Tuesday, March 15, 2011

Iraq’s Parliament May Cancel Akkas Natural Gas Deal

(Energy-Pedia News)
Akkas natural gas field in Anbar has been troubled since the day it was put up for auction on October 20, 2010. On that day, South Korea’s KOGAS and Kazakhstan’s KazMunai put in a winning bid for it. At the same time the Anbar provincial council protested against it. Now members of Iraq’s parliament are threatening to cancel the license for the field.

On March 12, 2011 a lawmaker from the oil and gas committee in the Iraqi parliament said it was thinking of revoking the license for the Akkas field. The politician went on to say that the committee would look over the contract with KOGAS and KazMunai on March 13. He claimed that a majority of parliamentarians were against the Akkas deal, and supported looking for new investors.

This is just the latest setback the Oil Ministry has faced in trying to develop Akkas. Immediately after the October auction, the Ministry said that it would hold talks with the Anbar provincial council about their issues. Officials there complained that the field should be under local control, that its gas should go to local needs first rather than being exported, and that Baghdad had ignored their earlier efforts at developing Akkas. By January 2011, the Ministry told reporters that the deal for the field would be signed by February because the differences with the Anbar provincial council had been resolved. That same month the Anbar governor confirmed that its demands had been met by Baghdad. Those included building a new pipeline to Hit to delivery gas for a power station being built there, another energy facility was to be built next to Akkas, that domestic use would have priority over exports, and that 85% of the employees would be local. Still, an Oil Ministry official was quoted as saying that signing an agreement with the foreign companies had now been pushed back to March. Then in February the Ministry announced that the deal had been delayed once again because Anbar politicians were demanding that housing units be built and services improved in the governorate. 

The oil and gas committee’s threat to overturn the auction for Akkas is the third delay Baghdad has faced in developing the field. At first, Anbar politicians had a never ending list of demands they wanted the central government and foreign energy companies to fulfill before they would sign off on any license otherwise they would not cooperate. Now parliament has run out of patience, and may force the Oil Ministry to re-auction the field. That may not turn out any better as the real issue is placating Anbar rather than finding new companies interested in Akkas.


Agence France Presse, “Iraq postpones gas field draft agreement again,” 2/24/11

Daood, Mayada, “gas and oil protests: “a misunderstanding,”” Niqash, 1/31/11

Dazae, Saman, “Iraq signs soon contract to develop Ukaz gas field,” AK News, 1/9/11

Hafidh, Hassan, “UPDATE: Iraq Akkas Deal Includes Provincial Demands –Governor,” Dow Jones, 1/25/11

Al-Wannan, Jaafar, “Parliament set to cancel Ukaz oil field license,” AK News, 3/12/11

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