In Kurdistan, Oil Industry Ramps up despite War

ERBIL, Kurdistan Region — Despite ongoing battles between Peshmerga and Islamic extremists on the outskirts of the Kurdistan Region, oil production is ramping back up and many energy companies are returning to business as usual.

A spokesman for the Kurdistan Regional Government’s (KRG) Ministry of Natural Resources told Rudaw, “The majority of (international oil companies) are now returning to their full work schedule with some 70 percent of blocks operational. About 95 percent of the service companies have returned and are resuming work.”

He added, “Kurdistan’s oil and gas infrastructure remains unaffected by the operations against terrorists…The Oil Protection Force is at all sites in Kurdistan and remains vigilant, having bravely prevented the terrorists from accessing oil and gas facilities.” 

Oil and gas continued to flow from major fields in the KRG since the Islamic State (IS) toppled Mosul in June. However, many companies evacuated non-essential staff and international workers, especially after an IS offensive in early August came within 25 kilometers of the regional capital, Erbil, forcing hundreds of thousands of Iraqis to flee to the KRG in a matter of days. 

“The main issue was the safety of staff, but most international oil companies are coming back now and resuming their normal operations,” said Shwan Zulal, who runs a consulting firm specializing in the Kurdistan Region.

“The oil industry is bullish about the prospect of oil export despite delays and setbacks,” he added, “and none has been deterred by the legal and political wrangling between Baghdad and Erbil.”

International staff for US-based Marathon Oil will begin returning to Iraqi Kurdistan on Friday, the latest in a string of companies that decided to send employees back to the region. Anglo-Turkish firm Genel Energy and Canadian Oryx Petroleum announced earlier this week that their staff would return. 

Companies in the exploration and drilling phases have been more cautious. During the August offensive, US firm Hess shut down a drilling operation.

Oryx’s Ain Al Safra and Banan discovery operations are suspended “pending further improvement in the security environment in the westernmost portions of the Hawler license area,” according to a company statement.

While there may be some delays in development, however, production has actually risen during the crisis.

Genel’s Tawke and Taq Taq fields are producing 234,000 barrels per day (bpd) and exporting 182,000 bpd thanks to an upgrade to the Iraq-Turkey pipeline in Iraqi Kurdistan. Baz Karim, president of the Kar Group which owns the region’s largest refinery, stated last week that production should rise to 400,000 bpd by the end of the year.