Business

In Kurdistan, Oil Industry Ramps up despite War

By Alexander Whitcomb 12/9/2014

International staff for US-based Marathon Oil will begin returning to Iraqi Kurdistan on Friday, the latest in a string of companies that decided to send employees back to the region.

ERBIL, Kurdistan Region — Despite ongoing battles between Peshmerga and Islamic extremists on the outskirts of the Kurdistan Region, oil production is ramping back up and many energy companies are returning to business as usual.

A spokesman for the Kurdistan Regional Government’s (KRG) Ministry of Natural Resources told Rudaw, “The majority of (international oil companies) are now returning to their full work schedule with some 70 percent of blocks operational. About 95 percent of the service companies have returned and are resuming work.”

He added, “Kurdistan’s oil and gas infrastructure remains unaffected by the operations against terrorists…The Oil Protection Force is at all sites in Kurdistan and remains vigilant, having bravely prevented the terrorists from accessing oil and gas facilities.”

Oil and gas continued to flow from major fields in the KRG since the Islamic State (IS) toppled Mosul in June. However, many companies evacuated non-essential staff and international workers, especially after an IS offensive in early August came within 25 kilometers of the regional capital, Erbil, forcing hundreds of thousands of Iraqis to flee to the KRG in a matter of days.

“The main issue was the safety of staff, but most international oil companies are coming back now and resuming their normal operations,” said Shwan Zulal, who runs a consulting firm specializing in the Kurdistan Region.

“The oil industry is bullish about the prospect of oil export despite delays and setbacks,” he added, “and none has been deterred by the legal and political wrangling between Baghdad and Erbil.”

International staff for US-based Marathon Oil will begin returning to Iraqi Kurdistan on Friday, the latest in a string of companies that decided to send employees back to the region. Anglo-Turkish firm Genel Energy and Canadian Oryx Petroleum announced earlier this week that their staff would return.

Companies in the exploration and drilling phases have been more cautious. During the August offensive, US firm Hess shut down a drilling operation.

Oryx’s Ain Al Safra and Banan discovery operations are suspended “pending further improvement in the security environment in the westernmost portions of the Hawler license area,” according to a company statement.

While there may be some delays in development, however, production has actually risen during the crisis.

Genel’s Tawke and Taq Taq fields are producing 234,000 barrels per day (bpd) and exporting 182,000 bpd thanks to an upgrade to the Iraq-Turkey pipeline in Iraqi Kurdistan. Baz Karim, president of the Kar Group which owns the region’s largest refinery, stated last week that production should rise to 400,000 bpd by the end of the year.

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2 Shamal | 12/9/2014

Read this article about KRG so called friendship with the Turkey, just so we know who we are playing with with our oil http://www.al-monitor.com/pulse/politics/2014/09/turkey-iraq-krg-kurds-erbil-ankara.html

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14 Omid | 12/9/2014

I proud when i see the progress of kurdistan, but dont forgot ISIS was a game between kurdish and western to get more oil from kurdish and not returning Dollar and sending guns and aid insted of cash money, we lose in this game and it was trap, because they never want see progress of middle east and whenever seen we getting development, they create an revolution to bring the man in power, and i can see the future right now. ( just re- read iran revolution , before and after to understand more) or read book answer to history by Mohammad reza shah Pahlavi. I m sorry for mr Barzani, i hope he realize it now to whats happened. We can not give our oil for nothing, what we wanna answer to next generation of kurdistan?????

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2 Carl | 12/9/2014

Though it is correct that Genel is a top producer and exporterter from Taq Taq and other fields, Tawke oil is produced by another company - DNO. These two companies have exported oil in periods since 2010. They are still waiting to be reimbursed in full for their export work. Without their hard work, independence for Kurdistan would be impossible. Maybe it is time to honor their contracts with the KRG?

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2 M Gonzales | 12/9/2014

Don't worry Kurds you are most likely going to be getting your Independence vote sometime at the end of this year or beginning of next year and Getting your Oil BPD up past 500,000 and getting your export up past 500,000 BPD is key. America put pressure on Erbil too join the Iraqi government and too put off your vote but honestly you are not ready right now. If you went Independent right now your Army is not organized, trained or properly equiped and that takes around 3 months at a minimum. And in regards too this news piece if you went Independent today 180,000 export per day would be enough too pay for your Military pay and some equipment and some oil expansion but thats it ...no more money for jobs. Just give it a few more months, show good faith too the world and when the time comes you can go your own way and be able to somewhat pay for your government. (It will be painful for a year or two money and job wise)

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2 Re da Caste | 12/9/2014

These are good news, but when will the oil companies get paid for the oil they deliver? Investors need to trust doing business in Kurdistan is as doing business anywhere else. Time to show us the green!

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