Page 4 - MEOG Week 38 2022

MEOG COMMENTARY MEOG

Iraq looks to expedite Eridu

development, Basra spill contained

Baghdad is keen to encourage its oilfield developers to ramp up
production from southern assets as exports face a short-term disruption.

IRAQ IRAQ’S Oil Minister this week met with dele- maximum remuneration rate for Block 10,
gates from Russia’s Lukoil to discuss the devel- which was awarded in the fourth licensing
opment of the Eridu oilfield and the remaining round, is $5.99 per barrel of oil equivalent (boe),
WHAT: phases of the West Qurna-2 (WQ-2) asset. though these terms are also understood to be
The Ministry of Oil has Meanwhile, exports were constrained following subject to ongoing amendment discussions.
held talks with Lukoil a spill at its key southern oil terminal. Eridu is spread across the Muthana and Dhi
about development plans The Ministry of Oil (MoO) published a state- Qar governorates, around 150 km west of Basra.
for the West Qurna-2 and ment in which it quoted Ihsan Abdul Jabbar as During a meeting with Stepan Gorgi, Lukoil’s
Eridu oilfields. saying that he and his colleagues are awaiting vice president for Central Asia, the Middle East
approval of the field development plan for Eridu, and North Africa, Abdul Jabbar expressed hopes
WHY: an undeveloped field located in Block 10. that production from the field would begin soon.
Iraq is working to add Operator Lukoil submitted its development Meanwhile, the delegates also discussed
several million barrels plan for the field and applied to state-owned Dhi WQ-2, which is operated by Lukoil and North
per day of oil production Qar Oil Co. (DQOC) in November 2021 “for Oil Co. (NOC), another regional subsidiary of
in the next five years. commerciality of reserves and filed a prelimi- the MoO.
nary proposal on the development of the Eridu The field has a capacity of around 450,000
WHAT NEXT: oilfield within Block 10,” according to the MoO. bpd, following the completion of the 50,000
Raising production will A declaration of commerciality was anticipated bpd final expansion phase targeting the Mishrif
increase the availability during Q1, but none has yet been forthcoming. formation out earlier this year. WQ-2 forms
of crude, but Baghdad Eridu was discovered in 2016 and is esti- the smaller of two development projects to tap
must not lose sight of mated to contain 7bn-12bn barrels of oil. Lukoil the West Qurna deposit, which has estimated
overdue work to stabilise holds 60% in the field’s technical services con- oil reserves of around 33bn barrels, with West
and expand export tract (TSC), in which it is partnered by Japan’s Qurna-1 (WQ-1) to the south holding the larger,
capabilities. Inpex Corp., which holds the remainder. The 20bn barrel share.
field development plan anticipates peak pro- The company is adding another 30,000 bpd
duction of 250,000 barrels per day (bpd) by 2027. through the first phase of development in the
Lukoil agreed preliminary terms with the Yamama formation following a three-well pilot
MoO for Eridu’s development in July, target- programme that last year targeted 10,000 bpd
ing an initial rate of 30,000 bpd by 2024. The from each well for a period of three months.

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