Thursday, 22 October 2009

Iraq’s oil pipelines

Iraq’s health care remains severely affected by war with ill-equipped doctors, filthy hospitals and lack of basic medicines even in Baghdad’s best hospitals. In contrast, gigantic infrastructure projects for exploitation of the country’s oil and gas reserves are fast-tracked fuel. The interests in these developments, and the pipelines, map the realpolitik of the invasion and ‘reconstruction’ of Iraq, behind the political posturing, but pass with little comment in the mainstream media outside dry reports in the business pages.

As a result of the first contract to emerge from Iraq’s oilfield auction in June, the country’s oil ministry has signed an agreement with British Petroleum and CNPC, China’s largest oil and gas producer and supplier, to develop the ‘super-giant’ Rumalia oil field. The foreign firms have the lion’s share of the development, which aims to boost output to 2.85 million barrels per day. BP has a 38 per cent stake, CNPC 37 per cent and Iraq’s State Oil Marketing Organisation the remaining 25 per cent. UK firm Foster Wheeler is to build the country’s biggest ever oil refinery to process over 300,000 barrels of oil per day, complete with an export pipeline.

Back in June 2008, UAE based Dana Gas and Crescent Petroleum’s LPG plants, complete with a 180km natural gas pipeline to fuel new power stations, was on fast track, and at $650 million the largest single private sector investment in Iraq since 2003. Now, Dana Gas and Crescent Oil intend to build a $60 billion Gas City in the province of Anbar, which has suffered some of the heaviest fighting since the US led invasion. Prime Minister, Nouri Maliki has identified gas from the Akkas field for possible export of 15 billion cubic metres via the planned Nabucco pipeline from Turkey to Western Europe, which aims to reduce dependence on Russian gas supplies, (see this article by Peter C Glover on the ‘international intrigue’ surrounding the Nabucco pipeline) or to Syria for power and fertiliser plants. The Province Governor, Quassim Al-Fahdawi is arguing that the first priority for use of the gas should be the local economy in Anbar, rather than export.

As pipelines are built for exporting fossil fuels, the Iraqi government is supporting a crackpot scheme aiming to produce biofuel from dates. It is estimated that Iraq’s production of dates could rise from about 350,000 tonnes per year to 900,000. So much for claims that new generations of biofuels will not compete with food supplies. Hunger is a pertinent issue for Iraq with the World Food Programme estimates that 930,000 Iraqis face food insecurity and an additional 6.4 million would be food insecure without the Public Distribution System.

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