Iraq to Build 5 New Refineries

By John Lee.

The Iraqi Ministry of Oil has reportedly announced that it will select a number of international investment companies to build five new refineries around the country:

  1. Kirkuk with a capacity of 70,000 barrels per day (bpd);
  2. Wasit capacity of 140,000 bpd;
  3. Nasiriyah capacity of 140,000 bpd;
  4. Basra card 140,000 bpd; and
  5. al-Faw capacity of 300,000 bpd.

According to Asharq Al-Awsat, the Ministry is financing Karbala refinery which is about 78 percent completed, and once it is fully constructed, it will provide about 9 million liters per day of high-quality gasoline, in addition to various oil derivatives in accordance with international standards.

(Source: Asharq Al-Awsat)

(Pictured: Baiji Oil Refinery)

Confusion over Iran-Iraq Oil Swap

By John Lee.

Iraqi Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] (pictured) has contradicted a recent report originating from Iran’s oil ministry news agency Shana, claiming that the Iran-Iraq oil swap had started.

Reuters quotes the minister as saying that implementation of the agreement has been delayed due to “logistical issues“.

(Source: Reuters)

Disputed Election Results Threaten Conflict in Kirkuk

By Mustafa Saadoun for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News

On May 30, the Independent High Electoral Commission of Iraq annulled votes cast at more than 1,000 of the country’s polling stations, including 186 stations in Kirkuk, a city that has faced political unrest among its three social components — Arabs, Kurds and Turkmen — since the elections on May 12.

On the same day, Jan Kubis, the head of the United Nations Assistance Mission for Iraq, talked during a meeting of the United Nations Security Council in New York, where he noted reports of electoral fraud and said that Kirkuk was “one of several hotspots” of tension over the election results, adding that the situation there continues to be “volatile.”

Hundreds of members of the Iraqi Turkmen Front in Kirkuk have staged a sit-in surrounding the warehouses where the governorate ballot boxes are being kept. This has prevented the electoral commission staff from retrieving the ballot boxes despite being accompanied by a counterterrorism force.

According to statements from the commission, the boxes from some polling stations in Kirkuk remain in the warehouses and have not been transferred to the Iraqi capital because of the sit-in, which is headed by parliamentarian Arshad Salhi. “There are armed men among the protesters near the warehouses,” the electoral commission’s statement said.

Al-Monitor secured a copy of a May 30 press statement by head of the electoral commission Riad Badran. The statement said, “The Kirkuk Election Office was unable to reach the ballot boxes because of the gathering of some groups affiliated with certain political parties.”

There are concerns over the possible breakout of a conflict between different ethnicities in Kirkuk, which is what deputy head of the Turkmen Front in Kirkuk Hassan Toran warned against.

“Not responding to the demands of the Turkmen to manually recount the votes could ignite a crisis in the governorate,” Toran told Al-Monitor.

Toran, who is a member of the current Iraqi parliament, accuses the Patriotic Union of Kurdistan (PUK) — which is led by the two sons of the PUK’s late leader Jalal Talabani, Qubad and Bafel — of “vote-rigging” in Kirkuk.

“President Fuad Masum is defending the false results and using his position for partisan purposes,” Toran said in a jab at Masum, who requested the federal court decide on the annulment of some votes cast.

On May 30, Masum said that annulling some poll results would be “unconstitutional.” Masum’s position came less than 24 hours after the PUK — the president’s party — rejected the proposal of having judges oversee the manual recount of votes.

Kurds indirectly accuse members of the Turkmen Front in Kirkuk, who are protesting against the election results, of “conspiring” against the peaceful coexistence in the governorate. PUK Bloc parliament member Shwan Daoudi went as far as to draw comparisons between this sit-in and the protests in the Anbar province in 2012-13, which were part of a civil conflict from which the Islamic State emerged.

In reference to the Turkmen Front, the PUK — which emerged with six seats in Kirkuk — has accused “political parties and militias” of storming into the warehouses where the ballot boxes are stored in Kirkuk.

“The head of the electoral commission office in Kirkuk handed the keys to the warehouses to the armed militias,” Daoudi said during a press conference May 30.

Arabs in Kirkuk also joined the protests against the election results. Arab political figures there believe the PUK has rigged the vote in the governorate because it seeks the return of peshmerga forces to Kirkuk.

Kirkuk Gov. Rakan al-Jabouri, who belongs to the Arab Coalition that came in second in the governorate after securing three seats in the future parliament, accused the electoral commission of covering up the fraud and vote-rigging in Kirkuk elections.

The Arab group in the Kirkuk Governorate Council warned of a conflict that may elevate the crisis in the governorate to an “unknown” state because of the results of the current elections. All of these serious repercussions indicate that there is a crisis looming in Kirkuk as long as the integrity of the elections remains in question.

“The crisis in Kirkuk is very serious, as it is related to the size of the administrative representation [of the different components] in the governorate. Turkmen believe that their representation rights are being rejected by the Kurds,” Falah Mashaal, the former editor of state-owned al-Sabah newspaper, told Al-Monitor.

“Should the situation remain at a standstill, the crisis could shift down a conflictual path and unprecedented ethnic escalation, leading to an armed conflict that would end the relative calm that has been ongoing in the governorate for years,” he added.

The international dimensions of the dispute only compound the crisis. Turkish President Recep Tayyip Erdogan also has concerns about the election’s repercussions, as was evident in his recent contact with the leader of the Sadrist movement, Muqtada al-Sadr, indicating that any potential conflict between Kurds and Turkmen will also include Arabs.

Iran Starts Oil Swap with Iraq’s Kirkuk

Iran started swapping oil with Iraq’s Kirkuk on Sunday, after the two neighbours sorted out the logistic issues that were preventing the swap’s startup.

According to the CIF-based swap deal, Iran receives 30,000 to 60,000 bpd of oil from the Kirkuk oil fields in northern Iraq to an Iranian refinery across the border via tanker trucks, in exchange for oil for southern Iraq.

On Sunday, the tankers offloaded their cargoes at storage tanks in Iran’s Darreh Shahr, the western province of Ilam, which were installed in the city by the National Iranian Oil Products Distribution Company (NIOPDC) for the purposes of the swap operation.

The oil is to be fed to Iranian refineries. The swap agreement is subject to renegotiation.

Based on cost, insurance and freight (CIF) sale terms, seller must pay the costs and freight includes insurance to bring the goods to the port of destination.

(Source: Shana)

Iran Starts Oil Swap with Iraq’s Kirkuk

Iran started swapping oil with Iraq’s Kirkuk on Sunday, after the two neighbours sorted out the logistic issues that were preventing the swap’s startup.

According to the CIF-based swap deal, Iran receives 30,000 to 60,000 bpd of oil from the Kirkuk oil fields in northern Iraq to an Iranian refinery across the border via tanker trucks, in exchange for oil for southern Iraq.

On Sunday, the tankers offloaded their cargoes at storage tanks in Iran’s Darreh Shahr, the western province of Ilam, which were installed in the city by the National Iranian Oil Products Distribution Company (NIOPDC) for the purposes of the swap operation.

The oil is to be fed to Iranian refineries. The swap agreement is subject to renegotiation.

Based on cost, insurance and freight (CIF) sale terms, seller must pay the costs and freight includes insurance to bring the goods to the port of destination.

(Source: Shana)

BP signs Contract to Develop Kirkuk Oil

By John Lee.

The Ministry of Oil has announced that BP has signed a contract to develop the Kirkuk oil fields.

According to Reuters, the deal with the North Oil Company (NOC) will see BP will boost output capacity from the six fields in the Kirkuk region to more than 1 million barrels of oil per day (bpd), three times current capacity.

In the past, BP has provided technical assistance to help develop the Kirkuk fields.

(Sources: Ministry of Oil, Reuters)

Power-sharing deal could end dispute over Kirkuk Elections

By Omar Sattar for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News

For the first time since 2005, Kirkuk governorate in Iraq will hold elections Dec. 22 to select its local governing council. Parliament included the multiethnic province of the Kurds, Arabs and Turkmens in the provincial election law approved March 3.

The decision follows an agreement among the three groups’ representatives in parliament and was greatly welcomed by all segments, especially the Kurds, who for years have demanded that elections be held in Kirkuk. Khalid al-Mafraji, an Arab parliament member from Kirkuk, told Al-Monitor that negotiations took more than a year.

The agreement binds the Independent High Electoral Commission to review voters’ records in coordination with the ministries of Interior, Commerce, Planning and Health. If they aren’t able to review the records before the elections, the commission will be obliged to undertake an audit within six months after the elected council begins its work.

“The most important articles of the agreement relate to sharing power,” Mafraji said. The largest bloc in the election will appoint the governor, and the two deputy positions will go to the other two groups. Moreover, federal positions will be determined by the governorate’s residents, according to party size. The agreement also states that the constitution and the law take precedence over the governorate’s council, parliament and the federal government.

The electoral law will remain in effect for four years. Shakhawan Abdullah, who represents Kirkuk in the Kurdistan Democratic Party in parliament, told Al-Monitor, “The agreement between the three components of Kirkuk’s governorate will be effective for only one electoral round, and the elections will not be held in the same way in four years’ time.”

Abdullah believes the provincial election law presents a good opportunity to resolve conflicts in the governorate and give it more administrative powers, like other governorates. The governorate has gone without elections all these years for various reasons. Oil-rich Kirkuk is a disputed area claimed by both the central government in Baghdad and the Kurdish Regional Government (KRG) in Erbil. Its situation is also unique because of its ethnic diversity and disagreements among them.

The constitution stipulates the conflicts in the governorate must be normalized in three stages. The first stage is to allow the return of displaced Kurds and Arabs who emigrated during the regime of deposed Iraqi President Saddam Hussein.

The second stage is to carry out a population census, and the last stage is to hold a general referendum on whether Kirkuk should become a new region, like the autonomous Kurdistan Region, or be annexed to the Kurdistan Region.

All of those procedures were to be carried out before 2007, which wasn’t done. This caused political conflict, partly because of the disagreement between Baghdad and the KRG over having elected authorities with the right to control the governorate’s future.

The Kurdistan independence referendum in September, which included Kirkuk, ended in crisis, and the central government subsequently took over the governorate and cut the Kurds’ authority. The coming elections will give Baghdad and the KRG a chance to solve the current dispute over Kirkuk’s administration.

However, the most important problem that may affect holding elections in Kirkuk is the agreement on a unified record of voters, which may raise doubts about the election results. Iraq hasn’t conducted a census in decades. Ali Khalil, the Arab bloc member of the governorate council, told Al-Monitor that Arabs weren’t in favor of the agreement’s clause that allows an audit to be delayed until after the elections if records can’t be reviewed before then.

“How would we elect a new governorate council while doubting voters’ records at the same time?” Khalil asked.

The Kirkuk local elections will provide a chance to reduce tension in the governorate, a good way to determine the real size of each of the three ethnic groups and a way to form a more legitimate administration — but it could lead to negative results. If one segment is counted and found to have significantly fewer representatives than before, that segment might refuse to accept the election results.

Iran says IS Resurgence could Hamper Iraq Oil Deal

By Adnan Abu Zeed for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

The Islamic State (IS) appears to be staging a comeback in parts of Iraq, which could endanger the country’s oil deal with Iran.

Hamid Hosseini, the Iranian secretary-general of the Iran-Iraq Chamber of Commerce, warned in late February that the countries’ plan can’t be implemented fully because of security concerns. The countries signed a bilateral agreement in July 2017 to install a pipeline to transport Kirkuk’s crude oil to Iran to be refined. In the meantime, the oil is being transported by trucks, which are vulnerable to attacks.

The Kurdish military, or peshmerga forces, took control of Kirkuk in 2014 after Iraqi forces fled as IS swept through the area. But in October, Iraqi forces reclaimed the oil-rich territory from the Kurds.

IS has been blamed for numerous recent attacks in the area. On Feb. 19, IS fighters ambushed a convoy of the Baghdad government’s Shiite Popular Mobilization Units (PMU) in the Hawija district, southwest of Kirkuk, killing 27. On Feb. 27, gunmen had targeted the Turkmen Front with a rocket shell. Since Hosseini’s warning, security has deteriorated both in Kirkuk and Hawija. Local authorities have called for military enforcement.

Masrour Barzani, the head of Kurdistan security, stressed that the “IS offensive in Kirkuk province is not coming to an end anytime soon.”

These developments cast clouds of uncertainty over any investment attempts in Kirkuk city, particularly in the oil sector. Yet Rakan al Jibouri, Kirkuk’s Baghdad-appointed interim governor, doesn’t agree, though he acknowledges “there are unsecured areas.”

“This won’t obstruct the development of oil facilities and exportation projects, as the agreement signed by the [Iraqi] Ministry of Oil on Feb. 8 to construct a new refinery clearly demonstrates otherwise,” Jibouri told Al-Monitor.

Ministry spokesman Asim Jihad also told Al-Monitor the present security situation won’t affect Kirkuk oil investments. “The Iranian official’s [Hosseini’s] statement reflects his state’s point of view. The Iraqi side is committed to upholding the agreement as long as Iran is not backing down.”

Jihad said the contract provides for exporting 30,000-60,000 barrels of oil a day via trucks from Kirkuk fields to the border zone near Kermanshah, Iran.

“Work is still underway to install an oil pipeline to Iran with a capacity of over 250,000 barrels [per day],” Jihad added. “Moving forward, we are going to stop using trucks, which are more exposed, require more security measures and cost more.”

Moreover, one of the reasons behind the agreement was “Iran’s need of large amounts of Iraqi oil for refinement purposes, as well as for complementary industries in Iranian areas across [the border].” Jihad said Iraq will also benefit because it will be able to export oil abroad at lower costs.

All that said, however, Jihad noted the Oil Ministry has no authority to assess the security situation: “The ministry is only concerned with the technical end of things.”

Iskander Witwit, a member of the Iraqi parliament’s Security and Defense Committee, contradicted Hosseini’s evaluation. “We haven’t recorded any indications of oil investments in Kirkuk being too risky,” Witwit told Al-Monitor.

He said the Kurdish peshmerga wants “security anarchy so that the oil trade project between Iraq and Iran fails, because the [Kurdistan Regional Government (KRG)] wants oil to be transported through its soil.” The KRG, he said, “seeks to stop all oil and economic projects as long as Kirkuk is not under its control.”

Witwit also challenged a statement by Hosseini that security is at risk because Iran doesn’t have X-ray machines to inspect trucks coming from Iraq.

“This is an irrational reason,” Witwit said. “Truck security is both countries’ responsibility, and oil-transporting trucks are registered and take off from secured points to their designated destination. Therefore, they can’t possibly be used for any other purposes, considering the strict security measures in oil zones. Also, army and PMU troops are dispatched throughout the route used by the trucks.”

Meanwhile, it appears Iraq is moving ahead to expand its export options. Aziz Abdullah, the head of the Iraqi parliament’s Oil and Energy Committee, told Al-Monitor, “Talks between the [Iraqi] federal government and the [KRG] government on transporting oil via Ceyhan [Turkey] pipe have reached advanced stages.”

Ahmad al Askari, the head of the Energy Committee of the Kirkuk Provincial Council, believes those talks reflect Iraq’s “new direction not to solely rely on one window that could be shut on account of political disagreements.”

Speaking to Al-Monitor, Askari added, “Political and security concerns compelled Iraq to consider more than one means of exporting Kirkuk oil. Iraq started a pipeline to Turkey’s Ceyhan port that doesn’t go through the [Kurdish] region, besides the one that does go through the region. In addition, trucks have been moving to Iran since Iraqi forces took over Kirkuk.”

GTC to Provide Gasoline Complex for ABG

Houston-based GTC Technology is providing a gasoline production complex project for ABG (Al Barham Group Companies) for the refining and distribution of petroleum products.

The grassroots complex will process 12,000 BPD of straight run naphtha (SRN) and untreated natural gasoline (UNG) blend feed to produce high octane gasoline meeting Euro-V specifications. The plant will be located in the city of Kirkuk, in northern Iraq and is supported by the Iraqi Oil Ministry.

The project consists of three units – a naphtha hydrotreater including a naphtha splitter, a C5/C6 isomerization unit, and a heavy naphtha reforming unit.

The project will be the first to utilize a network of three dividing wall columns (DWCs) in a single gasoline complex. The first application utilizes GT-LPG MAX®, a process developed by GTC using Uniting Wall Column (GT-UWC℠) technology which combines adsorption and distillation in the same column to optimize the overall operation and enhance C3+ recovery. The second application of DWC technology is a three-cut naphtha splitter column capable of producing three high purity fractions. The third application is a super deisohexanizer (Super DIH) combining the conventional depentanizer and deisohexanizer columns.

GT-LPG MAX® will collect and process LPG-rich streams, both vapor and liquid, from different stabilizers within the complex to produce on-spec LPG product at one central location (also within the complex) – thereby, eliminating duplicate equipment across different units. The unit will utilize GTC’s proprietary tower internals for the three DWCs as well as specialty heat transfer equipment to maximize productivity and minimize plot space.

Ilya L. Aranovich (pictured), GTC Licensing Manager, said:

We are pleased to work with ABG to provide our full suite of naphtha processing technology and advanced distillation expertise.

“We are confident that ABG will enjoy the robust, reliable performance of the hydrotreating, isomerization and reforming process designs which are optimized using the latest advanced distillation integrated solutions to maximize the return on investment of the project.

“We are excited to extend our track record of providing leading-edge solutions to improve the economics of naphtha processing facilities in the Middle East and around the world.”

(Source: GTC Technology)

Iraq signs Deal for Kirkuk Refinery

By John Lee.

Iraq’s Oil Ministry has announced that it has signed an agreement to build a 70,000-bpd oil refinery near Kirkuk.

The statement said the refinery would be built by “Rania international company“, which Reuters refers to as Ranya International, which it says is based in Iraqi Kurdistan.

The plant will produce high octane gasoline and other petroleum products.

(Source: Ministry of Oil, Reuters)