Page 5 - MEOG Week 06 2023

MEOG COMMENTARY MEOG

Sources: OIES

never left the country. Majnoon and West Qurna-1 (WQ-1) assets,
This followed comments by Iraqi Ministry narrowing its focus to the Basra Gas Co. (BGC)
of Oil (MoO) spokesman Assem Jihad on Feb- development of associated gas from major oil-
ruary 2 that talks between the parties have been fields. Meanwhile, BP has reduced its exposure
extended to deal with ‘sticking points’. “Some to the country and ExxonMobil has been trying
time has been given to continue the conversation to withdraw from WQ-1 for the last two years,
to reach a solution that is agreeable to all parties, with a deal to sell its stake to BOC for around
concerning some sticking points, including the $350mn held up by court proceedings.
shareholding in the project,” he said. Elsewhere, Japan’s Inpex is looking to offload
Such issues are thought to include the French its 40% stake in the Block 10 technical service
company’s desire to hold a majority stake and contract (TSC) which covers the Eridu oilfield
Iraq’s determination to hold 40% – a potential in which it is the junior partner alongside Rus-
stumbling block if QatarEnergy is to also hold a sia’s Lukoil. The Russian firm was also reported
minority share. to have been considering pulling out of the West
This point was said to have been part of dis- Qurna-2 concession, though high-level discus-
cussions between Iraqi Prime Minister Moham- sions in Baghdad brought a change of heart.
med al-Sudani and TotalEnergies’ CEO Patrick Meanwhile, Iraq is looking to raise oil pro-
Pouyanne last week. These talks followed the duction capacity to 7mn bpd by 2027 from the
signing of a strategic partnership between Iraq current level of just under 5mn bpd, with IDC
and France covering anti-corruption, security, leading the drilling push.
renewable energy and culture, as well as the The nationwide target was reaffirmed in
implementation of the 2021 deal. However, mid-November by Alaa Alyasri, director-general
the disagreement about Iraq’s share in the pro- of the state oil marketer SOMO, but has come
ject was reported to have caused a rift in the under scrutiny given inconsistency in statements
discussions. by former Oil Minister Ihsan Abdul Jabbar, who
Sources were quoted by Reuters as saying that suggested at various points in the last year or so
the Iraqi government is unable to alter the pre- that capacity could reach 8mn bpd, and at others
vious administration’s demand for a 40% stake 7mn bpd. Abdul Karim noted this week that oil
without being seen to be handing over more of production from Iraq’s southern oilfields cur-
the country’s rights. rently stands at 3.59mn bpd.
Jihad noted: “We emphasise that there is a will Given the international brain drain from
to go forward towards an agreement which will Iraq’s upstream in recent years, it can ill afford
take into consideration the benefit of both par- for TotalEnergies to give up on what would be a
ties [… We have no problems with TotalEnergies transformative project for the country, particu-
and our relationship is good and growing.” larly the gas development and the long-awaited
progress on supplying seawater from the Gulf
Production push to its supergiant assets in and around the Basra
While the entry of QatarEnergy would mark a Governorate.
coup for Baghdad, the potential breakdown in Seawater supply will be pivotal to achieving
negotiations with TotalEnergies – and the com- the capacity increase and while concessions may
pany’s subsequent departure – would be an even prove a challenging pill to swallow for Baghdad,
larger loss. it may find that there are few more attractive
Shell has already withdrawn from the alternatives.™

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