A New Hope for Iraq’s Oil and Gas Industry?

Samar in nina-iraq

Samar

By Samar Rassam-Whitticombe, CEO of Somer Industrial Projects (SIP)

 

After celebrating the end of Ramadan, I hope that everyone experienced a welcoming Eid al-Fitr. Unfortunately, the time of joy for Iraqi citizens was tinged with sadness due to memories of their missing loved ones. Around the world, families, friends and neighbours gathered to share traditional food and congratulate each other on achieving the test of Ramadan. I am proud to say that I attended Iftar. It was wonderful to see so many people, representing different cultures, colours and backgrounds joined together in harmony.

I know that all alike are thinking that people, irrespective of their beliefs, are hoping and praying that peace will soon endure in Iraq.This same message was shared in the greeting by Adel Abdul-Mahdi, the Iraqi Oil Minister, congratulating the Iraqi people on the occasion of Eid al-Fitr.

“We wish peace, increased harmony , understanding between different creeds, for a united Iraq and best wishes to you all. Kullu Aam wa Antum Bikhair!!

Even a year on the Baghdad –Kurdistan problematic relationship is still proving to be somewhat challenging to implement. Tensions between the two governments still exist. The need for all the parties to commit to the agreement and reach a solution between the two sides is  crucial to Iraq. On this occasion we hope a resolution between the Federal Government of Iraq and the KRG will be found and all the problems will be solved through dialogue and negotiation.  The finance problem and the terms of the agreement, with regard to the percentage of the federal budget and the amount of the oil export by the Kurdistan Regional Government (KRG), needs to be sorted soon.  An appropriate solution to the problem is required that is for the benefit of the two sides,  this is in their mutual interest as well as supporting the unity of the Iraqi people.

As we all know, Iraq is full of opportunities, albeit within  a challenging setting.  There is lots of potential and International Oil Companies (IOCs) need to be attracted by offering them a sustained Return on Investment (ROI).  These are the core drivers of Iraq’s economy, and need to be reframed in order to attract and maintain relationships with stakeholders, both internally and internationally, as security still remains an issue in Iraq.

The leadership of the Ministry is looking forward to reducing the progressive import of Oil derivatives, despite the difficult circumstances and the stopping  of production at Baiji refinery, which accounts for nearly half of all production (300 000 barrels / day).

The Minister concluded a recent address by emphasizing;

“The constant efforts to improve the production lines, and the completion of new lines in existing refineries. The Energy Committee has recently taken a decision to reduce the power required for the establishment of refineries by private investment to 50,000 barrels / day, on the condition that 80% would be white derivatives.  The Ministry has come a long way in negotiations regarding Nasiriyah and Maysan refineries and there are investment offers from Kirkuk and others, in addition to continuing to complete Karbala refinery.”

During the last couple of months, I have attended a few events, seminars and workshops related to Iraq and Iraqi work, such as:

  • CWC  Iraq Petroleum 2015 in London
  • Iraqi Britain Business Council (IBBC)
  • Eversheds
  • Iraqi Cultural Centre (IBC)

They all share the same opinion about the need for education, essential training and development.  They also agree about the importance of developing human resources through professional development. There is a real need for the improvement of the internal capacity needed in terms of skilled labour. This can be achieved through the transfer of expertise by selecting areas such as geology and technical, economic development and infrastructure development for the oil sector. All the while there should still be a major focus  on developing  Health, Safety and Environment;  ensuring ongoing safety by enhancing competency.

All of these elements will raise the production capacity and oil export significantly in regard to the future plan for Iraq and the government’s official targets.

We hope that Iraq will increase capacity beyond its targets.

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