ERBIL, Kurdistan Region – An oil advisor to the Kurdistan Regional Government says that most of Kirkuk’s oil reserves have been extracted, with only around 30 percent remaining.
According to Hama Jaza Salih, the Iraqi government has made US$82 billion from oil fields in Kurdish and disputed areas outside the borders of the autonomous Kurdistan Region.
Since the discovery of Iraq’s first oil field in Kirkuk in 1927, the multiethnic province has become a center of conflict in the country. With an eye on Kirkuk’s oil wealth, successive Iraqi governments have sought to expel Kurds and Turkomans from the area to turn it into an Arab-dominated province.
Kirkuk’s oil reserves were estimated at 25 billion barrels, Salih says, and so far approximately 15 billion barrels have been extracted.
According to some figures, the Iraqi government sold around 80 million barrels of oil from the Kirkuk oilfields last year.
In the Iraqi constitution, Kirkuk is considered a “disputed territory,” with both Erbil and Baghdad having a claim on the province. But the Iraqi government controls the province’s natural resources and Kurds are excluded from oil affairs in that territory.
Salih says the Kurdistan Region’s oil reserves are estimated at around 50 billion barrels. He believes that further exploration could lead to new fields, raising the figure to 100 billion barrels in the next five years.
According to Iraq’s National Oil Company, the country sold over 141 million barrels of oil last year, of which 79 million were produced in Kirkuk and other Kurdish-dominated disputed areas. Each barrel was sold at $104, according to the company, making the revenue from oil fields in Kirkuk and the disputed areas nearly $83 billion.
A senior official at Kurdistan’s Ministry of Natural Resources says that Kurdistan sold an average of 90,000 to 100,000 barrels of oil per day last year. The $4 billion of Kurdistan’s oil revenue was deposited at the central treasury in Baghdad.
Meanwhile, the Kurdish government suspended its oil exports last week because the Iraqi government refused to pays the companies that search for and extract oil in Kurdistan.
According to an agreement between Erbil and Baghdad, the federal government has to pay 50 percent of the fees to oil companies, but it has failed to do so for the past 10 months. Baghdad owes around $1.5 billion to companies drilling in Kurdistan.
One day after Kurdistan’s decision to halt its oil exploration, Iraq’s deputy prime minister and former minister of oil, Hussein Shahrestani, threatened to punish the Kurdish government. He said the federal government would deduct the damage caused by the KRG’s oil suspension from the annual budget sent to Kurdistan from Baghdad.
“As soon as Baghdad has paid the fees, Kurdistan will immediately resume oil exports,” said the official at Kurdish Ministry of Natural Resources, who requested anonymity.
He added that the Kurdistan Region could increase its oil production to 175,000 barrels a day, thus adding $7.5 billion worth of revenue to the coffers of Iraq.
Although Iraq’s Oil Minister Abdulkarim Luaibi stated last week that international oil giant, ExxonMobil, had frozen its deal with Kurdistan, officials at the Kurdish Ministry of Natural Resources dismissed his claim.
In a meeting with Kurdish President Massoud Barzani in Washington last week, the head of ExxonMobil reaffirmed his company’s commitment to its deal with the KRG.
There are 119 oil fields in Kurdistan. If the disputed areas were to become part of Kurdistan, the region’s oil fields could number as many as 500, according to the source at the Kurdish Ministry of Natural Resources. Work is currently going on in 12 new fields in Kurdistan, he said.
The KRG has signed 47 oil deals with international firms so far, but opposition groups say the deals are not “transparent.”
Salih calls himself “the father of Kurdistan’s oil.” He says he was the first engineer to drill for oil in 1994 in the Taqtaq area.
He says Taqtaq’s oil is of the best quality, even better than that of Texas. Taqtaq’s oil is referred to as “Champagne” among oil experts in Kurdistan, Salih says.
Since the production of oil in Taqtaq in 2006, around 12 million barrels have been extracted from the area. Its total reserves are estimated at 2 billion barrels.
Salih said Kurdistan is also rich in minerals such as iron, copper, gold, marble and granite.“The marble is a very expensive type … It can compete with Italian and Turkish marbles,” he said.
According to Salih, there is also uranium in Kurdistan, more than anywhere else in Iraq.
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