KRG Ministry of Natural Resources

11 July 2014 - Erbil, Kurdistan Region, Iraq (mnr.krg.org) - This morning, members of the Kurdistan Regional Government (KRG) and Kirkuk Oil Protection Forces moved to secure the oil fields of Bai Hassan and the Makhmour area, after learning of orders by officials in the federal Ministry of Oil in Baghdad to sabotage the recent mutually-agreed pipeline infrastructure linking the Avana dome with the Khurmala field.

The nearby Bai Hassan field and the other fields located in Makhmour district are now safely under KRG management. The KRG expects production at these fields to continue normally. Staff at the North Oil Company that previously operated these fields have been informed that from tomorrow they will be expected to cooperate with KRG management. Those who do not want to do so can leave.

The new pipeline linking Khurmala with Avana was designed and constructed with the express purpose of facilitating export from the Makhmour, Avana and Kirkuk area fields through the KRG pipeline network to help increase revenues for Iraqis, at a time of great need and at a time when most of the Iraq-Turkey pipeline is under ISIS control.

The new infrastructure was built and paid for by the KRG, working in full cooperation with officials and engineers at North Oil Company. However, the KRG learned on Thursday that some officials in the federal Ministry of Oil gave orders to a number of NOC staff to cease their cooperation with the KRG and to dismantle or render inoperable the valves on the new pipeline.

The Avana and Makhmour fields have been unable to export since March because the main Iraq-Turkey pipeline has been damaged by terrorist attacks. The main Iraq pipeline lies mostly within territory recently surrendered by the federal government to ISIS.

Despite the inability to export and the halt to refining at Beiji, the Avana and Makhmour fields were producing about 110,000 barrels of oil per day and utilising the associated gas to help with the operation of the LPG bottling plant in Kirkuk.

But instead of using the new KRG pipeline infrastructure to export the produced oil, officials at the NOC were ordered by Baghdad to re-inject the oil back into a small, disused field in Kirkuk. This politically motivated decision risked causing great damage to the field in question with a permanent loss of most of the oil that has been re-injected. It has also deprived the people of Iraq of much-needed oil export revenue.

From now on, production at the new fields under KRG control will be used primarily to fill the shortage of refined products in the domestic market. This will ease the burden on ordinary citizens caused by the failure of the federal authorities to protect the country's vital oil infrastructure in the region.

The KRG will also claim its Constitutional share of oil revenues derived from these fields to make up for the huge financial deficit triggered by the illegal withholding of the KRG’s 17 percent share of the federal budget by Baghdad.

The KRG has been and always will be open to cooperation and coordination with Baghdad, according to the rights and responsibilities of the Regions as outlined under the Iraqi Constitution. The KRG still hopes that Baghdad climbs down from its policy of punitive political and economic sanctions against the citizens of Kurdistan.

This morning’s events have shown that the KRG is determined to protect and defend Iraq’s oil infrastructure whenever it is threatened by acts of terrorism or, as in this case, politically motivated sabotage.