Can Iraq become a global player in the field of petrochemicals?

Theoretically, there is no reason why Iraq cannot become one of the world's major petrochemical producers, given its vast oil and gas reserves.

Iraq is making some progress in moving its long-stalled payments into the oil sector, while oil prices are relatively low along with a drop in crude exports in October, said Simon Watkins in his report published by Oil Price.

Earlier this week, the Iraqi Oil Ministry announced that Baghdad will go ahead with a series of projects that will add about 790,000 barrels per day of refining capacity to the current capacity list of about one million barrels per day, although its actual capacity does not exceed 650 thousand barrels per day. .

This expansion is likely to come through the addition of new refining units to the Karbala facility and the establishment of new facilities in Kirkuk, Wasit, Nasiriyah, Basra and FAO.

On the other hand, there are still some major obstacles to Iraq's efforts to become at the forefront of the global petrochemical sector, according to the Oil Price report.

Advances in the petrochemical market
The writer stated that such developments contradict the main problems that Iraq has yet to address at the level of petrochemical infrastructure in order to be able to conquer the global petrochemical market.

This is one reason why oil and petrochemical giant Royal Dutch Shell has not made any significant progress in Iraq's pioneering petrochemical project, the Nibras Petrochemical Plant at Basra's $ 11 billion southern oil center.

The deal to build the plant was signed in January 2015, at which time both sides had high hopes for the future of Nebras. Shell issued a statement confirming the Iraqi Council of Ministers' approval of the Nebras project, and that the company will work with the ministries of oil and transport to develop A common investment model for breaking a world record for petrochemicals.

For Shell, Nebras offers an opportunity to leverage upstream operations in Majnoon and West Qurna 1 to serve as an efficient downstream.

The fields provide their oil and gas stocks to add to the raw materials potential that comes from Shell's 44% stake in the Basra Gas Company project.

Overall, the Basra Gas Company is designed to collect gas from fields in the south, including West Qurna 1, Zubair and Rumaila.

In addition, Nebras's design plans related to a project capable of producing at least 1.8 million metric tons per year of various petrochemicals, making it the first major petrochemical project in Iraq since the early 1990s, and one of only four major Petroleum institutions across the country.

Shell is an ideal partner for Iraq
Shell has been and remains an ideal partner for Iraq in moving its hydrocarbon business chain beyond a source of low value-added crude oil to the next stage, which is crucial for both petrochemical sectors, Oil Price quoted the head of petrochemical projects for a major international oil company as saying. And value-added refining.

He added that Shell has already done a good job so far with the Basra Gas Company, but the country still needs to implement its plans to develop a second gas center away from Basra, which would help increase the volume of gas to one billion standard cubic feet per day until it becomes ethane extraction On a sustainable and reliable basis is possible.

The same source stressed the need to consider ethane raw material for the first few factories in Iraq, and this would reduce the capital required for construction works and the complexity of logistical requirements, which are important factors in the early stages of Iraq's experience in the petrochemical industry, and with the growth of industry and the corresponding infrastructure can Sources of heavier raw materials, such as propane, butane and naphtha, should be used.

corruption
The same source stressed that the construction of all the necessary parts to establish a public petrochemical sector in Iraq on a global level will require between 40 and 50 billion dollars, but given the commitment of major global players in Iraq is not a problem.

According to an Iraqi source working with the Iraqi Oil Ministry, the problem in this equation and the real reason behind Shell's reluctance to proceed with the Nebras project is corruption.

Corruption in Iraq is rampant and profound, but for Shell and all Western international oil companies, this is and remains the main reason why the company continues to assess the viability of Nebras Petrochemicals Complex.

Corruption is also the main reason why US giant Exxon Mobil has long delayed its participation in the joint sea water supply project.