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Stubborn Kurdish Petroleum Resources: Surveying Actual data and investigating the declared Numbers

Taq Taq Second Central Processing Facility; Source: Genel Energy Website
Energy Security

10/22/2019 8:02:00 PM

  by: Hemn Hussein Wali and Bahrooz Jaafar

 Introduction

The confusion over the Kurdish petroleum sector is related to a fundamental paradox which; the more petroleum industry developed and matured, the more financial crisis deepened and the population's living situation worsened. This reverse consequence is an unusual phenomenon neither to the people in the Kurdistan Region of Iraq (KRI) nor for the observers which it mainly stems from the lack in the transparency surrounding the industry. The KRI's Ministry of Natural Resources (MNR) has frequently affirmed the abundance of the petroleum resources and reserves (45-70 billion barrels of oil 'reserves'[1], and 200 trillion cubic feet equal to 5.67 trillion cubic meters of the natural gas reserves[2]) and repeatedly promised an ambitious target regarding oil and gas production. 

In the following disappointing years, The MNR blamed the advent of Islamic state (ISIL) threats along with the oil price dropping as the disruptive factors for its plans. However, still, all have seen that the advent of ISIL provided a golden opportunity to the KRI in controlling some robust and productive oil fields with production in between 150-300 thousand barrels per a day (bpd) and additionally, the Major Fields In the Region never stopped operating. The MNR occasionally tried to provide some data and details concerning petroleum operations in the Region, but it formed a cherry-picking policy which it has never been a comprehensive and continuous process.

These paradoxes and opposite consequences led the Region's citizens to lose their trust in the MNR's statements and periodically provided data and information. The industry, on the other hand, is far from the ambitions, and the financial crisis in one way or another is continuing. Consequently, what the Kurdish populations are desperately hoping for is the continuation of the new federal supplied funds ($317 millions). Still, neither the MNR makes an effort to explain the actual situation in the sector, nor do the Kurdish media try to follow the mysterious details.

This research aims in inspecting the KRI's oil and gas industry to find out its actual condition.  Section 1 covers the KRI's petroleum resources and reserves by setting out the importance of precision in distinction between resources and reserves. In addition, it presents the detailed data regarding the fields' oil and gas reserves and resources concluding with a technical estimation for possible total Region's resources.  Section 2 classifies the Region's petroleum fields in accordance with their production levels and reserves.  Section 3 introduces the working petroleum companies in the Region between 2012 and 2018 and also changes in the interests' acquisition besides their fields' status in 2018. Section 4 outlines the problematic dimensions of the KRI's petroleum industry. Section 5 discusses the declining production and reserves as well as the relinquished and suspended fields and blocks. Section 6 briefly focuses on the KRI's oil production, export and destinations and referring to unstable trends of the Regions oil production. Consequently this research ends with a conclusion recommending strategies that may help in avoiding disappointing consequences for the KRI's petroleum industry.

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