Page 4 - MEOG Week 26 2022

MEOG COMMENTARY MEOG

Companies comply with

Baghdad amid major field news

Federal Iraqi authorities have been informed of decisions to comply with a court ruling
on the status of the KRG energy sector as major oilfield projects maintain their allure.

IRAQ IN the two weeks since Baghdad’s latest threat of Oil (MoO) that they would heed Baghdad’s
to oil companies operating in the semi-auton- warning not to engage further with the Kurdis-
omous Kurdistan region, services firms have tan region’s energy sector.
WHAT: begun picking their side to ensure they can All three companies have said they will not
Three American services compete in future contracts. Meanwhile, updates engage in any further tender processes in the
firms have said they will have been provided about the future of two of the KRG without the MoO’s prior approval.
comply with the central country’s most important oilfields. In September, Baker Hughes signed a deal
government’s view of oil Earlier this month, companies working with with the MoO to capture up to 200mn cubic feet
and gas developments in the Kurdistan Regional Government (KRG) and (5.7mn cubic metres) per day of gas from the
the Kurdistan region. its Ministry of Natural Resources (MNR) were fields – 80 mmcf (2.27 mcm) from Nassiriyah
issued with a letter instructing them to end such and 120 mmcf (3.4 mcm) from Gharraf. This
WHY: collaboration and the last 10 days has seen three provided for the American company to con-
As Iraq works to expand US services specialists make commitments to struct modular gas processing facilities at the
production capacity, comply. oilfields to capture associated gas and built on a
large contracts continue Their choice is unlikely to have been a diffi- 2017 agreement between Baker Hughes and the
to be handed out for field cult one, given Iraq’s vast oil and gas resources South Gas Co., which sought to produce around
development. and the larger size of deals with Baghdad rather 100 mmcf (2.8 mcm) per day of gas by dehydrat-
than Erbil. However, for operators of assets in the ing and compressing associated gas from the two
WHAT NEXT: region, such a switch is clearly not possible. fields.
While IOCs are Companies were reported to have received a Halliburton has major contracts to collabo-
highly unlikely to letter from Hassan Muhammad Hassan, direc- rate on drilling work with the Iraqi Drilling Co.
be willing or able to tor-general of Basra Oil Co. (BOC), a subsidi- (IDC) and is widely expected to be included in a
walk away from field ary of the Iraqi National Oil Co. (INOC), telling consortium with Saudi Aramco to develop Iraq’s
development projects, them to cease activities in the region and ter- largest non-associated gas field, Akkas, with a
more contractors may minate their production-sharing agreements decision to be made soon. The field, which is
follow suit in pledging (PSAs), in compliance with the February ruling estimated to contain a total resource of 5.6 tril-
allegiance to Baghdad. by the Federal Supreme Court that Erbil’s inde- lion cubic feet (159bn cubic metres) of gas and
pendent control of the energy sector is uncon- recoverable reserves of around 3-3.5 tcf (85-99
stitutional. They were given 90 days to comply bcm), is located around 30 km from the Syrian
and pledge not to work in the Kurdistan region. border in the restive Western Desert.
Schlumberger was also previously touted
Services switch for work on Akkas and is undertaking a 37-well
According to local press that viewed leaked drilling campaign with IDC at the 6.4bn-barrel
documents, Baker Hughes, Halliburton and Zubair oilfield as its Italian operator Eni works
Schlumberger have all informed Iraq’s Ministry to increase production from 475,000 barrels per

P4 www. NEWSBASE .com Week 26 29•June•2022