By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has signed on Thursday a memorandum of understanding with BP to rehabilitate the oil fields in Kirkuk governorate.

Michael Townsend, CEO of BP, said that the company is going to prepare the necessary studies to increase production at the Kirkuk oil fields to 750,000 bpd.

The two men inspected the Kirkuk fields on Thursday and ordered a speeding-up of rehabilitation operations.

(Source: Oil Ministry)

By John Lee.

The Iraqi parliament has reportedly banned Erbil-based Kar Group from operating oil fields in Kirkuk.

According to Rudaw, it assigned the state-owned North Oil Company (NOC) to take over oil production in the province and export it through Iraq’s State Oil Marketing Organisation (SOMO).

Reuters reports that Kar Group had been operating some of the Kirkuk oilfields since Kurdish Peshmerga forces took control of the city in 2014, following the retreat of the Iraqi army in the face of so-called Islamic State (IS, ISIS, ISIL, Daesh).

It is said to have failed to reach agreement with Baghdad after Iraqi forces re-took the area.

The Kurdish Regional Government (KRG) claims that the Khurmala field, part of the Kirkuk oilfields, is located inside its boundaries.

(Sources: Rudaw, Reuters)

By Mahmut Bozarslan for Al Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

In the last week of December, an armed group ambushed a convoy on the Kirkuk-Hawija road in Iraq, killing seven people. Iraqi security forces couldn’t track the attackers. The identities of those killed were determined quickly: They were Col. Fazil Sebawi of the Iraqi police, his son and five bodyguards.

Shortly afterward, reports of another attack came from south of Kirkuk. Walid Nuri, the leader of the Jiheshad tribe and commander of Hashd al-Ashayer forces southwest of Kirkuk, his wife and son were killed.

Nobody could explain the attacks. After ousting Kurdish forces from Kirkuk, the Iraqi army and Popular Mobilization Units (PMU) had imposed total control over the area and ensured its security. However, the Islamic State (IS) soon claimed responsibility for both attacks.

After seizing Mosul in 2014, IS had turned toward Kirkuk but was repelled by Kurdish forces controlling the town. Yet, possibly because of the region’s oil wealth, IS never gave up on Kirkuk. Although the extremist group couldn’t control the city center, its influence over the province’s southern regions never waned.

Although IS was not active after it left Kirkuk, it resurfaced after the Iraqi army took control of the region. Iraqi forces went after the IS militants, killing 10 of them in two attacks. Six militants were killed, three in Sadiye and three in Beshir villages. Military commander of Kirkuk army operations announced the six killed were the attackers who had staged the two attacks.

But how did IS resurface even after the region came under the total control of the Iraqi army and the PMU? Security sources in the region, who asked not to be identified, said IS has resumed operations south of Kirkuk. They said sleeper cells of the group have been reactivated and are preparing for new operations.

Iraqi Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] said on Sunday that a deal signed with Tehran to swap up to 60,000 barrels per day of crude produced from the northern Iraqi Kirkuk oilfield for Iranian oil is for one year.

This is an agreement for one year and then we will see after that whether to renew it,” Luaibi told reporters in Kuwait City on the sidelines of an Arab oil ministerial meeting, Reuters reported.

The agreement signed on Friday by the two OPEC countries provides for Iran to deliver to Iraq’s southern ports “oil of the same characteristics and in the same quantities” as those it would receive from Kirkuk.

The deal in effect allows Iraq to resume sales of Kirkuk crude, which have been halted since Iraqi forces took back control of the fields from the Kurds in October.

Between 30,000 and 60,000 bpd of Kirkuk crude will be delivered by tanker trucks to the border area of Kermanshah, where Iran has a refinery.

The two countries are planning to build a pipeline to carry the oil from Kirkuk, so as to avoid trucking the crude.

The pipeline could replace the existing export route from Kirkuk via Turkey and the Mediterranean by pipeline.

(Sources: Tasnim, under Creative Commons licence; Iraqi Ministry of Oil)

For more than 3 years, the people of Hawiija [Hawijah] district in Kirkuk governorate, were cut off from lifesaving health care and immunization services, leaving many children susceptible to vaccine-preventable diseases. “For years, I worried that my children may contract polio and measles or die,” said Hadija, a 32-year-old mother of 3.

In September 2017, the district became accessible following military operations launched by the Government of Iraq. WHO, together with Kirkuk Directorate of Health, immediately deployed mobile medical teams to provide immunization services, and health care for people suffering from trauma injuries or chronic disease conditions.

Five mobile medical teams were deployed to Khan, Tal Ali, Abbassi, Masanaa, Al Zab and Ryadh areas. Since then, from mid-September to 15 November 2017, more than 10000 people in Hawiija district have benefited from WHO’s support, including 1563 children vaccinated against childhood immunizable diseases.

Although these newly accessible areas are still security compromised, WHO saw an urgency in delivering health care to thousands of people that had been cut off from aid for years, and whose health was being compromised day by day. Five main health facilities have been partially or completely damaged, in addition to Hawija general hospital. Currently, only the Kirkuk Directorate of Health and WHO-supported frontline health teams are delivering immunization services in these areas.

By Omar Sattar for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News. 

The first draft of Iraq’s federal budget for 2018, approved by the government at the start of the month, envisions slashing the Kurdish region’s share from 17% to 12.7% of the total.

The cut is one of several “punitive” constitutional measures that followed the Sept. 25 Kurdish referendum on independence. Those measures also saw Baghdad seize control of disputed areas, border crossings and air bases, and demand that the Kurdistan Regional Government (KRG) transfer taxes and other public revenues to the central government.

This is the first time that the KRG’s share of the budget has been subject to review since 2005, when the government of then interim Prime Minister Ayad Allawi allocated 17% to the Kurdish region, despite the fact there has not been an official census in Iraq since 1997.

“There have been no negotiations so far with Baghdad on the budget or other pending issues, despite the KRG’s desire for talks,” said parliament member Najiba Najib of the Kurdistan Alliance. “The central government is still refusing to receive the Kurdish delegation.”

“Iraq still doesn’t currently have official statistics,” she added. “Even data from the Ministry of Trade is inaccurate. It’s not reasonable to believe that the population of the Kurdish region has stayed at just 5 million, as the United Nations said in 2003 when it recommended the KRG receive 13% of the national budget.”

She said the central government has felt “arrogant and powerful” since it regained control of Kirkuk.

By Nahwi Saeed for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Although Baghdad imposed its authority on Kirkuk on Oct. 16 and appointed a new temporary governor, Kurds still hope to reach an agreement with Baghdad that will allow them to appoint a Kurdish governor in the disputed province between Baghdad and Erbil.

In the latest development, the Patriotic Union of Kurdistan (PUK) nominated a Kurdish candidate (the former head of the provincial council, Zarkar Ali) on Nov. 12, and demanded that the provincial council hold a meeting to vote on the new governor.

The Kurds’ proposal is one of several options on the table.

The first option is appointing a military governor. Some members of the Arab and Turkmen communities in Kirkuk proposed this before and after the Kurdish referendum. For Kurds, appointing a military governor, even if for a while, means Kirkuk’s restoration to the pre-2003 era and the reminder of bitter memories when the Kurds were the most aggrieved and affected group in the city.

The central government may be powerful enough to hold Kirkuk for now, but appointing a military governor would push the Kurds to one side, which is likely to prove both provocative and unsustainable. Election results indicate that the Kurds are larger than other groups in the province, although there has been no official and reliable census for some time.

Kurds will reassert their claim on Kirkuk at the first available opportunity — both for the symbolic reason that many Kurds regard Kirkuk as their “Jerusalem,” and for the economic reason that control of Kirkuk’s oil would play a big role in any future Kurdish independence bid.

The upshot is that Kirkuk was and remains a “disputed territory”; as a US State Department statement said Oct. 20, “The reassertion of federal authority over disputed areas in no way changes their status — they remain disputed until their status is resolved in accordance with the Iraqi constitution.”

By Ahmed Tabaqchali. Originally published by Iraq in Context; re-published by Iraq Business News with permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Between February 2017 and mid-October, Rosneft signed a number of deals with the Kurdish Regional Government (KRG) that established for it, and by extension for Russia, a major position as both an investor and stakeholder in the Kurdish Region of Iraq (KRI)’s hydrocarbon resources and infrastructure.

The move was interpreted, especially by the KRG, as implicit support for the KRG in its bid for independence, especially in light of the latest deal signed following the reassertion of Iraq’s federal control over Kirkuk and other disputed territories. While there is an element of truth to this thinking, the deals are part of a wider geopolitical positioning for Russia as a major gas supplier to Europe and as an emerging power in the Middle East.

The deals provide Rosneft, and by extension Russia, effective control of the KRG’s Oil & Gas infrastructure, and a controlling stake in the region’s finances in more ways than one.

Within the oil space it has established this in three ways. The first was by providing USD 1.5bn in financing via forward oil sales payable over 3-5 years. This would be payable in kind from the KRG’s exports, until recently at about 550,000-600,000 barrels per day (bbl/d). However, the loss of the Kirkuk fields takes away about 430,000 bbl/d of production or eventually about half of the KRG’s exports.

This leaves the KRG with a tiny revenue stream after payments to International Oil Companies (IOC)’s, from which to make payments on forward oil sales of up USD 3.5 bn including Rosneft’s USD 1.5bn. A complicating factor is the repayment of other KRG debt, estimated at over USD 21bn by end of 2017, which will have to be factored into debt payment sustainability.

By John Lee.

Iraq’s State Oil Marketing Organization (SOMO) has reportedly confirmed that talks are ongoing between Baghdad and Tehran to export crude oil from Kirkuk to the Kermanshah refinery (pictured) in Iran.

SOMO Director Alaa al-Mussawi is quoted as saying that trucks would initially supply 15,000 barrels of crude oil per day (bpd) to the refinery, increasing to 25,000 bpd.

Kirkuk oil has until recently been exported to international markets via the Ceyhan port in Turkey.

(Source: Kurdistan 24)

By Fazel Hawramy for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News. 

For now, Prime Minister Haider al-Abadi has pushed the separatist Kurds back and extended the power of the federal government once again to the areas considered disputed under the Iraqi Constitution. The Kurds are beaten. But the key question is how long this equilibrium will last.

The Kurds in Kirkuk and other disputed areas are disillusioned with the Kurdish parties, including the leadership of both the Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP). No Kurdish leader has come forward to apologize to their constituents for what went wrong, let alone attempt to explain what really happened on Oct. 15-16, when thousands of peshmerga retreated and left the people of Kirkuk to their own devices.

Meanwhile, the Turkmens in Kirkuk and nearby Tuz Khormato have become united through their opposition to the Sept. 25 Kurdish independence referendum and other perceived Kurdish excesses. But as the effect of Baghdad’s victory over the Kurds wears off, the old animosities and the regional states’ rivalries in Kirkuk are bound to resurface.

The Turkmens are divided along sectarian lines. The Shiite-dominated Popular Mobilization Units (PMU) that are protecting the Shiite Turkmens in the south of Kirkuk and the city of Tuz Khormato — the major Kurdish-Turkmens flashpoint — are directly linked to Tehran. On the other hand, most of the Sunni Turkmens in Kirkuk rally behind the Iraqi Turkmen Front, which has strong links to Ankara.

“There is no denying that, more than all groups in Iraq, the Turkmens are supported by Turkey. We are part of the Turkish people,” Ali Mahdi, the spokesperson for the Iraqi Turkmen Front told Niqash in May. “And we have always called upon them [Turkey] to play a role in developments taking place here.”

In 2014, the Turkmens failed to agree on a Turkmen candidate for the head of the Kirkuk provincial council, which could have prevented the Aug. 29 inclusion of the disputed city in the Sept. 25 Kurdish independence referendum. In parallel, the deep-rooted tension between the Kurds and the Turkmens, particularly in Tuz Khormato, has intensified as the threat of the Islamic State (IS) has receded.