By John Lee.

Russia’s Gazprom Neft has reportedly said it will not reduce investment in its projects in Iraqi Kurdistan, despite a request from the Kurdistan Regional Government (KRG) to do so.

Reuters reports that following a slump in oil prices, oil producers have been asked to reduce their investments, which governments often have to partially reimburse as part of their contractual arrangements.

Gazprom Neft holds a participating interest of 40 percent in the Garmian block and 80 percent in the Halabja and Shakal blocks. The Sarqala field is located within the Garmian block.

More here.

(Source: Ekurd, Reuters)

By John Lee.

Investment by Russian oil and gas companies in Iraq may increase three-fold, according to a report by Tass.

It quotes Russian politician Yury Fedorov [Nikolay Vasilyevich Fyodorov] as telling the Iraqi Ambassador to Russia, Abdul-Rahman Al-Husseini, that the total investment in Iraq by companies such as Lukoil, Bashneft and Gazprom Neft has exceeded $10 billion, and that this could triple.

Our companies such as Zarubezhneft, Tatneft and Rosneftegaz also show a high degree of interest,” he added.

(Source: Tass)

Gazprom Neft subsidiary Gazprom Neft Middle East B.V. has produced its three-millionth tonne of oil since starting commercial production at the Sarqala field in the Kurdistan Region of Iraq (KRI).

Total cumulative production at the Sarqala field has reached three million tonnes, or 23 million barrels of oil, as at December 2019. Daily liquid hydrocarbon production at this asset is currently running at 4,000 tonnes of oil, or 30,500 barrels, per day.

First oil was obtained at the Garmian block (which the Sarqala field is part of) in 2011, with commercial crude shipments commencing in 2015, following the commissioning of the Sarqala-1 well. A second well was commissioned in 2018, with a third due to come online in 2019.

Surface facilities and infrastructure have been significantly expanded in the course of developing this field. Final works on expanding the central processing facility (CPF) are expected to be completed by end-2019 — production throughput having reached 35,000 barrels per day (bpd).

Concurrently with this, the pipeline processing system has been updated, and the production-process automated control system modernised. Formation-water utilisation infrastructure (with throughput capacity of 5,000 bpd) is to be built at the Sarqala field in the near future.

Sergei Petrov, CEO of Gazprom Neft Middle East B.V., said:

“Our work at the Garmian block has allowed us to compile detailed information on the geological structure of the Sarqala field — allowing us not just to develop the asset effectively, but also identify potential for its future development. Preparations are now underway on drilling a further well. Commissioning this will allow us to maintain hydrocarbon production volumes in the KRI.”

(Source: Gazprom Neft)

By Vera Mironova and Mohammed Hussein, for Foreign Policy. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

With ongoing protests making other investors nervous, Moscow is charging ahead.

Despite ongoing protests in Baghdad, which have seen the departure of many foreign diplomats for security concerns, Russia has doubled down.

Not only has its embassy stayed open in the recent weeks of turmoil, but its foreign minister, Sergei Lavrov (pictured), also paid a visit last month, first touring Baghdad and then Erbil.

His tour did not look like a regular diplomatic mission. There were no official agreements signed; politics, Syria, and terrorism seemed like an afterthought; and diplomats were in the minority during the week’s events.

In fact, the majority of the participants were businesspeople, including representatives of such Russian oil and gas companies as Gazprom Neft, Rosneft, Soyuzneftegaz, and Lukoil.

Also in attendance were representatives of Technopromexport, a Russian company that builds energy facilities, and from Russia’s Federal Service of Military-Technical Cooperation.

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See also:

China, Not Iran, Is the Power to Watch in Iraq

Gazprom Neft subsidiary Gazpromneft-Badra has begun shipping granulated sulphur from its Badra oilfield in Iraq — the unique gas infrastructure installed by the enterprise here having made it possible not just to diversify production, but also increase associated petroleum gas (APG) utilisation to 98 percent.

The pilot consignment, delivered by order of Iraqi client “Ard as-Sakhlya”, totalled 1,000 tonnes and was shipped from the field with the help of 40,000-tonne-capacity heavy-goods vehicles (HGVs) over the course of one week. Gazpromneft-Badra is now preparing to ship its next consignment, of more than 3,000 tonnes of granulated sulphur, for another business in Iraq.

Gazpromneft-Badra has managed commercial production at this asset for a period of five years, during which time total cumulative production has reached 100 million barrels. The business has produced more than 2,1 million tonnes (15.6 million barrels) of liquid hydrocarbons since early 2019. Shipments of granulated sulphur from Badra commenced this year.

Production is undertaken through sulphur production and granulation plants with capacity of 110,000 and 136,000 tonnes per year, respectively, both of which form part of the 1.6-billion cubic metres per year capacity gas plant at the Badra field.

The technological process of producing granulated-sulphur production is automated throughout all key stages, from intake of raw materials to packaging of finished products. Gazpromneft-Badra has, already, produced more than 72,000 tonnes of sulphur (now in storage), which is expected to be shipped to Iraqi customers as orders are received.

Vadim Yakovlev, First Deputy CEO of Gazprom Neft, commented:

We have, in Badra, created a modern industrial complex, unique in the variety of its output, producing not only oil and gas, but also granulated sulphur and electricity.

“Cutting-edge technological solutions have allowed us to monetise all hydrocarbons produced, as well as ensuring optimum environmental friendliness on this project, increasing APG utilisation to more than 98 percent.”

(Source: Gazprom Neft)

By John Lee.

Russia’s Gazprom Neft is reported to be interested in expanding its operations in Iraq.

Reuters says boss Alexander Dyukov told the annual general meeting on Friday that the company, which is already developing the Badra oilfield, is also “looking at” the Mansuriyah gas field near the Iranian border.

It says that Iraqi government is expected to launch a tender to develop Mansuriyah later this year. Iraq Business News understands that the field is currently being developed by TPAO (37.5%), Oil Exploration Company (25%), Kuwait Energy (KEC) (22.5%), and Kogas (15%).

(Source: Reuters)

Russia’s Gazprom Neft has commissioned a third production well at its Sarqala field in the Kurdistan Region of Iraq (KRI)

Potential production at this new well is estimated at 12,000 barrels per day. Cumulative daily oil production at the field following the commissioning of the Sarqala-3 well has increased by 25 percent reaching 35,000 barrels.

The well runs to a total depth of 3,291 metres, with drilling having been undertaken under the challenging geological conditions of the Sarqala field — anomalously high pressure and reservoir temperature having demanded the use of a selection of 11 technological solutions. The construction of the Sarqala-3 well has, as a result, involved the use of large-diameter casing pipes with ultra-strong thread connections, weighted drilling mud for bottom-hole flushing, and cement incorporating mineral-based and iron-oxide additives.

Drilling the well has involved an international team, with members from 20 countries. The project was implemented by Gazprom Neft Middle East, with technical support from the Gazprom Neft Science and Technology Centre.

Vadim Yakovlev, First Deputy CEO, Gazprom Neft, commented:

“The Middle East remains an area of strategic interest to Gazprom Neft, being a region with a rich resource base, and a demonstrable willingness to allow access to investors. Experience in implementing projects from scratch — both in exploration and production — is important to us. We are continuing to evaluate opportunities for the further development of our business in the Middle East — independently and in partnership with other companies — both using the synergies offered by existing project infrastructure, as well as at other assets.”

(Source: Gazprom Neft)

By John Lee.

Russian Foreign Minister Sergey Lavrov has said that Moscow is very interested in increasing trade, economic and investment ties with Iraq.

Following a meeting on Wednesday with Iraqi Foreign Minister Mohamed Ali Alhakim, he said:

In the field of investment, especially in the hydrocarbon sector, there is a very good result. Lukoil, Gazprom Neft, SoyuzNefteGaz are already working, Rosneft is interested in projects in Iraq. The total investment in this industry has already exceeded $ 10 billion.

“We want to promote projects in other areas. Today we talked about electricity, agriculture, industry, transport – all this will be considered in the context of preparations for the next meeting of the Russian-Iraqi Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation.

He added that about 4 thousand Iraqi citizens are currently studying in universities of the Russian Federation, while dozens of diplomats from Iraq take part in special training courses at the Diplomatic Academy at the Russian Foreign Ministry.

(Source: Russian Ministry of Foreign Affairs)

By John Lee.

Russian Foreign Minister Sergey Lavrov has said that Moscow is very interested in increasing trade, economic and investment ties with Iraq.

Following a meeting on Wednesday with Iraqi Foreign Minister Mohamed Ali Alhakim, he said:

In the field of investment, especially in the hydrocarbon sector, there is a very good result. Lukoil, Gazprom Neft, SoyuzNefteGaz are already working, Rosneft is interested in projects in Iraq. The total investment in this industry has already exceeded $ 10 billion.

“We want to promote projects in other areas. Today we talked about electricity, agriculture, industry, transport – all this will be considered in the context of preparations for the next meeting of the Russian-Iraqi Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation.

He added that about 4 thousand Iraqi citizens are currently studying in universities of the Russian Federation, while dozens of diplomats from Iraq take part in special training courses at the Diplomatic Academy at the Russian Foreign Ministry.

(Source: Russian Ministry of Foreign Affairs)

Gazprom Neft subsidiary Gazprom Neft Middle East B.V. has commissioned a second well — the Sarqala-2 — at its Sarqala field (within the Garmian block), located in the Kurdistan Region of Iraq (KRI).

The new well is currently producing 11,000 barrels per day (bpd), with potential to increase this to 15,000. Total daily production at the field has now increased more than two-fold, exceeding 21,000 bpd.

Sergei Petrov, General Director, Gazprom Neft Middle East B.V. commented:

“The Sarqala-2 well is operating under high reservoir pressure and temperature. But by using exceptional technical solutions in well construction we have been able to make significant reductions in operating costs, as well as bringing the project in on time.”

Denis Sugaipov, Director of Major Projects Upstream at Gazprom Neft, added:

“Thanks to the commissioning of this new well we have been able to confirm our geological prognoses and obtain updated information on strata composition at the Sarqala field. The geology of the KRI is, generally, under-researched, so this new well is of major importance in terms of gaining knowledge and experience of the field.”

First oil from the Garmian block was obtained in 2011, with commercial crude shipments from the field commencing as early as 2015. As at 15.04.2018 total cumulative production at the field stood at seven million barrels of oil.

The first phase of expanding gathering and treatment capacity to 25,000 bpd is now complete, with work continuing on expanding infrastructure to accommodate 35,000 bpd. Drilling of the Sarqala-3 well is planned for Q3 2018, completing Phase I of field development.

(Source: Gazprom Neft)