Kirkuk’s First Oil Refinery: A Path for Future Independence
The effort supports the region's aspiration to become more self-reliant on a path for future independence backed by the Abraham Accords countries.
On 30 January, Rebwar Taha, the governor of Iraq’s Kirkuk province, signed a $2 billion investment contract with the Sulaymaniyah-based UAE-backed Rania Group to build the governorate’s first oil refinery. The planned refinery, with a capacity of 70,000 barrels per day (bpd), has been in the works since the Ministry of Oil first proposed it in 2017. Once completed, it will help reduce Kirkuk’s dependence on the Baiji refinery, Iraq’s largest and most advanced refinery, which reopened last year after years of conflict. The new facility is expected to take 2 to 3 years to complete, but its progress is threatened by ongoing political turmoil between the central government in Baghdad and the Kurdistan Regional Government (KRG). However, Gulf interest in integrating Iraq into the India-Middle East-Europe Economic Corridor (IMEC) could help secure its development.
Energy Independence Amid Domestic Turmoil
The Iraqi government has been actively investing in its rich oil sector since the American invasion and the years of devastation under ISIS, which severely disrupted oil production, with the latter even taking control of the Northern Baiji oil refinery. As part of its recovery and growth strategy, Prime Minister Mohammed Al Sudani recently highlighted Iraq’s progress toward energy diversification, stating: “We are approaching full self-sufficiency in hydrocarbons and moving steadily towards exporting gas within a vision that aims to convert 40% of oil production into transformation industries by 2030.” However, Iraq’s central government’s ongoing conflict with the KRG continues to impede such plans, as the two sides have struggled to agree on funding and resource management, particularly over oil revenue distribution, with the KRG pursuing independent oil contracts and claiming control over disputed areas like Kirkuk. This division has stalled national development and complicated Iraq’s ability to form a cohesive energy strategy.
The choice of contractor for this $2 billion project reflects this broader conflict: Rania Group, an oil and gas company based in Iraq’s Kurdistan region with offices in the United Arab Emirates and Germany, claims a significant role in economic development in the region with strong ties to the Emirati Dana Gas. The UAE is a strong backer for the independence of Kurdistan and its support for such efforts signals advancement to such an agenda.
IMEC and Gulf Influence in Iraq’s Growth
Regionally, this internal conflict, coupled with Iraq’s increasingly rich oil sector, presents an opportunity for countries like the UAE, which has interests in energy and infrastructure development within the framework of the IMEC, Iraq Development Road, and the Iraq-Jordan-Egypt Corridor (IJEC). The UAE recently held meetings with both Iraqi governments and expressed a desire to increase bilateral relations with the Kurdistan region. In line with these efforts, Qatari telecom company Ooredoo Group recently launched the data component of the IMEC, a project connecting the GCC, Iraq, and Europe. In collaboration with Alcatel Submarine Networks, Ooredoo will deploy the Fibre in Gulf (FIG) submarine cable, providing a high-capacity, low-latency route that enhances connectivity and supports the region’s digital transformation, while strengthening Iraq’s role in regional infrastructure within the IMEC framework.
Furthermore, the recent thawing of the Emirati-Iranian relationship, highlighted by joint naval activities in the Strait of Hormuz, could pave the way for a deeper Emirati role within Iraq and the KRG. As the UAE seeks to capitalise on shifting regional dynamics, it stands to benefit from increased economic cooperation and infrastructure development opportunities in both regions, potentially reshaping Iraq’s energy landscape and positioning itself as a key player in the country’s long-term energy and economic strategy. This influence could be amplified if the UAE continues to deepen its ties with the newly formed Hay'at Tahrir al-Sham (HTS) government in Syria, gaining leverage in Iraq and the Levant and solidifying its role as a trade hub within the IMEC.