Rudaw: You announced a very big achievement last month, and you increased the level of production in the Kurdistan Region to approximately over 700 million cubic feet per day. Tell us, how did you achieve that?
Majid Jafar: Alhamdulillah [Thank God], we achieved the start of the gas from the Khor Mor 250, what we call the KM250 project. This is a project to add 250 million cubic feet per day of gas capacity, plus LPG and condensate. So, as you said, it increased the production capacity by 50 percent. It's a project that we've been implementing for some years. We faced some challenges, many challenges. We had, of course, Corona, the COVID[19] pandemic, which led to some delays. And we had security incidents, unfortunately, which caused delays.
So, we focused all the attention of the companies to complete the project, and alhamdulillah, we've achieved that. It's a 1.1 billion dollar total investment, and it's a credit to everybody who was part of it. More than 1,000 workers from the Kurdistan Region in Iraq were involved in implementing this project, and so it's a pride for us, but it's a pride for Kurdistan, and it's a pride really for all of Iraq because, actually, it's hugely beneficial, of course, for the electricity situation within the Kurdistan Region, but also for other parts of Iraq.
Yes. You mentioned alongside natural gas, you also increased the volume of LPG gas and condensate gas. Could you tell us some statistics about that and how much LPG you produce now? How many barrels of condensate do you know we are having in the field?
Yes, so the condensate production was close to 15,000 barrels a day. This will add 50 percent again, so it's about seven, seven and a half thousand barrels a day. And the same with the LPG; with 1,000 tons a day of LPG, this will add another 400 to 500 tons per day. And this is really going to the local market, you know, for cooking gas, supplying the local market. So, this is an additional positive benefit from the project.
For those who don't know much about the consortium of petroleum, can you just explain the share of each company and the role, the most important role of each company that is involved and has a share in that Pearl Petroleum?
Sure. It's an important consortion. The partnership is 70 percent Crescent Petroleum and Dana Gas, 35 percent and 35 percent each, and they are the joint operators who are actually operating the project. And then we have also three leading central European energy companies: RWE from Germany, OMV from Austria, and MOL, M-O-L, from Hungary. And each of them is 10 percent each. These are non-operating partners. And together, this is the Pearl Constortion. So really, we have together invested now close to $4 billion in the Kurdistan Region in this project and the previous projects. This is the largest investment in the natural gas sector by the private sector anywhere in Iraq. And this is also the largest investment by UAE companies or any GCC companies in Iraq today. And it's an important sign of confidence of the investment community in the Kurdistan Region.
I mean, Dana Gas brings together, you know, more than 200,000 shareholders, including leading institutions, entities, and individuals from across the GCC. We have a hundred thousand Emirati shareholders; this is 10 percent of all UAE nationals. We have a similar number of Saudi shareholders. We have figures on the board who are leading business figures, leading government figures from the UAE and the Dana Gas board. So, this is an important GCC-wide, and UAE especially, of course, investment from Dana Gas. And these other European partners are major European companies with some government shareholdings, also publicly listed companies. And then Crescent Petroleum, the company which I run, is the oldest private oil and gas company in the Middle East, headquartered here in Sharjah now for 55 years, and we've been active across the region, and we're proud to bring that experience to benefit the Kurdistan Region and Iraq.
You mentioned an investment of $1.1 billion for KM250. So, tell us how you provided such a quite big amount of money.
The project budget increased because of some of the challenges that we faced. We were hoping to finish it for 600 to 700 million dollars, but because we had Corona, because we had many challenges including security incidents, the budget increased. And we had to, in the end, finish the project ourselves because the Western contractor, an American-Canadian contractor who was implementing the project, walked away after some of the attacks that we faced. And we had to step in as the investor and the operator and complete the project ourselves.
So, you completed it eight months earlier?
Eight months earlier than had been the anticipated schedule when the contractor walked away, and I must give great credit to my colleague, Mr. Richard Hall. I hope you will meet him also. He is the CEO of Dana Gas. He's British. Very good operator. He spent a lot of time there on the ground, changing the team and driving the project forward, under the support… with the support and oversight from the board to deliver the project on time.
In terms of financing, you know, when we first entered the Kurdistan Region, when we signed the agreements in 2007, there was no financing available. And even no international companies nor international contractors were willing to work in the Kurdistan Region. That situation has improved, but still, it's challenging. We, our finance team, worked very hard to bring diversity and different financing sources for the project. Some of it was local banks here in the UAE, Bank of Sharjah, for example, and we're now broadening to other banks in the UAE, and that's important because we are educating banks in the UAE about the Kurdistan Region and about these projects. Another one is contractor financing in some cases. But another very important one is we had the support of the US government, the US Development Finance Corporation, which committed 250 million dollars.
How did you get that agreement?
Yes, that took about two years of hard work, and it was not easy because during COVID, they could not visit. So, everything was virtual, even full inspection of Khormor using cameras and virtual online. They checked everything, even the kitchens and the sleeping quarters and all the technical details. I think it's a testament to the strategic importance of this project. This is the biggest financing that the US government has done in all of Iraq until now, and one of the biggest in the whole region. And we started it during the previous Trump administration, but it was closed during the Biden administration, and we're still getting a lot of support with the new Trump administration who even wants to do more in gas in Iraq and these countries.
And I think, you know, it's because of the strategic importance. We are enabling more than 80 percent of the electricity in the Kurdistan Region and even in some neighboring governorates in other parts of Iraq. It's because the gas replacing diesel helps the environment, helps with climate change, helps with pollution, and creates lot of jobs and economic growth, and helps enhance the energy independence of the Kurdistan Region and Iraq. And for all these reasons, we've had that support.
You very well know that the KRG has a Runaki project for supplying 24-hour electricity. So, how can your gas, your KM250, assist that goal now and in the future?
So I can really say, Kaka, we think, we believe, and I see it, that the Runaki project, the Runaki initiative, is the most important policy initiative. It's very important for the Kurdistan Region. I think it's a role model. And we know that there has been good support from the UAE, from Dubai, from the UAE government, because this was something that the UAE went through before: how to have different bands for different prices, for different use, to reduce losses, to improve collections. So, we're very pleased to see that it is not only enhancing the lives of the citizens by giving 24/7 electricity, inshallah, in all the parts of the Kurdistan Region.
It's great to see in Erbil and Sulaimani and Duhok, and all across Halabja, everybody getting behind it. And at the same time, the skies are clearer, the air is clearer, the need for burning dirty fuels and old generators has gone down, and thousands of generators have been removed. And from an investor point of view, having an electricity market which is rational and sustainable gives us more encouragement to invest in the gas because this electricity is being provided by the gas that we are producing. So, the two are linked with each other, so it is extremely positive.
You mentioned abandoning dirty fuel and replacing it with much cleaner natural gas in electricity production. So, how do you estimate your contribution to the reduction of CO2 emissions in the Kurdistan Region?
We have actually measured that since the beginning of our production, more than 62 million tons of CO2 have been saved. So, this is a big benefit, for you know, of carbon. This is a big benefit for the Kurdistan Region in terms of local air quality, but it's also a benefit for the climate. As we know, everybody is trying to decarbonize for carbon efficiency. [In] our own production, we also brought down leakages and flaring to near zero. We have 0.12 percent, and our carbon intensity is 4.4 kilos of CO2 per barrel of oil equivalent, which is 80 percent lower than the industry average. And then the remaining emissions we offset with carbon credits, UN-certified. So, we've been a net-zero, carbon-neutral operator since 2021, now in our fifth year, and we're maintaining that. So, we're very proud of that environmental contribution as well as the economic and social contribution.
Because when you have… when we first entered the Kurdistan Region, I remember the streets were dark at night. And we had the old airport; we didn't have these new hotels and malls, and developments as today. When you have energy provision, electricity provision, which this gas has enabled, everything changes, and you can feel it, you can see it. And this is a credit really to our partnership with the KRG, with the leadership in all parts of Kurdistan. We've had great support from Erbil and Sulaimaniyah. And this is a long-term partnership. Our contract is until 2049.
So, I said to, I mean, we have a family legacy and history. My grandfather, Dr. Dhia Jafar, in the 1950s, put major infrastructure projects in the Kurdistan Region, like in Dukan and Darbandikhan which are still producing power today. He was Minister of Development and Secretary General of the Iraqi Development Board during the time of King Faisal II, God bless him. And then we have 50 years, from 1958 until 2008, when there was no new power in the Kurdistan Region. So many military dictators in Iraq were ignoring or abandoning the Kurdistan Region. Now, thanks to the good policies of the KRG, and thanks to the partnership that we have had together, we started in 2008, after 50 years, producing gas, producing electricity, and the situation has completely changed.
And today he Kurdistan Region is sending electricity to other parts of Iraq. Inshallah, soon we can send gas also. And this is a pride for us, and I've said to Kak Masrour to Kak Qubad, you know, my grandfather made his contribution. My father then signed the agreements with Kak Nechirvan in 2007 and started our partnership. I am here now. My son, inshallah, will continue. We are generations committed to the Region and to Iraq.
So, how do you see the future of your development and contribution to the Kurdistan Region's energy sector, for example I heard you have another KM250, and it would be the next stage of development in other fields. You have Chamchamal, very high potential field. So, can you please tell us about your plan for the future development of those fields?
Sure. So, actually, we had a few years ago multiple projects that we were planning to do in parallel along with KM250. And then because of the challenges we had with COVID, with the security incidents, we chose to focus on the KM250 and to finish it. Alhamdulillah, now that we are there, we can start looking at these other projects again, and we have started. One of it is, first thing is, of course, appraisal. We have large potential resources in the fields. But we… 80 trillion cubic feet was the estimated potential resource, but you have to drill and prove to have proven reserves, as it's called in the industry. So, we have already been producing, you know, since 2008 continuously. So, we are now conducting a 3D seismic survey for both Khor Mor and Chamchamal fields this year.
So, how much did you spend and invested in developing in these fields?
So, total, we've spent already, as I said, close to $4 billion…
Total, for the projects?
… since the beginning. We have a project now in Chamchamal, which you mentioned, which we call the Early Works. We're spending $160 million, including...
Have you drilled any wells?
Yeah, we will drill three wells, inshallah. This project is ready. It's awaiting some approval in the Ministry of Natural Resources. It will help us understand the field potential, and it will add quite quickly, inshallah, another 80 to 100 million cubic feet per day. So, we already have 750 to 800. This will add 80 to 100. We will be getting close to, inshallah, 900 million cubic feet per day. We hope to be at 1 billion cubic feet per day in the not-too-distant future. It can be easily in the next couple of years. And to meet fully the needs in the local market, we heard that Runaki will achieve 24/7 electricity for Kurdistan next year latest, maybe even this year, which is really great. And we're already looking to supply local industry, you know, cement plants, other industrial projects which are burning liquid fuels. Natural gas is a cleaner, more reliable, you know, alternative for that, and it can create bigger investment, bigger economic output when you supply industry as well.
Have you received serious demand and requests from those industries? We know that the Kurdistan Region has very good, heavy industries?
Yes, we have, and we hope to announce very soon, inshallah, on that front. Because when you have gas, any country, the first priority has to be for your electricity. And inshallah now, as we heard from Runaki, that will be covered. Then the next priority is for your industry because industry creates economic output and jobs, and you then have more customers, and, it can be, industrial demand is more stable also because electricity goes up and down based on the weather. Here in the UAE, al-Khalij, it's always in the summer it’s more. In the Kurdistan Region, you have a double peak, which is winter and summer, and less in spring, less in autumn. Whereas industry is a constant demand. This is another benefit, of course. And then after that, when you have surplus, you can think, okay, export markets is potential also. So, this is usually for any country the way that you think about developing gas. And I think worldwide we see today natural gas is a key fuel for the future because this is providing electricity, it's providing a feedstock for industry, for economic output. And we see now the growth of artificial intelligence and data center demand is huge and is going to need more gas worldwide.
What would be the future potential market for exporting Kurdistan Region gas?
Of course, within Iraq, the Iraqi market is predicted to reach 8 billion cubic feet per day by the end of the decade. And there are big needs, as you know, to help all of Iraq to reach 24/7 electricity. Already there's electricity exports going to the rest of Iraq. And there is interest to buy gas from us. A formal decision has been taken by the Iraqi cabinet. Now, at the moment, of course, our gas potential to supply is limited, but from the KM250, there is 100 million cubic feet which cannot be currently used in the Kurdistan Region because some new pipelines have to be built, and they will be finished by next year, inshallah. So, this is some gas that in the short term we can send to Diyala to help with the electricity situation in the short term. Over the longer term, we have expressed interest from the Iraqi Ministry of Electricity to buy 400 million cubic feet per day for 20 years. This will need a new project, maybe from Chamchamal, it needs new financing. It will take two to four years, depending on how quick, and this is, of course, another positive.
Those are the Kurdistan Region gas wells. But what about the other part of Iraq? We know that you've got several contracts in the fifth and sixth round of Iraqi oil ministry contracts. Could you please shed some light on that?
Sure. So, as Crescent Petroleum, in the fifth round, actually, we were awarded three projects: two in Diyala and one in Basra on the Kuwait border, Khashim al-Ahmer-Ijana, Gilbar-Qumar, on the Kuwait border, Khider al-Mai. This is with the federal government, Midland Oil Company and South Oil Company. And we as a group, as the Crescent Group, we've invested over $5 billion in the last 10 to 15 years in Iraq overall, and not only in oil and gas, also in the power sector. You know, we have affiliates, we've invested, built power stations like Masnuriyah Power Station and others, and also in the south of the country in the port sector. We're operating a container terminal in Umm Qasr port through one of our group companies, which is called Gulftainer, which is the largest private operator of container terminals in the world now. So, we're very committed. Our family is from Iraq originally, and we are very committed to the country overall.
So it is great you are involved in the logistics sector in Iraq, too. For the oil and gas fields you've got in federal Iraq, have the work and preparation started already in those fields?
Yes, so we have conducted seismic surveys, we are preparing for drilling, there is good potential, and in the case in Diyala, it is not so far from where we are operating in Khor Mor, and similar geology as well. So, we hope to make our contribution there as well.
What about your manpower, your workforce? Do you rely on an internal workforce, a local workforce, or what percentage of your staff are foreigners?
So this has been for us, Kaka, a priority from the beginning, and for me personally, that we use as much as possible local staff. So, we have the highest percentage of local staff, including in management positions, not only in labor positions. We have more than 85 percent, and this is something we take great pride in. As I said, in the KM250 project, more than a thousand Kurdish workers were involved in implementing this project. We have close to 800 staff permanently in the country, and this has been a great pride, and training them so that they are able to advance into more senior positions. This has always been important for us, enhancing the local capacity. And I've been very pleased and proud to see how in the areas where we operate, companies have been created. Service companies have been enhancing.
I was visited recently by a gentleman who started working as a laborer in the field 10 years ago. He is now the CEO of a company which is providing services for us in Khor Mor. So, we've seen, and we're very proud, when we first entered, we made sure that the local areas where we operate had 24-hour electricity. And that's something that we take pride in. And meeting other needs, whether it's health, education, water, supplies. So, investing in the local capacity and the local communities is very central to our philosophy and Wider in the region, I mean, even as a family, we've been proud to make contributions and support the American University in Kurdistan, in Duhok, the American University of Iraq, in Sulaimaniyah, so supporting the next generation is very important to our ethos and our philosophy of investment.
What would you suggest that the government and the community, that people in the Kurdistan Region, should do to facilitate for oil companies and the private sector to be much more active? Are there any worries, obstacles, and concerns that are worrying other companies in the region?
So, we are there for the long term. I mentioned we have a multi-generational commitment. We have been through many challenges together with the KRG with our partners. Since 2007, we had some disagreement with the government. We ended up in a legal arbitration. Alhamdulillah, it was resolved with an amicable settlement, which led to more investment. And since that settlement, we have already more than doubled the production. And also, we've had challenges with Daesh [ISIS] coming to Iraq. We had challenges with some local issues at times. But generally, and we had, of course, the security incidents, where sadly we lost four colleagues who were four Yemeni workers for a subcontractor who gave their lives, really, while we were doing this KM250 project.
So, we have been through a lot in the past, and we have shown that where some of our, you know, other colleagues in other companies, large Western majors, they left Kurdistan when Daesh was coming in Iraq, even though they did not enter, alhamdulillah, the Kurdistan Region. They all went running to the airport. We stayed. Even all the expats stayed. And we are there for the long term. And we have shown that commitment through all the challenges.
I think the most important thing from the government point of view, when we look as an investor, it's not complicated. It's three things: payments on time, quick decisions and approvals, and respect for the contract. These are the fundamental pillars for an investor because oil and gas is large investments, lots of risks over many years. If these three things are there from the government, then things can go well.
In terms of the young people, I would encourage them to look at this industry. You know, sometimes young people think, "Oh, oil and gas is an old industry. I want to be in technology or something different." Actually, oil and gas is a high-tech industry. And it is an industry which brings together engineering, financial, and commercial, and it's long-term. So, this is why I've been in it my whole life. I started my career in Shell. And I've been now in the industry my whole career. And now we see the links between energy and technology. Because as we said, artificial intelligence and data centers are just now, we had recently in Abu Dhabi the ADIPEC conference, which is about bringing together energy and AI. And the key sentence was, in the past we used to say, "Knowledge is power." In the future, "Power is knowledge," because to have the data center, you need the power, and the power will come from electricity supplied by, in many cases, natural gas.
So how many of those new technologies, for example, AI-related technologies, are being used by Pearl Petroleum, Dana Gas, in the Kurdistan Region, in Khor Mor, for example?
Across the board, we've been implementing these new technologies to improve efficiency and availability, reduce downtimes, and for predictive maintenance where the tools can tell you you are going to have, instead of waiting for a leak, for example, from diesel equipment, it can tell you in advance, "Okay, there is a possibility, there is a possibility that you will have a leak after some time." So, this enables you to go and address it in advance. So, this saves costs, and this saves also in emissions for the environment and makes sure that you maintain as high as possible your gas production. So, this is all very exciting, very helpful. Even, for example, on the exploration or the appraisal side. In the old days, the seismic technology was all by wires. Now it's becoming wireless. This makes it faster to do it. Even the interpretation when you get the data. In the old days when I started in the industry, the man would sit with colored pencils drawing the lines to see the difference.
Today with AI, the interpretation is faster, more accurate. So, across all parts, from the studying to the operation, technology is enhancing our ability, and that's very good, of course, for the end user and for the economy.
It is great you mentioned the legal issues and you wanted every decision to be taken very fast by the government. How do you see the recent agreement between the federal government of Iraq and the Kurdistan Regional Government about the resumption of oil export? How does this help you in general terms, in the industry?
So, we think it's positive that there has been an agreement. We are not directly involved because we are supplying gas and condensate LPG, for the local market. We are not involved in the export. I can say I think it is a shame that it has taken until the end of this government in Iraq for this solution, just before the elections. We hope that in the new government, the principles which are agreed at the beginning are actually followed through. Because I remember at the beginning of this government, there was an agreement on the budget. It was clear, at least to me it was clear. Somehow, how it got interpreted later led to issues and delays, and this was not helpful. The Iraqi constitution is clear on the rights and obligations of all sides.
But still, we have a delay in public salaries, and people are actually somehow suffering in the Kurdistan Region.
Yes, that's of course, a major issue. You know, the oil and gas law still has not been passed. I remember when the first draft in 2007 was proposed. And here we are in 2025. The Kurdistan Region passed its oil and gas law. We hope that, the Iraqi constitution, the principle is quite clear that the wealth, the oil and gas benefit, should benefit all the people in all the regions and governorates. But that doesn't mean that you cannot have different investors in different areas. And it's also clear that the Kurdistan Region has rights, constitutional rights. But we hope for a better overall partnership from all sides which can lead to maximum production and maximum benefit.
So, do you think that decentralization of oil investment in Iraq is better than centralization? Are you for or against giving the power to the regions to have and go for developing their own resources?
So I think the Iraqi Constitution is very clear, and nobody can argue that this is a federal constitution, and it has certain powers which are exclusive for the federal government, which are the central bank, you know, the currency, foreign policy, defense. Other powers are devolved to the regions and the governorates. And the Constitution is clear on that. Here in the UAE, we have the same. And we have the same in the United States, Germany, India, Switzerland, you know, Canada, many countries around the world where you have a federal system. And I have seen when you have a federal system like here in the UAE, you get more economic development because there is somehow, we used to call it in business school, "co-opetition." It's like a friendly competition inside. Different regions are trying to get more investment by doing better policies. And this is good for everybody. And then everybody copies good policies from each other and raises the standard for everybody. And you see what the UAE has achieved under a federal system in just over 50 years is a miracle. I think it can be a good system. I think what we saw with decades of centralization in Iraq under the previous regime led Iraq to ruin. And I think that's very clear. I hope that the Constitution's principles can be realized with laws, with policies, with practices that bring the benefit for everybody in Iraq, as was envisaged in 2005 when it was passed.
Yeah, it is great. It is astonishing why, despite those positive and clear factors that you just mentioned, in the field, any party, you know, we have a federal government, is still explaining and translating the law and constitution differently from the Kurdistan Regional Government. So, the key point, if you think that there is a solution that both governments can go for to facilitate those agreements and finally reach an oil and gas law, a federal law in Iraq, what do you think about that?
We have seen that, you know, there are still those in Baghdad, some people in certain ministries or in parliament, who have a view to go back to an age where everything is centralized in Baghdad. And when the constitution says "the people of Iraq," that that is only represented by one minister or ministries in Baghdad. That's not what the Constitution says. We have seen with this government, the government of Prime Minister Mohammed Shia alSudani, pragmatism and not ideology, and not being anti-this sect or this group or this ethnicity, and a desire to move forward with investments and infrastructure and projects which benefit all of Iraq and to keep the salaries going.
I think that… we hope that the new Iraqi government after the elections will continue and build on that and further enhance that. The constitution is clear that these resources should benefit all the people in all the regions and governorates, and the principle is there on it being proportional to the population. And what we've seen is a lack of the necessary laws, especially the revenue-sharing law, how the revenue is shared. My view has always been the revenue sharing is how you divide the cake. Once you decide how you divide the cake, then we don't fight over the cake. Then we should both try to make the cake as big as possible. And that is the oil and gas investment law. If we don't know what our share of the cake is, then we have suspicions over how the cake is going to be grown, let's say. So for me, logically, and this was the case in 2007, 2008, but unfortunately, it didn't happen, the starting point is the revenue-sharing law. How are the revenues going to be divided? It should not have to be an annual negotiation over the budget law. It should be there is one law with clear principles for all the future, instead of having to negotiate each year with the budget. And it took the whole length of this government to finalize an agreement at the very end. Inshallah, we'll be better in the future.
My last question is, what is your message to the people of the Kurdistan Region?
My message is really one of thanks, Zor Supas [thanks a lot], one of, you know, one of congratulations, Piroza [in Kurdish], Mabruk [in Arabic], for this great achievement that we have done together. And we are really committed for the long term. We thank you for your partnership. We do all we can to provide the energy needs and to enhance also social needs and to also encourage young people to look at this industry as an exciting and interesting long-term potential industry for employment, whether that's with our companies or the many other companies who are active in the region. We've enjoyed a good partnership with the KRG, with the authorities in all the parts of Kurdistan. On the security also, we've had very good support from the KRG, from the authorities in Sulaimani, from the authorities in Baghdad, the federal government and the prime minister's office, from the UAE government also. And of course, safety and security is a top priority for our people, for our staff, and we believe what we are doing, we know in our heart what we are doing is good for the Kurdistan Region, It's good for Iraq. And so hopefully we can continue to do that for many years to come. And we look forward to that.
