Petro-Geology, Petro-Politics, and Frontiers for Iraq - Term Paper Example

? Petro-Geology, Petro-Politics, and Frontiers for Iraq of Petro-Geology, Petro-Politics, and Frontiers for Iraq Petro-geology in Iraq Petroleum mines exposed in Iraq are more or less entirely located in the lowland plateau locations, where the intended structures have universally an efficient cover of thick Fars. The basal section of this progression possesses a very excellent sealing potential (Lacombe, Mouthereau, Kargar & Meyer, 2006). Following the folding deformation inclusive of the Plio-Quaternary sediments, the consequential folds are well observable and quantifiable in these immature beds. All these elements were already identifiable by the initial exploration geologists; thus a general procedure of exploration was to conduct drilling of the peak of the anticlines. Kirkuk is renown, very lengthy anticline, which was amongst the first sites to be drilled (Benko, 2008). The extensive reserves revealed in the carbonate basins gave a constructive response to the above mentioned discovery tactic, and in the preceding years a huge number of topographically articulate anticlines were bored. Even though a majority of these structures had a very huge amount of hydrocarbons, impenetrable exemptions do exist, or different explanations concerning reservoir rocks and their efficacy (Hips, 2008). In some oil mine fields of varying eminence, or gas and condensate was revealed in the matching reservoirs. It came to be noticed later on that cretaceous fonts are slightly established. The oil kept in the Cretaceous is obtained from a Cretaceous font. It is decayed in the open parts and non-biodegraded in the deeper parts; though still at depth the tar is unaffected. In agreement with other regional research, the Jurassic foundation rocks are affluent and are in the oil window (Jassim & Goff, 2006). The carbonate font may give an explanation for the high quantity of sulphur and the considerably high viscosity, but the resultant oils must be of better quality than what is actually established. It was initially presumed that a sediment or gravitational division took place (Sarbazheri, Ghafor & Muhammed, 2009). All in all, more unstable divisions tend to be missing from these oil deposits. The system of Triassic must be late oil to damp gas established, and the petroleum established there keep up a correspondence to the proposed maturity of the origin (Pitman, Steinshouer & Lewan, 2005). Oil Frontiers in Iraq Iraqi Kurdistan region, celebrated by intercontinental petroleum firms as the final frontier for ashore gas and oil discovery, is making efforts to improve its energy infrastructure. Greeters at Erbil’s international airport have a sign that sums it all: Weatherford, General Electric, and Reliance-the forerunner of a wave of important new entrance prepared to bore wells or construct pipelines, energy factories and oil refineries (Navabpour, Angelier & Barrier, 2007). The main point of reference of the location’s gas and oil producers is that aid is within reach. This was the main motivation given the fact that in recent times the Kurdistan’s revolutionary oil and gas manufacturers had to be their own drilling and hauling service providers, engineers, repair men, and even mine cleaners. One of the founders of oil and gas exploration is the UAE that found Crescent Petroleum, which started manufacturing gas in Kurdistan in the late 2008. The Corporation’s CEO recounts the major challenges experienced in transporting over 60,000 metric tons of steel and marshalling numerous truckloads over the Turkish border in effort to establish their plant for oil and gas production. This was during the construction of the pipeline. They had to cross the rivers, construct bridges and clear the mines according to the report released by (Robert, 2006). The current situation is very different as power generation plant has been installed, facilitating a transition from the 185 MW supply of power to the current supply of 2,200 MW by use of a twin 50-year old hydroelectric power plant (Robert, 2006). The General Electric Corporation entered into a 12 year contract worth $ 200 million to maintain the turbines of the freshly fired gas plants in the three main cities of Kurdistan. These include; Erbil, Dohuk and Sulaymaniyah. Even though Kurdistan went a head of the rest of Iraq in relation to development of power, it is still behind in development of refinery and pipelines, a fact that investors in the industry are working round the clock to transform (Robert, 2006). At the Intercontinental Energy Summit held in Erbil between 20th and 21st May, the Kurdistan Regional Government (KRG)’s minister for natural resources had plans laid down for a pair of pipelines to conduct a detached flow of light and dense crude oil further than Turkish border which would help KRG to fulfill its export targets of 1 million b/d in 2014 and 2 million b/d by 2019. The Turkish would administrate the quality of the Iraq’s Northern crude exports from the terminal of Ceyan. The present crude output ability is approximately 250,000 b/d, with the domestic refineries having 60,000 b/d (Ghasemi &Talbot, 2006). Kurdistan exports its crude oil through Iraq’s Northern export pipeline that is federally operated from Kirkuk that climaxed at 181,000 b/d prior to the suspension by KRG on April 1, 2012 on the claim that it was owed by Baghdad $1.5 billion in arrears for the Kurdish crude oil. Offers are being reviewed by KRG to construct their own pipelines via the boundaries they administer. Besides, there are plans to construct tributary lines within the boundaries of Kurdistan to ferry oil from the pioneer mines. In addition, a tactical proposal to construct a gas pipeline to the border of Turkey is ongoing with full consent and collaboration from Ankara (Bellen et al., 2005). Plans are also underway to monetize gas outside the region. Power plants will be planned to distribute power to the entire Iraq. Furthermore, a bigger market is anticipated to meet the 70% requirement in Turkey and the international market in Europe to supply oil and gas (Robert, 2006). This is based on the fact that Turkey is in dire dependency on imports from Iran and Russia hence the desperate need to expand its supply of gas with the aim of improving on reliability of supply and lowering of costs. The region has great potential to be the major distributor of gas and oil owing to the 91% of recoverable gas sources. There are also speculations that an LNG terminal could be positioned on the Mediterranean coast on the eastern side of Turkey. Additional pipelines could be installed to ferry gas to Turkey for both internal use and export into the European and American markets (Nelida, 2005). In the meantime, the KRG production-sharing deals would be branded as unlawful by Baghdad whilst blacklisting of foreign dealers to such contracts continues. According to financial markets records, the Kurdistan has transformed considerably in the past three years in terms of oil and gas production. The main setback concern which form of infrastructure is required given financing is not an impediment. Plans are also underway by KRG to speed up the expansion of refinery aptitude to at least avert the impending threats from the capital of Baghdad towards halting the distribution and supply of petroleum products (Marius, 2009). Petro-Politics in Iraq A majority of the oil sales revenues around the world are denominated in United Sates dollars (USD) (William, 2005). The proponents of the hypothesis of petrodollar hold that since many nations depend on imports of oil, they are impelled to sustain a huge supply of dollars with an aim of continuing the exports. This establishes a reliable demand for US Dollars and an increasing force on the value of the USD not considering the fiscal circumstances in the United States. This in turn gives room for the government of the United States to amass revenues via seignorage and providing bonds at reduced rates of interests than they would otherwise be able to act upon. Consequentially, the government of United States can operate an increased budget deficit at a level that is sustainable than most of the nations (ICG, 2005). A stable US Dollar implies that products imported into the United States might be considerably cheaper. Another constituent of the petro-dollar theory is that oil prices are steadier in the United States compared to any other place in the world, because importers are not worried about the variations of the exchange rates. Given the fact that United States does importation of huge amounts of oil, its market setting are more dependent on the derivatives of oil and oil energy for the energy needs of the nation. The oil price is an important aspect in the political arena; the administration of the United States is quite responsive to the oil prices. Political enemies of the United States such as Iran have some interests of having the oil being denominated more in Euros and other strong currencies. In case the euro went into replacement of the dollar the European Union would be very much pleased to accrue some gains. Nonetheless, the economy of Europe might be critically damaged if the Euro would appreciate against the dollar or other currencies, especially the exports which would transform into being more costly compared to the rest of the world (ICG, 2005). Politics of petroleum have become a highly vital aspect of international relations because of the escalating petroleum industry. As the level of rivalry grows, so does the intense lobbying and scramble for the scarce resource. The tactical contemplation of minor and major nation’s role in the growth of the petro-dollar is equally a more eminent stress on the pumping, refining, hauling and utilization of the petroleum products. Iraq has the second largest oil reserves in the whole world. This is doubled with an escalating exploration to increase the capacity beyond the current 200 billion barrels of quality grade crude and exceptional cheap production costs (William, 2005). Organizations like the Global Policy Forum (GPF) have emphasized that oil in Iraq is the fundamental element of the political backdrop. Owing to the incursion of pleasant firms expectations to benefit more from the productive oil contracts that will cost billions of dollars in profits during the looming decades. According to GPF, the U.S control in the 2005 Iraq’s constitution has made to it that it contains the language that assures a major part to play for foreign firms. Iraq transformed its entire oil deals in 2000 using oil for food program into Euros. When the United States invaded Iraq in 2003, it changed oil sales from the Euro to the US$. The state of the Islamic Republican of Iran considered this theory as a reality. As a reprisal to this course of action the Islamic community saw it as neo-imperialism. Iran has made attempts to establish its own Iranian Oil Bourse hence selling oil in Gold, Euros and Japanese Yen upon its opening. The theory is anchored historically by intellectuals from Iran as a policy made by the American elites following World War II when the Bretton Woods Act did away with the Gold backing from the Sterling Pound. The Bretton Woods prudently began the ultimate pegging of oil producers currency from the Gulf Arab when independence was handed over to them in 1961 and 1971 (ICG, 2005). These nations were additionally secured militarily after the war in the Gulf in 1990. This process of pegging the currencies alongside the exchanges being independently in USD in two locations, a near monopoly was handed over to United States by the NYMEX and the IPE in London (Nelida, 2009). The critics termed this radical step by Iran in establishing a competitive market as one that might further energy associated rivalry between the United States and Iran. From 2006, there was an indication by Venezuela that they were in support of the decision by Iran to provide world oil exchange in the Euro currency. A divisive step such as the Iranian world has constrained the capability to impact the sales denomination in one form or another. A huge number of traders might be forced to consent to a shift in denomination prior to the considerable move. The conflict in Iraq is still a decisive element of the US nationwide security, and comprise of more significant tactical interests by the United States that the current war in Afghanistan. Guesstimate by the Agency of the energy Information under the department of Energy show that the world economy and the United States may not decrease their tactical reliance on the petroleum from the Gulf region till 2003 and that the future of Iraq in connection with that of United States might be decisive in establishing the potential to control Iran and ascertain the safety of the Arab and Israel partners (Nelida, 2011). It is also evident that Iraq still has an unpredictable potential to contend with its revolutionary and terror threats, prevent any threats and pressure from outside and later constrain the probable risk of fresh outbreaks of cultural and sectarian conflict with no assistance from the US. The fact that leadership in Iraq has decided to seek help from the US forces in staying is a one sign that the matters involved and the problems at hand that might have been outlined by different study centers such as ICG. There are still broader needs in Iraq to be addressed by US aid and help and it might take very many years before a rise in the petroleum revenues is observed which will give room for total funding by the internal security and growth. This might make the military forces stronger enough to guarantee its safety against vicious neighbors such as Iran (Nelida, 2010). In summary, a series of conclusive briefings have been developed on Iraq that outline the current trends in the conflicts on top of the security of Iraq, the politics, economy, security forces and governance. The crucial briefings in this sequence will provide a general outlook of the trends in the security of Iraq and its energy department with the present potentials and magnitude of security of Iraq army and the general reliance on aid. They put into summary the war cost to the present date to the United States. The trends in the US forces withdrawal and the present strategies for the exit of US military from Iraq are also addressed in the briefings (Nelida, 2008). Last but not least, a brief of summary strategies for the state department of the United States to establish a tactical ally with Iraq using the strategic Framework Agreement. References Benko, Z. (2008). Fluid inclusion studies on hydrothermal minerals, Kurdistan, Iraq. Internal Study, 59. Fuccaro, N. (2009). Histories of City and State in the Persian Gulf: Manama since 1800. Cambridge: Cambridge University Press. (Cambridge Middle East Studies) Fuccaro, N. (2011). 'The Ottoman Frontier in Kurdistan in the Sixteenth and Seventeenth Centuries' In: Woodhead, Christine, (ed.), the Ottoman World. London: Routledge, pp. 237–250. (Routledge Worlds) Fuccaro, N. (2010). 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