Iraq Update: Fighting Continues, Battle For Refinery, PM On The Rocks

Here are all the latest news and updates from the rapidly-changing situation in Iraq, courtesy of Bloomberg.

 

FRONT-LINE FIGHTING

  • Iraqi govt troops retain control of 310k b/d Baiji refinery, but facility surrounded by territory held by ISIL-led militants
  • Aerial photos yday showed some storage tanks on fire
  • Fierce battles near Baiji and Tal Afar airport: BBC
  • Fighting continues around Tal Afar, halfway between Mosul and Syrian border
  • Clashes reported between ISIL and Kurds south of Kirkuk


FOREIGN POLITICS

  • U.S. to send 300 military advisors to Baghdad; lack sufficient intelligence for imminent air strikes: Gen. Dempsey
  • Saudi Arabia warns against outside intervention in Iraq, blames “exclusionary policies” of Iraqi cabinet: Saudi ambassador writes in Telegraph
  • ISIL hands over captured foreign workers to police

 

PRESSURE ON MALIKI

  • Obama declines to endorse Maliki, but stops short of calling for him to step down
  • Challengers emerging to replace Iraq PM: NYT

 

OIL PRODUCTION IN NORTHERN IRAQ

  • Current output from Iraq’s northern fields cut to 30k b/d; supplying Kirkuk refinery
  • Northern fields were producing ~650-700k b/d before March 2 closure of export pipeline to Turkey

 

IRAQ’S NORTHERN EXPORTS

  • Exports from Iraq’s northern fields cut since March 2 when the Iraq-Turkey pipeline was bombed
  • Exports of Kirkuk crude from Turkish port of Ceyhan fell to 24k b/d in March, zero in April: Oil Ministry
  • NOTE: Iraq still exports crude from southern fields via Persian Gulf


ROLE OF KURDISTAN

  • Kurdish forces have taken control of Kirkuk oil field and city after central govt forces fled
  • Kurds fighting ISIL forces at Bayshir, south of Kirkuk
  • Ashti Hawrami, Kurdish Regional Govt’s natural resources minister, offered to export Kirkuk via Kurdish pipelines, but was rebuffed
  • Kurds to boost exports to 200k-250k b/d in July from 125k b/d now; targeting 400k b/d by end-2014

 

BAIJI REFINERY

  • Sprawling complex of storage tanks, processing units
  • Primary source of products for N Iraq; also supplies Baghdad
  • Linked power plant provides electricity to region
  • Represents ~40% of Iraq’s refining capacity; processes      crude delivered by pipeline and rail from Kirkuk, Ajeel (formerly Saddam) and other fields operated by North Oil Co.
  • Lies on Iraq-Ceyhan pipeline; important source of fuel for both govt and ISIL
  • Storage tanks full: Iraq Oil Ministry
  • Capture would provide immediate source of fuel for insurgents’ vehicles and for sale in N Iraq.

OIL PRODUCTION/EXPORTS FROM SOUTHERN IRAQ

  • Production in south unaffected by fighting so far
  • Iraq plans to ship 2.79m b/d from Basrah Oil Terminal in July; most since before 1980-88 Iran-Iraq War
  • BP, Exxon, CNPC and Petronas started to evacuate non- Iraqi staff from nation
  • Shell ’monitoring the situation very carefully’: Andy Brown, head of Shell Upstream International
  • Lukoil has increased security at West Qurna field, where it started production in March
  • Southern oil facilities not beyond ISIL’s reach: Barclays


 

WHO IS ISIL?

  • Islamic State in Iraq and the Levant (ISIL) is also known as Islamic State in Iraq and al-Sham (ISIS)
  • A Sunni jihadist group led by Abu Bakr al-Baghdadi
  • Broke away from al-Qaeda in 2013
  • Want to create a Sunni caliphate across Iraq, Syria and neighboring countries
  • Control large parts of northern Syria
  • Well funded through sales of Syrian oil and antiquities
  • Vowed to attack Baghdad and Shiite holy cities of Karbala and Najaf

 

WHAT IS THE CORE ISSUE?

  • ISIL insurgents have overrun large parts of northern and central Iraq; Prime Minister Nouri al-Maliki’s Shiite Muslim-led govt now seeking to regain control
  • 2003 U.S. invasion of Iraq and subsequent rise to power of Shiite-Muslim majority alienated Sunni Muslims; Sunnis felt marginalized under Maliki; some support ISIL
  • Maliki accuses ISIL of an alliance with Saddam Hussein’s Ba’ath party
  • Shiites constitute majority in southern Iraq

Source: BBG