Iraq: Islamic State ‘holds seven oilfields’

Iraqi oil production13 August 2014, News Wires – Militants known as Islamic State have captured seven oilfields in Iraq with a total output capacity of 80,000 barrels per day, adding to energy deposits they seized earlier in neighbouring Syria, according to a report.

The insurgents formerly known as Isis, who swept into northern Iraq in June, grabbed the Ain Zalah and Batma fields in Nineveh province this month, the International Energy Agency said this week in its monthly oil market report.

They already controlled the Najma, Qayara, Himreen, Ajeel and Balad fields, the agency said, adding that the potential flow of oil from deposits they hold in Iraq would fetch about $8.4 million a day on international markets.

The militants, tapping oilfields to supply their own fuel needs and generate revenue by smuggling, have advanced towards Iraq’s self-governed Kurdish region and its capital Erbil, the IEA said.

They were about 30 kilometres from the Bai Hassan field near Kirkuk, a northern oil hub and Iraq’s fourth-biggest field, it said.

US airstrikes have slowed Islamic State’s expansion, though the al-Qaeda breakaway group holds swaths of territory in north Iraq and in Syria, where it controls oilfields and installations. The political crisis in Iraq has escalated, with Prime Minister Nouri al-Maliki rejecting a push to replace him this week.

The seven fields seized by Islamic State are currently pumping no more than 30,000 barrels a day, Bloomberg reported.

Richard Mallinson, an analyst at Energy Aspects, told the news wire that when Islamic State fighters have captured oilfields, they have ordered local engineers and workers to remain in place and continue operating the facilities.

“They also have some limited experience from the oilfields they have controlled in Syria for the last year or two” and may have brought in workers from those areas to help, he said.

Fighting in Opec member Iraq has spurred companies including BP, ExxonMobil and Hess to evacuate workers from the country’s north and from the Jurdistan autonomous resion. Iraq pumps and exports most of its crude from the Shiite-dominated south, where the Sunni insurgency has had little impact.

Total Iraqi output from areas controlled either by the central government or the Kurdistan Regional Government dropped to an average of 3.1 million bpd in July, down 120,000 from June, the IEA said.


– Bloomberg

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