Page 9 - MEOG Week 40 2021

MEOG POLICY & SECURITY MEOG

Baghdad approves INOC participation

in TotalEnergies projects

IRAQ IRAQ’S Cabinet this week gave approval for the to produce around 12,000 bpd of condensate and
Iraqi National Oil Co. (INOC) to partner with 38,000 bpd of LPG.
TotalEnergies on its array of oil, gas and renewa- Iraqi Oil Minister Ihsan Abdul Jabbar said
bles projects in Basra. The move comes as Bagh- that the gas produced by TotalEnergies would be
dad is working to re-establish the state oil firm, cost around $6.50 per million Btu, less than that
which was incorporated into the Ministry of Oil of gas which is currently imported from Iran for
(MoO) in 1987. around $8 per mmBtu.
Last month, the French firm signed a deal to The French company will invest $3bn in a
invest in oil production, associated gas recovery 7.5mn bpd seawater supply facility that has been
and processing, the supply of water for increas- on the drawing board since 2010. With the pro-
ing oil output and a 1-GW solar project. ject already delayed by nearly a decade, talks
TotalEnergies said that engineering work broke down with previous operator ExxonMo-
would begin immediately, with the firm mak- bil in 2019.
ing an initial investment of $10bn, but the MoO
envisages a total investment of $27bn over the Sonangol talks
deal’s four projects, estimating the revenues from Also this week, Abdul Jabbar and his INOC
the 25-year contract at $95bn based on an oil deputies held discussions with the leadership
price of $50 per barrel. of Angolan NOC Sonangol over the firm’s role
CEO Patrick Pouyanne noted that TotalEn- in developing the Qayyarah oilfield in Nineveh
ergies would mobilise teams in Iraq by the end Governorate.
of the year. A long-term technical service contract (TSC)
During the same week INOC’s newly was signed for the heavy oil deposit during the
appointed board of directors approved the firm’s second licensing round in 2009, which set a
bylaws, while the MoO was instructed to transfer production plateau target of 120,000 bpd with a
control of its regionally focused firms to the new maximum remuneration of $5 per barrel.
company. During the meeting, INOC and MoO execu-
Oil Minister and INOC president Ihsan tives expressed their keenness to overcome tech-
Abdul Jabbar was reported to have instructed the nical, financial “and other” obstacles to achieve
MoO to hand over control of seven state-owned plans for the field.
companies to INOC – Basra Oil Co. (BOC), The Qayara field lies in the restive Ninevah
Midland Oil Co. (MOC), North Oil Co. (NOC), province, far from both the main export outlets.
Dhi Qar Oil Co. (DQOC), Maysan Oil Co., Oil Output from the field had been carried by truck
Exploration Co. (OEC) and State Company for to the port of Khor Al-Zubair, but, according to
Oil Projects (SCOP). MEES, this was halted in April 2019 owing to a
Abdul Jabbar is being charged with running reduction in the netback value of heavy crude.
the firm in addition to his ministerial duties. Production resumed in Q2 this year at around
Just over a year ago the Cabinet amended the 10,000 bpd, short of the asset’s 25,000-30,000 bpd
2018 INOC legislation following objections by capacity. Sonangol had been looking to roughly
the Federal Supreme Court to the law, which double capacity at the field prior to the early 2020
was deemed to be unconstitutional. This saw drop in oil price.™
the creation of the INOC governing board and
advisory board and the conducting of a valuation
of all companies to be moved from the MoO to
INOC’s authority.
INOC, which was established in 1966, will be
a “separate corporate entity enjoying financial
and administrative autonomy, represented by
the president.”
Under its deal, TotalEnergies will begin with
work to expand the capacity of the Ratawi oilfield
west of Basra from the current 85,000 barrels per
day to a peak production level of 210,000 bpd.
It will then invest $2bn to construct the
Ratawi gas complex, which will process associ-
ated gas from the southern oilfields of Ratawi,
West Qurna-2, Majnoon, Tuba and Luhais.
The facility will have a processing capacity of
600mn cubic feet (17mn cubic metres) per day

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