Page 4 - MEOG Week 09 2022

MEOG COMMENTARY MEOG

Iraq shuts in oilfields,

eyes increased production

Baghdad is set for another month of oil production disappointment having

shut in two sizeable fields, but improvements should be anticipated.

IRAQ IRAQ this week shut in one of its top produc- was taken offline on February 21 as part of ongo-
ing oil assets for work to expand capacity, while ing expansion works that are due to add a further
another was closed because of security concerns. 50,000 bpd to capacity.
WHAT: The moves come as data suggests that Iraq con- While Lukoil is yet to announce its 2021
The Nasiriyah and tinued to under-produce its OPEC+ targets in results with details about full-year production
West Qurna-2 oilfields January and receipts show that exports fell again at WQ-2, it averaged around 330,000-340,000
have both been shut in, in February. bpd during the first half of the year. This figure
though for quite different While the state-owned operators of the shut is likely to have risen to around 370,000-400,000
reasons. fields said that nearby assets could compensate bpd during Q3 and Q4.
for their combined almost 500,000 barrels per Speaking to local media last week, Hatem
WHY: day of combined production capacity, the clo- Abdul-Imam Khudair, NOC’s director for
Protests around the sures likely mean Iraq will fall short of its 4.37mn WQ-2, said that the asset would be offline for 21
Nasiriyah field have bpd March target. days “to implement the final development plan
persisted and the Having undershot its 4.28mn bpd January for the West Qurna field, prepared by the Minis-
developer was concerned target by around 130,000 bpd and data suggest- try of Oil and the Basra Oil Co.”
about a flare up. ing the February level was similar, Iraq con- He said that the projects associated with the
tinues struggling to push production upwards expansion of production include drilling several
WHAT NEXT: after reducing it to comply with more stringent wells and an associated water isolation system,
The larger WQ-2 asset OPEC+ quotas – a somewhat ironic situation as well as connecting the projects to the field’s
is undergoing expansion given its historic non-compliance with OPEC central processing facilities (CPF).
work that is vital to Iraq’s quotas. Khudair explained that operations at the
oil plans. CPF needed to be halted in order to carry out
Qurna-2 down the tie-up work.
Production will drop by nearly 10% through the The ongoing expansion is the final develop-
closure of the West Qurna-2 (WQ-2) field, which ment phase targeting the Mishrif formation,
is operated by Russia’s Lukoil and North Oil Co. which accounts for the full capacity. The com-
(NOC), a subsidiary of the Iraqi National Oil Co. pany is adding another 30,000 bpd through
(INOC). The asset is capable of 400,000 bpd but the first phase of development in the Yamama

Source: Rudaw

P4 www. NEWSBASE .com Week 09 02•March•2022