Malaysia’s Synergistic Generation Sdn Bhd (SGSB), which is 60 percent owned by UMW Holdings Bhd, has entered into a $30 million contract with Petronas Carigali Iraq Holding BV (PCIHBV).
The contract is for the procurement of materials and equipment and installation and commissioning of all equipment and facilities by SGSB for the setting up of the Garraf Power Plant Phase I at the Garraf oilfield.
(Source: Bernama)
Bloomberg reports that Malaysia’s Petronas and the Japan Petroleum Exploration Co. (JAPEX) will start producing crude from the Gharraf oil field in southern Iraq by September.
Sattar Mahdi, head of field development, said the field will initially produce about 35,000 barrels a day by the end of the third quarter, gradually increasing capacity to 230,000 barrels a day within five years.
The companies recently drilled four wells in Gharraf and will drill another 13 in the next six months.
(Source: Bloomberg)
By John Lee.
The Iraqi Deputy Prime Minister for Energy Affairs, Hussein al-Shahristani, has reportedly urged the consortium developing the Gharraf oilfield in Maysan province to speed up progress on the project.
He also offered to help “eliminate the obstacles facing the work of the company”, which is a venture between the Japanese JAPEX and Malaysia’s Petronas.
A delegation led by Osamu Watanabe, chairman of JAPEX, visited the Deputy PM on Sunday to discuss the development of the Gharraf and East Baghdad oil fields.
The company will open a training center for unemployed people this week.
The statement added that “both sides also suggested the establishment of a power plant of 150 megawatts which will use gas produced from the field,” explaining that “The middle of next year, 2013, will see production of more than 100,000 barrels per day from the Gharraf field.”
(Source: AIN)
By John Lee.
Japan Petroleum Exploration (Japex) and its partners have delayed the start of production in the Gharraf [Garraf] oil field by six months, according to Bloomberg.
Production was scheduled for the end of 2012, but will now be postponed until the end of June; a company official blamed the delay on problems with Iraq’s infrastructure.
Japex President, Osamu Watanabe (pictured), said he expects initial production of 60,000 barrels a day, rising to 230,000 bpd in 2017.
Malaysia’s state oil firm Petronas holds 45 percent of the oilfield development and production service project, Japex 30 percent, and Iraq’s North Oil Company (NOC) 25 percent.
The company previously had a plan to start operations by September of last year, and were urged last summer by Iraqi Deputy Prime Minister for Energy Affairs, Hussein al-Shahristani to speed up progress on the project.
(Source: Bloomberg)
By John Lee.
Iraq’s Ministry of Oil has announced that the long-awaited start of production at the Gharraf [Garraf] oilfield is now scheduled for the end of August.
Initial output is expected to be 35,000 barrels per day (bpd).
The company previously had a plan to start operations by September of last year, and were urged last summer by Iraqi Deputy Prime Minister for Energy Affairs, Hussein al-Shahristani to speed up progress on the project.
Malaysia’s state oil firm Petronas holds 45 percent of the oilfield development and production service project, Japan Petroleum Exploration (Japex) 30 percent, and Iraq’s North Oil Company (NOC) 25 percent.
(Source: Ministry of Oil)
By John Lee.
The Gharraf [Garraf] oil field in Thi Qar [Dhi Qar] province, 85km north of the City of Nasiriyah, produced its first commercial output of oil on 31st August.
Iraq’s Ministry of Oil said the flow rate was 35,000 barrels a day, and peak production of 230,000 bpd was expected in 2017.
Japan Petroleum Exploration (JAPEX), in partnership with Malaysian national oil company PETRONAS and the Iraqi state-owned North Oil Company (NOC), secured the winning bid for the field in December 2009 under Iraq’s Second Petroleum Licensing Round.
In July 2010, JOGMEC granted equity financing to Japex Garraf Ltd., an affiliate of JAPEX, for the development of the field.
(Sources: Ministry of Oil, JOGMEC)
Korea’s STX Heavy Industries has announced another major contract win in Iraq.
The $99.5-million deal will see the company build a new gas treatment facility at the Gharraf [Garraf] oilfield.
Malaysia’s state oil firm Petronas holds 45 percent of the Gharraf project, Japan Petroleum Exploration (Japex) 30 percent, and Iraq’s North Oil Company (NOC) 25 percent.
STX said that the project is expected to be completed by the end of November 2015.
Earlier this month, the company announced a $449m order to build a 550km pipeline in the Akkas gas field.
(Source: ConstructionWeekOnline)
Gazprom Neft has completed laying, testing and connecting a 165 km oil pipeline from the Badra field, which the Company operates in Iraq, to the Gharraf oilfield (Nasiriyah district, Iraq).
With infrastructure already in place at Gharraf, completion of the pipeline from Badra means that the field is now connected to the main Iraqi pipeline system.
The new infrastructure for transporting raw materials from Badra has the capacity to transport 204,000 barrels per day, around 10 million tonnes per year, and can now supply oil to the export terminal at the city of Basra.
The Badra-Gharraf pipeline has two underwater transits, including one crossing the river Tigris, and passes over dozens of canals and irrigation systems. For increased operating security, a system to detect leaks and shut off damaged sections and a power supply system running on solar cells will work along the entire length of the pipleline.
Automated systems ensure constant monitoring of the oil transit and real-time management of the pipeline from the Badra field. Gazprom Neft has successfully completed hydrodynamic testing of all sections of the pipeline and the system has been checked for robustness and integrity.
Gazprom Neft produced its first oil at Badra in December 2013 as part of operating tests on well BD4. Work is currently continuing at the site to develop the infrastructure necessary to launch production, which is scheduled for the first half of 2014.
The construction of a central gathering station (CGS) with a capacity of 170,000 barrels per day is under way. The first CGS line will be coming into operation imminently, with a capacity of 60,000 barrels per day. Work has also started on a complex gas treatment plant (UKPG) with the capacity to handle some 1.5 billion cubic metres per year.
(Source: Gazprom Neft)
By John Lee.
Oil Minister Dr. Adel Abdul Mahdi [Adel Abdel Mehdi] (pictured) has announced the establishment of three new oil companies.
The Dhi Qar Oil Company has been set up to put the extraction and production of oil from fields in Dhi Qar under their direct supervision of the people of the province. This follows the successful developement of the fields at Nasiriyah and Gharraf.
The Ministry is also setting up a new oilfield services company and a new crude oil pipelines company.
(Source: Ministry of Oil)
By John Lee.
Iraq has this week established the Dhi Qar Oil Company (DQOC), which will take over responsibility for the Nassiriya and Garraf oil fields.
The South Oil Company (SOC) has been renamed the Basra Oil Company (BOC), following the transfer of the Dhi Qar assets to the new company.
(Source: Reuters)
By John Lee.
Iraqi Oil Minister Adel Abdel Mahdi [Adil Abd Al-Mahdi] has said that Iraq’s oil and gas industry will need an investment of $300 billion over the next 15 years.
He made the statement during a visit to Japan, at which he also discussed the long relationship between the two countries in the energy sector, including the building of the north refinery in Baiji, the two gas treatment complexes for the North Gas Company (NGC) and the South Gas Company (SGC), and the contribution of Japex in developing the Garraf oilfield as a part of the consortium with Petronas.
He added that Iraq plans to increase production to 7 million barrels per day over the next 5 years.
(Source: Ministry of Oil)
By John Lee.
Iraq’s new Dhi Qar Oil Company (DQOC) is getting US$42 million in start-up capital following approval from the Iraqi Finance Ministry of Finance, according to a report from OilPrice.
The company was spun off from the South Oil Company (SOC) in January, taking over four of its fields in Dhi Qar governorate; the SOC has been renamed the Basra Oil Company (BOC).
The Garraf and Nasiriyah oil fields currently produce about 170,000 barrels per day, but Dhi Qar says it plans to ramp up production to 200,000 bpd by the end of this year.
Two other fields not yet in production are the Saba field and the al-Amoud field. Saba is expected to come online later this year with an initial 30,000 bpd, while al-Amoud is being developed and there are no indications as of yet when this field will be brought into production.
(Source: OilPrice)
BBC’s File on 4 has produced a 38-minute programme on the recent allegations of corruption in the Iraqi oil industry, following the leaking of emails from Unaoil.
The Monaco-based company denies that it helped companies win contracts by corrupting politicians and government officials.
Jane Deith has been given access to the leaked papers and reveals what they tell us about the business of oil.
Click here to hear or download the full programme.
(Source: BBC)
By John Lee.
A senior Iraqi oil official has told Reuters that international oil companies (IOCs) have warned of delays to projects to increase its crude oil output if the Iraqi government insists on drastic spending cuts this year.
Investments by IOCs are repaid with crude oil, which has become a problem since oil prices have fallen and Iraq has been struggling to find enough oil to repay the companies for their investments.
Due to budgetary pressures, Iraq has asked IOCs to cut their development budgets for a second year, but the two sides have failed so far to agree on spending levels.
BP has been asked to cut its 2016 budget for Rumaila to $2.48 billion, and to target output of 1.4-million barrels per day. (BP proposed a budget of $3.25 billion for 2015).
Lukoil is expected to cut spending to $1.26b illion and aim for a production of 400,000 bpd at West Qurna 2 project; it proposed a 2015 budget of $2.1 billion.
Eni should cut spending to $1.62 billion and aim for production of 351,000 bpd at Zubair.
ExxonMobil was asked to slash spending to $878 million and aim for output of 379,000 bpd at West Qurna 1. Last year, according to Reuters, it “insisted” on spending $1.8 billion.
Shell should cut spending to $855 million and aim for 200,000 bpd from Majnoon. Last year, it proposed a budget of $1.5 billion.
Petronas should reduce costs to $712 million and target production of 100,000 bpd at Garraf.
(Source: Reuters)
By John Lee.
Iraqi Oil Minister Jabar Ali al-Luaibi [Allibi] has officially launched the new Dhi Qar Oil Company (DQOC) [Thi-Qar Oil Company].
At a ceremony in Nasiriya, the Minister said he is working to develop the Nasiriya oil field and the other exploratory blocks and fields in the region, and called on international companies to invest in the new Nasiriya refinery project.
The DQOC was spun off from the South Oil Company (SOC) last year, and has responsibility for Garraf and Nasiriyah oil fields; following the transfer of assets to the DQOC, the SOC has become the Basra Oil Company (BOC).
The Iraqi Ministry of Finance approved a start-up capital of $42 million for the new company.
(Source: Ministry of Oil)
Following extensive discussions, the Iraqi Ministry of Oil and Baker Hughes, a GE company (BHGE) signed a contract for fast-track solutions to help the recovery of flare gas in line with the country’s strategy for energy sector development.
An advanced modular gas processing (NGL) plant has been recommended for Nassiriya as part of the initiative by Baker Hughes, which is the first and only company in the world to provide a full-stream offering covering products, services and digital solutions for the oil and gas sector, from upstream to midstream and downstream.
As per the agreement, Baker Hughes, will develop advanced solutions for flare gas at the Nassiriya and Al Gharraf oilfields, using modular gas processing technology developed in the United States, with the project to be undertaken in two stages. In the first stage, the advanced modular gas processing solution will be deployed to dehydrate and compress flare gas to generate over 100 million standard cubic feet per day (MMSCFD) of gas.
The Nassiriya plant will then be expanded to a complete natural gas liquid (NGL) facility to recover 200 MMSCFD of dry gas, liquefied petroleum gas (LPG) and condensate. The project will create direct and indirect jobs for Iraqis and help grow the local supply chain requirements that support Iraqi small and medium enterprises.
The modular solution will also support power plants with dry gas for efficient power generation, thus helping meet the growing demand for electricity using clean fuel. The project will also contribute to curtailing the amount of gas flared in the fields of Nassiriya and Gharraf that otherwise goes to waste.
The hundreds of thousands of tons per year of LPG and condensates produced will help meet the domestic demand for cooking gas. The surplus LPG and condensate will be exported, generating high revenue to the Iraqi government. Contributing to the social and economic development of Nassiriya, the project is aligned with the vision of the Ministry of Oil and the government.
His Excellency Jabbar Al-Luaibi, the Iraq Minister of Oil, said that the Ministry is moving ahead to implement its strategic plans to secure financial revenue to the treasury of the Iraqi state and to develop the oil industry. The statement came at the ceremony hosted by the Ministry to sign a contract for the project to invest in an optimum solution to recover flare gas in the fields of Nassiriya and Gharraf with Baker Hughes.
Rami Qasem, President, MENAT and India, Baker Hughes said:
“The Iraqi Ministry of Oil has outlined a clear vision and strategy to maximize the utilization of natural resources, especially gas. As a full-stream company that combines physical and digital strengths to increase reliability and uptime across the entire spectrum of oil and gas development, we bring advanced solutions that can support in transforming the industry and contribute to all-round development through our in-country investments in Iraq.
“We are committed to supporting the Ministry of Oil in its strategic goals, and in deploying advanced flare gas solutions and to build the country’s oil and gas infrastructure. From industrial to economic and environmental benefits our solutions will create long-term value for the country.”
Last year, BHGE had signed a first-of-its-kind partnership agreement with the Ministry of Oil to strengthen the performance of the Iraq energy sector by providing advanced equipment, technology upgrades, maintenance of the Ministry of Oil fleet and ensuring knowledge transfer, skills development and local jobs.
BHGE has also strengthened its localization initiatives in Iraq with the expansion of its technical services facility in the North Rumaila oilfield. It offers a wide range of testing, repair and refurbishment services for its customers in the country as well as undertakes fabrication and assembly of key products establishing BHGE as a complete technical solutions provider.
With three offices in Iraq – Baghdad, Erbil and the Basra – GE continues to deliver its latest technology and expertise to local customers. The company has more than 350 employees currently, nearly 95 per cent of them Iraqi professionals.
(Source: Baker Hughes)
By Ahmed Mousa Jiyad.
Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.
Developing Border Oilields and Utilizing Associated Natural Gas: Important Projects, Dubious and Non-Transparent Contracts
Information from and about the Ministry of Oil has been published and circulated extensively, in the last few days, concerning two important subjects or projects, each of which could have immense direct and effective impacts on the Iraqi economy and on the national interest.
The first concerns the development of border fields with Iran and Kuwait, and the second is related to utilizing associated natural gas from Nassiriyah and Gharraf oilfields in Thi Qar province.
After thorough reviewing all information from the mentioned sources and analyzing what relates to both projects, I made a few remarks, diagnosed some flaws, inaccuracies and inconsistencies, and then proposed some practical suggestions and alternatives that I hope will attract the attention of the Ministry; especially those related to the necessity of utilizing “National Efforts” in developing border fields.
The extent and implications of lacking competitiveness and transparency, which consequently lead to questioning the integrity of the contractual process, have also been clearly identified.
It should be recalled that the Iraqi Constitution emphasizes two basic principles directly related to these two projects: the first concerns achieving “the highest benefit for the Iraqi people” and the second “using the most advanced techniques of the market principles”. In the light of what was presented and analyzed below, it is clear that the Ministry did not comply with these Constitutional requirements and obligation.
The paper discusses the border fields/ blocks first then addresses the utilization of associated gas.
Please click here to download the full report.
Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.
By John Lee.
Janus Global Operations (JGO) has announced that it has been selected by “an integrated oil and gas multinational corporation based in Malaysia“, to provide security and risk management services for the company’s operations in central Iraq.
Some 600 JGO U.S. and foreign national employees will be responsible, during the two-year contract, for security and risk management for the Malaysian International Oil Company’s (IOC) oil exploration and development program in central Iraq, to include the company’s base camp, facilities, and also mobile security for company personnel.
Matt Kaye (pictured), JGO’s chief executive officer, said:
“We’re proud that the Malaysian IOC has selected JGO for this security responsibility.
“JGO has worked in Iraq with commercial and government clients for more than 13 years on demining and unexploded remnants of war clearance, munitions management, security and risk management, and other tasks critical to clients’ operations.”
The Malaysian IOC has a 10-year relationship with JGO, Kaye added.
Although not named in the announcement, Malaysia’s state-owned Petronas is the operator of the Garraf [Gharraf] oil field in Dhi Qar Governorate, in which it holds a 45-percent stake. The company also has interests in Iraq’s Majnoon, Halfaya and Badra fields.
(Source: JGO)
Iraq's South Oil Company, working with the IOCs, has set quarterly production targets for the country's southern oilfields for 2011, according to documents obtained by Reuters. Production is targeted reach an average of nearly 2.3m bpd by Q4 2011. Oilfields Q1 Q2 Q3 Q4
Rumaila 1,175,000 1,201,000 1,226,000 1,250,000
West Qurna 1 260,000 270,000 285,000 300,000
Majnoon 70,000 80,000 90,000 100,000
Zubair 280,000 310,000 340,000 360,000
Gharaf - - - 35,000
Nahr Bin Umar 45,000 50,000 60,000 70,000
Ratawi 10,000 14,000 18,000 25,000
Luhais 60,000 70,000 80,000 85,000
Tuba 10,000 15,000 20,000 30,000
Nassiriya 15,000 20,000 30,000 30,000 TOTAL 1,925,000 2,030,000 2,149,000 2,285,000 (Source: Reuters)
quarterly 2011 production targets for Iraq's southern oilfields
Iraq’s oil ministry announced on Friday that it would begin drilling for oil in the southern Gharraf oil fields by the end of the year.
Officials said initial production levels of 50,000 barrels per day from eight oil wells are expected.
Malaysia’s state-owned oil company Petronas and the Japan Petroleum Exploration Company (Japex) signed a deal with the Iraqi government late last year to develop the Gharraf oil fields.
The deal envisages 20 oil wells with an estimated daily output of 230,000 barrels over 20 years.
Iraq’s state oil company holds a minority share in the partnership.
Petronas has also just announced that it will train 60 Iraqi engineers in Malaysia to work on the Gharraf project.
(Sources: Deutsche Presse-Agentur, Rigzone, Azzaman)
