By John Lee.

Malaysia’s Petronas has reportedly decided to withdraw from its 30-percent participating interest in Iraq’s giant Majnoon oil field.

According to Bloomberg, the decision came as the company considers the returns to be too low. It is expected to hire advisers to help find an interested party to take up the holding.

Shell is also said to be trying to sell its 45-percent stake in the field, following a failure to reach agreement with Iraq’s Ministry of Oil. Both Chevron and Total have expressed interest in the project.

Petronas is currently involved in Iraq’s Badra, Garraf, Halfaya, and Majnoon.

(Source: Bloomberg)

By John Lee.

Janus Global Operations (JGO) has announced that it has been selected by “an integrated oil and gas multinational corporation based in Malaysia“, to provide security and risk management services for the company’s operations in central Iraq.

Some 600 JGO U.S. and foreign national employees will be responsible, during the two-year contract, for security and risk management for the Malaysian International Oil Company’s (IOC) oil exploration and development program in central Iraq, to include the company’s base camp, facilities, and also mobile security for company personnel.

Matt Kaye (pictured), JGO’s chief executive officer, said:

We’re proud that the Malaysian IOC has selected JGO for this security responsibility.

“JGO has worked in Iraq with commercial and government clients for more than 13 years on demining and unexploded remnants of war clearance, munitions management, security and risk management, and other tasks critical to clients’ operations.

The Malaysian IOC has a 10-year relationship with JGO, Kaye added.

Although not named in the announcement, Malaysia’s state-owned Petronas is the operator of the Garraf [Gharraf] oil field in Dhi Qar Governorate, in which it holds a 45-percent stake. The company also has interests in Iraq’s Majnoon, Halfaya and Badra fields.

(Source: JGO)

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)

The end of 2016 saw several new members join the Iraq Britain Business Council (IBBC), each of which are underpinned by strong reputations for innovation, reliability and a commitment to investing in Iraq.

GE, Khudairi Group, Pell Frischmann, Petronas and Siemens join 51 other world- and region-leading companies that form IBBC’s Council of Members.

IBBC warmly welcomes the addition of these five world-class companies to our membership,” IBBC Managing Director Christophe Michels says. “We greatly look forward to working closely with them and supporting them with the important work they are doing in Iraq.”

New members

GE has operated in Iraq for over 40 years. The world-leading company has three offices around the country – in Baghdad, Erbil and Basrah – which are manned by 120 staff. GE supports the country’s infrastructure needs in power generation, oil and gas and water processing, as well as in healthcare and aviation.

The Khudairi Group is a leading provider of services to the oil and gas, engineering and construction industries in Iraq. It is owned and run by the Khudairi family, one of the country’s most prominent commercial families. The company is active throughout Iraq across six primary business units: Engineering, Procurement and Construction; Oilfield Supply and Services; Heavy Machinery Dealership; Heavy Machinery Rentals; Distribution and FMCG Distribution.

Siemens provides solutions to help tackle the world’s major challenges, focusing on electrification, automation and digitalisation. In March 2016, the company signed a Memorandum of Understanding with the Government of Iraq, in collaboration with the Ministries of Electricity and Oil & Gas, to support the development and optimisation of the country’s power generation and grid infrastructure including power generation mix.

Pell Frischmann is one of the UK’s leading firms of consulting engineers, with major operations throughout Europe, the Middle East and Asia. The company has been working in Iraq since 2004. Its projects include the Mid-Western Water Supply Project, one of the biggest rebuilding projects in Iraq. In 2006, the firm received the Queen’s Award for Enterprise for its work in the reconstruction Iraq.

Established in 1974, Petroliam Nasional Berhad (PETRONAS) is Malaysia’s fully integrated oil and gas multinational ranked among the largest corporations on FORTUNE Global 500. It operates in Iraq under the name PETRONAS Carigali Iraq Holding B.V. Activities the company has been involved in developing the Garraf, Halfaya, Majnoon and Badra oil fields.

For more information on IBBC membership, please email the IBBC team at london@webuildiraq.org

(Source: IBBC)

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

On Sept. 22 and 23, the Dwryan Organization held its second conference in Sulaimaniyah with the participation of researchers and specialists in the field of education. The conference focused on the need to reform the curriculum on two levels.

The first is by replacing the curriculum with a more balanced, civil one. The second is by changing purely religious texts to ones that are closer to the spirit of the age, focusing on peaceful coexistence with nonviolent societal components, in addition to closing some religious schools and replacing them with more moderate schools.

During the 2015/2016 academic year, 39 schools, six institutes and 5,000 students were transferred from the Ministry of Religious Endowments to the Ministry of Higher Education and Scientific Research or to the Ministry of Education. But there are still traditional religious schools, called “hojra” in Kurdish vernacular.

Those belong to the Ministry of Religious Endowments. Mariwan Naqshbandi, the ministry’s public relations officer, told Al-Monitor, “There are still 100 traditional religious schools affiliated with the ministry and they comprise 570 religious students, or what they call in Kurdish ‘faqi,’ who receive lessons by clerics in the region of Kurdistan.”

Several changes have been made to the previous religious curriculum. But researcher Bahman Tahir, who teaches elementary school through high school, said that the commission tasked to change the curriculum consisted of seven men and no women, which was reflected in the curriculum’s masculine discourse.

By John Lee.

Reuters reports that Baghdad has reached agreement with BP, Shell and Lukoil to restart stalled investment in Iraqi oil fields, allowing production to increase by 250,000-350,000 bpd in 2017.

According to documents seen by Reuters, the three firms agreed to spend in the second half of 2016 roughly half the budgets they proposed for 2015:

  • BP to spend $1.8 billion this year at Rumaila. It had initially planned to spend $3.5 billion last year, which it revised down to $2.5 billion;
  • Shell to spend $742 million; it proposed $1.5 billion last year; and,
  • Lukoil to spend $1.08 billion; it proposed $2.1 billion last year.

Iraq has yet to reach agreements with Exxon Mobil, CNPC and Petronas regarding investment in their respective fields.

(Source: Reuters)

By John Lee.

According to a report from Reuters, the new Basra Heavy crude oil grade has been trading at a widening discount.

Malaysia’s Petronas reportedly sold 2 million barrels for June loading to Indian refiner Essar Oil at a discount of more than $1 a barrel to its official selling price.

bigger than expected export volume of the new grade, added to caution among Asian refiners, has restricted demand for the oil in Asia.

(Source: Reuters)

(Oil prices image via Shutterstock)

By John Lee.

The upstream international vice-president of Malaysia’s Petronas, Sharbini Suhaili, has reportedly said that Petronas was the largest international oil company in Iraq, and that the assets returns were promising despite numerous challenges.

There are always challenges.

“We can make it work and we are working well with our partners.”

(Source: AsiaOne)

(Picture: Halfaya oil field, in which Petronas is involved)

By John Lee.

Russia’s Gazprom Neft, the operator of the Badra oil field (pictured) in Iraq, has announced that first oil from the field is now being delivered to Iraq’s main pipeline system for transfer to the export terminal in Basra, on the Persian Gulf.

Current deliveries from Badra to the pipeline stand at over 15,000 barrels of oil per day and this level should be maintained until the end of 2014.

According to the service contract with the Government of Iraq, the consortium of investor companies will begin receiving a share of the oil produced at the field after a period of 90 days following launch of commercial supply.

All of the oil produced in southern Iraq, including at Badra, is Basrah Light oil. The Iraqi State Oil Marketing Organization (SOMO) is responsible for oil sales and each quarter will be delivering a share of oil to the investor companies to reimburse their initial project costs.

Once these project costs have been covered, the investor companies will receive remuneration in kind for ongoing development at the rate of $5.5 of oil per barrel produced. Each investor company will be selling their share of oil independently.

First oil from the Badra field was produced in December 2013. Final commissioning at the field and testing of production and transportation infrastructure began in May 2014. Two wells are currently in production at the field and a further three wells are being drilled under a contract with the Chinese company ZPEC. According to the service contract production at the field will achieve 170,000 barrels of oil per day.

Alexander Dyukov, Chairman of the Management Board of Gazprom Neft, said:

Over the period of just a few years, a consortium of companies led by Gazprom Neft has fully prepared Badra, one of the most complex geological field structures in Iraq, for full-scale commercial development.

“This is the first major international project in upstream the company has implemented from scratch. The unique experience gained during this project will contribute to our development of future projects both in Russia and internationally“.

The field is being developed by Gazprom as lead partner (30% stake), along with Korea’s KOGAS (22.5%), Malaysia’s Petronas (15%), Turkey’s TPAO (7.5%), and Iraq (25%).

(Sources: Gazprom Neft, KOGAS)

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