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Rebuilding Iraq’s Oil Sector In A War Zone 2003-2005

 

With oil being Iraq’s main source of income, both Iraqi and American officials were desperate to get the industry up and running again after the 2003 invasion. The oil business consists of three sectors: upstream, midstream, and downstream. Upstream consists of the oil fields and wells, and gas and oil separation plants. Midstream is made up of refineries, and gas processing plants. Downstream is the distribution networks, terminals, and service stations. Iraqis and Americans both believed that earning money was what Iraq needed the most so the reconstruction effort focused upon the upstream, and getting exports going as quickly as possible. This was eventually derailed by the insurgency, and the neglect of the other elements of the energy industry led to problems for the rest of the economy and shortages for the population.

The first problem Iraq’s oil industry ran into in 2003 wasn’t war damage, but rather the looting that took place afterward. The oilfields, wells, etc. were hardly touched by the invasion. Starting in May after Saddam Hussein’s government fell, they, along with other facilities, and the Oil Ministry were stripped. There were stories that the Ministry was the only building in Baghdad protected right after the end of hostilities, but the troops did not show up until after most of the building had already been ransacked. Before the war U.S. advisers had also pointed out places that were important to Iraq’s oil sector that needed to be protected, but the military said they didn’t have the personnel to take care of them. Originally, the Americans were worried that Saddam would set fire to his oil wells, similar to what that he did in Kuwait during the Gulf War. Instead, it was the Iraqis themselves that ended up causing $1.7 billion in damages. That just added to the costs of rebuilding the industry.

The Americans attention then turned to putting the Oil Ministry back together. They appointed Thamir Abbas al-Ghadban as the interim Oil Minister. He, along with U.S. advisers decided that getting oil production and exports going would be their main task. They wanted to get the country back to its pre-war levels, thinking that exports would bring in new cash that could then be used on the mid and downstream parts of the industry later on. Unfortunately, the Coalition Provisional Authority (CPA) decided that oil production and exports would be the main measurement for success, to the detriment of the other sectors of the industry.

The U.S. and Iraqis were immediately successful with their plans. First, Iraq was able to sell 7.5 million in oil that had been placed in storage in Turkey during the invasion. In June, exports started as well. In May, production was down to just 300,000 barrels a day. That went up to 675,000 in June, 925,000 in July, and then quickly shot up, reaching the 2 million barrel mark in October. Exports went from 0 in May to 1.149 million in October. Those numbers gave great hope that Iraq was on its way to recovery, and would be quickly pumping as much oil as it did before the war. Unfortunately, that was not to be.

In the summer of 2003, insurgents started a concerted effort to take down the oil industry. From June to November for instance, there were 13 attacks upon pipelines and facilities. In December 2004, the northern pipeline to Turkey was shut down due to attacks. In June 2005, there was another large wave of operations targeting oil infrastructure. Militants also went after Oil Ministry employees, reconstruction companies, and their workers. The violence was so bad that it shut down all work in some areas. It also limited the ability of U.S. officials to travel throughout the country, and many ended up just staying in the Green Zone. That meant oversight was severely restricted. This trickled down to all levels. First, production and exports were cut. Supplies were delayed arriving at sites, while Iraqis were intimidated and killed. That led to a high turnover in the work force. All of that resulted in skyrocketing costs. Huge amounts of money were then put into securing the oil infrastructure, taking away funds from other tasks.

From June 2004 to June 2005, the oil sector stagnated. An October 2004 State Department report found that security had led to rising costs and delays in work on petroleum. The Oil Ministry reported 186 attacks during 2004, causing $6 billion in damages, and 138 oil security and workers being killed. By that time, the U.S. and Oil Ministry were spending most of their time doing repair work rather than advancing any of their other goals.

On top of that, the U.S. suffered from some very poor planning. An early case was the Al Fatah Bridge in northern Iraq. It was accidently bombed by the Americans during the invasion. This was no ordinary bridge. It included 15 oil and gas pipelines that connected the Kirkuk field to the Baiji refinery, and also the northern pipeline to Turkey. As a result of the bridge being knocked out, Iraq was losing $5 million dollars a day, and helped retard exports. In June 2003, the U.S. decided to fix the Al Fatah Bridge, and put in new pipes. It was estimated that the work would cost $5 million over 2-4 months. Bechtel and Kellogg, Brown & Root (KBR) were given the job. Immediately, the plan ran into problems. First, Bechtel said it couldn’t start work for two months. Then the Americans decided to build the pipes underground instead of suspended from the bridge. Wilbros. Inc. and Laney were given a $50 million contract to do the work, with an additional $10,000 deal going to Fugro Inc. to do a soil survey before the drilling was to begin. That was over ten times the original estimate. Fugro came up with a bad geological report, and recommended that KBR do more pre-planning. That suggestion was ignored, and KBR went ahead anyway. In October 2003, the subcontractors on the job said they wouldn’t start until they were provided with more security. That delayed work until January 2004. They found the soil to be poor, and they couldn’t do any drilling just as Fugro warned. The companies went ahead anyway, and wasted five months of drilling with no success. In August 2004, the contract was cancelled, one year after it had been issued. KBR claimed it ran into unplanned problems, but it was really because it ignored the Fugro report. The Special Inspector General for Iraq Reconstruction audited the matter, and found that $75.7 million had been spent completing only 28% of the work, before the job was abandoned. Because all the businesses involved received cost-plus contracts, they were paid even though the project was never finished. Bad management, and the lack of oversight led to this fiasco. KBR seemed to be able to operate on its own in this case, and there was no contracting official that noticed the Fugro survey that could have saved millions.

Another famous case was that of the Qarmat Ali water treatment plant. During the sanctions period, neglect and the lack of funds meant that pressure in many of the wells was allowed to dissipate, and there was not enough to pump oil. Water had to be injected into the fields to solve the problem. The Qarmat Ali water treatment plant was seen as the solution for southern Iraq. KBR was given a $225 million contract to rehabilitate the plant. In August 2004, most of that work had been done with six out of eight water injection pump stations working. Qarmat Ali however, kept breaking down, because its old pipelines, which KBR did not include in its original contract, had cracks and leaks. It took another deal with KBR to repair all these, and that didn’t happen until 2006. This created a major drag on southern oil production, as there was never enough pressure to meet all the pumping requirements. If the management authorities or KBR had done an adequate assessment of the area they would have included those pipes in the original work order, and saved a huge amount of time and money.

The affect of the Al Fata Bridge, the Qarmat Ali water treatment plant, and others was that the U.S. decided to reform its management rules. First, it decided to move away from KBR. In late 2004, American officials issued a “cure notice” saying that it was going to end KBRs work, because of cost overruns. It then started shifting jobs to Parsons Iraq Joint Venture, which had been working on the oil sector in northern Iraq. By the spring of 2005, Parsons was getting the majority of contracts. Then it began using foreign companies working with the Oil Ministry’s state-owned businesses to do most of the rebuilding. This ended up reducing costs, and more projects being completed. By the spring of 2005, the U.S. had given 82 contracts for the oil sector worth $781 million.

All the emphasis upon maintaining oil production and exports led to neglect in other fields. Iraq’s refineries were one such example. The Americans decided they didn’t have the money to renovate them, and suggested that the Iraqis do it instead. One U.S. estimate predicted that rebuilding all of the country’s refineries would cost as much as $7 billion. Baghdad didn’t have those types of funds either, and were just as focused upon exports as the U.S. was. The result was chronic fuel shortages. On top of that, insurgents went after the facilities, and there was a lack of storage capacity for refined products. This trickled down throughout the economy as the Electricity Ministry didn’t have the necessary fuel to run many of its power plants. The result was chronic power outages. The CPA was forced to import massive amounts of fuel to meet demand. It also instituted a rationing system. To this day, Iraq still does not have the refining capacity it needs, and Baghdad is still making large fuel imports as a result. It is still caught up in boosting exports as well, leaving its refinery plans to largely fallow.

Rebuilding Iraq’s oil industry proved to be a daunting task. When the Oil Ministry was put back together and petroleum production restarted it seemed like Iraq would quickly recover. The insurgency had other plans. Their operations led to stagnation in exports, and money being diverted away from important projects to security instead. The lack of oversight led to more waste. By 2005, the country was heading towards civil war, and it seemed like any further progress in the sector would have to wait until major fighting was over. That’s exactly what happened as real progress was not made until 2009 when international oil companies returned to the country in two auctions. That was quite a change as planners originally thought that the entire effort could be done in just months, and oil would end up funding most of the rebuilding. Instead, it ended up being a huge cost.

SOURCES

Agence France Presse, “Oil ministry an untouched building in ravaged Baghdad,” 4/16/03

O’Hanlon, Michael Livingston, Ian, “Iraq Index,” Brookings Institution, July 2012

Special Inspector General for Iraq Reconstruction, “Hard Lessons,” 1/22/09

Iraq’s Electricity Minister Once Again Fails To Reach Its Mark

Every year Iraq’s Electricity Ministry says it will reach certain levels of production. These are all steps that are eventually supposed to end the country’s long standing power problems that date back to the 1991 Gulf War. This year for instance, Baghdad promised to raise production some 3,000 megawatts to 9,000 by August 2012, and that it would end all of the power shortages by 2014. What ended up happening was that the government failed to reach its mark this summer. This is leading to increased criticism from parliament, and even more from the public. While overall output has continued to grow, so has demand, which means there are continued black outs. The result is that when it comes to electricity, very little from the authorities is believed.

This summer the government promised, but failed to achieve a large increase in electricity production. At the end of August 2012, output was at 5,842 megawatts. Demand at the time stood at approximately 15,000 megawatts, and August’s figures were below the average for the second quarter of the year, which was 6,200 megawatts. The cause of the drop was a series of technical problems. First, a fuel pipeline blew up, and there was a problem with pressure in another, which reduced the power supply by some 1,400 megawatts according to the Electricity Ministry. By July, the Ministry was supposed to reach 7,450 megawatts, and 9,000 by August. This was just the latest example of Baghdad failing to achieve its goals. It also brings into question its claim that it will end all of the country’s power problems by 2014. It is repeated setbacks such as these that cause widespread cynicism amongst the public when it comes to government announcements about electricity.

Despite the continued shortages, the Electricity Ministry revived plans to charge the public for usage. At the end of August, the Ministry said that it wanted to install pay as you go meters on households. Residents would have to prepay to ensure their supply of electricity. Electricity Minister Abdul Karim Aftan said that he wanted the meters to be tested in the Karkh and Rusafa districts of Baghdad first to go along with a public relations campaign to inform people about the new rules. Iraqis are already supposed to pay for their usage, but because the supply is so bad few do. The government has attempted to use fees as a way to contain demand in Iraq before, but the plans have always failed. In June 2010 for instance, the Ministry said it would double charges for usage in an attempt to cut consumption. Then when protests broke out over power shortages in early 2011, the government said it would give away a free amount of electricity to appease the public. The government would later undercut its own program when the cabinet voted for subsidies for power bills. In the end, few seemed to pay attention, and the government claimed it was owed billions of dinars in unpaid bills. Installing meters would obviously be a firmer way to ensure that fees were taken care of. Given the authorities previous spotty record, and the intense anger that electricity shortages instill, going ahead with this idea, might cause even more resentment, and therefore lead the government to back down once again.

The Electricity Ministry’s continued problems are leading to increased criticism from parliament. At the beginning of August, the energy committee said that the Ministry was not sending its daily reports to the legislature anymore. That led one lawmaker to say that the government’s figures about the electrical sector were no longer reliable, because they could not be verified. The month before, members of the committee said that the country’s infrastructure was too old to reach any of the government’s goals for upping production. Some on the committee have also accused politicians of pressuring the Electricity Ministry into deals with Turkish companies that are incapable of completing their work. Charges such as those are leading to increasing claims that Minister Aftan and other officials are involved in corruption. As a result, there are more and more calls for the Minister to appear before parliament for questioning, but nothing substantive has been done about it. The Iraqi constitution gives the parliament wide ranging powers to oversee and regulate the government. Unfortunately, it has completely failed at this task. Party bosses for example, have blocked ministers from appearing before committees out of fear that if it becomes a regular practice they would have to answer for their performance. Lawmakers can complain all they want about the Electricity Ministry therefore, but it will have little to no affect.

The Iraqi government has consistently said that it would find a solution to the country’s power shortages. In February 2011, Prime Minister Nouri al-Maliki stated that the situation would be solved in just 15 months. That benchmark was only one of many to come and go without being fulfilled. Now, the Electricity Ministry has promised 14,000 megawatts by the middle of 2013, and 20,000 by the end of that year, which would end power shortages. The public has little faith in these announcements, and an increasing number of politicians believe them to be false promises as well. The government is moving ahead with construction of new power plants, and overall production has seen steady increases since 2003. Poor planning, and unrestrained usage however, has continually plagued the effort to resolve this issue. Several Electricity Ministers have been sacked as a result, and there have been two years of protests as well. Its continued failure to match rhetoric with results, is undermining Baghdad’s credibility, and hindering the economy as well since companies can’t operate without a consistent power supply. The authorities are feeling all of this pressure, but the dysfunctions within the government consistently undermine their efforts. It’s likely that Iraq will face years more of shortages as a result.

SOURCES

AK News, “Electricity bills subsidized,” 11/17/11

Ali, Nashoor, “Iraq only producing one third of its electricity needs,” Azzaman, 8/28/12

Aswat al-Iraq, “Electricity minister implicated in 27 offences, MP,” 8/21/12

Brosk, Raman, “Electricity production will reach 20,000 MW by end of next year, says ministry,” AK News, 7/31/12

- “Parliamentary committee warns of exposing politicians who pressurized Electricity Ministry,” AK News, 8/20/12

Al-Hamdani, Karim, “Unpaid electricity bills in Iraq amount to more than half a billion dollars,” Azzaman, 11/15/10

Hassoun, Nasir, “$28 Billion Allegedly Squandered on Electricity Projects in Iraq,” Al-Hayat, 8/2/12

International Crisis Group, “Failing Oversight: Iraq’s Unchecked Government,” 9/26/11

Kami, Aseel, “Iraqi electricity bills jump in power saving move,” Reuters, 6/1/10

Lee, John, “Iraq Exempts Citizens from Electricity & Water Charges,” Iraq Business News, 8/15/12

Rasheed, Ahmed, “Iraq subsidies power after protests over services,” Reuters, 2/12/11

Al-Rikabi, Basem, “Iraq’s power supply still way below domestic demand,” Azzaman, 7/29/12

Al Sayegh, Hadeel, “Iraq pays high price for lack of electricity,” The National, 7/13/12

Shafaq News, “Electricity Ministry announces the loss of 1,250 MW from the national system,” 8/27/12

- “Electricity ministry to install smart volt-ammeters based on prepayment and give energy for 24 hours,” 8/28/12

- “Energy ministry criticizes the electricity ministry,” 8/1/12

- “Parliamentary energy commission promise to increase electricity production unfeasible,” 7/7/12

Special Inspector General for Iraq Reconstruction, “Quarterly Report and Semiannual Report to the United States Congress,” 7/30/12

- “Quarterly Report to the United States Congress,” 4/30/10

Iraq’s Central And Regional Governments Reach Third Oil Deal, But Will It Last?

In September 2012, Baghdad and Irbil announced that they had come to a new agreement over Kurdish oil exports. The Kurdistan Regional Government (KRG) halted their petroleum shipments in April over a payment dispute with the central government. It then started them again in August hoping that would lead to a new deal, which has now happened. There are two important and unresolved issues however. The first is whether the Kurds can meet their quotas, because they weren’t able to do so the last time they exported. The second is whether Baghdad can be counted on to consistently distribute funds to the energy companies working in Kurdistan, which was the issue that led the last two deals to break down. Both of those are likely to come up again, making this latest agreement, perhaps just as short term as the others.

In mid-September 2012, Baghdad and Kurdistan negotiated a new export deal. This came as a result of a meeting headed by Deputy Premier Rowsch Nouri Shaways that included Finance Minister Rafi Issawi, Trade Minister Khayrulla Hassan Babakir, Oil Minister Abdul Karim Luaibi, the head of the Board of Supreme Audit, and KRG Natural Resource Minister Ashti Hawrami. The two sides came to a five-part agreement. First, the Kurds said they would export 140,000 barrels a day for the rest of September, and then increase that amount to 200,000 barrels for the rest of the year. Second, Baghdad would pay companies operating in Kurdistan $833 million. Third, the two would work out an export quota and payments to be included in the 2013 budget. Fourth, Baghdad would provide 17% of refined oil products and 17% of fuel to the KRG for its power stations. Finally, two committees would be formed to keep track of production, remunerations, oversee the agreement, and try to resolve any problems that might arise. These were all issues that led to the breakdown of the last deal between the two. The Kurds for instance, accused Baghdad of cuttings its fuel shipments. Now the central and regional governments have supposedly worked out their differences. It also has two mechanisms to try to problem solve any issues that may come up this time around. This move was widely hailed in the press.

The new agreement was the result of the breakdown of the last one. On April 1, Kurdistan halted its exports, claiming that Baghdad owed companies there $1.5 billion. Kurdish officials told the press that firms in the region had not been paid for their exports from 2009 and 2011. The central government countered that the KRG never provided invoices for its exports to be audited, so that payments could be made. Four months later on August 7, the Kurds’ Natural Resource Ministry restarted sending oil through the northern pipeline to Turkey, hoping that it would lead to a breakthrough with Prime Minister Nouri al-Maliki. At the time, the KRG was coming under increasing pressure from oil companies there over money. Norway’s DNO for instance, reported a loss in August, and that it had to ramp down production at the Tawke field in Dohuk, because it could not export. The few companies that produce oil in Kurdistan only make small amounts of cash either from selling to the domestic market there or through smuggling to Turkey and Iran, both of which pay below international prices. Having a deal with Baghdad only covers costs, but that is still more than they are currently being paid. This was the second time that relations between Baghdad and Irbil had broken down, so businesses were pushing Kurdistan to come to a firmer and longer lasting agreement with Maliki’s government, so that they could earn a steady income from their large investments in the KRG. It was for these reasons that the Natural Resource Ministry re-started exports in August. The problem is that there is no guarantee that Baghdad will keep up their payments, because they haven’t in the past. That could bring down this new deal just like it did the last two.

Another major issue is whether the KRG can reach its quotas. The Natural Resource Ministry has made many lofty claims about the potential of the region’s energy sector. Before, they said that Kurdistan could reach 200,000 barrels a day in exports by the end of 2011, an average of 400,000 barrels by the end of 2012, and 1 million by 2014. The problem is that it has never come close to any of these figures. In January 2011, Baghdad and Irbil reached their second deal over exports. The Kurds were to export 150,000 barrels a day as set in the 2011 budget, and then 175,000 barrels for the 2012 budget. When the details of this agreement were being worked out in early 2011 however, Kurdish officials said that they could only produce 100,000 barrels a day at the time, and wanted that to be their quota. That request was turned down. It turned out the KRG was able to quickly ramp up their exports, starting at 10,500 barrels in February, then 75,000 barrels later that month, rising to 100,000 barrels in March, and 115, 000 in April. By June, it finally hit an average of 175,000 barrels a day. The Natural Resource Ministry claimed it maintained that level all the way to March 2012, but Baghdad and the press said otherwise. A November article said that Kurdistan was only exporting 79,000 barrels a day that month, and 75,000 the next. In March, the KRG started complaining about the lack of payments, and stated that it had cut exports to 50,000 barrels a day to protest the matter. When Kurdistan re-started shipments in August it was at 100,000-120,000 barrels. While it only took four months for the region to reach the 175,000 set in the 2012 budget, there are questions about whether it was able to maintain that mark. Reports had exports quickly falling off afterward. Not only that, but some officials in Baghdad have claimed that Kurdistan doesn’t have the pipelines, pumps and other infrastructure to reach its quotas. The KRG will have to disprove these doubts, because it has to double output to 200,000 in just a few weeks under the new agreement. Something the Natural Resource Ministry said it could achieve by the end of last year, but failed to do.

This is the third time that the central and regional governments have cut a deal over oil. In 2009, it only took three months for the first one to fall apart over Baghdad not paying companies in Kurdistan. The second one lasted fourteen months, but then disintegrated over the same issue. There is no reason to believe that this latest one will be any different. The Maliki government has never objected to the Kurds exporting petroleum through the northern pipelines as long as profits are deposited in the central bank. That’s because it gives them control over the dispersal of the money, and allows it to claim that all energy deals have to go through it. The problems are that the KRG has not been able to maintain its quotas, which then draws criticism from Baghdad, and the central government has not kept up its payments. Both issues could be caused by a lack of capacity or political decisions to protest the actions of the other. With oil production and exports taking off in southern Iraq, that gives an added incentive for Premier Maliki to just stick to short-term deals with the Kurds, which can be quickly ended. It gives the central government the upper hand in its long-standing disputes over oil policy since it controls the purse and the pipelines to foreign markets. Rather than a solution, this new deal is likely just one of many that will fall apart, and then have to be re-negotiated in the future.

SOURCES

Agence France Presse, “Iraq pays Kurd oil contractors,” 5/6/11

- “Iraqi Kurdistan confirms oil deal with Baghdad,” 9/14/12

Ahmed, Hevidar, “Iraq’s Deputy Oil Minister Addresses Dispute Between Erbil and Baghdad,” Rudaw, 2/20/12

Ajrash, Kadhim and Razzouk, Nayla, “Iraq Oil Output Has Reached a 20-Year High, Shahristani Says,” Bloomberg, 12/22/11

AK News, “Kurdistan to produce 400,000 bpd by end of the year,” 3/11/12

Alsumaria, “Kurdistan Oil Exports increase to 100000 bpd,” 3/4/11

Aqrawi, Shamal, “UPDATE 1-Iraq starts exporting Kurdish oil – officials,” Reuters, 2/3/11

Associated Press, “Iraq’s February oil export highest since invasion,” 3/1/11

Aswat al-Iraq, “KA urges federal govt. to pay oil companies’ dues,” 8/3/12

Brosk, Raman, “KRG and Baghdad locked over budget bill and oil exports,” AK News, 1/17/11

Campbell, Robert, “COLUMN-The outsized impact of the Kurdish oil dispute: Campbell,” Reuters, 8/3/12

Carlisle, Tamsin and al Sayegh, Hadeel, “Iraq gives go-ahead to Kurdish oil contracts,” The National, 12/26/10

Chaudhry, Serena, “UPDATE 2-Iraq’s Kurdish region threatens oil export halt,” Reuters, 3/26/12

Chaudhry, Serena and Karouny, Mariam, “Iraq approves $560 mln for Kurdish oil payments,” Reuters, 3/27/12

Dow Jones, “Iraq Kurdish Oil Exports Sliding To 75,000 B/D On Payment Delay – Officials,” 3/12/12

- “Iraqi: KRG To Face Penalties If Oil Exports Fail To Hit Target,” 11/29/10

Faucon, Benoit and Hafidh, Hassan, “Iraqi Kurdish Oil Exports To Resume Within Days – Source,” Dow Jones, 2/1/11

Gibbs, Walter, “UPDATE 1-DNO boosts Iraq production, terms still not settled,” Reuters, 2/16/11

Hafidh, Hassan, “Impasse On Kurdish Exports Signals Broader Iraq Oil Uncertainty,” Dow Jones, 12/31/10

- “Iraq Kurdish June Oil Exports 175,000 B/D – Minister,” Dow Jones, 7/13/11

- “Iraq Kurds to Resolve Oil Issue,” Wall Street Journal, 9/13/12

- “Iraq’s Kurdish Oil Exports At 75,000 B/D – Official,” Dow Jones, 2/18/11

- “UPDATE: Iraq Plans To Export 2.75M B/D In 2012 Vs 2.2M B/D 2011-SOMO,” Dow Jones, 11/23/11

Holter, Mikael, “UPDATE 2-DNO says new Iraq govt to boost its oil export push,” Reuters, 11/11/10

Ketz, Sammy, “Iraq to respect Kurd profit-sharing oil deals: PM,” Agence France Presse, 2/5/11

Al-Khayat, Faleh, “Iraq’s oil exports reach 2.145 million b/d in December: SOMO,” Platts, 1/3/12

KRG, “KRG Oil Contractors to Get First Payment,” 5/5/11

Lawler, Alex, “Iraq Kurdistan oil export restart may be temporary,” Reuters, 8/2/12

Mackey, Peg, “Kurdish oil trade with Turkey rising, more to come,” Reuters, 9/9/12

Neuhof, Florian, “Charges in Kurdistan cause DNO to slide into the red,” The National, 8/23/12

Pfeifer, Sylvia and Blas, Javier, “Shell pulls out of Kurdistan oil talks,” Financial Times, 11/16/11

Rahman, Mohammed Abdul, “Erbil and Baghdad agree on reimbursing oil companies,” AK News, 9/15/12

Rasheed, Ahmed, “UPDATE 1-Iraq to pay expenses to oil firms in Kurdish region,” Reuters, 1/19/11

- “UPDATE 2-Iraqi Kurdistan to keep pumping oil to Sep. 15-sources,” Reuters, 9/1/12

- “UPDATE 2-Kurdistan warns Baghdad it will halt oil exports again,” Reuters, 8/28/12

Reuters, “FACTBOX-Oil companies active in Iraqi Kurdistan,” 1/5/11

- “Iraq’s Kurdistan restarts oil exports- source,” 8/7/12

- “Iraqi Kurdistan crude output at 115,000bpd,” 4/7/11

- “Kurdistan to keep Sept oil output in Baghdad deal,” 9/14/12

Al-Salhy, Suadad, “Iraq, Kurdistan end oil dispute, exports continue,” Reuters, 9/13/12

Smith, Grant, “Kurdistan Says Iraq Must Investigate Missing Crude Exports,” Bloomberg, 3/15/12

Al-Wannan, Jaafar, “Baghdad doubts Kurdistan’s ability to export 170,000 oil barrels per day,” AK News, 2/18/12

- “Erbil exports 75,000 barrels of oil illegally,” AK News, 12/17/11

Yeranian, Edward, “Iraq’s Kurdistan Region Halts Oil Exports to Baghdad,” Voice of America, 4/2/12

The Localized Nature Of Violence In Iraq

In an interview with Musings On Iraq, Dr. Michael Knights of the Washington Institute for Near East Policy pointed out that violence in Iraq has become increasingly localized. Between provinces and cities within the country there are great variations in the level of attacks and deaths. For instance, in places like Baghdad and Mosul there are on average a 100 a more attacks per month. That compares to places like Kut in Wasit province where an incident may only happen every few months. Even within cities there are differences. Mosul per capita, is the most violent urban area in Iraq, but even there 100 attacks spread out across a 10 mile area with around 1.8 million people means most only hear or read about an explosion or gunfire rather than actually witness it. This all points to the complicated nature of security in Iraq at present. Press reports of mass casualty bombings, especially now with the insurgents carrying out a summer offensive, give the impression that the whole nation must be on fire. A study of casualties across 30 cities shows that militants are in fact greatly limited in where they can carry out their deadly work.

Tracking violence in Iraq is extremely difficult today using open sources. Press reports capture many incidents, but not all of them. There are security firms like the Olive Group that issue weekly reports, but they do not capture everything either. The United Nations used to have a website dedicated to attacks and deaths, but it has gone down in recent months. Iraq Body Count is widely considered one of the longest running and most consistent in its coverage, but it too is limited, since it only records deaths. Given the fact that it provides daily statistics on casualties however, it will be used as the basis of this study.

Iraq Body Count’s database was used to track fatalities in 30 Iraqi cities that cover all regions of the country. This gives a sampling of the wide variations in insurgent activity today. Groups like Al Qaeda in Iraq for instance, claim that they are trying to regroup and expand their operations this summer. On July 21, 2012, its umbrella organization the Islamic State of Iraq announced Operation Breaking Walls, which was aimed at regaining ground it had lost, while the Americans were in the country. That coincided with a high number of deaths in June and July. There have since been reports that it is trying to impose a tax system in provinces like Diyala and Anbar to fund its work, and it has started issuing monthly internet announcements bragging about its effectiveness. Iraq Body Count’s figures however, show that Al Qaeda and other militants like the Baathist Naqshibandi are only able to sustain operations in a few of Iraq’s 18 provinces. Most of their attacks occur between Baghdad and Ninewa, which is roughly only one third of the country. In 2011, 68% of attacks recorded by the U.N. happened in just 4 governorates, Baghdad, Ninewa, Salahaddin, and Diyala. They are not even able to impose their will consistently across those provinces, as the numbers will show.

Baghdad is Iraq’s largest city and the seat of government. It has been a focal point for violence since the 2003 invasion as a result. That’s why it consistently has the highest death counts of any urban area. Even then, attacks come in waves that coincide with Shiite religious events, which are consistently targeted, and the summer when militants carry out their annual offensive. In August and September 2011 for instance, there were 86 and 68 deaths respectively. That then shot up to 156 in October, as the capital became the focus of the last month of the summer season, before dropping to 46 the next. Then in December, there were 139 fatalities, largely due to 17 explosions across the city on December 22, as the Islamic State claimed it was launching a new effort to rekindle the sectarian war and bring down the government. Those high numbers continued into January 2012, as Al Qaeda went after Shiite pilgrims. Those figures then saw a steady drop from 103 in February to 44 in March, 54 in April, and 49 in May, which is traditionally when insurgents regroup. June marked the beginning of the new summer offensive with 147 deaths, then 73 in July, and 102 in August. The figures for Baghdad show the up and down nature of attacks in Iraq. Certain months are extremely deadly, while others have relatively low figures. They also show how insurgents have concentrated most of their resources on the capital since it offers so many targets, and is an attempt to show that the government is not in complete control of the country. Still, in a city as vast as Baghdad with a population of at least 5 million, an average of 99.5 deaths per month shows that the vast majority of the populace is not really affected.

Baghdad Casualty Figures August 2011-August 2012

August 2011 – 86

September 2011 – 68

October 2011 – 156

November 2011 – 46

December 2011 – 139

January 2012 – 127

February 2012 – 103

March 2012 – 44

April 2012 – 54

May 2012 49

June 2012 147

July 2012 – 73

August 2012 – 102

Mosul, in Ninewa province, is the last major urban stronghold of the insurgency, and a major source of its funding. Attacks there are different than in Baghdad. There most casualties are caused by bombings. In Mosul, shootings are far more common. In August and September 2011, there were only 23 and 31 deaths respectively. That jumped to 78 in October, before going down to 30 in November, and then increasing again to 62 in December. That pattern was followed in 2012 with 38 killed in January, 42 in February, 61 in March, 58 in April, 32 in May, 55 in June, 48 in July, and 55 in August. Like in the capital, security incidents go up and down in number, but not always at the same times. Since small arms are the main tools used, there are far fewer casualties there than in Baghdad where large explosions take a heavier toll, yet Mosul is the second deadliest city in the country. Still, there was only an average of 51.0 deaths per month amongst 1.8 million people from August 2011 to August 2012.

Mosul, Ninewa Casualty Figures August 2011-August 2012

August 2011 – 23

September 2011 – 31

October 2011 – 78

November 2011 – 30

December 2011 – 62

January 2012 – 38

February 2012 – 42

March 2012 – 61

April 2012 – 58

May 2012 – 32

June 2012 – 55

July 2012 – 48

August 2012 - 55

The insurgents’ strong base in Mosul does not mean they are as active in the rest of Ninewa. In Sinjar and Tal Afar, which are to the west, there is very little violence. In Sinjar for example, there were no deaths from August 2011 to August 2012. In Tal Afar for that same time period, there were only a total of 35 killed. 20 of those were due to a car bomb and a suicide bomber at a restaurant in the city on March 7, 2012. This shows that militants are not able to operate freely across provinces, even when they have a large foothold in one urban area. This is highlighted in other governorates as well.

Sinjar, Ninewa Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 – 0

Tal Afar, Ninewa Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

November 2011 – 1

December 2011 – 4

January 2012 – 0

February 2012 – 0

March 2012 – 21

April 2012 – 3

May 2012 – 1

June 2012 – 0

July 2012 – 3

August 2012 - 2

Salahaddin, Diyala, and Anbar are three areas that have traditionally been stomping grounds for insurgents. Like in Ninewa however, they only seem to be concentrated in specific cities. In Salahaddin, which was the province of Saddam Hussein, his hometown of Tikrit is largely quite, along with Samarra, and Baiji. Tikrit only had 35 people killed from August 2011 to August 2012. For that same period, 54 died in Samarra, and 21 in Baiji. In Diyala, Baquba was far deadlier for that time with 164 casualties. Those high figures were not seen in other cities of the governorate though. In Jalawala and Khanaqin, which are in the disputed territories, Kurds have consistently claimed that they have been under attack. Very few deaths have occurred in either city however with 11 in the former and 5 in the latter. Likewise, other cities in the province such as Mandali and Muqtadiya saw very few casualties as well with just 0 and 36 respectively. The same pattern is seen in Anbar. Fallujah and Ramadi have been longtime bases for insurgents and remain the most insecure in the governorate with 133 and 125 deaths from August 2011 to August 2012. Outside of those areas however, there are very few casualties. In Haditha there were only 9, in Rutba just 3, and 4 in Qaim. Again, the insurgents are not evenly distributed throughout these provinces. Some areas see monthly attacks, but most have only sporadic incidents with many being relatively peaceful beyond an occasional explosion or shooting.

Tikrit, Salahaddin Casualty Figures August 2011-August 2012

August 2011 – 5

September 2011 – 2

October 2011 – 1

November 2011 – 0

December 2011 – 2

January 2012 – 2

February 2012 – 0

March 2012 – 6

April 2012 – 4

May 2012 – 2

June 2012 – 1

July 2012 – 1

August 2012 – 9

Samarra, Salahaddin Casualty Figures August 2011-August 2012

August 2011 – 1

September 2011 – 0

October 2011 – 3

November 2011 – 11

December 2011 – 2

January 2012 – 6

February 2012 – 1

March 2012 – 6

April 2012 – 7

May 2012 – 0

June 2012 – 7

July 2012 – 6

August 2012 – 4

Baiji, Salahaddin Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 0

November 2011 – 0

December 2011 – 1

January 2012 – 2

February 2012 – 4

March 2012 – 2

April 2012 – 1

May 20 12 – 0

June 2012 – 0

July 2012 – 0

August 2012 - 11

Baquba, Diyala Casualty Figures August 2011-August 2012

August 2011 – 11

September 2011 – 11

October 2011 – 13

November 2011 – 3

December 2011 – 6

January 2012 – 13

February 2012 – 18

March 2012 – 6

April 2012 10

May 2012 – 1

June 2012 – 52

July 2012 – 6

August 2012 - 14

Jalawla, Diyala Casualty Figures August 2011-August 2012

August 2011 – 4

September 2011 – 1

October 2011 – 0

November 2011 – 1

December 2011 – 0

January 2012 – 0

February 2012 – 5

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 – 0

Khanaqin, Diyala Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 1

November 2011 – 0

December 2011 – 0

January 2012 – 1

February 2012 – 1

March 2012 – 0

April 012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 - 2

Mandali, Diyala Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 – 0

Muqtadiya, Diyala Casualty Figures August 2011-August 2012

August 2011 – 1

September 2011 – 6

October 2011 – 1

November 2011 – 1

December 2011 – 1

January 2012 – 4

February 2012 – 1

March 2012 – 1

April 2012 – 1

May 2012 – 0

June 2012 – 1

July 2012 – 8

August 2012 - 10

Fallujah, Anbar Casualty Figures August 2011-August 2012

August 2011 – 9

September 2011 – 4

October 2011 – 6

November 2011 – 5

December 2011 – 15

January 2012 – 6

February 2012 – 10

March 2012 – 7

April 2012 – 2

May 2012 – 11

June 2012 – 24

July 2012 – 11

August 2012 – 23

Ramadi, Anbar Casualty Figures August 2011-August 2012

August 2011 – 23

September 2011 – 11

October 2011 – 6

November 2011 – 9

December 2011 – 4

January 2012 – 13

February 2012 – 5

March 2012 – 6

April 2012 – 6

May 2012 – 13

June 2012 – 18

July 2012 – 11

August 2012 – 0

Haditha, Anbar Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012 – 0

April 2012 – 3

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 - 6

Rutba, Anbar Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 - 3

Qaim, Anbar Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 0

November 2011 – 3

December 2011 – 0

January 2012 – 1

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 - 0

Kirkuk in Tamim governorate has been a flash point in Iraq for years, because it is hotly contested between the Kurdish Regional Government (KRG), which wishes to annex it and the central government in Baghdad. Its multi-ethnic composition has also been a target of insurgents who wish to divide the groups. It’s for those reasons that the city has a relatively high mark of 168 killed from August 2011 to August 2012.

Kirkuk, Tamim Casualty Figures August 2011-August 2012

August 2011 – 6 killed

September 2011 – 19

October 2011 – 4

November 2011 – 8

December 2011 – 15

January 2012 – 16

February 2012 – 8

March 2012 – 8

April 2012 – 12

May 2012 – 9

June 2012 – 5

July 2012 – 14

August 2012 – 32

In southern Iraq, security is completely different. There attacks are far and few between. Insurgents like to target Shiite pilgrims heading towards holy sites, but their ability to carry out these operations within the holy cities of Karbala and Najaf are negligible. In Karbala for instance, there were only 14 casualties from August 2011 to August 2012, with 13 of those occurring in one incident when a restaurant in the city was hit by a car bomb. In Najaf, only 13 people were killed over that same time period, with 8 in August 2011, and 5 in July 2012. Similar low numbers were seen in other cities of the region, such as Nasiriyah in Dhi Qar where only 2 people died over those thirteen months, and in Samawa in Muthanna, Umm Qasr in Basra, and Amarah in Maysan where there were no casualties. That doesn’t mean insurgents were not active in the area. Certain cities did witness some large attacks. Kut, in Wasit, saw 40 killed in August 2011 by a twin bombing in a market. After that incident however, only 15 more died over the next eleven months. Likewise, in Babil’s Hillah, 73 died during that period, with 21 being police recruits and civilians dying in a car bombing of a restaurant in June 2012. Diwaniya in Qadisiyah was similar with 53 fatalities, 40 of which were due to a truck bombing in a market. Finally, the major city of the south, Basra, had 55 deaths, 23 coming from bombings of a market, and twelve from a motorcycle bomb outside a café, both in November 2011. Even then, violence across the south was sporadic. Babil saw the most militant activity, but even then, eleven out of the 13 months from August 2011 to August 2012 had less then ten killed each month. Basically, outside of the occasional large bombing at a market, most of the south was relatively quite. That showed that insurgents could only venture into the region. Carry out a car, truck or motorcycle bombing in a city, and then leave.

Karbala, Karbala Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 17

October 2011 – 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012 – 13

April 2012 – 1

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 – 0

Najaf, Najaf Casualty Figures August 2011-August 2012

August 2011 – 8

September 2011 – 0

October 2011 – 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 5

August 2012 – 0

Nasiriyah, Dhi Qar Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 0

November 2011 – 0

December 2011 – 1

January 2012 – 0

February 2012 – 0

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 – 1

Samawa, Muthanna Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 – 0

Amarah, Maysan Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 – 0

Umm Qasr, Basra Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 – 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 – 0

Kut, Wasit Casualty Figures August 2011-August 2012

August 2011 – 42

September 2011 – 0

October 2011 – 1

November 2011 – 0

December 2011 – 1

January 2012 – 1

February 2012 – 2

March 2012 – 3

April 2012 – 1

May 2012 – 0

June 2012 – 0

July 2012 – 0

August 2012 – 6

Hillah, Babil Casualty Figures August 2011-August 2012

August 2011 – 11

September 2011 – 1

October 2011 – 1

November 2011 – 0

December 2011 – 5

January 2012 – 9

February 2012 – 2

March 2012 – 8

April 2012 – 0

May 2012 – 0

June 2012 – 32

July 2012 – 0

August 2012 – 4

Diwaniya, Qadisiyah Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 3

October 2011 – 2

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 1

March 2012 – 0

April 2012 – 2

May 2012 – 0

June 2012 – 0

July 2012 – 45

August 2012 - 0

Basra, Basra Casualty Figures August 2011-August 2012

August 2011 – 4

September 2011 – 0

October 2011 – 0

November 2011 – 35

December 2011 – 0

January 2012 – 3

February 2012 – 3

March 2012 – 5

April 2012 – 0

May 2012 – 3

June 2012 – 0

July 2012 – 0

August 2012 - 2

That leaves the northern Kurdish region, which is by far the most secure area of the country. In two of its main cities, Irbil and Sulaymaniya, there were only six people killed between them, none of which appeared to be due to insurgent activity. With its largely no-Arab population and tight border control the Kurdistan region is not conducive to militant infiltration.

Irbil, Irbil Casualty Figures August 2011-August 2012

August 2011 – 1

September 2011 – 1

October 2011 – 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012 – 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 2

August 2012 – 0

Sulaymaniya, Sulaymaniya Casualty Figures August 2011-August 2012

August 2011 – 0

September 2011 – 0

October 2011 - 0

November 2011 – 0

December 2011 – 0

January 2012 – 0

February 2012 – 0

March 2012- 0

April 2012 – 0

May 2012 – 0

June 2012 – 0

July 2012 – 2

August 2012 - 0

The 30 cities included in this survey show how security varies across Iraq. Baghdad and Mosul remain the two most violent cities of the nation, but even then, the number killed are such a small fraction of the population, that most are able to go about their lives without fear of suffering wounds or losing their life. That’s even more so in the south where a bombing might occur just once or twice a year. Then there’s Kurdistan where insurgents are not able to carry out any attacks. Sunni armed groups are still active in Iraq, but they are limited to certain areas of the country. Not only that, but they are only able to carry out a large number of operations for a limited amount of time before they have to regroup and rearm. This is far different from the years of the civil war when thousands were dying each month, militants could openly walk down the streets, certain parts of cities were off limits to the security forces, and polls showed that a majority of Iraqis had at least personally witnessed an act of violence. Iraq still faces daily violence, but it is important to note its increasingly limited affect upon the general population.

SOURCES

Iraq Body Count

Al-Khoei, Hayder, “Al-Qaeda’s surge spells further turmoil for Iraq,” Guardian, 8/21/12

Mohammed, Bryar, “Khanaqin council demands peshmerga protection,” AK News, 7/26/12

Musings On Iraq, “What Is Security Like Today In Iraq? An Interview With Dr. Michael Knights,” 7/31/12

Olive Group, “Weekly Security Update,” Iraq Business News, 9/13/12

Reuters, “Qaeda claims latest deadly Iraq attacks,” 9/10/12

Shafaq News, “Source: Al-Qaeda imposes taxes in Diyala and Anbar,” 9/8/12