Oil companies disregard Baghdad threats
Minister Hawrami welcomes Energy Industries Council delegation from UK
The UK’s leading trade association for oil and gas supplies and services last Thursday concluded its first mission to the Kurdistan Region.
Dr Ashti Hawrami, the Kurdistan Regional Government’s Minister of Natural Resources, met the delegation from the Energy Industries Council (EIC), which was accompanied by the British Consul General Hugh Evans.
After their meeting Minister Hawrami said, “I’m pleased to welcome this important delegation from the EIC to Kurdistan. We discussed expanding our relations in oil and gas services and having more discussions in Erbil and London between the Kurdistan Region and UK businesses.”
Terry Willis, the mission leader and the EIC’s Middle East Director, said, “We met all of the major players - the main oil and gas operators, contractors, relevant government departments. This visit has been very enlightening and has made us confident of the huge amount of opportunities that exist for the UK supply chain.”
He added, “What struck us is the ease of doing business here. We are looking to find initiatives to get the message out in the UK about the Kurdistan Region.”
During their seven-day visit the EIC delegation learned about the dynamics of the oil and gas industry of Kurdistan, met local companies in order to gain an understanding of the local business culture and seek business tie-ups, and learned about the Ministry of Natural Resources’ prequalification procedures for services providers.
The Ministry of Natural Resources has put in place a pre-qualification process for oil and gas services to ensure that those which are qualified and experienced operate here, that they follow good working practices and provide employment opportunities for locals.
The mission was organized with the assistance of the KRG UK Representation in London. The mission comprised eight British oil and gas services providers and was supported by UKTI, the UK government’s trade and investment agency. The mission participants were: Agility Logistics; Atmos International pipeline software; Decisive Operations personnel training providers; Garlock sealing products manufacturer; Manlift temporary power generators; Mott MacDonald which covers a very wide range of business areas; Onstream equipment providers and project and technical recruitment; and Triplefast fasteners and sealing products providers.
Minister Hawrami commented during the press conference following the meeting on the tensions between Baghdad and Erbil about the region’s oil activities. “Currently 50 [international oil] companies work in Kurdistan Region, which have invested US$10 to 20 billion in exploring oil,” Hawrami answered a reporter asking about risks of working in Kurdistan’s oil sector. “They are not afraid of the threats by the Baghdad government, since their threats are illegal and nonconstitutional, and no one cares about them.”
Kurdish Minister also added that when Baghdad threatens, the companies come and ask for more contracts and oilfields and they do not listen to such threats. “Neither Exxon Mobil listens to the threats from Baghdad. They have reiterated in their official website that they are committed to the oil contracts they have signed all over Iraq.”
Minister Hawrami also comments about his ministry’s oil revenues and said the revenues are transparent, and it is clear that they are spent to serve the region’s citizens, for instance “every year IQD 3 to 4 trillion [approximately US$ 2.5 to 3.5 billion] is spent on fuel for generating electricity as well as the fuel directly distributed over citizens via the governorates.”
In addition to those, Hawrami argued that Region’s oil revenues are spent on projects like Duhok’s water project, Duhok Airport, building houses for martyrs’ families in Garmian and many other public service projects.
Minister of Natural Resources also addressed the issue of exporting oil to Iran and Turkey.
“The oil we export to Turkey and Iran is according to the law and the constitution, and at the same time it is a right of Kurd- istan Region,” Hawrami told reporters. “This is because while the Iraqi government is supposed to share 17% of petroleum products with Kurdistan Region, they only share 3% with us. It is our right to fill this gap in our fuel demand. And when our refineries do not have the capacity to meet our demand, we are forced to exchange our crude oil with refined products of Iran and Turkey.”
KRG Minister of Natural Resources Dr. Ashti Hawrami speaks during a press conference following his meeting with the EIC deledation in Erbil, February 7, 2013.