Genel Energy has announced an update on activity at the Taq Taq field (Genel 44% working interest).

The TT-29w well, which was drilled to appraise the northern flank of the Taq Taq field, has been completed as a producer after successfully encountering oil bearing Cretaceous reservoirs.

The well, which was drilled to a measured depth of 3,100 metres, encountered good quality oil bearing Cretaceous Shiranish and Kometan reservoirs. Six zones were subsequently tested over a 20 day period, with test rates of up to 6,400 bpd (40/64 inch choke) of 48° API oil delivered from individual zones.

Four of the five tests in the Shiranish produced dry oil, with one test tight. The Kometan reservoir test produced oil with a 40-50% water cut, confirming the oil water contact within the Kometan reservoir at this location in the field. TT-29w production has commenced from the Lower Shiranish reservoir at a rate of 3,200 bpd of dry oil on a restricted 24/64 inch choke, with the expectation that this rate will increase following an initial observation period.

The TT-29w well has proved a current oil water contact at this location on the northern flank of the field at a level at least 145 metres deeper than pre-drill estimates. Combined with the testing results, management is optimistic for the potential of the northern flank of the Taq Taq field.

However, it is too early to estimate what impact the well result will have on reserves, long-term production rates or future investment activity in the northern flank and the field as a whole.

In addition to the positive result from TT-29w, the TT-30 Pilaspi well was also successfully drilled as a producer in November and is currently producing around c.650 bopd. A further Pilaspi development well (TT-31) is planned before the end of 2017.

Gross production from the Taq Taq field is currently 15,100 bopd. Gross field production averaged 13,700 bopd in November 2017 and has averaged 18,300 bopd in 2017 to date.

(Source: Genel Energy)

By John Lee.

Iraq has invited international oil companies (IOCs) to bid for contracts to explore and develop nine new oil and gas blocks.

The blocks are along the borders with Iran and Kuwait, with one located in the territorial waters.

According to Reuters, the bidding terms will be finalised by the end of May, with bids to be opened on 21st June 21, 2018.

The terms are expected to be different from previous service contracts, which remunerate companies regardless of oil prices fluctuations.

(Sources: Ministry of Oil, Reuters)

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Developing Border Oilields and Utilizing Associated Natural Gas: Important Projects, Dubious and Non-Transparent Contracts

Information from and about the Ministry of Oil has been published and circulated extensively, in the last few days,  concerning two important subjects or projects, each of which could have immense direct and effective impacts on the Iraqi economy and on the national interest.

The first concerns the development of border fields with Iran and Kuwait, and the second is related to utilizing associated natural gas from Nassiriyah and Gharraf oilfields in Thi Qar province.

After thorough reviewing all information from the mentioned sources and analyzing what relates to both projects, I made a few remarks, diagnosed some flaws, inaccuracies and inconsistencies, and then proposed some practical suggestions and alternatives that I hope will attract the attention of the Ministry; especially those related to the necessity of utilizing “National Efforts” in developing border fields.

The extent and implications of lacking competitiveness and transparency, which consequently lead to questioning the integrity of the contractual process, have also been clearly identified.

It should be recalled that the Iraqi Constitution emphasizes two basic principles directly related to these two projects: the first concerns achieving “the highest benefit for the Iraqi people” and the second “using the most advanced techniques of the market principles”. In the light of what was presented and analyzed below, it is clear that the Ministry did not comply with these Constitutional requirements and obligation.

The paper discusses the border fields/ blocks first then addresses the utilization of associated gas.

Please click here to download the full report.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi] (pictured) has announced exploration and rehabilitation projects for nine exploration blocks in Iraq.

These include the onshore exploration blocks of Khudher Al-Mai, Jebel Sanam (Jabal Sanam) and Umm-Qasr on the Kuwaiti border; the Sindbad, Huwaiza, Shihabi, Zurbatia and Naft Khana blocks on the Iranian border; and the offshore exploration blocks in the Iraqi regional waters of the Arab gulf.

The Ministry’s Petroleum Contracts and Licensing Directorate (PCLD) will prepare all the related technical data for companies that wish to buy them and participate in the competition to rehabilitate the exploration blocks.

He said also that the foreign companies not yet qualified but wanting to participate can present their technical, financial, legal, health & safety, security and environmental information and documents to the PCLD.

(Source: Ministry of Oil)

By John Lee.

Iraqi oil minister Jabar Ali al-Luaibi [Allibi] has directed the Iraqi Oil Exploration Company (OEC) to start exploring Iraq’s coastal waters for new oil and gas reserves.

Addressing an OEC conference, the Minister also emphasised the need to focus on areas bordering neighbouring countries.

Iraq recently declared an additional 10 billion barrels of oil reserves.

(Source: Ministry of Oil)

Russia’s Rosneft group has started drilling its first exploration well at Block 12 in Iraq.

The Salman-1 well will be drilled to the measured depth of 4,245 m through Kurra Chine target horizon to be followed by further testing of five prospective targets. The Company plans to complete drilling in July 2017.

Company of Rosneft group acts as the operator of the exploration and development of Block 12. China-based company Zhongman Petroleum and Natural Gas Group (ZPEC) is the general drilling contractor .

Iraq has huge proved and undeveloped oil resources. Exploration in Iraq is an important step in implementing the Rosneft strategy to expand competences in the area of hydrocarbon exploration and production outside of Russia.

The prospective oil-bearing Block 12 is located in the Najaf and Muthanna provinces, approximately 80 km to the southwest of the city of Samawa and 130 km to the west of the city of Nasriya. The block is a part of the Western Desert, an unexplored region having the biggest oil potential in Iraq. It has an area of 7,680 sq km. Exploration works on Block 12 are considered “low risk” due to its prospects.

(Source: Rosneft)

By John Lee.

ExxonMobil has reportedly pulled out of three of the six exploration blocks it operated in Iraqi Kurdistan.

According to Iraq Oil Report, it has abandoned the Qara Hanjeer, Arbat East, and Betwata blocks, while retaining 80 percent stakes in the Al Qosh, Pirmam and Bashiqa blocks.

KRG’s Minister of Natural Resources, Ashti Hawrami, is quoted as saying:

“Some companies didn’t meet contractual deadlines and according to the contract had to relinquish their areas.”

Click here to read the full report.

(Source: Iraq Oil Report)

The Ministry of Natural Resources (MNR) of the Kurdistan Regional Government-Iraq (KRG) invites expressions of interest from qualified international mining companies for the ‘Mineral Exploration & Investment in the Kurdistan Region-Iraq’.

According to the available data, historical reports, and recent investigations, the MNR has identified 7 prospective blocks for investment. All 7 blocks are believed to hold sufficient mineral deposits for the purposes of commercial extraction.

A formal Request for Proposal (RFP) for each of these blocks will be issued following a review of the Expressions of Interest (EoI) received. Interested parties that demonstrate requisite capability and alignment with the MNR’s requirements will be invited to submit proposals for one or more blocks.

Those chosen parties will be asked to sign a Confidentially Agreement with the MNR, after which they will receive a comprehensive data package pertaining to the 7 prospective blocks that have been identified. The package will include a GIS database and geological reports.

Interested parties are invited to submit their EoI by 17:00 hrs on the 15th of September 2016, by email to this address: mining@mnr.krg.org. The MNR shall formally respond to all interested parties via email as and when all EoIs have been reviewed.

Further details available here.

(Source: KRG)

(Mining image via Shutterstock)

Russia’s Bashneft has completed field seismic surveys at Block 12 as part of the geological exploration programme approved by the Iraqi Ministry of Oil.

The Oil Exploration Company, an Iraqi company specializing in geological and geophysical exploration, which won the open tender in the spring of 2014, has been employed as a contractor to conduct seismic surveys at Block 12; during the six months, the company performed 3D seismic surveys covering an area of 849 sq. km and 2D seismic surveys along two lines with a total length of 192 linear kilometres.

Currently, seismic data processing and interpretation is underway; the data will serve as a basis for seismic and geological modelling aimed at identifying formations that are potentially oil- and gas-bearing. The start of exploration drilling at Block 12 has been scheduled for late 2016.

The five-year geological exploration programme at Block 12, which may be extended for two years, involves conducting 2D and 3D seismic surveys and drilling one exploration well. Investments in the geological exploration programme to be made during the five-year period are to total US$ 120 million.

Under the service contract, before the start of seismic surveys, Bashneft had conducted an environmental impact assessment and a survey of the site designated for seismic exploration in order to detect unexploded mines and shells. Given that operations in Iraq entail considerable risk, the Company gives priority to ensuring the safety of its employees and contractors working at Block 12.

Block 12 has an area of 7.68 thousand sq. km and forms part of the Western Desert, an unexplored region having the greatest oil potential in Iraq. The Block is located in the Najaf and Muthanna provinces, approximately 80 kilometres to the south-west of the city of Samawa and 130 kilometres to the west of the city of Nasriya.

Bashneft gained the right to operate hydrocarbon exploration, development and production at Block 12 following a licensing round in June 2012.

To implement the project, a consortium was established, with Bashneft being represented by its wholly owned subsidiary, Bashneft International B.v. , which owns a 70% stake in the consortium and acts as the operator of the project.

Bashneft’s partner in the consortium, Premier Oil, is represented by its subsidiary, Premier Oil Exploration and Production (Iraq) Ltd., holding a 30% stake.

On November 8, 2012, the consortium signed a 25-year exploration, development and production service contract (EDPSC) with the Iraqi state-owned South Oil Company; the contract may be renewed for five years.

(Source: Bashneft)

Gazprom Neft is to conduct a 2D seismic survey on the south-eastern section of the Halabja block.

The technical equipment and personnel required for the survey are currently being transferred from the south-western section, where the company has already successfully completed a survey spanning 225 linear km. 2D seismic surveys covering approximately 870 linear km are scheduled to be conducted on the Halabja block by the end of the year.

In 2014, a 2D seismic survey covering 130 linear km was conducted on the block. The first exploration well is expected to be drilled in 2015/2016.

Mikhail Kholodov, CEO of Gazprom Neft Middle East, said:

“The Halabja block has until now undergone very little geological study. Conducting seismological surveys is the first step towards identifying the optimal location for an exploration well and these provide a significant amount of new information on the structure of the block.”

Gapzrom Neft is involved in four projects in Iraq, three of which are located in Kurdistan.

Gazprom Neft holds an 80% interest in the Halabja and Shakal blocks (the remaining 20% is held by the Kurdistan Regional Government). In August 2014 the drilling of two exploration wells began at the Shakal block, which are currently undergoing testing.

Gazprom Neft holds a 40% interest in the Garmian block and will become the operator of the project in 2015. Detailed appraisals of the field and preparation for its full-scale development are ongoing at the block. The Kurdistan Regional Government is currently considering a preliminary plan for the block’s development.

Gazprom Neft’s fourth project in Iraq is the development of the Badra oilfield located in the Wasit Province, Eastern Iraq. Preliminary estimates indicate total oil reserves at the Badra field at three billion barrels. Gazprom Neft operates the project and holds a 30% interest. Commercial production of oil at the Badra field began in August 2014.

(Source: JSC Gazprom Neft)