By Padraig O’Hannelly.

A senior oil executive has predicted that Iraq could surpass Saudi Arabia as an oil producer.

Addressing delegates at CWC‘s Iraq Petroleum conference in London, Majid Jafar (pictured), CEO of Sharjah-based Crescent Petroleum, said:

“Iraq is hugely underexplored. We at Crescent know of 300 structures just in the Western Desert that have yet to be drilled, so I for one believe that Iraq has a lot of potential, and I wouldn’t be surprised if it becomes the largest producer in OPEC during my career.”

Crescent Petroleum has an interest in the Khor Mor field in the Kurdistan Region of Iraq, and has signed initial contracts to develop the oil fields of Gilabat-Qumar (in Diyala), Khashim Ahmer-Injana (in Diyala), and Khudher Al-Mai [Khider al-Mai] (in Basra and Muthana).

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

Iraq exports around 3.5 million barrels of oil a day.

Heightened regional tensions between the US and Iran and recent attacks on oil tankers in the Gulf have heightened security fears.

The government of Iraq is worried about the threat to its oil exports – and how its economy could suffer.

Al Jazeera‘s Charles Stratford reports:

By John Lee.

Production at the West Qurna 1 oilfield has reportedly reached 465,000 barrels per day (bpd), following the completion of new crude processing facilities and oil storage tanks.

Officials told Reuters on Monday that the field was previously producing about 440,000 bpd.

Exxon‘s foreign staff were present at a ceremony to launch the new facilities, having returned to the oilfield on 2nd June.

(Source: Reuters)

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)

By John Lee.

ShaMaran Petroleum has announced the completion of its acquisition of an additional 7.5% participating interest in the Atrush Block [from Marathon Oil], previously announced on April 3, 2019, bringing ShaMaran’s total interest in Atrush up to 27.6%.

ShaMaran also announces that Atrush has been producing at approximately 32,000 barrels of oil per day.  The Company maintains its daily average production guidance for 2019 as previously published on February 15, 2019.

Adel Chaouch, President and CEO of ShaMaran, commented:

“Closing this Acquisition is a significant achievement for our Company and the recent production results are both positive and in line with our expectations. The Company is now well positioned for its next phase of growth.”

(Source: ShaMaran Petroleum)

By John Lee.

Oil production in the Al Faihaa area (Block 9) in Basra is reportedly expected to increase in the coming year with increasing investment.

Dragon Oil CEO Ali Al Jarwan told Oil & Gas Middle East that the company plans to increase production in Iraq to 100,000 barrels per day (bpd) by 2025.

(Source: Oil & Gas Middle East)

By John Lee.

Hyundai Engineering & Construction has reportedly won a $2.45-billion deal to build a seawater processing facility in Iraq.

South Korean media report that the company signed a letter of intent with Basra Oil Company (BOC) on Wednesday for the 49-month project, which will be capable of supplying 5 million barrels of fresh water per day.

This will help to increase output at Iraq’s oil fields.

(Sources: Yonhap, Korea Herald)

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)

The Rumaila oilfield produced 1.467 million barrels per day (bpd) in 2018 – the oilfield’s highest annual rate of production for 30 years. 2018 also saw the milestone of four billion barrels of oil produced since the Rumaila Operating Organisation [ROO] began operating in June 2010.

The results were reported in the 2018 Rumaila Annual Report, submitted by the Basra Oil Company (BOC) to the Iraq Ministry of Oil.

In accordance with BOC’s objectives, Rumaila continued its journey to becoming a more advanced oilfield in 2018. New infrastructure played an important part in the year’s success, with three major projects completed that help Rumaila’s capacity to produce its current high production rates, as well as contribute to securing the field’s long-term future.

The new Rumaila Power Plant began operating, providing 150,000kW of electricity to the Iraq National Grid and supporting Rumaila facilities; three new dehydrator and desalter production trains were commissioned – increasing production capacity by 124,000 bpd; and two degassing facilities installed new large-scale ‘free water knock out’ vessels that ensure oil quality remains high by stripping water from the hydrocarbons.

The introduction of new technologies continues to play a vital role in the field’s advancement. In 2018, this included: the further expansion of the ‘digital oilfield’ (with 2,000 digital sensors now providing instant data from wells, facilities and manifolds to guide production performance), the completion of a field-wide TETRA radio communications infrastructure, and new data analytics tools and frameworks that visualize, interpret and reveal meaningful insights to improve day to day working.

Underpinning the 2018 results has been the ongoing programme to drill new wells, optimize existing wells, and the injection of industrial-use water to restore pressure to reservoirs in the north of the field. Thanks to the water injection programme and its supporting operations, Rumaila has been able to produce oil from historically harder to access reservoirs: in 2018, the oil produced from the Mishrif reservoir was more than triple the amount of oil extracted from that reservoir in 2010 and generating results never previously achieved at the oilfield.

The 2018 Annual Report also highlighted:

  • 59 Iraqi contracted companies won 85 contracts worth $650 million
  • 220,181 training hours were delivered to Iraqi staff
  • 31 new wells were drilled
  • 23.5km2 of land was cleared of unexploded ordnance
  • 206,675m2 of land was remediated
  • $5 million spent on supporting Iraq’s oil and gas industry via the Rumaila Education Fund

Rumaila General Manager, Hussein Abdul-Kadhim Hussein, commented:

“2018 was a remarkable 12 months in the 70-year history of this oilfield, as well as another exceptional year for the Rumaila Operating Organisation. The partnership goes from strength to strength: our success derives from the way BOC, BP and PetroChina continues to operate as one integrated team.”

BOC Director General, Ihsan Ismael, said:

“On behalf of BOC, I’d like to thank every single BOC staff member who has ensured that Rumaila continues to deliver successful oil production for Iraq, as well as pay tribute to the support of our partners, BP and PetroChina.”

ROO Deputy General Manager, Julian O’Connell, said:

“Rumaila is in service to Iraq. Our objective is to provide oil to support Iraq today, as well as create a legacy for the future. Our strategy and programme for field rejuvenation and training Iraqi personnel is helping us to achieve these twin goals and to overcome the multitude of challenges Rumaila faces.”

Rumaila Special Deputy General Manager, Fan Jianping, added:

“We are very pleased to report another successful year at Rumaila. Equally important is the fact that we have achieved this within a safe working environment. We of course want to increase production, but we also want Rumaila to be the pride of Iraq, which can only be achieved by having safety as the number one priority.”

(Source: Rumaila Operating Organisation)

Iraq, one of the world’s biggest energy producers, can address its current electricity shortfall and growing power needs through immediate action to relieve pressure on the system, according to an in-depth report published Thursday by the International Energy Agency.

It also provides a medium-term strategy that makes the best use of the country’s abundant oil and natural gas resources and solar potential.

Despite the extraordinary challenges of war in recent years, Iraq has made impressive gains, nearly doubling the country’s oil production over the past decade. But the turmoil has also undermined the country’s ability to maintain and invest in its power infrastructure.

The new IEA report, Iraq’s Energy Sector: A Roadmap to a Brighter Future, maps out immediate practical actions and medium-term measures to tackle the most pressing problems in Iraq’s electricity sector.

The analysis finds Iraq has huge potential to cut its electricity network losses, which are among the highest in the world. Reducing these losses by half would help dramatically improve the efficiency of grid supply, effectively increasing available capacity by one-third.

The report also takes a detailed look at the country’s oil and gas sector. It projects that Iraq’s oil production will grow by 1.3 million barrels a day by 2030, accounting for the third-largest increase globally over the period, and soon becoming the world’s fourth-largest oil producer behind the United States, Saudi Arabia and Russia.

The report also notes that more gas can be captured and put to use in efficient power plants. Today, 16 billion cubic meters of gas are flared each year, more than enough to replace Iraq’s current imports.

Dr Fatih Birol, the IEA’s Executive Director met, with Iraqi President Barham Salih on Wednesday in Baghdad, and presented the study’s findings and recommendations. He then met with Prime Minister Adil Abdul-Mahdi to discuss ways forward for the electricity sector, including making best use of Iraq’s significant natural gas and solar resources.

On Thursday, Dr Birol will discuss the report at a press conference with Thamir Ghadhban, the Deputy Prime Minister for Energy and Minister of Oil, and Luay Al-Khatteeb, the Minister of Electricity.

The IEA has worked closely with the Iraqi Ministries of Oil and Electricity to produce the report, and would like to thank the ministers and their staff for their cooperation with this study.

“Operating under extremely challenging circumstances, Iraq has done a remarkable job expanding its oil industry,” said Dr Birol. “Today’s urgent issue is to address the national power sector as the summer heatwave approaches by improving grid maintenance, boosting electricity production with larger mobile generators, and incentivising upgrades of power plants. The IEA is pleased to recommend immediate practical actions for the benefit of the entire Iraqi people, and provide a roadmap for a sustainable power system in the medium term.”

Iraq’s electricity demand is set to double between now and 2030, and its shortfall in electricity supply will widen, as the country’s population grows by more than 1 million people each year.

Without changes to the current structure of electricity supply and improvements to the network, domestic generation, imports and neighbourhood generation would need to double by 2030, for a total supply of over 250 TWh. However, there are many opportunities to improve on this outcome through measures such as investing in transmission and distribution to cut network losses.

Promoting the more efficient use of electricity, including by introducing more progressive tariffs, would play an important role in ensuring that the growth in demand during the summer peak does not continue to outpace supply.

Iraq also needs to take advantage of its abundant renewable energy potential.  The analysis shows that expanding the share of solar PV and wind to 30% of electricity supply by 2030 would bring benefits both to the Iraqi consumer, in the form of reduced electricity bills, and to the environment.

Reducing network losses and moving towards an electricity mix where renewables play a more prominent role would free up 9 billion cubic meters of gas for other uses in 2030, plus 450 kb/d of oil for export.

“In addition to oil, Iraq is blessed with some of the richest solar and gas resources in the world but it is yet to take advantage of them,” Dr Birol said. “Turning that potential into fuel for its own economy and for export would help bring about a more sustainable, reliable and affordable energy future.”

The report is the second in-depth study of Iraq’s energy sector following the publication of the Iraq Energy Outlook in 2012.

Download the report here.

(Source: IEA)