Tag Archive | "oil production"

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

Gazprom Begins Production at Badra

By Patrick M Schmidt.

The Iraqi Ministry of Oil has announced that Gazprom Neft, a division of the Russian state-owned Gazprom, had begun production at Badra oilfield in the eastern province of Wasit.

Oil flow from Badra has started on Monday to fill the oilfield storages in preparing to feed the export,” said Ministry of Oil spokesman Asim Jihad.

Badra is expected to average 15,000 barrels of oil per day in the short term, but experts suggest its production figures could rise to 170,000 barrels of oil per day by 2017.

(Source: Reuters)

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ISIS Profits from Captured Oilfields

By Patrick M Schmidt.

The Iraqi government has confirmed that ISIS militants, who maintain a foothold in northern Iraq, are taking advantage of the oil infrastructure they have captured during the previous month of battles with security forces.

ISIS militants have made attempts to keep oil infrastructure intact and to keep petroleum industry employees on the job, so that the group can profit from the energy resources of the region.

Officials believe that ISIS is transporting oil overland from oilfields outside of Mosul and Tikrit to Syria to help fund their terrorist organization.

After processing the oil in Syria, the refined products are smuggled back into Iraq and sold to the populace in ISIS controlled territory. ISIS makes a profit from these activities by pricing their stolen oil products about three times above market price.

(Source: RT)

(Terrorism image via Shutterstock)

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Iraq, the Full Picture

Despite the often grim news coming from Iraq in recent weeks, many businesses are seizing the opportunity to go where others won’t.

In this week’s newsletter, for example, we report on a new truck distribution deal in Iraqi Kurdistan, a Turkish company completing a storage tank project, and a Malaysian firm planning to break into the Iraqi helicopter charter market.

We also have news of a new road that will greatly reduce travel times to and from the Iranian border, and an assurance from the Oil Minister that southern oil production is unaffected by the recent violence further North.

People who want the full picture of Iraq read Iraq Business News, and the most effective way to get your message to them is to advertising with us. We have a wide range of options to suit all budgets — you can find more details here.

(Flag image via Shutterstock)

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Hawrami: New Iraq Needs Power-Sharing

By John Lee.

The key to Iraq’s unity is power-sharing, revenue-sharing and the implementation of the Constitution, Dr Ashti Hawrami (pictured), the Kurdistan Regional Government’s Minister of Natural Resources, told a London conference yesterday, saying:

“The policies of centralisation and discrimination have put Iraq’s future at risk … As of last week (following the crisis in Mosul) there is a new Iraq. Iraq needs power-sharing, revenue-sharing and adherence to the constitution. Otherwise we will have more chaos in Iraq.”

Dr Hawrami explained that the federal budget law in 2013 had introduced a minimum export requirement of 400,000 barrels per day by the KRG, but this figure was unrealistic and had been inserted into the budget without consultation with the KRG.

He said that the KRG should have received $6 billion as its budget so far this year; instead, it had received $900 million. The KRG has been forced to borrow $3 billion locally and internationally, and it will be able to overcome the budget shortfall by exporting up to ‎250,000 bpd from July, with the aim of increasing to 400,000 bpd by the end of the year.

The minister said that Kurdish oil sales would continue through the Ceyhan port in Turkey and that two tankers of oil had already been sold, with a further two tankers expected to load this week for their agreed buyers.

He outlined that international oil companies have already invested $15 billion in the energy sector so far, and they are required to invest $10 billion more in the next two years. The Minister explained that the oil and gas sector, including services, employs about 33,000 people in Kurdistan, 87‎% of whom are locals.

Dr Hawrami reiterated the articles in the Iraqi Constitution that give the KRG the authority to export oil. He also said that the KRG now had the necessary pipeline infrastructure in place to enable the resumption of export from the Kirkuk oilfields, which have seen no exports since March due to persistent sabotage attacks on export infrastructure outside the KRG controlled area.

He concluded by saying, “Despite all the unfair treatment and discrimination, the KRG reaches out to Iraq and is ready to cooperate, to work together to resolve these problems.

(Source: KRG)

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Oil Price Surges amid Iraq Turmoil

By John Cookson. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Traders will tell you the price of oil is a speculative market based on expectations. Most of Iraq’s oil production is from the mega fields in the south, far from any fighting. But in the world’s skittish bourses just a threat to exports is enough to cause market jitters.

Iraq was expected to contribute to 60 percent of OPEC’s crude production in the next 10 years so its output had become important for the long-term global energy market.

Small wonder, as country slides towards possible civil war, some analysts predict the price of a barrel of oil could soar by US$30.

The jihadists lightning assault in the north of Iraq last week caused Brent crude to spike to US$113, and the price could rise still further today with the news ISIS seized another town,Tal Afar, in the north west and still had their sights on Baghdad.

The US Embassy in Baghdad has relocated some staff to its consulates in Erbil and Basrah and to Jordan. The oil industry has reacted too with majors like BP at Rumaila and ExxonMobil in West Qurna evacuating all but vital expatriate staff.

The oil companies are playing down any sense of panic. ExxonMobil is not commenting on the crisis and BP said simply the violence in Iraq “has no impact,” on production at Rumaila. Royal Dutch Shell at Al Majnoon put a statement out saying safety and security of staff was: “an absolute priority.”

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West Qurna-2 hits 200,000 bpd

By John Lee.

Lukoil boss Vagit Alekperov (pictured) has told journalists that production at the West Qurna-2 oilfield has reached 200,000 bpd, from a starting volume of 120,000 bpd two months ago.

He added:

By the end of the year according to obligations 400,000 will be reached. Today there is no doubt that 400,000 will be reached by December.

(Source: Reuters)

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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)




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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.

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