Iraq reopens largest oil refinery in effort to reduce imports

Iraq took a significant step on Friday towards reducing its dependence on fuel imports by reopening its largest oil refinery, the North Refinery, located in Baiji, 200 kilometers north of Baghdad. The refinery, once heavily damaged during battles with the Islamic State group in 2014, has been fully rehabilitated, now boasting an effective capacity of 250,000 barrels per day, according to Assem Jihad, spokesman for Iraq’s oil ministry.

This reopening marks a substantial milestone in Iraq’s journey towards self-sufficiency in oil production. Two smaller production units at the refinery complex had been operational in recent years, but Friday’s reopening brings the facility closer to its former capacity, with an additional unit capable of producing 150,000 barrels per day.

Prime Minister Mohammed Shia al-Sudani’s office expressed optimism, stating, “With this accomplishment, we are getting closer to meeting the country’s (oil) derivative needs no later than mid next year,” indicating that this development could potentially enable Iraq to end its fuel imports. Sudani emphasized that despite producing four million barrels a day, Iraq still relies on oil derivatives imports.

The Baiji refinery, constructed in 1975, had a production capacity of up to 300,000 barrels per day before it fell under the control of IS militants in June 2014. It was not until October 2015, after fierce clashes, that government forces managed to retake the facility and the city. However, extensive damage sustained during the conflict kept the refinery closed for several years.

While the North Refinery’s reopening is a significant achievement, Iraq continues to grapple with infrastructural challenges and endemic corruption, which have hindered reconstruction efforts. Despite being endowed with vast oil reserves amounting to 145 billion barrels, Iraq remains heavily reliant on crude oil sales, which constitute 90 percent of the country’s budget revenues, according to the World Bank.

Iraq has also taken steps to bolster its refining capacity elsewhere, inaugurating an oil refinery in Karbala in April with a capacity of 140,000 barrels per day. However, the road to energy self-sufficiency remains fraught with challenges, as the country seeks to leverage its abundant natural resources while addressing longstanding issues of governance and infrastructure development.