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By John Lee.

The Arab Energy Fund has led and closed a $346 million reserve-based lending (RBL) facility for Kuwait Energy Basra Limited (KEBL), operator of Block 9 (Faihaa Field) in Basra and a wholly owned subsidiary of China's United Energy Group Limited (UEG).

The financing will support the next phase of expansion and development at Block 9, enabling continued drilling, infrastructure optimization, and enhanced production potential.

The Fund was mandated in 2024 as Initial Mandated Lead Arranger and Structuring Bank, overseeing the transaction through to financial close. Kuwait Finance House and Trafigura joined as Mandated Lead Arrangers during syndication.

Full statement from The Arab Energy Fund:

The Arab Energy Fund, a leading multilateral impact financial institution, has successfully led and closed a USD 346 million Reserve-Based Financing (RBL) Facility for Kuwait Energy Basra Limited (KEBL), operator of Block 9 (Faihaa Field) in southern Iraq and a wholly owned subsidiary of United Energy Group Limited (UEG), a global integrated energy company listed on the Hong Kong Stock Exchange.

The RBL Facility provides KEBL with support for the next phase of Block 9's expansion and development. The financing enables continued drilling, infrastructure optimization, and enhanced production potential, ultimately contributing to increased output for Iraq and supporting the country's ongoing efforts to strengthen its energy sector.

The Arab Energy Fund was mandated in 2024 as the Initial Mandated Lead Arranger and Structuring Bank, leading the transaction from inception through to financial close. Kuwait Finance House B.S.C. (c) (DIFC Branch) and Trafigura Pte. Ltd. joined at the syndication stage as Mandated Lead Arrangers.

Nicolas Thévenot, Chief Banking Officer of The Arab Energy Fund, said:

"This successful close reflects The Arab Energy Fund's ability to structure and lead sophisticated financing solutions grounded in real operational needs, as well as our deep understanding of upstream project fundamentals. We are proud to partner with UEG, KFH, and Trafigura to support the continued expansion of Block 9 and contribute to strengthening Iraq's energy ecosystem."

The Faihaa Field represents a key upstream asset for Iraq's long-term production outlook and a driver of long-term energy security. The Arab Energy Fund remains committed to advancing the sustainable development of national energy sectors across its member states and the wider MENA region.

(Source: The Arab Energy Fund)

By John Lee.

Minister of Oil, Hayan Abdul Ghani, has launched drilling operations for the first oil well in the Fao [Faw] block during a recent visit to Basra.

He underlined the Ministry's commitment to developing oil fields and exploration blocks to boost crude output and expand gas investment in support of the national economy.

The Minister highlighted the importance of the Faw-1 project, noting that the block lies on the border with Kuwait and Iran, and confirmed that development by China's UEG is progressing successfully.

According to Abdul Ghani, the Faw block will contribute additional crude production capacity while also enhancing investment in associated gas to supply fuel for power generation. He stressed the Ministry's plans to adopt modern technology and professional standards in oil and gas projects.

The ceremony was attended by Deputy Minister for Extraction Affairs, Bassem Mohammed Khudair, Director General of Basra Oil Company (BOC), Bassem Abdul Karim, representatives of UEG, and senior officials from the Basra Oil Company.

The Faw block was one of the exploration and development areas offered in Iraq's fifth supplementary and sixth licensing rounds held last year, with UEG awarded the development contract.

(Source: Ministry of Oil)

By John Lee.

The Ministry of Oil has inaugurated the Central Gas Processing Facility at the Al-Faihaa [Fayhaa, Block 9] oil field in Basra, with a capacity of 130 million standard cubic feet per day (MMSCFD).

The launch was conducted via video link by Prime Minister Mohammed Shia Al-Sudani, in the presence of Deputy Prime Minister for Energy Affairs and Oil Minister Hayan Abdul Ghani.

The Prime Minister praised the engineers and technical teams who contributed to the successful completion of this and other gas-related projects, which align with the government's strategy to reduce gas flaring, enhance oil sector development, diversify revenues, and protect the environment.

Minister Abdul Ghani reiterated the Ministry's commitment to investing in associated gas from oil fields to drive industrial development and boost national economic returns through increased and diversified income streams. He emphasised that gas projects such as this are critical for ensuring a stable fuel supply for electricity generation.

The inauguration was also attended by Oil Ministry Undersecretaries Basim Mohammed Khudair (Extraction Affairs) and Izzat Saber Ismail (Gas Affairs), the Director General of South Gas Company, and officials from Basra's local government and the broader oil sector.

Al Faihaa field is also known as Block 9. According to Wood Mackenzie, it is an extension of Iran's giant Yadavaran field.

In January 2022, Kuwait Energy Basra Limited (KE Basra), an indirect wholly-owned subsidiary of Hong Kong-based United Energy Group (UEG), entered into an EPCC (engineering, procurement, construction and commissioning) contract with a Chinese consortium to provide a central processing facility including oil treatment system and auxiliary systems at the field. The contractor was a consortium consisting of China CAMC Engineering (CAMCE) and CNOOC Petrochemical Engineering.

(Source: Ministry of Oil)

By John Lee.

The Iraqi Cabinet has approved a Heads of Agreement (HOA) with US-based Halliburton for the development of the Nahr Bin Omar [Nahr Bin Umar, Nahr Ben Umar] and Sindbad oil fields in Basra.

According to a statement from the Media Office of the Prime Minister, the project will employ Integrated Field Management Services (IFMS) and the EPCM model, aligning with national efforts and licensing round frameworks.

The South Gas Company (SGC) and Halfaya Gas Company (HGC) signed a contract for the development and processing of gas from the Nahr Bin Umar last year, while China's United Energy Group (UEG) was awarded the contract for Sindbad in 2018.

(Source: Media Office of the Prime Minister)

By John Lee.

Canada's Sonoro Energy has announced the signing of a Heads of Agreement ("HOA") with TransAtlantic Petroleum LLC, a privately owned energy company headquartered in Dallas, Texas, to evaluate production investment opportunities in Iraq.

Sonoro is chaired by Sara Akbar (pictured), co-founder of Kuwait Energy Company (KEC), which has had interests in Iraqi energy projects at Siba, Block 9 and Mansuriya. KEC was sold to China's United Energy Group in 2019. Akbar, who joined the board of Sonoro in June 2023, also serves on the boards of Oilserv and Petrofac.

Sonoro has previously been involved in an asphalt licence in Salah ad Din.

According to a statement from Sonoro:

"Under the terms of the HOA, Sonoro Energy and TransAtlantic Petroleum will collaborate closely to identify and evaluate production investment opportunities in Iraq. These opportunities are expected to arise through licensing bid rounds and/or direct negotiations facilitated by Iraq's Ministry of Oil. The focus will be on securing production licenses for undeveloped or underdeveloped oil fields with the potential to significantly increase production.

"Once a production license is awarded, the two companies plan to establish a joint operating company ("JOC"). The JOC will be dedicated to advancing oil production from these accumulations, leveraging both companies' expertise to optimize field development and increase production in a cost-effective and sustainable manner. This collaboration combines Sonoro Energy's local knowledge and relationships with TransAtlantic Petroleum's robust technical capabilities and operational experience.

"TransAtlantic Petroleum has extensive international upstream experience in Eastern Europe and in Turkey, where it is actively deploying unconventional North American technology using 3D seismic data, horizontal and directional drilling, and hydraulic fracture stimulation to develop oil and natural gas reserves.

"This partnership represents a significant milestone for Sonoro Energy as it strengthens its presence in the MENA region, one of the world's most important oil-producing areas. By aligning with TransAtlantic Petroleum, a company with extensive international experience and production in the oil and gas sector, Sonoro is positioning itself for continued growth and success.

"Sonoro Energy is enthusiastic about the prospects of this partnership and looks forward to advancing discussions with the Ministry of Oil to explore and secure production opportunities in Iraq.

"Sonoro also advises that under the terms and conditions of CEO Greg Renwick's employment agreement, the Company would issue Mr. Renwick 500,000 common shares of the Company at a deemed share price of 10 cents per share. Issuance of these signing bonus shares remains subject to TSX Venture Exchange approval."

(Source: Sonoro)

By John Lee.

Iraq's Ministry of Oil has finalised contracts for the "fifth-plus" and sixth oil licensing rounds with the successful companies.

Minister Abdul Ghani highlighted that these agreements, which cover the development of oil and gas fields and exploration blocks across several provinces, are poised to boost Iraq's production capacity by 800-850 million standard cubic feet (mmscf) of gas and 750,000 barrels of crude oil per day.

The Minister noted Iraq's substantial plans to develop untapped exploratory blocks and undeveloped fields in upcoming rounds, with an eye toward increasing the country's reserves of both oil and gas.

According to a statement, these new projects will ensure a stable supply of fuel for power generation, petrochemical industries, and various other sectors, while also creating numerous job opportunities for Iraqi graduates, skilled workers, and craftsmen across different provinces. Collaborations with both international firms and the private sector are expected to drive local employment and economic development.

The Director General of Basra Oil Company, Mr. Bassem Abdulkarim, signed the following development contracts:

• Fao: United Energy Group (UEG)
• Jabal Sanam: Geo-Jade

The Director General of Maysan Oil Company, Mr. Hussein Kazem, signed:

• Ad Daimah: KAR Group

The Acting Director of North Oil Company, Mr. Amer Khalil Ahmed, signed:

• Alan: KAR Group
• Sasan: KAR Group

The Deputy Director General of Dhi Qar Oil Company, Mr. Saeed Saghir Shlakeh, signed:

• Sumer: Sinopec
• Addan: Sinopec [Note that the Ministry of Oil had previously announced that Sinopec bid for the Addan block, but the price was not accepted by the Ministry.]
• Abu Khema: Zhenhua Oil

The Director General of Central Oil Company, Mr. Mohammed Yaseen Hassan, signed:

• Middle Furat (Euphrates): Zhongman ZPEC
• Northern Extension of East Baghdad: Zhongman ZPEC
• Khliesiea: KAR Group
• Qurnain: Zhenhua Oil
• Zurbatiya: Geo-Jade
• Dhufriyah: Anton Oil

This announcement does not mention the signing of a contract for Block 7, which was previously announced has having been won by China National Offshore Oil Corporation (CNOOC). [Update: CNOOC announced on Wednesday 30th October, 2024, that it has entered into the Exploration, Development & Production Contract (EDPC) with Iraq's state-owned Midland Oil Company for Block 7.]

Click here to find a comprehensive list of oil and gas fields under the control of the Ministry of Oil in Baghdad. This listing covers 67 fields, and has been updated with the results of this week's fifth-plus and sixth licensing rounds. Simply click on any field in the list to find more details.

(Source: Ministry of Oil)

By John Lee.

Hayan Abdul Ghani, Iraq's Minister of Oil, has inaugurated the first phase of the Central Processing Facility (CPF) at the Al-Faihaa [Fayhaa] oil field in Basra, with a capacity of 100,000 barrels per day.

According to a statement from the Ministry of Oil, this marks the transition of Al-Faihaa from an exploratory site to a productive oil field, targeting three oil reservoirs: Yamama, Mishrif, and Zubair.

Abdul Ghani highlighted the ministry's plan to invest in associated gas from the field by constructing a gas processing plant with a capacity of 125 million standard cubic feet per day (Mscfd), expected to be completed by the end of 2024. This initiative aligns with the government's program to enhance the oil and gas industry and increase national revenue.

The inauguration was attended by members of parliament, ministry officials, representatives from oil companies, local dignitaries, and residents. Abdul Ghani's visit to Basra also included the opening of several other oil and service projects.

Al Faihaa field is also known as Block 9. According to Wood Mackenzie, it is an extension of Iran's giant Yadavaran field.

In January 2022, Kuwait Energy Basra Limited (KE Basra), an indirect wholly-owned subsidiary of Hong Kong-based United Energy Group (UEG), entered into an EPCC (engineering, procurement, construction and commissioning) contract with a Chinese consortium to provide a central processing facility including oil treatment system and auxiliary systems at the field. The contractor was a consortium consisting of China CAMC Engineering (CAMCE) and CNOOC Petrochemical Engineering.

(Source: Ministry of Oil)

By John Lee.

The Ministry's Deputy Minister for Gas Affairs has inspected the gas project in Block 9 (Al-Fayhaa, Faihaa) in Basra province.

Mr. Ezzat Saber said he hoped to utilize 130 million cubic feet per day of gas from the field by year-end, along with equipping power stations to process 100 million cubic feet per day of dry gas and producing 1100 tons of liquid gas.

He held a meeting with officials from Basra Oil and Gas Company and the Chinese company United Energy Group (UEG), urging them to adhere to project timelines due to its importance in supplying power stations with new quantities to increase citizen service hours.

Two years ago, Kuwait Energy Basra Limited (KE Basra), an indirect wholly-owned subsidiary of UEG, entered into an EPCC (engineering, procurement, construction and commissioning) contract with a Chinese consortium to provide a central processing facility including oil treatment system and auxiliary systems at the field. The contractor was a consortium consisting of China CAMC Engineering (CAMCE) and CNOOC Petrochemical Engineering.

Earlier this week, UEG won the contract to develop Iraq's Fao field.

According to Wood Mackenzie, Block 9 is an extension of Iran's giant Yadavaran field.

(Source: Ministry of Oil)

By John Lee.

Iraq's Ministry of Oil has concluded its fifth-plus and sixth oil and gas licensing rounds, with Chinese companies winning most of the fields awarded:

Fifth-plus licensing round:

• Abu Khema: Zhenhua Oil
• Ad Daimah: KAR Group
• Alan: KAR Group
• Block 7: China National Offshore Oil Corporation (CNOOC)
• Dhufriyah: Anton Oil
• Fao: United Energy Group (UEG)
• Jabal Sanam: Geo-Jade
• Middle Furat (Euphrates): Zhongman ZPEC
• Northern Extension of East Baghdad: Zhongman ZPEC
• Sasan: KAR Group
• Zurbatiya: Geo-Jade

No bids were received for the following blocks: Block 11, Pulkhana, Qalat Salah, Arabian Gulf, Shihabi

Sixth licensing round:

• Khliesiea: KAR Group
• Qurnain: Zhenhua Oil
• Sumer: Sinopec

No bids were received for the following blocks: Tel Hajar, Anah, Anbar, Anz, Okashat, North Rutba, South Rutba, Tobal, Waleed, Shaiban.

Sinopec bid for the Addan block, but the price was not accepted by the Ministry.

KAR Group, based in Erbil, was the only non-Chinese company to be granted a contract.

Click here to find a comprehensive list of oil and gas fields under the control of the Ministry of Oil in Baghdad. This listing covers 67 fields, and has been updated with the results of this week's fifth-plus and sixth licensing rounds. Simply click on any field in the list to find more details.

(Source: Ministry of Oil)

By John Lee.

Prime Minister Mr. Mohammed S. Al-Sudani attended the final signing ceremony of the contracts for the fifth licensing round for border zones and fields, held on Tuesday 21st February at the headquarters of the Ministry of Oil.

The Prime Minister pointed out that implementing the fifth licensing round was delayed for five years, causing significant losses and great environmental damage to Iraq.

His Excellency also emphasized that the endeavors for the investment of the associated gas and natural gas stem from a firm determination to achieve economic reforms, which are the main focus of the government program.

These contracts relate to the development and production of six fields and exploratory blocks in border areas, which were granted to the following companies:

Development blocks:

• Gilabat-Qumar [Kalabat], in Diyala: Crescent Petroleum (UAE)
• Khashim Ahmer-Injana [Khasham Al-Ahmar], in Diyala: Crescent Petroleum (UAE)
• Huwaiza, in Missan (Maysan): Geo Jade Petroleum (China)
• Khudher Al-Mai [Khider al-Mai], in Basra and Muthana: Crescent Petroleum (UAE)

Exploration blocks:

• Naft Khana, in Diyala: Geo-Jade Petroleum (China)
• Sindibad [Sindbad] field in Basra: United Energy Group (UEG) (Hong Kong)

(Source: Media Office of the Prime Minister)