Iraq Oil & Gas News


Basrah Gas Company to Increase Capacity by 40%

By John Lee.

Shell has reportedly announced that the Basrah Gas Company (BGC) has taken a “final investment decision (FID)” on its growth programme, which will increase BGC’s capacity by 40 percent.

According to Oil and Gas Middle East, the decision was taken with the support of all BGC’s shareholders: South Gas Company (SOC), Shell and Mitsubishi.

BGC captures flared gas from the Rumaila, West Qurna 1 and Zubair oilfields, converting it into dry gas for power generation and liquids for the domestic market and for exports.

At the heart of the new development is the Basrah Natural Gas Liquids (Basrah NGL) project; a 400 million standard cubic feet per day greenfield gas processing plant at Ar Ratawi.

More here.

(Source: Oil and Gas Middle East)

Taq Taq Oil Reserves Update

Genel Energy has announced that McDaniel and Associates (‘McDaniel’) has completed the competent person’s report (‘CPR’) relating to the oil reserves at Taq Taq as at 31 December 2018.

Field performance in 2018, and notably the success of the TT-29w well drilled on the northern flank of the field, has led to an upwards technical revision of reserves, resulting in a 62% reserves replacement at the 1P level.

This revision does not take into account the recent positive results from the TT-32 well, which completed in 2019 and is currently adding over 3,000 bopd to field production.

Drilling in 2019 is targeting opportunities on the flanks of the field, with the TT-20z well nearing completion and three others then to follow. Should the wells match the performance of TT-29w and TT-32, Taq Taq could deliver a significant year-on-year production increase, with room for further growth in 2020.

The Company expects to announce CPR reports for other assets in the portfolio prior to the announcement of full-year results on 20 March 2019.

(Source: Genel Energy)

DNO Increases Oil Reserves, Shares Rise

Shares in DNO ASA, the Norwegian oil and gas operator, were trading up five percent on Monday afternoon following the company’s announcemnt that it has replaced 2018 production through additions to reserves, marking the second consecutive year in which the Company’s replacement of proven reserves reached or exceeded 100 percent of production.

“DNO’s stellar record of reserves replacement through the drill bit is a result of stepped up spending on our portfolio of quality assets coupled with rapid-fire execution,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman. “And the barrels we continue to add are among the lowest cost in the industry, anywhere,” he expounded.

Yearend 2018 Company Working Interest (CWI) proven (1P) reserves stood at 240 million barrels of oil (MMbbls), unchanged from yearend 2017 after adjusting for production and technical revisions. On a CWI proven and probable (2P) reserves basis, DNO replaced 98 percent of its 2018 production, exiting the year with CWI 2P reserves of 376 MMbbls (384 MMbbls in 2017).

At 2018 production rates, DNO’s 1P reserves life is 8.2 years and its 2P reserves life is 12.9 years.

Significantly, the Company’s 1P reserves replacement ratio (RRR) has reached or exceeded 100 percent in eight of the past ten years.

On a gross basis, at the Tawke license in the Kurdistan region of Iraq containing the Tawke and Peshkabir fields, yearend 2018 1P reserves stood at 348 MMbbls, unchanged from 2017 after adjusting for production of 41 MMbbls and upward technical revisions of 41 MMbbls. Tawke license 2P reserves stood at 502 MMbbls (513 MMbbls in 2017) and proven, probable and possible (3P) reserves at 697 MMbbls (880 MMbbls in 2017).

Broken down by field, Tawke field gross 1P reserves stood at 294 MMbbls (335 MMbbls in 2017), 2P reserves at 376 MMbbls (438 MMbbls in 2017) and 3P reserves at 477 MMbbls (588 MMbbls in 2017). Peshkabir field gross 1P reserves stood 54 MMbbls (13 MMbbls in 2017), 2P reserves at 126 MMbbls (75 MMbbls in 2017) and 3P reserves at 220 MMbbls (292 MMbbls in 2017).

International petroleum consultants DeGolyer and MacNaughton carried out the annual independent assessment of the Tawke license. The Company internally assessed the remaining licenses in its portfolio.

The 2018 Annual Statement of Reserves and Resources, prepared and published in accordance with Oslo Stock Exchange listing and disclosure requirements (Circular No. 1/2013), is attached and is also available on the Company’s website at www.dno.no.

(Sources: DNO, Yahoo!)

Lukoil Drills New Production Wells at West Qurna-2

Russian oil company Lukoil has commenced drilling of new production wells at West Qurna-2 field as part of the second development phase.

The company has so far concluded contracts to drill 57 production wells, including 54 wells at Mishrif formation and 3 wells at Yamama formation.

The drilling campaign will ramp up production at West Qurna-2 from the current level of 400 thousand barrels per day to 480 thousand barrels per day in 2020.

To deliver the project Lukoil uses an approach to cluster drilling which envisages erection of two drilling rigs at one well pad.

This approach is new for Iraq and will provide for significant field development speed up and production growth within the shortest time.

Over five hundred Iraqis, residing in proximity to West Qurna-2 field, will be employed for the drilling campaign.

(Source: Lukoil)

Oil Smugglers can count on Corruption in Iraq

By Adnan Abu Zeed for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Accusations are flying about oil smuggling in Iraq’s Ninevah province, and many accusers say government officials, armed factions and other powerful parties are involved.

Representatives of the province, including parliament member Ahmed al-Jubouri, have said recently that oil is being smuggled from the Ninevah wells.

That news coincided with Osama al-Nujaifi, head of the Iraqi Decision Coalition, telling the media Feb. 1, “Security forces sent out military vehicles to halt the smuggling operations, but armed parties controlling the wells stood in the way.”

Click here to read the full story.

Iran, Iraq to Use Euro, Dinar in Oil Trade

The governor of the Central Bank of Iran unveiled plans for using non-dollar accounts for oil and gas trade with Iraq.

Abdolnaser Hemmati on Wednesday held a meeting with presidents of Iraqi banks, members of Iraq’s chamber of commerce and the Arab country’s business people during a trip to Baghdad.

In the gathering, the top Iranian banker unveiled a new mechanism to continue Iran’s trade with Iraqi businesses, saying the CBI is going to open euro and dinar-based accounts to process transactions for trade in oil and gas.

Describing Iraq as Iran’s major partner, Hemmati said the two countries have agreed to make the banking ties much stronger.

“According to the agreements, Iranian exporters should be able to continue activities via Iraqi banks, and Iranian banks could also open dinar accounts in Iraqi banks.”

He also stated that Iraqi companies can reciprocally open accounts in Iranian banks and conduct transactions in dinar.

In December 2018, Chairman of Iran-Iraq Chamber of Commerce Yahya Ale-Eshaq said the central banks of Iran and Iraq were finalizing negotiations to begin trade in their own currencies.

Iraq’s Foreign Minister Mohamed Ali Alhakim has made it clear that his country cannot cut off trade ties with Iran under the US sanctions, saying the value of annual trade between Iran and Iraq amounts to $12 billion.

(Source: Tasnim, under Creative Commons licence)

DNO Reports Record Revenues

DNO ASA, the Norwegian oil and gas operator, today announced 2018 net profit of USD 354 million on revenues of USD 829 million, the highest annual revenues in the Company’s 47-year history. Cash flow from operations increased 40 percent to USD 472 million in 2018, of which USD 334 million represented free cash flow.

Operated production averaged 117,600 barrels of oil equivalent per day (boepd) including 81,700 boepd on a Company Working Interest (CWI) basis, up from 113,500 boepd and 73,700 boepd, respectively, during 2017. January 2019 operated production averaged 128,000 barrels of oil per day (bopd) or 90,000 bopd on a CWI basis.

The Company stepped up its operational spend in 2018 to nearly USD 300 million to support the fast-track development of the Peshkabir field in the Kurdistan region of Iraq and the ongoing drilling program at the Tawke field within the same license.

Spending levels in 2019 are projected to rise more than 40 percent from 2018 levels to an estimated USD 420 million. DNO’s 2019 drilling program includes up to 20 exploration and production wells in Kurdistan, including up to 14 wells at the Tawke field, four at Peshkabir and two at the Baeshiqa license. Another five wells are planned in Norway on DNO’s licenses.

In Kurdistan, two recently completed wells, Peshkabir-9 and Tawke-52, will be placed on production in February. Testing of the first Baeshiqa exploration well targeting the Cretaceous reservoir has been delayed by extensive rainfall but is also expected to commence this month.

Already the leading international oil company in Kurdistan, with a 75 percent operating interest in fields contributing a third of the region’s total exports, the Company is now firmly establishing itself in Norway as it completes the takeover of Faroe Petroleum plc. With 90 licenses, of which 22 are operated, DNO will leapfrog to the ranks of the top five companies in total licenses held in Norway.

“The Faroe transaction transforms DNO into a more diversified company with a strong, second leg,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani. “This represents not a pivot away from Kurdistan but a pivot to Norway,” he added. “We are now well positioned in two areas in which we have a comparative, even competitive, advantage.”

The combination places DNO among the top three European-listed independent oil and gas companies in production and reserves.

DNO has acquired more than 96 percent of Faroe shares and initiated the compulsory acquisition of the remaining shares. The integration of the Faroe and DNO organizations is well underway; the new combined entity has over 1,100 employees and offices in Oslo, Stavanger, Erbil, Dubai, London, Aberdeen and Great Yarmouth.

The Company will release pro-forma financials and 2019 investment programs and budgets for the combined entity in February and March.

Separately, DNO’s Board of Directors have approved a dividend payment of NOK 0.20 per share to be made on or about 27 March 2019 to all shareholders of record as of 18 March 2019. DNO shares will be traded ex-dividend as of 15 March 2019.

(Source: DNO)

Eni eyes New Opportunities in Iraq

By John Lee.

Oil Minister Thamir A. Al-Ghadhban met Eni’s CEO Claudio Descalzi on Monday in Baghdad.

Eni’s CEO outlined the Company’s current activities in the country in light of the recent achievements of the Zubair field development. Mr. Al-Ghadhban and Mr. Descalzi also discussed future opportunities and development investments that will further strengthen Eni’s relationship with the country.

At Zubair oil production has grown by over 100% since 2015 and a new 380 MW plant that will generate power for domestic consumption is in the final stages of construction.

Mr. Al-Ghadhban and Mr. Descalzi also discussed future opportunities and development investments that will further strengthen Eni’s relationship with the country. The Deputy Prime Minister for Energy Affair and Eni’s CEO also discussed the progress of social projects that are currently underway in the Basra Governorate in the areas of healthcare, education, access to energy and clean drinking water.

Finally, Eni’s CEO also highlighted potential synergies related to energy projects in Iraq, a strategic lever for the Country in maximizing its use of national natural resources.

Eni is one of the largest international upstream oil & gas players in the country, where it currently operates 475,000 barrels of oil equivalent per day (35,000 boed Eni equity).

Eni has been present in Iraq since 2009 through its subsidiary Eni Iraq B.V., and with the ramp up of the Zubair Field Development Project (Eni 41.56%, Kogas 23.75%, BOC 29.69%, State Partner 5%) the Company has become one of Iraq’s main operators in the oil sector.

(Source: Eni)

Jordan to Buy Discounted Oil From Iraq

By John Lee.

Jordan has reportedly agreed to buy 10,000 barrels per day (bpd) of Kirkuk crude oil from Iraq.

According to The Jordan Times, Jordan’s Minister of Energy and Mineral Resources, Hala Zawati (pictured), said the oil will be bought at a discount of $16 to Brent crude, to cover the difference of transport costs and deviations in specifications.

The supply will cover 7 percent of Jordan’s demand.

(Source: The Jordan Times)

PM receives the Putin’s Special Envoy to MEA

By John Lee.
Prime Minister Adil Abd Al-Mahdi has received the Russian President’s Special Envoy to the Middle East and Africa, the Deputy Foreign Minister of Russia and his accompanying delegation, Mr. Mikhail Bogdanov, who conveyed the greetings of the Russian President and the Russian Prime Minister to His Excellency, renewing the support of the Russian leadership for the Iraqi government and expressing the desire to develop relations between the two countries in all fields.

His Excellency Prime Minister expressed his pride in the relations between the two countries and peoples, commending Russia’s support for Iraq, confirming Iraq’s keenness to expand relations of cooperation in the economic, investment fields and the development of oil and gas fields.

His Excellency praised the Russian role and its balanced relations, which contribute to strengthening security and stability efforts in the region.

They discussed the holding of the next session of the Iraqi-Russian Joint Governmental Committee and the developments in the region.

The meeting was attended by Mr. Yixi Solomatin, Vice President of the Middle East and North Africa Department of the Ministry of Foreign Affairs, Mr. Yuri Shafranik, President of the Russian Federation of Oil and Gas Producers, Mr. Guse Gochetel, Director General of Soyuz Naft Gas, and Maxime Maximov, Russian Ambassador to Iraq.

Also, the meeting attended by Iraqi Oil Minister Thamer Ghadhban, Deputy Foreign Minister, Mr. Nizar Al-Khairallah, the Iraqi Ambassador in Moscow Mr. Haider al-Athari, and a number of advisers.

(Source: Media Office of the Prime Minister)