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Alderley FZE, a subsidiary of Alderley plc, has recently secured contracts for two crude oil metering systems in Iraq.

The contracts for both projects were issued by Petrofac, the international oil and gas facilities service provider, for the new Early Production System (EPS) for the Majnoon field in southern Iraq and for the first phase of the Badra Oilfield Development Project.

The Alderley FZE scope of supply for the Shell Early Production Facilities Project – Majnoon is for the provision of a Crude Oil metering system comprising 2 x 50% 14” duty meter streams with 10” ultrasonic meters, master meter stream, fast loop sampling and Containerized Control room with the associated flow computing equipment. The operator Shell holds a 45% stake in all licences, while Petronas and Iraqi Ministry of Oil hold 30% and 25% of interest.

The Alderley FZE scope of supply, for Gazprom Neft (Gazprom) Badra Oilfield Development project, is to provide a Liquid Ultrasonic metering system comprising 3 x 50% Ultrasonic Meter runs, bi-directional prover and analyser system along with the associated control systems. The Badra Oilfield Development Project is being developed by Gazprom (30%), Korea’s KOGAS (22.5%), Malaysia’s Petronas (15%), Turkey’s TPAO (7.5%), and Iraq (25%).

Eric Maddock, Group Business Development Manager, Alderley comments, “These two projects are the first projects Alderley have won in the country since sanctions were dropped. This puts us in the perfect place to participate in the development of the country and support Iraq’s future needs in the oil and gas industry.”

The systems are being designed and manufactured at Alderley FZE’s facility in Jebel Ali, United Arab Emirates. Alderley FZE is part of the Alderley Group and is the firm’s largest operating company overseas. Alderley FZE provides the full range of services for engineering, supply and operation of bespoke metering and produced water treatment solutions to the oil and gas industry.

(Source: Alderley)

(Picture: Alderley ultrasonic oil meter)

Smit Lamnalco has secured the turnkey contract to support Single Point Mooring operations for The Iraq Crude Oil Export Expansion Project (ICOEEP). The scheme, 20 km off the Al Fao Peninsula, looks to triple oil exports from Iraq.

The SPM contract covers operations and maintenance of four SPM systems and runs for up to three years, a term that would generate over US$200 million for Smit Lamnalco. The agreement involves the full scope of maritime support services for the export facilities. It follows hard on the heels of an over-arching support and maintenance agreement reached between Iraq’s South Oil Company and oil and gas service provider Petrofac in August. Smit Lamnalco will be responsible for the majority of the work scope and will purchase seven new vessels to support the contract.

“This is one of the largest ever SPM operations and maintenance contracts in annualised terms,” said Daan Koornneef, Smit Lamnalco Chief Executive. “It is also one of our most complex SPM projects to date due to its short start-up phase, regional logistics and the operational complexity involved in delivering the full package of integrated maritime services.

“The scale of the contract bears testament to customer confidence in our enhanced capabilities following the merger of Smit’s terminal handling activities with Lamnalco in July 2011. It is a major step towards our goal of becoming the leading supplier of cost effective marine support services in the world.”

Smit Lamnalco owns, operates and crews one of the most modern marine and offshore support fleets in the industry. To meet the ICOEEP requirements, the company will mobilise up to 14 vessels ranging from high powered berthing tugs, maintenance vessels and mooring boats, to an accommodation barge and a patrol vessel. As part of its commitment, Smit Lamnalco has contracted two newbuild tugs from Damen, with delivery due one apiece in October and November 2012.

“We provide expertise which is local and regional, and combine that with strict adherence to international standards and Smit Lamnalco’s global reach,” said Vivek Seth, Smit Lamnalco Managing Director, Middle East and Indian subcontinent. “Asset deployment will be backed up by extensive Masters, Officers and crew training in operational procedures and safe vessel loading. We will provide diving capabilities as part of the package to support the uninterrupted loading of tankers. Furthermore, a dedicated team of onshore management will oversee supporting logistics arrangements.”

In total, close to 200 Smit Lamnalco employees will be deployed to service the ICOEEP.

Sources: Smit Lamnalco; SeaNews Turkey

By John Lee.

If anyone ever doubted the international nature of business in Iraq, just look at the nationalities making the business news in the past week:

• Iraqi, Turkish and Italian firms building new bridges;
• Indonesia selling defence equipment;
• Kuwait doing a seismic survey at Siba gas field;
• China opening a new consulate in Erbil;
• US company providing power for a cement factory;
• British company building offshore export facilities;
• Denmark building a highway;
• Malaysia winning a water project;
• Korea building a major power plant.

... and that's not even the full list!

On the subject of international presence, Iraq Business News has readers in 180 countries - there’s no better way to reach this global audience than to advertise in IBN!

Can you see opportunities for your business in Iraq?

If so, Upper Quartile and AAIB are the perfect team to help you manage the risks and grasp the opportunities. For more information please contact Gavin Jones or Adrian Shaw.

By John Lee.

Petrofac, the international oil & gas service provider, has today signed a contract worth approximately US$100 million to provide offshore operations and maintenance services for the Iraq Crude Oil Expansion Project.

Awarded by Iraq's South Oil Company (SOC), the 12-month contract will commence following a three-month mobilisation period. There is also additional scope for the contract to be extended via two one-year contract extension options.

Petrofac's Offshore Projects & Operations (OPO) business secured the award following a competitive tender. OPO will now provide operations and maintenance services for the new oil export facilities situated approximately 60km offshore the Al Fao Peninsula in Southern Iraq. The facilities include: an offshore platform, metering station, single point moorings (SPMs), subsea pipelines and tanker operations.

Marwan Chedidn (pictured), Chief Executive of Petrofac's Engineering, Construction, Operations and Maintenance division, commented:

"This is our first offshore operations contract in Iraq which broadens the scope of our growing operations within an important country for Petrofac.

"This is also the first time Petrofac has contracted directly with an Iraqi National Oil Company, and we are delighted to begin our working relationship with SOC, a new and important customer for our Group.

"We intend to deploy our capabilities together with our focus on delivery to enable SOC to operate its offshore facilities safely, while delivering increased crude export."

Dyeyaa Jaafar Hyjam, Director General, Southern Oil Company, said:

"Petrofac was selected for this contract in recognition of the Group's capabilities and the good work it has undertaken within Iraq to date.

Increasing the export of crude is a key driver for this important project and we are confident that Petrofac can help us deliver our targets and become a trusted partner for SOC over the long-term."

(Sources: Petrofac, Yahoo!)

Reuters reports that Petrofac has won a $95 million contract to carry out maintenance work for Iraq's new offshore terminals and sub-sea pipelines at the Gulf.

The contract involves maintenance work to ensure there are no leakages in the pipelines or any faults at the two new single point mooring (SPM) terminals that may delay the loading of crude.

Iraq's South Oil Company awarded the deal to Petrofac ahead of the also shortlisted Saipem of Italy and Australia's Leighton Holdings.

"Petrofac's offer was picked for the service contract and the one year extendable contract has been referred to the oil minister for final approval," the oil official, who declined to be named, said.

Two of Iraq's four new SPM terminals, built by Leighton, have already started operation and have boosted oil exports significantly.

(Source: Reuters)

His Excellency Dr Khalaf Samad Khalaf (pictured), Governor of Basrah, is guest of honour at IBBC’s Iraq Day Conference at London’s Mansion House on May 17th 2012 attended also by executives from the world’s leading corporations including major oil and construction companies.

As rising oil sales supercharge the Iraqi economy Dr Khalaf’s keynote address will outline business opportunities in the Basrah region for Western firms.

Delegates will hear millions of new homes are being planned along with highways, hospitals, schools, power plants, airports, ports and sports stadiums.

In short: contracts worth millions of dollars are up for grabs.

Other keynote speakers include former NATO Secretary General, Lord Robertson of Port Ellen, British Minister of State for Universities and Science, Rt.Hon. David Willetts MP and IBBC Executive Chairman Baroness Nicholson of Winterbourne.

Companies sending delegates include: Aegis, AMEC, Basrah Engineering, BP, CCC,Chevron, Clyde & Co, Control Risks, Dome Group, ExxonMobil, Fluor Ltd, Foster Wheeler, G4S, Gulfsands, KBR, KCA Deutag, Kier, Mott MacDonald, Olive Group, Petrofac, PwC, Shell, SKA International, South Oil Company, Trinity Group, Vitol, Weir Group and Wood Group.

Other delegations include: UK Trade and Investment, The Foreign and Commonwealth Office, UK Export Finance ECGD, UK Border Agency, Basrah Chamber of Commerce and Basrah Business Council, Embassy of the Republic of Iraq, London.

Following the reports earlier in the week that Petrofac has won a major contract in Iraq, the company has issued the following statement to the markets this morning:

Petrofac, the international oil & gas service provider, has been awarded a US$330 million lump-sum engineering, procurement and construction (EPC) contract by Gazprom Neft Badra B.V. ('Gazprom') for the first phase of the Badra Oilfield Development Project in Iraq. The competitively tendered project will commence shortly and be completed in three 18-month phases, with final completion scheduled during the second half of 2015.

Under the terms of the contract, Petrofac will provide detailed design, engineering, procurement, construction, pre-commissioning, commissioning and start-up work on the Badra development's central processing facility, which comprises three crude oil processing trains. The first phase of the project is expected to come on stream in the second half of 2013.

Marwan Chedid, chief executive of Petrofac's Engineering, Construction, Operations & Maintenance (ECOM) division, commented:

"We are delighted to be working with Gazprom on this important development which holds significant future potential for the progression of Iraq's oil & gas industry. This is Petrofac's third notable project award in Iraq and also marks our first lump-sum EPC project in the country.

"Iraq represents a sizeable market opportunity for Petrofac and our Basra office is continuing to expand as we develop our presence in the country. In the meantime, our teams are looking forward to delivering a successful outcome on the Badra project in line with our commitment to safety, quality, integrity and corporate social responsibility."

Reuters reports that Iraq's cabinet has approved a $329.8 million tender with British oil service firm Petrofac for the country's Badra oilfield.

Petrofac plans to build a major crude processing facility to help production at the field to reach 170,000 barrels of oil per day (bpd) in 2017, a target which was set by Iraq's oil ministry.

Russia's Gazprom Neft, Turkey's TPAO, South Korea's KOGAS and Malaysia's Petronas, are teaming up to develop the field near the Iran border, which has estimated reserves of 100 million barrels.

Gazprom Neft, expects to start commercial production of 15,000 bpd of oil at the Badra field in August 2013.

(Source: Reuters)

British companies need to move fast if they are to gain a foothold in Iraq and avoid losing out to their competitors.

This was the clear message given at the Middle East Association’s ‘Iraq: Untapped Opportunities’ conference held on 22nd November at the Dorchester Hotel, London.

Supported by the National Investment Commission of Iraq, UK Trade & Investment and Allurentis, the event was sponsored by Shell, Parsons Brinckerhoff, Petrofac and Mott MacDonald and attended by over 230 business and government representatives. A strong Iraqi delegation attended, led by HE Dr Hussein al-Shahristani, Iraqi Deputy Prime Minister for Energy and including HE Dr Khairallah Hassan Babiker, Minister of Trade; HE Mr Herish Muharam, Chairman of the Kurdistan Regional Board of Investment; and Dr Abbas Al Sa’adi, Adviser and General Director of Legal Directorate of the General Secretary of the Council of Ministers.

Opening the conference Middle East Association Director General Charles Hollis commented that Iraq is now entering a more stable phase, and opportunities for business are growing. “We need to replicate the UK success in the Kurdistan region throughout the whole of the country,” he said, adding that the Association is looking to organise a trade mission to Baghdad and Basra within the next twelve months.

In a keynote speech, HE Dr al-Shahristani urged British companies to participate in Iraq’s unprecedented reconstruction and development programme “for the benefit of all parties.” He underlined the Iraqi government’s commitment to creating a conducive environment for foreign investors through the generous benefits and incentives offered by Iraq’s investment law. Highlighting Iraq’s huge economic potential he noted that Iraq’s real growth rate has been more than 7% per annum over the last four years, and is expected to grow even faster over the next decade, with GNP in 2010 standing at $150 billion. Iraq is looking to invest $200 billion over the next six years in the oil and gas sector alone, with a need for new technology and modern management skills. Iraq’s goals “cannot be achieved without international companies” he said. He stressed that the opportunities are not limited to the energy sector, highlighting telecommunications, transport, housing, financial services and tourism as areas offering opportunities.

Dow Jones reports that Lukoil and its partners are about to award a feast of contracts to international engineering and construction companies as it moves full speed ahead with development of its supergiant West-Qurna Phase 2 in southern Iraq.

The company is in the final stages of evaluating commercial and technical bids for contracts competing to build the central processing facility, or CPF, export pipelines, tank farms, and a 126-megawatt power station.

A senior Lukoil executive told Dow Jones Newswires, "we have received the bids. We have been evaluating them and expect to award the contracts very soon". He expected all packages to have been awarded in the coming weeks.

According to other sources, five companies had been shortlisted: Saipem , SNC Lavalin Group Inc , Punj Lloyd Ltd , Globalstroy Engineering and South Korea’s Samsung Engineering.

Two other bidders, Petrofac and Technimont, were said at the time to have been dropped.

The biggest package will be the construction of the CPF which will enable the consortium to produce 400,000 barrels of oil a day from West Qurna-2 by 2014 as part of the first-stage development of the field.

First output of about 150,000 barrels a day will flow in 2013 and then rise rapidly as more wells are tied in, officials from the consortium said.

Lukoil awarded in August a contract to Baker Hughes to drill 23 new wells in the field. "Drilling in the first well started three weeks ago," the executive said.

Lukoil, along with Norway's Statoil and Iraq's state South Oil Company were awarded the 20-year service contract for West-Qurna 2 in Iraq's second licensing round in December 2009.

It is a green field that has yet to produce any oil, but the firms promised to get the southern Iraqi field pumping at a rate of 1.8 million barrels a day for payment of $1.15 a barrel.

(Sources: Dow Jones)