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 Iraqi State Organization for Marketing Oil (SOMO) announced Nov. 2 that it is arranging with Turkey to allow SOMO to sell Iraqi crude from the disputed territories through the pipeline from Kirkuk to the Ceyhan Turkish port.
The Kurdistan Regional Government (KRG) used to export about 500,000 barrels per day independently through Ceyhan before the Baghdad operation to retake the disputed areas in mid-October.
It was not long after the Iraqi army took over the oil fields in Kirkuk in a military operation to “impose security,” as described by Prime Minister Haider al-Abadi, that the federal government resumed oil pumping operations.
The operations started about a week after the clashes between governmental forces and Kurdish peshmerga forces. Meanwhile, the Ministry of Oil rushed to increase oil production, and on Oct. 23, the ministry requested the help of the British petroleum company BP in increasing production in Kirkuk oil fields to more than 700,000 barrels per day. The ministry also announced the formation of a ministerial committee to advance the oil industry in the province of Kirkuk.
Kirkuk has more than 35 billion barrels in oil reserves and a production capacity ranging from 750,000 to 1 million barrels per day. The federal government seems determined to control the oil sources, especially in Kirkuk and the disputed areas. In light of this, on Oct. 19, the Iraqi minister of oil warned all countries and international petroleum companies against signing contracts with any Iraqi party without first consulting the federal government.
By John Lee.
Iraq’s State Oil Marketing Organization (SOMO) has reportedly confirmed that talks are ongoing between Baghdad and Tehran to export crude oil from Kirkuk to the Kermanshah refinery (pictured) in Iran.
SOMO Director Alaa al-Mussawi is quoted as saying that trucks would initially supply 15,000 barrels of crude oil per day (bpd) to the refinery, increasing to 25,000 bpd.
Kirkuk oil has until recently been exported to international markets via the Ceyhan port in Turkey.
(Source: Kurdistan 24)
By John Lee.
Iraq has replaced the head of its State Oil Marketing Organization (SOMO).
Falah al-Amri [Falah Jasim Alamri, Falah al-Amiri], who has been in the top job at SOMO since March 2006, is to become an advisor on marketing and strategy at the Oil Ministry.
He is to be replaced at SOMO by Alaa Khader Kadhim Yasiri.
(Sources: Ministry of Oil, SOMO)
By Ahmed Mousa Jiyad.
Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.
Debating SOMO Transformation
New important developments pertaining to or initiated by Iraq’s State Oil Marketing Organization (SOMO) surfaced during the last few months; they seemed to be integrated components of what was revealed as SOMO’s unstoppable transformation. They are:
- Partnership with IOCs in activities outside Iraq;
- Offering crude oil through regular spot/auction-trading;
- Contemplating oil-hedging and Change of “marker crude” in the pricing formula for Asian market only.
These initiatives could have real, effective and far-reaching consequences in both directions — positive and negative. Thus, serious, evidence-based and professional debate is urgently needed to address all matters relating to SOMO and its unique status not only for the petroleum sector but also for the entire national economy; signs of discontent with SOMO began to show visibility and generate impacts.
In this brief contribution, our Monitoring, Analyzing and Reporting (MAR) (an ongoing activity covering Iraqi petroleum sector), analyses, first, these new four initiatives and highlights many key questions that have to be addressed and specifies critical issues that require further investigation.
That is followed by discussing transparency, as necessary condition for SOMO transformation, and the paper ends with concluding remarks and suggests the launching of SOMO Transformation Debate and convening a special workshop.
Please click here to download the full report.
Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.