Iraq Oil Almanac

326 Pages·2012·1.36 MB·English

by  Amrit Naresh

Iraq Oil Almanac
An OpenOil Reference Guide
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Table of Contents
Preface......................................................................................................6
Energy Industry Background......................................................................8
Iraqi Hydrocarbon Reserves.....................................................................8
Definition of Reserves............................................................................12
Dependency on Oil Revenues.................................................................13
Energy Governance Weak Points............................................................14
Oil theft...................................................................................................17
Regulatory Framework..............................................................................21
Ministry of Oil (Iraq)..............................................................................21
Ministry of Finance (Iraq)......................................................................23
Central Bank of Iraq...............................................................................24
Draft Laws Concerning Hydrocarbons in Iraq.......................................27
Treatment of Oil in Iraq's 2005 Constitution..........................................30
KRG Contract Disputes..........................................................................32
Federal Oil and Gas Council...................................................................34
Iraq National Oil Company Law............................................................37
Revenue Sharing Procedures..................................................................38
Middle East Comparisons.......................................................................40
Iraq's First Licensing Round (2009).......................................................46
Iraq's Second Licensing Round (2009)...................................................49
Iraq's Third Licensing Round (2010)......................................................53
Iraq's Fourth Licensing Round (2012)....................................................56
Historical Overview....................................................................................60
Iraq National Oil Company....................................................................60
Iraq Petroleum Company........................................................................62
Iraqi Oil Nationalisation.........................................................................65
Oil Industry post-Saddam.......................................................................67
Iraqi Membership of OPEC....................................................................71
Impact of Wars and Sanctions................................................................74
Federalism, Factionalism and Regional Differences..............................79
Regional Dynamics.....................................................................................85
Iran-Iraq..................................................................................................85
Saudi Arabia-Iraq....................................................................................88
Kuwait-Iraq.............................................................................................94
Turkey-Iraq.............................................................................................97
International Entities...............................................................................101
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Firms with Contracts with Kurdistan Regional Government (KRG)...101
BP.........................................................................................................102
BP Operations in Iraq...........................................................................105
CNOOC................................................................................................106
CNOOC Operations in Iraq..................................................................109
China National Petroleum Corporation................................................110
CNPC Operations in Iraq......................................................................113
DNO......................................................................................................114
DNO Operations in Iraq........................................................................117
Eni.........................................................................................................118
Eni Operations in Iraq...........................................................................120
ExxonMobil..........................................................................................122
ExxonMobil Operations in Iraq............................................................125
Genel Energy........................................................................................128
Genel Operations in Iraq.......................................................................130
Heritage.................................................................................................131
Heritage Operations in Iraq..................................................................133
Hunt......................................................................................................134
Hunt Operations in Iraq........................................................................136
Japex (Japan Petroleum Exploration Company Limited).....................137
Japex Operations in Iraq.......................................................................140
KazMunayGas......................................................................................141
KazMunayGas Operations in Iraq........................................................144
Kogas (Korea Gas Corporation)...........................................................145
Kogas Operations in Iraq......................................................................147
Kuwait Energy Company.....................................................................150
Kuwait Energy Company Operations in Iraq.......................................152
Gazprom...............................................................................................153
Gazprom Operations in Iraq.................................................................156
Lukoil....................................................................................................157
Lukoil Operations in Iraq......................................................................160
Marathon...............................................................................................161
Marathon Operations in Iraq.................................................................164
Occidental.............................................................................................165
Occidental Operations in Iraq...............................................................167
Petronas.................................................................................................168
Petronas Operations in Iraq..................................................................170
Shell......................................................................................................171
Shell Operations in Iraq........................................................................174
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Sonangol...............................................................................................176
Sonangol Operations in Iraq.................................................................178
Statoil....................................................................................................179
Statoil Operations in Iraq......................................................................182
Talisman Energy...................................................................................183
Talisman Energy Operations in Iraq.....................................................185
Total S.A...............................................................................................186
Total Operations in Iraq........................................................................189
TPAO (Türkiye Petrolleri Anonim Ortaklığı).......................................190
TPAO Operations in Iraq......................................................................193
Iraqi Entities.............................................................................................196
State Oil Marketing Organization.........................................................196
Petroleum Contracts and Licensing Directorate...................................197
Prime Minister's Office.........................................................................199
Maysan Oil Company...........................................................................201
North Oil Company (Iraq)....................................................................203
South Oil Company (Iraq)....................................................................204
Iraq Drilling Company..........................................................................206
Other Iraqi Entities...............................................................................207
Secondary Iraqi Entities........................................................................210
KRG Institutions...................................................................................213
Iraqi Federation of Oil Unions..............................................................215
Key Infrastructure...................................................................................219
Baiji Refinery........................................................................................219
Basra Refinery......................................................................................220
Daura Refinery......................................................................................221
Samawa Refinery..................................................................................222
Khor al-Amaya Terminal......................................................................223
Basra Oil Terminal................................................................................224
Kirkuk-Banias Pipeline.........................................................................225
Iraq Pipeline Through Saudi Arabia (IPSA).........................................227
Kirkuk-Ceyhan Oil Pipeline.................................................................228
South Gas Utilisation Project................................................................230
Environmental Impacts.........................................................................232
Oil and Gas Fields....................................................................................238
Ahdab (Field)........................................................................................238
Badra (Field).........................................................................................240
Kirkuk (Field).......................................................................................242
Majnoon (Field)....................................................................................245
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Rumaila (Field).....................................................................................247
East Baghdad (Field)............................................................................250
Nahr Umr (Field)..................................................................................252
Najmah (Field)......................................................................................254
West Qurna Phase 1 (Field)..................................................................255
West Qurna Phase 2 (Field)..................................................................258
Qayara (Field).......................................................................................261
Zubair (Field)........................................................................................262
Nasiriya (Field).....................................................................................265
Bai Hassan (Field)................................................................................266
Eastern Fields (Field)............................................................................267
Siba (Field)...........................................................................................269
Akkas (Field)........................................................................................270
Mansuriya (Field).................................................................................272
Middle Furat (Field).............................................................................274
Maysan (Field)......................................................................................275
Garraf (Field)........................................................................................277
Halfaya (Field)......................................................................................278
Resource Transparency Opportunities...................................................281
Resource Curse.....................................................................................281
Natural Resource Charter.....................................................................285
Resource Transparency Movement.......................................................288
Resource Transparency Movement in Iraq...........................................289
EITI.......................................................................................................291
EITI in Iraq...........................................................................................295
Global Witness......................................................................................299
Revenue Watch Institute.......................................................................301
Transparency International...................................................................303
Transparency of Global Oil Companies (TI Report)............................304
TI Report: Grades of Companies in Iraq..............................................306
Publish What You Pay..........................................................................307
Directory of Contacts............................................................................310
Directory of Oil Companies in Iraq......................................................315
Alphabetical Index...................................................................................325
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Preface
The Iraq Oil Almanac has been created to significantly increase the stock of
information available in local languages and contexts among independent
journalists, civil society activists and others. The guide will provide a living
database of publicly available information around the Iraqi oil industry, not
only for journalists but for anybody wanting to know more about the Iraqi
oil industry, and as such, be the basis for a locally based knowledge com-
munity around the industry. This first edition of the guide has been prepared
by MICT International and OpenOil UG. Internews Network will use it as
the basis to work with a group of Iraqi journalists to develop future versions
of the guide online and in book form.
The Almanac will provide the basis for a series of capacity building work-
shops for Iraqi journalists. The principal behind the workshops is twofold;
to focus on creating a group of journalists with a high level of understand-
ing of the topic who will then go on to be the sole administrators of the Ar-
abic version of the wiki, as well as to create a lasting resource of informa-
tion around the Iraqi oil industry.
The English language version of the Wiki can be seen online at www.ir-
aq.wiki.openoil.net and the Arabic language version of the Wiki can be
seen online at www.ar.wiki.openoil.net. The information there currently will
only increase in quantity and quality as the number of contributors to it in-
creases.
All of the information included here is publicly available, and is clearly ref-
erenced (please see the footnotes at the end of each page) which enables the
reader to easily find the source of the information for further research. Cru-
cially, it was created using a MediaWiki, which means that there is now an
online database of all of the articles included here which can be updated as
more information becomes available. This also means that this printed guide
is just a snapshot of what the database is at the moment; we hope that it will
grow in the future as the online articles are updated.
At the end of the workshop programme, we hope there will be an ever in-
creasing group of energy specialist Iraqi journalists who would feel com-
fortable and be capable of covering the oil industry, which is essential espe-
cially in Iraq, both for increasing public knowledge and for holding the
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state-owned oil industry accountable for their actions.
OpenOil has created similar guides for a range of other countries. If you are
interested in finding out more, please see our website: http://openoil.net, get
in touch at [email protected] or telephone [phone].
7
Energy Industry
Background
Iraqi Hydrocarbon Reserves
Many reports and sources estimate oil and natural gas reserves in Iraq - and
the Iraqi Kurdistan - in ways that conflict, agree, or simply differ. Reliable
and relevant estimates are indicated and explained in the sections that fol-
low in some detail.
Oil
BP Statistical Review
Proven Reserves
Iraq's official reserve estimate for crude oil proven reserves has risen to 115
billion barrels (bbl) today from 34 billion barrels in 1980.1 The major part of
this increase in the estimates came during the 1980s, as can be seen from
the graph on the right.
There have been three significant leaps in the estimate during this time.
• In 1982, early in the war with Iran, reserves estimates nearly doubled from
32 billion to 59 billion barrels.
• In 1987, as the Iraqi economy was suffering from the long war with Iran,
and as it appeared that OPEC was about to base production quotas on stated
reserves, the figure jumped from 72 billion barrels to exactly 100 billion
barrels.
• In 1996, as the United Nations was finalising terms of the Oil For Food
program which would allow Iraq to export oil again after a total ban for sev-
eral years, the estimate jumped from 100 billion to 112 billion barrels.
1 "British Petroleum Statistical Review" 2009
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• In 2000, barely some months before the United Kingdom and the United
States carried out bombing raids in order to attempt to disable Iraq's air de-
fense network,2 the reserves estimate was calculated at 112.5 billion bar-
rels.3
• In 2009, the same year in which Iraq assumed control of security in Bagh-
dad's 'Green Zone', most United States military personnel withdrew, and Ira-
nian troops briefly occupied the Fakka oilfield,4 reserves estimates reached
115 billion barrels of oil, a figure that has remained stable until December
2011.
However, as with other OPEC producers, it is not clear if the current estim-
ate of 115 billion barrels also includes oil that has already been produced.
The United States Geological Survey's World Petroleum Outlook of 2000
estimated that of the 100 billion barrel figure that was then being used, 22
billion barrels had already been produced, leaving only 78 billion barrels yet
to be recovered from the proven reserves.5
Nevertheless, it should be noted that BP defines "proved reserves of oil" in
its annual statistical review of world energy as "those quantities that geolo-
gical and engineering information indicates with reasonable certainty can be
recovered in the future from known reservoirs under existing economic and
operating conditions [emphasis is this article's]." BP also states that the es-
timates in their tables are compiled using: "a combination of primary offi-
cial sources, third-party data from the OPEC Secretariat, Oil & Gas Journal
and an independent estimate of Russian reserves based on information in
the public domain."
Daily and Yearly Production Estimates
BP's June 2011 statistical review of world energy shows the profound vari-
ations in oil production (both in terms of daily and yearly production)
throughout the decade 2000-2009 and until 2010. Whereas yearly produc-
tion had reached 104 million tonnes of oil (mtoe) in 2002, it dropped to 66.1
in 2003, rose back to 100 in 2004, and kept rising to 119.5 in 2008, 119.8 in
2009, and 120.4 mtoe in 2010. For the same years, averaged daily produc-
tion was 2.116 million barrels per day (mb/d) in 2002, dropped to 1.344 in
2 " Iraq Profile" BBC 20 December 2011.
3 " BP Statistical Review of World Energy June 2011: Oil BP website June 2011.
4 " Iran-Iraq Standoff Over Oil Field Ends" New York Times 20 December 2009.
5 " How much oil does iraq have?", Brookings Institute paper, May 12, 2003
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2003, rose back to 2.03 in 2004, and kept rising to 2.428 in 2008, 2.442 in
2009, and 2.46 mb/d in 2010.
Estimates for Ultimately Recoverable Crude Oil
Since Iraq is the least explored of the oil-rich countries, there have been nu-
merous claims of huge undiscovered reserves there as well - oil thought to
exist, and expected to become economically recoverable - to the tune of
hundreds of billions of barrels. The respected Petroleum Economist
Magazine estimates that there may be as many as 200 bbl of oil in Iraq; the
Federation of American Scientists estimates 215 bbl; a study by the Council
on Foreign Relations and the James A. Baker III Institute at Rice University
claimed that Iraq has 220 bbl of undiscovered oil.
Overall, only about 2,000 wells reportedly have been drilled in Iraq (of
which about 1,500-1,700 were actually producing oil in 2005), compared to
around 150,000 producing wells in Texas for comparison purposes.6
Tareq Shafiq
In 2003, Tareq Shafiq, a founding executive of the Iraq National Oil Com-
pany in the 1960s, endorsed a figure of 140 billion barrels as being Iraq's
eventual proven reserves, and a potential reserve of 215 billion barrels.7
Hussain al-Shahristani
In early October 2011, the Iraqi Minister of Oil at the time, Hussain al-
Shahristani, stated that the country's oil reserves were higher than previ-
ously estimated and should be considered to be almost 143.1 billion barrels
of oil.8
6 " OPEC Revenues", the US Energy Information Administration, retrieved July
25, 2010
7 " Iraq Oil Development Policy Options: In Search Of Balance", Middle East
Economic Survey, December 15, 2003
8 " Iraq now the second biggest oil producer: oil reserves increase by 25% to
143.1 billion barrels" Daily Mail Online 5 October 2011.
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