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Provinces of southern Iraq fight over huge oil field


22 Jan 2013
Iraq’s oil riches are a blessing for a country that has experienced disastrous wars and devastating civil strife. But they can also a bone of contention. The sparring is pitting two of Iraq’s richest oil provinces against each other. The provinces of Missan and Basra both lay demand to the gigantic Majnoon oil field, which is one of the biggest oil field in world with recoverable reserves estimated at 38 billion barrels. The authorities in Missan say Basra is demanding most of the field and that almost all the current drilling activities and oil wells being dug fall within its provincial borders. They have asked the Ministry of oil to define their provincial borders and clearly mark which parts of the field belong to each of the two provinces. The ministry states that it is not its job to separate the provincial borders and that its main interest is increasing oil production from Majnoon and so increasing the economy of the country. Majnoon straddles the borders of both the provinces but so far the ministry has shunned work on blocks within Majnoon province. Iraq has an engineering and procurement deal with the oil major Shell and the foreign major has drilled scores of wells with production expected to hit 200,000 barrels a day this year – a level enabling the foreign major to recover costs. Oil output is vital not only for Iraq’s economy which almost exclusively relies on the exports for hard cash, but for the producing provinces as well. Each province is entitled to $ 2 for each barrel produced within its borders. The Basra province emerged as the country’s biggest beneficiary from the so-called the ‘petrodollar scheme’ since it contributes to the lion’s share of oil production of Iraq of approximately 3.4 million barrels a day – a level not reached in the past 30 years. Source: [Azzaman]
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