Page 4 - DMEA Week 14 2021

DMEA COMMENTARY DMEA

Protests and progress at

southern Iraqi refineries

Iraq’s Nasiriyah refinery was shut down entirely last week as protesters
prevented employees from entering, while progress continues to be

made at Basra as work elsewhere appears to have stalled.

MIDDLE EAST A protest over unemployment last week led to The project has been on the drawing board
processing being halted at the Nasiriyah refin- since 2010, but was further delayed by the gov-
ery in Iraq’s southern Dhi Qar Province, while ernment’s intention that the refinery would be
WHAT: progress continues to be made on a project to part of an integrated project, including the devel-
Iraq’s downstream upgrade and expand the major facility at Basra. opment of the estimated 4bn barrel Nasiriyah
continues to be an area Iraq has spoken of plans to drastically oilfield nearby.
of concern with units increase refining capacity, but few announce- A list of international pre-qualifiers had been
targeted by protesters, ments have led to tangible results. lined up in 2013 to bid to carry out the estimated
while much-hyped plans $10bn combined project, but the tender was
for expansion have failed Nasiriyah cancelled in the wake of the IS invasion and the
to materialise. Dozens of protestors gathered outside the facil- oil price crash the following year. This made the
ity following the approval of Iraq’s 2021 budget, challenge of attracting foreign investment in the
WHY: without it addressing the lack of available jobs in downstream sector even more daunting.
Numerous ambitious the country. An invitation to invest in the refinery alone
projects have been With the gates blocked, Reuters sources said – with envisaged capacity halved from the origi-
announced over the past that employees could not enter the 30,000 barrel nal 300,000 bpd – was issued by Baghdad in late
decade by Baghdad, per day (bpd) refinery, which was forced to close, 2016.
though many have leading to fuel shortages in Dhi Qar. This failed to progress and the abandonment
stumbled at the financing A group of more than 200 unemployed uni- of the integrated project remained a possibility as
stage. versity graduates had been staging a sit-in out- the ministry negotiated with various IOCs about
side the unit, demanding jobs. investment in the oilfield in combination with
WHAT NEXT: In an official statement the Nasiriyah unit various other schemes.
Expansion work at the said that the closure had left the province unable In 2018, a contract was awarded to Canadian
major southern refinery to produce and refine crude oil and oil deriva- firm Pacific Future Energy for the construction
at Basra remains the tives. It added that the closure would “cause fuel of a 150,000 bpd unit following rumours that
bright spot and work is scarcity in the province … if the closure contin- French super-major Total had been in talks to
ongoing to expand the ues the movement of cars will stop completely.” do so.
facility’s capacity to The refinery has been targeted previously,
280,000 bpd, supported with protesters shutting the facility down in late Basra
by Japanese export credit. 2019 as unrest spread around the country. Meanwhile, state-owned South Refineries Co.

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