The repercussions of the Ukrainian company continue.. Is Iraq facing a real economic disaster?

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Economy News - Baghdad

 Last month, the Iraqi Ministry of Oil announced the signing of a contract with the Ukrainian company (Ukrazm Resource) to develop the Akaz gas field in Anbar Governorate, a step that Iraqi Oil Minister Hayyan Abdul-Ghani described at the time as important, but it sparked controversy over the feasibility of entrusting the development process to a company that some see as “unknown.” ".

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The contract signed between Iraq and the Ukrainian company aims to produce 100 million standard cubic feet in the first two years, bringing production to 400 million standard cubic feet within four years and feeding the Anbar power station and the Okaz gas station.
Iraq has an abundant reserve of liquid gas. But it suffers from a scarcity of dry gas, which forces it to import large quantities from Iran to meet its dire need to operate electrical power production stations.
The government is working to benefit from the large quantities of gas associated with oil extraction, by investing it gradually to reach full benefit by 2030.
However, analysts believe that the gas investment file is still developing slowly. While parliamentarians and experts criticized the assignment of development of one of the largest gas fields in Iraq to the Ukrainian company, specialists believe that the step was necessary in the absence of competitors.
Engineer Haider Al-Battat, an expert in oil and energy affairs, said that the rights to develop the large field were supposed to be granted to a well-known international company that has great experience in this field, “and not to a small and unknown Ukrainian company, especially since its country is in a state of war.”
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Between wrong and right

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Al-Battat considered that this decision “is wrong. These are the wealth of Iraq and the Iraqis, and they must be managed better, especially since gas is the energy that will be relied upon in the coming years, and this requires that this wealth be in the hands of large international companies.”
This opinion is shared by energy expert Mazen Al-Saad, who said that gas fields “must be granted to reputable international companies; this great wealth must be well managed, so that there is no waste or mismanagement and planning. Therefore, we must rely on international companies.” “with expertise and competence in this important economic field.”
As for Ali Al-Mashkour, a member of the Oil and Gas Committee in the Iraqi Parliament, for his part, he described Iraq’s contract with an “unreliable” Ukrainian company regarding the Akkas field as “a real economic disaster... that will lead to the waste of national wealth.”
He said, "We have a parliamentary movement to find out the reasons that prompted the Ministry of Oil to contract with such a company that could work to waste national wealth. The Ministry of Oil should have contracted with well-known international companies specialized in this important sector, away from any other trends... This contract does not "There are no suspicions of corruption."
He added, "We will work to uncover these suspicions; we have ongoing investigations into them and we will have a parliamentary position, as it is not acceptable to waste Iraq's wealth according to any personal or political interests of any party or personality... Why did the Ministry of Oil exclude the Korean Coke Company, or other companies?" "Sober internationalism, in contrast to the vision proposed by Prime Minister Muhammad Shiaa al-Sudani?"
But Engineer Hamza Al-Jawahiri, an expert specializing in the development and production of oil and gas fields, explained granting the rights to develop the Akkas field to the Ukrainian company because there is no international company that wants to work in this region.
He said that the reason for the lack of competition to develop the field is “concern about security, especially since this region was at one time under the control of ISIS, so there is no company competing for the contract.”
At the same time, Al-Jawahiri indicated that the Ukrainian company “will not work in this gas field alone, as there will be approximately 10 companies that the Ukrainian company will work to bring in to work in this field within the specialized international companies.”
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Propane gas export

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On the fifth of this month, Iraq announced the export of its first shipment of propane gas through the Gulf, with a load of 10,700 tons. Despite the small financial return for this shipment, specialized analysts view it as a positive step that raises optimism by encouraging greater investments and activities in the gas sector and other oil derivatives in Iraq.
Al-Battat said that exporting this shipment of propane gas “will not add anything significant on the economic level, but it will constitute a small addition to Iraq’s exports, especially since this export occurs once every month... This step will not have significant financial returns and does not constitute major importance.” By exporting it, but in general it is a good step and gives a glimmer of optimism.”
The Basra Gas Company succeeded in transforming Iraq from an importing country into an exporting country of this type of gas, which is used for cooking and heating purposes and as fuel for cars. Last year, it announced a four-fold increase in its production since 2012 to reach 950 million standard cubic feet, and said that it would export cooking gas. To 11 countries.
For his part, Al-Jawahiri said that the export of this shipment is due to the fact that Iraq “now has a surplus of this gas, and its prices are very good... As for the financial returns, this depends on the quantities that are exported.”
Al-Jawahiri believes that the export of this shipment is “a step in the right direction, as it will be an encouraging factor for the export of other oil derivatives during the next stage, especially since Iraq will be a greater exporter of oil derivatives at the end of this year.”
He pointed out that Iraq "will be satisfied with improved (premium) gasoline, as well as gasoline (soil) and white oil, and will possess many white derivatives that can be exported during the next stage."
For his part, Al-Saad considered that this step “confirms the government’s endeavor to develop the oil and gas sector in Iraq; and this matter will certainly have different economic consequences on the Iraqi reality,” stressing the necessity of exporting large quantities of gas “so that there is a financial return that can cover part of it.” of the state budget deficit.[/size]

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Added 05/19/2024 - 1:24 PM
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