In Iraq, Combating Oil Corruption, Staving Off Fears of a Kurdish-Arab War

Iraq Oil Report. Posted February 22, 2009.

One might call them the Batman and Robin of the Bayji oil refinery.
Together Ali al-Obaidi, director-general of the Northern Oil Company, and his sidekick, Colonel Adil al-Jamali, commander of the Bayji oil police, have become a formidable crime-fighting duo at Iraq’s largest oil refinery, Anna Fitfield reports for the Financial Times.

“Everyone knows this place had the worst corruption in Iraq – they said $1bn a year was being lost here,” says Mr Obaidi at his office in the refinery 190km north of Baghdad. “Gangs, mafias, al-Qaeda, everyone was trying to steal from this depot.”

The arrival of Mr Obaidi and Col Jamali at the refinery’s production facility in late 2007 began to put an end to much of the theft.

“When I first came to the refinery I found guards were bringing their own containers to work to steal gasoline, and they did not respect their bosses because their bosses were also stealing,” Col Jamali says. “Corruption was like a cancer in the system, so I fired hundreds of men, to change the blood.”

Iraq’s Oil Ministry will award a service contract to develop a prized oil field in southern Iraq next month, Sinan Salaheddin reports for The Associated Press.

Italy’s Eni SpA, Spain’s Repsol and Japan’s Nippon Oil are competing for the service contract to develop the Nasiriyah oil field. The contract is designed to offer engineering, procurement and construction services.
Iraq’s deputy oil minister, Ahmed al-Shamaa also divulged the ministry’s plans to develop part of another prized oil field in central Iraq - the East Baghdad field.

Turkey’s pipeline company Botas is in talks with Sharjah-based Dana Gas on the proposed project to send Iraq’s natural gas north to Turkey. Iraq Directory reports the gas would feed the proposed Nabucco pipeline, a project backed by the Europe and the United States as a non-Russian gas supply. Nabucco has yet to commence because, in part, of a lack of supply commitments. There’s no counting on Iraq, however, for that guarantee, as the country has yet to determine how it will develop its natural gas resources. Iraq is flaring most of its natural gas, almost all produced during oil production. It is in talks with Shell to create a joint venture dedicated to natural gas, and is offering gas fields for international bidders. Iraqi residents, and current and future power plants and other domestic industry are in need of gas, which will make exporting the resource a hard political sell until the needs at home are met.

Norwegian oil firm DNO says it has “commenced the remaining work” to hook its Tawke oil field in the KRG contract to the pipeline sending Iraqi crude to Turkey. In a end 2008 results statement, the company says “the initial drilling phase on the Tawke field was completed as the gross initial cumulative well capacity from the field is significantly in excess of the 50,000 bopd capacity of the Tawke facilities.”

As a result of the good progress made on the Tawke development during 2008 we are now preparing for increased production at low cost from a substantial reserve base, without further investments. This put us in a good position to meet the challenges and opportunities in today’s market
- Helge Eide, Managing Director of DNO International ASA.

Today, Iraqi Navy and coalition forces are working together to protect the platforms from harm. By Dec. 2009, the Iraqi Navy will take full responsibility for the Khwar Al Amaya Oil Terminal and the security of a proportion of the nation’s oil wealth, according to a Multi-National Force-Iraq statement.

Iraqi Prime Minister Nouri al-Maliki last Thursday said that Iraq will establish open relations with France in the fields of armament, oil, in addition to other sectors, Voices of Iraq reports.

Spanish government showed readiness to present loan to Iraq to buy an electricity station to revive marshes in Missan province, according to a release from Iraq’s National Media Center.

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