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Iraqi Oil Smuggled to Azerbaijan and Afghanistan

Stacey Doyle's picture

Hussein al-Shahristani, Iraqi deputy prime minister for energy affairs, said smuggling of Iraqi crude oil is reaching as far as Azerbaijan, Afghanistan and the Gulf States.

The Finance Ministry spent $427 to settle disputes arising over the production of oil and exporting from the Kurdish region. Now Iraqi deputy prime minister for energy affairs, Hussein al-Shahristani, says the smuggling of Iraqi crude oil is going on unabated.

Yesterday Azzaman reported Shahristani said, “Oil smuggling operations are continuing from Iraq to Azerbaijan, Afghanistan, Iran and the Gulf ports.”

Shahristani continued, “Oil smuggling operations are continuing from the Kurdish regions to these countries and we have spotted these operations via satellites. They are documented with pictures.”

It is unclear how Kurds in northern Iraq could smuggle oil to the south. Shahristani did not state what the government would do to stop the reported smuggling or who might be involved.

According to Shahristani, the central government, “has no knowledge of oil exports originating in the Kurdish region” and it “receives no royalties.”

The quantities of oil produced by the Kurdish region are estimated to be around 100,000 barrels a day.

The prime minister is critical of the deals made by Kurds with foreign firms regarding development of oil fields in their region including the provinces of Arbil, Dahouk and Sulaimaniya.

In July, the Center for Global Energy Studies (CGES) reported Azerbaijan's oil production was starting to decline between January and April, 2011. It was down 4.6 percent from the same period in 2010.

According to the CGES report, the Early Oil Project in the Chirag field performed somewhat better than expected. The production did not live up to expectations in the Central Azeri platform where a gas leak occurred in 2008.

Last month News.Az reported Azerbaijan will be a major exporter to Europe once this region decides not to use nuclear energy.

William Ramsey, Director of Energy Program at the French Institute of International relations, stated, “Europe is very interested in Caspian oil and gas. Discussions to promote oil and gas trade were held recently. There is a need for the Caspian gas, energy resources of the Caspian Sea, particularly Azerbaijan.”

According to the article, the new gas fields discovered in Azerbaijan make its role in the energy security of Europe very important. Ramsey indicated, “The crisis in Europe can have an impact on a gas demand, budget organizations and some infrastructure projects. The pace these infrastructure projects are implemented may slow down. But implementation of these projects will not be stopped.”

Azzaman.com spoke to Hussein al-Shahristani about the oil situation and will publish the interview on December 18, 2011.

Photo from Wikimedia Commons

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