Page 6 - DMEA Week 43 2020

DMEA COMMENTARY DMEA

Iraq remains committed to oil

developments

The country’s oil minister has underlined its commitment to ramping up oil
production amid market struggles

IRAQ IRAQ’S Oil Minister told conferences over the be provided by the CSSP.
past week that the country has no intention of However, BP has greater flexibility in its
WHAT: cancelling or postponing any projects with inter- development of the supergiant Rumaila field.
The country’s oil minister national oil companies (IOCs), but admitted that Its Qarmat Ali water treatment plant provides
told conference attendees the ongoing pandemic has caused delays. around 500,000 bpd of water and the capacity
this week that Baghdad Speaking during the Siemens MEA Energy could be doubled to avoid reliance on the CSSP.
intends to increase oil Week, Ihsan Abdul Jabbar said: “Our contracts With water-flooding planned to boost output,
production capacity to with our IOCs in Iraq will stay as is – there is though, estimates have suggested that the field’s
7mn barrels by 2027.t no cancelling of projects … There is some slow- water requirements could reach 8mn bpd.
down due to the cash shortage, but our commit- Meanwhile, Jabbar also alluded to delays to
WHY: ments with our IOCs will stay.” the laying of three pipelines to improve export
Iraq is almost entirely Meanwhile, speaking at this week’s CWC capabilities from southern terminals, with Sea
dependent on oil Iraq Petroleum event, Jabbar said that Baghdad Line 3 having previously been anticipated to add
revenues for government remains committed to achieving a 2mn barrel 700,000 bpd by Q2 this year.
spending. per day increase in oil production capacity to
7mn bpd by 2027. Improvements
WHAT NEXT: Despite issues of security, ambassadors from On a positive note, Jabbar said that the Basrah
French super-major Canada, the UK and US all spoke during virtual Gas Co. (BGC) joint venture was considering a
Total is in discussions to conferences of huge interest from companies in plan to speed up construction of two NGL facili-
develop gas projects in their respective countries in collaborating in the ties under its broad South Gas Utilisation Project
the Western Desert and next stage of developing Iraq’s oil and gas sector. (SGUP) on which a final investment decision
near Basra. (FID) was taken by super-major Royal Dutch
Delays Shell in January last year.
Among the projects delayed by the pandemic, BGC comprises state-owned Basrah Oil Co.
the most unsurprising inclusion must be the (BOC), Shell and Japan’s Mitsubishi, and it will
Common Seawater Supply Project (CSSP), execute the $17.5bn development to treat, pro-
which Jabbar said had been pushed back even cess and distribute associated gas from the giant
further. Rumaila, West Qurna 1 and Zubair oilfields.
In May last year, discussions about the Current plans envisage the facilities coming
long-delayed project between the Ministry of on stream in 2027, but Jabbar said that the plans
Oil (MoO) and ExxonMobil broke down, with under consideration would bring this forward by
a $2.4bn package for the development awarded four years.
to Hyundai Engineering & Construction the fol- The stage in question – Basrah NGL – covers
lowing month. Hyundai’s pricing for the project the installation of the two-train gas-processing
was reported to have come in lower than that of plant at Al-Ratawi in the west of Basra to process
the US super-major. an additional 4.1bn cubic metres per year of gas.
The CSSP is designed to take seawater from Also this week, the MoO said that it was in
the Gulf, treat it and then pipe it to major south- talks with French super-major Total over the
ern oilfields, where it will be injected to increase development of two gas projects, one in the
pressure in oil wells. With this being key to Iraqi Western Desert and one near Basra. Without
efforts to raise oil output, the importance of the giving much more detail, the statement said that
CSSP is paramount. Jabbar had met with officials from Total and
ExxonMobil holds a stake of 25% in the giant that it was hoped that an agreement would be
West Qurna-1 field, where it is partnered by reached soon. Middle East Oil & Gas (MEOG)
Japan’s Itochu (20%), PetroChina (25%), Per- understands that the assets in question include
tamina (10%) and South Oil Co. (SOC, 20%). Akkas, Al-Mansouriya and Siba.
The field holds an estimated 9bn barrels of crude Baghdad is known to have been shopping
oil reserves, but increases in output are depend- the Akkas gas field, the country’s largest non-as-
ent on the injection of large volumes of water to sociated gas asset, and is actively looking for a

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