Oil Companies in Iraq too Ambitious

An Iraqi oil industry veteran, Dr Thamir Al Uqaili, says there is a general belief that the production plateau targets (PPTs) of the international oil companies who have won contracts in Iraq are too ambitious and that export will face a marketing problem.

The exploration of Iraq’s rich oil and gas fields will be under the spotlight during Iraq Energy Future 2010, a top meeting of oil executives and Iraqi energy regulators in Istanbul from 27-28 September, as global companies that have won contracts prepare to start the development of various fields.  Dr Al Uqaili heads up a distinguished list of speakers and experts and will host a roundtable discussion at the event addressing operational challenges, opportunities, legislation, infrastructure and pipeline modernisation.

Common issues on different oil sites
A 30-year-old veteran of Iraqi oil companies such as the Iraq Petroleum Company, Basra Petroleum Company, Iraq National Oil Company, State Company of Oil Projects and the Iraq Drilling Company, Dr Uqaili comments on the challenges facing the IOC winners of the 1st and 2nd bid rounds as they prepare their teams and sites:  “There are certainly common issues, mainly use of production surface facilities, export terminals in addition to achieving and maintaining the contracted plateaus ‘PPTs’ (production plateau targets).”

Maintaining field pressure and boosting production is a key area for the IOCs to solve as they get started, says Dr Al Uqaili: “The fields are multi-reservoir fields of different characters. The IOCs are evaluating the characteristics and requirements of each reservoir. The evaluation includes revising recoverable oil under water injection and may be other solutions, to be able not only to achieve the production plateau target but to maintain it for some seven years. “

Export infrastructure

According to Dr Al Uqaili there are several production or export facilities that need upgrading and expansion to ensure Iraq can export its output.  “A new production centre like Hlafaya-Nahr-Umer-Majnoon down to the Fao [Faw] sea terminal and removing the bottlenecks in the pipelines from Rumaila and Zubair depots to the Fao terminal”, he continues, “as well as sea lines from Fao to the Basra sea terminal and installations of single buoy moorings (SBMs) in the Basra sea terminal”.

He also believes that the current bottleneck in the Iraq-Turkey export pipeline must be removed and perhaps a third line constructed.  Furthermore, should Iraq reach an agreement with Saudi Arabia, the Iraq Petroleum Saudi Arabia (IPSA) pipeline should be put into service.  He continues:”There is the possibility of constructing a pipeline each to Kuwait and Jordan.  Furthermore, we can resolve the current stalemate of the oil export from Kurdistan by using Iraq’s transport transportation system.”

Safety and security

“The main worries are security and political stability”, says Dr Al Uqaili, “that may severely affect fulfillment of a reliable national integrated plan that includes other sectors beside the oil sector. This integrated plan has not been started yet.”

High-level speakers at Iraq Future Energy 2010 include:

  • His Excellency Thamir Al Ghadhban, Chairman, Advisory Committee to the Prime Minister of Iraq, Former Oil Minister
  • Michael Townshend, President Iraq, BP
  • Dr Abdul Hadi Al Hassani, Vice Chairman, Oil and Gas Committee, Iraqi Parliament
  • Baroness Nicholson of Winterbourne, Executive Chairman, IBBC (Iraq Britain Business Council)
  • Mounir Bouaziz, Vice President Commercial, New Business, LNG, Middle East and North Africa, Shell EP International

Event website:  www.theenergyexchange.co.uk/iraq10
Event dates and location:  27-28 September 2010 – Istanbul, Turkey


For more information:
Programme director: Claire Pallen [email protected]
Mobile: +44 78 330 93510


For more information, interviews and media accreditation:
Communications manager:  Annemarie Roodbol
Tel.  +27 21 700 3558
Fax.  +27 21 700 3501
Mobile: +27 82 562 7844
Email:  [email protected]

AAIB View

A spokesperson from A.A.I.B. Insurance Brokers observed “a number of commentators have recently raised the question of the achievability of the documented production targets within the planned timescales, feeling that they may not be realistic considering the circumstances faced.

However, penalty clauses built into contracts if certain project milestones are not met and output targets are not achieved, are additional spurs for the International Oil Companies and the oilfield support and service companies to strive to meet contractual deliverables and get the Oil and Gas sector infrastructure refurbished and expanded as quickly as they are able to.

The challenges of operating in Iraq in this sector are formidable and should not be underestimated. The security situation, the bureaucratic procedures faced by businesses operating in the country, the current degree of political uncertainty, the transportation bottlenecks at Umm Qasr etc. have all been highlighted and are caused for concern.

However the International Oil Companies and their support network have faced similar obstacles before in many other challenging environments such as Angola and Nigeria, etc. and have gained valuable experience in overcoming such obstacles.

They have demonstrated adaptability and determination and they will certainly need these qualities in order to build a long term presence in Iraq and in supporting the modernisation and expansion of Iraq’s Oil and Gas sector.

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