Page 5 - MEOG Week 21 2021

MEOG COMMENTARY MEOG

to be set for further conflict”. While ExxonMobil Baghdad began soliciting bids from IOCs to
is believed to have dragged its feet on aspects of replace the incumbent TPAO-led consortium in
the WQ-1 development, most notably the com- October, with Total again reported to have been
mon seawater supply project (CSSP) which is a in the mix in December. Gas produced from the
prerequisite for increasing oil production from field will feed the nearby Mansouriyah power
southern fields, there has not yet been any sug- station and one in Baghdad.
gestion of animosity between it and Baghdad.
ExxonMobil, which operates the field, has Gas initiatives
already divested nearly half of its original 60% The movement on the Akkas and Al-Man-
and is partnered by PetroChina (32.7%), Japan’s souriya gas fields comes against a highly politi-
Itochu (19.6%), Indonesia’s Pertamina (10%) cal backdrop because of the potential for easing
and Iraq’s state-owned Oil Exploration Co. Iraq’s reliance on Iran and US sanctions waivers
(OEC, 5%). to continue importing gas and electricity.
Meanwhile, the potential involvement of a
Akkas Saudi company is particularly noteworthy given
Meanwhile, little-known Saudi firm Delta Oil that Iraq has facilitated recent talks between
is understood to be under consideration as Riyadh and Iran.
a potential partner for US services specialist Earlier this month, Baghdad reached a deal
Schlumberger for the development of Iraq’s with Tehran for settling outstanding debts to
Akkas gas field. the Islamic Republic for gas. The agreement
In February, Iraqi Oil Minister Ihsan Abdul was announced after a meeting between Iraqi
Jabbar had spoken of his hopes that Saudi Ara- Electricity Minister Majid Mahdi Hantoush and
mco would take a role in the project, noting Iranian Energy Minister Reza Ardakanian in
that a consortium led by Schlumberger was the Tehran.
front-runner take over Akkas, with Baghdad The visit followed a reduction in flows by the
planning to terminate an agreement with Korea National Iranian Gas Co. (NIGC) as a result of
Gas Corp. (KOGAS). arrears building up from previous payments.
The MoO is known to have been courting Following his meeting with Hantoush, Iranian
new developers for Akkas for some time, with Oil Minister Bijan Zanganeh said that two major
the field believed to have been brought up in gas export deals had been signed, while “27 bcm
talks with French super-major Total, which led of gas has been exported to Iraq … but the pay-
to the broad, multi-billion dollar deal agreed ment is facing problems and we hope we could
earlier this year that will cover oil production, reach a solution on the issue.”
capture of associated gas, solar and the CSSP. Iraq has also spoken to Syria about potentially
Akkas is the country’s largest non-associated importing Egyptian gas through the country,
gas field, holding 5.6 trillion cubic feet (159bn though this would require major rehabilitation
cubic metres). Production was anticipated work on damaged conduits connecting Baniyas
reaching 400mn cubic feet per day, but progress and either Haditha in central Iraq or an old line
by KOGAS and Turkish partner TPAO has been which links to the Kirkuk-Ceyhan in the north.
limited. This has largely been caused by its loca- Closer to home, and perhaps more proba-
tion in the north-western Anbar governorate, a ble, is the initiative by Baghdad to invest around
long-time stronghold of IS until its expulsion in $3bn in the Basra Gas Co. joint venture (JV) over
late 2017. the next five years to facilitate a gas production
The MoO then requested that the companies increase to 1.4bn cubic feet (40 mcm) per day.
resume work, with KOGAS awarding a contract With the development of gas fields and tap-
to the UK’s Petrofac to modify the front-end ping associated gas a major hurdle to Iraqi eco-
engineering and design (FEED) contract for the nomic diversification, there appears to be plenty
field’s gas plant. of political will behind them.
The announcement follows the April However, concerns about Akkas’ continued
announcement by the MoO that China’s Sinopec struggles with insurgency and a lack of a track
had been chosen to partner with state-owned record are perhaps indicated by Baghdad’s
Midland Oil Co. for the development of the 4.6 embracing of Iranian imports, and while there is
tcf (130 bcm) Al-Mansouriyah gas and conden- reason for optimism, Iraq’s courting of Syria as
sate field, another of Iraq’s largest non-associated a conduit for gas is illustrative of its desperation
gas assets. for options.™

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