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US-based Capstone Turbine Corporation (Nasdaq: CPST) has announced today that it has secured an order for two C600 Signature Series microturbines to provide 1.2 megawatts (MW) of energy to power a triethylene glycol (TEG) dehydration facility in the Basra region of Southern Iraq.

The order also includes Capstone’s new self-cleaning pulse filtration system which will allow the microturbines to endure the remote and sandy conditions with minimal maintenance. The order was secured by Technical Solutions to Industry FZE (TSI), Capstone’s authorized distributor to Iraq and United Arab Emirates (UAE).

Fueled by available raw gas, Capstone’s two C600S microturbines will power 100% of the new dehydration facility. The new facility is part of a larger 25-year joint venture between local gas and leading oil producer’s efforts to capture, treat and monetize associated gas currently being flared from three southern Iraq oilfields.

Capstone recently developed a new line of self-cleanable severe environment air filtration systems for its Signature Series line of microturbine products to facilitate its expansion into the oil and gas business in the Middle East as part of its overall double digit revenue growth strategy.

The company announced its intentions to expand its business into the Middle East a couple of years ago and has previously delivered successful projects in Oman, Qatar, Saudi Arabia and the UAE. Capstone expects that higher oil prices and the move towards reduced gas flaring will continue to drive demand and should provide a positive backdrop for Capstone’s low emission microturbine solutions.

Darren Jamison, President and Chief Executive Officer of Capstone, said:

“Flaring is the traditional way to dispose of unwanted gas produced during oil exploration activities, but the long standing practice creates an immense amount of carbon dioxide emissions and adds to climate change.

“In Iraq alone, 16 billion cubic meters (bcm) of natural gas is flared annually, making it a wasted resource that could instead provide electricity or other benefits to meet the predicted doubling demand by 2030.”

Iraq is one of the world’s biggest energy producers and is set to become the fourth-largest oil-producer by 2030 behind the United States, Saudi Arabia and Russia according to the IEA report, Iraq’s Energy Sector: A Roadmap to a Brighter Future 2019.

At the same time, 60-70% of gas produced is being flared due to the lack on infrastructure causing Iraq to import natural gas from the neighboring country of Iran. To improve efficiency and help with shortfalls due to rising electricity demand, the Iraqi government is working with international gas companies to capture and utilize its resources versus flaring.

Jim Crouse, Executive Vice President of Sales and Marketing for Capstone, said:

“As pressure for more efficient and environmentally conscious oil and gas production increases, we continue to see an increased demand for microturbines for flare reduction applications.

“Capstone, through its distributor network, is committed to do its part by educating and working with producers and local operators for a more profitable production. Flare reduction applications like this in Basra can have a payback as short as one year which makes it an economic win as well as an environmental win.”

(Source: Capstone)

There can be no doubting Iraq’s oil credentials. It is Opec’s number two oil producer, second only to Saudi Arabia, and holds the world’s fifth-largest proved oil reserves. Production is on the rise, having nearly doubled over the past decade, averaging around 4.5 million barrels per day in 2018.

Almost 90 per cent of the country’s output comes from giant oilfields in the southern part of the country. The remainder is largely pumped from oilfields in the northeast, in the semiautonomous Kurdistan Region of Iraq (KRI), which is under the control of the Kurdistan Regional Government.

This is good news for a country that is heavily dependent on revenues from its oil exports, which, according to the IMF, accounted for almost 90 per cent of total government revenues in 2017. The rise in oil prices, despite recent wobbles in the face of US-China trade tensions, has certainly been a boost to the country’s coffers and provides further impetus for investment in development and infrastructure.

This upwards trajectory is likely to continue as the country seeks to fill the supply gap left by new US sanctions on Iran. Iraq is keen to lift production capacity to 5 million bpd this year, and to 8.5 million bpd in the coming years as it upgrades its infrastructure. The southern oilfields are key to this growth, expected to pump some 6.5 million bpd in the coming years, with the country keen to partner with international oil companies (IOCs) to secure the necessary investment to unlock its vast resource potential.

Iraq’s growing importance as a key player on the world’s energy stage will be discussed at the upcoming CWC two-day event, Iraq Petroleum, which will be held in London on June 27-28 in collaboration with the new Federal Government of Iraq. For the first time, the event is being co-located with the one-day Kirkuk & Mosul Mega-Projects event on June 29, where delegates will be first to hear government plans and investment opportunities to develop the giant oilfields in the newly liberated oil-rich areas of Kirkuk and Mosul.

The three-day event brings together key figures shaping the future of this strategically important country. The Iraqi ministerial delegation will be led by H.E. Thamir Gadbhan, Deputy Prime Minister for Energy & Minister of Oil along with the heads of the Basra Oil Company and North Oil Company, while the international oil industry is well represented, with confirmed speakers including Michael Townshend, Regional President of BP Middle East, Jeffrey T. Levy, President of Chevron Chevron Europe, Eurasia and Middle East E&P, Majid Jafar, CEO of Crescent Petroleum, and Gati Saadi Al-Jebouri, Managing Director of LUKOIL Mid-East Limited.

It’s not just oil that’s creating new investment opportunities for international partners. Oslo-based energy consultancy Rystad Energy forecasts that in terms of resoruces sanctioned for development, gas will overtake oil projects in 2019, with new projects, mainly in the Kurdistan Region, set to triple the country’s gas output from just over 1 billion cubic feet per day in 2017 to 3 billion cf/d in 2022, enabling it to meet growing domestic demand for gas and possibly even launch the country as a gas exporter for the first time. Again, it’s a topic that will be widely covered at CWC’s Iraq Petroleum event, including presentations from Dr Jaafar Oklany, commercial director of Basra Gas Company and Ali H. Khudhier Al-Saady, former director general of South Gas Company, Basra.

For anyone with an interest in Iraq’s future, and indeed the stability of the world energy mix, this is one event not to be missed.

For further information, visit https://www.cwciraqpetroleum.com/

For full programme, download the brochure

(Source: CWC)

From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Could Iraq be pulled into a conflict between the United States and Iran?

The United States is raising the stakes against what it calls threats from Iran.

President Donald Trump is sending an extra 1,500 troops to the Middle East.

He's also bypassing Congress to sell billions of dollars' of weapons to Iran's rivals, Saudi Arabia and the United Arab Emirates.

Iran's neighbour, Iraq, is vowing support and offering to mediate.

At the same time, Iraq is wary of straining relations with the Americans.

How should leaders in Baghdad handle this balancing act?

Presenter:

• Hashem Ahelbarra

Guests:

• Andreas Kreig - Assistant Professor, Defence Studies Department, King's College London
• Sami Nader - Director, The Levant Institute for Strategic Affairs
• Robert Gutsche - Associate Professor, Lancaster University

Iraq, one of the world's biggest energy producers, can address its current electricity shortfall and growing power needs through immediate action to relieve pressure on the system, according to an in-depth report published Thursday by the International Energy Agency.

It also provides a medium-term strategy that makes the best use of the country’s abundant oil and natural gas resources and solar potential.

Despite the extraordinary challenges of war in recent years, Iraq has made impressive gains, nearly doubling the country’s oil production over the past decade. But the turmoil has also undermined the country’s ability to maintain and invest in its power infrastructure.

The new IEA report, Iraq’s Energy Sector: A Roadmap to a Brighter Future, maps out immediate practical actions and medium-term measures to tackle the most pressing problems in Iraq’s electricity sector.

The analysis finds Iraq has huge potential to cut its electricity network losses, which are among the highest in the world. Reducing these losses by half would help dramatically improve the efficiency of grid supply, effectively increasing available capacity by one-third.

The report also takes a detailed look at the country’s oil and gas sector. It projects that Iraq’s oil production will grow by 1.3 million barrels a day by 2030, accounting for the third-largest increase globally over the period, and soon becoming the world’s fourth-largest oil producer behind the United States, Saudi Arabia and Russia.

The report also notes that more gas can be captured and put to use in efficient power plants. Today, 16 billion cubic meters of gas are flared each year, more than enough to replace Iraq’s current imports.

Dr Fatih Birol, the IEA’s Executive Director met, with Iraqi President Barham Salih on Wednesday in Baghdad, and presented the study’s findings and recommendations. He then met with Prime Minister Adil Abdul-Mahdi to discuss ways forward for the electricity sector, including making best use of Iraq’s significant natural gas and solar resources.

On Thursday, Dr Birol will discuss the report at a press conference with Thamir Ghadhban, the Deputy Prime Minister for Energy and Minister of Oil, and Luay Al-Khatteeb, the Minister of Electricity.

The IEA has worked closely with the Iraqi Ministries of Oil and Electricity to produce the report, and would like to thank the ministers and their staff for their cooperation with this study.

“Operating under extremely challenging circumstances, Iraq has done a remarkable job expanding its oil industry,” said Dr Birol. “Today’s urgent issue is to address the national power sector as the summer heatwave approaches by improving grid maintenance, boosting electricity production with larger mobile generators, and incentivising upgrades of power plants. The IEA is pleased to recommend immediate practical actions for the benefit of the entire Iraqi people, and provide a roadmap for a sustainable power system in the medium term.”

Iraq’s electricity demand is set to double between now and 2030, and its shortfall in electricity supply will widen, as the country’s population grows by more than 1 million people each year.

Without changes to the current structure of electricity supply and improvements to the network, domestic generation, imports and neighbourhood generation would need to double by 2030, for a total supply of over 250 TWh. However, there are many opportunities to improve on this outcome through measures such as investing in transmission and distribution to cut network losses.

Promoting the more efficient use of electricity, including by introducing more progressive tariffs, would play an important role in ensuring that the growth in demand during the summer peak does not continue to outpace supply.

Iraq also needs to take advantage of its abundant renewable energy potential.  The analysis shows that expanding the share of solar PV and wind to 30% of electricity supply by 2030 would bring benefits both to the Iraqi consumer, in the form of reduced electricity bills, and to the environment.

Reducing network losses and moving towards an electricity mix where renewables play a more prominent role would free up 9 billion cubic meters of gas for other uses in 2030, plus 450 kb/d of oil for export.

“In addition to oil, Iraq is blessed with some of the richest solar and gas resources in the world but it is yet to take advantage of them,” Dr Birol said. “Turning that potential into fuel for its own economy and for export would help bring about a more sustainable, reliable and affordable energy future.”

The report is the second in-depth study of Iraq’s energy sector following the publication of the Iraq Energy Outlook in 2012.

Download the report here.

(Source: IEA)

By John Lee.

According to Miriam Malek, writing for S&P Global Platts, Iraq is again becoming a viable destination for energy investment after the final defeat of Islamic State and the election of a new government revived interest in the region's second-largest oil producer.

The US, Qatar, Saudi Arabia and Iran are now vying for a share in the spoils.

Click here to read the full article.

(Source: S&P Global Platts)

Saudi Arabia’s Industrialization and Energy Services Company (TAQA) has announced that its drilling subsidiary, Arabian Drilling Company (ADC), has agreed to acquire Schlumberger’s Middle East onshore drilling rigs business in Kuwait, Oman, Iraq and Pakistan for $415 million (SAR 1.56 billion).

According to a TAQA press release, the transaction transforms ADC into a regionaldrilling leader with one of the largest rig fleets, client portfolios and geographic footprints in the Middle East. ADC, a drilling rig partnership between TAQA and Schlumberger, was established in 1964 through a royal decree.

Through this expansion, ADC, Saudi Arabia’s current market leader and drilling national champion, will become an industry powerhouse, operating a superior fleet of 58 onshore rigs and 9 offshore rigs across the MENA region. The combined firm will have more than 5,900 employees and builds on ADC’s long-standing reputation of reliably serving national and international oil and gas companies for over 55 years.

The transaction will combine the outstanding track records of the parties with respect to operations, quality of service, health, safety and environment. It will also create economies of scale and cost synergies, making ADC a regional leader, encompassing a diversified, multi-country and multi-client offering.

For TAQA, the expansion represents a major step forward in its ongoing group-wide transformation and growth strategy. TAQA’s 2021 strategy is to become a leading regional oilfield services and equipment (OFSE) company and is based on three key pillars:

1. creating value by strengthening the position and growth of its existing businesses and expanding into higher-tier services and new markets,
2. sustaining value by providing differentiated, best-in-class client services and safety, using the latest technologies, and,
3. realizing value and greater operational efficiencies by delivering more integrated client services that are safe, reliable and competitive.

“This acquisition is fully aligned with Saudi Vision 2030. It unlocks value and drives growth across our entire value chain through a more integrated regional approach, while positioning a leading Saudi company as a global player,” said TAQA chief executive officer Azzam Shalabi, who is also chairman of the ADC Board.

He said the transaction also follows on from ADC’s accelerated expansion activity in 2018 when 16 rigs were commissioned to support the growth of Saudi Aramco.

“This new combination clearly demonstrates that TAQA and ADC are delivering on their transformation and growth strategies, and further strengthens what is already a long-standing and trusted partnership between TAQA and Schlumberger. We look forward to supporting ADC in the next phase of its expansion and have full confidence that this will benefit all stakeholders, most notably our regional clients,” he added.

The transaction is expected to close in the second half of 2019, subject to regulatory approvals.

Moelis & Company acted as exclusive financial advisor to TAQA, and Rothschild & Co. acted as exclusive financial advisor to Schlumberger.

(Source: TAQA)

New IEA report provides practical roadmap to address Iraq’s current electricity shortfall and future energy needs

Iraq, one of the world's biggest energy producers, can address its current electricity shortfall and growing power needs through immediate action to relieve pressure on the system, according to an in-depth report published Thursday by the International Energy Agency (IEA).

It also provides a medium-term strategy that makes the best use of the country’s abundant oil and natural gas resources and solar potential.

Despite the extraordinary challenges of war in recent years, Iraq has made impressive gains, nearly doubling the country’s oil production over the past decade. But the turmoil has also undermined the country’s ability to maintain and invest in its power infrastructure.

The new IEA report, Iraq’s Energy Sector: A Roadmap to a Brighter Future, maps out immediate practical actions and medium-term measures to tackle the most pressing problems in Iraq’s electricity sector.

The analysis finds Iraq has huge potential to cut its electricity network losses, which are among the highest in the world. Reducing these losses by half would help dramatically improve the efficiency of grid supply, effectively increasing available capacity by one-third.

The report also takes a detailed look at the country’s oil and gas sector. It projects that Iraq’s oil production will grow by 1.3 million barrels a day by 2030, accounting for the third-largest increase globally over the period, and soon becoming the world’s fourth-largest oil producer behind the United States, Saudi Arabia and Russia.

The report also notes that more gas can be captured and put to use in efficient power plants. Today, 16 billion cubic meters of gas are flared each year, more than enough to replace Iraq’s current imports.

Dr Fatih Birol, the IEA’s Executive Director met, with Iraqi President Barham Salih on Wednesday in Baghdad, and presented the study’s findings and recommendations. He then met with Prime Minister Adil Abdul-Mahdi to discuss ways forward for the electricity sector, including making best use of Iraq’s significant natural gas and solar resources.

On Thursday, Dr Birol will discuss the report at a press conference with Thamir Ghadhban, the Deputy Prime Minister for Energy and Minister of Oil, and Luay Al-Khatteeb, the Minister of Electricity.

The IEA has worked closely with the Iraqi Ministries of Oil and Electricity to produce the report, and would like to thank the ministers and their staff for their cooperation with this study.

“Operating under extremely challenging circumstances, Iraq has done a remarkable job expanding its oil industry,” said Dr Birol. “Today’s urgent issue is to address the national power sector as the summer heatwave approaches by improving grid maintenance, boosting electricity production with larger mobile generators, and incentivising upgrades of power plants. The IEA is pleased to recommend immediate practical actions for the benefit of the entire Iraqi people, and provide a roadmap for a sustainable power system in the medium term.”

Iraq’s electricity demand is set to double between now and 2030, and its shortfall in electricity supply will widen, as the country’s population grows by more than 1 million people each year.

Without changes to the current structure of electricity supply and improvements to the network, domestic generation, imports and neighbourhood generation would need to double by 2030, for a total supply of over 250 TWh. However, there are many opportunities to improve on this outcome through measures such as investing in transmission and distribution to cut network losses.

Promoting the more efficient use of electricity, including by introducing more progressive tariffs, would play an important role in ensuring that the growth in demand during the summer peak does not continue to outpace supply.

Iraq also needs to take advantage of its abundant renewable energy potential.  The analysis shows that expanding the share of solar PV and wind to 30% of electricity supply by 2030 would bring benefits both to the Iraqi consumer, in the form of reduced electricity bills, and to the environment.

Reducing network losses and moving towards an electricity mix where renewables play a more prominent role would free up 9 billion cubic meters of gas for other uses in 2030, plus 450 kb/d of oil for export.

“In addition to oil, Iraq is blessed with some of the richest solar and gas resources in the world but it is yet to take advantage of them,” Dr Birol said. “Turning that potential into fuel for its own economy and for export would help bring about a more sustainable, reliable and affordable energy future.”

The report is the second in-depth study of Iraq’s energy sector following the publication of the Iraq Energy Outlook in 2012.

(Source: IEA)

By John Lee.

Iraq and Saudi Arabia have signed 13 political and economic agreements during the visit by Prime Minister Adel Abdul Mahdi to the Saudi capital Riyadh.

According to Reuters, Iraqi Oil Minister Thamer Ghadhban has said that Saudi state-owned oil giant Saudi Aramco will help Iraq explore for gas in the western desert.

Saudi Arabia cut ties with Baghdad after it invaded Kuwait in 1990, but the new moves are seen as a sign of improving relations between the two countries.

(Sources: Office of the Iraqi Prime Minister, The National, Reuters)

By John Lee.

The state-owned Trade Bank of Iraq (TBI) will reportedly open its first operational branch outside Iraq on Thursday.

Chairman and President Faisal Al-Haimus told Arab News that the new branch in Saudi capital Riyadh will also be the only active Iraqi bank in the Kingdom.

(Source: Arab News)