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Economy News _ Baghdad
The International Center for Development Studies in London confirmed that restoring the Baiji oil refinery to work will have important benefits for the Iraqi economy, noting that Iraq annually loses at least $5 billion as a result of its import of oil derivatives despite having the second largest oil reserves in OPEC.
A report of the center, under the supervision of the Director of Economic Research, Sadiq Al-Rikabi, stated that Iraq possesses refining capabilities of 1116 million barrels per day, while its current production does not exceed 950 thousand barrels per day, indicating that the return of the Baiji refinery to work would raise Iraq’s refining capabilities to the level of 1260. One million barrels per day, which satisfies the country's consumption needs of oil products, and Baghdad is free from importing them.
Iraq annually spends about 3.5 billion dollars to buy gasoline and diesel, as it consumes 32 million liters of gasoline per day, which puts pressure on the country’s budget that needs these funds in huge infrastructure projects, such as the development road at a cost of 17 billion dollars, and the large port of Faw at a cost of 4.6 billion. Dollars, according to the report, of which Al-Araby Al-Jadeed obtained a copy.
Regarding the timing of restoring the Baiji refinery to work, the report stated that it coincided with Turkey's refusal to export Kurdistan's oil through the Kirkuk-Ceyhan pipeline, amounting to about 450,000 barrels per day, which observers interpreted as a reaction to the Paris International Court's decision to pay Ankara 1.5%. One billion dollars in compensation to Baghdad for Turkey's export of Kurdistan region's oil without the approval of the Iraqi government.
However, Turkey rejects this claim, and blames the "major circumstances" that led to the damage to the Iraqi-Turkish pipeline after the February earthquake this year.
The report highlights that the Turkish decision caused Iraq to lose more than $5 billion annually, in addition to suspending the work of most foreign oil companies operating in Kurdistan due to their inability to produce in light of the halt in exports.
Ankara also asked Baghdad to consider the "PKK" a terrorist organization, which was considered "the use of oil as a political pressure card," according to the report, which indicated that Turkey expressed its dissatisfaction with the agreement to exchange Iraqi oil for Iranian gas to generate electricity, especially since nearly 100 thousand Barrels will be exported daily from the Kirkuk fields under this agreement, which means that Turkey will lose the fees for transporting, storing and loading those quantities, which were supposed to be exported through its ports.
The negotiating position
According to the assessment of the International Center for Development Studies, Turkey's continued suspension of Kurdistan's oil exports will make the Baiji refinery the ideal solution, as the refinery's refining capacity, amounting to 310 thousand barrels per day, can be used for domestic consumption.
Baghdad currently receives 85,000 barrels per day of oil from the Kurdistan region to be refined in Iraqi refineries, with plans to increase the quantities to 150,000 barrels per day. .
The increase in Iraq's refining capabilities also reduces the country's dependence on oil derivatives from Iran as well, and the Iraqis avoid more economic pressures related to high inflation and basic prices related to fuel and transportation, according to the estimate of the International Center for Development Studies.
Al-Rikabi points out, in this regard, that Iraq imports Iranian gas to operate its power stations, which exposes it to the danger of US sanctions from which it is exempted annually. Therefore, Iraq's independence and sufficiency in terms of oil derivatives will be a source of international welcome, and will be added to Iraq's steps to strengthen its independence in a file. energy.
As for Iraq's international obligations, the return of the Baiji refinery will enhance Iraq's ability to abide by the agreement to reduce production in the "OPEC +" bloc, as Iraq announced a voluntary cut of up to 210 thousand barrels per day, and it will also enable Iraq to transfer the reduced quantities to domestic consumption. Without causing more pressure on global oil prices due to increased production, according to Al-Rikabi.
It is noteworthy that the Iraqi Prime Minister, Muhammad Shia’ al-Sudani, announced, earlier, the recovery of equipment and devices that were stolen from the Baiji refinery, during the control of the terrorist organization “ISIS” over it in 2015, explaining that one of the citizens returned a large proportion of the equipment of the refinery, which is considered essential to restore Work in it, which costs millions of dollars to order from abroad, and takes many years to manufacture.
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