Oil is one of the most important pillars of economic development in Iraq, which feeds all its vital aspects, and is a strategic material of utmost importance in the present and future of Iraq.
Iraq plans to increase oil production and export it, increasing the production of oil fields in Kirkuk to one million barrels per day, as confirmed by Iraqi Oil Minister Jabbar Luaibi.
The Iraqi Oil Ministry is witnessing clear progress in its performance by its independent oil expert Jabbar Luaibi, which has been positively reflected on the Iraqi economy, where Laiibi has visited oil fields of Bai Hassan and Afana, and ordered to accelerate the work of repair and maintenance to resume work soon.
In the same context, the Iraqi oil marketing company “Sumo” signed an agreement with the Iranian side in Baghdad to export oil from the fields of Kirkuk to Iran, where he said the agreement is initial between the two sides, and will be exported from Kirkuk fields to Iran, an average of 30-60 thousand barrels Per day can be increased by tankers until the completion of the extension of an oil pipeline for this purpose.
The Iraqi side will transport oil through trucks to the joint border point between the two countries near the province of Kermanshah, while the Iranian side to receive it across the common border in southern Iraq.
Luabi pointed out “The agreement will contribute to the addition of a new export port for Iraq to the disposal of Kirkuk oil and achieve economic feasibility of Iraq and strengthen economic relations with neighboring countries, adding that the initial agreement will be followed by signing during the coming period on the final contract with the Iranian side after agreement on some technical and operational issues, stressing Iraq’s keenness to promote equal relations with neighboring countries.
Luaibi added that oil is a national wealth that the public and private sector should make use of in providing a real opportunity for development in the comprehensive civilized sense, especially in the economic aspect.
One of the Iraqi government’s plans for economic development is the establishment of strategic projects that will enhance the prospects for bilateral cooperation with Turkey, Arab countries and other countries that share common interests with Iraq.
Oil Ministry spokesman Assem Jihad said the Iraqi oil ministry had asked the Kurdish authorities on Nov. 2 to allow Baghdad to use the region’s pipeline to export Kirkuk crude but had not yet received a response, noting that exports from the Kirkuk fields had been stalled since Iraqi forces have retaken Kurdish fields in October 2017.
On the other side, Iran is preparing to receive crude exports from the fields of Kirkuk and is waiting for the arrival of its first shipments within days, which are estimated at 15 thousand barrels of oil per day and will gradually increase to 60 thousand barrels per day, according to an official source in the oil sector.
This is the first time that Iraq has agreed to divert the course of crude oil exports from Kirkuk fields to Iran.
The secretary-general of the Iran-Iraq Chamber of Commerce, Hamid Hosseini, said Baghdad and Tehran agreed to revive a project to build a pipeline from Kirkuk fields to central Iran and then to ports on the Gulf.
He added that Iran wanted to build a pipeline capable of transporting up to 650,000 barrels per day of Kirkuk oil to meet the needs of its domestic refineries and for export. The pipeline will replace the pipeline that carries oil from northern Iraq to the Turkish port of Ceyhan on the Mediterranean and from there to Europe.
The project is a blow to Turkey’s ambitions to become an energy hub for Europe and a sign of the failure of US policy to prevent further economic rapprochement between Iraq and Iran.
The oil ministry of Iran said it was working to transfer the Kirkuk oil to 4 Iranian refineries, namely Carmashah, Arak, Tehran and Tabriz. “The capacity of the Kramahah refinery is 25,000 barrels of oil per day. A part of oil is secured in Kermashah and the other in southern Iran , The refinery will grant the equivalent of 280 billion riyals to the private sector.
The Arak refinery, which belongs to the Iranian National Oil Company, can produce 250,000 barrels of oil per day. Iran is seeking to launch the largest gasoline project in the refinery, but the production of high-quality gasoline needs good oil.
And that the Tehran refinery can produce 235 thousand barrels of oil per day, where the crude oil is transported from southern Iran to the refinery via pipelines.
Tabriz refinery produces 110 barrels of oil per day, and oil is also supplied to the refinery from southern Iran via pipelines.
The Iraqi Oil Marketing Company has already announced that “the oil is only exported to the refinery of Kermanshah, and is scheduled to be transferred 15 thousand barrels of Kirkuk oil per day to Kermanshah by tankers.”
The Iraqi and Iranian oil ministries announced last July that “they reached an agreement to build a pipeline to transport oil from Kirkuk, and for the success of this project, it was needed to control the oil wells and fields in Kirkuk.
The Kirkuk province has a reserve of oil of nine billion barrels, while the production capacity of Kirkuk wells and fields to 400 thousand barrels per day, and Kirkuk oil was exported to Turkey through the Kurdistan – Ceyhan pipeline, before the events of 16/10/2017.
The Iraqi Oil Ministry said that “part of the oil produced in Kirkuk is exported, while the other part is returned to Iraq from the south after liquidation.”
The Ministry of Oil has made important leaps in the production of crude oil, under the policy of its minister to achieve real development in this important sector, and the optimal investment of gas and a very higher rate than it was and work to conclude agreements with international companies to invest gas.
The ministry is working to stop the burning of gas by the middle of 2021, which achieves financial returns that maximize the federal treasury by more than $ 6 billion annually, as well as improving the environmental and health impact of the areas surrounding oil fields.
Shatha Khalil
Economic unity
Rawabet Center for Research and Strategic Studies