Conflict in Iraq – new hope for Kurdistan

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Although Iraq is still dangerous place, Kurdistan is relatively peaceful region. In recent years, the Kurds have formed there virtually independent state, and today use the conflict in the north of the country to earn money on oil. Kurdistan has become one of the most promising areas for exploration and production of crude oil. Hope for its development came after the fall of Saddam Hussein’s regime in 2003.

Petroleum resources of Kurdistan, although they are smaller than in other parts of Iraq, have strategic importance for the relations between Kurds and Baghdad, as well as for the potential export of gas to Turkey and European Union countries. This autonomous region ruled by president Masoud Barzani since several years gradually gaining more independence from the government of Iraq. Robin Mills, head of consulting Manaar Energy Group providing advisory services on matters of oil, said that the Kurds have used ISIL offensive to take most of the territories, including the city of Kirkuk and oil fields in the surrounding area. From both oil fields – Kirkuk and Bai Hassan – they can export even 450 thousand barrels per day, but since March this year Kurds haven’t mined significant quantities after damaging Iraqi-Turkish pipeline Kirkuk-Ceyhan pipeline by saboteurs. Current export is big step forward for the Kurds towards even more independence. In 2011 the government of Kurdistan signed independently contract with Exxon Mobil to start mining in the north of the country. Since then, the Kurds have signed new contracts – with Chevron, Gazprom and Total.

The conflict in Iraq and Islamist offensive sparked hopes of Iraqi Kurds to create an independent state. Probably this will not happen, because United States and the countries of the region with the Kurdish minority are against. Kirkuk is the center of the oil industry in Iraq, located outside the Kurdish autonomous region, but Kurds suggest that they do not intend to give it back. According to experts, mastering additional oil reserves will give them economic independence. Kurdish Regional Government plans in the future to produce up to one million barrels per day. Deposits of oil in the region is estimated at 45 billion barrels. On the basis of the Iraqi constitution adopted in 2005, crude oil – the main wealth of the country – should be passed by all the provinces to the central government, and only government has the right to export it.  The Kurds, however, do not apply to this provision. Kurdish authorities have also entered into long-term agreements with the Turkish government on the oil export.

Sources: iraqoilreport.com, theenergycollective.com
Photos: americancontractor.com

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Radosław Budzowski

Logistics Manager in YoungPetro, third year student of Oil and Gas Engineering at the Faculty of Drilling, Oil and Gas at AGH. Interested in reservoir engineering and gas industry. Privately badminton and travels enthusiast.

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