Top Energy Stories

ExxonMobil is attempting to sell its stake in the West Qurna 1 oil field to two Chinese companies, PetroChina and CNOOC, setting an end-April deadline that has prompted fraught negotiations with the Oil Ministry. Under the terms of the technical service contract (TSC) for West Qurna 1, the Iraqi government must approve any sale of a company's stake in the project. But if Exxon leaves, the Oil Ministry wants to replace it with another American company rather than the Chinese buyers that have been lined up. "We all want it to go to Chevron," said Khalid Hamza Abbas, the director general of the state-run Basra Oil Company (BOC). "But Chevron also told us — unofficially, to date — that they are not hugely encouraged to invest in West Qurna 1.... The message was clear: the project economics were unaccommodating." For more details on Exxon's departure and the negotiations over who will take over as operator, read the full story on Iraq Oil Report.

Total is looking for a huge new deal in Iraq. But after signing a Heads of Agreement with the Oil Ministry, the French company is entering a difficult phase of negotiation over the contracts that would govern the multi-billion-dollar, multi-faceted energy investment. In a statement at the end of March, the Oil Ministry confirmed it had reached a provisional framework agreement with the French company for a suite of projects, including the Ratawi gas hub, upstream development of the Ratawi field, infrastructure to supply water to several Basra oil fields, and a solar power plant. But the Heads of Agreement did not specify several key details, according to multiple officials familiar with the deal, and now negotiators are struggling to agree on how various aspects of the project will be financed and the mechanisms by which Total will ultimately get paid — the same topics that resulted in deal-breaking disagreements when the Oil Ministry tried to negotiate a similarly multi-faceted energy deal with ExxonMobil known as the Southern Iraq Integrated Project (SIIP). For a view inside the negotiations, read the full story on Iraq Oil Report.

In a period of major new developments for Basra's oil sector, Iraq Oil Report sat down with Basra's oil chief for an insightful interview. As the director general of BOC, Khalid Hamza Abbas has a keen appreciation for what Exxon's departure would mean for the West Qurna 1 oil field, as well as the importance of the infrastructure that Total might build if its Heads of Agreement leads to binding contracts. He also spoke about plans for further developing the super-giant Majnoon and other state-operated fields in Basra. Read the full transcript here.

Sinopec won a bid to develop the Mansuriya gas field, the Oil Ministry announced Tuesday, after years of contractor problems at the field. The deal aims to provide Iraq with badly needed feedstock for power generation and could help reduce the country's dependence on gas imports from Iran, which has been a persistent diplomatic headache as Baghdad manages sanctions-related tensions between Washington and Tehran. The field will ultimately produce 300 million standard cubic feet per day (scf/d), according to a statement from the Oil Ministry, with a short-term target of 50 million scf/d. For more details on the contract model and the fraught history of Iraq's efforts to develop the field, read the full story on Iraq Oil Report.

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Almost every politician and government official in Iraq acknowledges that corruption is a huge problem, including at oil fields, but they are rarely willing to provide hard evidence of specific incidents. That's largely because so many people are tainted. Anyone with power has participated to some extent in a patronage-based system that rewards leaders for channeling money, jobs, and favor to their parties and supporters — so anyone who tries to combat systemic corruption would likely harm their own interests and suffer retribution. This ecosystem of corruption is so impenetrable that it has ensured impunity even in cases that have drawn high-profile international scrutiny and investigations. For example, the UK's Serious Fraud Office has convicted four people of paying over $17 million in bribes to secure contracts in Iraq in 2007, but the alleged Iraqi recipients of those bribes — including two former oil ministers — have totally avoided accountability. In this context, a recent high-profile corruption bust in Nassiriya is all the more surprising. Ahmed Jabbar Abdul-Razzaq, licensing chief at the Gharraf oil field, operated by Malaysia's Petronas, is now facing at least one charge of bribery after he was caught by officers of the Iraqi National Security Service with $100,000 in cash. What explains this rare moment of apparent accountability? Read the full story on Iraq Oil Report.

Families of martyrs who died while serving in Iraqi paramilitary groups are growing disenchanted. The groups, operating under the government's al-Hashid al-Shabi (Popular Mobilization) program, had promised compensation to martyrs' families. But even though the families are publicly celebrated, they are privately expressing feelings of betrayal because they have not received adequate payments, according to Louisa Loveluck and Mustafa Salim, reporting for the Washington Post. The government's Hashid Commission is supposed to distribute money from the Iraqi budget to the families of the war dead, but there is little accountability around where the money actually goes. The complaints have the potential to shape public opinion of the Hashid, which is already complicated. While many Iraqis celebrate the role that Hashid paramilitaries played in the war against the self-proclaimed Islamic State (IS) militant group, many also regard some of the most powerful groups with increasingly deep suspicion, given the role they have played as enforcers tied to Iraqi political parties suppressing dissent and supporting a corrupt status quo.

Iraqis are entering the Muslim fasting month of Ramadan with a feeling of dread because of the rising prices of basic goods. For example, a bottle of cooking oil has gone up to 2,500 dinars from 1,500 dinars, according to AFP, and imported goods have become more expensive because of the recent devaluation of the Iraqi dinar. AFP reports that 16 million people out of Iraq’s population of about 40 million are living under the poverty line, and unemployment — which was untenably high before the covid-19 pandemic — has only grown worse. Haider, 32, told AFP that "Ramadan fills me with dread. We need a lot of things for the house and new clothes for the children." Abu Ahmad, also 32, told AFP, "I'm not going to be giving big dinners at my place, so as not to spread Covid… but also, because I can't afford it."

Iraq has a crystal meth problem. The UN Office on Drugs and Crime said that crystal meth has now become the main drug of concern in Iraq, as Iraqis are increasingly using it to escape the stresses of rampant unemployment, crumbling infrastructure and institutions ravaged by corruption. Reporting for the Independent, Bel Trew writes that crystal meth used to be smuggled over the border from Iran, but is now being manufactured in laboratories inside Iraq. The trade is reportedly run by powerful gangs in Basra. Those with addiction issues are also overwhelming Iraq’s criminal justice system. One prison in Baghdad was at full capacity with 217 crystal meth addicts and dealers, "the inmates lying crammed side by side in cells." Health practitioners worry the drug has become even more dangerous during the pandemic because it leaves the body’s defenses weak and therefore more susceptible to covid-19. One individual with addiction issues told Trew that he is a laborer and started taking crystal meth "because we have a hard life…. It transports you to another, better world. You don’t care."

A kangaroo court in Iraqi Kuridstan has sentenced three journalists and two activists to prison. "The proceedings in the Erbil Criminal Court were marred by serious violations of fair trial standards as well as high-level political interference," according to Human Rights Watch, releasing preliminary findings from an investigation. The defendants were arrested after criticizing the semi-autonomous Kurdistan Regional Government's (KRG) inability to pay public-sector salaries on time — a major political vulnerability for the ruling Kurdistan Democratic Party (KDP), which has a well established history of violently suppressing dissent in its territorial strongholds. The defendants were not charged with libel or unlawful assembly. Rather, prosecutors accused them of acting as spies, "to infringe on the security, stability, and sovereignty of government institutions." Those charges relied on dubious and circumstantial evidence, according to Human Rights Watch:

The judge and prosecutor repeatedly mentioned information from “secret informants” who did not appear in court that the defendants were spies. Since they did not appear in court, there was no opportunity for the defense to cross-examine them. Both sources who were at the trial said that an Asayish officer who was not part of the prosecution team would occasionally stand and raise his hand, after which the judge would allow him to present new evidence that the defense had not previously seen. The judge did not allow the defense to cross-examine him.

Given the egregious violations of due process documented by Human Rights Watch, the convictions do not seem to credibly establish any real guilt among the defendants. They do reflect a deficit of confidence among Kurdistan's ruling elite, who appear to be lashing out against a type of criticism that would be celebrated in a healthy democracy.

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