Iraq has approved the construction of its first oil refinery in Kirkuk, a significant step toward enhancing the province’s refining capacity and reducing reliance on imports. The $2 billion project, to be executed by Rania International Oil Company with equipment supplied by US-based UOP, will have a processing capacity of 70,000 barrels per day (bpd). The refinery is expected to provide jobs, improve fuel supply to neighboring provinces, and support Iraq’s long-term energy strategy.
Kirkuk’s First Oil Refinery Approved
Governor Rebwar Taha announced on Thursday that Prime Minister Mohammed Shia al-Sudani and the Ministry of Oil had approved Kirkuk’s first investment contract for a refinery. The facility will be built southwest of Kirkuk, near the North Gas Company (NGC).
“This refinery is a strategic project that will benefit Kirkuk and surrounding provinces,” Taha said. “It will enhance oil production, improve fuel supply, and create employment opportunities for young people.”
Ali Hamadi, investment advisor to the Kirkuk governor, confirmed that the project is valued at $2 billion and will take between two and three years to complete. Construction will begin once the project site is officially handed over.
Jalal Haji Ahmed, head of Rania Energy and Oil, emphasized that the facility would be constructed to international standards. “The refinery will use advanced, environmentally friendly technology to ensure efficiency and sustainability,” he stated.
Strategic Importance and Economic Benefits
Kirkuk currently relies on the Baiji refinery and other facilities for fuel, which has led to supply shortages in the province. Oil expert Ali Khalil highlighted the significance of the new refinery, noting that Kirkuk, despite being a major oil-producing region, has long lacked adequate refining capacity.
“The existing refinery in Kirkuk can process 60,000 bpd but lacks modern hydrocracking and distillation units,” Khalil explained. “This new facility will improve fuel quality and reduce dependence on other refineries.”
The project aligns with the Iraqi Oil Ministry’s broader plans to expand refining capacity, decrease reliance on imports, and eventually export surplus products. Iraq, which holds the world’s fifth-largest oil reserves, has been seeking investment from foreign companies to boost production and refining capabilities.
Government Plans and Future Prospects
The Iraqi government initially announced plans in 2017 to build a new refinery in Kirkuk and increase oil production in the region to over one million bpd. The approval of this project marks a step toward fulfilling that goal.
The federal government has also warned of legal action against the Kurdistan Regional Government (KRG) if it obstructs Kirkuk’s oil exports. Disputes over oil revenues and export routes between the federal government and the KRG have long been a point of contention.
With this new refinery, Kirkuk is set to strengthen its role in Iraq’s oil sector, improving energy security and economic stability in the region. The project represents a crucial investment in the province’s future, with long-term benefits for both local residents and the national economy.
