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The Iraq War: In the beginning was the lie “codename, “Curveball”

April 9, 2018 By administrator

On April 9, 2003, US soldiers toppled the statue of Saddam Hussein in Baghdad. Fifteen years later we know that this war cost hundreds of thousands of lives, plunged the Middle East into chaos — and was based on lies.The statue of Saddam Hussein was toppled in Baghdad, and on millions of TV screens around the world, less than three weeks after the start of the US-led invasion of Iraq. Those pictures from April 9, 2003, are etched on our collective memory. Yet even 15 years later, many questions remain unanswered. We still don’t know, for example, exactly how many Iraqis died as a result of the war and in the chaos that followed.

Most sources estimate the number of dead at anything from 150,000 to half a million. Some reliable investigations have concluded that the number was actually far higher. As early as 2006, the respected medical journal The Lancet calculated that there had been more than 650,000 “additional deaths.” As well as from direct violence, this figure also takes into account the consequences of the bombed-out infrastructure and the collapse of the health system.

What we do know for sure is that the rationale for going to war was based on lies. There is a second picture associated with the Iraq War that is also ingrained in our collective memory: US Secretary of State Colin Powell giving his speech to the UN Security Council on February 5, 2003. Six weeks before the war began, Powell spent 76 minutes influencing international public opinion in favor of war. The core of his speech was that Saddam Hussein possessed biological and chemical weapons of mass destruction, that his regime was supporting international terrorism, and that it aimed to build nuclear weapons.

‘Mobile chemical weapons laboratory’

The presentation culminated in a claim, backed up by detailed illustrations, that in order to evade strict controls by UN weapons inspectors Iraq had converted a fleet of trucks into mobile chemical and biological weapons labs. We remember Powell’s speech primarily because all of these claims turned out to be false. In 2005 Powell himself described the speech as a lasting “blot” on his career.

Ray McGovern is a security services veteran. He worked for the CIA for 27 years, and held senior positions within it. In 2003, he and some colleagues from the CIA and other intelligence services founded the organization Veteran Intelligence Professionals for Sanity (VIPS), which critically examines US policy. McGovern told DW, “The intelligence was not mistaken; it was fraudulent — and they knew it.” And a significant part of Powell’s presentation was based on intelligence provided by Germany.

Codename ‘Curveball’

In 1999 the Iraqi chemist Rafid Ahmed Alwan al-Janabi came to Germany as a refugee. Alerted to his presence, Germany’s foreign intelligence service (the BND) interrogated him. They were hoping for information about Saddam Hussein’s weapons of mass destruction. Al-Janabi — referred to by his codename, “Curveball” — realized that the more information he provided, the more his status improved. He was given a German passport, money and his own apartment.

This continued until the BND tracked down al-Janabi’s former boss, who picked apart his web of lies. The German intelligence services then informed their American partners of this development. Nonetheless, there was renewed interest in “Curveball” after the attacks of September 11, 2001. Citing former BND head August Hanning, the daily newspaper Die Welt reported in August 2011 that the Americans had demanded a binding commitment from the Germans in 2001 assuring that Curveball’s statements were correct. Hanning refused to provide it, writing instead to the head of the CIA, George Tenet, “attempts to verify the information have been unsuccessful” and that it “must therefore be considered unconfirmed.”

Despite other, more explicit warnings about the veracity of Curveball’s testimony, it became the centerpiece of Powell’s war propaganda. Ray McGovern is certain: “They didn’t care whether Curveball knew what he was talking about. What they had was something they could put on the record, that they could give to these very imaginative and very professional graphics people working for the CIA, and they in turn could render drawings of these nonexistent mobile chemical weapons labs, which of course they did and which Colin Powell featured during his speech.”

Britain has doubts – but nothing comes of it

The US’s allies in Britain were brought into line early on. In May 2005 The Sunday Times of London reported the contents of what had been, until then, a strictly confidential memo. The subject: a meeting with the then British Prime Minister Tony Blair on July 23, 2002, to discuss Iraq. Those present included new Foreign Minister Jack Straw, Defense Minister Geoff Hoon, Attorney General Lord Goldsmith, and the head of the foreign intelligence agency MI6, Sir Richard Dearlove, referred to, according to tradition, as “C”, in what became known as the “Downing Street Memo.”

Dearlove later spoke of a meeting in Washington just beforehand with the head of the CIA, George Tenet: “Military action was now seen as inevitable. Bush wanted to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy.” Foreign Minister Straw rightfully objected that “the case was thin. Saddam was not threatening his neighbors, and his WMD capability was less than that of Libya, North Korea or Iran.”

And Attorney General Goldsmith is on record as saying that “the desire for regime change was not a legal base for military action.” None of these reservations, however, stopped Blair from going to war in the interests of the “special relationship” between the US and the UK.

Source: http://www.dw.com/en/the-iraq-war-in-the-beginning-was-the-lie/a-43301338

Filed Under: Articles Tagged With: Companies, Iraq war, oil

Iraq Kurdistan Lost 50% of Oil Profits After Baghdad Took Over Kirkuk – Lawmaker

November 8, 2017 By administrator

An Iraqi Kurdistan energy official has told Sputnik about how the recent capture of the oil-rich Kirkuk region and escalated tensions over recent months have influenced the oil market.

“We lost 50 percent of all of our revenues from oil after the Iraqi Army … came,” Dilshad Shaaban, deputy head of the energy and natural resources committee in the Kurdistan Parliament, told Sputnik.

Tensions in the area have been escalating since the Kurdish referendum on independence that was held on September 25, which had resulted in more than 90 percent of Kurds favoring secession from Iraq. Baghdad has opposed the referendum and launched an offensive to recapture the Kurdish-held disputed areas of the country.

According to recent statements made by the Moscow office of the Kurdistan Democratic Party, the authorities of Iraqi Kurdistan and the Iraqi government are still negotiating on the status of the region and future actions.

Russia’s Stake

Dilshad Shaaban has explained why the Iraqi government and the UK oil and gas company BP should come to an agreement with Russia’s Rosneft and Iraqi Kurdistan to start pumping oil from the Kirkuk field through a pipeline to Turkey.

“The Iraqi government and BP will not be able to start working and deliver Kirkuk oil to Turkey without cooperation with Rosneft and the Kurdish government. Rosneft’s stake in the Iraqi Kurdistan pipeline is 60 percent. That’s why, BP must simply agree with Rosneft on the joint development of deposits in Kirkuk and the subsequent transportation of oil to the Turkish port of Ceyhan,” the lawmaker said.

According to Shaaban, the Kurdish government retained control over the Fish-Khabur border crossing, which was the only point through which oil could be transported to Turkey, as the Iraqi oil pipeline was destroyed by terrorists, and, therefore, Baghdad needed to agree with Erbil on the issue.

Earlier, the Iraqi Oil Ministry had asked Rosneft to clarify its position on contracts with Iraqi Kurdistan amid escalating tensions in the region, with the Russian company responding that it had clarified all necessary issues.

Filed Under: Articles Tagged With: Iraq, Kurdistan, oil

Breaking News: Turkey Erdogan threatens to shut off oil pipeline, to close border on Kurdistan

September 25, 2017 By administrator

ERBIL, Kurdistan Region — Turkish President Recep Tayyip Erdogan said on Monday that Ankara would close its border with northern Iraq over an independence referendum and threatened the Iraqi Kurds with blocking their key oil exports.
Erdogan commented on the Kurdistan referendum from the Islamic Cooperation Ombudsmen conference.

“Entrance-exit will be closed” at the Habur border crossing to the Kurdistan Region, Erdogan said in a speech as he angrily denounced Monday’s referendum as “illegitimate,” according to AFP.

He added: “After this let’s see… who they sell (their oil) to. The valve is with us. It’s finished the moment we close it.”

The president didn’t rule any possibilities out.

“If there is a threat against us in Iraq and Syria, all options are on the table,” he said.

“We are not and will not threaten Turkey’s national security, and neither will we intervene in the Turkish affairs, not today, and neither in the future. We want to be a good neighbor,” Barzani said.

He added that that Turkey, and others should see the vote for what it is — an expression of the will of the people exclusive for the Iraqi Kurdistan.

“It has been two months that I have been trying and requesting to visit Turkey so that I will explain that this process of ours is not a threat to Turkey. It is unfortunate that they did not agree to this opportunity to me — or us — to explain it to them up close,” Barzani said adding that other relations with Turkey are continuing such as continued phone calls.

Source: http://www.rudaw.net/english/middleeast/turkey/25092017

Filed Under: Articles Tagged With: Erdogan, oil, threatens, Turkey

Iraqi government asks foreign countries to stop oil trade with Kurdistan

September 24, 2017 By administrator

BAGHDAD (Reuters) – Iraq on Sunday urged foreign countries to stop importing crude directly from its autonomous Kurdistan region and to restrict oil trading to the central government.

The call, published in statement from Prime Minister Haider al-Abadi’s office, came in retaliation for the Kurdistan Regional Government’s plan to hold a referendum on independence on Monday.

The central government’s statement seems to be directed primarily at Turkey, the transit country for all the crude produced in Kurdistan. The crude is taken by pipeline to the Turkish Mediterranean coast for export.

Baghdad “asks the neighboring countries and the countries of the world to deal exclusively with the federal government of Iraq in regards to entry posts and oil,” the statement said.

The Iraqi government has always opposed independent sales of crude by the KRG, and tried on many occasions to block Kurdish oil shipments.

Long-standing disputes over land and oil resources are among the main reasons cited by the KRG to ask for independence.

Iraqi Kurdistan produces around 650,000 barrels per day of crude from its fields, including around 150,000 from the disputed areas of Kirkuk.

Filed Under: Articles Tagged With: Iraq, Kurd, oil

Cyprus to continue gas exploration despite Ankara’s warning

July 14, 2017 By administrator

Nicosia, 14 Jul 2017 (AFP) – Cyprus said on Thursday it will continue exploration of gas deposits off the island despite Ankara’s warning this week against carrying out projects in this area.

Yesterday, earlier in the day, the Turkish Foreign Minister said that his country would take action against the exploration of gas by the Cypriot authorities, without giving further details.

Monday, a few days after the failure of the last round of negotiations on the reunification of the Mediterranean island, Turkish President Recep Tayyip Erdogan had warned international companies against possible gas projects in Cyprus.

The following day, Greek Prime Minister Alexis Tsipras had supported him “the sovereign rights” of Cyprus to the exploitation of its gas fields. Cyprus has been divided since 1974 and the invasion of the Turkish army of the northern third of the island in reaction to a nationalist coup aimed at linking it to Greece. The Turkish Cypriot entity installed in the north is recognized only by Ankara.

In 2011, the American firm Noble Energy was the first to discover gas off the coast of Cyprus, in the Aphrodite field, whose reserves are estimated at 127.4 billion cubic meters of gas. Its operation has not yet begun.

Cyprus hopes to eventually become a major energy player in the eastern Mediterranean and build a terminal on land to export gas to Europe and Asia by 2022. But it needs to find more gas reserves.

Greek Energy Minister George Lakkotrypis said on Thursday that he remained unmoved by Turkey’s position. “We are prepared for different scenarios,” he told public radio. “Our perception is that Turkey will continue to challenge us in one way or another.”

This rise in tensions comes as the French and Italian energy giants, Total and ENI, could start Friday a drilling test off Cyprus. The two companies signed a hydrocarbon exploration contract in April.

Friday, July 14, 2017,
Ara © armenews.co

Filed Under: Articles Tagged With: Cyprus, oil, Turkey

Secret Documents reveal Iraqi Kurdistan govt “Barzani” attempts to sell oil fields to Turkey

December 28, 2016 By administrator

SULAIMANI, Iraq’s Kurdistan region,— Iraqi Kurdistan Region’s Minister of Natural Resources, Ashti Hawrami, proposed a project to the Turkish Minister of Energy and Natural Resources regarding selling part of the oil fields’ divisions in Iraq’s Kurdistan Region for $5 billion, according to a secret document leaked by whistle-blower organization Wikileaks.

Hawrami put forward a three-part proposal to Turkish minister Berat Albayrak through an email sent on 19 March 2016 to sell part of the oil field shares in Iraq’s Kurdistan Region to the Turkish government for $5 billion, the Wikileaks’ documents, which NRT obtained a copy of, reported.

According to the Wikileaks documents, the money that the KRG minister demanded from Turkey would be part of a loan paid to the KRG by the Turkish government.

Hawrami highlighted the KRG’s needs for the $5 billion as below:

First: $1.150 million loan paid to the KRG by the Turkish government.

“To date, the total amount of the Loan paid to the KRG by Turkish side stands at $1,150m (the payment was made in three installment of $500m, $500m and $150m),” the Wikileaks document stated.

Second: $514 million loan from TEC for services to be provided to the Kurdish government. “In addition to these Loans, now the total amount due to TEC for services provided to the KRG is in access of $514 million, and this amount is rising every month.”

Third: $1 billion for payments to Turkish construction and other Turkish contractors to complete the proposed projects.

“The KRG needs immediate funding of around $800m plus a further $1,000m over the next 18 months to pay the contractors to restart and complete these vital projects,” the document added.

Fourth: $700 million to pay companies operating in the Chamchamal and KorMor Gas project. “For various reasons, including the KRG’s financial problems the current Operator of these fields has not been paid by the KRG for its entitled remuneration, which the Operator estimated to be a very large amount … but withheld from the Operator is around $700m, which needs to be settled soon.”

Fifth: Payments of $750 million for implementing the Gas and Oil Pipeline Constructions.

“In order to tie in the new oil discoveries like Shaikan to boost KRG’s oil export and to construct a new strategic gas pipeline to export a 20 to 30 BCM of gas from ChemChemal/KorMor and Miran/BnaBawi projects, the KRG needs to fund the pipeline infrastructure, particularly to enable the gas assets to be developed within the next 2 year,” according to Wikileaks document. “The total costs of these pipeline is estimated to be around $750m.”

Sixth: a payment of $540 million to “support KRG’s reduced budget shortfalls and to protect the 20% Shaikan Government Interest due to KRG’s non-payments.”

The KRG minister also gave three options to the Turkish government to expand its support to the KRG, the Wikileaks report revealed.

In the first option, Hawrami stated that the KRG would pay back the loans as the financial capability of the KRG improved, which was stated as possibly beginning in 2019 and ending by 2021.

“Extend the additional Loans of $3,740m to the KRG in the same way as the existing Loans, to be repaid as the financial position of KRG improves.”

“Extend the additional Loans of $3,740m to the KRG provided that the KRG allocates certain identifiable streams of cash flow from an agreed list of Oil and Gas Assets, or even some Oil Cargos in Ceyhan to the Turkish Side to ensure that all the Loans plus agreed interests are repaid, again the time line to be agreed,” the second option stated.

Hawrami’s third option was that the Turkish government buys the KRG’s shares in the Kurdistan Region’s oil fields.

“Rather than just being offered the cash flow of the Oil and Gas Assets, the KRG prefers and proposes that the Turkish Side be assigned the long-term working interests and benefits of these assets,” the document said.

“In this case the Turkish Side may benefit more from any upside profitability of these Assets, but the KRG will also offer a guarantee to the Turkish Side against any possibility of underperformance of the Assets.”

Hawrami also offered three proposals for his Turkish counterpart regarding the third option referred to in the email.

The first proposal stated that the Turkish government buys the shares of TaqTaq, Tawke and Shaikan oil fields from the KRG.

“The KRG proposes the Turkish Side considers converting the current outstanding Loans and the TEC outstanding entitlements to a long-term investment in the TaqTaq, Tawke and Shaikan producing Fields … The KRG proposes to transfer these assets to the Turkish side on an 8% discount basis.”

In the second proposal Hawrami offered the Turkish government the option to buy the KRG’s division in the BnaBawi and Miran projects.

“These two streams of free cash flow are expected to generate $2,705m at 7.5% discount (7.5% interest rate). The KRG proposes to transfer these assets to the Turkish Side on a 10% discount basis.”

In the third proposal, the KRG minister offered the Turkish government the option to buy the KRG’s division in the Khurmala oil fields.

“KRG proposes that the Turkish Side considers advancing a further new payment to the KRG, again not as a loan, but against KRG assigning 50% net working interests in the Khurmala Field – in both the Shallow and the Deep reservoirs. The current operator to retain 30% working interest and the KRG to hold 20% carried interest.”

The Wikileaks document reveals the complete amounts, and documents of the KRG’s divisions in the oil fields, and all the ways proposed of selling them to the Turkish government for receiving the $5 billion.

Kurdistan considered as the most corrupted part of Iraq. According to Kurdish politicians and observers billions of dollars are missing from Iraqi Kurdistan’s oil revenues.

Senior KRG officials including Kurdish leader Massoud Barzani have long been accused by the opposition and observers of corruption or taking government money.

Lawmakers and political figures have previously criticized and accused the KRG of not being transparent with oil exports and revenues.

Members of Kurdistan Parliament have claimed that millions of dollars have gone missing from the region. The region’s Ministry of Natural Resources has rebutted those accusations as unfounded.

Many Kurdish politicians and observers believe that many of the oil industry projects in Iraqi Kurdistan are conducted in a non-transparent way. Some have even described them as secretive.

Source: http://ekurd.net/kurdistan-sell-oil-fields-turkey-2016-12-27

Filed Under: Articles Tagged With: field, Iraqi, Kurdistan, oil, Turkey

Kurdistan Reportedly Sells 910,000 Bpd For $1B Every Month “Where Barzani stashing the Billions?”

November 3, 2016 By administrator

barzani-and-billions-oilBy Tsvetana Paraskova

The Kurdistan Regional Government (KRG) in northern Iraq is selling 910,000 bpd and reaping nearly US$1 billion in oil revenues every month, an investigative reporting piece by the Kurdistan region’s news outlet NRT showed on Wednesday. If the figures are correct, Iraq as a whole is pumping much more than the central government, the Kurdistan government, and OPEC sources have been estimating.

According to a foreign source with knowledge of Kurdistan’s oil, NRT has estimated that the fields in the Kurdistan Region and in Kirkuk under the control of the KRG Ministry of Natural Resources are producing as follows: Khurmala oil field – 210,000 bpd, Tawke oil field – 190,000 bpd, Taq Taq oil field – 110,000 bpd, Havana and Bai Hassan oil field – 300,000 bpd, and other small oil fields – 100,000 bpd. That’s a total of 910,000 bpd, or 27,300,000 barrels every month. If oil is sold at US$36 as the KRG has indicated, this means almost US$1 billion in revenue.

NRT’s investigation has revealed that except for some foreign companies and “officials from the Kurdistan Region, including Masoud Barzani, the KRG Prime Minister Nechirvan Barzani and the KRG Minister of Natural Resources, Ashti Hawrami, no other individual or party is aware of the revenue”.

According to figures by the autonomous province’s Ministry of Natural Resources, the KRG received US$328 million from crude oil exports in September. For the whole month of September, the KRG shipped a total of 16.94 million barrels of crude, according to the ministry.

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Iraq – which has questioned the way OPEC calculates output from secondary sources since day one after the cartel agreed to work toward an agreement to limit production – released a few days ago detailed data about the crude oil output at each of its 26 oilfields as well as equally detailed export figures, in an attempt to prove that OPEC’s external-source output estimates do not reflect reality.

The data also included a total output figure from fields in Kurdistan. According to these figures, Iraq pumped 4.7 million bpd in September.

By Tsvetana Paraskova for Oilprice.com

Filed Under: News Tagged With: 25 governors replaced across Turkey, Barzani, Billions, Iraq, oil, Turkey

Iraq: Arrest warrant issued for Iraqi Kurdistan oil minister over corruption: MP

October 9, 2016 By administrator

Iraqi Kurdistan oil minister Ashti Hawrami. Photo: AFP

Iraqi Kurdistan oil minister Ashti Hawrami. Photo: AFP

SULAIMANI, Iraq’s Kurdistan region,— The head of Iraqi Kurdistan Parliament’s natural resources committee, MP Sherko Jawdat, said on Saturday that a court in the town of Chamchamal has issued an arrest warrant for the region’s Minister of Natural Resources Ashti Hawrami on corruption charges.

Jawdat told NRT that he raised the issue with the court after obtaining evidence and documents pointing to misuse of power and corruption.

Jawdat also accused Hawrami’s former wife Chrakhan Rafiq of involvement in business dealings that purchased oil from the Kurdistan Regional Government (KRG) and sold it on the black market with for a monthly revenue of nearly $10 million.

Rafiq has fought back against allegations of corruption and misuse of public funds since May 2016.

Massoud Barzani issued a detention order for Rafiq at that time, according to the official website of the Kurdistan Democratic Party (KDP).

“The court issued an arrest warrant for Ashti Hawrami and a number of other officials, saying they need to appear before court,” Jawdat said.

“A fake plant named Zipo is operating by Ashti Hawrami’s approval and specialist committees in the Ministry of Natural Resources.”

According to Jawdat, the Ministry of Trade and Industry confirmed that no Zipo plant exists in the region.

NRT however contacted an investigator working on the case who said Hawrami was not named among three defendants listed in the complaint.

The investigator added that the case has been transferred to the Sulaimani Board of Integrity for further investigation.

Need to be mentioned that Chamchamal city is located in the area which under control of the Patriotic Union of Kurdistan PUK while Ashti Hawrami a member in the KDP party and live in the area which is controlled by his party.

Ashti Hawrami routinely accused of corruption by observers, Kurdish officials.

Many Kurdish politicians and observers believe that many of the oil industry projects in Iraqi Kurdistan are conducted in a non-transparent way. Some have even described them as secretive.

Members of Kurdistan Parliament have claimed that millions of dollars have gone missing from the region. The region’s Ministry of Natural Resources has rebutted those accusations as unfounded.

Massoud Barzani has been accused by critics of amassing huge wealth for his family instead of serving the population. Barzani’s son is the Kurdistan region’s intelligence chief and his nephew Nechirvan Barzani is the prime minister.

Source: http://ekurd.net/warrant-arrest-kurdistan-oil-2016-10-09

Filed Under: Articles Tagged With: arrest warrant, Iraq, Kurdistan, minister, oil

Islamic State smuggling Kirkuk oil via Kurdish middlemen to US & Israel: report

March 31, 2016 By administrator

ISIS OIL Export 1KIRKUK, Iraq,— The recently refurbished tarmac at Maine’s busiest airport contains the usual mixture of gravel, water and chemical binder, but what gives this asphalt its jet-black color is crude oil supplied by the Islamic State group. The Portland International Jetport’s new pavement isn’t the only blacktop of its kind on American soil. Four hundred miles south, highways outside Philadelphia are lined with the same mixture, as are hundreds of potholes on the streets of New York City, a four-month-long International Business Times investigation found.

These are but a few of the many places where ISIS’ oil ends up as part of an illicit business that helps fund the group’s reign of terror, according to Kurdish officials and local police documents. Part of what makes the Islamic State group, known as ISIS, so difficult to defeat is its diverse revenue stream. The Sunni militant group draws income from taxes it levies on the people in conquered lands, kidnapping ransoms and other forms of extortion. But it also makes money to fuel attacks like the ones in Brussels last week by selling a steady stream of oil that flows from ISIS-controlled territories in Iraq to the U.S., parts of Europe and Israel. It’s a constant source of money — as much as $1 million per day at its height — that U.S. and Iraqi officials have failed to halt.

In the aftermath of the Belgium attacks, U.S. President Barack Obama said his priority is defeating ISIS. “There’s no more important item on my agenda than going after them and defeating them. The issue is, how do we do it in an intelligent way,” Obama said at a press conference following the attack last Wednesday. But the U.S. administration, though it has pursued a strategy of striking ISIS’ oil supply centers and mobile refineries, has not choked off the group’s oil reserves completely. It has not hit the pipeline that the terrorist group uses to export its oil or the major roads that serve as trading routes.

The story of how the Islamic State group profits from crude that makes its way to refineries and storage facilities around the world begins in the central Iraq town of Kirkuk. Here, on the main dusty road that leads into the city, black smoke billows in the distance. Refineries are busy readying hundreds of thousands of barrels of crude for transport to ports in Turkey. Kirkuk’s streets bustle with local markets, where men, women and children buy food to prepare dinner. It’s a lively town despite the frequent car bomb attacks launched by Islamic militants.

Oil and gas officials here in Kirkuk tell International Business Times that ISIS colludes with smugglers in western Iraq and eastern Syria and pays off middlemen working for the Kurdistan Regional Government (KRG) to move oil out of Iraqi Kurdistan.

“ISIS benefited a lot from the oil fields it took over. At the beginning of the conflict, this [smuggling] used to happen a lot. People would buy and sell oil from ISIS and get it through the border in Turkey,” said Brig. Gen. Sarhad Qader, head of police in Kirkuk and its subdistricts. Qader told IBT that he has arrested dozens of ISIS of oil smugglers that have mixed the product with legitimate Kurdish oil. He said that while the region had a difficult time at first cracking down on the smuggling, his team is much more equipped today.

The height of ISIS’ oil sales coincided with a two-year peak in international oil prices and a reign of terror that included the recruitment of thousands of troops and the takeover of large swaths of land in northern Iraq and eastern Syria. Between May 2014 and March the following year, the group’s largely unmonitored oil extraction and export ramped up and fueled ISIS’ early rise to international prominence. By fall of 2015, U.S. airstrikes on ISIS oil facilities in eastern Syria and throughout Iraq had hindered production, but ISIS’ capacity to extract and sell oil remained.

The U.S.’s strategy to combat ISIS doesn’t include attacking the group’s funding sources. Instead, military and intelligence experts say, the U.S. is targeting ISIS finance and oil ministers, as well as storage facilities. But the extraction sites, some refineries, trucking routes and pipelines are still intact. These transportation routes also serve massive global energy companies.

“The problem is, there’s no one on the ground tracking this,” said Denise Natali, an expert on oil in Iraq at the National Defense University in Washington, who explains that the few local officials who are aware of the illicit oil trade are also profiting from it.

The Road to Market

A dirt mound lines the street on a two-lane road leading from Kirkuk to Sulaymaniyah, the oil-rich city near Iraq’s northeastern border with Iran. The mound is a de facto barrier that prevents cars steering off course. Just behind that dirt barrier is a large, black pipe, marked by yellow wooden poles that warn people not to approach. ISIS used this pipeline, along with trucks sent along smuggling routes, to transport its oil to the international market. During former dictator Saddam Hussein’s reign, smugglers amassed wealth and power by taking advantage of these illicit trade routes, which extend deep into the country’s western Anbar province. Following the U.S. military’s exit from Iraq in 2011, Shiite leaders in Baghdad targeted Hussein’s former Baathist supporters in retaliation for aligning with the ideals of a brutal dictator. Frustrated by the suppression under former Prime Minister Nouri al-Maliki, the former Baathists joined ISIS and continued to use the formerly established smuggling networks to make millions of dollars for ISIS.

Andrew Tabler, an expert on ISIS oil at the Washington Institute for Near East Policy, explains that Iraq’s economy has depended on the smuggling routes used to transport not only oil, but other goods, throughout the region. “ISIS was able to take advantage of these kind of smuggling networks that are impervious to politics,” he said.

Even before ISIS began gaining ground after the fall of Iraqi city of Mosul in June of 2014, it had taken control of oil fields, wells and small refineries in eastern Syria and northern Iraq. The group took control of oil fields around the cities of Kirkuk and Baiji. The tradesmen and smugglers responsible for transporting and selling ISIS’ oil would send convoys of as many as 30 trucks at a time to these extraction sites, according to a report written by George Kiourktsoglou, a researcher at the University of Greenwich who studies the group’s oil business.

ISIS sold the bulk of its oil in the region and “exported anywhere from 3,000 to 8,000 barrels a day, about 15 percent of its total production, for sale on the high seas in 2014,” Kiourktsoglou tells IBT.

ISIS had several ways of getting its oil out of Iraq. Sometimes the group hired people to truck the oil to Turkey on the international E90 route, which twists and turns its way east from Lisbon, Portugal, to the Turkish-Iraqi border. That oil trucked to Turkey was often mixed with Kurdish oil. Once in Turkey, the oil would be refined in the southeastern part of the country before sale at either the Port of Ceyhan or the Port of Dortyol, which is located directly across the bay. Other times, it passed off the oil to middlemen who mixed ISIS oil with oil produced by legitimate American and European energy companies for transport via pipeline to Turkey, senior officials in Erbil told IBT.

The oil pipeline system from Iraqi Kurdistan to eastern Syria is an intricate maze of small feeder ducts that lead to a main artery — the Kirkuk-Ceyhan pipeline. This single line is the pipe every major oil company in the region dumps its oil into to transport it to ports in the east. A network of roads connects various pipeline entry points to oil fields and refineries.

As ISIS extended its influence across eastern Syria and parts of Iraqi Kurdistan in 2014, ISIS operatives would pay off workers guarding the Kirkuk-Ceyhan pipeline’s access points to dump its product into mix of all oil flowing out of the region.

Much like an effective money-laundering operation, it was nearly impossible for officials at the end of the pipeline in Turkey to determine illicit batches of oil from those produced by legitimate energy companies.

“Oil is fungible, it is hard to track,” said James Jeffrey, the former U.S. ambassador to Iraq. “Smuggling was happening under our noses [in Iraq] in the 1990s and we tried to stop it. But the smuggling of oil business into Turkey is deeply rooted in infrastructure. It is impossible to shut down without shutting down the entire thing.”

Several American and British companies operate in Iraqi Kurdistan, including Chevron, ExxonMobil, Hess, Marathon Oil and Genel Energy.

Tensions between the Kurdish government and Baghdad only served to strengthen illicit oil exports. For decades, the KRG has wanted to establish independence from Baghdad and the fastest way it knew how was to strengthen the region’s economy by selling as much oil as possible on the international market, Natali said. During the summer of 2014, the Kurdish Government wrested control of its regional fields from the Iraqi leadership in Baghdad and began reaching out to international buyers. Investors rushed into the Kurdish market and jumped on the opportunity to sell oil at cut-rate prices.

The KRG began exporting its discounted crude in May 2014 using its independent pipeline. Baghdad could at one point access it, but fighting and damage to the infrastructure shut the central government off.

Buyers from all over the world — Italy, Cyprus, Malaysia, Hungary and Israel — wanted a piece of the market. Vitol and Trafigura, two of the largest oil-trading firms in the world, made it happen. Starting in 2012, the firms conducted trade of the Kurdish oil through secretive pre-pay deals. The Kurdish government reaped millions and put the money in Turkish bank accounts.

Israel was one of the biggest buyers of the Kurdish oil. Refineries and oil companies in Israel imported more than 19 million barrels of Kurdish oil between the beginning of May and August, according to a report by the Financial Times.

“The buyers of the oil have it imported to Israel first because they know that Iraq won’t try and prosecute,” said Shwan Zulal, the head of Carduchi Consulting, a firm based in London and Iraqi Kurdistan with energy clients with stakes in the oil market in Erbil. “Iraq doesn’t recognize Israel as a country so it is not going to file a lawsuit.”

The only way Iraqi Kurdistan could build up its relationship with new oil traders and companies without angering Baghdad, also a major oil exporter, was to keep the deals under wraps.

“The KRG kept the sale process all confidential,” said Luay al-Khatteeb, an Iraqi oil expert from Brookings Doha Center, a think tank based in Qatar. “The Ministry of Natural Resources acted not only as an energy ministry but also the ministry of finance and kept all the books sealed. There is oil that is unaccounted for.”

The KRG also kept everything under wraps because the majority of the money earned from oil production and export in the region went into the pockets of the leadership in government, said Sherko Jawdat, the chairman of energy and natural resources in the Kurdish parliament in an exclusive interview with IBT. The oil sector, and all of its transactions, were and still are overseen by the KRG, led by President Masoud Barzani.

“Everyone knows this. It is not a secret,” Jawdat said.

“The Mineral and Natural Resource department is not checked or verified by any independent institution. You can’t make right decisions if the information can’t be verified and checked professionally. If it is not audited, then a lot of money will go to special powerful people.”

Oil and gas officials in the KRG, the Kurdish government based in Erbil, told IBT in interviews in Kirkuk and Sulaymaniyah that they knew about the mixing of ISIS oil with Western energy companies’ product. They even told their bosses, the prime minister and the president.

“They said the government already started to establish a committee to follow up and verify the case. Finally, they told us that they questioned 15 people regarding illegal trade with ISIS. This was the end of the story [from them],” Jawdat said.

The U.S. government was aware of the illicit sales as well. The State Department told IBT it was aware of the situation as early as June 2014. And in the fall of 2014, prominent U.S. officials started to speak about it publicly.

“As of last month, ISIL was selling oil at substantially discounted prices to a variety of middlemen, including some from Turkey, who then transported the oil to be resold,” said Treasury Department Undersecretary David S. Cohen in October 2014 at the Carnegie Endowment for International Peace, a think tank in Washington. “It also appears that some of the oil emanating from territory where ISIL operates has been sold to Kurds in Iraq and resold into Turkey.”

The State Department described the sale of the ISIS oil as a “drop in the bucket.”

“I took these issues to the State Department when I visited there in December,” Jawdat said. “No one responded, they said, ‘Our priority is security and fighting ISIS.’ ”

Since then, the U.S. government has launched dozens of airstrikes on the terrorist group’s oil facilities and has even captured some of its leaders. But ISIS is still in control of two oil fields in western Iraqi Kurdistan where the group is producing about 20,000 barrels of oil a day.

Iraqi Kurdistan is still trying to establish oversight bodies for the oil market. The informal nature of oil extraction in Iraq — and the chaotic war environment in the region — provided fertile ground for ISIS’ oil business to flourish.

“The government in Baghdad is letting some of this go for now because it preoccupied with the war,” Natali says.

That preoccupation allowed the KRG to kick-start its oil sales with little retribution from Baghdad. At the same time as the Iraqi military focused on fighting ISIS, political leaders and business executives around the world were scrambling to figure out how to keep economies and companies flush with the oceans of oil they required to stay afloat. In May and June of 2014, oil was at $111 per barrel, its highest price in nearly two years. Meanwhile, the KRG was exporting its crude for $40 a barrel, according to two pipeline workers interviewed by IBT.

And that’s how ISIS oil turned up on the streets of New York, courtesy of Axeon Specialty Products LLC, a small New Jersey-based asphalt maker. The company uses petroleum to make its products, and in the spring of 2014, it was looking for bargain buys. Earlier that year, New York private investment firm Lindsay Goldberg purchased half of the asphalt business from NuStar Energy for $175 million. At the time, Rod Pullen, a senior vice president at Axeon said the new co-owners hoped to make the Paulsboro, New Jersey, refinery more efficient.

That June, according to shipping data and U.S. customs documents, Axeon purchased a shipment of the cheap Kurdish crude to feed its operations in New Jersey. At the time, oil experts and watchdog groups were tracking a lawsuit between KRG and Baghdad over oil exports that had left an oil tanker filled with Kurdish crude stuck in international waters off the coast of Texas. That case alerted news organizations to begin following the Kurdish crude to buyers in the U.S.

Like its competitors in the asphalt business, Axeon sought the least expensive crude it could find, and it found its match in KRG. A tanker loaded with KRG oil shipped out of Dortyol, Turkey and delivered 254,840 barrels of crude to Philadelphia on June 6. Axeon has not disclosed what it paid for the oil, but the company said it transported the shipment to its refinery in Paulsboro and used at least of part of the oil to make batches of asphalt that went to the Portland International Jetway and to departments of transportation up and down the eastern seaboard. The deliveries serviced projects that began just weeks after the delivery to Paulsboro.

In a statement prepared for IBT, Axeon said: “Axeon carefully vets all suppliers of oil and receives clear assurances regarding the source and title of any oil it buys. In the late spring of 2014, Axeon committed to purchase two small parcels of Kurdish crude oil from reputable oil traders. Axeon was assured that the oil purchased was 100% sourced from the Kurdish Shaiken field via the Kurdish regional government.”

Back in Iraq, the Kurdish government is busy trying to reach its ambitious production targets. It plans to reach a production pace of about 1 million barrels of oil a day within the next few months. Still, Kurdish officials say they can not guarantee to buyers that their crude is free of ISIS oil.

This story has been updated to reflect that IBT had access to Kurdish government documents.

Read more about Ashti Hawrami and Kurdistan oil
Read more about Corruption in Iraqi Kurdistan

Source: eKurd

 

Filed Under: Articles Tagged With: Al-Qaeda Claims Iraq Kurd Attack, islamic state, kirkuk, Kurd, oil, smuggling

Russian oil giant Gazprom cutting gas supplies to Turkey

February 26, 2016 By administrator

56d058a0c461889c2c8b45faThe already strained relations between Moscow and Ankara have taken a turn for the worse. Gazprom has cut gas supplies by nearly a quarter after failing to reach an agreement with Turkish importers on discounts for Russian natural gas.

Delivery is down 23 percent, compared to the same period last year, Interfax reports, quoting data from Bulgarian gas operator Bulgartransgaz that processes about 50 percent of Russian gas going to Turkey.

According to the news agency sources, the reduction is linked to a price dispute between Gazprom and Turkey’s private gas importers.

Last year, Gazprom gave the importers a 10.25 percent discount, but is now doing away with it as energy prices have dropped significantly.

Business daily Kommersant’s sources say Gazprom stopped giving the discount at the beginning of the year. For January deliveries, Turkish companies had to pay at a higher price, but on the payment date of February 21 they only paid the discounted price.

As a result, Gazprom has cut the volume delivered by the size of the underpayment.

Enerco Enerji, Bosphorus Gaz, Avrasya Gaz, Shell, Bati Hatti and Kibar Enerji are the importers affected. Overall, they import 10 billion cubic meters of Russian gas per year. Kommersant’s sources in the companies say the cancellation of the discount hurts their business, as they have signed contracts with clients based on the discount gas price.

From the 1st to the 24th of February Gazprom under-delivered 117 million cubic meters worth $30 million, the newspaper’s calculations say. Kommersant added that Turkey could fine the Russian gas monopoly $2.5 million for not fulfilling its obligations.

The source in Gazprom claimed the reduction in supply will not affect supply of the Turkish market, “especially because Botas does not reach its contractual volumes.”

State-owned Botas imports about 17 billion cubic meters of Russian gas per year. In 2015, it didn’t get a discount from Gazprom due to the failure of the Turkish Stream negotiations and is now suing Gazprom.

Filed Under: News Tagged With: cutting, gasprom, oil, Russia, Turkey

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