Mitsubishi


BGC to Increase Gas Output by 16% by end-Dec

By John Lee.

The Basra Gas Company (BGC) is expected to increase production from its current level of 900 million cubic feet per day (mcf/d) to 1,050 mcf/d by the end of this year.

A statement from the Ministry of Oil on Thursday added that the project aims to reach a target of 2,000 mcf/d from the fields of Rumaila, Zubair and West Qurna 1.

Shell has a 44-percent stake in the $17-billion, 25-year BGC project, with Iraq having 51 percent, and Japan’s Mitsubishi 5 percent.

(Source: Ministry of Oil)

Mitsubishi awarded $110m Iraq Port Contract

Japan’s Mitsubishi Corporation has been awarded a contract for port construction in the Republic of Iraq.

Extended by the General Company for Ports of Iraq (GCPI), the contract covers a port rehabilitation project in the country’s southern region of Basra, and is valued at approximately 110 million US dollars. The project is being funded through ODA loans provided by the Japan International Cooperation Agency (JICA).

The project will be executed through a partnership between MC and multiple international contractors, including Turkey-based energy infrastructure provider Calik Enerji (CE), in which MC holds shares, and construction firm Gap Insaat, also Turkey-based.

Both part of the Calik Holding group, these two sister companies will play a major role in executing construction while MC will be responsible for overall project coordination and serve as the prime contractor, facilitating the import of steel structures and other necessary supplies from Japan.

The objective of this project is to modernize existing industrial port facilities around Basra by (i) expanding the oil products berth at Khor Al-Zubair Port, and (ii) building a new service berth for working ships and service boats at Umm Qasr Port.

The rehabilitation of ports throughout Iraq is essential to meeting increasing demands for port infrastructure, which is growing rapidly as the volumes of trade flowing in and out of the country grows. Rehabilitating this critical infrastructure will also contribute to further stabilizing the country’s economy as post-war reconstruction advances.

This project is particularly noteworthy given that Khor Al-Zubair and Umm Qasr are the only ports currently in operation in the Basra region, where a system of ports located in the 48 kilometer wide tip of the country wedged in between Iran and Kuwait along the Persian Gulf gives Iraq its only outlet to the sea.

In addition to this project, MC intends to continue leveraging provisions under the Japanese Government policy framework for promoting export of “high-quality infrastructure” to identify opportunities that support Iraq’s efforts towards reconstruction, economic development, and increased quality of life.

(Source: Mitsubishi Corporation)

(Picture: Takehiko Kakiuchi, President and CEO of Mitsubishi Corporation)

Shell plans Major Expansion at BGC

By John Lee.

Having sold its stake in the West Qurna 1 project to Japan’s Itochu, Shell is now said to be “fully committed” to the giant Basra Gas Company (BGC), which captures gas from Iraq’s southern oilfields.

Frits Klap, managing director of BGC, told Reuters that processing capacity has more than tripled to 938 million standard cubic feet (scf) per day since operations started in 2013, and further expansion is planned:

“We are going to go for something called BNGL, or Basra NGL (natural gas liquids) expansion, which really is going to take us from 1 bcf to 1.4 bcf through two trains, each of 200 million scf per day.”

Shell has a 44-percent stake in the $17-billion, 25-year project, with Iraq having 51 percent, and Japan’s Mitsubishi 5 percent.

More here.

(Source: Reuters)

Abadi visits Japan to Boost Trade

Prime Minister Haider al-Abadi has arrived in Tokyo for discussions with major Japanese industry and government.

He met the CEO of Sumitomo Corporation, Kuniharu Nakamura to discuss future projects in Iraq, including the establishment of factories for car manufacturing in Iraq and providing after-sales services.

He also met Hiroyuki Ishige, Chairman and CEO of the Japan External Trade Organization (JETRO), who said that Japanese companies are keen to invest in Iraq, adding that his organization wants to expand its office in Iraq.

The rehabilitation of the Haritha power plant in Basra was discussed with the President and CEO of Mitsubishi Corporation, Takehiko Kakiuchi, while Ichiro Kashitani, President and CEO of Toyota Tsusho Group, discussed supplying fixed and mobile power stations.

(Source: Office of the Prime Minister)

MHPS to Upgrade Hartha Power Station

By John Lee.

Iraq’s Ministry of Electricity has reportedly awarded a contract to Japan’s Mitsubishi Hitachi Power Systems (MHPS) to refurbish the Unit 1 of the Hartha thermal power station (pictured) in Basra province.

According to Energy Business Review, the power station is claimed to account for approximately 25 percent of Basra’s total power generation capacity.

It’s original equipment was developed by Mitsubishi Heavy Industries (MHI).

Funding will be provided by Japanese Official Development Assistance (ODA) through the Japan International Cooperation Agency (JICA).

Mitsubishi Electric will be responsible for the generator-related work, while the Turkey’s Gama Power System will be responsible for installation and other work.

The work is scheduled to be completed in 2020.

(Source: Energy Business Review)

Shell to Exit Iraqi Oil Business

By John Lee.

Oil giant Shell is trying to sell its stake in the Majnoon oilfield (pictured) in southern Iraq, following a failure to reach agreement with Iraq’s Ministry of Oil.

A Shell spokesman told UAE-based newspaper The National:

“Following extensive discussions with the Ministry of Oil, the oil minister of Iraq formally endorsed a recent Shell proposal to pursue an amicable and mutually acceptable release of the Shell interest in Majnoon, with the timeline to be agreed in due course.”

Reuters quotes an oil official as confirming that the Ministry failed to reach an agreement with Shell over its Majnoon operations, including production plans and investments budgets. “We think it’s for the interest of all parties that Shell should withdraw,” he added.

A Shell spokesman told Reuters:

“In May 2017, the ministry of oil in Iraq applied the performance penalty and remuneration factor on the Shell operated venture, the Majnoon oil field, which had a significant impact on its commerciality.”

The company holds a 45-percent share in the project, with Malaysia’s Petronas holding 30 percent, and the Iraqi state-owned Maysan Oil Company having 25 percent.

Output from the field, which commenced production in 2014, is currently estimated at around 235,000 barrels per day (bpd), with a 400,000 bpd target by 2020.

Shell is also seeking to selling its stake in the ExxonMobil-operated West Qurna 1 oil field.

In addition to its oil interests in Iraq, Shell is a key player in the Basra Gas Company (BGC), a joint venture between the Iraq’s South Gas Company (SGC) (51%), Shell (44%) and Japan’s Mitsubishi (5%), which processes gas from the Rumaila, West Qurna and Zubair fields, which would otherwise be flared.

The National also quotes a Shell spokesman as saying that the company remains committed to this, and to its petrochemical project in Iraq:

“By leaving Majnoon, Shell will be in a stronger position to focus its efforts on the development and growth of the Basrah Gas Company and the Nebras Petrochemicals Project.

(Sources: Reuters, The National)

Iraq to Begin Snuffing Out Flares

Oil-producing countries yet to address their gas flaring may begin to feel there are no more excuses.

In a remarkable and bold decision, the government of Iraq recently endorsed the “Zero Routine Flaring by 2030” Initiative, (ZRF), which means the country has committed to not routinely flare associated gas in any new oil fields and will work to end routine flaring in existing oil fields as soon as possible and no later than 2030.

Launched in 2015 by UN Secretary-General Ban Ki-moon and World Bank President Jim Yong Kim, the ZRF Initiative is designed to end a 150-year-old oil industry practice that is responsible for emitting more than 300 million tons of CO2 into the atmosphere.

Gas flaring also wastes a valuable source of energy that could be put to productive use, particularly in countries where many people lack access to electricity.

Even in the most difficult circumstances we recognize that Iraq must ensure its resources are managed sustainably for future generations. Flaring is not only bad for the environment, it represents several billion dinars going up in smoke.
— Dr. Hamed Younis Saleh, Deputy Minister of Oil for Gas Affairs

The latest satellite data released by the US National Oceanic & Atmospheric Administration and the World Bank-led Global Gas Flaring Reduction Partnership (GGFR) shows that Iraq’s gas flaring has increased dramatically. Just four years ago the country was flaring about 12 bcm of gas annually. However, in 2015 the country flared close to 16 bcm, making it the second-largest gas flaring country in the world.

Japan to Resume Lending to Iraq

By John Lee.

Nikkei Asian Review reports that state-owned Japan Bank for International Cooperation (JBIC) and the country’s two leading commercial banks — Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking — are preparing to make Japan’s first loan to Iraq in 31 years.

The consortium will support an Iraqi government power project with a cofinancing deal is worth 53 billion yen ($480 million). The deal includes purchasing power-related equipment from Japanese companies.

JBIC, formerly known as the Export-Import Bank of Japan, stopped all fresh lending to Iraq in 1986 due to the Iran-Iraq War.

(Source: Nikkei Asian Review)

(Picture: Akira Kondoh, Governor, JBIC)

IBBC Celebrates Successful Inaugural Conference in Dubai

More than 180 expert speakers and delegates from the UK, Iraq, UAE and abroad gathered in Dubai at The Address Dubai Marina on Sunday 18 December for the Iraq Britain Business Council’s (IBBC) Autumn Conference.

Usually held in London, the well-attended conference marked the first time the IBBC has held an event in the UAE, a hub for global and regional companies that operate in the Middle East.

The decision to move the Autumn Conference to Dubai has certainly proven to be a good one, with the new location attracting a new audience of business leaders and decision makers based in the region.

A record number of delegates from non-member companies registered for the event, including representatives from Mitsubishi, Serco, Rolls-Royce, Capital Bank of Jordan and LUKOIL.

They were joined by representatives from IBBC member companies, such as Shell, ExxonMobil, Siemens, GE, Amec Foster Wheeler, GardaWorld, Restrata, Eversheds and more.

The conference was supported by H.E. Mr Kadhim Finjan Al-Hamami, Iraq’s Minister of Transport, and Mr Frank Baker OBE, Her Majesty’s Ambassador to Iraq, who jointly opened the event with IBBC President Baroness Nicholson of Winterbourne.

The theme of the conference was ‘Doing Business in Iraq’. Delegates heard from Ariel Flores, General Manager of BP (Rumaila Operating Organisation), on operating Rumaila in a $50-barrel world during the first session, ‘The Iraq Oil and Gas Sector in 2016’. He focused particularly on how investing in technology, training and safety is key to Rumaila’s operations.

Meanwhile, Marwa Al Nasaa, the International Monetary Fund’s Resident Representative for Iraq delivered an overview of the IMF’s Stand-By Arrangement (SBA), economic developments under the SBA and a forecast of what’s to come.

Other headlining speakers included Dennis Flannery of Citibank, Dr Jafar Dhia Jafar of URUK Engineering and Contracting Company LLC., Zeeshan Sheikh of the International Finance Corporation, Salem Jawad Chalabi of Stephenson Horwood Middle East LLP and Jorge Vila of Iraq Middle Market Development Foundation (IMMDF), who addressed the audience from Paris via a Skype link-up.

IBBC members also joined panel discussions. Asrar Abdulhussein Mohammed of International Islamic Bank participated in the finance session, while Iain Rawlinson of Gulftainer and Peter Turner of SKA International shared their insights on opportunities in Iraq for investment and partnership within the transport and logistics sectors.

Amar Shubar of Management Partners, Gavin Rennie of EY, Afif Masri of PwC and Vikas Handa of Beas LLC (formerly of Weir Group) chaired the panels on finance, power, opportunities in the private sector and O&G respectively.

he IBBC Autumn Conference was generously sponsored by the Islamic International Bank, Gulftainer, Weir Group, SKA International and the IMMDF.

The IBBC’s next conference will take place at Mansion House, London, on Monday 3 April 2017. More information will be available in due course.

For information on the IBBC Autumn Conference, membership or conference sponsorship opportunities, contact the IBBC London team at london@webuildiraq.org or +44 20 7222 7100 or our UAE Representative Samer Al-Omari at samer.alomari@webuildiraq.org or +971552088000.

(Source: IBBC)

Shell “Considering Selling” Iraq Oil Assets

By John Lee.

Shell is reported to be considering selling its oil fields in Iraq, as part of a global $30-billion asset disposal program.

The move follows the company’s $54-billion acquisition of gas company BG Group earlier this year.

Industry sources told Reuters that Shell has found only limited financial benefits in recent years from its involvement in Iraq’s oil production, where it is paid in crude oil but has limited say on production strategy, but that it continues to see value in developing its gas business in Iraq and is not interested in selling those assets.

Iraq accounted for around 4.4 percent of Shell’s total oil and gas production in 2015, according to its 2015 annual report.

Shell holds a 45 percent stake in the giant Majnoon oil field, that it operates under a technical service contract that expires in 2030. Production at Majnoon has stalled at 200,000 bpd, and although it has plans to double output, the company is just focusing on sustaining production this year.

It also has a 15 percent interest in the West Qurna 1 field (Reuters reports that it has 20 percent interest), which is operated by ExxonMobil.

The Basrah Gas Company (BGC) is a joint venture between the state-owned South Gas Company (SGC) (51%), Shell (44%) and Mitsubishi (5%).

(Source: Reuters)