Page 13 - NorthAmOil Week 34

NorthAmOil COMMENTARY NorthAmOil

US firms sign Iraq energy deals

Around $8bn worth of deals were signed last week between US energy firms and

the government of Iraq as Baghdad continues pivot away from Iran

US-IRAQ FIVE US oil and gas and power firms signed and production contract in the country’s south-
deals worth a total of $8bn last week during a ern Dhi Qar Province.
WHAT: state visit to Washington by top Iraqi diplomats. As reported by NewsBase last week, this will
Deals were signed The news comes as Baghdad continues to seek lead to the further development of the Nassiriya
between the Iraqi external support in building out its energy sector oilfield in Dhi Qar Province. The field has a
government and and pivoting away from Iran, which had become production capacity of 90,000 barrels per day
five US energy increasingly influential over the past five years of crude from an estimated 4.36bn barrels of
companies focusing or so. recoverable reserves, though output is around
on oil production, gas The deals were signed by Prime Minister 15,000-20,000 bpd lower. Chevron is reported
capture and electricity Mustafa al-Kadhimi during a ceremony at the to be discussing further exploration work on the
generation. White House, which was attended by US Pres- asset.
ident Donald Trump and Energy Secretary Dan The MoO has previously spoken of inten-
WHY: Brouillette. Al-Kadhimi was joined by Iraqi tions for the field to produce above 100,000 bpd
The country’s power Minister of Oil Ihsan Abdul-Jabbar Ismail and and such a target will likely be included in any
sector has struggled Minister of Electricity Majid Mahdi Hantoush. agreement.
badly and Baghdad “As two of the top oil producers in the world, Meanwhile, Iraq’s intention to build out its
remains reliant on the United States and Iraq share an appreciation gas capture and utilisation capabilities was high-
neighbour Iran for gas for how energy shapes our economies and can lighted in deals with services firms Baker Hughes
and electricity. strengthen our respective security,” Brouillette and Honeywell. The former agreed to further
said in a press release. collaboration on flare gas-to-power opportuni-
WHAT NEXT: He added that together, he and the Iraqi dele- ties, and the deployment of oilfield services and
Iraq has said that it will gation had “laid the groundwork for commercial equipment, while the latter agreed to advance the
reduce imports from partnerships worth up to $8bn [that are] key to development of the Ar Ratawi gas project.
Iran, but this will depend Iraq’s energy future.” Progress on gas capture will be comple-
greatly on the progress mented by deals with General Electric and Stel-
made in capturing gas, Deals lar Energy. GE signed three agreements that will
and grid connectivity. The deals emphasise Baghdad’s focus on improv- improve the reliability of access to electricity,
ing the country’s connectivity, and while oil pro- including efforts related to GE’s existing gener-
duction and exports are likely to remain the key ation maintenance programme, adding com-
source of wealth for generations to come, the bined cycle units at the Dhi Qar and Samawah
lack of reliable access to electricity has become a power plants, and collaboration on strengthen-
factor leading to major protests and civil unrest. ing Iraq’s electricity grid and interconnection
Chevron agreed a framework deal with the with neighbouring countries. This final point
Ministry of Oil (MoO) to enter into exclusive gained traction when Finance Minister Ali
negotiations for an exploration, development, Allawi told the Atlantic Council that Baghdad

Week 34 27•August•2020 www. NEWSBASE .com P13