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By John Lee.

Iraq's Petroleum Contracts and Licensing Directorate (PCLD) has announced the five additional companies have been approved to bid for Iraq's "borderline onshore & offshore exploration blocks & fields."

The companies are listed as:

• Dana Gas (UAE)
• Dragon Oil (UAE)
• Geo-Jade Petroleum (China)
• Schlumberger (USA)
• Zarubezhneft (Russia)

Eight companies had applied for approval.

The five successful companies will be eligible to compete along with the following companies which are qualified from previous licensing rounds:

• BP (United Kingdom)
• China Zhenhua Oil Company (China)
• China National Offshore Oil Corporation (CNOOC) (China)
• China National Petroleum Corporation (CNPC) (China)
• Crescent Petroleum (UAE)
• Daqing (China)
• Eni (Italy)
• ExxonMobil (US)
• Gazprom (Russia)
• Itochu (Japan)
• JSOC Bashneft (Russia)
• Kogas (Korea Gas Corporation) (South Korea)
• Lukoil (Russia)
• ONGC Videsh (India)
• Pakistan Petroleum (Pakistan)
• Pertamina (Indonesia)
• Petronas (Malaysia)
• Shell (Netherlands/UK)
• Sinopec (China)
• United Energy Group (UEG) (China)
• Total (France)

The areas to be offered include the onshore exploration blocks of Khudher Al-Mai, Jebel Sanam (Jabal Sanam) and Umm-Qasr on the Kuwaiti border; the Sindbad, Huwaiza, Shihabi, Zurbatia and Naft Khana blocks on the Iranian border; and the offshore exploration blocks in the Iraqi regional waters of the Arab gulf.

The bidding process should commence in May, according to the following schedule:

(Source: Oil Ministry)

By John Lee.

Oil giant Shell is trying to sell its stake in the Majnoon oilfield (pictured) in southern Iraq, following a failure to reach agreement with Iraq's Ministry of Oil.

A Shell spokesman told UAE-based newspaper The National:

“Following extensive discussions with the Ministry of Oil, the oil minister of Iraq formally endorsed a recent Shell proposal to pursue an amicable and mutually acceptable release of the Shell interest in Majnoon, with the timeline to be agreed in due course.”

Reuters quotes an oil official as confirming that the Ministry failed to reach an agreement with Shell over its Majnoon operations, including production plans and investments budgets. "We think it’s for the interest of all parties that Shell should withdraw,” he added.

A Shell spokesman told Reuters:

“In May 2017, the ministry of oil in Iraq applied the performance penalty and remuneration factor on the Shell operated venture, the Majnoon oil field, which had a significant impact on its commerciality.”

The company holds a 45-percent share in the project, with Malaysia's Petronas holding 30 percent, and the Iraqi state-owned Maysan Oil Company having 25 percent.

Output from the field, which commenced production in 2014, is currently estimated at around 235,000 barrels per day (bpd), with a 400,000 bpd target by 2020.

Shell is also seeking to selling its stake in the ExxonMobil-operated West Qurna 1 oil field.

In addition to its oil interests in Iraq, Shell is a key player in the Basra Gas Company (BGC), a joint venture between the Iraq’s South Gas Company (SGC) (51%), Shell (44%) and Japan's Mitsubishi (5%), which processes gas from the Rumaila, West Qurna and Zubair fields, which would otherwise be flared.

The National also quotes a Shell spokesman as saying that the company remains committed to this, and to its petrochemical project in Iraq:

“By leaving Majnoon, Shell will be in a stronger position to focus its efforts on the development and growth of the Basrah Gas Company and the Nebras Petrochemicals Project.”

(Sources: Reuters, The National)

DNO ASA, the Norwegian oil and gas operator, today announced an agreement with ExxonMobil to join the Baeshiqa [Bashiqa, Bashika] license in the Kurdistan region of Iraq.

DNO will assume operatorship of the license with a 40 percent paying (32 percent net) interest, acquiring one-half of ExxonMobil's position.

ExxonMobil retains a 40 percent paying (32 percent net) interest, the Turkish Energy Company (TEC) its 20 percent paying (16 percent net) interest and the Kurdistan Regional Government its 20 percent carried interest.

Pending Government approval, DNO will drill an exploration well in the first half of 2018 with a second exploration well to follow on a separate structure.

The 324 square kilometer license is situated 60 kilometers west of Erbil and 20 kilometers east of Mosul. ExxonMobil had previously conducted extensive geological and geophysical studies and constructed a drilling pad before work was interrupted due to security conditions in the region.

The Baeshiqa license contains two large, undrilled structures which are expected to have multiple independent stacked target reservoir systems, including in the Cretaceous, Jurassic and Triassic.

DNO currently operates two other licenses in Kurdistan: one contains the Tawke and Peshkabir fields which together produce over 110,000 barrels of oil per day and the other the Benenan and Bastora heavy oil fields which are undergoing further appraisal and development. With three rigs currently deployed, the Company is the most active driller among the international operators in Kurdistan.

Bijan Mossavar-Rahmani (pictured), DNO's Executive Chairman, said:

"We are pleased to partner with ExxonMobil, TEC and the Government on this exciting exploration opportunity.

"We bring to the project a 10-year record of successful and fast-track operations in Kurdistan, culminating in more than 200 million barrels produced to date.

"Following regularization of export payments and a landmark agreement with the Government to close out our historical receivables, our foot is back firmly on the accelerator."

(Source: DNO)

By John Lee.

Energy services company Wood Group has said that the "pace of activity" on its contract with Exxon in Iraq is "slower than anticipated." Exxon operates the West Qurna I field in southern Iraq.

In its Annual General Meeting Statement on this morning, the Scottish-based company added that management’s expectations of full year trading performance are broadly unchanged.

The company as won contracts valued at $230 million in Iraq over the past two years.

(Source: Wood Group)

By Mustafa Saadoun for Al Monitor. Any views expressed here are those of the author, and do not necessarily reflect the views of Iraq Business News. 

Iraq is trying to revive the Trebil border crossing between Iraq and Jordan, which was closed in 2014 after the Islamic State (IS) took control of Anbar province.

But the highway from Baghdad toward the crossing is not safe and has been the stage of terrorist attacks for a while, most recently the IS attack on an Iraqi security forces’ convoy April 22 in the Al-Sakkar area east of Rutba on the highway near the Jordanian border.

As a result, 10 security officers were killed and 20 others were injured. Following the incident, soldiers of the Eighth Brigade deployed in Rutba appealed to Prime Minister Haider al-Abadi for equipment and weapons to secure the international highway between Ramadi and Rutba to avoid surprise attacks by IS sleeper cells.

Due to the imminent threats to the road, which is one of Iraq’s vital economic lines as it connects Basra in the south to Jordan in the west, Iraq commissioned an American company to secure and rebuild the road. The contract also included reconstructing bridges, 36 of which are destroyed.

A government source close to Abadi told Al-Monitor on condition of anonymity, “In his recent visit to Baghdad, Jared Kushner, US President Donald Trump’s adviser and son-in-law, discussed with Iraqi officials the issue of securing the Baghdad-Terbil and the Safwan-Terbil crossings.”

By Salam Zidane for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

On Jan. 15, Iraqi members of parliament, including Sadeq al-Mhanna from the ruling National Alliance, revealed that they are in possession of documents that prove the theft of 300,000 barrels of Basra oil by officials who modified the counters.

A Jan. 25 statement issued by the Oil Ministry in response to the allegation said, “Iraq adopts the best international standards in exporting oil via export ports. The process is supervised by local and international agencies.”

The statement added that the ministry “employs an advanced electronic counters system calibrated according to international standards. The system is certified and approved by Intertek, an international testing company that supervises loading procedures, as well as the inspection and approval of exported quantities via the counters.”

Up to 98% of the Iraqi national budget relies on the oil produced in Basra, especially after Kurdistan refused to hand over its production to the State Organization for Marketing of Oil (SOMO) due to disputes over Kurdistan’s 17% share of the federal budget.

Iraq exports Basra oil via two offshore ports, Basra and Khor al-Amaya. The process of loading the crude oil carrier usually takes 48-56 hours in the presence of representatives from the client company and SOMO and is supervised by Intertek.

Mhanna told Al-Monitor, “The National Security Service addressed a letter to the Ministry of Oil confirming the theft of 100,000-300,000 barrels of Basra oil per day. Furthermore, the ministry’s periodic meetings with the international testing company have underlined this huge squander. Iraq is losing around $20 million daily due the wastage in oil exports, which amounts to annual losses of $7 billion.”

By Dilshad Abdullah for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News. 

International oil companies pull out of Kurdistan

Exxon Mobil has pulled out of three of the six exploration blocks it operated in the Kurdistan Region. The American oil giant withdrew from Betwata, Arbat and Qara Hanjeer in Sulaimaniyah province, raising many questions about the sudden step.

Hemen Hawrami, the head of the Kurdistan Democratic Party's foreign relations office, announced during a Dec. 26 press conference that Exxon’s withdrawal came as the result of decreasing production and had no political motivation.

Hawrami said, “Kurdistan is rich in oil and natural gas, and all oil companies wish to work there. Exxon Mobil is now seeking to exploit natural gas.”

In the Dec. 6 Iraq Oil Report, Kurdistan’s Minister of Natural Resources Ashti Hawrami said that Exxon is withdrawing because it could not fulfill its contract with the region's government. “Some companies didn't meet contractual deadlines and according to the contract had to relinquish their areas,” Hawrami was quoted as saying.

Since August 2014, with the onset of the war against the Islamic State (IS) in Iraq, international oil companies have started to relinquish exploration blocks in Kurdistan.

By the end of 2015, Chevron, the second-largest US oil company after Exxon Mobil, had pulled out of the Rovi block in Dahuk province, but continued to operate in the Sarta area.

International oil companies have relinquished interest in a total of 19 exploration blocks in Kurdistan. The withdrawals will weigh heavily on the Kurdistan Regional Government (KRG), which already faces an economic crisis.

Bilal Saeed, who hosts a program called “Black Gold” on Rudaw Radio, told Al-Monitor that Exxon’s withdrawal will have direct repercussions on the oil sector in the Sulaimaniyah province and the Kurdistan Region in general.

More than 180 expert speakers and delegates from the UK, Iraq, UAE and abroad gathered in Dubai at The Address Dubai Marina on Sunday 18 December for the Iraq Britain Business Council’s (IBBC) Autumn Conference.

Usually held in London, the well-attended conference marked the first time the IBBC has held an event in the UAE, a hub for global and regional companies that operate in the Middle East.

The decision to move the Autumn Conference to Dubai has certainly proven to be a good one, with the new location attracting a new audience of business leaders and decision makers based in the region.

A record number of delegates from non-member companies registered for the event, including representatives from Mitsubishi, Serco, Rolls-Royce, Capital Bank of Jordan and LUKOIL.

They were joined by representatives from IBBC member companies, such as Shell, ExxonMobil, Siemens, GE, Amec Foster Wheeler, GardaWorld, Restrata, Eversheds and more.

The conference was supported by H.E. Mr Kadhim Finjan Al-Hamami, Iraq’s Minister of Transport, and Mr Frank Baker OBE, Her Majesty’s Ambassador to Iraq, who jointly opened the event with IBBC President Baroness Nicholson of Winterbourne.

The theme of the conference was ‘Doing Business in Iraq’. Delegates heard from Ariel Flores, General Manager of BP (Rumaila Operating Organisation), on operating Rumaila in a $50-barrel world during the first session, ‘The Iraq Oil and Gas Sector in 2016’. He focused particularly on how investing in technology, training and safety is key to Rumaila’s operations.

Meanwhile, Marwa Al Nasaa, the International Monetary Fund’s Resident Representative for Iraq delivered an overview of the IMF’s Stand-By Arrangement (SBA), economic developments under the SBA and a forecast of what’s to come.

Other headlining speakers included Dennis Flannery of Citibank, Dr Jafar Dhia Jafar of URUK Engineering and Contracting Company LLC., Zeeshan Sheikh of the International Finance Corporation, Salem Jawad Chalabi of Stephenson Horwood Middle East LLP and Jorge Vila of Iraq Middle Market Development Foundation (IMMDF), who addressed the audience from Paris via a Skype link-up.

IBBC members also joined panel discussions. Asrar Abdulhussein Mohammed of International Islamic Bank participated in the finance session, while Iain Rawlinson of Gulftainer and Peter Turner of SKA International shared their insights on opportunities in Iraq for investment and partnership within the transport and logistics sectors.

Amar Shubar of Management Partners, Gavin Rennie of EY, Afif Masri of PwC and Vikas Handa of Beas LLC (formerly of Weir Group) chaired the panels on finance, power, opportunities in the private sector and O&G respectively.

he IBBC Autumn Conference was generously sponsored by the Islamic International Bank, Gulftainer, Weir Group, SKA International and the IMMDF.

The IBBC’s next conference will take place at Mansion House, London, on Monday 3 April 2017. More information will be available in due course.

For information on the IBBC Autumn Conference, membership or conference sponsorship opportunities, contact the IBBC London team at [email protected] or +44 20 7222 7100 or our UAE Representative Samer Al-Omari at [email protected] or +971552088000.

(Source: IBBC)

By John Lee.

Iraqi oil minister Jabar Ali al-Luaibi [Allibi] met with ExxonMobil senior executive Brad Corson, to discuss development of the Iraqi oil industry.

Mr. Allibi said that the ministry of oil is aiming to develop relations with Exxon Mobil to develop the oil and gas sector in Iraq.

Mr. Corson said that his company is aiming to open new horizons of work with the ministry of oil to develop the work and go forward to achieve the desired goals.

Exxon's CEO, Rex Tillerson, is to join the incoming Trump administration as Secretary of State.

(Source: Ministry of Oil)

By John Lee.

ExxonMobil has reportedly pulled out of three of the six exploration blocks it operated in Iraqi Kurdistan.

According to Iraq Oil Report, it has abandoned the Qara Hanjeer, Arbat East, and Betwata blocks, while retaining 80 percent stakes in the Al Qosh, Pirmam and Bashiqa blocks.

KRG's Minister of Natural Resources, Ashti Hawrami, is quoted as saying:

"Some companies didn't meet contractual deadlines and according to the contract had to relinquish their areas."

Click here to read the full report.

(Source: Iraq Oil Report)