Middle East Economic Survey

 

VOL. LI

No 12

24-March-2008

 

IRAQ

 

Iraqi Border Fields: Politics And Realities

 

By Thamir Uqaili

 

Dr Uqaili is a senior petroleum engineer with 40 years of experience in exploration and technical management in the Iraq National Oil Company and Ministry of Oil. He is the principal author of a study just published by the Centre for Global Energy Studies (CGES) in London entitled “Hydrocarbon Exploration And Field Development In Iraq – A Comprehensive Technical And Policy Reference Manual For Entering Iraq And Operating In Its Oil And Gas Sector.” For details, contact jenni.wilson@cges.co.uk (www.cges.co.uk). Dr Uqaila can be contacted at tuqaili@yahoo.co.uk

 

Iraq has border fields with Iran, Kuwait and Syria. There is so far no common field with Jordan apart from a possible small extension of the Risha gas field. The border fields of Iraq are discussed in more details in the major study mentioned above.

 

I- Iraq-Iran Border Fields And Structures

There are 15 fields and structures common with Iran. They are located in the eastern limit of the Governorates of Sulaimaniya, Dyala, Wasit, Misan and Basra.

 

A-The current proven fields starting from the Kurdistan–Iran border are:

B- Prospective structures:

 

At least three prospects (Biyal, Derbendikhan and Bishkan surface exposures) are located within Kurdistan and five other (seismic anomalies) are situated further to the south along the border areas. The latter are: Chia Surkh South, Nhairat, Nhairat South, Zurbatia (yet to be confirmed) and Shihabi (southeast of Badra field)

 

II- Iraq- Kuwait Border Fields And Structure

Three Iraqi fields extend to Kuwait:

 

South Rumaila, has 2-3km extension in Kuwait, produces from one reservoir ‘Upper Shale Member of Zubair Formation’. The Kuwaitis started their activities in the early 1970s while Iraq drilled two lines of wells (6-8 wells) near the old border line trying to stop the migration of the crude oil to the Kuwaiti side.

 

Zubair field extends some 10km inside Kuwait. Its 4th dome, called sometimes Safwan field, has at least three reservoirs with large reserves. The dome was discovered and delineated on the Iraqi side in 1977, and put to production with one degassing station. The Kuwaitis are believed to be producing from their part ‘North Abdali field’.

 

Umm Qasr field, to the west of the southern tip of Zubair field, was discovered in 1979 after drilling the first well. The extension in Kuwait is about 3-5km. The reserves are probably around 50mn barrels.

 

III- Iraq-Syria Border Fields

Sfaya field, an extension of the Syrian Suwaidiya field, has been producing for over 25 years. Iraq, mostly for political reasons, started a campaign of increasing production using electric submersible pumps. Iraq is believed to have exported some of the field production to Syria by trucks, after the 1991 Gulf War.

 

Two other small Syrian Fields (one to the north of Suwaidiya and one to the south of it) may have small extensions into Iraq. The latter has not been confirmed by any Iraqi field’s activities.

 

Still further to the south of Suwaidiya, a few small prospects seem to extend to Syria: Abtekh, one tiny structure of 3-Qahtan prospects and Nada. Qahtan structures are 3km east of the Syrian Hol gas field. The Iraqi prospects are believed to be hydrocarbon bearing as they are situated between the Iraqi discoveries south of Ain Zala-Butma fields and the Syrian discoveries at the border areas to the west.

 

IV- Iraq-Jordan Border

The Jordanian Risha gas field is believed to have a limited extension in Iraq that is still not confirmed. Future discoveries in the Western Desert and Jazira Area (North of the Euphrates) may reveal further interesting discoveries.

 

V- History Of Politics And Realities

The issue of the border fields with Kuwait and Iran has been mostly used as a political scarecrow. It was only during the first Gulf War that Saddam intensified his effort to inflict economic damage on Iranian oil installations. The following historical review may shed light on the political intentions of the governments concerned so far. It will also remind the politicians on either side of the borders that the only civilized attitude to serve their countries is unitization of such fields. The law of capture can only lead to disaster.

 

Iraq-Iran Relations

The border fields issue during the rule of the Shah was a sleeping dog.

–         Technical Advisor from INOC as head of the Iraqi team

–         One Ministry Technical Official [the author of this article]

–         One INOC Technical Official

–         One Technical Official from Geological Survey and Mineral Investigation

The delegation visited Tehran in December 1977 and met a high-level NIOC team over three days when oil cooperation was discussed. Priority was given to gas supply to Iran, border fields, and joint mineral exploration. The author of this article was entrusted to prepare a report to be sent to the highest Oil Committee in Iraq that was under Saddam at the time, ‘Committee for Oil Affairs and Execution of Agreements’. The report was sent to the committee and discussed in details with the general secretary of the committee (Majid Adham, executed by Saddam years later, accused of being involved in a conspiracy against the president). The recommendations included a proposal of field unitization but no response or guidance was advised to INOC or MOO. A few months later, the joint Iraqi-Iranian committee met in Baghdad where the Iraqi side (included the head of the Iraqi team and the author) was led by 'Izzat al-Duri (number two in the Saddam regime). Again, no decision was reached in the joint meeting, despite the expressed desire of the Iranian side regarding the need to converge on decisions concerning the recommendations of the December 1978 Tehran meeting.

–        Saddam, during the war with Iran, held regular meetings with the top military officials in presence of a senior representative from MOO and INOC. In some of those meetings, Iranian targets were chosen for attacks. In 1985, a meeting was called to choose offshore oil targets in the Gulf. MOO was represented by the DG of South Oil Company who thought that a sensible comment from him was required. His comment was: “Sir, Mr President: if we attack a target in the Gulf, there will be a lot of pollution and the Iranians will retaliate against our onshore border installations. Plus we have obligations towards future generations to preserve some oil reserves for them.”

 

–        Saddam asked the man to repeat what he said, a signal for him to retreat; but it was not understood that way. The man repeated the same comment. He was sacked from the meeting, lost his job as DG, and was demoted to Chief Engineer and sent to the army to be on the southern battlefield. His task was to remove damaged Iraqi tanks, guns and trucks. Later he was lucky to leave the army alive, but was never employed by the government again.

 

–        There was a takeover of the Iranian side of Nafti Shah during the Iraq-Iran war during which the surface installations and wells were damaged. Iran, after the cessation of the war in 1988, rebuilt the facilities and drilled new wells to be able to resume production. Iraq has stopped production from its side (7,000-10000 b/d) since 2005 due to bad security in the area. It is ironical that a 4in pipeline was laid down in late-1991 to the border to enable the smuggling of crude oil to Iran.

 

The border with Iran since September 1988 has been quiet. Recently there has been a series of conflicting rumors/reports that the Iranians have taken over 15 Iraqi wells and started producing them. The news from Misan Governorate suggests that the Iranians have prevented Iraqi oil personnel from operating Abu Gharab producing wells located 50-100km from the border. The Iranians are reported to have claimed that the border is not well identified which needs some coordination with the Iraqi authorities to fix it. Some mix-up of the claimed takeover with the Iraqi-Iranian agreement for Iran to refine Iraqi crude and deliver products to Iraq has been reported too. That agreement seems to be a political gesture on the part of Iran as the latter has no surplus refining capacity to do that. In fact, Iran itself is suffering from a shortage of white products. No clear categorical denial has been issued by either side, Iraqi or Iranian. The news that both sides are to discuss border problems makes one wonder whether the border fields are meant to be discussed with the Shatt al-Arab problem.

 

The new border issue seems to be politically motivated by many factions inside and outside Iraq. There was no clear definition of the ‘border event’ by either side in the first two weeks. The Iraqi oil minister then denied the incident but he admitted recently that the Iranians have prevented Iraqi workers securing access to their wells near the border in a marsh area where the border line was not clear.

 

Iraq-Kuwait Relations

The issue of border demarcation has been a real problem for Kuwait since its independence. The problem escalated when ΄Abd al-Karim Qasim [prime minister of Iraq, 1958-63] claimed Kuwait to be part of Iraq. Kuwait was said to have paid Iraq some ID/$30mn in 1963 to get the border line defined and marked.

 

From the mid-70s, Iraq and Kuwait intensified their activities in the border area, rather than agreeing on the demarcation of the border line. Iraq’s good relations with Kuwait during the Iraq-Iran war did not convince Saddam to resolve the border problem. Many reports were sent to the president’s office about the activities at the border line during 1975-80, but again no guidelines or directive was given to peacefully handle the problem.

 

In 1984, a pipeline to export gas to Kuwait was constructed and operated until the invasion of Kuwait. The exploitation by the Kuwaitis of South Rumaila was one of the main reasons for Saddam’s takeover of Kuwait in 1990. After the first Gulf War, the Kuwaitis were rewarded with the shifting of the border line to more than 200ms to the north, giving them more reserves from South Rumaila, Zubair and Umm Qasr fields. The Kuwaitis may look at this war achievement as a substitute for their lost oil as result of the damage Saddam did to them during the occupation. The Iraqis, on the other hand, see it as an unfair demarcation of the border imposed on Iraq, an issue that may re-ignite tension in the future.

 

Iraq-Syria Relations

Despite the acute differences between the governments of Syria and Iraq during the Saddam era, the border fields were not a real issue. No attempt to unitize the Sfaya field, even during the UN sanctions period when Iraq started exporting crude oil to Syria, has been made. Unconfirmed reports suggest that Sfaya was tied-in with Suwaidiya in 2001, when production was in the range of 800,000 b/d; but production stopped during the second Gulf war. Iraq, post-2003, agreed to barter 10,000-15,000 b/d for electricity from Syria.

 

Iraq-Jordan Relations

Currently there is no border field problem with Jordan. The extension of Risha field is too small to require attention from both sides. Jordan has shown interest to drill on the Iraqi side but the latter has not responded.

 

VI- Better Outcome For Iraq

When countries capture cross-border oil, problems and perhaps disasters ensue. Iraq, especially now and for years to come, requires stability and partners, not enemies. The longest borders are with Iran and in the presence of 15 fields and prospects there is a real need to unitize plans and operations here.

 

Iraq now may not be in a position to handle the issue of the border fields with Kuwait, but there will be a time when this is needed. Success with the Iranians will no doubt have positive effects and economic mutual benefits in similar deals to come, whether with the Kuwaitis or the Syrians.

 

The task with Syria is easier due to the limited cases concerned and the reasonably good relations between the two countries. Syria needs extra oil badly, due to the continued decrease of the country’s production. Iraq, on the other hand, has difficult security conditions preventing safe field operations on its land. The Ministry of Oil has recently announced the formation of a committee to handle the issue of the border fields. The committee will need help from international experts on unitization. Its task is difficult in the absence of enough Iraqi experts, and a strong INOC or local Iraqi operators.