The American energy company Chevron is in negotiations with the Iraqi government to build a pipeline connecting the south of the country with the north, where the city of Kirkuk is located, an important oil hub. Not only that: Chevron has formed a consortium with the American investment fund Ti Capital and the conglomerate of the al-Khayyat brothers – two billionaires of Syrian-Qatari nationality – to build a second pipeline from Kirkuk to Baniyas, a port city in Syria, overlooking the Mediterranean Sea.
IRAQ NEEDS ALTERNATIVES TO THE STRAIT OF HORMUZ
The infrastructure would allow Iraq, the second largest oil producer in OPEC, to free itself from the Strait of Hormuz, once again blocked by Iran. At the moment, in fact, Baghdad is unable to bypass this waterway, which guarantees it access to the Gulf of Oman and finally to the Indian Ocean, thus allowing it to reach international crude oil markets.
– For more information: Syria as an alternative to the Strait of Hormuz
Iraq needs to equip itself with alternatives to the Strait of Hormuz because it cannot afford not to export oil, being extremely dependent on it: last year crude oil accounted for 88 percent of government revenues, according to World Bank data. This is a much higher figure than that of Saudi Arabia, for example – which is often considered the “petro-state” par excellence – whose government revenues depended on oil for 55 percent of the total.
In February, before the war between the United States and Iran began, Iraq had produced over 4 million barrels per day. In May, due to the closure of the Strait of Hormuz, its output fell below 1.5 million.
WHAT CHEVRON IS DOING IN IRAQ AND SYRIA
It is not certain that the Kirkuk-Baniyas pipeline will be built, however: the consortium with Chevron is considering an alternative route, which from Haditha (near Kirkuk) could also head to Turkey or Jordan.
The American company, however, is expanding its presence in Iraq: it is expected to announce an agreement soon for the development of two large oil fields in the south of the country. Among other things, it could take control of the West Qurna 2 field, taking it away from the Russian Lukoil, which can no longer operate following the sanctions imposed by the United States in 2025.
And then there is Syria, where last February Chevron signed an agreement with the Power International Holding group of the al-Khayyat brothers for the exploration of the country’s first offshore oil field (at sea). According to the consulting company Wood Mackenzie, Syria has oil and natural gas reserves of at least 1.3 billion barrels: the greatest potential is precisely offshore, as it has never been explored.
OTHER AGREEMENTS
American president Donald Trump, who seems to be on good terms with Iraqi Prime Minister Ali al-Zaidi, recently stated that Iraq “has enormous potential thanks to its oil. We will conclude many agreements: a lot of oil is being extracted, and it is American companies that are doing it.”
American energy companies have indeed signed several agreements on fossil resources in Iraq and Syria – such as ConocoPhillips with the Damascus government, in June – but few of these have then materialized: the two countries have infrastructural problems and limited capacity to guarantee the security of operations, which discourage foreign investments.
