Iraq awarded Akkas gas development to Ukrainian company – Reaction from Russia, Iran, China

While Western powers are “preoccupied” with whether or not Israel will enter Rafah, Russia, Iran and China are now working closely together on Iraq’s vital Akkas gas field. It is these strategic reserves that have put enormous pressure on politicians in Baghdad to ensure that all field-related contracts go to Russian companies in the first instance, with support from Chinese companies when required.

Iranian gas companies have no intention of managing a significant development of natural gas fields, so their own natural gas fields are mostly operated by companies from these two countries, particularly Russia.

However, in one of the most unusual surprises in the recent history of gas or oil field contracts, Iraq has awarded the development of Akkas to a virtually unknown company from Russia’s current archenemy – Ukraine.

What is the reason for this “geopolitical” movement?

The importance of the Akkas gas field to Russia, Iran and China cannot be overstated. Located in the heart of the Middle East, sharing its eastern border with Iran, its northern border with Turkey, its western border with Syria and Jordan, and its southern border with Saudi Arabia, Iraq is perhaps the most geopolitically important country as a whole.

The Middle East in these three countries—and in the U.S., in turn, the lawless western desert province of Anbar—a place so violent and unpredictable that even the Islamic State has avoided it wherever possible—is perhaps the most vital geopolitically area throughout Iraq.

And the most strategic location in Anbar is the huge Akkas gas field. The field itself has about 5.6 trillion cubic feet of proven reserves, and Iraq’s Ministry of Petroleum plans to produce about 400 million cubic feet of gas per day.

But Akkas could have nothing in it, and Russia, China and Iran would still do anything to get it. A key reason for this is that oil and gas companies are legally entitled to secure their businesses in oil and/or gas fields around the world by any means they deem necessary.

In practice, this may involve stationing a huge heavily armed security force around an oil and/or gas field.

The role of China

This aligns perfectly with China’s multi-generational power project, the Belt and Road Initiative, which leverages large investments in oil, gas, industry and transportation to ensure effective control over large swaths of the country’s economy and, hence, her future political allegiance.

A bonus for China is that its massive investments in Iraq in recent years have supposedly given it first refusal on most of the oil, gas and petrochemical projects that came up in Iraq during the Iraq-China Framework Agreement. As part of this, China was also required to receive at least a 30% discount on all oil, gas and petrochemicals it buys from Iraq.

The remaining deals – mainly in westernmost Iraq – are said to have given Russia first refusal, with similar concessions on oil and gas markets included in those deals.

The strategic position

However, there are even greater stakes for Russia in developing Akkas because of its geographic location. The Akkas field is one of three major natural gas sites that form an oblique triangle across southern Iraq, stretching from the Mansuriya field near the eastern border with Iran, to the Siba field in the south (very close to the main export hub of Basra, Iraq), and then all the way west to Akka itself (very close to the Syrian border).

Along the backbone of this entire region running from east to west are the historic ultra-nationalist and ultra-anti-Western cities of Falluja, Ramadi, Hit and Haditha. At this point geographically, Iraq becomes Syria and it is only a short transition to the key strategic ports of Banya and Tartous, and Latakia – all three critical global strategic points for Moscow.

The Syrian port of Tartus remains a huge naval base for Russia and the only Mediterranean port to which it has access. The port is a short distance from Khmeimim Airport, which – under an agreement signed in 2015 – became a dual-use civil-military airport-airbase for use by Russia. And a short distance from these two key strengths is Russia’s intelligence gathering station in Latakia.

Russia believed it had finally gained control of these three sites in September 2019, when Stroytransgaz signed a preliminary contract with Iraq’s Ministry of Petroleum to develop the hitherto largely unknown Block 17 in Anbar province.

The Block 17 site in Anbar province was ideal for Russia’s purposes, as it was right in the middle of what the US military called the Islamic State’s “spine” where the Euphrates flows west into Syria and east into the Persian Gulf, extremely close to border with Iran. However, US pressure on Iraq caused constant delays in this agreement.

The conductors

For both Russia and Iran, securing Iraq’s spine through Akka is vital to the development of the port of Banya in Syria.

This has long been envisioned as the end point for the long-planned Iran-Iraq-Syria pipelines that would carry Iranian and later Iraqi oil and gas from Iraq to Syria and on to the less heavily policed ports of southern Europe.

This route would not only allow Iranian oil and gas to move to Europe, but also anything else Russia and Iran want to get through the continent without too many checks.

It has also long been the last part of Russia and Iran’s plans to build a “land bridge” from Tehran to the Mediterranean Sea through which they could exponentially increase the scale and scope of arms delivery to southern Lebanon and the region. of the Syrian Golan Heights to be used in attacks on Israel.

This main goal of this policy was to provoke a wider conflict in the Middle East that would drag the US and its allies into a war of the kind recently seen in Iraq and Afghanistan.

The “wedge” Ukrezemresurs

With all this at stake, why did Iraq award the Akkas gas development to the hitherto unknown Ukrainian company Ukrezemresurs?

The answer lies in the question, which is that there is so much at stake for the US’s three main geopolitical rivals in the region – notably in Russia’s war against Ukraine – that Washington could not allow it to happen at this time. According to sources working very closely with Iraq’s Ministry of Oil in the past two weeks, it has been made clear by the US in Iraq that financial disbursements and waivers to continue importing energy from Iran would be thoroughly considered if Akkas is awarded to Russia or any companies from China or Iran at this time.

This message was emphasized in the recent delegation to Washington led by the Prime Minister, Mohammed Al Sudani, and seems to have been clearly received. It was also promoted with further promises of investment from US companies on the one hand, or further sanctions against Iraq for helping Iran on the other.

Indeed, the announcement of the Akkas award came around the same time as Iraq-based power and utility company Raban Al-Safina for Energy Projects (RASEP) signed memorandums of understanding (MoUs) with US companies KBR, Honeywell, Baker Hughes, Emerson and GE to develop the Nahr Bin Omar gas field in Basra in southern Iraq.

Given Iraq’s history of promising one thing to the US and then doing the exact opposite, it remains to be seen how these memorandums of understanding and the exploitation of the Akkas gas field by the Ukrainian company Ukrezemresurs will play out, of course.

But given the weight of resources in this new US initiative in Iraq, if it doesn’t work, then Washington is unlikely to ever find a way back into the country.

About the author

The Liberal Globe is an independent online magazine that provides carefully selected varieties of stories. Our authoritative insight opinions, analyses, researches are reflected in the sections which are both thematic and geographical. We do not attach ourselves to any political party. Our political agenda is liberal in the classical sense. We continue to advocate bold policies in favour of individual freedoms, even if that means we must oppose the will and the majority view, even if these positions that we express may be unpleasant and unbearable for the majority.

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