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Tehran, Baghdad sign One-Year Oil Swap Deal

Iraqi Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] said on Sunday that a deal signed with Tehran to swap up to 60,000 barrels per day of crude produced from the northern Iraqi Kirkuk oilfield for Iranian oil is for one year.

“This is an agreement for one year and then we will see after that whether to renew it,” Luaibi told reporters in Kuwait City on the sidelines of an Arab oil ministerial meeting, Reuters reported.

The agreement signed on Friday by the two OPEC countries provides for Iran to deliver to Iraq’s southern ports “oil of the same characteristics and in the same quantities” as those it would receive from Kirkuk.

The deal in effect allows Iraq to resume sales of Kirkuk crude, which have been halted since Iraqi forces took back control of the fields from the Kurds in October.

Between 30,000 and 60,000 bpd of Kirkuk crude will be delivered by tanker trucks to the border area of Kermanshah, where Iran has a refinery.

The two countries are planning to build a pipeline to carry the oil from Kirkuk, so as to avoid trucking the crude.

The pipeline could replace the existing export route from Kirkuk via Turkey and the Mediterranean by pipeline.

(Sources: Tasnim, under Creative Commons licence; Iraqi Ministry of Oil)

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New Pipeline to Export Kirkuk Oil via Ceyhan

By John Lee.

Iraq’s Oil Ministry has announced that it will build a new pipeline from Baiji to Fishkabur, enabling Kirkuk oil to be exported again from Turkey’s Ceyhan port (pictured).

Kirkuk’s oil was previously being exported via the Kurdistan Regional Government’s (KRG) pipeline to Ceyhan, but this has been on hold since Baghdad took control of the area.

Plans to rehabilitate Baghdad’s existing oil pipeline to Turkey, which was badly damaged by militants in 2014, have been scrapped.

(Sourced: Ministry of Oil, Rudaw)

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Baghdad “Looks to Take Control of KRG Oil”

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.

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Putin boxed in by Iran, Turkey on Iraqi Kurdish referendum

From Al Monitor. Any opinions here are those of the author, and do not necessarily reflect the views of Iraq Business News. 

Russian President Vladimir Putin had been banking on Iraqi Kurdistan Region President Massoud Barzani.

Over the past year, Russia has invested over $4 billion in the Kurdistan Region’s energy sector, overtaking the United States as the largest investor. By making such a commitment to northern Iraq, Putin was likely counting on both an eventual energy windfall and another card to play as a regional broker at the expense of the United States.

He could count on good, or at least working, relationships with Damascus, Tehran, Ankara, to some extent Baghdad and, with the massive oil and gas venture, Erbil.

What the Russian president had not banked on was that Barzani would go ahead with the independence referendum on Sept. 25 against widespread international and regional opposition. The Kremlin, of course, could not support ethnic separatism, and was probably hoping for a last-minute deal with Baghdad to stave off the vote.

As the prospects of a postponement collapsed, Barzani likely saw Russia’s investment as a hedge against the nearly unified international opposition to its referendum on independence.

Putin, of course, kept up appearances of being in control, but there was no denying the unusual nature of his visit to Ankara on Sept. 28 for consultations with Turkish President Recep Tayyip Erdogan, just three days after the referendum vote.

Erdogan’s position was predictable and blustery, including when he said, “No one has a right to throw our region into the fire,” as Yekaterina Chulkovskaya reports. But Putin sought to dial it down, and instead referred to the Russian Foreign Ministry’s statement, which included the phrase “Moscow respects the national aspirations of the Kurds” and the hope for a “constructive and respectful dialogue, with a view to devising a mutually acceptable formula of coexistence within a single Iraqi state,” as reported by Jasper Mortimer.

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Iraq seeks to collect KRG’s Oil Revenues

Iraqi Prime Minister Haider al-Abadi has hinted that his government wants to take control of revenue generated from Kurdish oil exports.

The measure is the latest of a set of actions taken by Baghdad against the Kurdistan Region for carrying out last week’s referendum that saw a 92-percent vote for independence, the first of which saw a ban in international flights to and from the Kurdish region.

Abadi said in a tweet that his government wanted to pay monthly salaries of KRG employees with money from Kurdish oil sales.  “Federal government control of oil revenues is in order to pay KR (Kurdistan Region) employee salaries in full and so that money will not go to the corrupt,” Abadi tweeted.

The Kurdistan Region has described the Iraqi-imposed flight ban, and other measures as “collective punishment,” that, among others, affect the wounded Kurdish Peshmerga who need medical treatment abroad, and Yezidi survivors of IS atrocities.

Amanj Rahim, the secretary of the Kurdistan Regional Government (KRG), told the Kurdish parliament on September 30 that the oil export through Turkey’s Ceyhan pipeline was going ahead as normal.

Separately, Prime Minister Haider al-Abadi reassured Kurdish citizens they will remain secure even as the government escalates its measure against their region’s government over the recent referendum on independence.

“You are citizens of the first degree, we will not allow any harm to you and we will share our loaf of bread together,” Iraqi Prime Minister Haider al-Abadi said, addressing Kurds via twitter on September 30. “To our people in the Kurdistan region: We defend our Kurdish citizens as we defend all Iraqis and will not allow any attack on them,” Abadi added.

(Source: GardaWorld)

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Post-Referendum Threats And Demands

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.

Iraqi Kurdish Politicians Talk About Post-Referendum Threats And Demands

While many uncertainties remain about Iraqi Kurdistan’s referendum on independence, there is one thing that seems clear to the people on the streets: On the day, the semi-autonomous region felt united in a way that it has not been for a long time.

Part of the reason Iraqi Kurdistan has remained an oasis of relative calm and security, while the rest of Iraq fell apart during the recent security crisis caused by the extremist group known as the Islamic State and earlier, is that the Kurdish people have always considered their ethnicity more important than the religious sect they belong to.

Ethnicity has trumped religion in their case and, despite infighting, has tended to unite locals in this area, with the long-term goal being to form their own nation.

In many other situations recently, the Kurdish have been divided – often between the two zones that basically make up the semi-autonomous northern region, which are run by the two major political parties, the Kurdistan Democratic Party, or KDP, and the Patriotic Union of Kurdistan, or PUK.

Up until the very last minute some of the region’s political parties remained opposed to the referendum. The KDP, the PUK and the Kurdistan Islamic Union had supported the referendum while the Change movement, also known as Goran, and the Islamic Group of Kurdistan wanted it postponed.

Just one day before the referendum though, when it became clear it was going ahead, the Islamic Group of Kurdistan relented and senior members said they would be voting “yes” in the poll.

Even the Change movement, a long-time opposition group in the region that formed on an anti-corruption platform, told members to follow their own consciences. Then the movement also told members they should vote, and that they should vote “yes”.

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Turkey Threatens to Invade Iraq, Cut Off Oil Pipeline

By John Lee.

Turkish President Recep Tayyip Erdoğan (pictured) has threatened to invade Iraq, and said he could cut off the oil export pipeline from Iraq to the Turkish port of Ceyhan, following the vote supporting independence in Iraqi Kurdistan.

“We have the tap,” he said. “It is done once, we close the tap.”

The pipeline typically carries between 500,000 and 600,000 barrels of crude oil per day.

In a strongly-worded speech, Erdoğan said that fighting the Iraqi Kurdish bid for independence was “a matter of survival“.

His Prime Minister, Binali Yildirim, added that Ankara could take punitive measures involving borders and air space against the Kurdistan Regional Government (KRG).

Shares in Genel Energy fell 7 percent in early trading on Tuesday, but had recovered by lunchtime; Gulf Keystone Petroleum (GKP) was down 2 percent, while Norway’s DNO was 5 percent higher.

(Sources: The Independent, Alliance News, Reuters, Yahoo!)

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DNO Joins ExxonMobil on Baeshiqa License

DNO ASA, the Norwegian oil and gas operator, today announced an agreement with ExxonMobil to join the Baeshiqa [Bashiqa, Bashika] license in the Kurdistan region of Iraq.

DNO will assume operatorship of the license with a 40 percent paying (32 percent net) interest, acquiring one-half of ExxonMobil’s position.

ExxonMobil retains a 40 percent paying (32 percent net) interest, the Turkish Energy Company (TEC) its 20 percent paying (16 percent net) interest and the Kurdistan Regional Government its 20 percent carried interest.

Pending Government approval, DNO will drill an exploration well in the first half of 2018 with a second exploration well to follow on a separate structure.

The 324 square kilometer license is situated 60 kilometers west of Erbil and 20 kilometers east of Mosul. ExxonMobil had previously conducted extensive geological and geophysical studies and constructed a drilling pad before work was interrupted due to security conditions in the region.

The Baeshiqa license contains two large, undrilled structures which are expected to have multiple independent stacked target reservoir systems, including in the Cretaceous, Jurassic and Triassic.

DNO currently operates two other licenses in Kurdistan: one contains the Tawke and Peshkabir fields which together produce over 110,000 barrels of oil per day and the other the Benenan and Bastora heavy oil fields which are undergoing further appraisal and development. With three rigs currently deployed, the Company is the most active driller among the international operators in Kurdistan.

Bijan Mossavar-Rahmani (pictured), DNO’s Executive Chairman, said:

“We are pleased to partner with ExxonMobil, TEC and the Government on this exciting exploration opportunity.

“We bring to the project a 10-year record of successful and fast-track operations in Kurdistan, culminating in more than 200 million barrels produced to date.

“Following regularization of export payments and a landmark agreement with the Government to close out our historical receivables, our foot is back firmly on the accelerator.”

(Source: DNO)