Page 7 - MEOG Week 23
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MEOG Commentary MEOG
all repairs and upgrades to southern Iraq’s stor- age, pipelines and export facilities.
Despite its importance, progress on the CssP has been painfully slow. However, Abdul Jabbar said last week that south Korea’s Hyundai Engi- neering & Construction had been selected to build a Us$2.4 billion ‘seawater injection facil- ity’ and that the award was pending ministry approval.
MEOG understands that bidders for the EPC contract for the pipelines included UK-based Biwater, Petrofac and Hyundai E&E, but on June 2, MEED reported that Hyundai was no longer bidding for an ‘Iraqi seawater pipeline package’ ahead of a bid deadline of June 16.
Marathon deal reaches nish line
To the north, Us-based Marathon Oil announced on May 31 that it had “closed on the sale of its 15% participating interest in the Atrush Block in Kurdistan”, meaning that the company has now divested from 10 countries since 2013.
Marathon’s departure brings to an end a divestment process prolonged by disagree- ment between Atrush’s Abu Dhabi govern- ment-owned operator TAQA and minor stakeholder shaMaran of Canada.
e latter agreed a deal with Marathon last year to acquire the full 15%, taking the Cana- dian rm’s share to 35.1%, but TAQA, holding 39.9%, blocked the deal in November, in keeping with a history of di cult relations between the partners.
A deal was reached in December that would give TAQA and shaMaran another 7.5% each, taking their holdings to 47.4% and 27.6%, respectively for a total fee of Us$63 million.
Celebrating the announcement, shaMaran noted that production from the eld has been running at 32,000 bpd, adding that it maintained its annual guidance of 30,000-35,000 bpd. e Canadian rm’s 2018 revenues from Atrush were Us$69.6 million.
It previously announced that it was testing heavy oil from its Atrush-3 well and was plan- ning to dilute the crude with oil from the nearby Chiya Khere-10 well. Heavy oil capabilities at Atrush are 5,000 bpd, taking full- eld capacity to 35,000 bpd.
In February the company announced that an independent evaluation by Canada’s McDaniel & Associates had increased estimated gross 2P reserves at Atrush from 102.7 million barrels at the end of 2017 to 106 million barrels on Decem- ber 31, 2018. is took into account 2018 pro- duction of 8 million barrels. e gure for 2C reserves was cut from 296 million barrels to 268 million barrels.
e company has repeatedly said that output could ultimately reach 100,000 bpd and said it hoped that investment decisions necessary to deliverthehikecouldbemade“byearly2020”.
Crude from Atrush is purchased by the Kurdistan regional Government (KrG) at the block boundary and pumped through the main Kirkuk-Ceyhan export pipeline. e discount from the monthly average Dated Brent price was reduced from Us$15.73 to Us$15.43 in an amended sales agreement signed in December
While political and corporate bullishness on Iraqi upstream opportunities has in recent years been largely unfulfilled, the latest announce- ments give some cause for optimism in the short-term.
Week 23 11•June•2019 w w w . N E W S B A S E . c o m P7
