Custom Search

By John Lee.

Japan Petroleum Exploration (Japex) and its partners have delayed the start of production in the Gharraf [Garraf] oil field by six months, according to Bloomberg.

Production was scheduled for the end of 2012, but will now be postponed until the end of June; a company official blamed the delay on problems with Iraq’s infrastructure.

Japex President, Osamu Watanabe (pictured), said he expects initial production of 60,000 barrels a day, rising to 230,000 bpd in 2017.

Malaysia’s state oil firm Petronas holds 45 percent of the oilfield development and production service project, Japex 30 percent, and Iraq’s North Oil Company (NOC) 25 percent.

The company previously had a plan to start operations by September of last year, and were urged last summer by Iraqi Deputy Prime Minister for Energy Affairs, Hussein al-Shahristani to speed up progress on the project.

(Source: Bloomberg)

Malaysia's Synergistic Generation Sdn Bhd (SGSB), which is 60 percent owned by UMW Holdings Bhd, has entered into a $30 million contract  with Petronas Carigali Iraq Holding BV (PCIHBV).

The contract is for the procurement of materials and equipment and installation and commissioning of all equipment and facilities by SGSB for the setting up of the Garraf Power Plant Phase I at the Garraf oilfield.

(Source: Bernama)

As part of its third quarter earnings results, Schlumberger has issued the following statements on its operations in Iraq:

• In Iraq, Wireline MSCT* mechanical sidewall coring technology has been deployed on two exploration wells. Core recovery in the tight and fractured carbonate reservoirs was 100% for each job and the cores will yield the petrophysical properties needed to evaluate these difficult reservoirs accurately. The information will be integrated with other log data for better reservoir characterization and to subsequently design optimal testing and completion programs.
• Also in Iraq, Techlog* petrophysical analysis software has been introduced on a project on the Siba field to provide an independent evaluation on three wells as a first step to evaluate future exploration wells and build the reservoir simulation model. The workscope includes recommendations for further data acquisition and technical work, which will help reduce uncertainties in future field development plans. The project was conducted jointly by Data & Consulting Services and Schlumberger Information Solutions.
• Elsewhere in Iraq, Schlumberger has been awarded a new contract by PETRONAS Carigali. The PETRONAS contract covers well testing services for the Garraf field appraisal and development program that includes two exploration and nine development wells.
• In Iraq, Gazprom Neft Badra, B.V. has awarded Schlumberger a 3-year contract for well construction services covering 11 wells and requiring 3 drilling rigs. The contract includes technologies from IPM, Bits & Advanced Technologies, Drilling & Measurements, Geoservices, M-I SWACO, Wireline and Well Services, as well as the supply of third-party drilling rigs, coring, casing and well heads.
• In Iraq, as part of IPM operations on the Rumaila field for the Rumaila Operating Organization, Drilling & Measurements PowerPak* ERT high-performance steerable motors have been deployed in combination with Smith ONYX* PDC drill bits and M-I SWACO drilling fluids to drill the geologically challenging 8 1/2-in hole section. This was drilled in one run, with no service quality incidents, at a rate of penetration that reached section total depth three days ahead of plan.

(Source: Schlumberger)

Weatherford International has won a deal to build early production facilities at Iraq's untapped Garraf oil field in southern Iraq, a former Iraqi oil ministry official said Wednesday, according to a report from Dow Jones.

Adnan Galay, who retired as chairman of the field's joint management committee a few weeks ago, declined to give the value of the deal. However, contracting sources attending an Iraqi energy meeting in Istanbul said the contract is worth about $200 million.

Galay said that Lakeshore TolTest Corp will be a subcontractor to the project.

Weatherford was awarded the contract by the Malaysian company Petronas (45% stake) and its partners, Japan Petroleum Exploration (Japex) (30% stake), and Iraq's state South Oil Company (25% stake).

Petronas, which has been considering bid proposals since the late summer of 2010, chose Weatherford over three rival bidders--Petrofac with JGC, and Saipem with Punj Lloyd.

The giant oil services company earlier this year won a deal worth $52 million to drill 11 new wells in Garraf, located halfway between the southern cities of Karbala and Nasiriya in Thi Qar [Dhi Qar] governorate. The field was discovered in the 1980s by the then Iraqi oil ministry, and has oil reserves of 1 billion barrels.

Output from the field is expected to hit 50,000 barrels a day next year, 60,000 barrels a day in 2013 and 100,000 barrels a day in 2014, Galay said.

Garraf has an eventual output target of 230,000 barrels a day, although the Petronas-Japex partnership may increase production beyond that level, officials said.

"Three wells have been drilled to date, and testing oil proves that gravity ranges from 24 to 36 degrees API in the two reservoirs of the field," Galay said.

The Garraf early production work involves construction of a degasing facility with two trains of 50,000 barrels a day each, as well as storage tanks and infrastructure.

Weatherford earlier carried out the front-end engineering and design study at Garraf.

(Source: Dow Jones)

Reuters reports that the state-run Japan Oil, Gas and Metals National Corp (JOGMEC) said on Thursday it expects to provide about 16.3 billion yen ($198 million) of capital in 2011-2012 to Iraq's Gharaf [Gharraf, Garraf] oilfield development project.

In return, JOGMEC said it would take a stake of less than 50 percent in Japan Petroleum Exploration's (Japex) wholly owned subsidiary that is taking part in the project.

Malaysia's state oil firm Petronas holds 45 percent of the oilfield development and production service project, Japex 30 percent, and Iraq 25 percent.

The consortium, which expects to invest up to $8 billion, expects oil production to start in 2012 at 50,000 barrels per day, rising to 230,000 bpd of plateau output from 2016.

In a statement, JOGMEC said: "It is expected that this project will contribute to strengthen and deepen a relationship with Iraq, as well as reinforce Japan’s energy security".

(Sources: Reuters, JOGMEC)

Malaysia's Petronas and Japan Petroleum Exploration (Japex) are planning to award a deal shortly to drill several wells at Iraq's untapped Garraf [Gharraf] oil field in southern Iraq, a company executive said.

The  consortium is planning to drill two appraisal wells at Garraf, in Dhi Qar province, starting in November, he said.

"We have issued a tender but we haven't awarded it yet," the executive told Dow Jones Newswires.

The Petronas-Japex alliance was awarded the deal to develop Garraf, with estimated proven oil reserves of one billion barrels, during the country's second licensing auction in December last year.

The field was discovered in 1984, but has not yet been developed. It is situated 5 km northwest of Al-Refaei city, 9 km southeast of Qal’at Suker city, and 85 km north of Nasiriyah.

The executive said the consortium is in discussions with tribesmen who had allegedly refused to cede their ancestral lands peacefully without a cash payment from the two companies.

"We are in discussions with them," the executive said.

The alleged extortion drew condemnation from the Iraqi oil ministry, and the tribal sheiks have since denied any threat of violence, saying that they merely approached the two companies with a request.

Local leaders appear to have helped mitigate the tribal pressures, an Iraqi oil industry source said.

The companies pledged to boost crude oil production from Garraf to 230,000 barrels a day in 2016 and accepted $1.49 for each barrel produced.

Petronas holds 45% stake in the venture, Japex owns 30%, while the remaining 25% sake is owned by Iraq's state oil company.

(Sources: Upstreamonline.com, Dow Jones, Iraqi Ministry ofOil)

Related articles:

• Malaysian-Japanese Consortium Embarks on Developing Gharraf Oilfield
• Local Iraqis Oppose New Oil Deals

The Iraq Petroleum 2010 conference will bring together high profile speakers, senior decision makers, leading businessmen, policy makers and advisors to debate key strategic issues, share expertise and exchange views.

As Iraq plans to quadruple its oil production and the second round of bidding is complete, this year we will be focusing on longer term objectives and building strategic relationships to ensure targets are met.

Over three days, including workshops and networking features, the leaders of the oil and gas industry will convene to meet suppliers and partners to help drive innovation and business.

There has never been a better time to be a part of the exciting opportunities in the Iraqi oil and gas industry.  Click here to get the latest updates.

“An excellent program allowing the participants to obtain the present situation of the Iraq oil industry and the opportunities offered to the IOCs”.
Jorge Duarte Pedro, Gas & Business Development Manager, Partex Services Portugal

To find out how your company can increase its profile within this burgeoning market place call Phillip Clarke on +44 20 7978 0056 or email [email protected]

Malaysia's Petroliam Nasional Bhd, or Petronas, has started recruiting hundreds of Iraqis for four oil projects the company won during Iraq's second post-war licensing auction in December, a senior Iraqi oil official said yesterday.

"Petronas is looking for Iraqis to staff its two offices it is planning to open in Iraq and also some security personnel," the official told Dow Jones Newswires.

Petronas will open an office in Baghdad and another one in Missan province where the firm along with China National Petroleum Corp and Total S.A. won a deal to develop the 4.1-billion-barrel Halfaya oil field in the southern Missan province. Petronas' officials weren't immediately available for comment.

The Malaysian firm in a team with Japan Petroleum Exploration Co Ltd also won a deal to develop the 1-billion-barrel Garraf oil field in Dhi Qar province in southern Iraq. Petronas is the field operator.

The company will hold the first joint management meeting with the Iraqi authorities on May 1, the official said. The meeting will discuss a preliminary plan and a one-year tentative budget for the field development.

Petronas also won the right to develop the super-giant 12.8-billion-barrel Iraq's Majnoon oil field in partnership with Royal Dutch Shell. Shell holds 45 per cent in the venture, while Petronas owns 30 per cent and Iraq's state-run South Oil Co holds 25 per cent.

The Malaysian firm also has a stake along with Russia's Gazprom, Turkey's TPAO and South Korea's state-run Korea Gas Corp, or Kogas, on the Badra oil field in Diyala province in eastern Iraq.

Meanwhile, the Iraqi oil ministry is seeking unrecoverable signature bonuses, rather than recoverable five-year soft loans, from international oil companies planning to develop two of the country's giant oil fields, a senior Iraqi oil official said yesterday.

"We have asked companies to pay signature bonuses instead of the soft loans for West Qurna Phase 1 and Zubair oil fields," Abdul Mahdy Al Ameedi, director-general of the oil ministry's Petroleum Contracts and Licensing Directorate, said.