Page 4 - MEOG Week 38 2021

MEOG COMMENTARY MEOG

Work ongoing to expand

Halfaya as Iraq gas deal agreed

Iraq is moving to increase oil production, while fitful efforts to develop gas resources

have been boosted by an agreement to capture associated gas from southern oilfields.

IRAQ IRAQ’S state-owned Missan Oil Co. (MOC) this barrels. Middle East Oil & Gas (MEOG) under-
week confirmed that work remains ongoing with stands that the full cost of extraction at Halfaya
its Chinese partner to develop the Halfaya oil- is $15 per barrel, compared with an average of
WHAT: field, while a major gas capture deal was agreed $5 per barrel across other Iraqi fields, including
Work is ongoing to with US-based Baker Hughes. capital expenditure.
increase oil production at The two developments are illustrative of PetroChina is believed to have invested at
the south-eastern Halfaya Baghdad’s dual-pronged strategy of achieving a least $3bn in Phase 1 and 2 of Halfaya.
field while drilling 3mn barrel per day (bpd) hike in oil production In August state-owned Iraqi Drilling Co.
continues nearby. capacity by 2027 and increasing the availability (IDC) signed an agreement with the China
of gas for electricity generation and industrial National Offshore Oil Co. (CNOOC) to drill
WHY: uses. 150 wells at the Buzurgan oilfield in Missan.
Baghdad is pushing to At the time, IDC director Bassim Abdul Karim
raise oil production from Missan possible said that the contract would be carried out in two
5mn bpd now to 8mn bpd Halfaya is the largest oilfield in the eastern May- stages, the first of which would include the drill-
by 2027. san Governorate and the remaining third devel- ing of 71 wells, with the second to be kicked off
opment phase is seen adding another 100,000 at a later date.
WHAT NEXT: bpd to the current production capacity of around Abdul Karim noted that 22 of the wells would
Baker Hughes this week 300,000 bpd. The expansion work aligns with the be drilled in partnership with China National
signed a deal to capture MoO’s intention of raising oil output from 5mn Petroleum Corp. (CNPC) subsidiary CNPC
5.7 mcm per day of bpd to 8mn bpd by 2027. Bohai Drilling Engineering Co. (BHDC) “at a
associated gas from the Speaking to the Iraqi News Agency (INA) this cost of up to $160mn”.
Gharraf and Nassiriyah week, MOC director-general Ali Jassim Ham- Buzurgan is joined by Abu Ghraib and Faqqa
oilfields. moud said that the partners remain engaged to comprise the Missan Oil Fields concession,
in projects under the field’s third development which is overseen by MOC, which is also respon-
phase to achieve the 400,000 bpd production sible for the development of the Amara and Noor
plateau agreed when plans for the field’s devel- fields that are operated under state control.
opment were revised in 2013. A 20-year technical services contract (TSC)
The original 2009 contract signed with China for the Missan fields was awarded in 2009 to a
National Petroleum Corp. (CNPC) subsidiary consortium of CNOOC (63.75%), Turkey’s
PetroChina set a maximum remuneration fee of TPAO (11.25%) and IDC (25%) calling for pla-
$1.40 per barrel to reach a production plateau of teau production to reach 450,000 bpd based on
535,000 bpd, with the target revised downward a maximum remuneration fee of $2.30 per bar-
when the government decided its 11mn bpd rel. The fields are believed to contain combined
production target was too ambitious. reserves of 1.5-1.7bn barrels.
Hammoud told INA: “Halfaya oilfield is one
of the most prominent fields of [MOC], as it is Gas gathering momentum
being developed by CNPC under its contract To the south, Baker Hughes this week agreed a
with the Ministry of Oil [MoO] to reach the pro- deal with the MoO to capture up to 200mn cubic
duction of 400,000 bpd.” feet (5.7mn cubic metres) per day of gas from the
He added: “The development operations also Nassiriyah and Gharraf oilfields in Dhi Qar Gov-
include benefiting from the associated gas of ernorate. The signing ceremony was attended by
crude oil in operating electric power plants and local and American officials, including Ambas-
sustainable energy projects, and implementing sador Matthew Tueller.
projects aimed at improving the service situa- The company will construct modular gas
tion for the people living near the development processing facilities at the oilfields to capture gas
projects.” associated with oil production.
Halfaya is located 35 km south of the city of The deal builds on a 2017 agreement between
Amarah and has estimated oil reserves of 4.1bn the US firm and the South Gas Co. which sought

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