Page 5 - MEOG Week 35 2022

MEOG COMMENTARY MEOG

Southern concerns The two companies had signed a technical
Baghdad’s issues are equally combustible close services contract (TSC) for the field following
to home as violent clashes between rival groups the second licensing round in 2009.
broke out this week. This paid a maximum remuneration fee
Followers of Shi’ite cleric Moqtada al-Sadr of $1.39 per barrel, setting an ambitious pla-
took up arms on August 29 after he announced teau production target of 1.8mn bpd, which is
that he was retiring from politics, storming the unlikely ever to be reached.
presidential palace in Baghdad and surrounding With reserves of nearly 13bn barrels and far
the Majnoon oilfield and Basra oil refinery, both higher resources, Majnoon, whose name trans-
in the south-east of the country. lates as ‘insane’, is one of Iraq’s largest assets, but
At least 34 people were killed in clashes has so far failed to fulfil much of its potential.
between those loyal to Al-Sadr and support- In December last year, Oil Minister Ihsan
ers of former Prime Minister Nouri al-Maliki, Abdul Jabbar announced a production capacity
whose State of Law party aligns more closely target for Majnoon of 450,000 bpd, up from the
with neighbouring Iran. current 240,000 bpd and state-owned Iraqi Drill-
In a televised speech the following day, ing Co. (IDC) kicked off drilling at the first of a
Al-Sadr apologised for the violence. “I was hop- 43-well drilling campaign on behalf of BOC in
ing for a peaceful demonstration, not with mor- late February.
tars and weapons. I don’t want such revolution,” Meanwhile, in early March, the MoO
he said. Al-Sadr added: “This is not a revolu- reported that two water treatment plants had
tionary (anymore) because it has lost its peace- been inaugurated with 28 production wells
ful character […] The spilling of Iraqi blood is drilled and tied-in targeting the Hartha, Al-Zu-
forbidden.” bair, Ibn Omar and Mishrif formations.
Soon after, crowds began to disperse from “All wells were connected and introduced to
central Baghdad and the diplomatic Green Zone the production facilities to produce sweet oil,
and were expected to withdraw from Majnoon which contributes to improve the quality of oil,”
and the 210,000 bpd refinery, with local industry the MoO said.
sources telling Reuters that the protests would It noted that the water treatment projects
not affect Iraqi oil exports. included the construction of a 12-node pipeline
running 28 km from the Shatt al-Arab water-
Majnoon management way to Majnoon’s first central processing facility
Majnoon is of significant importance to Bagh- (CPF1), with associated infrastructure including
dad and the Ministry of Oil’s (MoO) efforts to a pumping station and a filtration and treatment
expand capacity from the current 5mn bpd to unit.
8mn bpd by 2027. Having lost IOC operators Abdul Jabbar has heaped praise on BOC for
Shell and Malaysia’s Petronas in 2017 amid con- reducing costs associated with the field by 30%
cerns about reservoir pressure and corruption, during the period it has been in charge of pro-
the state-owned Basra Oil Co. (BOC) – now a ceedings. Meanwhile, drilling work continues,
subsidiary of the Iraqi National Oil Co. (INOC) with IDC completing the MJ-136 well in collab-
– was put in charge. oration with Halliburton in July.™

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