Custom Search

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

Qs & As Regarding Al-Zaidi Government' Views on Petroleum Issues

Interest in the Iraqi petroleum sector has intensified lately, particularly from energy-focused Western media sources. In response to my articles and presentations since the US-Israeli war against Iran, I have received, through emails and direct discussions on Zoom and Microsoft Teams, many questions and requests for comments and clarification. All of them want to know and understand what the current Al-Zaidi government intends to do on a variety of issues pertaining to the Iraqi petroleum sector. Western inquiries focus on upstream petroleum and the prospects of IOCs, while Iraqi concerns focus on oil export prices, discounts, and the impact and consequences of the continued war on Iran.

This brief article provides answers to the questions and requests, which focused on the following topics*:

• The new higher oil production target.
• The increasing presence of US companies in Iraqi petroleum projects.
• IOCs' dominant role in upstream petroleum.
• The availability of enough resources to support a two-digit production level.
• Matters relating to bureaucracy and transparency in petroleum contracting and awarding decisions.
• The ongoing US war on Iran and its impacts on Iraq.
• New pipeline proposals to diversify export routes.
• Monetising associated gas.
• The prospect of Turkish involvement in the Iraqi petroleum sector.
• SOMO's high discounts on its official selling price.

Before answering the questions, I expressed, through direct communications, my readiness and delight to cooperate and respond professionally and objectively to the related parties. I highlighted that I have an elaborate, well-organised and updated database that covers more than three decades of development in the Iraqi petroleum sector in particular and the national economy in general. I have published numerous articles in Arabic and English, and authored seven books in English documenting the development of the Iraqi petroleum sector. Links to my publications were provided for easy access when needed. Therefore, everything I say or write in due course is verifiable and evidence/fact based. Below are the questions (Qs) and my answers (As).

Q1. On the oil side, Al-Zaidi initially said that the country's goal is to grow oil production to 7 million barrels per day (mbd) from the pre-US-Iran war level of over 4 mbd, most recently upping this target to 8-9 mbd and giving a timeline of six years. Is this feasible?

A1. Based on available data, Iraq (excluding the KRG) currently has an installed oil production capacity of ca. 5 mbd, while actual utilised capacity fluctuates. During the period 2014-2025, the maximum actual production was in 2019: 4.576 mbd (Ministry of Oil (MoO) data) or 4.678 mbd (secondary sources used by OPEC). The annual average during 2025 was 3.775 mbd and 4.011 mbd according to MoO and OPEC data respectively.

Yes, but Al-Zaidi proposed escalating targets reaching 10 mbd within six years! In my view this is unrealistic and probably unattainable.

1. Since the signing of the first bid round in 2010, Iraq's installed production has almost doubled, reaching ca. 5 mbd in 2025.
2. From 2019, actual production, according to MoO data, declined from 4.576 mbd to 3.775 mbd at the end of 2025.
3. Almost all of the production increase is attributable to oilfields offered under the first two licensing rounds.
4. Apart from the impacts of COVID-19, geopolitics and market fundamentals, the absence of a coherent, integrated and comprehensive Energy Policy has contributed to complicating and hindering progress in actual oil production. The Al-Zaidi government demonstrates no resolute orientation in its programme to remedy the situation.
5. So, if it took the country 15 years to increase its installed capacity from ca. 2.3 mbd to 5 mbd, how is it possible to reach 10 mbd in six years?

Q2. Al-Zaidi appears to know the path to achieve it - bring in US and other international operators to develop legacy and new fields. Does he?

A2. I am not sure he knows the path well! He has absolutely no experience in oil matters, let alone the political economy of international oil contracting with IOCs and the recent historical experience of US IOCs in Iraq.

Materially verifiable evidence suggests the US "Big" oil companies had the "lion's share" in Iraqi upstream petroleum through:

1. The Memoranda of Cooperation (MoCs) concluded between IOCs and the Ministry of Oil during 2004-2008.
2. The list of IOCs qualified to participate in the bid rounds (2009-2024).
3. The companies that participated in the first two bid rounds (2009-2010).

Yet none of the US "Big" oil companies won a contract, as operator, in the open, competitive and transparent bidding events. Through the "back door", yes, but in only one case, which did not last long.

Q3. Foreign-operated fields in Federal Iraq (excluding Kurdistan, where 100% of working fields are in the hands of international oil companies (IOCs)) already account for 75% to 80% of total oil production in the country. Is this so?

A3. Correct, and it could be more than 80%. The number of oilfields operated by "National Efforts" is declining because some of them have been offered to IOCs, such as NOC's four producing oilfields (Kirkuk, Bay Hassan, Jembour and Khabaz) contracted to BP, the Ratawi/Artawi oilfield offered to TotalEnergies, the Himreen oilfield to HKN, and the Nassiriya and Balad oilfields offered to Chevron, among others.

Regretfully, there has been a tendency by the last three governments, of Al-Kadhimi, Al-Sudani and now Al-Zaidi, to offer nationally operated oilfields and exploration blocks to IOCs.

Q4. Does Iraq have a sufficient number of explored fields in place to offer to international oil companies to support 8-9 mbd of production? One could suspect the Majnoon/West Qurna 2 oilfields will be central in achieving this goal, but maybe you can point to other fields that may be instrumental in achieving it? Do you think the goal is realistic at all?

A4. To answer this question, we have to remember that after concluding the contracts for the fields under the first two bid rounds, Iraq's plateau production target/capacity (PPT) was to reach 12 mbd by ca. 2017. The PPTs were revised downwards, and the contracts were revised accordingly in 2014/15.

Iraq, in my humble view, has many options to reach the 10 mbd threshold. But is it advisable to develop a production capacity of such a level while ignoring, as has been the case since 2010, the required parallel expansion of export infrastructure and outlets, associated gas utilisation, international market conditions, OPEC/OPEC+ compliance, and the absence of a coherent, comprehensive national petroleum policy?

That said, Iraq could increase oil production through the following options:

1. Expedite oilfield development under the contracts concluded in the first four bid rounds.
2. Revise the amended contracts back to, or close to, their originally contracted PPTs.
3. Quick and timely conversion of exploration block contracts into oilfield contracts for already discovered oilfields. Exploration Block 10 to the Eridu oilfield is the most obvious example, with its huge discovery and the high possibility of its boundaries extending beyond the contracted area. Another example is the Salman oilfield in Exploration Block 12.
4. The agreement with BP could enhance NOC's oil production, gradually.
5. The Majnoon and West Qurna 2 oilfields could have significant impacts, but there are legal hurdles in offering them to IOCs under a different contract type and basic fiscal conditions.

As it stands today, Iraq has enough oil.

But the country needs to do more: first, to utilise associated gas, and second, to develop the gas fields, namely Akkas, Mansuria and Siba. Moreover, Iraq is a relatively under-explored country, particularly in its western part.

Evidence suggests a high exploration success ratio. Hence, the focus should be on exploration activities, with priority given to areas with promising natural gas prospects. The required exploration could be done by Iraqi national efforts, with some external assistance when needed.

Q5. It appears from Iraqi news that Al-Zaidi is making strong efforts to cut domestic bureaucracy and simplify the approval process for IOCs, as well as to increase the transparency of tenders and other governmental dealings. More often than not, exemptions from existing regulations are being granted by the Cabinet of Ministers to speed up approvals. So, the question to you is whether you think bureaucracy is indeed becoming less of an obstacle for IOCs, and whether there is a need to implement a wider reform/overhaul of existing regulations/laws to avoid such individual/per-case exemptions, instead putting more robust legislation in place to replace these regulations and laws?

A5. The increasing number of exemptions could reveal different forms of high-level corruption, irregularities or favouritism. This pattern of exemption intensified under ex-PM Al-Sudani. For example, exempting an oil company (x), because it is American, from the qualification criteria and process usually applied by the Ministry of Oil is counterproductive and undermines an established system of qualification.

Moreover, there has been a dangerous lack of transparency, particularly during the last ten years. No basic information has been disclosed regarding the fiscal, economic and legal regime of any contract or agreement the government has signed. Neither the Ministry of Oil nor the related IOCs have disclosed the regime of the signed contracts during the last ten years.

Logically, it is rather unreasonable to expect less bureaucracy in a strictly non-transparent working environment. Lack of transparency covers corruption, inefficiency and rigid bureaucracy.

So far, the Al-Zaidi government, as far as the oil sector is concerned, has not publicly and openly disclosed the basic details of any contract or agreement, or even the status of previously concluded deals. The Oil Ministry website usually shows more photos and a few words on any meeting it reports on; absolutely no substance on the subject matter.

And by the way, Iraq is obliged under the provisions of the EITI to disclose contracts and agreements in the extractive activities of the petroleum sector. And the Minister of Oil is the chair of the Iraqi EITI!!!

Finally, laws in Iraq are promulgated and amended according to the Constitution and through an established process and procedure. But "exemptions" are usually pursued by the executive branch, for justifiable reasons or otherwise, though mostly on unjustifiable premises.

Q6. Another key issue is the Strait of Hormuz and the US-Iran war. While grand plans are announced in Baghdad and IOCs are invited to Iraq, the country is having major issues with oil production/exports. These issues may drag on for months, if not years, as the US-Iran confrontation may last a long time. So, this poses the question of whether you think Iraq and Al-Zaidi remain hostage to the situation in the Middle East, and whether, until there is permanent peace/stability in the region, IOCs may be slow or reluctant to commit billions of dollars of new investment to the country?

A6. Many important issues are relevant for consideration regarding this topic.

First, the Strait of Hormuz remains strategically important not only for seaborne oil transport but also for other petroleum and petrochemical products, LNG, and a wide range of trade and supply chains. It will open again, fully or partly. The question is not if but when, depending on the geopolitical and military standoff prevailing since the end of last February.

Second, I recently proposed a southern-bound joint pipeline: Basrah-Kuwait-Bahrain-Qatar-Saudi Arabia-UAE-Oman, with terminal options on the Gulf of Oman or the Arabian Sea. This new, outside-the-box pipeline could provide a "necessity option" for exporting oil through terminals bypassing, but in addition to, the Strait of Hormuz.

Third, it is helpful to know or remember some data on the current status of Iraq's export outlets. The highest volume through the southern export terminals and the SPMs was 3.627 mbd in December 2018; this tells a lot about the infrastructural limitations on the country's export capacity and, consequently, the time and magnitude of investment needed to expand that capacity if Iraq aims to boost oil production to a much higher level than it has today.

As for exports through Turkey, Iraq, under current domestic and regional conditions and geopolitics, is unable to provide the 758 tbd envisaged by the transitional commercial arrangement, let alone provide 1.5 mbd by next July!

Q7. The pipeline proposals to diversify routes and connect Basrah/southern fields to the existing Iraq-Turkey pipeline and the rebuilt Iraq-Syria pipeline may take several years to complete. So, do you think the diversification of export routes should be completed (or at least started) before major Western investment can start coming into oil developments and higher production?

A7. As I mentioned above, Iraq needs to formulate and implement a harmonised, integrated petroleum policy that coordinates the parallel development of the four sub-sectors of petroleum: upstream, midstream, downstream and international marketing.

Iraq should always have some sort of "Dynamic Oil Material Balance" covering and aiming at the optimisation of oil production, oil exports and domestic requirements (for the refining sub-sector, electricity generation and other uses), which should be reviewed regularly - weekly, monthly or quarterly.

An IOC's attention is usually and mainly "project-focused"; the Ministry's approach should be "sector-wide", i.e., covering the four sub-sectors. Hence, contractual provisions, particularly "Take or Pay", should always be kept in mind when considering upstream petroleum projects.

Q8. Another question is about monetising associated gas. Al-Zaidi has emphasised that a priority is ending Iraq's reliance on foreign natural gas imports, notably from Iran. Do you expect any quick progress on this plan? With decades of gas flaring, declarations on eliminating gas flaring do not appear that easy to implement - and may take years to complete, delaying the desired ramp-up in oil production. But maybe you have your own opinion on the associated gas programme to share...

A8. Gas flaring is, and has been, one manifestation of the MoO's failure so far. The MoO has not published data on associated gas production, utilisation and flaring on its website since the last quarter of 2016.

Data from the World Bank's Zero Routine Flaring Initiative still shows Iraq among the top four countries in gas flaring: Russia, Iran, the USA and Iraq.

Gas provisions in the contracts for oilfields offered under the second bid round were not properly observed, or were even ignored, by the MoO in many oilfields, particularly Majnoon, West Qurna 2 and Gharraf.

Moreover, there are cases indicating confusion and inconsistency in awarding associated gas projects to companies while the related oilfields are operated by other companies.

Basrah Gas Company (BGC), a joint venture comprising SGC, Shell and Mitsubishi, which is supposed to utilise associated gas from six oilfields (Rumaila, West Qurna 1, Zubair, and the three Missan Province fields of Buzorgan, Faqah and Abu Gharab), has not yet reached its contracted target, even after 11 years in operation that followed 7 years of negotiation to finalise the JV agreement.

Finally, by definition and logic, associated gas is a by-product of oil. The exact relationship depends on the Gas-Oil Ratio (GOR) of each type of crude oil. There is, naturally, a strong statistical correlation/regression between the two, with gas dependent on oil. Therefore, if Iraq is unable to utilise associated gas at the current oil production level, it will not be able to utilise the higher volumes of associated gas resulting from higher oil production levels. Unless current gas flaring is ended, new oil production capacity (over 5 mbd) would augment the malpractice of gas flaring and all the negative consequences such flaring causes.

Q9. A question about Turkey. Turkey has strong ambitions of becoming a large regional oil hub by securing 2 mln bpd or more of Iraqi oil transiting the country. It also wants a guaranteed supply of 1 mln bpd to Turkey's refineries. Ankara is ready to jump on this opportunity to increase its regional importance as an oil hub, after securing natural gas transits and imports/exports. Do you think the interests of Baghdad and Ankara align? Do you think that in the long term Turkey may rival the US and China in Iraqi oil and gas developments and influence?

A9. The one-year transitional commercial agreement concluded on 1 August includes a 750 tbd throughput, rising to 1.5 mbd once the comprehensive new agreement is reached by the end of the current transitional commercial agreement.

Many important issues will need to be resolved, depending on what the comprehensive new agreement covers. No specific information has been revealed so far, and there is a good deal of confusion and contradiction even in what has been revealed.

Iraq has to optimise the allocation of oil exports between the four outlet options: Turkey, Syria, the Strait of Hormuz and the southern joint pipeline mentioned earlier.

I do not believe that Turkey has the strength and capacity to rival the US or China in Iraqi oil and gas developments and influence. China already has a strategically consolidated position in the Iraqi petroleum sector; Turkish companies do not pose any challenge to the Chinese.

As for US companies, it is rather early to assess their possible standing in Iraqi petroleum, since what has been concluded so far is a few framework agreements, not definitive contracts. But again, Turkish companies are no match for US "Big Oil" capabilities.

Currently, Turkish involvement in Iraqi upstream petroleum development projects is confined to two fields, through TPAO: a minor (7.5%) participating interest in the Badra oilfield, and a 40% interest in the Siba gas field. But some Turkish companies have a role in the petroleum sector as service companies or sub-contractors, such as in drilling activities.

Nevertheless, in a comparative sense, Turkey has an edge in its negotiations with Iraq: the water issue, the Development Road, the PKK and Turkish military forces in northern Iraq, and trade relations, all in addition to oil matters, including direct links with the KRG.

Q10. Why does SOMO offer high discounts while international oil prices are soaring, markets are tight and seaborne oil trading has been seriously interrupted by the closure of the Strait of Hormuz?

A10. This is an important, timely and complex topic that was raised by different parties, especially from inside Iraq, including journalists, parliamentarians and oil professionals, among others.

To begin with, offering discounts or imposing premiums on oil prices is normal practice for all oil exporters, depending on how they assess market conditions, geopolitical risks, their pricing mechanism/setting formula, their market share and their need for oil export revenues, among other considerations.

The recent discounts in question are primarily related to geopolitical risks that have increased tanker insurance, fuel and operating costs to unprecedented levels. Moreover, "dark" transits of the Strait and "ship-to-ship" round-trip practices increase oil tanker costs, which are compensated for by further discounts.

That said, the main issues in the Iraqi case are the magnitude of the discounts, their duration, which markets they apply to, why, and what the fiscal consequences of these discounts are.

SOMO-based information indicates discounts increased from $14 a barrel to $25/b during July and August respectively, while international sources give a much higher threshold of $30/b for mid-August deals.

Trading sources and Reuters report that SOMO offered September crude at discounts of $15 to $20.80 per barrel to its official selling prices, and some cargoes were sold at even larger discounts. Vitol and ADNOC have been active in concluding Iraqi oil liftings at such discounts; they purchased a total of 70 million barrels for September loading.

The above discounts are themselves significant, as are their fiscal magnitude and ramifications for Iraq's oil export revenues, and assessing them requires real, full and accurate data. But SOMO does/did not disclose the relevant data needed on the following related matters.

First, the reference Official Selling Price (OSP) to which the above discounts applied.

Second, Iraq exports two types of crude from the southern export outlets: Basrah Medium and Basrah Heavy. While the exported quantities of the two types are published occasionally, their prices are not, either in aggregate or for different market destinations.

Third, SOMO announces, on a ministerial monthly basis, the OSP setting formula for the two Basrah crudes destined for the three major international markets: East Asia, Europe and the Americas. The price formula for each market has its own "marker crude", which differs from market to market. Data from international sources indicates a wide margin of variation between the prices of the marker crudes used.

Fourth, Iran has publicly and formally exempted Iraqi oil cargoes from fees or restrictions on transiting the Strait of Hormuz. This implies that SOMO is not compelled to offer discounts when a cargo exemption is on offer.

Fifth, SOMO did not release its Monthly Export Reports for April to July. The August Export Report shows the following: Basrah Medium 55,702,595 barrels; Basrah Heavy 14,052,339 barrels; Kirkuk and KRG oil exported through Turkey 3,932,683 barrels.

The monthly report says nothing about the export price, total revenues, or how much Basrah crude was sold at the reported discount of $25/b during August. If this discount applied to all Basrah crude exports, SOMO lost well over $1.7 billion in August.

The MoO's preliminary estimate of all oil export revenues was $4.5 billion in August, indicating the discount represents 37.8% of oil export revenues. The preliminary average oil export price during August was $64.29 a barrel, indicating SOMO's OSP for Basrah crude could have been $89.29 a barrel at most. Lost oil revenue of more than $1.7 billion in one month is a painful, unacceptable fiscal blow for Iraq.

Sixth, as mentioned above, Vitol and ADNOC have reportedly contracted to lift a total of 70 million barrels during September. Unless oil production and exports from the southern terminals increase above August levels, all oil exports from the south will be earmarked exclusively for Vitol and ADNOC.

The consequences will be both costly and damaging in the short and medium term.

Discounts, if continued at such hefty levels, will remain fiscally heavy, eroding oil export revenues and deepening the fiscal crisis for the current government.

SOMO will not be able to fulfil its "Term Contracts" with all or most of its ca. 40 International Oil Buyers (IOBs); that could damage its reputation as a reliable supplier and could reduce its market share.

Moreover, in-kind payment of IOCs' entitlements could very well be affected, causing further delay in the ramp-up of oil production.

Seventh, the magnitude of the discount in just one month has outraged many inside Iraq, prompting calls to question the MoO on why its affiliated company, the Iraqi Oil Tanker Co. (IOTC), has no capacity to transport Iraqi crude. It has also exacerbated the sharp differences of position that surfaced during August between the Ministries of Transport and Oil when a parliamentary committee debated this issue. More debate is probably forthcoming on two options: offering costly discounts vs. enhancing IOTC's fleet capacity.

*My answers reflect data and information as of mid-September.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq's Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad's biography here.

By Simon Watkins, for OilPrice.com. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Why The U.S. Is Racing To Lock Down Iraq's Most Explosive Geopolitical Gas Prize

Sharing its eastern border with Iran, its northern border with Turkey, its western border with Syria and Jordan, and its southern border with Saudi Arabia, Iraq is arguably the single most geopolitically important country to the U.S., China, and Russia in the entire Middle East.

In turn, the lawless western desert province of Anbar is perhaps the most geopolitically vital area in Iraq, and the most strategically important asset in Anbar is the huge Akkas gas field.

With the new Iraqi Prime Minister, Ali al-Zaidi, having taken office on 16 May and showing every sign of being open to new Western energy initiatives across the country, U.S. firms have positioned themselves centre-stage to take control of the Akkas field's development.

So, what are their key objectives here and how do they aim to achieve them?

Click here to read the full article.

By John Lee.

Iraq's Ministry of Oil has announced a long-term plan to raise production at the Akkas gas field to 400 million standard cubic feet per day (MMscfd), with an interim target of 143 MMscfd by mid-2027. A meeting with a delegation from US company ConocoPhillips is expected in Baghdad to discuss implementation of an agreement signed between the Iraqi government and the company through the Ministry of Oil in the United States.

Mohammed Yassin Hassan, Director General of Midland Oil Company (MdOC), told the state-run Iraqi News Agency (INA) that the field currently produces 43 MMscfd under a national effort following severe damage caused by ISIS in 2014. An existing contract with SLB (formerly Schlumberger) covers the drilling of six wells and the construction of a processing facility with a capacity of 100 MMscfd, which is ongoing. Hassan said the first 100 MMscfd increment could be completed by mid-2027, bringing total output to 143 MMscfd.

The 400 MMscfd target is described as a long-term ambition, with a strategy to be developed in coordination with the new investor. Hassan said the plan is to achieve this before the end of 2030.

(Source: Iraqi News Agency)

By John Lee.

The Iraqi Minister of Oil has been authorised to sign a memoranda of understanding (MoU) with a consortium comprising US-based companies ConocoPhillips, TI Capital and Novaterra Energy.

Cabinet approved the agreement, which involves assessing the exploration and development potential at the Akkas gas field (pictured) in western Iraq, and surrounding areas.

Earlier this month, ConocoPhillips has agreed to acquire a 42% interest in BP Energy Company of Kirkuk Limited (BP ECKL) from BP, supporting the redevelopment of four producing oil fields in the Kirkuk area of northern Iraq.

(Source: Prime Minister's Office)

By John Lee.

Drilling operations have begun at the Akkas gas field in Anbar province as part of efforts to expand domestic gas production and support power generation.

The project has entered an initial fast-track production phase with capacity of 100 million standard cubic feet of gas per day, with subsequent phases planned to raise output to a target of 400 million standard cubic feet per day.

The field is expected to play a strategic role in supplying nationally produced gas to the energy sector, including fuel for the Anbar combined-cycle power plant and the Akkas power station, while also supporting the national economy and employment.

The development of the field is being carried out by Midland Oil Company in cooperation with Schlumberger of the United States, under the Ministry of Oil's plans to strengthen investment in the gas sector and reduce reliance on imports.

(Source: Ministry of Oil)

By John Lee.

Ukrzemresurs LLC, a Ukrainian gas producer and operator of the Akkas gas field in Iraq since 24 April 2024, has announced that it has filed a claim with the International Court of Arbitration of the International Chamber of Commerce (ICC) to protect its rights as operator and investor under the Gas Development and Production Service Contract for the Akkas contract area with, among others, the Midland Oil Company.

The company stated that it has consistently fulfilled its contractual obligations and made significant investments in the project since the agreement was established. However, Ukrzemresurs said it had "no choice but to commence arbitral proceedings" following alleged breaches by its counterparties, including what it described as the wrongful termination of the contractual arrangements.

According to the statement, the situation escalated with the seizure of Ukrzemresurs' field camp and property "by armed force without prior notification and legal grounds," which the company considers a serious violation of its rights and investments in Iraq.

Full statement from Ukrzemresurs:

Ukrzemresurs LLC, an Ukrainian gas producer and operator of the Akkas gas field in Iraq since 24 April 2024, announces that it has filed a claim with the International Court of Arbitration of the International Chamber of Commerce (ICC) to protect its rights as operator and investor under the Gas Development and Production Service Contract for the Akkas contract area with, among others, the Midland Oil Company.

Ukrzemresurs has worked consistently and diligently since the aforementioned agreement was put in place, including making a number of significant investments into the project.

Unfortunately, however, it now has had no choice but to commence arbitral proceeding following breaches of the agreements by its counterparties, including, notably a wrongful alleged termination of the contractual arrangements, and an absence of desire on the part of the counterparties to resolve the dispute culminating recently in the seizure of Ukrzemresurs' field camp and property by armed force without prior notification and legal grounds. Such actions amount to a serious violation of Ukrzemresurs' rights in relation to its significant investments in Iraq.

Ukrzemresurs regrets this development, which hinders the implementation of a strategically important project for Iraq. although as always it remains available for constructive and good faith discussions with the aim of resolving the dispute amicably.

(Source: Ukrzemresurs)

By John Lee.

The Iraqi Cabinet has authorised the Ministry of Electricity to sign an addendum with China's SEPCOIII [Electric Power Construction Corporation] for the construction of a dry gas pipeline supplying the Anbar Combined-Cycle Power Plant.

The project involves a 250-kilometre pipeline, with the new addendum covering the construction of the section from the Akkas gas field to the T1 station.

According to a statement from the Prime Minister's Office, the decision forms part of Iraq's efforts to expand energy infrastructure and secure fuel supplies for power generation.

(Source: PMO)

By John Lee.

The Ministry of Oil has signed a contract with US-based Schlumberger (SLB) to increase natural gas production at the Akkas gas field in Anbar province.

Speaking at the signing ceremony, Deputy Prime Minister for Energy Affairs and Minister of Oil, Hayan Abdul Ghani, described the project as a major milestone in Iraq's gas development strategy. He confirmed that Midland Oil Company has been tasked with overseeing the implementation of the project, which targets increasing production at the field to 100 million standard cubic feet per day (mmscfd).

The new contract follows the cancellation of a previous agreement with the Ukrainian company Ukrzemresurs. Minister Abdul Ghani said the project will include:

Drilling new wells by Schlumberger;

• A forthcoming contract for the construction of surface facilities;
• A parallel contract with the State Company for Oil Projects (SCOP) to build a pipeline network linking wells to central processing units.
• The gas produced will be directed to the Anbar Combined Cycle Power Plant, currently under construction by the Ministry of Electricity.

The Minister stressed the urgency of delivering the project on schedule, noting that the initial 60 mmscfd addition will bring the total processed volume to 100 mmscfd out of an expected full capacity of 400 mmscfd.

Gokhan Yarim, President of Integrated Projects at Schlumberger, expressed satisfaction at signing the agreement and affirmed the company's commitment to the project timeline.

Deputy Oil Minister for Extraction, Bassem Mohammed Khudair, said the deal reflects Iraq's commitment to ending gas flaring, expanding domestic gas production, and providing a secure investment environment in Anbar. He highlighted the project as a key step in the ministry's strategy to develop gas fields like Akkas and Mansouriya through national efforts, supported by international expertise.

Mohammed Yaseen, Director General of Midland Oil Company, emphasised the strategic and economic dimensions of the project, noting the use of a new economic model and a more direct role for service companies.

(Source: Ministry of Oil)

By John Lee.

As part of Iraq's government-backed gas development programme, the Ministry of Oil has reported significant progress in reducing gas flaring and increasing gas utilisation.

It says the Ministry has raised associated gas capture from 53% to 70%, and dry gas production from 1,300 to 1,800 million standard cubic feet per day (mmscfd).

Key projects already completed or underway include:

• Halfaya Gas Project (Missan): 300 mmscfd
• Basra Gas Company (BGC) (BNGL1 and BNGL2): 200 mmscfd each
• Artawi [Ratawi] Gas Project (TotalEnergies contract): 600 mmscfd
• Faihaa Field Gas Project: 130 mmscfd
• Nahr Bin Umar Field (Basra): 300 mmscfd
• Gharraf and Nassiriya Fields: 200 mmscfd
• Akkas Gas Field (Anbar): 40 mmscfd
• Accelerated Artawi Project: 50 mmscfd

The government aims to end routine flaring by 2028 and increase gas output to 3,000 mmscfd by 2030, aligning with Iraq's environmental commitments under the 2016 Paris Agreement.

In liquefied petroleum gas (LPG), production rose from 2 million tonnes in 2024 to 3 million tonnes in 2025. Exports also surged from 250,000 tonnes in 2023 to 1 million tonnes in 2025. LPG systems were installed in over 41,000 homes and more than 38,000 vehicles.

To expand storage capacity, the Ministry completed 8 of 16 spherical LPG tanks, each with a 3,000-cubic-metre capacity, adding 24,000 cubic metres overall.

The Ministry reiterated its commitment to maximise national resource utilisation, enhance electricity supply, and boost petrochemical production. Gas field contracts under the 5th and 6th licensing rounds have been awarded to international companies, alongside dozens of investment agreements to develop both associated and free gas resources.

(Source: Ministry of Oil)

By John Lee.

The Council of Ministers has approved an accelerated plan to develop the Akkas gas field in Anbar as part of the government's strategy to advance the oil and gas sector.

The project will be led by the state-owned Midland Oil Company (MdOC), with Schlumberger (SLB) implementing the first phase.

The field is expected to produce 100 million standard cubic feet of gas per day within one year.

Rights to the field were originally awarded to a consortium of Kogas and KazMunaiGas (KMG) in the third licensing round (October 2011), but KMG pulled out, leaving Kogas as sole investor and operator on new contract terms.

In April 2024, Iraq signed a contract with a little-known Ukrainian company called Ukrzemresurs to develop the field, replacing Kogas.

Industry experts, including, Iraq Business News Expert Blogger, Ahmed Mousa Jiyad, have questioned the wisdom of this decision.

There was no mention of Ukrzemresurs in Wednesday's announcement from the Prime Minister's Office.

(Source: PMO)