Page 4 - MEOG Week 34

MEOG COMMENTARY MEOG

US firms sign

Iraq energy deals

$8bn worth of deals were signed last week between US energy firms
and the government of Iraq as Baghdad continues pivot away from Iran.

IRAQ FIVE US oil & gas and power firms signed deals negotiations for an exploration, development,
worth a total of $8bn last week during a state visit and production contract in the country’s south-

to Washington by top Iraqi diplomats. The news ern Dhi Qar Province.
WHAT: comes as Baghdad continues to seek external As reported by Middle East Oil & Gas
Deals were signed support in building out its energy sector and (MEOG) last week, this will lead to the further
between the Iraqi pivoting away from Iran, which had become development of the Nassiriya oilfi eld in Dhi Qar

government and increasingly influential over the past five years Province. Th e fi eld has a production capacity
five US energy or so. of 90,000 barrels per day of crude from an esti-

companies focusing The deals were signed by Prime Minister mated 4.36bn barrels of recoverable reserves,
on oil production, gas Mustafa al-Kadhimi during a ceremony at the though output is around 15,000-20,000 bpd
capture and electricity White House, which was attended by US Pres- lower. Chevron is reported to be discussing fur-
generation. ident Donald Trump and Energy Secretary Dan ther exploration work on the asset.
Brouillette. Al-Kadhimi was joined by Iraqi The MoO has previously spoken of inten-
WHY: Minister of Oil Ihsan Abdul-Jabbar Ismail and tions for the fi eld to produce above 100,000 bpd
The country’s power Minister of Electricity Majid Mahdi Hantoush. and such a target will likely be included in any
sector has struggled “As two of the top oil producers in the world, agreement.
badly and Baghdad the United States and Iraq share an appreciation Finance Minister Ali Allawi told the Atlantic
remains reliant on for how energy shapes our economies and can Council: ““I think it’s beyond an MoU stage. It is
neighbour Iran for gas strengthen our respective security,” Brouillette a detailed drilling programme and 3D mapping
and electricity. said in a press release. of what we think is a very, very significant undis-

He added that together, he and the Iraqi dele- covered oil-producing area.” On August 24,
WHAT NEXT: gation had “laid the groundwork for commercial Ismail told state media that Baghdad had plans
Iraq has said that it will partnerships worth up to $8bn [that are] key to in place to increase output from Dhi Qar to 1mn

reduce imports from Iraq’s energy future.” bpd by 2025, which would require a significant
Iran, but this will depend increase from Nassiriya.
greatly on the progress Deals Meanwhile, Iraq’s intention to build out its
made in capturing gas, The deals emphasise Baghdad’s focus on improv- gas capture and utilisation capabilities was high-

and grid connectivity. ing the country’s connectivity, and while oil pro- lighted in deals with services firms Baker Hughes

duction and exports are likely to remain the key and Honeywell. Th e former agreed to further
source of wealth for generations to come, the collaboration on fl are gas-to-power opportuni-
lack of reliable access to electricity has become a ties, and the deployment of oilfi eld services and
factor leading to major protests and civil unrest. equipment, while the latter agreed to advance the
Chevron agreed a framework deal with the development of the Ar Ratawi gas project.
Ministry of Oil (MoO) to enter into exclusive Progress on gas capture will be complemented

P4 www. NEWSBASE .com Week 34 26•August•2020