By John Lee.

Shell has reportedly evacuated its foreign staff who had been working at the Basra Gas Company (BGC).

BGC executives told Reuters that around 60 staff were flown out on Wednesday after workers who had been laid off staged a protest.

Shell has a 44-percent stake in the $17-billion, 25-year BGC project, with Iraq’s South Gas Company (SGC) having 51 percent, and Japan’s Mitsubishi 5 percent.

(Source: Reuters)

Baker Hughes, a GE company has been awarded a contract by the South Gas Company of Iraq (SGC) for fast-track solutions to help the recovery of flare gas for Nassiriya and Al Gharraf  [Garraf] oilfields. The importance of the project was highlighted by the attendance of several high-level officials, including HE Jabbar Al-Luaib, the Minister of Oil of Iraq, at the agreement-signing ceremony.

As per the agreement, BHGE will develop solutions for flare gas recovery at Nassiriya and Al Gharraf oilfields using advanced modular gas processing (NGL) technology developed in the United States and Italy. The project will utilize the modular skid-mounted Gas Processing technology to build 200 million standard cubic feet per day (MMSCFD) NGL plant and is expected to be completed by 2021.

The project will support the development of a fully integrated natural gas liquid (NGL) plant at Nasiriya that will recover 200 MMSCFD of dry gas, liquefied petroleum gas (LPG) and condensate.

The modular solution will support power plants with dry gas for efficient power generation, thus helping meet the growing demand for electricity using clean fuel. It will also contribute to curtailing the amount of gas flared in the fields of Nassiriya and Gharraf that otherwise goes to waste.

The advanced technology used to develop the plant will help produce more than 1,000 tons of LPG per day and recover more than 900 cubic meters per day of condensates, which will help to meet the domestic demand for cooking gas.

The surplus LPG and condensate will be exported, generating high revenue to the Iraqi government.  Contributing to the social and economic development of Nassiriya, the project is aligned with the vision of the Ministry of Oil and the government.

H.E. Jabbar Ali Al-Allaibi, Iraq’s Minister of Oil said, that this project is important achievement for the Ministry and marks the entry of a new phase for the sector, highlighted by time optimal utilization of flare gas, which is a major milestone in the government’s extensive efforts to drive a better future for Iraq.

H.E. also highlighted the prominence of this project for the province of Dhi Qar specifically and for Iraq in general adding that BHGE will provide it latest and advanced technologies and solutions to optimize the use of flare gas at the Nassiriya and Al Gharaf oilfields recovering 200 MMSCFD of dry gas daily.

Rami Qasem, President, MENAT & India, BHGE, said:

“As a local trusted partner to Iraq, BHGE is bringing advanced technologies and solutions that can help meet the Ministry’s goals for the industry. This contract is a testament to our continued commitment to supporting the Ministry of Oil’s strategic goals by deploying advanced flare gas solutions to build the country’s oil and gas infrastructure. The project will create more than 500 direct and indirect jobs for Iraqis, build local capabilities and strengthen the local supply chain.”

BHGE is the first and only company in the world to provide a fullstream offering covering products, services and digital solutions for the oil and gas sector, from upstream, to midstream to downstream.

BHGE has been a committed partner to Iraq for more than 50 years, with three offices in Iraq – Baghdad, Erbil and the Basra –  and more than 350 employees in country, BHGE continues to deliver its latest technology and expertise to its local customers.

(Source: Baker Hughes)

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)

Oil-producing countries yet to address their gas flaring may begin to feel there are no more excuses.

In a remarkable and bold decision, the government of Iraq recently endorsed the “Zero Routine Flaring by 2030” Initiative, (ZRF), which means the country has committed to not routinely flare associated gas in any new oil fields and will work to end routine flaring in existing oil fields as soon as possible and no later than 2030.

Launched in 2015 by UN Secretary-General Ban Ki-moon and World Bank President Jim Yong Kim, the ZRF Initiative is designed to end a 150-year-old oil industry practice that is responsible for emitting more than 300 million tons of CO2 into the atmosphere.

Gas flaring also wastes a valuable source of energy that could be put to productive use, particularly in countries where many people lack access to electricity.

Even in the most difficult circumstances we recognize that Iraq must ensure its resources are managed sustainably for future generations. Flaring is not only bad for the environment, it represents several billion dinars going up in smoke.
— Dr. Hamed Younis Saleh, Deputy Minister of Oil for Gas Affairs

The latest satellite data released by the US National Oceanic & Atmospheric Administration and the World Bank-led Global Gas Flaring Reduction Partnership (GGFR) shows that Iraq’s gas flaring has increased dramatically. Just four years ago the country was flaring about 12 bcm of gas annually. However, in 2015 the country flared close to 16 bcm, making it the second-largest gas flaring country in the world.

Oil-producing countries yet to address their gas flaring may begin to feel there are no more excuses.

In a remarkable and bold decision, the government of Iraq recently endorsed the “Zero Routine Flaring by 2030” Initiative, (ZRF), which means the country has committed to not routinely flare associated gas in any new oil fields and will work to end routine flaring in existing oil fields as soon as possible and no later than 2030.

Launched in 2015 by UN Secretary-General Ban Ki-moon and World Bank President Jim Yong Kim, the ZRF Initiative is designed to end a 150-year-old oil industry practice that is responsible for emitting more than 300 million tons of CO2 into the atmosphere.

Gas flaring also wastes a valuable source of energy that could be put to productive use, particularly in countries where many people lack access to electricity.

Even in the most difficult circumstances we recognize that Iraq must ensure its resources are managed sustainably for future generations. Flaring is not only bad for the environment, it represents several billion dinars going up in smoke.
— Dr. Hamed Younis Saleh, Deputy Minister of Oil for Gas Affairs

The latest satellite data released by the US National Oceanic & Atmospheric Administration and the World Bank-led Global Gas Flaring Reduction Partnership (GGFR) shows that Iraq’s gas flaring has increased dramatically. Just four years ago the country was flaring about 12 bcm of gas annually. However, in 2015 the country flared close to 16 bcm, making it the second-largest gas flaring country in the world.

By John Lee.

Shell is reported to be considering selling its oil fields in Iraq, as part of a global $30-billion asset disposal program.

The move follows the company’s $54-billion acquisition of gas company BG Group earlier this year.

Industry sources told Reuters that Shell has found only limited financial benefits in recent years from its involvement in Iraq’s oil production, where it is paid in crude oil but has limited say on production strategy, but that it continues to see value in developing its gas business in Iraq and is not interested in selling those assets.

Iraq accounted for around 4.4 percent of Shell’s total oil and gas production in 2015, according to its 2015 annual report.

Shell holds a 45 percent stake in the giant Majnoon oil field, that it operates under a technical service contract that expires in 2030. Production at Majnoon has stalled at 200,000 bpd, and although it has plans to double output, the company is just focusing on sustaining production this year.

It also has a 15 percent interest in the West Qurna 1 field (Reuters reports that it has 20 percent interest), which is operated by ExxonMobil.

The Basrah Gas Company (BGC) is a joint venture between the state-owned South Gas Company (SGC) (51%), Shell (44%) and Mitsubishi (5%).

(Source: Reuters)

By John Lee.

Iraq exported its first shipment of natural gas on Sunday.

Oil Ministry spokesman Assem Jihad said a cargo of about 10,000 standard cubic feet of gas, in the form of condensates, left the port of Umm Qasr.

He declined to name the buyer, but Oil and Gas Year cites sources as saying the ship is on its way to the United Arab Emirates (UAE).

The gas was produced by the Basrah Gas Company (BGC), a joint venture between the South Gas Company (SGC) (51%), Shell (44%) and Mitsubishi (5%).

The next cargo is to be shipped by the end of this month.

(Source: Associated Press, Oil and Gas Year)

By John Lee.

Iraqi Oil Minister Adel Abdel Mahdi [Adil Abd Al-Mahdi] has said that Iraq’s oil and gas industry will need an investment of $300 billion over the next 15 years.

He made the statement during a visit to Japan, at which he also discussed the long relationship between the two countries in the energy sector, including the building of the north refinery in Baiji, the two gas treatment complexes for the North Gas Company (NGC) and the South Gas Company (SGC), and the contribution of Japex in developing the Garraf oilfield as a part of the consortium with Petronas.

He added that Iraq plans to increase production to 7 million barrels per day over the next 5 years.

(Source: Ministry of Oil)

The Basra Gas Company (BGC) has awarded UnaE&C Iraq, an engineering and construction subsidiary of Unaoil Group, a contract for the Rehabilitation of West Qurna Compressor Stations CS7 and CS8 at West Qurna, Iraq.

BGC is a joint venture between state run South Gas Company (51%), Shell (44%) and Mitsubishi (5%).

The project will enable flared associated gas generated from Degassing Stations DGS7 and DGS8 in West Qurna to be collected, compressed and dehydrated prior to being sent via pipeline to the downstream gas treatment plant at North Rumaila NGL Plant for further processing.

UnaE&C’s scope of work includes project management, procurement, fabrication, installation and construction of the related works. Unaoil’s operating centres in Dubai and Basra will support the project execution at West Qurna.

Cyrus Ahsani, CEO of Unaoil Group said:

“This is an excellent opportunity for Unaoil to utilise our local capabilities and deliver this important project to the high international standards expected by BGC.”

(Source: Unaoil)