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Syria and Iraq have reached a final agreement to build two oil pipelines and a gas pipeline between their two countries, and tender invitations will be issued soon, Syrian Oil Minister Sufian Alao [Suffian Alao] (pictured) was quoted as saying on Tuesday.

Alao was quoted by Syrian newspaper Al-Thawra as saying an existing oil pipeline from Iraq to Syria was being repaired.

Platts reports that the pipeline, linking the northern Iraqi oil region of Kirkuk to the Syrian Mediterranean port of Banias, was shut down in the 1970s when relations deteriorated between the rival Ba'ath parties in power in Damascus and Baghdad.

Iraq reopened the line in 2000 to bypass UN sanctions, shipping some 200,000 bpd of Kirkuk crude to Syria, which used the crude in its own refineries and exported an equal amount of its own oil to markets.

The leaky pipeline, which has a capacity to carry 300,000 b/d of crude oil, has been shut since the US-led invasion of Iraq in March 2003, when the main K3 pumping station along the pipeline was damaged by US air strikes.

Alao did not say when work, which has already been delayed since initial agreement was reached to repair the pipeline in 2007, would be completed.

Iraq has said it plans to build three pipelines through Syria for heavy and light oil as well as natural gas to cope with new export capacity once incremental production comes on line from fields being developed by foreign oil companies under long term service contracts.

The heavy oil pipeline would likely transport heavy crude from the northern Qayara and Najmah oil fields, which were awarded to Angola's Sonangol.

The light crude oil pipeline would carry Kirkuk crude oil to Banias.

Iraq currently exports its Kirkuk blend crude oil to the Turkish port of Ceyhan, which lies to the north of Banias. There are plans to rehabilitate the existing Kirkuk-Ceyhan twin pipeline system, which has a design capacity of 1.6 million bpd, following a deal with Ankara to extend the transit agreement.

A senior Iraqi official said recently that while the Syrian pipeline option had been discussed for years, there was now movement on the issue with Baghdad seeking foreign investors for the projects.

One of the Iraqi gas fields awarded in last year's gas auction, Akkas, lies in the north near the border with Syria. The field, which is slated to produce 400,000 Mcf/d of gas when developed, has been earmarked as a potential source of exports in the future to the European market, possibly through the Arab Gas Pipeline that carries Egyptian Gas through Jordan, Syria and Lebanon and is being extended to the Turkish border.

Alao referred to plans to build a 56-inch pipeline with capacity to transport 110 million cu m/d of natural gas from Iran's South Pars gas field through Iraq and Syria, where it would link up with the Arab Gas Pipeline.

The agreement with Iran was reached during talks January 20 in Damascus last week with Iranian Oil Minister Masoud Mirkazemi. The two sides signed a cooperation agreement allowing Iranian gas exports through Syria and then on to Europe with the proposed pipeline.

Syria has been ramping up its gas production in recent years to meet high domestic demand. Alao said total gas output last year rose to 10.07 Bcm, up from around 9.1 Bcm/year in 2009. Syria produced an average 27.5 million cu m/d last year.

Because Syria cannot produce sufficient gas domestically, it has to rely on imports to meet rising demand for power generation as it phases out reliance on fuel oil. At present Syria is importing around 1.45 Bcm/year from Egypt but is seeking additional supplies.

Alao said that the electricity sector accounted for 87% of total gas usage, taking 6.704 million cu m/d of the 8.9 million cu m/d of clean gas supplied by gas processing plants.

Oil production rose marginally to a total 140.931 million barrels in 2010, an average of 386,000 b/d, a slight increase over 383,000 b/d produced the previous year, he said.

(Source: Platts)

A multi-billion-dollar gas deal between Iraq and Royal Dutch Shell will be presented for ratification to the new cabinet once it has been formed, Iraq's Oil Minister said.

"We are still negotiating the contract," Hussain Al Shahristani said after a graduation ceremony for the oil police, according to a report from Trade Arabia.

The $12 billion deal, a venture between Iraq's South Gas Company, Shell and Japan's Mitsubishi, involves the capture of natural gas produced at fields near Basra, including Rumaila.

Prime Minister Nouri Al Maliki is forming a new government expected to include all the main political factions. Al Maliki has said he would pick his cabinet by mid-December. He has until December 26 to form a government.

Al Shahristani said he expected an initial contract for Iraq's western Akkas gas field to be initialled soon.

A deal was won by South Korea's Kogas and Kazakhstan's KazMunaiGas in October, but the signing, scheduled for November 14, was postponed. Officials said the delay was to give the firms more time to look over the contract.

(Source: TradeArabia)

Further to our reports of major gas contracts being agreed in principal on 20 October for three fields holding 11 trillion cubic feet of gas (4 trillion cubic metres), most of them have now been signed.

Turkish Petroleum Corporation (TPAO),  Kuwait Energy and Kogas won the right to operate Iraq's Mansuriyah gas fields and have committed to producing 320m cubic feet of gas per day (113m cubic metres) for $7 per barrel of oil equivalent. The Mansuriyah fields contain almost 370bcf (130bcm), according to the Oil Ministry.

Turkish Petroleum Corporation (TPAO) and Kuwait Energy will also operate the Siba field, producing 100m cubic feet of gas per day (35m cubic metres) at $7.50 per barrel of oil equivalent.

Abdul-Mahdy al-Ameedi, from the Oil Ministry expects that the contractors will reach 25% of its production target in three years and the full target in six.

The signing of the contract for gas production in the Akkas field, which is split 50-50 between KazMunaiGas and Kogas, has been put back to "clear a misunderstanding," the Oil Ministry said. These companies have agreed to produce 400m standard cubic feet of gas per day (141m cubic metres) at Akkas at a price of $5.50 per barrel of oil equivalent.

However, there could still be political setbacks to these contracts, which might be revealed as the new government takes shape.

(Source: Oil Ministry, Oil Directory, Bloomberg)

Iraq's Oil Ministry expects to sign the initial contracts for the Mansuriyah and Akkas gas fields on 14th November, and for the Siba gas field the following day, Abdul-Mahdy al-Ameedi, head of the ministry's licensing and contracting office said on Thursday.

"And after the signing we will send the initial contracts to the cabinet for final approval. After the approval of the cabinet we will finalise the gas deals. The companies have to start work immediately after finalising the deals," Ameedi told Reuters.

Click here to see details of the winning bids.

(Source: Reuters)

Iraq has awarded three of its established gas fields to foreign consortia in the third stage of an energy sell-off, as the country races to supply gas to local power plants and to export markets.

The three fields, in the south, centre and far west of Iraq were sold at or slightly below the price the oil ministry had wanted. They were taken by three groups that now have rights to develop about 10% of Iraq's proven gas reserves – around 300bn cubic metres.

The Iraqi government maintains overall control of the fields (As was the case with the two rounds of oil auctions conducted last year), and will pay each consortium a fee per barrel of oil equivalent.

The winners of the three fields have been announced as follows:

As Iraq reports the results of its recent gas auctions, the western province of Anbar is demanding more control over its potentially huge energy reserves, including the vast desert province’s Akkas reservoir.

According to Reuters, Anbar’s government last week rejected Baghdad’s plan for the auction due to the possibility that surplus gas will be exported.

Anbar’s opposition reflects deep discontent in Iraq’s Sunni heartland about the Shiite-led central government.

“We are against the approach of the central government and we will be against any contract between the central government and any company in the world,” Anbar Governor Qasim Abid said.

“We have our own vision of how to develop this [field].”

Mainly Sunni Anbar Province, controlled by Al-Qaeda in the years following the US-led ouster of Saddam Hussein, has been relatively quiet since tribal sheikhs joined forces with US troops to drive out Sunni Islamist militants in 2006 and 2007.

“We demand the Oil Ministry start exploration in Anbar because it’s unfair to develop and start production from oilfields in some provinces and ignore the billions of barrels of crude we have,” Anbar provincial council leader Jassim Mohammad said.

Anbar authorities warned they would refuse to provide security to foreign firms working in Akkas and would use all means, including “civil revolt,” if Baghdad ignores their demands.

Two weeks ago Iraq revised its estimates of oil reserves upwards, and this was immediately followed by Iran doing the same.

Now Reuters reports that a former oil minister has cast doubt on the numbers and on the motivation of the governments in issuing the figures, saying that the estimates are politically motivated and not justified by the evidence.

Mr Issam Al Chalabi, who served as Iraqi oil minister in the government of Mr Saddam Hussein, said Iraq's announcement last week that its proven oil reserves were 25% higher was 'unreliable'. Unfortunately the announcement that was made last week has not been substantiated by proper evidence; he said that it is not a reliable figure. This is not the way to handle the reserves. I think it was made for political reasons.

According to BP data, Iraq raised its total estimate of proven oil reserves to 143 billion barrels making it the holder of the world's third largest reserves after Saudi Arabia and Venezuela.

Iraqi officials said that the figures had been inflated by new estimates for the West Qurna and Zubair oilfields. But Mr Chalabi, who was Iraqi oil minister from 1987 to 1990, questioned the motivation for the new estimate.

Iraq's Ministry of Oil will auction off more gas fields on the 20th October 2010.

Xinhua was told by an official: "The bidding for the gas fields of Akkas in Iraq's western province of Anbar, Mansuriyah in eastern Diyala province and Siba in the southern province of Basra, will be held on October 20th." Ministry of Oil figures put the gas reserves of these fields at 11.23tn cubic feet. Currently, the country is producing just 1.5bn to 1.65bn cubic feet per day from proven reserves of 112tn.

This auction has been delayed from May, as firms needed time to look into the contracts, which could last 20 years, according to Nina News. There was a symposium last month so that firms could review the petroleum reserves of the fields.

Countries with interested companies include: France, India, Japan, Kuwait, Norway, Turkey, Russia, South Korea and the UK.

In the first two rounds of licensing, the Ministry of Oil signed 12 contracts, with the aim of increasing oil production to 12m barrels per day by 2017. Currently it produces about 2.5m barrels and exports about 2m.

Read more on oil and gas.

(Sources: Nina News, Xinhua)

Gas companies bidding to develop three Iraqi gas fields (Mansouriya, Akkas, and Siba) have had the terms of the deal clarified.

Reuters reports that the companies will not have to develop export facilities or pipelines, and that the Oil Ministry will pay the companies anyway so long as they have done the required work (even if Iraq fails to establish the national gas pipeline network in time to receive gas from the fields).

Abdul-Mahdy al-Ameedi, director general of the Iraqi Oil Ministry's Petroleum Contracts and Licensing Directorate, said: "There is no article in the contract that states that companies should build export infrastructure. The contractor digs wells then produces gas and builds infrastructure to process and manufacture the natural gas."

He also clarified that the companies will not be responsible for finding customers for the gas.

Click here for more details of the gas fields being auctioned.

(Source: Reuters)

Iraq, site of the world’s third-largest oil reserves, will hold a third bidding round for gas fields which will take place on October 1, an Oil Ministry official has confirmed, according to a report from Bloomberg.

“Definitive model contracts and final tender protocols will be ready on September 10, and the bidding process will be on October 1,” Abdul Mahdy al-Ameedi, deputy director general at Iraq’s Petroleum Contracts and Licensing Directorate, said in a telephone interview.

“We expect the round to be a success, it is now all going fine and everything will be on time,” al-Ameedi said.

It held two licensing rounds last year for oil and gas investments, and the third is specifically for the gas fields Akkas, Mansouriya and Siba, which Iraq is eager to develop for domestic power generation as well as export revenue.

You can find more details of the gas fields here.

(Source: Bloomberg)