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ExxonMobil Iraq Limited is contributing 1.2 billion Iraqi dinar (US$1 million) to equip petroleum engineering laboratories at the University of Basrah to be used by students seeking careers in Iraq's oil and gas industry. This grant will also fund faculty and curriculum development under which some 46,000 students are expected to study over the next 20 years.

'The ExxonMobil grant will support the university in educating internationally qualified professionals and professors in support of Iraq's energy priorities.'

There is a growing demand for highly skilled Iraqi professionals to work in the oil and gas sector. 'With funding from ExxonMobil Iraq Limited, the university will be able to improve significantly the petroleum engineering department's educational capacity, while supporting the broader objectives of the college of engineering,' said University of Basrah Chancellor Saleh Al-Qernawi.

'A highly skilled technical workforce is crucial to the country's future success. In parallel, the ability of the university to further develop its faculty for a growing student body is the key to preparing the next generation of innovators,' said James Adams, ExxonMobil Iraq vice president. 'The ExxonMobil grant will support the university in educating internationally qualified professionals and professors in support of Iraq's energy priorities.'

The College of Engineering at the University of Basrah is focusing on increasing the number of qualified engineers in Iraq, particularly in the southern region of the country. In 2008, it established a department of petroleum engineering.

ExxonMobil Iraq Limited (60% interest) is the lead contractor working with the South Oil Company of Iraq to redevelop and expand the West Qurna I field along with the Oil Exploration Company of Iraq (25% interest) and Shell West Qurna B.V., a Royal Dutch Shell affiliate (15% interest).

ExxonMobil and its affiliates have a long history of supporting education programs from pre-school through higher education in regions around the world, with a special emphasis on science, technology, engineering and mathematics.

Iraq's South Oil Company said on Tuesday that productivity at the West Qurna-1 oil field  increased to 300,000 barrels per day, and stressed that the productivity of the field will rise at the end of the current year to 400,000 barrels per day.

ExxonMobil, which along with Shell has the contract to develop West Qurna I, said that it intends to drill 20 new oil wells during the upcoming period.

"South Oil Company and ExxonMobil and its partners are celebrating realizing the primary production target as to West Qurna 1 oil field after signing its development contract which is raising the field’s productivity from 200,000 barrels to 300,000 barrels," South Oil Company Manager Diaa Jaafar al-Moussawi said on the sidelines of a celebration organized for the occasion of raising the oil field productivity.

He noted that the local government of Basra showed cooperation with the South Oil Company and with the other investment companies in Basra.

The celebration was attended by senior local officials and heads of investment companies in Basra.

(Source: Aswat al-Iraq)

Sterling Energy Plc has issued its Interim Management Statement for the period beginning 1 January 2011.

HIGHLIGHTS

• Sangaw North-1 exploration well is drilling ahead at 3,760m.
• Production, net to Sterling from the Chinguetti field, averaged 629 bopd for the first quarter 2011 (Q1 2010: 714 bopd)
• Adjusted EBITDA in first quarter of $0.6 million (Q1 2010: $2.1 million) (unaudited).
• Loss after tax in first quarter of $0.5 million (Q1 2010: loss $1.3 million) (unaudited).
• Cash as at 31 March 2011 of $115.8 million (unaudited), including partner funds of $10.8 million.
• Exploration programme funded from existing cash, cash flow and partner carry.

Angus MacAskill, Sterling's Chief Executive, said:

"Drilling operations at the Sangaw North-1 well continue to make progress; the parted drill pipe incident that took place during the fourth quarter of 2010 and subsequent fishing and side-track operations took some 115 additional days. However, these latest challenges have been overcome and we are now drilling ahead to evaluate the prospectivity in the Jurassic and Triassic formations."

Kurdistan

The drilling operations at the Sangaw North-1 exploration well continued to present operational challenges during the first quarter of 2011. The well control and parted drill pipe incidents were successfully overcome with the drilling of a side track well bore to a depth of approximately 3,360m and the subsequent running and cementing of a 7" liner.

Sangaw North-1 exploration well is drilling ahead at 3,760m. The original well design had a planned total depth of 3,660m with an option to continue drilling to a depth of 4,160m. The joint venture partnership has elected to continue drilling to the deeper depth to explore the prospective targets within deeper Jurassic and Triassic formations. For the Sangaw North-1 well, Sterling's share of drilling costs are carried by Addax, with Sterling paying only its participating interest share (53.33%) of testing costs.

Halliburton has been awarded a contract by ExxonMobil Iraq Limited (EMIL) to provide drilling services for 15 wells in the West Qurna (Phase I) oil field located in Southern Iraq.

Halliburton will provide a complete range of well construction services utilizing three drilling rigs to safely deliver the wells.

Joe Rainey, president of Halliburton's Eastern Hemisphere operations, said:

"This contract award is a testament to the ongoing success of our Eastern Hemisphere growth strategy and is in addition to work awarded in this field by this customer in 2010."

Halliburton has been active in the Middle East since 1946. Currently, Halliburton has more than 4,000 employees in the Middle East.

As predicted, ExxonMobil and its Iraqi partners have reached "a major milestone" for oil production at the West Qurna oil field in southern Iraq, according to a report from UPI.

ExxonMobil announced field production at West Qurna-1 rose from 244,000 barrels of oil per day to 285,000 bpd under the terms of its technical services contract.

Dheyaa Jaafar, director general of Iraq's South Oil Company, praised the teamwork of all involved in achieving this important goal.

ExxonMobil said it could eventually produce around 2.8 million barrels of oil per day from the field.

Iraqi Oil Minister Abdul Kareem al-Luaibi [Elaibi] announced a plan last week to increase crude production in Iraq from 2.6 million barrels per day to nearly 6.5 million bpd by the end of 2014.

Some analysts have said that Iraq may lack the infrastructure to meet Luaibi's objectives.

(Source: UPI)

Sterling Energy, the upstream oil and gas company listed with operations in Iraqi Kurdistan, has announced its annual results for 2010.

2010 SUMMARY

• Sangaw North-1 exploration well testing the potential of the Sangaw North block.
• Received $15.6 million of net cash flow from Chinguetti field operations during 2010 (2009: $13.3 million).
• Cash resources as at 31 December 2010 $111.7 million including partner funds (2009: $113.9 million).
• Company remains debt free.

CHAIRMAN'S STATEMENT

During 2010 Sterling's primary focus was the drilling activity at Sangaw North-1; an exploration well testing a large prospective structure in the Kurdistan autonomous region of Iraq. We have encountered many geological and mechanical challenges while drilling this well, however the expertise of our drilling team, with the support of our joint venture partners, has meant we could continue operations in a safe and controlled manner, albeit at a slower overall pace. The delay to the drilling program caused by the geological and mechanical events was further extended by the 'crowning incident' on the rig caused by the rig contractor. However frustrating these delays may be, the financial impact for Sterling has been mitigated as our drilling costs for Sangaw North-1 well are carried by Addax. I thank all the stakeholders in the Sangaw North project for their assistance and support during a very exciting and challenging drilling operation.

Financial

As a result of the re-structuring undertaken at the end of 2009, the Company remains in a very strong financial position with some $101.6 million of own funds at the end of 2010; our approved work programme for 2011 is fully funded and we have funds available for new venture activity. As an explorer without significant production we generally fund our day to day activities from our cash resource; our $15.6 million of net cash flow during 2010 from the Chinguetti field operation in Mauritania exceeded our general overhead costs and made a significant contribution towards our cost of operations.

Board and management changes

On 9 November 2010 Angus MacAskill was appointed as Sterling's Chief Executive Officer and a Director; Angus has some 30 years of hands-on experience covering many aspects of exploration, development and production activity and thus the management of Sterling's field operations is now one of his direct responsibilities. On 15 November 2010, Malcolm Pattinson was appointed a non-executive Director; Malcolm has spent most of his career as a geo-scientist and his experience will greatly assist in our new venture activity. On 31 December 2010, Richard Stabbins stepped down as a non-executive Director; we thank Richard for his contribution over the years and wish him well in his retirement.
Outlook for 2011 and beyond

An economist from the Central Bank of Iraq (CBI) has said that per capita income in the country is projected to more than double within the next four years as a result of a sharp increase in Iraq’s oil output and higher market prices for oil, according to a report from RFE/RL’s Radio Free Iraq (RFI).

Majid al-Suri told RFI that per capita income in Iraq is expected to reach $10,000 by the end of 2015 compared with about $4,500 at present.

He said the projections are based on data provided by the Oil Ministry showing that oil contracts signed with major energy firms such as ExxonMobil, Shell, and BP will boost Iraq’s oil production to an estimated 12 million barrels per day, including 3 million barrels that will be used domestically.

But he said he does not expect the considerable increase in oil revenue to guarantee proportionally higher living standards for the populace due to the “rampant corruption” in the country and the “mismanagement of public funds.”

Iraq affairs analyst Bassim Jamil Anton told RFI that emphasis should be placed on promoting other economic sectors to help increase Iraq’s per capita income rather than putting all of the country’s development prospects on the oil sector.

He said Iraq can only hope to match the prosperity of its oil-rich Arab counterparts with growth in such potentially promising sectors as agriculture and tourism and by attracting foreign investment.

Anton said that despite the continuing terror attacks in some parts of Iraq, economic progress is being made and the number of Iraqis living below the poverty line is projected to decline in the coming years to some 5 million people from the current 7 million.

He said that in the meantime, the government’s priority should be lowering the country’s high unemployment rate of 30 percent.

(Source: RFI)

Reuters reports that ExxonMobil is expected to raise production at Iraq's West Qurna I oilfield by 10 percent over the agreed baseline this month or in early April.

When asked when Exxon would hit its initial production target in West Qurna, Abdul-Mahdy al-Ameedi, head of the Oil Ministry's licensing and contracting office, told Reuters,"God willing, during this month or start of April".

That would qualify Exxon and its partners to start recovering investment costs, Ameedi said.

ExxonMobil and partner Shell won a contract to develop the 8.7-billion-barrel West Qurna I field. The group aims to boost output to 2.825 million bpd after setting baseline production at 244,000 bpd.

An oil source said on Thursday that Exxon has already managed to hit its initial output target in West Qurna by boosting production to more than 268,000 bpd. The increase is being examined by the Iraqi Oil Ministry.

Higher production rates must be sustained for 30 days before the firms are able to recover development costs.

(Source: Reuters)

Fluor Corporation has announced that ExxonMobil Iraq Limited has awarded the firm an early works program contract for the West Qurna (Phase I) field near Basra, Iraq.

The engineering, procurement, construction and management contract is a reimbursable continuing services agreement for oil field and related infrastructure development with an expected duration of three years. Fluor will book the undisclosed contract value in each quarter as the work is released.

The detailed scope of work and corresponding capital value is under development and will be released as the work progresses. Fluor will perform the work from its Houston operations center, other Fluor Middle East offices, and on site near Basra.

Iraq's state-run Iraqi Drilling Company plans to drill 76 wells in 2011 as part of a national effort to boost oil output to more than 200,000 barrels per day, the head of the firm said on Friday.

According to Reuters, the firm's director, Idrees al-Yassiri, said the plan included drilling more than 15 wells at the Nassiriya oilfield, which would help boost output from the field by 50,000-60,000 bpd.

"Our plan for 2011 is ambitious. We have enough energy to accomplish it ... The increase in production through the national effort will be more than 200,000 bpd through 2011," he said in a news conference.

The national effort includes drilling new wells in oilfields Iraq is developing on its own, including some of its giant fields like Nassiriya and East Baghdad.

Yassiri said the Iraqi Drilling Company would also drill wells for oilfields being developed by global oil companies.

"We will drill 23 wells for ENI at the Zubair oilfield and 20 wells for ExxonMobil in West Qurna (Phase One)," he said, adding the company will drill 15 wells as part of a consortium in Majnoon oilfield, which is being developed by Royal Dutch Shell.

"Drilling operations for foreign companies will add close to 150,000 barrels per day in 2011," Yassiri said.

The company has also submitted a bid for a tender to drill 23 wells in West Qurna (Phase Two), which is being developed by Russia's LUKOIL, Yassiri said, adding the development plan for the field included drilling 75 wells in the next two years.

(Source: Reuters)