The KRG interior ministry has tasked a committee to work on the closure of 164 "illegal refineries,” said Sami Jalal, a relevant official from the ministry.
"They will not just be closed down, but completely removed so they cannot be restored to operate again," said Jalal, who is in charge of monitoring refineries in the Kurdistan Region.
He hinted that other refineries "do have shortcomings, despite holding licenses.”
The government has warned those facilities to improve or they will face permanent closure.
"Some 28 refineries have shortcomings. They will be given a two month ultimatum to fix their shortcomings or they will be closed and face investigations," he explained.
The KRG Ministry of Natural Resources repeatedly vowed to remove the illegal refineries, but has not followed through.
“These refineries have caused great damage to the environment and health. Examples from Erbil and Sulaimani were discussed where refineries have caused great damage to water resources and agriculture, and they are a main cause for the spread of some diseases,” read a government statement after a meeting of the KRG’s Oil and Gas Council in late July.
Oil sales provide the bulk of the KRG’s revenues. Several multinational oil firms operate in the Kurdistan Region, which has privatized its energy sector. Elsewhere in Iraq, the energy sector is state-owned.
Illegal operations and refineries have plagued the environment. Waste is frequently dumped untreated into waterways in the Kurdistan Region.
In April 2017, the KRG shut down 61 illegal refineries and pledged to address the problem of an additional 129 locations.
After the loss of oil-rich Kirkuk in October 2017, the KRG says oil revenues were nearly halved. Baghdad has refused to export oil from Kirkuk through the Ceyhan pipeline. Economic insiders say the decision has cost Iraq $5 billion so far. Around 300,000 bpd pumped from Kirkuk to the Turkish port daily.
Smaller international oil companies have explored more difficult oil deposits and have reported promising results for investors. The KRG remains committed to repaying oil debts to several firms which left the Kurdistan Region during the economic crisis that was coupled with the ISIS conflict and an influx of 1.8 million IDPs and refugees.
