Top Energy Stories

Iraq's state-run North Oil Company (NOC) issued a statement on May 14 accusing the semi-autonomous Kurdistan Regional Government (KRG) of deploying armed forces to control a handful of oil wells along its disputed boundary with federal Iraq. The KRG has denied the accusations, but the controversy still has the potential to aggravate tensions with Baghdad that were already running high after the Federal Supreme Court issued a February ruling that undermined the legal foundations of Kurdistan's oil sector. In interviews with Iraq Oil Report, two NOC officials said the May 14 statement had been prompted by an incident earlier that day at three oil wells that had been inactive for decades near Lheban village in the Sargaran sub-district, about 40 kilometers northwest of Kirkuk city. The NOC officials said a flare was burning near the long-dormant wells, presumably to dispose of associated gas and other byproducts from newly revived crude oil production. “The [Kurdish technical] team was apparently running some sort of test on one of the wells, which produced the flare,” one NOC official said. “An NOC team spotted the flare and attempted to inspect it, but they were stopped by a Peshmerga force.” Read the full story on Iraq Oil Report.

Iraq's federal government and Kurdistan region produced a combined 4.56 million barrels per day (bpd) of crude oil in April, just below the 4.59 million bpd produced in March. According to field-by-field data compiled by Iraq Oil Report, supply from fields under Baghdad’s control averaged 4.11 million bpd in April, slightly below the 4.14 million bpd in March. Output from KRG fields held steady at about 455,000 bpd. Production jumped significantly at several southern fields operated by international oil companies, but those were more than offset by lower production from state-operated fields in Basra. Read the full story on Iraq Oil Report.

Iraq's Oil Ministry intervened to stop Lukoil from selling part of its West Qurna 2 stake to Sinopec. The move was part of Iraq's broader strategy to limit its reliance on Chinese investment in the oil sector. Sarah McFarlane and Aref Mohammed report for Reuters:

China is among the biggest buyers of Iraq's crude and Chinese state firms have built up a dominant position in its oil industry.

But when Lukoil notified the government last summer that it was considering selling some of its stake in West Qurna 2 to Sinopec, the oil minister intervened, people familiar with the matter said.

It has not previously been reported that Sinopec was the potential buyer of Lukoil's stake. The Chinese company did not respond to a request for comment.

To encourage Lukoil to stay, Iraq offered a sweetener, a person with direct knowledge said.

A few months after Lukoil signalled it was considering a sale, Baghdad finally approved its plan to develop a field known as Block 10, where the Russian company had discovered an oil reservoir in 2017. Afterwards, Lukoil dropped the idea of selling its stake in West Qurna 2, the source said.

How To Navigate Iraq's Business Environment

A message from Iraq Britain Business Council (IBBC):

International and regional companies operating in Iraq need good advocacy, insights, and support to navigate Iraq’s business environment. IBBC has many years of successful operations on behalf of our members, with strong Governmental and supply chain contacts to enable and promote your business. Why not apply for membership and attend our international London and Dubai conferences open to non-members?

Register for our upcoming IBBC Spring Conference at the Mansion House, London on May 24 via our website here.

IBBC also runs trade missions to Iraq, at least three events a month in the UK, Iraq and MENA region, special member away weekends, dinners, and meetings with Iraqi officials in UK and Iraq, and regular advisory papers on economics and political economy of Iraq. We are Iraq’s International business network with a strong anchor in the UK, and we welcome reputable businesses from all sectors, including especially Education, Training and Heritage, Professional Services, Energy, Tech, General Trading, Construction and Finance.

Email london@webuildiraq.org for further information.

Interview of the Week

Electricity Minister Adel Karim spoke with Iraq Oil Report about the Iraqi government's efforts to boost power supply in time for summer — and the obstacles standing in their way. One major problem is a recent ruling by the Federal Supreme Court, which limits the current caretaker government's power, including likely preventing it from paying Iran for new gas supplies. “I don't know, maybe they [Iran] will cut the gas, and we would lose around 8,000 MW,” Karim said. He also gave updates on various solar power projects that are currently being negotiated, as well as deals to import power from Turkey and GCC countries. A full transcript of the interview is available on Iraq Oil Report.

More Iraq News

AFP: Trawling Iraq's threatened marshes to collect plastic waste

Iraq's vast swamplands are the reputed home of the biblical Garden of Eden, but the waterways are drying out and becoming so clogged with waste their very existence is at risk, activists warn.

"For 6,000 or 7,000 years the inhabitants have protected the marshes," said Raad al-Assadi, director of Chibayish Organisation for Ecotourism, who this week began work on a boat to try to clear some of the worst areas of trash. "But we have reached a stage where the marshes are threatened with extinction."

... After decades of brutal war, Iraq lacks structures for the collection and disposal of waste, and 70 percent of its industrial waste is dumped directly into rivers or the sea, according to data compiled by the United Nations and academics.

The UN Committee against Torture has reiterated concerns about "continued reports of torture or ill-treatment in detention facilities" in Iraq. According to the UN, the committee "observed that the existing mechanisms to investigate the acts of torture and ill-treatment committed by officials do not effectively hold the perpetrators to account. The Committee urged the State party to immediately address the impunity issue and adopt measures to ensure accountability in practice."

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