A report issued by the London-based International Centre for Development Studies confirmed that Iran is stealing large amounts of oil from neighboring Iraqi fields.
According to the report, Iran steals $17 billion worth of Iraqi oil from fields that are mostly Iraqi and not shared between the two countries. Those fields are home to more than 100 billion barrels and the majority of them are inside the borders of Iraq.
The amount of oil Iran takes from Iraq, the report explained, is estimated at 130,000 barrels and mainly comes from four Iraqi fields: Dehloran, Naft Shahr, Beidar West, and Aban. Iran’s violation of Iraqi oil rights also extends to the fields of al-Tayeb and Fakka as well as parts of Majnoun field with an estimated 250,000 barrels.
The total amount of oil Iran steals from Iraq is estimated at 14 percent of Iraqi oil revenue.
The report points out that Iran is using Iraqi oil unilaterally even though the two countries have previously agreed on forming joint committees to regulate the use of oil in border fields. In addition, excavation activities Iran carries out on the border have a negative impact on the quality of Iraqi oil since it affects the pressure in Iraqi fields.
According to the report, the transfer of Iraqi oil to Iran is made possible through smuggling networks spread across the borders that take to Iran an average of 35,000 barrels a day.
The smuggling of Iraqi oil to Iran plays a major role in abating the effect of the economic sanctions imposed on Iran. The stolen oil is later re-exported to Iraq after being manufactured into a variety of oil products or into electric power.
Such export deals are done under the agreement Iraq signed with Iran and which enables the first to import four million barrels of fuel daily from the second in order to make up for shortage of energy. Meanwhile, Iran’s daily production of fuel has increased by 20 million liters in 2012.
The report pointed out that the Iraqi Ministry of Petroleum has not been diligent enough to install electronic meters that would detect the amounts of extracted and transferred oil. The ministry also refused applying the satellite vigilance system that monitors the in and out of oil.
The report described the Iraqi government’s attitude as “surprising” since it is too lenient with Iran while it imposes a lot of restrictions on its oil partners inside Iraq.
For example, the Iraqi central government is boycotting companies that signed oil contracts with the autonomous region of Kurdistan despite the negative impact this is bound to have on the Iraqi national economy.
The Iraqi economy is also expected to suffer another blow, the report stated, after the agreement that allows the Syrian Oil Company to carry out excavation operations in southern Iraq despite the sanctions imposed on the Syrian regime and the possibility of similar sanctions on Iraq following this agreement.
In the report, the International Centre for Development Studies called upon the Iraqi government to demarcate the borders of its oil fields and to develop local oil manufacturing facilities. This, the report highlighted, is especially important now with Iran trying to sign contracts with Russian and Chinese oil companies that allow the three countries to use Iraqi oil fields in order to produce 5.2 million barrels daily by the year 2012.
According to the report, Iran now has the right to supervise oil production in the Yadfaran oil field in southeastern Iraq after signing a deal with the Chinese company Sinopec.
This deal will deprive Iraq of benefiting from the production of this field, home to almost 12 billion barrels of crude oil and 12.5 cubic meters of natural gas in addition to 1.9 billion barrels of oil concentrates.