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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)

The Agricultural Initiative panel plans to spend roughly 225 billion Iraqi dinars [$190m] on agricultural irrigation in 2011, according to a statement issued by the panel on Thursday.

“The Initiative’s executive director, Dr. Hussein Jabir, proposed to the water resources ministry some selected projects for the year 2011 and offered a brief study on each of them to be adopted soon,” said a statement received by Aswat al-Iraq news agency.

The projects include sprinkle irrigation stations in Kirkuk, linkage to the main canals of al-Furat, al-Sharqi, Sharq al-Gharraf, and Gharb al-Gharraf, and excavation of water wells in the provinces of Karbala, Najaf and Muthanna.

(Sources: National Media Centre, Aswat al-Iraq)

Petronas, the Malaysian state oil firm, has agreed to train 60 Iraqi oil engineers to help it develop the Gharaf oilfield.

The engineers will attend an intensive 6-month course in Malaysia and will then be sent back home to supervise the company’s operations, according to a report from Azzaman.

Petronas and Japan Petroleum Exploration Co (Japex) won the 20-year service contract to develop the 900-million barrel field. They have agreed to invest about $7 billion.

Petronas has a 60 percent stake in the venture, and Japex the rest.

Petronas and Japex will get $1.49 per barrel from Gharaf the development of which could churn out 230,000 barrels a day.

Iraq's oil ministry announced on Friday that it would begin drilling for oil in the Gharraf oil fields by the end of the year.

(Source: Azzaman)

Iraq's oil ministry announced on Friday that it would begin drilling for oil in the southern Gharraf oil fields by the end of the year.

Officials said initial production levels of 50,000 barrels per day from eight oil wells are expected.

Malaysia's state-owned oil company Petronas and the Japan Petroleum Exploration Company (Japex) signed a deal with the Iraqi government late last year to develop the Gharraf oil fields.

The deal envisages 20 oil wells with an estimated daily output of 230,000 barrels over 20 years.

Iraq's state oil company holds a minority share in the partnership.

Petronas has also just announced that it will train 60 Iraqi engineers in Malaysia to work on the Gharraf project.

(Sources: Deutsche Presse-Agentur, Rigzone, Azzaman)

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

In June 2010 Iraq Oil Report had two stories about locals in southern Iraq who opposed the government’s new oil deals. In Dhi Qar, tribal leaders stopped an oil exploration company from doing their work, and threatened them with violence if they didn’t give them money for using their land. Sheikhs also asked Malaysia’s Petronas, which won an auction for the Gharraf field in Dhi Qar in December 2009, to pay them as well.

In southern Iraq, marsh Arabs claimed that oil companies were encroaching on their property and forcing them out. The Arab Marshes Revival Committee also said that their territory was being polluted by petroleum projects. As development steps up on Iraq are other oil fields, more Iraqis may begin protesting.

The first demonstrations actually began last year in Wasit province. There the China National Petroleum Corporation (CNPC) won the first post-Saddam oil contract for the Ahdab field. Shortly after the foreign company began work, farmers started destroying equipment and demanding compensation for damages to their land.

One news story said that the locals caused up to $1 million in damages. They also complained that the company had not hired any locals for jobs as they had hoped. As a result, CNPC actually shut down operations for a month until the government deployed more security for them.

Iraqi’s Oil Ministry has signed twelve oil deals in the last two years. It’s hoping that they will dramatically boost exports, which account for 90% of the government’s revenue, and provide jobs and development as well. The 2010 budget will also pay provinces that produce oil $1 per barrel.

Some Iraqis are not satisfied with these promises, and are taking matters into their own hands by protesting against encroachments upon their property, and threatening international oil companies unless they are paid directly.

This could cause problems for the Oil Ministry’s plans, and may ironically lead the government to crackdown on its own people to develop the country’s greatest resource. This is an issue that needs close attention as the work on the petroleum fields unfolds.

A consortium of Malaysia’s Petronas and Japan’s Japex embarked on developing the al-Gharraf oilfield it had obtained during the second round of oil licensing, an oil official in Thi-Qar province on Thursday.

“The Japanese-Malaysian consortium started initial works to upgrade al-Gharraf oilfield, (25 km) north of al-Nasseriya,” Kareem Yasser Hashem, the director of oilfields in Thi-Qar, told Aswat al-Iraq news agency.

Gharraf is one of five key oilfields in Thi-Qar whose combined reserves are up to 12 billion barrels. Gharraf alone is estimated to contain 3 billion barrels.

The two companies will receive fees of US$1.49 (S$2.09) per barrel produced.

Petronas will take 60 per cent while Japex will take the remaining 40 per cent.

Iraq auctioned Gharraf to the pair on December 12, the second day of a two-day oilfield auction which dramatically increased Iraq’s projected crude production to 12 million barrels per day (bpd) within seven years.

Iraq boasts actual oil reserves of 120 billion barrels, 11% of the total global reserves, ranking third worldwide despite suspended exploration and development since the 1970s. U.S. studies, however, concluded that Iraq is sitting on a lake of petroleum estimated to hit 350 billion barrels in reserves.

Nasseriya, the capital city of the province of Thi-Qar, lies 380 km south of Baghdad.