Iraq Seeks Huge Investment to Build Oil Refineries

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Researched by Industrial Info Resources India (Delhi, India)--Iraq is planning to ramp up its production of refined products, along with the development of its crude production facilities. Iraq's Oil Ministry says that during the next six years, the country "will become the biggest producer and a major exporter of refined products." In the last few years, Iraq has made steady progress in achieving its goal of returning to its pre-2003 position of prominence in the international oil sector. Last year, the Iraqi Oil Ministry made some deals to allow foreign companies to work in Iraq's oil fields.

To reach the status of a "major exporter" of refined products, the Oil Ministry is seeking a total of $20 billion to $25 billion to construct four new refineries. The ministry is open to all levels of investment, including a partnership with the Iraqi government, which plans to invest $25 billion of its own funds to modernize its refining infrastructure and crude production.

Iraq's potential contribution to world supplies of crude and refined products is so large that it could have an effect on heating oil prices. The nation currently produces 9 million liters (about 2.38 million gallons) of heating oil per day. Adding four new refineries could quadruple that figure and provide the kind of increase in world heating oil supplies that has the power to steadily lower prices.

Iraq currently has three refineries: Baiji in the north, Basra in the south, and Dora in southern Baghdad. The Karbala refinery is intended to have a capacity of 140,000 barrels per day (BBL/d), the Nasiriyah refinery 300,000 BBL/d, and the Maysan and Kirkuk plants 150,000 BBL/d each. A major priority is the construction of a refinery in Karbala, as it is in the center of Iraq and inputs can be transferred to it from the south and north; others are in Maysan, Kirkuk and Nasiriyah. It is expected that some of the production from the latter three refineries will be surplus to domestic requirements, but that will be reduced with the increase in demand over time.

All these existing operational refineries have a combined capacity to process 550,000 barrels of crude oil per day, producing refined products such as 12 million liters of petrol, 15 million liters of diesel, 9 million liters of heating oil and large volumes of fuel oil for power stations. Currently, Iraq struggles to meet its domestic demand for refined products and has no spare production for export. Hence, Iraq aims to boost its refining capacity by 740,000 BBL/d on top of the current 550,000, through the construction of four new modern refineries in the central province of Karbala, in the northern oil hub of Kirkuk, and in the southern areas of Nasiriyah and Maysan.

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