Kurdistan has world’s 8th oil and gas reserves
DOR Organization for Kurdistan Oil and Gas Information has recently published a report about Kurdistan Region’s oil and gas sector and announced that Kurdistan Region is the world’s 8th in terms of its oil and gas reserves, and that it will be last place in the world to run out of oil
According to the report the Region will export 1.65 million barrels of oil and 10 billion cubic feet of natural gas during the year 2016.
The report is written by Dr. Ghalib Mohammed Ali, head of the Oil and Gas Committee of the Suleimaniya Provincial Council.
“What is available now is not a suitable oil and gas policy in Kurdistan Region,” Dr. Ali says in the report. “Neither the data and figures of oil exports does not match with our pocket money, nor the wealth and amount of oil reserves we have with our welfare and living standards of our society.”
The reports reads that according to the latest OPEC report, Iraq has more than 150 billion barrels of proved reserves and more than 300 billion barrels of unproved reserves, which makes Iraq, the second largest oil country in the world after Saudi Arabia.
According to the report, Kurdistan Region, as part of Iraq has 50 billion barrels of proved reserves and 80 billion barrels of unproved reserves, in addition to 8-10 trillion cubic meters of natural gas reserves. These figures put Kurdistan in the 8th place in the world for oil and gas reserves.
“The Gulf region, including Iraq and Kurdistan commonly own 65% of world’s total oil reserves, and Kurdistan Region will be last place on earth to run out of oil reserves.”
The report adds that Kurdistan has 3% of the world’s oil and gas reserves.
It is expected that the region will increase its oil exports via Turkey to 1.07 million bpd by 2016 and will also export 10 bn cubic meter of natural gas by 2020.
Dr. Ali criticizes the Kurdistan Regional Government’s (KRG) oil policy and argues there is a big lack of transparency in the oil and gas activities of the KRG as well as a significant mismanagement.
The report suggests that the oil and gas law was supposed to be implement- ed by 2008, but it is still not fully implemented.
“The Ministry of Natural Resources (MNR) should not sell oil, receive the revenues, and distributes them all by itself. Oil revenues should be deposited in the central bank and be managed and distributed by the Finance Ministry.”
Additionally, the report says the parliament has failed to establish the four state-owned companies as legislated by the oil and gas law.
Dr. Ali also criticises the agreements signed between MNR and international oil companies. He says out of 57 agreements signed with 52 international oil companies, only one is a service agreement while the rest are production sharing contract, by virtue of which the company will share 15% of the revenues and the interest in the blocks. Additionally, the company retains 55% of the revenues at the beginning of production till its cots are recovered. All these terms, according to Dr. Ali, make the oil companies the first beneficiaries in the contracts, leaving the government and the people with fewer benefits as compared to the central government of Iraq, which only gives service contracts with oil companies.
The report lists other negative aspects of the KRG oil policy and also puts forward some recommendation for improving the management of natural resources for the benefit of the Kurdistan Region, its government and its people.