Attacks on main Iraqi gasfield drive out U.S. contractors

A sequence of rocket assaults on a gasfield in northern Iraq has despatched the U.S. contractors engaged on its enlargement packing, dealing a blow to the Kurdish area’s hopes of boosting its revenues and providing a small various to Russian gasoline.

The undertaking to broaden the Khor Mor discipline operated by Pearl Consortium, majority-owned by Abu Dhabi’s Dana Gas and its affiliate Crescent Petroleum, was suspended on the finish of June after three rocket assaults.

Workers from Texan firm Exterran Corp returned final month to renew work however two extra rockets hit the location on July 25, forcing the corporate to depart once more with no return date deliberate, trade and Kurdish authorities sources stated.

Khor Mor is among the largest gasfields in Iraq and the enlargement plan goals to double manufacturing in a area desperately in want of extra gasoline to generate electrical energy and finish virtually day by day energy blackouts.

There was no severe injury from the assaults and current operations haven’t been disrupted however the enlargement has been suspended till safety within the space is ensured, the sources stated.

The enlargement undertaking is partly funded via a $250 million financing settlement with the U.S. International Development Finance company.

Exterran is the third contractor to demobilise since assaults began focusing on the sphere on June 21, with two Turkish subcontractors, Havatek and Biltek, having already halted work.

Dana Gas declined to remark. Exterran, Havatek and Biltek didn’t reply to requests for remark.

Uncertain Future

Last yr, the Kurdish authorities signed a contract with home power firm KAR Group to construct a pipeline from Khor Mor through the regional capital Erbil to town of Dohuk, near the Turkish border, operating parallel to an current pipeline.

Delays may value the debt-ridden Kurdistan Regional Government (KRG) a sizeable penalty and can go away Kurdish gasoline export plans on maintain.
If the infrastructure is just not prepared by a May 2023 take-or-pay deadline, the Kurdish authorities should pay Dana Gas $40 million a month till it’s prepared, the federal government supply stated.

“More than that is the reputational damage because added security threats add another layer of risks that could impact the cost of capital and insurance”, Ali Al-Saffar, Middle East and North Africa programme supervisor on the International Energy Agency, stated.

The KRG didn’t reply to a request for remark.

Dana Gas has the rights to take advantage of two of the most important gasoline fields in Iraq, Khor Mor and Chemchemal, which produce about 450 million cubic toes of gasoline a day. It plans to greater than double manufacturing to as much as 1 billion cubic toes per day within the subsequent few years, sufficient to cowl home wants.

With 16 trillion cubic toes of confirmed reserves, output may then probably ramp as much as 1.5 billion cubic toes a day, leaving a sizeable amount for exports to Turkey and Europe, authorities and trade sources stated.

Dana Gas provides about 80% of the area’s gasoline feedstock, in line with an trade supply.

However, the area’s gasoline export plan may threaten Iran’s place as a serious provider of gasoline to Iraq and Turkey at a time when its economic system remains to be reeling from worldwide sanctions.

In March, Iran’s Islamic Revolutionary Guards Corp (IRGC) fired a dozen ballistic missiles at Erbil in an assault, which appeared to focus on the area’s plans to provide gasoline to Turkey and Europe, officers have stated.

While no group has claimed accountability for the 5 assaults on Khor Mor since June, Kurdish officers, diplomats, trade sources and power specialists stated they believed they have been carried out by Iranian-backed militias.

Iran’s international ministry didn’t reply to a request for remark.

However, two diplomats primarily based in Iraq stated they believed that rivalry inside the Patriotic Union of Kurdistan (PUK), the get together that controls the land the place the sphere is situated, led one facet to retaliate for being excluded from the enlargement undertaking.

A PUK official, who spoke on situation of anonymity, dismissed this model of occasions.

No man’s land

The Khor Mor discipline is near a no man’s land between the Iraqi military, Kurdish forces and Shi’ite militias, from the place the primary three rocket assaults have been launched.

Because of a scarcity of settlement over territorial management, there are areas neither the Iraqi military nor Kurdish forces can enter, leaving a safety vacuum the place militias are lively.

But the final two assaults with bigger rockets got here from areas nearer to town of Kirkuk, which lies below the management of the federal authorities.

“Khor Mor has a lot of potential and can help the Kurds,” stated a Kurdish official. “We get attacked from all sides. The future is very uncertain.”
The setback to the gasoline plan comes at a time when the oil sector, the area’s monetary lifeline, can also be in hassle.

Oil reserves are getting depleted at greater than double the worldwide common and a Federal Supreme Court ruling in February that deemed the authorized foundations of the Kurdistan area’s oil and gasoline sector to be unconstitutional, pressured some international oil firms to depart.

Exterran has halted work for safety causes, slightly than the ruling, trade and authorities sources stated.

Further delays in funding within the sector will weigh closely on the KRG, which faces an financial disaster in a area already struggling inside an unstable Iraq.

KRG’s debt at the moment stands at about $38 billion, in line with a authorities official, and parliamentarian Karwan Gaznay, who’s a member of the area’s oil and gasoline committee, stated oil exports accounted for 85% of Iraqi Kurdistan’s finances.

Delayed cost of public sector salaries, poor public companies and corruption have fuelled typically violent protests over the previous two years towards the political events that run the area.

Widespread financial hardship amongst younger Kurds was additionally one of many major elements behind the migrant disaster on the Belarus-European Union border that started in 2021.