By John Lee.

Oil production is to increase at the West Qurna 1 oilfield, according to Reuters.

The news agency quoted Basra Oil Company (BOC) chief Ihsan Abdul Jabbar as saying on Wednesday that output will rise from 440,000 barrels of crude oil per day (bpd) to 490,000 bpd in the “next few days”.

The field is being developed by ExxonMobil (25%), PetroChina (25%), Itochu (15%), Pertamina (10%), Iraq’s state-owned Oil Exploration Company (25%)

(Source: Reuters)

By John Lee.

At its regular meeting in Baghdad on Tuesday, the Iraqi Cabinet received a briefing on negotiations led by Iraq’s Ministry of Oil with ExxonMobil and PetroChina on the Southern Iraq Integrated Project.

In a statement, the government describes the project as “a mega energy and infrastructure scheme consisting of building oil pipelines, storage facilities and a seawater supply project to inject water from the Gulf into reservoirs to increase oil production and Iraq’s export capacity.”

According to Reuters, Iraq is close to signing the $53-billion, 30-year agreement, from which it expects to make $400 billion over the life of the project.

It quotes the Prime Minister as saying that it will involve increasing production at the Nahr Bin Umar and Artawi oilfields from around 125,000 barrels per day (bpd) now to 500,000 bpd.

(Sources: Iraqi Cabinet, Reuters)

By John Lee.

Wood Group has said that it is seeing strong growth in the Middle East due to “increased activity in Iraq with Exxon and Basra Gas [Company (BGC)]“.

In its full year results for the year ended 31 December 2018, the UK-based energy services company said it sees “opportunities in Middle East driven by Iraq“.

In addition to trading as Wood Group, the company is also sole owner of Iraqi subsidiaries Ghabet El Iraq for General Contracting and Engineering Services, Engineering Consultancy (LLC) and Touchstone General Contracting, Engineering Consultancy and Project Management LLC.

(Source: Wood Group)

By John Lee.

ExxonMobil Iraq Limited has awarded Schlumberger a 42-month IDS contract for 30 wells in the West Qurna Field.

The contract includes the provision of drilling rigs and multiple technologies and services, and the first well was spud in July.

The announcement was made in the company’s Third-Quarter 2018 Results on Friday.

(Source: Schlumberger)

DNO ASA, the Norwegian oil and gas operator, today announced plans for its first dividend distribution to shareholders in 13 years following release of strong half-year 2018 results, including revenues of USD 289 million which were up 83 percent from the same period last year. The Company also reported a net profit of USD 61 million and free cash flow of USD 142 million during the first half of the year.

“With growing production and robust and reliable revenues, the dividend announcement underscores confidence in our strong growth prospects,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani (pictured). “Kurdistan is back and so is DNO,” he added.

The Company continues to ramp up activity in the Kurdistan region of Iraq, where fast track development of the Peshkabir field is expected to boost output by another 15,000 barrels of oil per day (bopd) to 50,000 bopd by yearend.

The Company, the most active driller in Kurdistan, has three rigs operating across its licenses with a fourth to be added next month.

Two rigs will be active at the flagship Tawke field to reverse natural field decline through workovers and the drilling of two wells in the main Cretaceous reservoir and two wells in the shallow Jeribe reservoir.

Operations will commence at the Baeshiqa license with another rig to be mobilized to spud the first well in September as part of a back-to-back, three-well exploration program. DNO acquired a 32 percent interest in and operatorship of the Baeshiqa license last year, joining ExxonMobil (32 percent), the Turkish Energy Company (16 percent) and the Kurdistan Regional Government (20 percent).

At Peshkabir, the fourth rig will spud Peshkabir-8 in 10 days followed by Peshkabir-9 in October. Early production and successful appraisal have raised previous field proven (1P) and proven and probable (2P) reserves. Two newly completed wells, Peshkabir-6 and Peshkabir-7, will commence testing by the end of this month before being placed on production. Peshkabir-6 is key to unlocking further Cretaceous and Triassic reserves.

“Peshkabir is proving prolific in production and has generated over USD 300 million in gross revenue since startup last year or three times the investment,” said Mr. Mossavar-Rahmani.

Elsewhere, DNO recently completed the sale of its Tunisia assets and relinquished Block SL18 in Somaliland as part of the Company’s ongoing rationalization of its portfolio through divestment of non-core assets and focus on expanding operations in Kurdistan and Norway.

Offshore Norway, the Company recently added six new exploration licenses for a total of 21 licenses and plans to participate in one exploration well in the fall, followed by at least five wells next year.

DNO retains indirect interests in North Sea assets through its 28.23 percent strategic stake in Faroe Petroleum plc and, given the size of its shareholding, will request seats on the board and has asked for an extraordinary general meeting to be called for this purpose.

DNO exited the second quarter with a cash balance of USD 584 million in addition to USD 288 million in marketable securities and treasury shares. The Company’s outstanding bond debt stands at USD 600 million.

The planned annual dividend distribution of NOK 434 million (USD 50 million equivalent), payable in two tranches, is subject to shareholder approval. To facilitate the distribution of the planned dividend, the DNO Board of Directors will convene an extraordinary general meeting on 13 September 2018 (i) to seek approval for payment of a dividend of NOK 0.2 per share in H2 2018 to be distributed to shareholders of record on 13 September 2018 (as registered in the VPS on 17 September 2018), and (ii) to seek authorization to approve an additional dividend payment of NOK 0.2 per share in H1 2019.

(Source: DNO)

By John Lee.

Italy’s Saipem has been awarded a contract by ExxonMobil Iraq Limited for the DS6 project for the debottlenecking of the West Qurna field, in the south east of Iraq.

Debottlenecking is a process that optimises a plant in order to increase its overall capacity.

The works will have a duration of 23 months and will mainly be executed in the Rumaila fabrication yard, owned by Saipem.

(Source: Saipem)

(Picture: Saipem chief executive, Stefano Cao)

By John Lee.

Talks between ExxonMobil and Iraq on the multi-billion-dollar Common Seawater Supply Project (CSSP) have reportedly broken down.

According to Reuters, the director general of the Basra Oil Company (BOC) told reporters that the BOC will award the contract through a tender process, which it expects to complete at the end of July.

It adds that the BOC has already shortlisted three companies from an initial list of seven for the contract.

(Source: Reuters)

By John Lee.

According to a report from Platts, Iraq has reached “key preliminary terms” with ExxonMobil and PetroChina on the South Integrated Project.

The project involves the development of the Nahr Bin Umar and Ratawi oil fields in southern Iraq, with gas plants at the two fields, a multi-field water injection project, storage, pipelines and export infrastructure.

Abdul Mahdi al-Ameedi, director general of the Petroleum Contracts and Licensing Directorate (PCLD), told S&P Global Platts that the scope of work, the schedule, and the cost have been agreed to.

More details here.

(Source: Platts)

By John Lee.

Iraq’s Ministy of Oil has awarded all four development projects, and two of the seven exploration blocks, that it offered in its fifth auction of oil licences.

Only nine of the 26 companies originally pre-qualified took part in the auction, with majors such as Lukoil (Russia), ExxonMobil (US) and Total (France) not bidding.

Development blocks:

  • Gilabat-Qumar, in Diyala: Crescent Petroleum (UAE)
  • Khashim Ahmer-Injana, in Diyala: Crescent Petroleum (UAE)
  • Huwaiza, in Missan (Maysan): Geo Jade Petroleum (China)
  • Khudher Al-Mai [Khider al-Mai], in Basra and Muthana: Crescent Petroleum (UAE)

Exploration blocks:

  • Naft Khana, in Diyala: Geo-Jade Petroleum (China)
  • Sindibad [Sindbad] field in Basra: United Energy Group (Hong Kong)
  • Zurbatiya [Zurbatia], in Wasit and Diyala: not awarded
  • Shihabi in Missan and Wasit: not awarded
  • Fao, in Basra: not awarded
  • Jebel Sanam [Jabal Sanam], in Basra: not awarded
  • Offshore Gulf block: not awarded

Abdul Mahdi al-Ameedi, director general of the Petroleum Contracts and Licensing Directorate (PCLD), told Reuters that the failure of five blocks to attract bids was due to a combination of factors, including the fact that some of them cover former battlefields, some are hard to access, and the one offshore plot needs more data.

He said another round could be held for those five blocks.

More details here from Iraq Oil Report (subscription required)

(Sources: Iraq Oil Report, Reuters, Associated Press, AFP)

DNO ASA, the Norwegian oil and gas operator, today announced expansion and acceleration of operations in the Kurdistan region of Iraq while building up its North Sea exposure.

First quarter revenues, the highest in nearly four years, stood at USD 142 million and net profit at USD 18 million. The Company exited the quarter with cash balances of USD 518 million plus USD 76 million in treasury shares and marketable securities.

The Company added a third license in Kurdistan following government and partner approvals of the previously announced transaction with ExxonMobil. Effective 10 April 2018, DNO assumed operatorship of the Baeshiqa license with a 40 percent (32 percent participating) interest alongside ExxonMobil, Turkish Energy Company and the Kurdistan Regional Government.

At the Tawke license, the Company fast tracked development of the Peshkabir field with three new wells. The recently completed Peshkabir-4 well will shortly undergo production testing and the Peshkabir-5 well is drilling ahead at 2,250 meters. The Peshkabir-6 well was spudded as a development well last week and will also explore the field’s deeper Triassic formation.

We have the wind on our back,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani, “with higher oil prices, timely export payments in Kurdistan, a growing portfolio of quality assets, efficient drilling and bold strategy execution.

On the DNO-operated Tawke license containing the Peshkabir and Tawke fields, 15,000 barrels of oil per day (bopd) of production from two Peshkabir wells are comingled with 90,000 bopd from the flagship Tawke field for export through Turkey.

A new Tawke Cretaceous well was brought onstream earlier this month at more than 5,000 bopd. The Company will drill additional Tawke development wells in 2018 following mobilization of a fourth rig.

Elsewhere, the Company acquired 28.71 percent of North Sea-focused Faroe Petroleum plc at a price of GBP 1.25 per share through four separate transactions in April, complementing DNO’s existing portfolio of 19 exploration licenses offshore Norway and the United Kingdom.

DNO’s current cash balance stands at USD 356 million plus USD 280 million in treasury shares and marketable securities. The Company’s outstanding bond debt remains at USD 400 million and the equity ratio at 61 percent.

(Source: DNO)