Latest news with #OilandGasCommittee
Asharq Al-Awsat
10-03-2025
- Business
- Asharq Al-Awsat
Iraq Turns to Gulf for Alternative to Gas from Iran
Baghdad said on Saturday it had not officially received the United States' decision to rescind a waiver that had allowed Iraq to pay Iran for electricity. The Trump administration rescinded the waiver on Saturday as part of President Donald Trump's "maximum pressure" campaign against Tehran, a State Department spokesperson said. The decision to let Iraq's waiver lapse upon its expiration "ensures we do not allow Iran any degree of economic or financial relief," the spokesperson said, adding that Trump's campaign on Iran aims "to end its nuclear threat, curtail its ballistic missile program and stop it from supporting terrorist groups." For Iraq, the end of the waiver "presents temporary operational challenges," said Farhad Alaaeldin, foreign affairs adviser to Prime Minister Mohammed Shia al-Sudani. "The government is actively working on alternatives to sustain electricity supply and mitigate any potential disruptions," Alaaeldin told Reuters. "Strengthening energy security remains a national priority, and efforts to enhance domestic production, improve grid efficiency and invest in new technologies will continue at full pace." Trump initially granted waivers to several buyers to meet consumer energy needs when he reimposed sanctions on Iran's energy exports in 2018, citing its nuclear program and what the US calls its meddling in the Middle East. His administration and that of Joe Biden repeatedly renewed Iraq's waiver while urging Baghdad to reduce its dependence on Iranian electricity. The State Department spokesperson reiterated that call on Saturday. "We urge the Iraqi government to eliminate its dependence on Iranian sources of energy as soon as possible," the spokesperson said. "Iran is an unreliable energy supplier." The Iraqi government acknowledged that ending the import of gas from Iran without ready alternatives will lead to the collapse of the electricity grid during the hot summer season. An Iraqi government spokesman said in a statement that "dialogue between Baghdad and Washington will continue as both sides realize the importance of Iraq as a main factor of stability in the region." Iraq has been fully committed to the waiver and it had set a long-term strategy to achieve independence in the energy sector, he went on to say, while highlighting financial reform enacted by Baghdad and efforts to bolster transparency according to international standards. The government is looking at the worst-case scenario in various fields, including energy, and has started to hold intense meetings to overcome any electrify crisis, he added. Meanwhile, the parliamentary Oil and Gas Committee said Iraq will seek alternatives, including turning to the Gulf, to secure fuel for its power plants. Another parliamentary committee has warned that the energy sector will collapse during the summer when temperatures soar. Spokesman for the Oil and Gas Committee Ali Shaddad said on Sunday that the government will turn to the Gulf for gas. The problem is that the electricity ministry had built power plants in Iraqi provinces that only operate on gas. The stations located in Basra operate on gas and oil, which has helped keep energy generation in the province stable, he revealed. The prime minister himself is following up on the completion of a gas pipeline from Basra. The energy ministry has been working on the project for 30 days already and it will be completed within 120, he added. Iraq produces 27,000 megawatts of electricity through plants that mostly operate on gas. Production occasionally drops to 17,000 megawatts. The total production does not meet the country's daily needs, which is 40,000 megawatts. Dr. Ihssan Shmary, professor of strategic and international studies at Baghdad University, told Asharq Al-Awsat that the US decision to rescind the waiver is a precursor to gradually start imposing sanctions on Iraq. He said the sanctions will cover entities, institutions and even some figures. The US decision effectively confirms that the administration does not distinguish between Iran and Iraq and it sees the former as a card to impose its maximum pressure policy on the latter, he stressed. The decision has greater political rather than technical implications, especially since the next decisions may alter the balances of power in Iraq, he explained. On the alternative to gas from Iran, he said efforts should be exerted to boost the electricity connection with Saudi Arabia. The Kingdom can also help develop Iraq's energy sector and connect it to the Gulf, he said.
Shafaq News
06-03-2025
- Business
- Shafaq News
Iraqi lawmaker: Domestic gas production years away
Shafaq News/ Iraq has no immediate alternative to Iranian gas for powering its electricity plants, and transitioning to domestic production will take more than two years, a member of the parliamentary Oil and Gas Committee said on Thursday. "There are several power plants that rely primarily on Iranian gas, and any sudden disruption or halt in supply would reduce electricity availability in Baghdad and other provinces," lawmaker Ali Saadoun al-Lami told Shafaq News. He stressed that shifting to local gas production instead of imports from Iran would take "at least two years or more." Meanwhile, securing alternative gas or electricity supplies from other countries would take months to implement. "Iraq does not currently have any new alternatives," al-Lami added. Iraq depends on Iranian gas for 40-60% of its electricity generation, despite US sanctions on Tehran, which have complicated payment mechanisms for energy imports. Earlier, Saeid Tavakoli, Iran's Deputy Oil Minister and head of the National Iranian Gas Company (NIGC), revealed that Baghdad would receive another exemption from Washington to continue importing gas from Iran. While Iraq has been working to increase domestic gas production, progress has been hindered by infrastructure limitations and investment delays. The country is now exploring natural gas imports from Qatar and Algeria, though an agreement with Turkmenistan remains unfeasible, as the gas would need to transit through Iran.
Shafaq News
11-02-2025
- Business
- Shafaq News
Iraq acts urgently to contain 'Trump Crisis'
Shafaq News/ In January, US President Donald Trump signed an executive order ending Iraq's exemption from sanctions related to Iranian gas and electricity imports. The move, part of a broader sanctions package aimed at Iran, targets Iran's economic activities, including its energy exports. The executive order stipulates that the US will take immediate steps to prevent Iraq from using its financial system to facilitate Iranian sanctions evasion and to ensure that Gulf countries do not serve as transit points for Iranian energy exports. The memo also outlines measures to reduce Iran's oil exports to zero, including shipments to China, and to revoke any exemptions that provide financial relief to Iran. Two members of the Iraqi Parliament's Oil and Gas Committee announced plans to host the ministers of electricity and oil, along with administrative officials from both ministries, in the coming days. Bassem Naghimash, a member of the committee, criticized 'the lack of diversification in Iraq's gas sources, despite the ongoing crisis surrounding Iranian gas imports.' He noted that several alternatives have been proposed, including potential deals with Jordan, Turkmenistan, and Qatar, as well as tapping into Iraq's gas resources. However, Naghimash emphasized that 'the country's capacity to invest in domestic gas solutions has been hindered by a lack of government financial and logistical support.' Another member of the committee, Kazem Al-Touki, agreed with Naghimash's assessment, explaining that Qatar had been considered as a potential gas supplier. However, challenges arose due to the absence of gas platforms in Iraq's ports, leading the country to rely on Turkmenistan, where gas is transported through pipelines passing through Iran. 'US sanctions also thwarted this deal, as the intermediary company is Iranian-owned.' Al-Touki stated that the 'real issue lies not only in sanctions against Iran but also in the broader impact on Iraq.' He confirmed that the ministers of electricity and oil would be hosted to discuss potential solutions following Trump's decision. He further explained that Iran's gas supply issues were already evident before the sanctions, primarily due to unpaid debts. In a prior meeting, Iraq's electricity minister, Ziad Fadhil had suggested supplying a station in the Kurdistan region with fuel and redistributing the electricity to the rest of the country. As for Iraq's next steps, Al-Touki speculated that the government would likely use its 'diplomatic influence' to negotiate an exemption from the sanctions, similar to past agreements. Iraq's Energy Dependence Since the 1990s, Iraq has relied on electricity rationing due to low domestic power production, with households depending on private generators to make up the shortfall. To meet its energy needs, Iraq imports between one-third and 40% of its electricity and gas from Iran. However, ongoing US sanctions have made it increasingly difficult for Iraq to settle payments for these imports. Iraq has also been working on regional electricity interconnection projects to stabilize energy supplies without depending on imported fuel. In August 2023, Iraq signed an agreement with Turkmenistan to import gas as a partial solution to its power generation challenges. On January 18, 2025, Iraq's electricity minister confirmed that importing gas from Turkmenistan would reduce the country's reliance on Iranian gas by 50%. However, he acknowledged that any disruptions to gas imports would directly affect Iraq's electricity supply. Fadhil also stated that domestic gas development projects would take 3 to 5 years to complete, meaning Iraq would remain dependent on gas imports in the interim. Potential Impact on Iraq Saeed Shavardi, an Iranian economic expert, expressed confidence that Iran would continue supplying gas to Iraq despite US sanctions. However, he acknowledged that 'the final decision rests with the Iraqi government, which will face significant pressure from the United States.' He argued that the Iraqi government, led by Prime Minister Mohammed Shia Al-Sudani, would prioritize the needs of its people and likely resist US pressure. Shavardi also criticized Trump's decision, calling it 'an infringement of international law and an unjust move against the Iraqi people', emphasizing that the gas trade between Iraq and Iran is essential for electricity generation and warned that cutting off the gas supply could lead to widespread protests in Iraq during the hot summer months when temperatures often exceed 50°C. Shavardi further argued that US actions have systematically undermined Iraq's efforts to address its electricity crisis, despite the presence of major American companies in the power sector. Regarding Iran's prospects, Shavardi noted that Tehran could find new customers for its gas, given the global demand for energy, especially in Europe, China, India, Pakistan, and Turkiye. He believed that 'Iran could mitigate the impact of US sanctions by redirecting its surplus gas to these markets,' thereby nullifying the effect of Trump's 'maximum pressure' campaign. Economic expert Nabil Al-Marsoumi warned of severe consequences for Iraq's economy and society if the US sanctions on Iranian gas imports go into effect. Al-Marsoumi explained that 'Iraq's electrical grid relies on Iranian gas for about 40% of its supply, amounting to approximately 8,000 megawatts of power.' The withdrawal of this gas would create a significant energy shortfall, impacting millions of Iraqis. Possible Solutions Al-Marsoumi suggested that short-term solutions could include promoting household solar energy systems, offering bank loans to citizens, deploying floating power stations like Turkiye's Karadeniz PowerShip, and converting some power plants to use heavy fuel oil or diesel. He also recommended rationing electricity and implementing scheduled outages. For long-term solutions, Al-Marsoumi pointed to the construction of infrastructure for liquefied natural gas (LNG) imports at the large Al-Faw port and the development of solar energy projects with companies such as TotalEnergies, ACWA Power, and Masdar. He estimated that 'these projects could add up to 3,000 megawatts to Iraq's electricity grid within three years.' Additionally, Al-Marsoumi highlighted the 'importance of Turkmen gas as a viable alternative.' However, transporting this gas through Iran would require a new contract with an intermediary company and several months of logistical arrangements, delaying its potential impact. He noted that 'Turkmenistan could supply Iraq with around 4,000 megawatts of electricity, but this would only partially address the country's needs.'
Shafaq News
08-02-2025
- Business
- Shafaq News
Iraq scrambles to avert energy crisis after Trump's sanctions move
Shafaq News/ Iraq is scrambling to avert a severe energy crisis after US President Donald Trump revoked its exemption from sanctions on Iranian gas and electricity imports, a move that threatens to cut off nearly 40% of the country's power supply. Iraqi officials are racing to secure alternative energy sources and prevent widespread blackouts. Iraq's Energy Dilemma, Trump's Order Since the 1990s, Iraq has relied on electricity rationing due to low domestic power production, with households depending on private generators to make up the shortfall. To meet its energy needs, Iraq imports between one-third and 40% of its electricity and gas from Iran. However, ongoing US sanctions have made it increasingly difficult for Iraq to settle payments for these imports. On January 31, 2025, Trump signed an executive order ending Iraq's exemption from sanctions related to Iranian gas and electricity imports. The move, part of a broader sanctions package aimed at Iran, targets Iran's economic activities, including its energy exports. The executive order stipulates that the US will take immediate steps to prevent Iraq from using its financial system to facilitate Iranian sanctions evasion and to ensure that Gulf countries do not serve as transit points for Iranian energy exports. The memo also outlines measures to reduce Iran's oil exports to zero, including shipments to China, and to revoke any exemptions that provide financial relief to Iran. Iraq's government now faces a complex challenge in navigating these sanctions, seeking solutions that balance its energy needs with its diplomatic and economic priorities. Hosting Oil and Electricity Minister in Parliament In response to Trump's decision, two members of the Iraqi Parliament's Oil and Gas Committee, Bassem Naghimash and Kazem Al-Touki announced plans to host the ministers of electricity and oil, along with administrative officials from both ministries, in the coming days to discuss the matter and find solution to exempt the country from sanctions due to importing electricity and gas from Iran. Speaking to Shafaq News, Naghimash criticized the lack of diversification in Iraq's gas sources, despite the ongoing crisis surrounding Iranian gas imports. He noted that several alternatives have been proposed, including potential deals with Jordan, Turkmenistan, and Qatar, as well as tapping into Iraq's gas resources. However, 'the country's capacity to invest in domestic gas solutions has been hindered by a lack of government financial and logistical support.' "There are local efforts and capabilities, but they lack financial and logistical support from the government. Meanwhile, our monitoring of the companies that obtained licensing rounds indicates a lack of seriousness in investing in gas, which may be influenced by internal or external factors." Another member of the committee, Al-Touki, agreed with Naghimash's assessment, explaining that Qatar had been considered as a potential gas supplier. However, 'challenges arose due to the absence of gas platforms in Iraq's ports, leading the country to rely on Turkmenistan, where gas is transported through pipelines passing through Iran…this deal was also thwarted by US sanctions, as the intermediary company is Iranian-owned.' Al-Touki stated that the real issue lies not only in sanctions against Iran but also in the broader impact on Iraq. He confirmed that the ministers of electricity and oil would be hosted to discuss potential solutions following Trump's decision. 'Iran's gas supply issues were already evident before the sanctions, primarily due to unpaid debts.' In a prior meeting, Iraq's electricity minister had suggested supplying a station in the Kurdistan region with fuel and redistributing the electricity to the rest of the country. As for Iraq's next steps, Al-Touki speculated that "the government will leverage its diplomatic influence to secure an exemption for Iraq to resolve this issue, as it has in the past." Potential Impact on Iraq Saeed Shavardi, an Iranian economic expert, expressed confidence that Iran would continue supplying gas to Iraq despite US sanctions. However, 'the final decision rests with the Iraqi government, which will face significant pressure from the United States…the Iraqi government, led by Prime Minister Mohammed Shia Al-Sudani, would prioritize the needs of its people and likely resist US pressure.' Shavardi also criticized Trump's decision, calling it an infringement of international law and an unjust move against the Iraqi people. He emphasized that the gas trade between Iraq and Iran is essential for electricity generation and warned that 'cutting off the gas supply could lead to widespread protests in Iraq during the hot summer months when temperatures often exceed 50°C. Shavardi further argued that US actions have systematically undermined Iraq's efforts to address its electricity crisis, despite the presence of major American companies in the power sector.' Regarding Iran's prospects, Shavardi noted that Tehran could find new customers for its gas, given the global demand for energy, especially in Europe, China, India, Pakistan, and Turkiye. He believed that Iran could mitigate the impact of US sanctions by redirecting its surplus gas to these markets, thereby nullifying the effect of Trump's 'maximum pressure' campaign. Economic expert Nabil Al-Marsoumi warned of severe consequences for Iraq's economy and society if the US sanctions on Iranian gas imports go into effect. 'Iraq's electrical grid relies on Iranian gas for about 40% of its supply, amounting to approximately 8,000 megawatts of power. The withdrawal of this gas would create a significant energy shortfall, impacting millions of Iraqis.'Al-Marsoumi explained. Possible Solutions Iraq has been working on regional electricity interconnection projects to stabilize energy supplies without depending on imported fuel. In August 2023, Iraq signed an agreement with Turkmenistan to import gas as a partial solution to its power generation challenges. On January 18, 2025, Iraq's electricity minister, Ziyad Ali Fadel, confirmed that importing gas from Turkmenistan would reduce the country's reliance on Iranian gas by 50%. However, he acknowledged that any disruptions to gas imports would directly affect Iraq's electricity supply. Fadel also stated that domestic gas development projects would take 3 to 5 years to complete, meaning Iraq would remain dependent on gas imports in the interim. Al-Marsoumi suggested that short-term solutions could include 'promoting household solar energy systems, offering bank loans to citizens, deploying floating power stations like Turkiye's Karadeniz PowerShip, and converting some power plants to use heavy fuel oil or diesel.' He also recommended rationing electricity and implementing scheduled outages. For long-term solutions, Al-Marsoumi pointed to the construction of infrastructure for liquefied natural gas (LNG) imports at the large Al-Faw port and the development of solar energy projects with companies such as TotalEnergies, ACWA Power, and Masdar. 'these projects could add up to 3,000 megawatts to Iraq's electricity grid within three years.' Additionally, Al-Marsoumi highlighted the importance of Turkmen gas as a viable alternative. However, transporting this gas through Iran would require a new contract with an intermediary company and several months of logistical arrangements, delaying its potential impact. 'Turkmenistan could supply Iraq with around 4,000 megawatts of electricity, but this would only partially address the country's needs.'
Shafaq News
26-01-2025
- Business
- Shafaq News
Iraq blames foreign operator for Rumaila fire
Shafaq News/ A fire at Iraq's Rumaila oil field disrupted exports and caused extensive damage, with lawmakers blaming the incident on negligence by the foreign operator managing the field. Ali Shaddad, a member of Iraq's parliamentary Oil and Gas Committee, said the fire broke out on Friday in a decommissioned storage tank at the field's fifth gas separation station (DS5) in northern Rumaila. The blaze, which lasted several hours, forced a complete shutdown of the station and resulted in the loss of an estimated 180,000 to 200,000 barrels of oil from Iraq's export capacity. 'Preliminary findings show negligence by the foreign operator, which instructed employees to activate a storage tank that had recently undergone maintenance but was out of service,' Shaddad told Shafaq News. He added that while there were no fatalities, initial reports of worker injuries and the financial impact highlight broader safety concerns. According to the safety department at Rumaila, the fire ignited around 1:30 p.m. and was contained by 5:30 p.m. after extensive firefighting efforts involving 20 fire trucks. Workers were evacuated, and adjacent tanks were cooled to prevent further escalation. 'The infrastructure at Rumaila lacks modern safety systems, making it vulnerable to similar incidents,' Shaddad warned, adding that Iraq's parliamentary oil and gas committee will act after the investigation concludes. The Oil Ministry confirmed that the fire occurred as crude oil was introduced into Tank No. 2 at DS5, a tank recently rehabilitated by an Egyptian company. Petroleum experts said operational errors were likely responsible for the explosion, noting that such incidents were more common in the past but are increasingly rare with modern safety standards. Rumaila, one of the world's most productive oilfields and a vital source of revenue for Iraq, is operated by a BP-led consortium.
