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The $80 Billion Megaproject Splurge In Oil

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Iraq Begins To Rebuild Largest Refinery

Iraq

Iraq began to rebuild its largest oil refinery this week, jumpstarting an effort to reconstruct the country after a three-year war with the terroristic Islamic State, an announcement from the oil ministry said

The Baiji complex should produce 70,000 barrels of oil per day upon completion, ministry spokesman Assem Jihad told reporters on Thursday. The facility, originally constructed in 1975, is currently completely offline and refined between 250,000 to 300,000 barrels per day before it was seized by ISIS in 2014.

"The rehabilitation will allow the distribution of refined products for the north of the country and reduce our imports," said Jihad.

Baiji is strategically located along Highway 1, which runs from Baghdad to Rabia, a border town in the North West of Iraq. It is only 111 kilometers from Kirkuk and therefore encroaches on the oil concessions that have been granted by the KRG to international oil companies in South-Eastern Kurdistan. Despite its geographical proximity to Kurdish oil fields, the Baiji refinery is more of a strategic asset for Baghdad’s National Oil Company (NOC) as opposed to Erbil. 

ISIS presence in this region, and control over the refinery, not only hampered Baghdad’s oil production, but also threatened to spill over into de facto Kurdish civilian territory. The New York Times cited reports from the Iraqi military that it had retaken the Baiji oil field from ISIS on the 16th of October 2015, bringing an end to approximately six months of ISIS control over the refinery. Although ISIS no longer occupies the land, the damage to the refinery after its re-capture was extensive.

Reports in early 2016 stated that it was ‘plundered beyond repair’, this corresponds with a wider ISIS tactic of decimating all existing infrastructure when forced out of an area.

By Zainab Calcuttawala for Oilprice.com

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