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Iraq Approves $5B Oil Refinery Project In Kurdistan’s Kirkuk

Refinery

Iraq’s oil ministry has authorized the construction of a refinery in Kirkuk in the semi-autonomous region of Kurdistan that would cost US$5 billion, Kurdish media network Rudaw reported on Monday, citing an Iraqi lawmaker from Kirkuk.

The Iraqi oil ministry has given the go-ahead for a modern refinery to be built which will cost $5 billion,” Rebwar Taha from the Patriotic Union of Kurdistan (PUK) party told Rudaw. The project will be carried out in phases and could take between 3 and 5 years to complete, Taha noted.

The existing refinery in Kirkuk is 65 years old and refines just 30,000 bpd—a capacity that cannot meet demand in Kirkuk, the lawmaker said.

This is why we have asked for the refinery’s production rate to be increased to 70,000 barrels a day so that oil from Kirkuk is no longer taken elsewhere under the pretext of refining it,” Rudaw quoted Taha as saying.

The region of Kurdistan in northern Iraq is estimated to have 45 billion barrels of oil reserves. Exports from the fields in northern Iraq held by the Kurdistan Regional Government (KRG) stand at around 600,000 bpd.

A spokesman for Iraq’s oil ministry, Asim Jihad, told Rudaw that the oil ministry had given its consent for a new refinery to be built in Kirkuk.

Related: Is This Saudi Arabia’s Newest Strategy To Boost Oil Prices?

At the beginning of March, production from the Kirkuk fields was disrupted after Kurdish protestors seized a pumping station in order to protest the policies of Baghdad and Erbil, the capital of the autonomous Kurdish area. The protest was allegedly inspired by Kurdish demands that Baghdad authorize the construction of a refinery in Kirkuk, and they shut down the line shipping oil to Turkey.

A few days later, PUK agreed with Iraq’s central government to keep oil from the Kirkuk oilfields flowing via the pipeline to the Turkish export terminal Ceyhan on the Mediterranean. The deal was reportedly reached after Baghdad agreed to boost the capacity of the Kirkuk oil refinery, and thus PUK withdrew its threat to shut the pipeline to Ceyhan.

By Tsvetana Paraskova for Oilprice.com

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