Iraq Business News is delighted to bring you the latest Iraq Market Tracker report from Dunia Frontier Consultants. The market tracker highlights the activities and market performance of a basket of publicly traded firms who derive a significant percentage of their revenues from operations in Iraq, but are traded on foreign exchanges: a proxy Iraq play as much as practicable. It also identifies and analyzes the primary political and security events that occur in country that have market-moving implications.

Click here to access the report.
 

Companies Mentioned:

ExxonMobil, Lukoil, Statoil, Total, Samsung

Action Calls:

• National Reconciliation Conference looks dead, Sadrists ask their price: Nothing likely to come of it, unless it is to be used to announce developments elsewhere.
• Exxon moving into KRG: Exxon has their contractual commitments, so expect this to continue.
• Total close to securing Kurdistan oil rights: Just as we predicted, another major moving towards Kurdistan.

Headlines:

• Increasing attacks along the trigger line: Triggered by increasing political uncertainty, something to watch.
• Samsung wins $1 billion WQ-2 contract: Shows that life goes on in southern Iraq.

Calendar:

• 31 Jan – Parliament to reconvene
• This week – Exxon reports, Basra single point mooring set enter service
• Next month – National Reconciliation Conference

Click here to access the report, or to add your email address to Dunia’s mailing list to receive the Iraq Market Tracker via email.

Halfaya is not currently the most exciting oil field, but it is growing fast. In less than two years, the large consortium of Chinese, Malaysian and French companies developing it has increased production from 3,000 barrels per day to around 15,000 bpd, with 2,000 bpd of those having just been added with a new well, according to Missan Oil Company, which is overseeing the project.

CNPC, Total and Petronas are drilling 300 wells over five years to free up more than 500,000 bpd in an oilfield with as much as 15 billion barrels of reserves. The oilfield in the south-east of Iraq was initially believed to hold recoverable reserves closer to four billion.

Back in summer, state-run Missan Oil Co. had expected Halfaya to be producing 90,000 bpd by the first quarter of 2012. Now it expects a more modest 70,000 bpd by the end of 2012. Still, it is a good growth rate from modest beginnings.

(Sources: Bloomberg)

Mohammed Saleh, Deputy Governor of the Central Bank of Iraq, highlighted his fears for Iraqi revenues due to the second leg of the financial crisis in the U.S.A., which was kickstarted by a credit-rating downgrade.

With oil prices moving between $80 and $90, they are down from the $100 to $115 range they were trading in before the renewed crisis. The budget for 2011 allows for an average price of $85.

Saleh said that the two key factors affecting Iraq’s economy cannot be influenced by the state: oil prices and the dollar. The Central Bank attempts to hedge against these risks.

Economists have called for the government to diversify away from oil and find other sources of income, according to Al-Sabaah.

(Source: Central Bank of Iraq; Al-Sabaah)

Gulf Keystone, the London Aim-listed, independent oil and gas exploration and production company with operations exclusively in the Kurdistan Region of Iraq, found its second massive oil discovery just days ago. The share price rose by more than a quarter on the news, and have now fallen back to +12%, putting them just over 120p.

Gulf Keystone said its Sheikh Adi discovery near Erbil contains perhaps 1.9bn barrels of oil. This is one of the biggest discoveries to date, although not as big as the company’s other massive find.

Gulf Keystone made another discovery earlier at Shaikan, a neighboring block, which could contain five to eleven billion barrels of oil.

John Gerstenlauer, Gulf Keystone’s chief operating officer, said: “The Sheikh Adi oil in place numbers are all the more significant due to our 80% interest in the block”. The Kurdistan Regional Government holds the other 20%.

“This report reinforces our belief in having encountered yet another potential world-class oil source,” he said in a statement.

Legal battles, and worries about exploration risk and the global economy have pushed down the company’s share price this year from its peak of 184.25.

(Source: Gulf Keystone, The Telegraph

Hillwood International Energy, an independent oil and gas explorer from Dallas, Texas, and Marathon Oil Corporation, another independent, based in Houston, Texas, have gauged a large oil discovery on the Sarsang block north of Dohuk on the Zagros fold belt in Iraqi Kurdistan, according to the Oil & Gas Journal.

The total flow rates in the three zones of the Swara Tika-1 discovery well was more than 7,000bpd of light oil, plus gas. Equipment size and capacity limited the flow rates. The well was drilled to a depth of 12,500ft and found 1,500ft of gross oil  column.

(Source: Oil & Gas Journal, Hillwood International Energy, Marathon Oil Corp)

The drilling and completions contract covers 23 wells in the West Qurna phase two field.

LUKOIL has awarded Baker Hughes a two-year contract to provide full drilling and completion services for 23 wells in the West Qurna field in southeast Iraq, 50km west of Basra.

Under the terms of the contract, Baker Hughes will provide engineering and project management for the turnkey drilling and completions scope of the project. Baker Hughes will supply drilling services, formation evaluation, casing and tubing running services, completion tools and services, wellbore intervention services, and wireline logging as well as perforation operations.

Baker Hughes will also contract all third-party services, equipment, personnel, tools and materials required for the project, including the provision of up to five drilling rigs and three workover rigs.

Some of the wells will be drilled directionally, targeting the Mishrif formation, with step outs of up to 3,000m. The wells are closely spaced, so the operation will employ a cluster (pad) drilling technique. The five drilling rigs and three workover rigs will be mounted on skids for fast, efficient rig moves.

In 2010 Baker Hughes opened a 120,000 square-metre operations base in Basra to serve the Iraq oil and gas industry. The base includes a workshop to support a wide range of Baker Hughes products and services. The facility also houses chemical blending capabilities and inventory, as well as bulk drilling fluids storage for quick response to customers’ requirements.

In addition to the LUKOIL drilling and completions award, Baker Hughes manages and operates drilling and workover rigs in the Zubair field for an international oil company. Baker Hughes also has a strategic alliance with the South Oil Company to support the development of Iraqi wireline capabilities; and supplies electrical submersible pumping (ESP) systems and services, including real-time remote monitoring and automation capabilities to optimize production to three major international operators.

Trade between Iraq and Syria is now running at US$2bn per year, according to a spokesperson for the Iraqi Ministry of Trade.

Hashem Hatam said that this does not include trade in oil and gas, according to Aknews.

At the same time, events could sour increasing trade between the neighbours. As Syria cracks down on protesters, Iraqi parliament speaker Osama Nujaifi has joined the international criticism and said that the “repression” must stop.

The speaker had previously prevented a statement about the repression from being read out in parliament, writes Aknews.

A large delegation from Syria visited Iraq in July and signed further trade deals.

(Source: Aknews; Ministry of Trade)

The Iraq Future Energy Conference will be hosted in Istanbul, Turkey, from 26th September to 29th September.

There is a full programme to demonstrate how energy and infrastructure companies can take a piece of the projects worth tens of billions of US dollars.

Attendees can learn about the Ministry of Oil’s four-year plan ending in 2014, the reorganisation of the Ministry of Oil, new regulations related to energy, and on getting the balance between domestic energy needs and exports, and how the electricity and oil and gas sectors can help.

There will be talks from Shell, Total and StatOil on their own projects, and attendees will learn what is on offer in the fourth bidding round for oil and gas-related projects.

Other sessions cover Iraq’s ambitious infrastructure plans, including upgrading pipelines and building storage terminals, as well as information on the financing and how to overcome Iraqi bureaucracy.

And all that is just part of what’s happening on the first day of the conference. For more details, visit The Energy Exchange.