Tag Archive | "State Oil Marketing Organization"

Basra Light Crude may Split into 2 Grades

By John Lee.

The Iraqi State Oil Marketing Organization (SOMO) has proposed splitting its Basra Light crude supply into two grades.

Reuters cites trade sources as saying that SOMO and has requested feedback on the proposal by the end of the week from buyers in Asia.

Iraq now plans to offer two grades of crude for exports from its southern terminals: “light” with an API gravity of 29 degrees, and “heavy” with an API gravity of 24-25 degrees.

SOMO would set monthly official selling prices (OSPs) for each grade.

(Source: Reuters)

Posted in Oil & GasComments (0)

Iraq Bans KRG Tankers

By John Lee.

Platts reports that Iraq has banned three oil tankers from loading at its oil terminals.

in response to direct exports of crude by the Kurdistan Regional Government over the objections of Baghdad, shipping market sources said Friday.

The United Carrier (pictured), the United Dynamic and the Nautilus have previously transported crude on behalf of the KRG. The United Dynamic and the United Carrier are managed by Greece-based Marine Management Services (MMS).

A document from Iraq’s State Oil Marketing Organization (SOMO) gave no reason for the ban, but a chartering source told the news agency:

Ships that loaded Kurdish crude have been blacklisted by Iraq …

“Maybe they [shipping companies] are getting a high premium [for loading Kurdish] crude and their activity is not reported.”

(Source: Platts)

Posted in Oil & GasComments (0)

New US Airbase ‘No Threat To Iran’

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Spokesman For Iraqi Kurdish Govt: ‘New US Airbase in Erbil No Threat To Iran’

NIQASH interviewed Safeen Dizayee, the spokesperson for the government of semi-autonomous Iraqi Kurdistan. During a candid and wide ranging conversation, Dizayee spoke about why the US is building a new airbase in the region, where exactly Iraqi Kurdish oil is going and whether refugees in the region are being maltreated.

Over the past few months, Iraqi Kurdistan has come under attack from Sunni Muslim extremists in the group known as the Islamic State, it has become home to over a million refugees and it has also been subject to a “financial blockade” by the Iraqi government in Baghdad.

NIQASH held a wide-ranging conversation with Safeen Dizayee, the spokesperson for the Iraqi Kurdish government in the semi-autonomous northern region and a member of the region’s biggest political party, the Kurdish Democratic Party.

The conversation covered everything from the establishment of a new US air base in Iraqi Kurdistan to whether Iraqi Kurdish authorities were discriminating against Arab refugees. He also discussed whether Iranian and Turkish reactions to Iraq’s security crisis were adequate as well as where exactly Iraqi Kurdish oil was being exported to, and how much of it was going there.

Dizayee also commented on whether Iraqi Kurdish authorities might be getting any closer to resolving their long standing disputes with the government in Baghdad, especially now there is a new Prime Minister in charge.

The conversation has been split into three parts for ease of reading.

On US Plans To Build Air Base in Erbil

NIQASH: Apparently the US has also decided to build a military base – maybe more than one – in Iraqi Kurdistan. What can you tell us about this?

Safeen Dizayee: Discussions are continuing about the specifics of this issue. Nothing has happened on the ground as yet.

NIQASH: Would this base be a substitute to the nearest US base, the Incirlik Air Base in Turkey?

Dizayee: No. Incirlik Air Base is a NATO base and it will remain so. The prospective air base in Erbil is in order to confront the IS group in the nearby area.

NIQASH: Do you think that the Iranians will see this as a threat to their influence in the region?

Dizayee: Incirlik Air Base and other US military bases in the Gulf States – in places like Bahrain, Qatar, Kuwait and the United Arab Emirates – are also close to Iran. The base to be built in Erbil is all about fighting the IS group, not about confronting Iran, or any other country, in any way. We have stressed time and again that we don’t want Iraqi Kurdistan to become a battlefield for major powers in the region.

Posted in SecurityComments (0)

BP, CNPC Increase Stakes in Rumaila

By John Lee.

Reuters reports that a revised contract signed last week by BP and China’s CNPC for the Rumaila oilfield has raised both companies’ stakes in the project.

Thamer Ghadhban (pictured), energy adviser to former Prime Minister Nuri al-Maliki, told the news agency that BP’s share has been increased from 38 percent to 47.6 percent, and CNPC’s from 37 percent to 46.4 percent.

The stake owned by Iraq’s State Oil Marketing Organization (SOMO) was cut from 25 percent to 6 percent.

It was reported earlier this week that output targets for the supergiant field had been reduced, and the contract period extended.

(Source: Reuters)

Posted in Oil & GasComments (0)

Gazprom Starts Oil Deliveries from Badra

By John Lee.

Russia’s Gazprom Neft, the operator of the Badra oil field (pictured) in Iraq, has announced that first oil from the field is now being delivered to Iraq’s main pipeline system for transfer to the export terminal in Basra, on the Persian Gulf.

Current deliveries from Badra to the pipeline stand at over 15,000 barrels of oil per day and this level should be maintained until the end of 2014.

According to the service contract with the Government of Iraq, the consortium of investor companies will begin receiving a share of the oil produced at the field after a period of 90 days following launch of commercial supply.

All of the oil produced in southern Iraq, including at Badra, is Basrah Light oil. The Iraqi State Oil Marketing Organization (SOMO) is responsible for oil sales and each quarter will be delivering a share of oil to the investor companies to reimburse their initial project costs.

Once these project costs have been covered, the investor companies will receive remuneration in kind for ongoing development at the rate of $5.5 of oil per barrel produced. Each investor company will be selling their share of oil independently.

First oil from the Badra field was produced in December 2013. Final commissioning at the field and testing of production and transportation infrastructure began in May 2014. Two wells are currently in production at the field and a further three wells are being drilled under a contract with the Chinese company ZPEC. According to the service contract production at the field will achieve 170,000 barrels of oil per day.

Alexander Dyukov, Chairman of the Management Board of Gazprom Neft, said:

Over the period of just a few years, a consortium of companies led by Gazprom Neft has fully prepared Badra, one of the most complex geological field structures in Iraq, for full-scale commercial development.

“This is the first major international project in upstream the company has implemented from scratch. The unique experience gained during this project will contribute to our development of future projects both in Russia and internationally“.

The field is being developed by Gazprom as lead partner (30% stake), along with Korea’s KOGAS (22.5%), Malaysia’s Petronas (15%), Turkey’s TPAO (7.5%), and Iraq (25%).

(Sources: Gazprom Neft, KOGAS)

Posted in Oil & GasComments Off

Erbil and Baghdad: One Step Forward?

By John Lee.

Just as some observers were saying the dispute looked intractable, Deputy Prime Minister for Energy Hussein al-Shahristani has announced a potentially big breakthrough in the ongoing saga of deal and no deal between Baghdad and the Kurdish Regional Government over oil exports to Turkey and oil revenues.

Reuters has reported that after intensive negotiations which have seen Kurdish oil exports stuck at the Turkish port of Ceyhan, the KRG has agreed to export through SOMO, the State Oil Marketing Organisation.

If such a deal survives where previous agreements have stumbled, this leaves an ongoing dispute about the 17% of oil revenue the KRG is supposed to receive from Baghdad, which the KRG complains is frequently reduced. Since January, Baghdad has been withholding salaries of civil servants in the KRG and threatening to sue Turkey.

Shahristani has hailed the deal with SOMO as a positive step forward, and salaries for KRG civil servants will supposedly be paid for the month of January. Shahristani has said February’s payments will go through when the SOMO deal comes into effect.

(Source: Reuters)


Posted in Oil & Gas, PoliticsComments (6)

Southern Oil Exports Rise

Oil exports from southern Iraq increased by almost 300,000 bpd in the first two weeks of this year, compared to the December average, according to a report from Reuters.

Exports averaged 2.35 million bpd in the first 15 days of January, up from 2.08 million bpd in December.

Although this is seen as a sign that Iraq is delivering on its plan to increase supply significantly, Iraq is still catching up with loading delays caused partly by bad weather.

The State Oil Marketing Organization (SOMO) has cut crude allocations to some customers for February.

Work is said to be finished at the new terminals, and they should be capable of handling exports of more than 2.5 million bpd.

From the north, Iraq also exports about 300,000 bpd from its Kirkuk fields to the port of Ceyhan in Turkey.

(Source: Reuters)

Posted in Oil & GasComments (4)

KRG Confirms Oil Export through Ceyhan

The KRG Ministry of Natural Resources (MNR) gives public notice of the commencement of the sale of its first shipment of crude oil exported via Kurdistan Region’s new pipeline through Turkey to the Port of Ceyhan (pictured).

MNR anticipates the sale of the first parcel of two million barrels of exported crude oil to occur at the end of January 2014. Thereafter, monthly parcels will increase to 4 million barrels by the end of February and 6 million by the end of March, then steadily stepping up to 10-12 million barrels for the month of December 2014.

At the beginning of this month, some initial quantities of crude oil produced from the Tawke field began flowing through Kurdistan’s new pipeline system to the Turkish port of Ceyhan, and crude oil from Taq-Taq and other producing fields will soon be added to the export system, resulting in a blended medium crude oil quality of 30 to 32 Degrees API.

Prospective buyers can lift the crude oil shipments in the port of Ceyhan under similar arrangements as those used for SOMO (the State Oil Marketing Organisation) for oil export from Kirkuk.

Details of each parcel will be published by MNR in due course. All tenders will be competitive and based on international pricing. In order to ensure full transparency of the sales and contracting process, independent observers will be invited to each tender, together with representatives of the oil companies that have produced the exported oil.

MNR also invites representatives of SOMO to join the process as observers.

At this stage, MNR is inviting reputable and financially capable companies to register with MNR their interest in participating in the January tender or any of the future tenders.

All applicants should in the first instance write to the Ministry of Natural Resources with information about their company profile, track record and financial status via email [email protected]

All submissions should be addressed to:

KOMO – Kurdistan Oil Marketing Organization,

Ministry of Natural Resources,

Council of Ministers, Kurdistan Regional Government,

Erbil, Kurdistan Region, Iraq

(Source: KRG)

Posted in Oil & GasComments (1)

IBN Newsletter 'FREE Weekly Subscription'