and their negotiation will be key to the ISF to making permanent gains in ISIS-controlled territories.

North

Most of the violence reported in the North remained concentrated in northern Salahuddin, where ISF units are attempting to regain control of Tikrit. Additional hotspots for violence include southern areas of Kirkuk and northern districts of Diyala, with firefights between ISF and ISIS reported in Muqdadiyah. On 14 July, the ISF attempted to re-take control of the Amreli area of eastern Tikrit, following a two-week long counter-offensive on the Baathist stronghold. Although the ISF appears to have consolidated its positions in the outskirts of Tikrit and is now able to launch regular assaults on the area, claims that the Iraqi Army has managed to expel insurgents from Tikrit are an overstatement and the town is expected to remain disputed over the next weeks. In a possible attempt at alleviating the pressure on Tikrit, ISIS launched an assault on Dhululiya in the southeast of Samarra, and reportedly controls 40 percent of the town after two days of ongoing clashes. The rest of the town is controlled by local tribes and the ISF does not currently have a presence there, though units are expected to reach the area in the coming days. As appears to be demonstrated by ongoing reports from the ground, the concentration of military resources on Tikrit may lead to further ISIS gains south of Samarra. Meanwhile, the lack of local support for Iraqi forces in Tikrit is unlikely to lead to a major breakthrough, though an escalation in direct fighting between Iraqi troops and ISIS fighters is expected.

Central

As assessed in previous reports, the situation in central provinces remained stagnant this week, with most ISF operations on the western front focussed on targeting neighbourhoods of Fallujah, and major interactions between Iraqi soldiers and ISIS reported in Haditha and Ramadi. On 13 July, an assault organised by ISIS fighters and supported with military vehicles, was met by forces consisting of ISF, volunteers and tribal elements. The attack resulted in dozens of casualties. Meanwhile, levels of violence in Baghdad remained consistent with previous weekly averages, with attacks involving car bombs relatively scarce and confined to the outer borders of the capital, failing to inflict heavy losses. Eastern districts remained the most exposed to ISIS violence. On 12 June, unidentified gunmen stormed a residential complex in the capital’s Zayuna neighbourhood and killed over 30 civilians. The attack, which targeted apartments allegedly used as a brothel, may have been staged by Shia militias, whose role has become increasingly active in the capital following the collapse of armed forces in the North. Stagnating dynamics on the ground mean that the nature and frequency of attacks will remain similar over the next weeks.

South

The concentration of military resources in the North continued to provide ISIS cells with opportunities to strike areas south of Baghdad. Levels of violence in Babil continued to increase in frequency, demonstrating a continued commitment to weaken Baghdad’s southern belt. On 09 July, a VBIED struck Hillah’s northern neighbourhood of Jaza’ir, followed by the detonation of two additional car bombs in Mahawil district, northern Babil, killing at least 11 people. Ongoing ISF operations in the North have impacted on ISIS tactics, with attacks on Babil seen as a means to alleviate the pressure currently put on ISIS positions on the northern frontline. South-eastern provinces remain assessed as a low priority for insurgents, who are already engaged on multiple fronts across the country. The upcoming Shia festival celebrating the martyrdom of Imam Ali on 19 July nonetheless has the potential to trigger militant assaults on civilians, as pilgrims are expected to converge on Karbala over the next days.

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Kurds Seize Oilfields, Leave Cabinet

By John Lee.

Kurdish politicians officially suspended their participation in the Iraqi government on Friday, as forces under their control seized two oilfields in northern Iraq.

Prime Minister Nouri al-Maliki has appointed temporary replacements for the five Kurdish ministers of the cabinet.

Kurdish forces took over the Bai Hassan and Kirkuk oilfields near Kirkuk; an oil ministry spokesman in Baghdad described the takeover as dangerous and irresponsible.

(Source: Gulf Today)

(Picture: Iraqi Cabinet)

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KRG Statement on Kirkuk Oil Fields

KRG statement on recent events at oil facilities and infrastructure in Makhmour district

This morning, members of the Kurdistan Regional Government (KRG) and Kirkuk Oil Protection Forces moved to secure the oil fields of Bai Hassan and the Makhmour area, after learning of orders by officials in the federal Ministry of Oil in Baghdad to sabotage the recent mutually-agreed pipeline infrastructure linking the Avana dome with the Khurmala field.

The nearby Bai Hassan field and the other fields located in Makhmour district are now safely under KRG management. The KRG expects production at these fields to continue normally. Staff at the North Oil Company that previously operated these fields have been informed that from tomorrow they will be expected to cooperate with KRG management. Those who do not want to do so can leave.

The new pipeline linking Khurmala with Avana was designed and constructed with the express purpose of facilitating export from the Makhmour, Avana and Kirkuk area fields through the KRG pipeline network to help increase revenues for Iraqis, at a time of great need and at a time when most of the Iraq-Turkey pipeline is under ISIS control.

The new infrastructure was built and paid for by the KRG, working in full cooperation with officials and engineers at North Oil Company. However, the KRG learned on Thursday that some officials in the federal Ministry of Oil gave orders to a number of NOC staff to cease their cooperation with the KRG and to dismantle or render inoperable the valves on the new pipeline.

The Avana and Makhmour fields have been unable to export since March because the main Iraq-Turkey pipeline has been damaged by terrorist attacks. The main Iraq pipeline lies mostly within territory recently surrendered by the federal government to ISIS.

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