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The CWC Group’s Director, Nawar Abdulhadi interviews Mr Zaid Elyaseri, Iraq Country Manager, BP Iraq ahead of the 11^th edition of the Iraq Petroleum Conference in May.

Mr Elyaseri shares with us his experience working in the Rumaila oilfield, how BP is optimising and innovating in the current market and his outlook for the future of the industry in the country:

Nawar Abdulhadi: Why is Iraq such an important market for the Oil & Gas industry?

Zaid Elyaseri: As well as being the fourth largest oil-producing country in the world, Iraq’s reservoirs harbours approximately 145 billion of oil reserves, so the country today is clearly an important market for the oil and gas industry and how the world meets its energy needs.

Moreover, with OPEC’s recent decision to curtail oil production supply, there is now clearly an emphasis on extracting oil that delivers values for money for both national governments and IOCs.

In the case of the Rumaila oilfield – which accounts for over a third of Iraq’s total oil production – the lifting cost per barrel is relatively low, making Rumaila’s oil production among the country and the world’s most competitive oilfields. So, despite its many challenges and because of this access to prolific and low-cost oil-production, Iraq is likely to remain a key player in the international oil market.

Nawar Abdulhadi: How does the Government of Iraq and the oil and gas industry work together to drive innovation?

Zaid Elyaseri: Innovation manifests itself in different ways. And in times of austerity the industry in Iraq has had to learn to work smarter.

In the face of a deep operational budget cut, at Rumaila we’ve had to reassess the way we work across the operation. We’ve had to look at where we could optimize processes – for example we now take a lot less time to drill a new well, to put on production and to complete a workover. Innovation at Rumaila has been about doing the same job better, in less time and for less money. I’d add that in many ways, the greatest innovations take place out on the field: the daily jobs that maintain and maximise production in what is largely a brownfield operation.

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi] has met with the president of PetroChina in the Middle East, Mr. Shu Jian Fing, and his entourage.

They discussed the development of the oil industry in Iraq, and plans to raise and investment and production of gas at the Halfaya field in Maysan province.

(Source: Ministry of Oil)

By John Lee.

Output from BP’s Rumaila oilfield has hit the milestone three billion barrel mark, according to a report from Energy Voice.

The field is producing oil at its highest rate in 27 years; since BP joined the partnership to redevelop the field in 2010, output has increased by 40 percent.

In the past six years, the field has generated $200 billion for the Iraqi economy.

Bernard Looney (pictured), BP’s chief executive of Upstream, said:

“Achieving 3 billion barrels of oil in less than seven years is a fantastic achievement ... Despite this challenging environment the BP team, working shoulder-to-shoulder with our colleagues at PetroChina and SOC, safely delivered increased production and important oil revenues for Iraq.”

The Rumaila Operating Organisation (ROO) is comprised of BP, PetroChina and the state-owned South Oil Company (SOC).

The site’s producing wells have increased by 50 percent under ROO’s stewardship.

(Source: Energy Voice)

By John Lee.

Iraqi oil minister Jabar Ali al-Luaibi [Allibi] has met with the Middle East head of PetroChina, Mr. Shaw Jian Vying, and his entourage.

They discussed cooperation and development of the oil industry in Iraq.

They also reviewed the new plans to raise the production and invest in gas at Halfaya oil field in Maysan governorate.

(Source: Ministry of Oil)

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Ministry of Oil should withdraw its plan to offer 12 new oilfields.

In a rather surprise move, the Ministry of Oil (MoO) announced its “intention” to offer 12 medium and small oilfields to IOCs for development and production.

The most alarming and absurd components of the announcement are the contractual modality and the process of awarding and contracting.

Considering the danger and implications of the announcement I call upon the Ministry of Oil to withdraw this announcement immediately and focus instead on properly manage and monitor what has been contracted already. Otherwise, the Iraqi upstream petroleum could suffer from devastating consequences at a time when the country is liberating its provinces, especially Mousil from Da’esh.

The offered fields are Sindebad, Um-Qaser, Rachi and Abu-Khema (in Basra Governorate); Kumait, Noor, Umara, Dema and Dujaila (in Missan Province); and Merjan, Kifl and West Kifl-all known as Mid-Euphrates (in Middle Iraq).  MoO announcement provides further information which will be addressed in this commentary.

At the outset, this is not a new move at all. After completing the fourth bid rounds, the MoO has at least formally announced three times its intention for new offering. The first was during the former Minister Abdul Kareem Luaibi, who in March 2013 announced a fifth bid round comprising “10 oilfields”, then in October he postponed that round to “next year”.

The second was related to the well-known Nassiriya Integrated Project-NIP, which combines the development of Nassiriya oilfields with a 300kbd modern refinery. Though NIP attracted good number of reputable IOCs, the project was put on shelves and related bid round was postponed indefinitely in June 2014. Recently, MoO offered Nassiriya Refinery for private investors, thus NIP is dead!

The third is related to linking Ratawi and Bin-Umar oilfields (in Basra) to funding the water-injection Common Seawater Supply Project (CSSP) reportedly negotiated with ExxonMobil and PetroChina (CNPC). Since January this year no further information is publically available on earmarking the two oilfields to CSSP.

The current Minister of Oil made many pledges when he took office among them two of particular relevance to this topic: first, he emphasized the “national efforts” in upstream petroleum development and second, decision will be based on “solid and thorough studies and assessment”. The recent announcement by the Ministry is diametrically opposing to what the Minster has recently pledged.

By offering these 12 oilfields to IOCs “whether as independent (individual) company or as consortium of companies” in addition to what was contracted under the previous four bid rounds nothing meaningful is left for the “national efforts” role in this sub-sector. Moreover, where are these “solid and thorough studies and assessment” which the recent announcement was premised upon?   None!

Please click here to download Ahmed Mousa Jiyad’s full report.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.

By John Lee.

The Missan Oil Company (MOC) has announced for the completion of four new wells at the Halfaya field in Maysan province.

Adnan N. Sajit, the director general of the MOC, said that the Chinese companies Bohai and Daiken had completed the drilling at the field, which is being developed by Petrochina (CNPC).

He added that 165 wells had been drilled at Halfaya since the start of development operations in 2010.

The field is now producing about 200,000 bpd of crude oil, in addition to gas.

(Source: Ministry of Oil)

By John Lee.

Iraq's Deputy Oil Minister has said that Iraq is negotiating with Exxon Mobil and Petrochina to develop the Artawi and Nahran Omar [Nahr Bin Umar, Nahr Umr] oil fields in the south of the country.

Fayyad Al-Nima, who has been acting oil minister since Adel Abdel Mahdi [Adil Abd Al-Mahdi] "suspended his participation" in the cabinet in March, told Bloomberg that the Oil Ministry hopes hopes to increase combined production at the two fields from around 70,000 barrels per day to 550,000 bpd.

The ministry wants to start the project within six months.

(Source: Bloomberg)

By John Lee.

Iraq's Ministry of Oil has announced the completion of five new oil wells at the Halfaya oil field.

Mr. Adnan N. Sajit, the director general of the Maysan Oil Company (MOC), said the drilling was done by two Chinese companies contracted by Petrochina, the main operator of the field.

Production at Halfaya is now more than 200,000 barrels per day (bpd), and is expected to exceed 400,000 bpd with the completion of the third stage of development.

(Source: Ministry of Oil)

By John Lee.

Iraq plans to supply an additional 5 million barrels of crude oil to its partners in June, according to industry sources cited by Reuters.

The country joins other Middle East producers in attempting to increase market share ahead of an OPEC meeting in Vienna later this week.

Iraq had already been targeting record crude export volumes from southern terminals next month of 3.47 million barrels per day.

The State Oil Marketing Organization (SOMO) has allocated 5 million more barrels of Basra Light grade to partners including PetroChina, Eni and Lukoil, with which Iraq has technical service contracts (TSCs).

An industry source said the additional oil was given "because of the pressure from the TSC contractors".

The additional supplies come from an expansion of the Luhais and Artawi fields in southern Iraq.

(Source: Reuters)

By John Lee.

The Missan Oil Company (MOC) has announced for the successful drilling of 5 new wells at the Halfaya oil field, which is being developed by Petrochina.

Mr. Adnan Noshi, director general of the company, confirmed that the Bohai and Daiken companies have recently finished the drilling of wells 13, 23, 57, 61 and 74.

A total of 152 wells have been drilled at Halfaya, where production is now more than 200,000 bpd.

(Source: Ministry of Oil)