Page 5 - MEOG Week 38 2022

MEOG COMMENTARY MEOG

The field’s production plateau was previously had happened at the facility’s surplus oil storage
revised downwards first from 1.8mn bpd to system. It noted that loading and exporting from
1.2mn bpd and then to 800,000 bpd, though the ABOT’s single-point moorings (SPMs) had not
timeline for the latest revision was also extended been interrupted; rather that the interruption
from 2025 to 2030. had occurred at the main oil terminal.
A full 350,000 bpd addition to current out- BOC added that loadings had “returned to
put levels will be achieved through the Yamama their normal levels”, noting it would “compen-
expansion. This will account for a major part sate for the pauses in the coming days by pump-
(more than 10%) of the country’s plans to ing additional quantities, without affecting the
expand oil production capacity by 3mn bpd to planned export rates”.
8mn bpd by 2027. The company concluded by saying that the
Lukoil holds a 75% stake in the WQ-2 TSC spillage had been dealt with “in a record time
alongside the state-owned North Oil Co. This not exceeding 24 hours”.
accords the developers a maximum remunera- BOC has been working to rehabilitate two
tion fee of just $1.15 per barrel, and according pipelines that feed the nearby Khor al-Amaya
to Wood Mackenzie, Lukoil’s net profit from Oil Terminal (KAAOT). Ruptures in the con-
WQ-2 is just $0.56 per boe when considering duits forced the terminal to go offline in 2017
state equity interest and tax, with this dropping and only return to operations briefly in the inter-
to $0.19 per boe after applying the performance vening period.
factor. A contractor has been hired to find and repair
Abdul Jabbar emphasised the need that the fault, while a third pipe is to be installed, aim-
Lukoil maintain its efforts to increase production ing to resume exports from KAAOT’s SPMs by
and expedite investment towards harnessing the end of 2023. When operations resume, the
associated gas production. WQ-2 currently pro- terminal is anticipated to operate at around
duces around 150mn cubic feet (4.25mn cubic 400,000 bpd, down from its 600,000 bpd capacity
metres) per day of associated gas. prior to going offline.
In March, BOC said that the pipeline over-
Basra spill haul is part of efforts to increase crude export
The MoO released two other statements over capacity from the southern ports to 6mn bpd by
the weekend, first announcing that an oil spill 2026. This will include the laying of two 48-inch
had occurred at the Al-Basrah Oil Terminal (1,066-mm) pipelines as well as the construction
(ABOT) on September 15, then that it had been and installation of new SPM facilities, with BOC
contained. The spill saw export capacity con- preparing a tender worth around $1bn that will
strained by 1mn bpd, with Basra Oil Co. (BOC) be opened up to international companies. Iraq’s
saying that its technical and engineering teams current export capacity from its southern oil ter-
had worked swiftly to mitigate the spill, which minals is around 3.4mn bpd.™

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