A summary
The Kurdistan Region has about 10 gas fields, some of which produce coal gas, with a total of about 30 trillion cubic meters of natural gas reserves. This field administratively belongs to Chamchamal district.
Gas investment has recently started in Chamchamal field. The Kurdistan Region has a great opportunity to start building a natural gas industry by selling small amounts of this gas and converting it into chemical foam and other chemicals, which will create about 100,000 jobs and investment worth more than $ 120 billion. It explains how to enhance energy security, improve lives and accelerate economic activities through natural gas industrialization for the Kurdistan Region.
First, Danagaz’s efforts need to be complemented
Dana Gas, Crescent Petroleum and Pearl Petroleum are owned as entities by a single family residing in the United Arab Emirates. Kormor field administratively belongs to Chamchamal district, was explored in 1928, and Chamchamal fields and wells were explored in When the Ba’ath regime collapsed in Iraq, the village of Kormor, which belonged to the old Qadir Karami district, was liberated from the Iraqi government’s military forces and became part of the Kurdistan Regional Government.
Dana Gas was established in 2005. After negotiations and facilitations, it signed a contract with the Ministry of Natural Resources of the Kurdistan Regional Government to produce gas from the field.
In 2025, the Cormor Project facilities will supply 525 million cubic feet of gas per day to four power plants, contributing to the generation of approximately 2,800 megawatts of electricity, accounting for 75% of total electricity generation in the Kurdistan Region. Natural gas is now being extracted from three wells in Chamchamal.
What was said above is not ambiguous, our problem is that:
One: Industrial sectors need a constant and stable supply of energy to maintain production efficiency. Any disruption in energy supply — due to natural disasters, geopolitical tensions, or market volatility — can directly affect industrial output. Fields such as Kormor and Chamchamal, which supply about 80 percent of the Kurdistan Region’s liquefied natural gas and are the source of three parts of Kurdistan’s electricity, have 15,000 barrels of condensate per day and plan to reach 1 billion cubic feet per day The countryside around the farm and Chamchamal district have not been a great blessing!
Second, although Crescent Petroleum was established in 1971, Dana Gas was established as a wing of the consortium in 2005, and Pearl Petroleum was established in 2009 as a joint venture between Dana Gas and Crescent Petroleum signs a big deal on a big farm (Cormor) in 2006; However, in 2013, when the Kurdistan Region was in its best financial situation, Danagaz filed a complaint with the International Court of Justice against the Kurdistan Region in London, alleging that the Kurdistan Regional Government had not respected the contract between them and had not been paid! Who and what was behind this is another matter. In July 2015, the International Court of Arbitration ruled that the company must pay $1.96 billion in compensation to the Kurdistan Regional Government (KRG) in exchange for its products. This was a huge loss to the Kurdistan Regional Government’s economy, which Danagaz filed a lawsuit against as a result of its short vacation. Now and once again, the foxes and wolves have not slept. It is not unlikely that a similar incident will be repeated again in this moment of expansion of the energy sector in the region and in the dynamics of regional events!
Third, the Kurdistan Region has signed a contract with Dana Gas, but they do not respect the situation that the Kurdistan Region is going through. They go to Diyala, Baghdad and Basra to deal with the Iraqi central government.
Fourth, Dana Gas and its partners in the Kormor field make tens of millions (sometimes hundreds of millions) of dollars every season, but have failed in social programs (CSR) and service to the region. Even though the Kormor field has been attacked by the militias with drones and Katyushas about six times in three years, they have not been able to provide an advanced air defense system for the field and its surroundings!
Fifth: If Kurdistan’s revenues are managed institutionally and nationally, everyone will benefit from them, first of all the authorities. The previous method of management has not served the political power itself in the Kurdistan Region. In order to do this and solve domestic and regional problems, we must think about “industry”; Although the time is a little late:
Second, KPM is creating an industrial and financial revolution in the region
Koreans have made a significant industrial, economic and cultural contribution to Iraq and Kurdistan. According to the proposal I have, a large Korean company, which operates in the energy and infrastructure industry in several countries, has expressed its willingness to sell some natural gas from Chamchamal and Kormor for almost a year.
One: They use gas to produce integrated fertilizer, which, like chemical fertilizer, seeks to strengthen food and agricultural security. This will revive not only the depleted land of Kurdistan, but also Iraq and other countries in terms of food and agricultural products, because the plan is to export to Iraqi cities and abroad. In addition, they produce dozens of chemicals such as ammonia, phosphate, urea, etc., whose prices are more stable and expensive in the world market. In general, industry-driven R&D fosters innovations that can be exported or applied to other sectors (e.g., produce hydrogen from natural gas).
Second, KPM, sponsored by JP Morgan and its partner Gross, will invest more than $122 billion in the industrial sector in Chamchamal district.
Third, according to the proposal, five industrial zones will be created that will create 105,000 medium- and high-paid jobs.
Fourth, the time is right. If the Kurdistan Region does not sign this contract with the assistance of Crescent Petroleum and its subsidiaries, Iraq may sign this plan tomorrow, or the regional situation will change in a different way.
Fifth, the KPM project has allocated $6 billion for charity. This is an opportunity not only for Chamchamal and its surroundings, but for the Kurdistan Region in general. No one else will do that. Chamchamal, known as the capital of martyrs and Anfal victims and the largest district in the Kurdistan Region; It has been suffering from water shortage for two decades. Which company is willing to solve the smallest problem for the district, which requires millions of dollars?!
Sixth, when you start with “industrialization,” industrialized countries always have a significant share of global energy markets. These countries or regions engage in energy diplomacy and participate in international agreements to ensure access to sustainable development. Moreover, thanks to this project offered by KPM; It will serve significantly to energy security and the diversification of its resources, as this is not only a technical issue, but has become a matter of national security relevance; In fact, diversification and ensuring energy security has become an issue of survival for every country.
Seventh, this generally diversifies national energy levels and composition and enhances resilience to global price shocks.
Third, joint cooperation strengthens human and natural capabilities
Just as Dana Gas sells its products to a local company such as Qaywan with the support of the Sulaimani administration, it should do the same to a foreign company such as KPM. In particular, according to the contracts signed by the KRG with the companies in the Kormor field, the KRG has the full right to intervene.
Just as in September 2024, Dana Gas partnered with British climate technology solutions company Levidian to implement LOOP technology, which will help convert methane into clean hydrogen and high-quality graphene, this is an important effort, necessary in many ways Expand and diversify these efforts.
Industry is the great pillar of nation-building
Political Science Professor Abramo Fimo Kenneth Organski- AFK Organski at the University of Michigan is famous for formulating the “Power Transition Theory”. Organsky introduced this important theory into the international relations literature during his book World Politics; Here he identifies three important principles; Industrialization, population and the existence of an effective government. Although he emphasizes the importance of industry, it is not important alone, but political skills and population (human resources needed) provide a source of sufficient power that can cause a major shift in the classification of power:
Organsky divides countries into three levels according to their dominance and power in the world system: Great Powers, Middle-Powers, and Weak States/Colonies. For you to move your weak power in the category from weak to medium and then become a big force, industry is one of the biggest factors. India was under British colonialism for 190 years, similarly to the example of China in the “Humiliation Century”, which between 1839 and 1949 for about 110 years China suffered repeated defeats, unequal treaties and occupation of part of its territory by foreign powers. How did they move from such a weak and uneven stage to become a present power on the world stage? Of course, industry.
Each company or group of companies must first work on improving the strength of the Kurdistan Region; There are dozens of other sectors in Kurdistan where you can invest; First of all, in terms of industry, because one of the constituent elements of “nationalism” is “industry of being”. If you are not an industrialized region or country, you have to rely on others.
There is always a direct relationship between political thought and economic wealth: Friedrich List, one of the pioneers of the school of realism in international relations, wrote The National System of Political Economy in 1841 in Germany.
List advocates a cosmopolitan economy (an ideology in which all humanity, past, future, nationality and identity, belong to the same society and circle, in other words, all morality comes from the same source. In short, capitalism is a common value; Economics is for the whole of human society). For this, Germany imprisoned him and forced him to give up his identity. Friedrich List attacked the liberals, linking economic nationalism to the manufacturer, so that if the state or local companies owned their own small materials or primary industry, they could strengthen themselves and compete with others and compete with others!
Conclusion
The Kurdistan Region must decide on another platform for energy security, which on the one hand reviews all the companies that have previously operated in the region, on the other hand to promote the energy industry in the form of the proposal submitted by KPM; This is a safe and strategic way to get up, grow and jump from one stage to another. After World War II, as Friedrich List put it a century earlier, with the idea that “the government supported the manufacturing and industrial sectors,” Japan became an industrialized and developed country. Here, a stateless region like the Kurdistan Region is not a base for industry, imports all its raw materials, pays all its investment fees, and has not been able to embody the energy sector and the oil and gas industry within a national system. Instead of industrializing the country, some people have suddenly become millionaires and rulers in the name of production; It has created inflation and class differences!
