Quality of Oil Project by the Kurdistan Government

Introduction. Research question

Oil is considered to be the most significant product in the Kurdistan region of Iraq. Throughout the Saddam Hussein ruling, the Kurdistan Regional Government was deal with just 13% of the incomes achieved from their oil. But transforms in the political outlook have also provided a better probability to increase revenue attainment. Furthermore, the region is granted the probability to apply the oil segment as a driver of financial steadiness in Iraq. With the existing requirement for oil in the world, Kurdistan can retort to the region’s natural product to increase the living circumstance in the region and the whole nation of Iraq. The present paper is claimed to regard the issues of quality management, its standards and the matters of its application to large projects. The current paper regards the Oil project by the Kurdistan government as the key one. (Ahire, Damodar, 2001).

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Quality management

Quality management is a means for guaranteeing that the entire functions essential to blueprint, expand and implement a product or service are effectual and resourceful with respect to the structure and its performance. Quality management can be regarded to have three key components: quality control, quality assurance and quality improvement. Quality management is concentrated not only on product quality but also on the ways to gain it. (Cohen, 2002) Quality management consequently uses quality guarantee and control of procedure as well as offers the attaining of steadier quality. Quality Management is all functions of the overall organization function that resolves the quality policy, purposes and accountabilities and applies them by means such as superiority control and quality enhancements within a quality structure. The Quality Management System standards created by ISO are claimed to confirm the procedures and the systems of any company or project. ISO 9000 standards do not confirm the quality of the product or service but offer the general rules on how to control quality. The Kurdistan Oil project is regarded here through the prism of ISO standards. (Connor, 2005).

Oil project

As for the matters of quality management in the oil sphere in Kurdistan, it is necessary to mention, that The Kurdistan Regional Government (KRG) Ministry for Natural Resources proclaimed that the KRG Regional Oil and Gas Council has endorsed four new Production Sharing Contracts (PSCs) and approved two new factory projects in the Kurdistan Region in Iraq. (Eye of Dubai, 2008).

Dr Ashti Hawrami, the KRG Minister for Natural Resources, stated, “The projects will spearhead international investment for the whole of Iraq”. He added, “The first step was the KRG Oil and Gas Law in August, also approved unanimously by Kurdistan’s legislature. Pursuant to the Iraq Constitution, the KRG Law is the supreme law governing oil and gas activities in the Region.” Now, these agreements are concluded with highly regarded and experienced oil corporations. New oil discoveries under these agreements will bring large sums of new incomes for the all-Iraqi welfare, and locally purified petroleum products will assist the people of the Kurdistan Region and the whole of Iraq, who now experience the costly black market imports. It will imply the start of the end of the uneconomical fuel subsidies of the federal government and the dishonesty and offence that is applied to all these factors. (The Evening Standard, 2007).

It is necessary to point out that the notion of management as the control of resources is suitable here as any other. The oil project requires an essential inflow of means and resources, in the order it was beneficial. Consequently, the norms of management are to control the resources and provide all the conditions for the successful and beneficial extraction, storage and trade of oil and oil products. If profitable detections are made, the two PSCs will offer an approximated aggregate return/income of over 85% to Iraq and around 15% to the contractors. (Rusinko, 2005).

The commercial periods of these contracts match the term principles issued by the KRG on its website and offer alike returns to Iraq. The contract concluded with Hunt Oil in August 2007 was also within these conditions. The presented KRG contracts, concluded prior to Kurdistan Region Oil and Gas Law, will also be brought into conventionality with the principles, and as entailed by those regulations.

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From the viewpoint of quality management this step may be regarded as essential for the providing of further project development, but, unfortunately, some additional details that could clarify the situation are not divulgated. And the general information that is available is not sufficient for making some precise conclusions on the effectiveness of the quality management approach in this project.

Project survey

This paragraph is claimed to consider the largest projects, offered for oil extraction and transportation. One of the most interesting because of the additional provisions is the project offered by Turkey.

The fact is that Ankara has much to expand from a huge bargain with Iraq, Iraqi Kurds and the United States that claims to serenely and considerately decide exceptional matters. Turkey can attain lots of its goals with minimum intervention in Iraq by the means of its natural advantages: its floating financial system, access to Western markets, membership in NATO and ready oil pipeline networks. Turkey can propose, even if unreservedly, defence to Kurds who are apprehensive for their future, particularly given their landlocked geographical location. Since 2003, Kurds have got confidential ventures from Turkish corporations – even at the expenditure of Turkish Kurdish ones – in an attempt to increase ties and intensify the addition between the two monetary systems. There are some 1,200 Turkish corporations functioning in northern Iraq, typically engaged in construction, but also in oil exploration and other functions, which have produced some $2 billion in business. Some Turkish entrepreneurs even suppose that they would get as much as $10 billion of a total of $15 billion worth of agreements the KRG will subject in the following three years. (Kurdistan Regional Government, 2007).

The local companies are also interested in the development of the oil industry in the region. The negotiations between the KRG Prime Minister and Hamid Jafar also touched upon the issue of the progress of the Strategic Alliance Protocol signed by the parties, whereby the Kurdistan Regional Government of Iraq, Dana Gas, and its partner Crescent Petroleum have consented to mutual regard and investigate the region’s natural oil resources in Northern Iraq with a regard to the optimization, expansion and application of that significant resource for the advantage of the Iraqi population.

The Protocol agreement entails the “Kurdistan Gas City” – a key innovative gas-utilization industrial complex to be created over an area of about 35 square kilometres, worked out to promote confidential sector venture in a diversity of gas-associated productions to further promote the country’s citizens by the means of education, employment in the amounts of the tens of thousands, and the endorsement of general economic activity. The original possibility study for the “Kurdistan Gas City” project has now been completed, with the final site assortment underway. (Kurdistan Regional Government, 2007).

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The central aims of the project have been stated by Hamid Jafar, Executive Chairman of Dana Gas and Chairman of the Board of Crescent Petroleum, who added: “We have been honoured to work on this project to provide a complete solution of state-of-the-art gas field development, processing and transportation that is urgently required on a fast-track basis for electrical power generation for Iraqi citizens…” (Eye of Dubai, 2008).

Quality and implementation standards

The project implementation entails further progress and production, processing with high-tech LPG oil-refining plants, and transport of oil through a new 180km pipeline, with the intention of providing immediately-required gas supplies to cost-efficiently fuel the new power stations under creation, offering reductions to the Government funds of over $2 billion yearly in fuel charges. The project completion will also present work capabilities for over 2,000 Iraqi citizens of all ethnic groups, and offer inclusive education in oil & gas procedures for Iraq’s population.

Quality management standards offer a framework for a business to arrange its progressions and performances. They can assist a business to expand its effectiveness by offering a best practice replica for it to pursue. To meet a quality management structure sets it would be necessary to set up a system to recover the key procedures which are used to supply the products, thus permitting to deliver constantly with the regard of the promises.

One of the key challenges the project would tackle include how to stockpile oil in a safe manner, how to succeed in oil storage projects and new oil extraction techniques, and what should be the industrial set for transmission of oil in pipelines.

The fact is that some executives offer the risk-based qualification approach

In accordance with the ISO 9000 standards, the quality management executives would face significant, and not so easy to resolve issues for successful functioning. All the measures, presupposed by these standards include the following points:

  • a set of processes that cover all essential processes in the industry;
  • checking processes to guarantee they are efficient;
  • holding sufficient records;
  • ensuring productivity for shortcomings, with proper and remedial action where required;
  • repeatedly regarding personal procedures and the quality schemes itself for efficiency;
  • assisting steady enhancement (Fredendall, Robbins, 2001).

But it should be mentioned, that the oil project has its own restrictions in development, and taking into account all the mistakes. It is appropriate for most large projects to miss some minor mistakes and defects, which may further result in larger consequences, thus, it is necessary to retort to the experience by previous and foreign managers, who were engaged in the oil extraction industry.


In the conclusion, it is necessary to highlight, that oil extraction in Kurdistan can be rather problematic, from the viewpoint of quality management. In spite of the fact, that any large project is difficult to realize, but a great ship asks deep water, so it is worth realization.

The circumstances and the obstacles that may interrupt the realization of the project generally should be taken into account, and the team of managers must be very experienced to make this. Thus, Dana Gas, the Middle East’s first and hugest regional private sector oil company, has proclaimed that its scheme in the Kurdistan Region of Iraq to provide, procedure and transfer oil and gas to fuel immediately required local electricity generation is progressing at a speedy pace, with over 70% general project conclusion to date.


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