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By John Lee.

The Korea Gas Corporation (KOGAS), the state-run South Korean gas company, is to invest $4.9 billion (5.7 trillion Iraqi dinars) to develop the Zubair oilfield.

In a stock exchange filing, the company said this investment is part of the total $19.4 billion capital expenditure required for the project, and added that it had invested $370 million in the first half of 2015.

KOGAS is developing the field together with Eni and Occidental.

(Source: Reuters)

(Picture: Seung-hoon Lee, CEO of KOGAS)

Penspen, a leading global provider of engineering and management services to the energy industry, has underlined its commitment to growth in the Middle East with three new appointments and investment in a new office in Iraq.

Ahmed Al-Dadah and Na’el Barghouthi have this month joined the company from other engineering providers, whilst Michael Simm, EVP of Engineering and Project Management, has been newly appointed to the role of Regional Director for Penspen’s Middle East business.

A new Iraq office, located in Basra will expand Penspen’s geographical reach and become the fourth location in the region joining Abu Dhabi, Doha and Khafji.

Peter O’Sullivan (pictured), Chief Executive of Penspen said:

“This is an exciting time for Penspen as we continue our substantial growth in the Middle East. I am confident Michael, Na’el and Ahmed will play a key role in strengthening our 300-strong team in the region.

"Their industry expertise and leadership skills will drive our strategic objectives to grow our engineering, project management, field development and asset integrity businesses. ”

Ahmed Al-Dadah has been appointed to the role of Business Development Director for E&PM. He joins the company from Amec Foster Wheeler, where he spent 12 years working in various project delivery and business development roles. His experience includes working in the successful execution of study, pre-FEED, FEED, EPC phases across both new build and modifications projects

Na’el Barghouthi joins Penspen as Director of Asset Integrity, Middle East and Asia Pacific regions. Na’el’s career spans over 15 years working in the oil and gas industry with experience in management, offshore engineering and integrity. He has previously worked for Wood Group Kenny, GE Oil & Gas, Al Shaheen Holding Joint Venture, and Occidental Petroleum of Qatar.

Regional Director of the Middle East, Michael Simm, said:

“I’m delighted to welcome Ahmed and Na’el to the team. Their skills and experience in delivering key services that our clients require in today’s lower-oil price economy will be of great value in further expanding our Middle East presence.”

(Source: Penspen)

During his visit to Washington this week, Prime Minister Haider al-Abadi received the Chairman and CEO of Occidental Petroleum, Mr. Steve Chazen, and the Chairman and CEO of ExxonMobil, Mr. Rex Tillerson, in separate meetings.

Both chairmen discussed the progress in oil production in Iraq, and thanked the Prime Minister for the security and stability in the Basra region, which has positively affected their operation.

They also discussed the removal of obstacles to achieving higher production volumes.

(Source: Office of the Prime Minister)

By Patrick Schmidt.

On Monday, Korea Gas Corporation (KOGAS) announced that it will invest $4.9 billion in the Zubair oil field project.

The investment will help establish the facilities needed to launch the project and help Zubair reach its potential of over 800,000 barrel per day production. KOGAS have a 23% stake in the Zubair field, while other stakeholders include Italy's ENI and US firm Occidental Petroleum.

Zubair remains one of the key oil fields in the south of Iraq, located far from the violence in the centre and north of the country. A spokesman from KOGAS noted,

“The turmoil in Iraq is occurring in northwestern Iraq, which is located a considerable distance from the Zubair field, so it has not disrupted our output.’’

(Source: Reuters)

By John Lee.

Iraq's cabinet has approved an $589 million oilfield service contract with South Korea's Daewoo Engineering & Construction.

The contract, approved on Tuesday, is for the engineering, procurement and construction of a gas separation facility at the Zubair oilfield.

Production at the field is planned to increase from the current 320,000 barrels per day (bpd) to 850,000 bpd by 2017.

The development of the Zubair Field is led by Eni (32.8%) with Occidental Petroleum Corporation (23.4%), Korea Gas Corporation (KOGAS) (18.8%) and Iraq's state-run Missan Oil Company (25%).

(Source: Reuters)

(Picture: Youngsik Park, CEO, Daewoo Engineering and Construction)

By John Lee.

Samsung Engineering Co., Ltd. has officially announced that it was awarded the North (Hammar Mishrif) New Degassing Station Facilities contract for the ENI Zubair Oil Field Development project in Iraq, worth  $840 million.

The signing ceremony was attended by Samsung Engineering’s President & CEO Mr.Park Choong-Heum, South Oil Company’s Director General Mr. Dheyaa Jaafar Hyjam and ENI’s Managing Director Mr. De Lorenzo.

The development of the Zubair Field is led by Eni (32.8%) with Occidental Petroleum Corporation (23.4%), Korea Gas Corporation (18.8%) and Iraq's state-run Missan Oil Company (25%).

Samsung Engineering will be responsible for engineering, procurement, construction and pre-commissioning on a lump-sum turnkey basis to build a gas and oil separation plant (GOSP) with a capacity of 200,000 barrels per stream day (BPSD). The project is located in the Basrah region, 480km southwest of Baghdad, the capital of Iraq.

The project is expected to reach completion in 2016. Samsung Engineering’s CEO Park Choong-Heum expressed,

“This contract award is a direct result of proven project execution capabilities and commitment to the Iraqi market since 2012. Samsung Engineering will build a long-term partnership with the Iraqi government and client, thus, socially contribute to the communities."

Entering Iraq in 2012 with the West Qurna-2 GOSP project and continuing its operation with the Badra GSP project in 2013, Samsung Engineering expects to further improve its position in the Iraqi market. Moreover, Samsung takes an interest in the welfare of the local community in Iraq.

Last year, Samsung Engineering built and donated two libraries for children in cooperation with UNICEF in the Basrah region, providing more educational opportunities for young students.

(Source: Samsung)

Occidental Petroleum has reportedly begun trying to sell a minority stake in its Middle East unit for as much as $8 billion.

According to a report from Bloomberg, Chief Executive Officer Stephen Chazen (pictured) has held talks with sovereign wealth funds and possible strategic partners for a 40 percent stake in the Mideast business, whose value he pegs at $20 billion.

It cites two informed sources, who asked not to be named as the discussions are private, as saying that Chazen is handling the talks himself and isn’t working with bankers now.

No buyer has emerged and any deal may take several months.

Occidental has operations in countries including Oman, Qatar, Iraq and Libya. Fadel Gheit, an analyst with Oppenheimer & Co. in New York, told Bloomberg:

“It’s difficult to sell assets in six countries .. The whole area is almost radioactive.”

(Source: Bloomberg)

By John Lee.

Businessweek reports that Iraq plans to award contracts at the Zubair oil field the the Korean companies Samsung Engineering, Hyundai Heavy Industries, and Daewoo Engineering & Construction.

Oil minister Abdul Kareem Luaibi [Elaibi] (pictured) has told reporters:

“We are in the last stages in attributing the project entirely to three Korean companies ... This matter will be completed in less than two weeks.”

The Zubair project will cost more than $3 billion, he said, without indicating whether it was the sum that the three companies would get, or how much each would receive.

Italy's Eni is the lead partner on the 4.1 billion barrel field with a 32.81 percent stake; Iraq’s Missan Oil Company holds 25 percent, Occidental Petroleum Corp 23.44 percent, and South Korea’s KOGAS 18.75 percent.

In July, Eni signed a deal revising its contract, and setting a new target for the field of 850,000 barrels of oil per day (bpd) through 2035. The original 20-year deal signed in 2010 called for 1.2 million bpd.

(Source: Businessweek)

By John Lee.

Iraqi Prime Minister Nouri Al-Maliki and Eni’s CEO Paolo Scaroni (pictured) met on Monday in Baghdad to discuss Eni’s activities in the country.

During the meeting, Mr Scaroni along with Claudio Descalzi, COO of Eni E&P, updated the Prime Minister on the development activities at the Zubair oil field and discussed the contractual and operative requirements needed to reach the new production plateau of 850,000 barrels of oil per day (bopd) in 2016 , as agreed in the Amendment to the Technical Service Contract signed on 15 July 2013.

The parties also discussed the potential of the Iraqi hydrocarbon sector and the future opportunities of development of Eni in Iraq.

The Prime Minister al-Maliki expressed his satisfaction with the activities carried out by Eni in the country.

During this visit, Eni’s CEO and COO also met with the Iraqi Deputy Prime Minister, Hussain al-Shahristani, and the Minister of Oil, Abdul-Kareem Luaibi.

Eni is the operator of Zubair, which is located near Basrah and is regarded as one of the largest oil fields of Iraq, with current production of 320,000 bpd.

Eni is the Lead Contractor of a consortium that includes Occidental Petroleum Corporation, Korea Gas Corporation and Missan Oil Company.

(Source: ENI)

By John Lee.

Associated Press reports that the Italian oil company Eni has agreed to lower production targets at the Zubair oil field. It has also extending the length of the contract by five years.

Eni says that the deal signed on Monday in Baghdad sets a new target at the field of 850,000 barrels of oil per day (bpd) through 2035. The original 20-year deal signed in 2010 called for 1.2 million bpd.

Eni is the lead partner on the 4.1 billion barrel field with a 32.81 percent stake; Iraq’s Missan Oil Company holds 25 percent, Occidental Petroleum Corp 23.44 percent, and South Korea’s KOGAS 18.75 percent.

(Source: Associated Press)