We reported last week how ISIL had cast the net as far as South Africa looking for a skilled professional to manage its failing oil refineries in Iraq after a string of fatal accidents and a “lack of ideological commitment” from trained engineers saw its profits slump by over two thirds.
ISIL, which has captured at least 11 oil fields across Syria and Iraq and was understood to be making about £2 million ($A3.2 milliion) per day from sales in June, had retained engineers largely by threatening to kill their families.
Now, London-based research and consulting firm GlobalData says production declines in ISIL’s oil fields have been “less dramatic than expected” because the terrorist group has promised to protect workers and pay their wages.
It has also been able to fund its war operations primarily by controlling oil fields that it has seized, gaining an estimated $US2-3 million a day from oil smuggling.
GlobalData’s upstream analyst Ali Rasheed said ISIL was selling the oil in Iraq’s Sunni-majority regions at a price of $10–22/barrel, or sometimes at higher prices.
Oil is also being smuggled into Turkey, Kurdistan and Iran, where buyers risk breaking the law to access crude at a fraction of the market price.
“A good percentage of ISIL’s oil revenues come from the Hamrin and Ajeel fields,” Rasheed said.
“Hamrin is estimated to hold remaining recoverable reserves of 303 million barrels of oil equivalent, while Ajeel has approximately 500MMboe and 496 billion cubic feet of gas.
“Production levels under ISIL’s control were maintained and have fallen less than anticipated.”
The two fields combined generate around $1 million each day for ISIL.
Productivity at each of the 33 Hamrin wells under ISIL control is around 334bpd, constituting an estimated $700,000 of daily revenues, and Ajeel’s wells generate around $320,000 per day.
Rasheed said that while it is assumed that ISIL would lose control of these fields by the end of the year due to UN-authorised air strikes, an estimated decline in remaining net present value would be much lower than initially expected.
Hamrin and Ajeel will continue to be prolific assets after ISIL loses control of them, he said.