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 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)

Turkish oil and gas services company Ergil has been awarded a design, engineering, fabrication, and testing contract by China Petroleum Engineering & Construction Corporation ( CPECC), for Petronas‘ Garraf oil field.

The company says it has completed designing, manufacturing and supplying of 12 units 320-bar high-pressure pig receivers and launchers, 28 units pig signallers, 12 units manual pig jib crane and 8 units pig trolley.

The field is owned by Petronas (45%), Japex (30%) and the North Oil Company (25%).

(Source: Ergil)

Baker Hughes, a GE company has been awarded a contract by the South Gas Company of Iraq (SGC) for fast-track solutions to help the recovery of flare gas for Nassiriya and Al Gharraf  [Garraf] oilfields. The importance of the project was highlighted by the attendance of several high-level officials, including HE Jabbar Al-Luaib, the Minister of Oil of Iraq, at the agreement-signing ceremony.

As per the agreement, BHGE will develop solutions for flare gas recovery at Nassiriya and Al Gharraf oilfields using advanced modular gas processing (NGL) technology developed in the United States and Italy. The project will utilize the modular skid-mounted Gas Processing technology to build 200 million standard cubic feet per day (MMSCFD) NGL plant and is expected to be completed by 2021.

The project will support the development of a fully integrated natural gas liquid (NGL) plant at Nasiriya that will recover 200 MMSCFD of dry gas, liquefied petroleum gas (LPG) and condensate.

The modular solution will support power plants with dry gas for efficient power generation, thus helping meet the growing demand for electricity using clean fuel. It will also contribute to curtailing the amount of gas flared in the fields of Nassiriya and Gharraf that otherwise goes to waste.

The advanced technology used to develop the plant will help produce more than 1,000 tons of LPG per day and recover more than 900 cubic meters per day of condensates, which will help to 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.

H.E. Jabbar Ali Al-Allaibi, Iraq’s Minister of Oil said, that this project is important achievement for the Ministry and marks the entry of a new phase for the sector, highlighted by time optimal utilization of flare gas, which is a major milestone in the government’s extensive efforts to drive a better future for Iraq.

H.E. also highlighted the prominence of this project for the province of Dhi Qar specifically and for Iraq in general adding that BHGE will provide it latest and advanced technologies and solutions to optimize the use of flare gas at the Nassiriya and Al Gharaf oilfields recovering 200 MMSCFD of dry gas daily.

Rami Qasem, President, MENAT & India, BHGE, said:

“As a local trusted partner to Iraq, BHGE is bringing advanced technologies and solutions that can help meet the Ministry’s goals for the industry. This contract is a testament to our continued commitment to supporting the Ministry of Oil’s strategic goals by deploying advanced flare gas solutions to build the country’s oil and gas infrastructure. The project will create more than 500 direct and indirect jobs for Iraqis, build local capabilities and strengthen the local supply chain.”

BHGE is the first and only company in the world to provide a fullstream offering covering products, services and digital solutions for the oil and gas sector, from upstream, to midstream to downstream.

BHGE has been a committed partner to Iraq for more than 50 years, with three offices in Iraq – Baghdad, Erbil and the Basra –  and more than 350 employees in country, BHGE continues to deliver its latest technology and expertise to its local customers.

(Source: Baker Hughes)

By John Lee.

Japex is reportedly planning to increase production at the Gharaf oil field from around 90,000 barrels of oil per day (bpd) currently to 230,000 bpd by the end of 2020.

S&P Global Platts quotes Japex director Michiro Yamashita as saying that the company has allocated capital expenditure of $460 million for the project in fiscal 2019-20 (April-March).

(Source: S&P Global Platts)

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

IOC's Strategic Positioning in Iraq Upstream Petroleum

Much talk have been circulating recently on "Big Oil" abandoning Iraq upstream petroleum projects after they rushed into the country many years ago. How much truth is in this; who is leaving, remaining and planning a comeback; why and what material evidences are available to provide verifiable realistic explanation are some of the topics this brief intervention attempts to address.

IOCs positioning in Iraq upstream petroleum have seen a dramatic shift since a Grand Opining Big Push Policy- GOBPP was pursued in 2004; offering IOCs opportunities to achieving unprecedented expansion in the petroleum production capacity during short period.

Their involvement and strategic positioning went through three phases: the first, 2004 to end 2008, comprises many memoranda of understanding/cooperation (MoU/Cs ) in search for foothold and as springboard for further opportunities; transparent competitive bidding phase, June 2009 to May 2012, includes four bid rounds and, third phase covers contracts implementation that began from January 2010 up to date.

Ministry of Oil- MoO concluded some 40 MoU/Cs with IOCs from 23 countries, with overwhelming dominance of the US (9); Japan and Norway (4 each); China, UAE, UK and Canada (2 each) and one company from 16 countries.

For IOCs, MoU/Cs represent invaluable direct contact with Iraqi staff and professionals at all layers of responsibility and access to most archives and database relating to upstream petroleum; that helped IOCs exploring where and what they could do to chart their way towards business in Iraq's upstream petroleum and beyond, i.e., to plan their strategic positioning in the sector. Some IOCs had their MoU/C terminated and were blacklisted from further involvement in upstream petroleum projects, due to their agreements with KRG in violation of the government declared policy.

MoU/Cs contributed in formulating and development of a model contract, and by the time they were terminated MoO succeeded, through direct government-to-government talks (with China), in converting Alahdab oilfield from production sharing to service contract. That conversion presents the model for what MoO offers: a long term service contract not a production sharing contract; an outcome many IOCs had not hoped for and probably impacted their decision for further undertaking.

The first bid round, for brown oilfields, was held end June 2009, followed by three bid rounds for green fields, gas fields and exploration blocks respectively; the last was convened end May 2012.

120 IOCs participated in the qualification process for the bid rounds, 55 from 27 countries were qualified: Japan (9); USA (7); Russia (5); China and UK (4 each); Australia, India and Italy (2 each), and 19 other countries with one company each; a different profile from phase one with obvious strategic positioning implications.

The outcome of the four bid rounds and Alahdab are: 14 oilfields contracted to 15 IOCs from 12 countries; a consolidation of strategic positioning. Total contracted plateau production was 12.3mbd and their total proven reserves ca. 67 billion barrels (58% of the country's proven reserves at that time). Three gas fields were contracted to 3 IOCs from 3 countries with total plateau production of 820mcfd and proven reserves of 11.2tcf. Finally, four exploration blocks were contracts with 7 IOCs from 5 countries resulting in discovery of Fayha and Eridu oilfields.

The contracted plateau production of 12.3mbd was IOCs making that proven to be unrealistic and unattainable, thus, consequently revised downward repeatedly!!

During the second phase many meaningful signs for significant shift in IOCs strategic positioning began to emerge, the most apparent consolidation was Russia.

The third phase, i.e., contracts implementation period, witnessed the most dramatic effective and lasting shifts in IOCs strategic positioning.

A complexity of combined reasons had contributed to such an outcome; some are related to IOCs themselves, others related to the Iraqi side (entities, policies and circumstances), while the rest are related to a variety of international factors and geopolitical considerations. Space limitation prevents from indulging in the details of relevant data, facts and documents, but it is useful to mention the most impacting among them: Fracking revolution in the US; ISIS and oil price collapse in mid-June 2014 that inflicted serious blow to Iraq fiscal, security and developmental efforts; OPEC+ impact on Iraq production; Covid-19 and finally energy/green transition and climate change debate.

However, it is vital to highlight briefly the IOCs that strengthened or weakened their positions during this phase.

In the context of Iraqi GOBPP, strategic positioning is taken here to mean IOCs persistent, competitive, enhanced and long-term underrating in Iraq upstream petroleum. Three dimensions manifest IOC involvement and its strategic positioning: horizontal (in multi-fields), vertical (the participating interest-PI in the fields) and volumetric (in terms of proven reserves and production due to field development).

From November 2013 China began enhancing its presence in the country through consolidating CNPC , CNOOC, ZhenHua , Sinopec , UEG and probably CPECC, which   invests in utilizing all associated gas produced in Missan Province . In addition to the above, there are many Chines service companies that are involved in upstream petroleum activities such as drilling, supply and construct surface installations, pipelines, field management among others.

Russian Lukoil enhanced its position vertically horizontally and volumetric in West Qurna 2-WQ2 oilfield and in exploration Block 10 that led to Eridu oilfield discovery; Lukoil found other reservoirs beyond the field's current borders and thus requested to expand Eridu field. Surprisingly, the Oil Minister reportedly said recently Lukoil intends to sell its PI in WQ2 to a Chines company!

Other Russian IOCs with bid round contracts include Gazprom (operator of Badra oilfield) and Bashneft/ Rosneft (for Exploration Block 12), KRG not included here.

In addition to Chines and Russian IOCs Japanese companies increased their presence as well: Japex (Gharraf oilfield); INPEX (Exploration Block 10/Eridu oilfield) and Itochu bought entire Shell' PI (20%) in WQ1.

Against the consolidation of the Chines, Russian and Japanese companies, other IOCs lost or weakened their presence in upstream petroleum; these include Big Oil- as ExxonMobil, Shell and Oxy and medium-small size companies such as Petronas, Kogas, Kuwait Energy, TPAO.

Occidental Petroleum relinquished, in 2016, its PI in Zubair oilfield to South Oil Company (now Basra Oil Company), due to its decision pulling out from projects in the Middle East for financial reasons.

ExxonMobil demise began almost ten years ago soon after it had attained significant consolidation; a demise of its own making!! Apart from the contribution of the Iraqi factors ExxonMobil faced and facing many other challenges that exacerbate its decision to abandon Iraq. These include restructuring its international profile; energy transition (away from fossil-based to renewable-energy) environmentally-conscious; shareholder revolts, expulsion of ExxonMobil representative from EITI'MSG due to position regarding Dobb-Franck issue and the forthcoming SEC environmental compliance rules.

Royal Shell story is not very different from that of ExxonMobil. Shell launched initially a powerful strategic positioning, resisted the temptation of engaging with KRG petroleum and diversified its portfolio in oil, gas and petrochemical projects. Now it has much weakened role; withdrew from Majnoon oilfield, sold its PI in WQ1, rumors that it contemplate leaving Basra Gas Compan- BGC , whose  HoA was signed in 2008 but it did not deliver the contracted target, and Nibras petrochemical project, with MIM & MoO, draggeed for too many years without any prospect.

Again, Shell decision to leave WQ1 and Majnoon oilfields and possibly BGC was not entirely due to contractual and working conditions in Iraq; one possible explanation relates to Shell' overall plan to restructure its global business, following its takeover of British Gas Group- BGG. Also Shell faces legal action; A Dutch court ruled, recently, that Shell will have to reduce its carbon emissions by 45 percent from 2019 levels by 2030.

BP has only one engagement- Rumaila oilfield, with almost equal PI with CNPC (while during the June 2009 bidding round BP' PI was double that of CNPC). Recently, BP decided to spin off its involvement in Rumaila into a stand-alone company, a "ring fencing practice", for reasons relating to diverting its global assets and investment plans.  Though this move is more structural and organizational in nature that has, contractually, no effect on Iraq, it, nevertheless, could indicate possible departure from Rumaila sooner or later.

Total, rebranded TotalEnergies, have very modest PI in only one oilfield- Halfaya, is trying a comeback to Iraq through concluding HoA comprising four major projects, three of which are part of SIIP that Iraq wasted too many years discussing with ExxonMobil!!

Surely, IOCs strategic positioning has significant implications for petroleum sector and the prospect of the entire economy. There has been a tendency for some to be highly selective by focusing only on one Iraqi based, real reason, such as harsh contractual terms; type of contracts; corruption, resource mismanagement and security conditions among others. While all these are real and effective, they are absolutely not the only factors behind IOCs shift and change of priorities as there is a complex wed that one should be aware of; 20 IOCs have recently warned for tax violation and IOCs that lost their strategic positioning inside Iraqi petroleum had themselves contributed to that outcome.

Moreover, global energy/green transition and international geopolitics have powerful ramifications though the debate is, as usual, not conclusive. While IEA recent report could have effective impact, REN21 new report raises doubt; and such wide divergence suggests oil remains needed much longer than some thinks.

Click here to download the full report in pdf format.

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.

Petronas Carigali Iraq Holding B.V. has opened its K-123 well in the Garraf Contract Area in Dhi Qar.

Present at the event were, Petronas Vice President International Assets of Upstream Mr. M Jukris A Wahab; Director, Managing Executive Officer and President of Middle East, Asia & Europe Project Division of Japex, Mr. Toshiyuki Hirata; and Petronas Iraq Country Chairman, Mr. Norafizal Mat Saad.

The field is operated by Petronas (45%), Japex Garraf Ltd (30%), and North Oil Company (25%). (Japex Garraf Ltd is owned as follows: Japex 55%, Mitsubishi Corporation 10%, and JOGMEC 35%).

(Source: Petronas)

By John Lee.

Demonstrators have reportedly caused disruption at oil facilities in Dhi Qar on Wednesday.

According to Anadolu Agency, dozens of university graduates gathered at the Al-Gharraf oilfield to demand employment.

A local resident is quoted as saying that applications for jobs at the field had received no reply.

(Source: Anadolu Agency)

Writing in Oil Price, Simon Watkins says $100 oil has prompted the Iraqi government to fast-track development of more technically challenging oil fields.

Click here to read the full article.

By John Lee.

The Iraqi Drilling Company (IDC) has recently completed the drilling of oil well 48 at the Nasiriyah oil field.

The company's general manager, Engineer Basem Abdel Karim Nasser, said this was part of the contract with Dhi Qar Oil Company (DQOC) to drill 20 oil wells at the field in cooperation with US-based Weatherford.

Drilling operations were carried out over 18 months using the IDC 44 drilling rig.

IDC has also recently completed the drilling of oil well J120P in the Al-Gharraf field, which reached a depth of 3,037 meters.

Nasser said this was the thirteenth well drilled as part of the contract with the Malaysian Petronas company to drill 28 directional oil wells in the Al-Gharraf oil field in Dhi Qar Governorate.

The work was carried out using the IDC 54 drilling rig (pictured), which has a power of 2000 HP.

The company owns 43 drilling and reclamation rigs distributed in the Iraqi oil fields.

(Source: Ministry of Oil)

By Simon Watkins for the OilPrice.com. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Iraq Pushes Key Gas Developments To Reduce Import Dependence On Iran

Iraq is advancing some key associated gas projects at the Gharraf and Nassiriya oil fields.

Click here to read the full report.

By John Lee.

The Iraqi Drilling Company (IDC) has begun drilling the FQCS-88 oil well at the Fakka oil field in eastern Maysan [Missan] province.

The 2,000-horsepower IDC 55 rig is operating as part of a project to drill 22 oil wells for the China National Offshore Oil Corporation (CNOOC).

It will drill to a planned depth of 3,150 meters.

The company has also deployed the 2,000-horsepower IDC 58 drilling rig has part of a project to drill 28 oil wells in the Gharraf oil field in Dhi Qar for Malaysian company Petronas.

(Source: Ministry of Oil)

By John Lee.

Iraq's cabinet has approved a plan to refer the second phase of the gas drying project for the Gharraf oil field to a consortium consisting of the State Company for Oil Projects (SCOP), which is part of the Ministry of Oil, and the Italian company Progetti Europa & Global S.p.A. (PEG).

The project will cost $320,884,293 and will take 35 months to implement with a guarantee of 12 months.

PEG is separately involved in the rail project linking Al Faw Grand Port with Turkey.

(Source: Media Office of the Prime Minister)

By John Lee.

Production at the Garraf [Gharraf] oil field in southern Iraq has reportedly fallen to an average of around 93,000 barrels per day (bpd) in January.

According to S&P Global Platts, officials from Japan Petroleum Exploration (JAPEX) said on Monday that the drop was due to delays in drilling works.

It added that takeholders remained committed to increasing output to 230,000 bpd by the end of 2020.

Japex, which has a 35-percent stake in the field, issued results for the nine months to the end of December on Monday - see here and here.

(Source: S&P Global Platts)

By John Lee.

Malaysia's Petronas has said it has shut down production and safely evacuated all of its Malaysian employees from Iraq due to coronavirus (COVID-19).

In a statement, the company said:

"In view of the COVID-19 pandemic and as a precautionary measure to ensure the health, safety and well-being of our employees, PETRONAS has safely evacuated all 80 of our Malaysian employees from PETRONAS Carigali Iraq Holding B.V. (PCIHBV), located at the Garraf Contract Area, in the Thi Qar Province, Republic of Iraq.

"This is certainly an unfortunate and unforeseeable event that is not within PCIHBV's control. PCIHBV had accordingly issued the necessary notice in accordance with the provisions of the Development and Production Service Contract and engaged with the host authority prior to the suspension of operations and evacuation of our employees.

"Operations at the Garraf Contract Area are now temporarily suspended until further notice.

"We are also closely monitoring the situation."

(Source: Petronas)

China's Recon Technology has announced that it has signed a $2.8-million engineering and construction service subcontract with Grand Energy Development Limited on a heavy oil transportation system project (the "Project") at the Garraf oilfield in Iraq for the services that Recon has provided.

Pursuant to the subcontract, Recon shall carry out all the engineering design services, provide the technical support to the procurement, construction, commissioning activities and provide the training services of the heavy oil transportation system project.

Garraf oilfield is located in the province of Thi Qar, Iraq, approximately 5km north-west of Al-Refaei city and 85km north of Nasiriya city. The oilfield is 17.5km long and 5.5km wide. It is estimated to hold 1.3 billion barrels of oil reserves.

Based on the Final Development Plan approved by the Government of Iraq in 2018, the oilfield is undergoing further development in stages to achieve crude oil production of 230,000 barrels per day by the end of 2020.

As part of the Project, the heavy oil pipeline with a total intended capacity of 275,000 barrels per day will be built to support the Garraf production target. By providing the services under the Project, Recon has played an important role in building the heavy oil pipeline.

Shenping Yin, co-founder and CEO of Recon said:

"With advanced technique and wide experiences in the automation and digitalization of oil and gas industry, Recon has a relatively competitive advantage in the engineering design and construction businesses in oilfield segment.

"With the successful completion of the project, we expect to construct more oilfield projects and hope to help more oilfields reduce costs and maintain yields at a healthy level in the near future."

Recon Technology, Ltd. (RCON) is China's first non-state-owned oil and gas field service company listed on NASDAQ.

(Source: Recon)

UK-based pump company Amarinth has delivered four API 610 VS4 vertical pumps with Plan 53B seal support systems for the Oil Train 5 Project at Garraf oilfield.

Located at the northwest of Al-Refaei, approximately 85 kilometers north of the City of Nasiriya, half way between the Tigris and Euphrates rivers in the southeast of Iraq, Garraf is the fifth largest oil and gas field in Iraq with estimated reserves of 1 million barrels of oil.

Petronas and its partners are currently increasing production in the field, and the addition of Oil Train 5 is expected to bring this up to 230,000 barrels per day.

The $650,000 order of four API 610 VS4 vertical pumps with Plan 53B seal support systems was placed with Amarinth by China Petroleum Engineering Procurement & Construction (CPECC).

According to a press release from the company, this was the first time that CPECC had ordered from Amarinth and the decision was made based on Amarinth's proven ability to design and deliver bespoke API 610 pumps for hazardous areas, along with the company's previous experience of successfully supplying pumps for the Iraq market, all to strict deadlines.

The pumps were manufactured in Inconel Alloy 625, a nickel-based superalloy that possesses high strength properties, resistance to elevated temperatures and excellent protection against corrosion and oxidation. In addition, the Plan 53B seal support systems required a bespoke mounting configuration and piping design.

Amarinth successfully completed the design, manufacture, and delivery within the required 34 weeks.

Oliver Brigginshaw, Managing Director of Amarinth, commented:

"We are delighted with this first order from CPECC, again underlining our strength in the Middle East, and in particular our ability to delivery API 610 pumps into the developing oil and gas projects in Iraq."

(Source: Amarinth)

By John Lee.

Under the guidance of Iraq's Deputy Prime Minister for Energy and Minister of Oil, Mr. Hayan Abdul Ghani, Dhi Qar Oil Company (DQOC) has completed the trial operation of a gas power plant at the Al-Gharraf oil field in Dhi Qar province.

This achievement aligns with the ministry's strategy to harness associated gas from oil production, aiming for integrated self-sufficiency in oil fields' operations. The gas power plant has a capacity exceeding 70 megawatts and will provide electricity for the field and its facilities.

The plant will be supplied with gas from oil operations within the field, reflecting DQOC's ongoing efforts to fully invest in this gas resource in collaboration with the operator.

This development is expected to contribute significantly to the oil field's electricity needs independently, reducing reliance on the national grid. In turn, the saved capacity of 70 megawatts will be channeled into the national grid to serve citizens. These initiatives are part of the Ministry of Oil's comprehensive plan to implement similar projects in other producing fields.

(Source: Ministry of Oil)