Page 4 - DMEA Week 12 2023

DMEA COMMENTARY DMEA

Investors invited

for new Iraqi

refining projects

Iraq has announced plans to develop seven new refineries to help with

energy security and lower imports, but the plans look too ambitious

IRAQ IRAQ has invited foreign investors for seven 100,000 bpd, the Kirkuk refinery with a capacity
planned refinery projects in the country, with of 100,000 bpd and the Qayyarah refinery with
bidding for three of these already underway. an equal capacity of 100,000 bpd.”
WHAT: Iraq has The move comes as part of Iraq’s drive to In early 2021, then deputy Oil Minister
invited bids for new rebuild its downstream sector in a bid to domes- Hamid Younis said the ministry was keen “to
refinery projects, hoping to ticate more fuel production and monetise its accelerate the development of the refinery sec-
secure large scale foreign growing upstream output. tor in Iraq by building modern refineries and
investment. The initial three projects consist of a 50,000 introducing new units for the current refineries.”
barrel per day refinery in Maysan, a 70,000-bpd He added that the country would experience a
WHY: The country plant in Nineveh and a 30,000-bpd unit in Basra “qualitative increase in the production of oil
aims to cut its reliance on city. derivatives.”
imported oil and increase Offers for a further three refineries are to While Iraq has announced ambitious plans
domestic production. be submitted on April 2, with another unit to at various points over the last decade, tangible
be tendered later in the year, according to Iraqi progress has finally been made with the devel-
WHAT NEXT: Oil Minister Hayan Abdulghani. Regarding the opment of the 140,000-bpd Karbala unit, which
Despite progress at goals of the projects, he said: “These investment is in the process of commissioning. According to
Karbala, there is plenty of opportunities constitute a shift in the govern- a statement from the oil ministry, the aim of the
scope for scepticism about ment’s strategy towards encouraging foreign projects is “to increase national refining capacity,
the latest raft of promised investment in oil refining and opening new hori- cover local needs for oil products and eventually
investments. zons for international companies and the local export surplus to foreign markets”.
private sector in this industry”. Dr. Haider Muhammad Makiya, chairman
Projects with the April 2 deadline comprise a of the National Investment Commission (NIC),
50,000-bpd plant in Dhi Qar, a 100,000-bpd unit expressed hope that the investment opportuni-
in Wasit, and a 70,000-bpd facility in Muthanna. ties would “contribute to the national economy
The seventh is located in the restive Anbar Prov- and set the country on a path to sustainable
ince and is also planned to have a capacity of development”.
70,000 bpd.
Project purgatory?
Boosting output capacity Iraq’s refining sector has long suffered from
Iraq’s downstream ambitions have been in the dilapidation and under-investment despite big
works for years, with Abdulghani, who was promises, resulting in the country, the second
appointed in October, saying in January that largest oil producer in OPEC+ (at 4.6mn bpd),
multiple investment opportunities would soon having to import most of its fuel requirements.
be offered in the form of new production units The country was estimated last year to be
for existing refineries. spending around $3bn per year on importing oil
Abdulghani said that “a number of invest- products, including 1.07mn tonnes of gasoil at
ment opportunities will soon be presented in $657mn, 3.46mn tonnes of gasoline for $2.5bn
the refining industry sector, after completing and 163,000 tonnes of white oil at a value of
the papers and information related to the refin- $102mn.
ery bags that will be announced in a number of Delays have also consistently slowed or halted
Northern, Southern and Central governorates.” the progress of many new Iraqi projects, like Kar-
He added: “The ministry, within plans to bala, which had been slated to start production
increase refining capacities, will offer invest- in 2018.
ment opportunities in the Amarah refinery in This was later adjusted to 2022, and
Maysan Governorate with a capacity of 150,000 finally mid-March of this year. However, lat-
bpd, the Muthanna refinery with a capacity of est announcements have spoken of further

P4 www. NEWSBASE .com Week 12 23•March•2023