|
Iraqi Kurds refuse to allow oil fields to lie
fallow
13.8.2007
By Susan T.Martin |
|
|
|
August 13, 2007
Sulaimaniyah, Kurdistan region (Iraq), --
It's 10 a.m., the temperature is 107 degrees and
Ahmad Ramses is getting hotter by the minute. And
not just because of the weather.
"We have no idea when the pumps will open," he says,
angrily gesturing at two ancient gasoline pumps that
he and hundreds of other drivers have been watching
since midnight.
"Sometimes we wait too long and get nothing."
Iraq has more oil than most places on earth, but
motorists still sit in mile-long lines to buy
rationed amounts of gas, often of poor quality. The
reasons are many: a shortage of refineries, sabotage
of pipelines, corruption and smuggling. And the
failure to pass an oil law.
For months, the Iraqi Parliament has wrangled over a
package of laws that would govern the development of
Iraq's oil industry and determine a basis for
dividing oil revenues among Iraq's three largest
groups: Kurds, Shiites and Sunnis.
Although the Iraqi Cabinet approved draft
legislation in June, Kurds and Sunnis have rejected
it as giving too much power to a
yet-to-be-established national oil company. Kurds
want greater control over their own fields - not
surprising since they could be some of the richest
in the world. |
Drilling rig at the Taq Taq oil fields at dawn. The
field is located in Kurdistan autonomous region near
the town of Koya, and is about 50 miles east of
Erbil and 74 miles northwest of Sulaimaniyah city |
"It's very high quality," expert Leslie Blair says
of the Kurdish oil found so far. "You can almost put
it in your car."
The Kurdistan Regional Government
passed its own oil law
last week, though it had already signed agreements
with several foreign oil companies.
Among them is TTOPCO,
a joint venture between a Turkish conglomerate and
Canada's Addax Petroleum
that began work in 2005 at the Taq Taq field 75
miles northwest of Sulaimaniyah.
"It's a big deal," says Blair, TTOPCO's general
manager. "Today there are very few countries you can
actually get access to. Venezuela has shut down,
Russia has shut down."
Millions at stake
The risks are great, but so are the potential
rewards.
The Iraqi government estimates that the three
Kurdish provinces in the north contain 25-billion
barrels of oil. That's double the amount thought to
be in Mexico, the world's 11th-biggest oil producer.
No one knows how much oil is in the Taq Taq field,
located in a remote area accessible only by a
teeth-rattling gravel road. The field was discovered
in 1965 but was never fully explored during Saddam
Hussein's era "because there was so much oil in the
south that was easy to get to," Blair says.
The southern oil, though, is of cruder quality and
is in what has become a far more dangerous part of
Iraq.
Since 2005, Blair's team has drilled several wells
at Taq Taq that are producing about 2,000 barrels a
day. The oil is trucked to a small refinery in
Sulaimaniyah that can refine 25,000 barrels daily -
enough to ease fuel shortages for at least part of
the Kurdish region.
It is costing $1-billion to develop the field, and
TTOPCO may spend another $750-million to build a
pipeline that would carry oil to ports in Turkey.
The existing pipeline, which runs from the oil-rich
but violent city of Kirkuk, is frequently blown up
by insurgents.
Despite Iraq's vast potential, Exxon Mobil, BP and
other major companies have steered clear of signing
contracts in the absence of a national oil law that
would protect their interests.
"You have to work under a rule of law," Blair says.
"Companies like us have taken a huge risk and some
of the larger ones can't take that risk. We're not
making any money - it's all outgoing."
It's uncertain if the Kurdish contracts would still
be valid if Iraq's Parliament passes national oil
legislation by September, one of the Bush
administration's benchmarks of progress. But if the
contracts stand, they could be enormously lucrative
for TTOPCO and other foreign firms drilling in
Kurdish areas. They will get a percentage of the
revenues.
Iraqis and war critics have long suspected that the
real reason for the 2003 U.S.-led liberation was to
open the country's oil fields to American and
foreign firms. A recent poll found that 63 percent
of Kurds and other Iraqis would prefer to see their
oil developed by state-owned companies.
But the Kurdish government, which has agreed to
share its oil wealth with the rest of Iraq, has
decided private investment is the best and fastest
way to start making money to pay for other critical
needs.
"Large parts of the economy are not open to private
investment - schools, highways, airports - and
that's where the government should be spending its
money," Blair says. "It could be $100-billion just
to rebuild Kurdistan. Yes, they could develop their
oil fields themselves, but it would take a much
longer time."
sptimes com
Top |
Kurd Net
does not take credit for and is not responsible for the content of news
information on this page
|
® 