Western energy chiefs hope for Iraqi profits as Kurdish troops take oil city of Kirkuk

 

DEPUTY business editor

The battles raging across northern Iraq could end up benefiting the Western oil companies operating in the Kurdistan region, industry executives claimed last night.

In the short term, the current instability is making day-to-day work on the oilfields difficult for those closer to the fighting. But senior Western executives in the autonomous region said the decisive action of the Iraqi Kurdish army to take control of the northern oil city of Kirkuk would strengthen its hand in critical negotiations with Baghdad over its large oil reserves.

Kurdistan wants to be allowed to sell its oil directly abroad, bypassing the Iraqi system. The Iraqi president Nouri al-Maliki has decreed this illegal. The two-year spat escalated last month when Kurdistan started exporting oil directly from its newly built pipeline to Turkey.

However, now the Kurdish "peshmerga" army have shown themselves such an able fighting force – compared with the fleeing Iraqi troops – oil executives hope Mr al-Maliki will realise that he needs to keep the autonomous region onside.

"It seems awful talking about positives when there are hundreds of thousands of refugees, and nobody is enjoying anything that's happening here, but at the moment we're pretty comfortable with the situation," said one executive. "The Kurds have shown they would and can defend Kurdistan. They're an able force – which is a far cry from the Iraqis. Al-Maliki will see clearly that the Kurds have protected Kirkuk where his government could not."

Another oil executive close to the Kurdistan government added: "If al-Maliki wants to get the Kurdish army on his side, he knows he has to relent on allowing them oil exports. So people out here are seeing this could draw al-Maliki into the deal they wanted."

He suggested the Kurds could offer to help retake Mosul, Iraq's second city, which was overrun by the jihadist forces of the Islamic State in Iraq and the Levant (Isis), if Mr al-Maliki proved accommodating.

A liberation from the Iraqi oil system would result in greater profits for the region, which is keen to push its independent ambitions. That could also spur more activity for London Stock Exchange companies such as Genel, Gulf Keystone and Oryx, as well as giants like Exxon, Chevron and Total that are operating in the region.

However, not all executives are optimistic. One major player in the region with operations near the fighting said: "Perhaps this can create some sort of a bridge in the negotiations with Baghdad [over the Kurdish oil exports], but there are deep-seated personal animosities between the leaders. Al-Maliki is weakened but he's hardly a unifying figure." Some had already begun to question Mr al-Maliki's ability to keep a grip on Kurdistan's oil after it emerged recently that the Russian energy giant Rosneft had been buying its crude, circumventing the Baghdad ban.

Mr al-Maliki's administration has already blacklisted the Austrian trading firm OMV but neither it, nor Rosneft, works in Iraq.

Meanwhile two oil tankers, the United Leadership and United Emblem, are in a holding pattern in the Mediterranean with a million barrels each of Kurdish crude that Baghdad has managed to prevent from being unloaded.

Another executive said that Kurdistan's beefed-up security, including troop movements and roadblocks, was making it difficult to move people and machinery along the Erbil-to-Mosul road, which runs through some oilfields.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Guru Careers: Communications Exec / PR Exec

£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral