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By John Lee.

The Iraqi Council of Ministers has approved an increase in the consultancy contract amount for the Basra Refinery Development / Fluid Catalytic Cracking (FCC) Project with Japan's UNICO and France's Technip.

The decision also includes an extension of the contract duration, granted as an exception to Government Contracting Instructions No. (2) of 2014.

This move aligns with Iraq's strategy to modernize refining capacity and enhance fuel production efficiency.

(Source: PMO)

By John Lee.

During his official visit to London, Iraqi Prime Minister Mohammed S. Al-Sudani met with Fakhri Dhaidan, Vice President of French engineering company Technip Energies, to discuss the company's ongoing and future operations in Iraq.

The meeting focused on Technip Energies' consultancy work for the Karbala and Basra refineries and its role in developing and expanding crude oil refining units. Al-Sudani reiterated Iraq's commitment to enhancing refining capacities, boosting petroleum derivative production, and integrating advanced technologies into new production lines.

Dhaidan highlighted the company's expertise in advisory services and project execution, affirming Technip Energies' readiness to deepen its collaboration in Iraq's oil sector.

Technip Energies was established in 2021 as a spinoff of multinational energy company TechnipFMC.

(Source: PMO)

By John Lee.

The Minister of Oil has announced the commencement of crude oil supplies to Karbala refinery for the start of its trial operation.

Ihsan Abdul-Jabbar Ismail said that the refinery has a capacity of 140,000 barrels per day (bpd) and will help partially in meeting local needs and reducing imports of refined fuel.

He also praised the efforts of all involved, including the consortium of Korean companies and all the parties who supported the project.

Regular production is due to start by the end of the year.

In 2014, a group of companies led by Hyundai Engineering & Construction won the $6.04-billion contract to build the new refinery. The joint venture, HDGSK, also involved GS Engineering & Construction, and SK Engineering & Construction.

French company Technip provided project management consultancy (PMC) services for the engineering, procurement and construction (EPC) phase.

(Source: Ministry of Oil)

DNO ASA, the Norwegian oil and gas operator, today reported third quarter revenues of USD 253 million, a 38 percent quarter-on-quarter increase driven by higher North Sea sales and strengthening commodity prices.

The Company's operating profit climbed seven percent to USD 65 million, weighed down by non-cash net impairments of USD 40 million primarily related to revised Ula area cost and production profiles in the North Sea.

Cash flow from operating activities totaled USD 163 million in the third quarter. Net debt was reduced by USD 36 million to USD 360 million, the lowest level since 2018.

"Like much of the rest of our resilient industry, we are recovering rapidly from the early ravaging of the oil and gas markets by the runaway pandemic," said DNO's Executive Chairman Bijan Mossavar-Rahmani. "We are back delivering value to our host countries, shareholders and other partners in an efficient and responsible manner," he added.

Gross operated production at the Company's flagship Tawke license in Kurdistan averaged 105,200 barrels of oil per day (bopd) in the third quarter, of which the Peshkabir field contributed 59,900 bopd and the Tawke field 45,300 bopd. Of the total, 78,900 bopd were net to DNO. In the North Sea, net production averaged 13,100 barrels of oil equivalent per day (boepd), bringing the Company's total third quarter net production to 92,000 boepd.

DNO's USD 110 million Peshkabir-Tawke gas project, which was commissioned in mid-2020, has injected eight billion cubic feet of otherwise flared gas through the end of the third quarter, capturing 480,000 tonnes of CO2 equivalent. In September, the Company initiated a USD 25 million second phase of the gas capture project to reinject and retain gas in the Tawke reservoir and avoid flaring. Having already eliminated routine venting of methane in operations in 2019, DNO recently launched a leak detection and repair initiative to measure, monitor and mitigate fugitive methane emissions.

Elsewhere in Kurdistan, commerciality was declared on the DNO-operated Baeshiqa license and plans submitted for a fast-track development.

DNO's active North Sea exploration program notched up a success in the third quarter with appraisal drilling on the 2020 Bergknapp discovery (DNO 30 percent) resulting in a 35 percent upgrade of DNO's recoverable resource estimate. Also during the quarter, DNO made an oil discovery on the Gomez prospect (DNO 65 percent and operator). Due to uncertainty of producibility, no estimate of recoverable volumes has been established pending further analysis. Another third quarter 2021 appraisal well, Black Vulture (DNO 32 percent), was dry. Following the end of the quarter, the Mugnetind exploration well (DNO 30 percent) encountered limited hydrocarbons and is unlikely to be commercial.

The Brasse development (DNO 50 percent and operator) is on track for a 2022 project sanction with DNO recently entering into a strategic framework agreement with Technip FMC covering subsea deliveries (SURF and SPS).

During the third quarter, the Company completed the placement of USD 400 million of new five-year senior unsecured bonds with at a coupon rate of 7.875 percent, lowering DNO's average interest rate on its debt while extending the maturity profile.

A videoconference call with executive management will follow today at 15:00 (CET). Please visit www.dno.no to access the call.

(Source: DNO)

By John Lee.

Oil and gas company TechnipFMC has agreed to pay more than $5 million to settle an Iraq-related corruption case with the US Securities and Exchange Commission (SEC).

The company is alleged to have taken part in bribery between 2008 and 2013 to secure business from Iraqi state-owned oil companies.

Just last month, the company announced that it would demerge its operations into two separate companies.

The full statement from the SEC can be read here.

(Source: SEC)

TechnipFMC plc (NYSE: FTI) (Paris: FTI) has announced that its Board of Directors has unanimously approved its plan to separate into two industry-leading, independent, publicly traded companies: RemainCo, a fully-integrated technology and services provider, continuing to drive energy development; and SpinCo, a leading engineering and construction (E&C) player, poised to capitalize on the global energy transition. The separation would enhance both RemainCo’s and SpinCo’s focus on their respective strategies and provide improved flexibility and growth opportunities.

The transaction is expected to be structured as a spin-off of TechnipFMC’s Onshore/Offshore segment to be headquartered in Paris, France. The separation is expected to be completed in the first half of 2020, subject to customary conditions, consultations and regulatory approvals, at which time all outstanding shares of SpinCo will be distributed to existing TechnipFMC shareholders.

The 2017 merger of Technip S.A. and FMC Technologies, Inc. created a new subsea leader and established TechnipFMC as the only fully-integrated subsea provider. TechnipFMC has redefined subsea economics through its integrated model and accelerated technology development and innovation.

At the same time, the Company’s Onshore/Offshore business has consistently demonstrated operational excellence, successfully delivered landmark projects, built an unprecedented backlog, and positioned itself to continue capitalizing on growing demand for liquefied natural gas (LNG). The exceptional performance of TechnipFMC since the merger has made the proposed spin-off possible and, when completed, will enable the two companies to unlock additional value.

The two companies would have:

• Distinct and expanding market opportunities and specific customer bases
• Enhanced focus of management, resources and capital
• Robust backlogs supporting future revenue growth
• Strong balance sheets and capital structures tailored to individual business needs
• Compelling and distinct investment profiles

Doug Pferdehirt, Chairman and CEO of TechnipFMC, stated, “Since the creation of TechnipFMC, we have pioneered the integrated business model for subsea and transformed our clients’ project economics. To further enhance value creation, our Board of Directors and management team have continuously evaluated strategic options and, after a comprehensive review, determined that it is in the best interest of TechnipFMC and all of our stakeholders to create two diversified pure-play leaders. We are confident that the separation would allow both businesses to thrive independently within their sectors, enabling each to unlock significant additional value.”

SpinCo

With approximately 15,000 employees, SpinCo would be one of the largest E&C pure-plays and is poised to capitalize on the global energy transition. SpinCo will be uniquely positioned to capture LNG opportunities as a result of its robust project delivery model, demonstrated capabilities and proven track record. In addition, the new company will benefit from its leadership position in the downstream market, as well as future growth opportunities in biofuels, green chemistry and other energy alternatives.

The company would comprise the Onshore/Offshore segment, including Genesis – a leader in front end engineering and design. SpinCo would also include Loading Systems, a leader in cryogenic material transfer products, and Cybernetix, a technology leader in process automation, that have historically been a part of the Surface Technologies and Subsea businesses, respectively.

SpinCo will be led by an experienced, proven management team. Catherine MacGregor, who currently serves as TechnipFMC’s President, New Ventures, will serve as Chief Executive Officer of SpinCo. Bruno Vibert will serve as Chief Financial Officer, and Marco Villa will serve as Chief Operating Officer. SpinCo will be incorporated in the Netherlands with its headquarters in Paris and listed on the Euronext Paris exchange. Bpifrance, a key shareholder of TechnipFMC, strongly supports the proposed transaction and recognizes SpinCo as a global leader with the potential for high value creation.

RemainCo

With approximately 22,000 employees, RemainCo would be a fully-integrated technology and services provider, continuing to drive energy development. The company’s role will be to support clients in the delivery of unique, integrated production solutions. As TechnipFMC has transformed the industry through its pioneering, integrated model in Subsea, RemainCo will apply the same winning formula to Surface Technologies.

As a standalone company, RemainCo will be the largest diversified pure-play in the industry. Doug Pferdehirt, Chairman and Chief Executive Officer of TechnipFMC, and Maryann Mannen, Executive Vice President and Chief Financial Officer of TechnipFMC, will continue to serve in their roles following the separation. RemainCo will remain incorporated in the United Kingdom with headquarters in Houston and listed on both the NYSE and Euronext Paris exchange.

Upon closing, RemainCo and SpinCo will have tailored capital structures and financial policies appropriate for each company’s business, and both companies are expected to have investment grade credit metrics. Both companies will be committed to disciplined capital allocation and prudent return of capital to shareholders. Both companies will have compelling and unique financial profiles well suited to their respective businesses.

(Source: TechnipFMC)

By John Lee.

Oil services firm TechnipFMC (TFMC) has agreed to pay $296 million to resolve allegations that the company paid bribes in Brazil and Iraq.

TFMC is the product of a 2017 merger between two predecessor companies, Technip S.A. and FMC Technologies, Inc..

The admissions and court documents establish that beginning by at least 2008 and continuing until at least 2013, FMC conspired to violate the US's Foreign Corrupt Practices Act (FCPA) by paying bribes to at least seven government officials in Iraq, including officials at the Ministry of Oil, the South Oil Company (SOC) and the Missan Oil Company (MOC), through a Monaco-based intermediary company in order to win secure improper business advantages and to influence those foreign officials to obtain and retain business for FMC Technologies in Iraq.

(Source: US Justice Dept)

By John Lee.

France's Technip, in partnership with UNICO, a Japanese engineering consultant, has been awarded a Project Management Consultancy (PMC) contract on a reimbursable basis, for the upgrading of the Basra refinery.

This contract, awarded by Ministry of Oil's South Refineries Company (SRC), covers the engineering, procurement, construction, commissioning, start-up and warranty management phase of the refinery upgrading project, located in Basra.

The project has been funded by the Japan International Cooperation Agency (JICA).

The project will aim at increasing the gasoline production capacity through the installation of a new fluid catalytic cracking unit and associated units like visbreaker, hydrotreating, hydrogen plant, etc. This development is part of the Iraqi Government’s long term plan to meet increasing future demand for hydrocarbon products.

This award follows the PMC contract attributed to Technip in June 2013 for the Karbala refinery. It will be executed by Technip’s engineering center in Milton Keynes, United Kingdom, and supported by Technip PMC teams.

Nicoletta Giadrossi, President of Technip’s Region A, commented:

“We are delighted to help SRC and the Iraqi’s Ministry of Oil achieve their goals and business objectives, while meeting safety, cost, schedule and quality targets".

Riccardo Moizo, Senior Vice President for Technip PMC, added:

“We are honoured to have been awarded this important project by SRC. This new award continues to reinforce Technip’s positioning on PMC activities. We are looking forward to assisting SRC in the development of this complex project.”

(Source: Technip)

Technip, in partnership with China HuanQiu Contracting & Engineering Corporation (HQC), has been awarded a front-end engineering design (FEED) contract for the Ar Ratawi Natural Gas Liquids (NGL) train1 project at North Rumaila in Basra.

The deal was awarded by the Basra Gas Company (BGC), a joint venture between the Iraq's South Gas Company (51%), Shell (44%) and Mitsubishi (5%).

The project is the first of the new greenfield associated gas processing facilities that will significantly minimize gas flaring in Iraq and make more energy resources available for power and domestic use– an NGL train with nominal feed gas capacity of 530 million standard cubic feet per day. The standalone facilities will produce liquefied petroleum gas (LPG), NGL and condensate for domestic markets.

The scope of work covers the basic engineering design package of the NGL process units, utilities and the submission of an engineering procurement and construction (EPC) package.

Technip’s operating center in Abu Dhabi will execute the project, scheduled to be completed by the end of 2014.

Vaseem Khan, President of Technip in the Middle East, declared:

“This award reflects Technip’s strengthened position in the Middle-East market, following several previous awards. We are proud to bring our specific technological edge and licensed innovative solutions to the downstream industry, while leveraging our 30 years presence in the region.”

(Source: Technip)

By John Lee.

A group of companies led by Hyundai Engineering & Construction has won a $6.04-billion contract to build the new 140,000-bpd Kerbala oil refinery.

The Iraqi cabinet approved the deal between the Oil Ministry's State Company for Oil Projects (SCOP) and the consortium on Tuesday.

Construction is to be completed within 54 months.

In June, French company Technip won the contract for project management consultancy (PMC) services for the engineering, procurement and construction (EPC) phase of the Karbala refinery.

(Sources: ConstructionWeekOnline, Iraq Oil Report)