Last month, Russia’s state-controlled Rosneft oil company secretly signed a 20-year deal for the management and upgrade of the oil storage and port facilities at Lebanon’s second city, Tripoli. President Vladimir Putin has cast this town as the Mediterranean exit point of a projected Russian-owned pipeline that will carry Iranian oil through Iraq and Syria for export.
Tripoli is just 30km from the Syrian border and 60km from the Russian-controlled port of Tartus, Syria, its only outlet to the Mediterranean. The tankers which have begun delivering fuel from Russia to Syria, mysteriously list their destination on GPS monitoring systems as “Lebanon.” They switch off their transponders as they near the Syrian coast.
Rosneft moves into Lebanon after gaining control of the Iraqi segment of the future Iran-Iraqi-Syrian pipeline with a memorandum of understanding signed in 2017 “to study the Kirkuk pipeline.” The main part of this plan is to run a natural gas pipeline 5.600km long with a diameter of 142cm from the Iranian South Pars/North Dome Gas-Condensate field to Europe via Iraq, Syria and Lebanon. Another pipeline carrying oil will run parallel.
The project will go forward in stages: In 2019, the Haditha section of the old Kirkuk-Haifa pipeline will be reactivated, bringing a key chapter of its history back to life.
Haditha is situated in the western Iraqi Anbar province on the Euphrates River.
From 1935 to 1948, in the days of the British Mandate, a 942km long pipe with a diameter or 300mm, built by the Iraq Petroleum Company, took 10 days to carry crude from Kirkuk to Haifa. There, the Haifa Refineries distilled it and stored it in tanks for loading on tankers bound for Europe.
A second pipeline carrying oil from Baba Gurgur oilfield of Kirkuk split off at the Haditha Pumping State and continue to Tripoli, Lebanon, then under French mandate. The Compagnie Française des Pétroles had demanded a separate line from the British branch.
It is the once French-controlled line that the Russians are bringing back to life the while coping with the political complexities in their path.
When the Iraqi government showed reluctance to play ball with Rosneft, its director Igor Sechin, a good friend of Putin, turned to the semi-autonomous Kurdish Regional Government (KRG), whose government in Irbil showed keen interest in working with Moscow. This avenue moved swiftly forward in the face of an angry Baghdad. Rosneft pledged multibillion-dollar investments in Kurdistan and was rewarded with the ownership of landlocked Kurdistan’s oil export pipelines to Turkey for a payout of $1.8bn.
For Moscow, this was more than just a profitable investment. Control of these pipelines has won Russia and Rosneft a seat at the table of the talks between the KRG and Baghdad for resuming in full the oil exports that were disrupted in 2017. The Kurds then staged an independence referendum and were punished by the Iraqi government’s seizure of Irbil’s oil fields. Kurdistan holds large oil reserves, around one-third of Iraqi’s total. Exports are an essential source of revenue for both their economies.
At one point last year, the Kurds refused to restart the flow of oil and transfers of funds to the Iraqi government, until Baghdad paid pipeline transit dues to Rosneft.
This crisis was resolved with Washington’s intercession. Irbil and Baghdad were persuaded by US intermediaries to sign an agreement in November 2018 for restoring the flow of oil from the Kirkuk oilfields.
The US owned more than one interest in this resolution – especially when Russia’s expanding in Iraq needed to be offset. Unlike its predecessors, the Trump administration resolved to take a more significant hand in matters relating to oil, especially when they concern Kurdistan, which is a US ally. Keeping Irbil and Baghdad in accord helps contain Iran’s drive to take charge of the Iraqi government. And finally, oil prices needed to be held stable by a steady supply after US sanctions depressed Iran’s oil exports last November.
The deal concluded between the Kurds and Iraq allocated 60 percent of the Kurdish-controlled pipeline to the Russians. In return for using it, Baghdad is believed to have agreed to earmark a portion of its 2019 budget to the KRG. When the Rosneft official Didier Casimiro visited Baghdad three months ago, he found the Iraqis more cooperative than before and ready to go along with Rosneft’s plan to renovate the pipelines.
For the Kremlin, the state oil company is a highly effective instrument of foreign policy. While controlling the pipelines carrying oil from Iraqi Kurdistan, Moscow has been striving to mend its relations with Baghdad. By February 2019, there was no political bar to Rosneft reactivating the Haditha section of the old Kirkuk-Haifa oil pipeline. Putin is already the controlling force in Bashar Assad’s Syria. And so, DEBKA Weekly’s sources predict that when the Trump administration eventually pulls US troops out of Syria, local Kurdish leaders will come to terms with Rosneft for the piping to Tripoli of the oil in the fields they own in the east.