Canada’s SNC-Lavalin has announced the award of a contract to Kentz, a member of the SNC-Lavalin Group, by ExxonMobil, for a new oil processing facility to increase production at its West Qurna 1 oil field in Iraq.

Kentz, with its regional partner, is providing the front-end engineering design (FEED), detailed design engineering, procurement, fabrication, construction, commissioning and start-up of the new facility, capable of producing an annual average of 100,000 stock tank barrels of crude oil per day.

The facility, located in the province of Al Basra, will be designed to process full well stream fluids from the production wellhead area and separate them into associated gas, untreated produced water, and stable product crude for export.

The project will be executed out of the company’s Abu Dhabi engineering hub, with support from its Dubai operations and is expected to be completed in 26 months. This project is critical for the West Qurna 1 overall development plan and this contract highlights key advantages that the integration brings to the company’s overall capability to service key clients.

Christian Brown (pictured), President, Oil and Gas, SNC-Lavalin, said:

We are delighted to continue our relationship with ExxonMobil, a client we’ve provided services to for many years.

“The combined expertise and resources in our Oil & Gas business allows us to offer an even a broader range of high-quality services, and in the Middle East we have a strong team of over 8,000 people in the region that can deliver for clients.”

(Source: SNC Lavalin)

By John Lee.

Genel Energy has announced that it signed a definitive sale and purchase agreement with OMV to acquire its 36% operated stake in the Bina Bawi field. Completion of the acquisition is subject only to government approval, which is expected shortly.

The consideration comprises an upfront payment of $5 million. A contingent payment of $70 million is payable once gas production exceeds agreed threshold volumes from the Miran and Bina Bawi fields. A further contingent payment of $75 million is payable two years after the date of the second payment.

In consideration of the Kurdistan Regional Government (‘KRG’) agreeing to the transfer of OMV’s stake in the Bina Bawi field, on completion of the acquisition Genel will offset US$25 million against monies owed by the KRG to Genel in respect of past expenses incurred on the Miran field.

(Source: Genel Energy)

KRG continues direct oil export despite sabotage attempt on pipeline

In August, direct oil export from Kurdistan Region continued despite sabotage and attempted theft on the export pipeline inside Turkey borders, which occurred on 27 July and extended to the first week of August.

According to the Kurdistan Regional Government, KRG, Ministry of Natural Resources Oil Export Report, in August Kurdistan Region has exported 14,657,798 barrels of crude oil, an average of 472,832 bpd, through the Kurdistan pipeline network to the port of Ceyhan (pictured) in Turkey. This is an 8.5 per cent decline comparing to 16,019,090 barrels which were exported in July.

The decline, according to the report, was due to nine days of downtime for the export pipeline which mostly occurred at the beginning of the month.

Of the exported amount, fields operated by the KRG contributed 10,958,817 barrels, an average of 353,510 bpd, while fields operated by the North Oil Company, NOC, contributed 3,698,981 barrels, an average of 119,322 bpd.

In August, the Kurdistan Regional Government delivered a total of 1,579,004 barrels, an average of 50,936 bpd, to the Iraqi State Oil Marketing Company, SOMO.

The monthly export report said that in August, the KRG “continued its direct oil sales in Ceyhan to compensate the Region for the budget shortfalls from the federal government in Baghdad and to continue to pay down debts accumulated in 2014 from pre-payments for direct oil sales” the report highlighted.”

Last week, KRG Ministry of Natural Resources confirmed that the Kurdistan Regional Council for Oil and Gas Affairs expects the first tranche of regular payments to the producing IOCs to be made available during the first half of September 2015.

In an earlier statement by KRG ministry of Natural Resources it was urged that as oil export is expected to rise in early 2016, the KRG envisages making additional revenue available to the IOCs to enable them to begin to catch up on the past receivables due under their production sharing contracts.

(Source: KRG)

By John Lee.

Gas Plus Khalakan, a 75%-owned subsidiary of New Age, is about to commence the development drilling of three wells for Phase 1 of the approved Field Development Plan for the Shewashan oil field in the Kurdistan Region of Iraq.

Phase 1 of the development includes the installation of an Early Production Facility and targets production of 10,000 barrels of oil per day in 2016.

The discovery well Shewashan-1, drilled in 2014 to a final depth of 3038m in the Cretaceous, produced light oil from reservoir zones in the Shiranish, Kometan and Qamchuga formations at a maximum rate of 2,850 bopd of 46° API oil.

The exploration well was put onto production for a period of 180 days, producing a total of 65,000 barrels of oil before increased water production required the well to be shut-in. The oil was sold into the domestic market and transported by road tanker to a nearby refinery by the buyer.

The Proved plus Probable (2P) Oil Reserves at Shewashan have been independently certified by DeGoyler and MacNaughton at 75 million barrels. GPK is the Operator of the Khalakan PSC with an 80% interest.

Steve Lowden, CEO of New Age, said:

‘Despite the current low oil price environment GPK is fully committed to the development of the Shewashan field reserves and to supporting the KRG as it becomes a significant oil producer on the world stage over the next few years.

“It is a world-class basin that remains a highly economic prospect for the company.’

(Source: OilVoice)

(Drilling rig image via Shutterstock)

By John Lee.

Ability with Innovation (AWI) has announced that it has been awarded a contract by PAE Government Services for its equipment lease services to support their BLiSS project in Baghdad, Iraq.

AWI will provide bulk waste removal service at Baghdad Embassy Compound (BEC) as second provider.

AWI will supply and deliver dump trucks to remove and transport the bulk trash of the Olympia Collection point on a daily basis.

The contract is scheduled to begin on August 24, 2015 and will continue until December 31, 2015. This contract has an extension option period for another three years.

(Source: AWI)

By John Lee.

Iraq’s State Oil Marketing Organization (SOMO) has said that oil exports amounted to 95.447 million barrels in August, which equates to 3.079 million barrels per day.

According to a report from Shafaaq, this generated revenue of approximately $3.874 billion, at an average price of $40.59 per barrel.

Exported from the southern port of Basra, which suffered from some technical problems, were 93.655 million barrels, while exports through the port of Ceyhan reached 1.791 million barrels.

(Source: Shafaaq)

By John Lee.

ShaMaran Petroleum has announced the successful testing and completion of the Chiya Khere-8 (“CK-8″) development well in the Atrush Block in the Kurdistan Region of Iraq.

The CK-8 development well was drilled in the third quarter of 2014. The well was re-entered in July 2015 and two well tests (“DST”) using an electrical submersible pump were carried out.

DST#1 was conducted over a 24 metre interval in the Mus Formation. The interval tested at a final average oil rate of 4,200 bopd (barrels of oil per day) with no water cut and an oil gravity of approximately 24 degrees API.Production was limited by ESP capability. This is the first test of medium gravity oil from the Mus Formation.

DST#2 was conducted through 36 meters of perforations within a 60 metre interval in the Sargelu Formation. The interval tested at an average oil rate of 4,200 bopd with a small drawdown and had a maximum rate of 8,200 bopd. There was no water cut at the end of the test. Oil gravity was measured at approximately 26 degrees API.

At the end of the testing operations the CK-8 well was completed for production.

The Atrush Block is operated by TAQA Atrush BV (“TAQA”) and is held 39.9% by TAQA, 20.1% by ShaMaran Petroleum Corp through its wholly owned subsidiary General Exploration Partners, Inc., 15% by Marathon Oil KDV B.V., (a wholly owned subsidiary of Marathon Oil Corporation (NYSE: MRO)), and 25% by the Kurdistan Regional Government of Iraq.

(Source: ShaMaran)

By John Lee.

Iran’s Deputy Oil Minister has announced that an office of the National Iranian Oil Company (NIOC) has been officially opened in Iraq.

According to a report from Mehr News Agency, Roknoddin Javadi (pictured), who is also the Managing Director of the NIOC, stressed the need to be present in neighbouring countries, adding that Iran’s oil industry has come a very long way.

(Source: Mehr News Agency)

By John Lee.

In its latest Half Yearly Report, Russia’s Lukoil reports that in the first half of 2015, the Group accrued revenue from the West Qurna-2 project in the total amount of $1,535 million, consisting of cost recovery of $1,475 million and remuneration fee of $60 million, compared to the revenue of $1,179 million in the first half of 2014.

This revenue was classified as crude oil sales revenue. Attributable amount of 4,412 thousand tonnes, or 30,260 thousand barrels, of crude oil was included in Group’s crude oil production for the first half of 2015 (1,781 thousand tonnes, or 12,218 thousand barrels in the first half of 2014) that represented approximately 52% of total production from the field (65% in the first half of 2014).

In the first half of 2015, the company received 4,769 thousand tonnes of crude oil from the Iraqi party as a debt settlement within the cost compensation. This crude oil at cost of $1,683 million was recognized in Cost of purchased crude oil, gas and products.

Subsequently, Lukoil sold this crude oil to third party customers or delivered it to its refineries.

During the first half of 2015, the cost compensation increased the Group’s EBITDA by $1,072 million ($1,017 million in the first half of 2014).

The project’s target production level is 1.2 million barrels per day and the total term of the contract is 25 years.

(Source: Lukoil)

By John Lee.

A suicide bomber has killed a police officer and an employee of the Kirkuk Oil Company (KOC), and wounded four others, according to a report from Shafaaq.

The attack happened on the main road between Kirkuk and Debes.

Kirkuk Provincial Council recently changed the name of North Oil Company (NOC) to Kirkuk Oil Company (KOC).

(Source: Shafaaq)

(Terrorism image via Shutterstock)