Page 5 - DMEA Week 46

DMEA Commentary DMEA The Baiji refinery
rehabilitation would be much lower.
Clearly, this is not consistent with industry
costing, and the lack of consistency which has long plagued Iraq’s downstream shows no sign of being resolved.
domestic capabilities
The official said that rehabilitation and develop- ment would be carried out by Iraqi staff, with the MoO having prepared a plan to add fluid cata- lytic cracking (FCC) units to existing refining complexes to convert crude into more valua- ble products. Such claims about Iraqi domestic refining capabilities are inconsistent with the level of dependence Baghdad has shown on for- eign partners.
In October 2018, Pacific Future Energy – formed in 2014 to develop a bitumen-to-fuel refinery in the Canadian province of British Columbia – was reported to have signed a deal with the MoO to develop the Nasiryah refinery.
The choice inevitably raised some concerns. The company has no existing international pro- jects or presence in the region. In 2013, having failed to secure interest on mutually-acceptable terms from better-known international down- stream investors Baghdad signed a deal calling for little-known Swiss-based Satarem to develop a planned 150,000-bpd refinery in Missan province.
The MoO was also forced in January 2018 to issue an ultimatum to the firm and partner Wahan Co. of China to start work immediately or lose the contract, since when nothing more has been heard.
The Pacific agreement was struck at a time of personnel flux at the top of Iraq’s oil indus- try. Former Minister of Oil Jabbar al-Luaibi, appointed to the role just over three years ago,
was made head of the revived Iraq National Oil Co. – and swiftly irritated his superiors by declaring that management of Dhi Qar Oil Co. (DQOC) and other state oil companies would be transferred immediately to the new entity, forc- ing a hasty retraction.
With so many announcements having been made and then apparently forgotten about in recent years, Iraq’s refining sector resembles that of Nigeria around half a decade ago, though with the added distraction of even more endemic cor- ruption and civil unrest. Few international play- ers worth their salt will be queuing up to engage in there projects until some form of clarity is offered.™
Week 46 21•November•2019 w w w . N E W S B A S E . c o m
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