Page 5 - MEOG Week 50 2021

MEOG COMMENTARY MEOG

licensing round in 2009. This paid a maximum state-owned China National Petroleum Corp.
remuneration fee of $1.39 per barrel, setting an (CNPC) and China National Offshore Oil Co.
ambitious plateau production target of 1.8mn (CNOOC).
bpd, which is unlikely ever to be reached. The US firm is partnered in WQ-1 by China’s
Abdul Jabbar lauded BOC for reducing costs PetroChina (32.7%), Japan’s Itochu (19.6%), Per-
associated with the field by 30% during the tamina (10%) and BOC (5%).
three and a half years it has been in charge of
proceedings. Other developments
In July, BOC and its engineering, procure- The MoO’s busy week continued as Abdul Jabbar
ment and construction management (EPCM) hosted the French and Japanese ambassadors at
lead on Majnoon field development, KBR, the ministry HQ in Baghdad and meetings were
awarded a contract to UK-based Proserv Con- held with incumbent operators to discuss exten-
trols to manufacture and deliver 22 wellhead sions to their planned developments.
control panels (WHCPs) for use in the field. The MoO’s Reservoirs and Fields Develop-
Each of these can control up to four wells at once ment Directorate (RFDD) held talks with WQ-2
and BOC intends to employ the units on 70 new operator Lukoil and TotalEnergies to increase
wells that continue to be drilled. Proserv has collaboration with the state on their sizeable
begun drilling the WHCPs and expects to com- upstream programmes.
plete the contract by the end of Q1 2022. Discussions with Lukoil surrounded the
While the IOCs appear to be sticking with company’s Block 10 concession containing the
Iraq, achieving the 2027 production target is Eridu field, for which the Russian firm and its
seen by many as unlikely. Data by S&P Global Japanese partner Inpex submitted development
Platts suggests that capacity will fall before recov- plans last month. These envisage peak pro-
ering to just under 5mn bpd by 2027. duction of 250,000 bpd from a reserve base of
However, a research note by consultancy 7-12bn barrels, starting at around 30,000 bpd in
IGM Energy highlights that field expansion pro- 2024.
jects could yield a significant uptick in capacity, Lukoil and the MoO met to discuss wider
though the firm’s best-case scenario envisages a exploration efforts in the block, for which the
total of around 7.1mn bpd, noting, though, that technical services contract (TSC), awarded dur-
this depends on the successful implementation ing the fourth licensing round, accords the part-
of TotalEnergies’ common seawater supply facil- ners a maximum remuneration fee of $5.99 per
ity (CSSF). This scenario identifies the super- barrel of oil equivalent (boe).
giant southern fields of Rumaila, West Qurna-1 Meanwhile, talks were held with the French
(WQ-1), West Qurna-2 (WQ-2) and Zubair as super-major to discuss potential collaboration
the providers of the largest output increases. with INOC on studies relating to the Nahr Umar
field east of Rumaila. Production at the asset is
Qurna confusion currently running at 40,000 bpd of oil and Bagh-
Meanwhile, confusion over the future of the dad has hopes of hitting a 100,000 bpd peak.
WQ-1 concession has continued amid reports During Q3, TotalEnergies signed off on a
that US services firm Halliburton was in discus- wide-ranging, $27bn deal that includes a simi-
sions as part of a consortium to acquire Exxon- lar incremental increase at the Ratawi oilfield, to
Mobil’s operated 32.7% stake. the west of Rumaila. There it will work to expand
Having last week denied that the company capacity from 85,000 bpd to a peak production
was in talks to buy the stake, Halliburton spokes- level of 210,000 bpd. However, MEOG under-
person Emily Mir said that it had been in talks stands that the talks focused on the recovery of
with US investment firm Twelve Seas Investment gas from Nahr Umar, which aligns even more
Co. to provides services for the asset, adding that closely with the broader deal, with the French
the talks have ended. firm having committed to build the $2bn Ratawi
“These discussions are typical course of busi- gas complex to process associated gas from
ness for us and similar to talks we have with cus- Ratawi, WQ-2, Majnoon and two smaller oil-
tomers everywhere – none of which call on us to fields – Tuba and Luhais.
buy an oilfield,” she said. Following a major push to keep IOC partners
Meanwhile, Abdul Jabbar said that BOC onside, the wranglings over ExxonMobil’s depar-
“wants to acquire Exxon’s stake, but to maintain ture, which have now rumbled on for around 12
the balance of partners and market, we support months, appear to be the main disappointment
a US partner”. This comes following BOC’s in what has otherwise been a highly productive
refusal of ExxonMobil’s plan to sell its share to and successful year in the Iraqi upstream.™

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