Tag Archive | "oil production"

The latest news on Iraq Oil Production – oil companies, oil output and more – brought to you by Iraq Business News

Iraq’s Oil Exports Hit Record High


By John Lee.

Surprising skeptics, the International Energy Agency has announced that Iraq’s oil exports have hit 3.6 million bpd, a record 30 year high, The Wall Street Journal reports.

Previously exports were falling due to export bottlenecks, bad weather and extensive work on infrastructure, while some northern areas such as Kirkuk were adversely affected by insecurity.

More recently, efforts to clear Iran-Iraq war era shipwrecks from the Shatt al Arab waterway caused some disruption, but experts are divided as to whether the recent rise represents Iraq meeting their export target of 3.4 million bpd for the year or whether February’s achievement is a blip.

Notably, challenges involving pumping and storage capacity at the Fao peninsula and ongoing infrastructure improvements represent near term challenges to Iraq’s export target for the year.

If these challenges are surpassable, Iraq’s oil exports can be expected to rise considerably.

(Source: WSJ)

 

 

 

Posted in Oil & GasComments (4)

WesternZagros to Start Production at Sarqala


Following approval of its declaration of commerciality by the Kurdistan Regional Government (KRG), WesternZagros Resources has announced that it is moving to develop the first of its two significant light oil discoveries.

Once its development plan for the Sarqala field is approved, the Company expects to produce up to 10,000 barrels per day (bbls/d) of light, sweet oil in the second half of 2014.

After 10 years of rewarding exploration in the Kurdistan Region, WesternZagros is turning its discoveries into production that is destined for the domestic market and potentially the Kurdistan Region’s export markets via the new pipeline,” said Simon Hatfield (pictured), Chief Executive Officer of WesternZagros. “This monumental step marks a new era in our Company history that was recently defined by the KRG’s approval of our declaration of commerciality on the Sarqala Discovery.

We are focused on promptly generating productive value from the Sarqala field for our shareholders and the people of the Kurdistan Region, and undertaking development planning for our giant Kurdamir Discovery, which contains mean contingent resources of almost a billion barrels of oil equivalent,” Hatfield said.

Moving to production and cash flow

The Sarqala-1 well, which produced up to 5,000 bbls/d during a nine-month extended well test in 2011-12, already has production facilities in place. WesternZagros is completing a workover on this well that is expected to take production capacity up to 10,000 bbls/d. Additional development wells at Sarqala, including the Hasira-1 well currently being tested, are expected to deliver additional volumes through planned expansions to initial production facilities that have a design capacity of up to 35,000 bbls/d.

WesternZagros will submit a Garmian Block development plan, outlining future development wells, production facilities and support infrastructure, to the KRG by June 21, 2014. Independent reserves evaluators have audited estimates that, as at February 8, 2013, the Sarqala Discovery contained gross unrisked mean estimates of 463 million barrels of oil equivalent in prospective resources and 24 million barrels of oil in contingent resources. Future expansion phases will be determined by the success of a forthcoming development drilling campaign to delineate the prospective resources.

On the neighbouring giant Kurdamir Discovery, development planning to bring this find into production is a longer-term initiative that requires extensive geological and operational evaluation, as well as engineering and financial planning. Three Kurdamir exploration wells have defined an oil and natural gas-charged structure that contains gross unrisked mean estimates of 541 million barrels of oil in contingent resources, and a further 1.3 billion barrels of oil in prospective resources. WesternZagros expects to file a declaration of commerciality for the Kurdamir Discovery within the next 12 months.

“As we move to this development phase, WesternZagros is focused on optimizing and monetizing the value of its discoveries through a variety of means, which includes working with our partners and the KRG to generate near-term production from Sarqala, as well as exploring the greatest value creation opportunities available from our suite of resources,” Hatfield said.

Transition to development

As part of transitioning to development, WesternZagros, its co-venturer, Gazprom Neft, and the KRG have agreed to end exploration activities on the Garmian Block following the completion of the Hasira-1 well. As such, the Company has no further exploration expenditure obligations and will now be able to apply its focus and financial resources on development. Under the agreement with the KRG, the partners have relinquished the areas of the Garmian Block that are not covered by the development plan. The development plan area includes the Sarqala and Hasira discoveries. The relinquished area includes Chwar, Qula, Quilijan and Baram, which are considered non-core to WesternZagros’s development plans.

Optimizing drilling rig contracts

During the preparation of the development plan and its approval by the KRG, and in order to minimise short-term expenses, WesternZagros is in advanced discussions with the KRG and Gazprom Neft to temporarily assign two of its contracted drilling rigs elsewhere for the remainder of 2014. Under this arrangement, the rigs would return to the Company’s Garmian Block for development drilling on Sarqala in early 2015 once the development plan is approved and additional development locations are prepared.

Financing Alternatives

WesternZagros as at December 31, 2013, had net working capital of approximately $97million, which is sufficient to fund planned operations in 2014. As development plans advance, the Company will evaluate funding options with a mind to maximizing value creation for shareholders. Options may include accessing the debt and/or equity markets, additional partnerships, farmouts or other strategic arrangements.

Posted in Oil & GasComments (2)

Oil Exports Hit 25-yr High


By John Lee.

Iraq produced oil at a rate of 3.5 million bpd in February, and exported at a rate of 2.8 million bpd, a sharp month-on-month gain and the highest such figure in at least a quarter-century, reports AFP.

The deputy prime minister for energy affairs, Hussain Al Shahristani (pictured), said February output would have been significantly higher if not for energy disputes with the Kurdistan region.

We think the average for the year is probably going to be about 2.9 million bpd, so maybe in the latter part of the year there will be a little bit more than that,” a Western oil executive in Iraq told Reuters.

Most of Iraq’s crude is exported via its southern terminals near Basra, but a significant portion goes through a northern pipeline that is periodically bombed by militants.

(Source: AFP, Reuters)

Posted in Oil & GasComments (3)

ENI Stays in Last Minute Deal, Sonangol Exits


By John Lee.

Tense negotiations between Baghdad and Italy’s ENI came to a close just hours before ENI was supposedly going to call time on their Iraq operations, Reuters reports.

ENI CEO Paulo Scaroni made his dissatisfaction clear to reporters on Tuesday before the new deal was struck, stating,

“If they do not sign the contracts in a couple of weeks we will go. We have waited six months. I am hopeful, we have no reason to believe they won’t do it.”

In the North, Angola’s Sonangol ended its operations citing security concerns. An Iraqi government official blamed persistent al-Qaeda activity in the area.

But the decision of ENI’s CEO to stay in Iraq is a victory of sorts for the Iraqi government following a series of reports about the damaging effect of bureaucracy and unattractive  contractual terms offered by the government.

ENI has now gained approval to raise production at the Zubair field from 320,000 bpd to 850,000 bpd. An Iraqi government spokesperson said of the recent deal,

“We respect Eni and take their opinions seriously. We want them to stay in Iraq.We’re doing our best to approve high-cost contracts as quickly as we can. If they are delayed, it affects productivity and profitability.”

(Source: Reuters)

 

 

Posted in Oil & GasComments (3)

KRG Natural Resources Monthly Report


The KRG Ministry of Natural Resources (MNR) announces the publication of its first Monthly Report.

The Report contains the latest information on production and export in the Kurdistan Region, domestic refining and consumption, well activity, rig counts and map, employment figures and updates on Production Sharing Contracts.

The report will help interested citizens, companies and the media to closely follow the activities and progress of the oil industry in the Kurdistan Region. New information sections will be added over the coming months.

The first report, published today, covers activities in the month of October, 2013. Reports for November and December 2013 are being prepared and will appear in mid-February. Thereafter, it will be published monthly.

The Monthly Report is part of MNR’s ongoing commitment to transparency. Each report will be in English and Kurdish and will be posted every month on MNR’s website when it will be announced soon. Hard copies will also be available. An Arabic version is under preparation.

Please click here to download the full report from the Iraq Business News reports service.

(Source: KRG)

Posted in Commodities & Mining, Oil & GasComments (4)

Iraq, Iran Plot Oil Revolution, Challenge Saudi


By John Lee.

Iraq and Iran, which together hold more oil reserves than Saudi Arabia, are planning to challenge Saudi Arabia’s grip on OPEC and its status as the “swing producer” in the cartel, according to a report from The Telegraph.

With Iraq poised to triple its capacity to 9 million bpd by 2020,  the result could be a dramatic fall in oil prices.

Hussain al-Shahristani (pictured), Deputy Prime Minister for Energy, said:

We feel the world needs to be assured of fuel for economic growth … It’s very difficult to predict actual world (oil) demand by 2020 because the world economy is unpredictable … Iran has been in touch with us; they want to share our contracts model and experience.

This news that Baghdad is working with Iran to help it attract investment ahead of the possible lifting of sanctions could be seen as a challenge to Saudi Arabia. Oil companies are understood to be queuing up to win Iranian oil deals.

The report speculates that, even if Iraq is able to achieve its target of boost production capacity as planned, it is unlikely to be able to put in place sufficient pipeline and port infrastructure to export the additional crude; the main export terminal near Basra will require billions of pounds worth of improvements in addition to the refurbishment of its pipeline network.

Currently, crude oil exports account for 93 percent of Iraqi government revenue.

(Source: The Telegraph)

Posted in Oil & GasComments (5)

Iraq Oil Revenues Decline


By John Lee.

Iraq exported a total of 872.3 million barrels of oil last year, giving an average of 2.39 million barrel per day, down from 2.42 million bpd in 2012, according to AFP.

Revenue for the year was also down, falling from $94.02 billion in 2012 to $89.22 billion last year.

OPEC said Iraqi oil production declined 1.8 percent from November to settle at 2.9 million barrels per day in December.

(Sources: UPI, AFP)

(Oil revenue image via Shutterstock)

Posted in Oil & GasComments (5)

Majnoon Exceeds 210,000 bpd


By John Lee.

The Director of the Majnoon oilfield has told Aswat al-Iraq that production at the field has exceeded 210,000 bpd.

Basim Tahir added that production may be increased to 220.000 bpd at the beginning of 2014, with gas supplying Rumaila power station.

Shell owns 45 percent of the venture, with Petronas owning 30 percent, and the Iraqi state holding 25 percent.

(Source: Aswat Al Iraq)

Posted in Oil & GasComments (3)

IBN Newsletter 'FREE Weekly Subscription'

wyg.com