How did KAR Group’s story begin in terms of the oil and gas industry in the Kurdistan Region?
In 2003, the energy sector in Iraq was run completely by the government. This was for all sectors, be it upstream, midstream, or downstream; each one was managed by the government. After 2003, I put forward a new strategy that called for the involvement of the private sector in the future of Iraq. This was a new concept for the country. So, I began to assemble a team here at KAR Group that would allow us to begin participating in the energy sector. We decided to participate in the first tender that was offered by the Iraqi Ministry of Oil. The scope of that tender was for the development of oil fields in the northern part of Iraq. We won the tender and became the first Iraqi company to be awarded an oil field development contract, the Khurmala field, by the Ministry in 2004.
How do you assess KAR Group’s efforts to increase the production capacity of the Khurmala field?
The Khurmala field currently has a capacity of 100,000 bpd. The equipment is there and the facilities have been constructed to allow for the production of 100,000 bpd. The equipment we are adding from Ventech will increase our processing capabilities. Right now, we have H2S (Hydrogen Sulfide) gases that must be extracted from the oil. To do this, we have added a quality-stabilizing unit; this unit will help stabilize all the crude oil that is being produced. So, we are producing very close to the capacity of both our equipment and the field itself. Right now, we are producing close to 80,000 BPD at our refinery.
How do you evaluate the KRG’s policy to process natural gas?
The KRG has implemented rules and put pressure on all the operators here regarding gas treatment. When there is a gas deposit of commercial size, it must be processed and not burned. From our first day of operation until now, KAR Group has been very dedicated to processing all the gas that we have. For example, we are currently developing our downstream capabilities for operations involving gas power generation. We are installing our own facilities to do this, and we feel very proud that we are one of the operators doing this. We are very serious in terms of maximizing the production and the revenue for the field. It doesn’t matter if it is oil or gas, we don’t want to lose anything.
With the natural gas treatment facilities, are you still aiming to have those operations up and running in June or July?
That is our current objective. We are doing everything in our power to get these operations launched even earlier, but June or July at the latest.
From our first day of operation until now, KAR Group has been very dedicated to processing all the gas that we have. For example, we are currently developing our downstream capabilities for operations involving gas power generation. We are installing our own facilities to do this, and we feel very proud that we are one of the operators doing this.
KAR Group has been working on improving the octane rating of its fuel. Can you tell us about this initiative?
On the refinery side, we have two trains currently operating. One is capable of processing 40,000 BPD and the other 60,000 BPD. Each train has a hydro-treatment unit and a catalytic reformer unit; these two processes help to maximize the octane rating. Currently, the octane rating of our products is around 92, which is high for both Iraq and the international market as well. These processes have been part of our investment, and they are now part of our standard operating procedures.
Regarding the Erbil power plant, can you tell us about your plans to bring that project to fruition?
The project will be completed in two stages. The first will be a simple cycle facility with a 640 megawatts capacity. The later stage will involve an increase to 1,200 megawatts. This figure includes the addition of a combined cycle and additional simple cycles. The first stage should be operational at the end of June or beginning of July. The facility itself will eventually reach a total of four gas turbines. So, we will start with one and then increase with a new one each month.
What are KAR Group’s priorities in terms of daily operations?
We are pushing to make all of our operations ecologically safe. Simply treating the gas helps to solve certain environmental problems. Moreover, even with our oily-water or any water being produced with our oil, we have the ability to process it within our own treatment facilities. We then have pumps and wells on-site to reinject the treated water back into the reservoirs.