MOSUL: Iraq’s northwest Ninevah province has started talks with oil companies and is drafting terms to attract investment in its significant oil and gas reserves, steps certain to antagonize the central government.
Ninevah Governor Atheel Nujaifi says Baghdad has focused on the giant southern oil fields and has paid little attention to developing resources in his province.
“We are not ready to wait for decades until the crude runs out from the south to start energy investment in Ninevah province,” he said in an interview.
Nujaifi said he had met with ExxonMobil and other major oil companies to discuss investment opportunities.
“We listened to their proposals about how to best invest in Ninevah, but we did not sign deals,” he said.
Last month the provincial council of the predominantly Sunni governorate granted him the power to sign deals with foreign oil firms independently of Baghdad, which immediately rejected the move.
Iraq’s Shiite-led government claims sole authority over the exploration and export of all oil and gas resources. “The government will not tolerate such a decision, whether from Ninevah or any other province,” a senior official said at the time.
That has not deterred Ninevah from following the example of the autonomous Kurdistan region in pursuing an increasingly independent energy policy.
“We will start oil investments in the province with a priority to the downstream industry, and that could be followed by broader investments in the upstream sector,” Nujaifi said.
The governor has drafted regulations that could allow foreign investors to bid for an integrated project to build a 150,000 barrels per day refinery and develop an oil field to feed it.
Nujaifi said the province holds around 20 discovered but untapped oil fields and has the potential for huge resources that have yet to be discovered.
“When we have oil majors working, then definitely there will be social benefits, job opportunities and economic gains. Huge investments could create a better, stable environment.”
Kurdistan, which borders Ninevah, is embroiled in a long-running row with Baghdad over contracts it signed with companies to develop northern fields.
Exxon, the world’s largest publicly traded energy company, infuriated Iraq by signing up for six Kurdish exploration blocks in 2011.
Two of those blocks – Bashiqa, seen as the most promising, and Al-Qush – lie in areas where Ninevah and Kurdistan both claim jurisdiction.
Nujaifi said Ninevah was prepared to coordinate and cooperate with Kurdistan in managing joint exploration blocks and oil fields to ensure both sides can make gains.
“First we should make clear that both Al-Qush and Bashiqa are part of Ninevah province. But we can’t do anything about these [Kurdish] contracts; they are irrevocable,” he said.
“We are planning to benefit from these deals by getting a share of the revenue from the crude that’s produced.”
Nujaifi said his province was learning from Kurdistan’s journey toward energy independence.
“We should get the benefits of the Kurdish region’s experience in energy investment and also follow the same constitutional and legal path the region followed in drawing its energy policy,” he said.
Nujaifi said neither the central government nor the Oil Ministry have the right to stop him from developing the energy resources of the province.
Baghdad has clashed with the governor on several fronts in recent years, including Nujaifi’s support for protests by Iraq’s Sunni minority against the Shiite-led government.
“If the government or the Oil Ministry object to the province’s authorizing me and object to our future contracts, then they could go to federal court,” the governor said.
A new committee of experts will soon be formed to draft an energy policy for Ninevah, Nujaifi said. It will also prepare the legal and technical ground for forthcoming talks with Kurdish officials.