Iraq seeks to relaunch investment plans for refineries, storage tanks

oil ministry spokesman Assem Jihad said in a statement Sunday.The ministry also plans to double Iraq's crude oil storage capacity to 24 million barrels, over the next few years through international investment, Luaibi said after inspecting a tank farm near the Zubair oil field.

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Iraq is offering either a build, own, operate or a build, operate, transfer contract model for new refineries, where the private sector constructs the facility, operates it, and eventually hands it over to the government.The country has struggled to attract private investment after finally breaking with its tradition of state control over the oil industry.Baghdad passed a refining law in 2007 which gives foreign companies the right to build refineries and operate them over a 40-year period. It also set out the overall terms of investment.A 2010 amendment to the law was supposed to make it even more attractive. The oil ministry's statement did not mention the Nassiriyah integrated project, which was linked to the oil field of the same name and included a 300,000 b/d refinery, the largest of the greenfield facilities proposed earlier.The project has been offered in various forms to investors since 2008, but is still to find an investor. A bidding round, most recently scheduled for 2013, has been delayed indefinitely.DELAYS, CANCELLATIONSFaced with a pressing lack of refining capacity, Baghdad has for a long time sought to attract investment in new refineries as well as upgrading and expanding its existing facilities.The need has become more urgent since the shutting of the 310,000 b/d Baiji refinery in mid-2014 after attacks by the IS.So far, of the planned grassroots facilities, only one, the 200,000 b/d facility at Karbala, is under construction, with completion scheduled for 2019.Even here, the Iraqis are falling behind schedule due to a funding shortfall as low global oil prices hit Iraq's budget, though a senior oil ministry official said that approval was given to pay contractors in crude liftings.The 140,000 b/d refinery is being built under a $6 billion BOT contract by a consortium led by Hyundai E&C. But the funding, to come from Iraq's annual budget, is at risk, deputy oil minister Fayadh Nema said in June.A 150,000 b/d refinery in Missan province was awarded in a secret deal to French-Swiss company Sataram and China's Wahan, which sources close to the deal said was a subsidiary of state-owned China National Petroleum Corp. Despite a groundbreaking ceremony in February, it is not clear what, if any, steps have been taken since.Brownfield rehabilitation projects are also making slow progress.After many delays, the oil ministry signed a contract in October last year with Czech engineering firm Technoexport to build a new crude distillation unit at the 210,000 b/d Basra refinery in the south of the country, adding 70,000 b/d of processing capacity.The company has been given two years to develop the project, once financing is secured.Part of this will come from a loan of more than $2 billion from the Japan International Cooperation Agency, which was approved in July.