Energy and Economic News

Protests at energy facilities in Dhi Qar have shut down the Nassiriya refinery, causing local fuel shortages and other disruptions that highlight political chaos and social instability in the province. The demonstrations have not caused any oil production to be taken offline so far, according to local industry officials, but they do appear to be spreading throughout Dhi Qar and increasingly affecting the energy sector. This week protesters have been blockading not only the refinery, which typically processes about 30,000 barrels per day (bpd), but also the offices of the state-run Dhi Qar Oil Company (DQOC), which manages oil fields in the province, as well as the Oil Products Distribution Company (OPDC) branch office and an Oil Pipelines Company depot. For more details on the political and economic dynamics that have caused the protests — and the potential for resolution or further escalation — read the full story on Iraq Oil Report.

The Sarqala oil field has restarted. A dispute within the Patriotic Union of Kurdistan (PUK) political party led to the shutdown of Sarqala's 30,000 bpd of production on April 1. But party leaders quickly found a solution: arranging for the transfer of a lucrative trucking contract from a company associated with one faction of the party to another company that handles business interests on behalf of the entire party. The episode illustrates the extent to which the institutions of the semi-autonomous Kurdistan Regional Government (KRG) sometimes wield relatively little power compared to the two ruling political parties. Read the full story on Iraq Oil Report.

Iraq is gearing up for more oil drilling. With global oil prices growing stronger, the financial crisis ebbing, and the restraints from OPEC easing, the state-run Iraqi Drilling Company (IDC) wants to put dozens of idle rigs to work. Bassem Abdul Karim Nassir, who was named director general of the IDC last September, gave an update to Iraq Oil Report during an interview at his office in Basra. Read the full interview on Iraq Oil Report.

How To Transport Personnel in a Pandemic

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And to hear directly from FronteraSky President Carlos Barbosa, read his interview with Iraq Oil Report.

International News

The U.S. and Iraq concluded the latest round of talks in their strategic dialogue. They issued a lengthy joint statement on Wednesday detailing the topics discussed, from pandemic-related assistance to the repatration of Iraqi cultural artifacts. The sentence that attracted the most media attention centered on the future of the U.S. military presence in Iraq: "Based on the increasing capacity of the ISF [Iraqi security forces], the parties confirmed that the mission of U.S. and Coalition forces has now transitioned to one focused on training and advisory tasks, thereby allowing for the redeployment of any remaining combat forces from Iraq, with the timing to be established in upcoming technical talks." That said, as Louisa Loveluck noted in a story for the Washington Post, the statement didn't signal much of a policy change.

In a news conference in Baghdad on Wednesday evening, Iraq’s National Security Adviser Qassem al-Araji said that the talks had led to “important progress” in opening the way for American combat troops to leave Iraq. But in practice, the statement’s newly debated description of the U.S. troop presence appeared to be more a restatement of current realities than a strategic shift. The coalition, led from Baghdad by U.S. Marine Brig. Gen. Ryan Rideout, officially transitioned to a formal advisory capacity in July.

With respect to the energy sector, the statement also highlighted some continuity with Trump administration priorities in Iraq, including U.S. support for Iraqi efforts to capture flared gas and diversify its electricity supplies, as well as highlighting the potential role of American companies to participate in those projects.

In their "advisory capacity," RAF and coalition aircraft participated in the biggest anti-IS raid in two years. The UK’s Ministry of Defense said that the RAF took part in a 10-day mission, attacking up to 100 IS cave hideouts near Makhmour, concluding on March 22. Guardian Defense Editor Dan Sabbagh writes that British and other coalition nations are fighting an estimated 10,000 IS guerrillas in Iraq and Syria nearly seven years after Operation Inherent Resolve began. RAF Air Commodore Simon Strasdin said, "We went after, as a coalition, a number of these targets every night for circa 10 days" which amounted "to between 50 and 100 of the targets and complexes." Strasdin said the UK would be involved in operations during 2021. The latest operation follows a pause in RAF air raids and drone strikes in late 2019 and early 2020. The RAF used Typhoon jets during the operation, targeting the caves with Paveway bombs and Storm Shadow cruise missiles.

The Iraqi theater in the war between Turkey and the PKK has grown increasingly deadly. The conflict is now claiming "more Iraqi civilian lives than at any point since a ceasefire broke down in 2015," according to the monitoring group Airwars, cited in a recent report by Bethan McKernan for the Guardian. The end of the ceasefire between Turkey and the PKK heralded a new aggressive foreign policy for Turkey, writes McKernan, "helped in part by its rise as a drone power." Turkish drone operations are "hammering" senior PKK leaders and killing more than ever, but there is "no accountability for strikes that injure and kill civilians." Renewed fighting around Amedi, in Dohuk province, has emptied an estimated 400 villages and killed almost 100 civilians to date, according to the report, with some displaced people forced to return to the conflict area to forage for food. Turkey launched Operation Claw-Eagle against the PKK last summer, followed by operation Claw-Tiger. Drone, jet, helicopter and artillery strikes have targeted PKK positions in the Amedi area, Qandil region, and Sinjar in Ninewa province.

National News

Prime Minister Mustafa al-Kadhimi insists Iraq is making progress in cracking down on armed groups. In a March 28 interview with Asharq TV, Kadhemi said, "We are still struggling in Iraqi society with the issue of uncontrolled weapons. The weapons are sometimes in the hands of armed groups that fought IS for a time, but now they are running wild." His government has "adopted a policy of patience but also of decisiveness" when it comes to using security forces to stop armed groups. At the same time, Kadhimi ruled out the idea of a broad military campaign against militias, saying, "We won’t let Iraq become a theater of war.... Iraq won’t be another Yemen. Never." His remarks highlight the difficult tradeoffs his government faces in trying to rein in militia groups without provoking heavy violence.

Sulaimaniya's LGBT community is "terrified." Reporting for Rudaw, Dilan Sirwan writes that, despite Sulaimaniya's reputation as a relatively cosmopolitan and socially liberal enclave, LGBT people in the city are scared to leave their homes after security forces launched an operation against them. LGBT activist Zhiar Ali told Rudaw that forces from the Asayish intelligence service were arresting people on suspicion of being homosexual, and that "our lives are not safe." Another anonymous source said the Asayish had detained and tortured LGBT people. Sulaymaniya Asayish said in a statement that the arrests were part of a crackdown on prostitution and not directed at any group of people. The arrests come as part of a long history of intimidation, threats, violence and discrimination levelled at LGBT people by the security forces in the Kurdistan region, according to human rights groups. Amir Ashour, the founder of rights organization IraQueer, told Rudaw that the real threat to society "is the oppression, the spreading of misinformation, and arbitrary arrests that were led by the Asayish. They are supposed to uphold the law, but in this case, they were the ones who broke the law and they must be held accountable. No one is above the law." The arrests follow a lawsuit in February filed by Komal MP Omar Gulpi against an LGBT organisation, calling homosexuality a "violation" of public rights and morals.

Oil Companies Face New Regulatory Hurdles

A message from New Frontiers:

International oil companies, oil service companies, and other contractors in Iraq face a major new compliance challenge. The oil sector has long enjoyed a de facto exemption from some Iraqi regulations, including Ministry of Labor requirements associated with social security and work permits. But in September 2020, the government started enforcing the rules on foreign oil contractors. If they don't comply, companies risk severe consequences — including payment delays, visa problems, and exclusion from tenders.

To learn more about these latest challenges, Iraq Oil Report spoke with Steve Rahola and Mustafa al-Janabi, two key leaders of New Frontiers Business Consulting. For more than a decade, New Frontiers — which is also known by its Kurdish-language name, Asteki Nwe — has been on the ground navigating Iraq's bureaucracy, gaining the experience and relationships necessary to help foreign companies. Read the full interview here.

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