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By Simon Kent.

Iraq is developing a new strategy for its southern oil fields in relation to the ongoing Common Sea Water Supply Facility project, which opened bidding for completion last year.

ExxonMobil and PetroChina were approached to invest in the critical strategic water injection project, which has been long delayed.

In a statement to Reuters,  Iraq's South Oil Company deputy chairman Basim Abdul Kareem said that the new water injection project will also target smaller fields in southern Iraq, such as the Nasiriyah field, in the hope of raising the output of these fields by around 100,000 barrels, to 350,000 bpd.

The project's main goal, to boost production at the giant fields of Majnoon, Rumaila, West Qurna and Zubair, will continue, operated by the major IOCs who are working on those fields--BP, Shell, Eni and Lukoil.

Abdul Kareem noted that any new contracts would not be service contracts, and that they would be designed to be beneficial to all under low price scenarios.

(Source: Reuters)

(Oil drilling rig image via shutterstock)

Canada's SNC-Lavalin has announced the award of a contract to Kentz, a member of the SNC-Lavalin Group, by ExxonMobil, for a new oil processing facility to increase production at its West Qurna 1 oil field in Iraq.

Kentz, with its regional partner, is providing the front-end engineering design (FEED), detailed design engineering, procurement, fabrication, construction, commissioning and start-up of the new facility, capable of producing an annual average of 100,000 stock tank barrels of crude oil per day.

The facility, located in the province of Al Basra, will be designed to process full well stream fluids from the production wellhead area and separate them into associated gas, untreated produced water, and stable product crude for export.

The project will be executed out of the company's Abu Dhabi engineering hub, with support from its Dubai operations and is expected to be completed in 26 months. This project is critical for the West Qurna 1 overall development plan and this contract highlights key advantages that the integration brings to the company's overall capability to service key clients.

Christian Brown (pictured), President, Oil and Gas, SNC-Lavalin, said:

"We are delighted to continue our relationship with ExxonMobil, a client we've provided services to for many years.

"The combined expertise and resources in our Oil & Gas business allows us to offer an even a broader range of high-quality services, and in the Middle East we have a strong team of over 8,000 people in the region that can deliver for clients."

(Source: SNC Lavalin)

By Simon Kent.

Iraq's Common Seawater Supply Facility, the project originally intended to supply 12 million barrels a day of treated sea water for injection to maintain pressure at oil wells, may be delayed until 2020.

Originally scheduled for 2013 after planning began in 2009, the project stalled when Exxon (who had the original contract to run it) had their work cancelled due to their involvement in the Kurdish region. Since Baghdad objected to what they considered unilateral deals between Erbil and IOCs, the project was terminated.

The project was then taken up by Iraq's South Oil Company, but has since slowed and may result in a reduction of 10% in output per year until it is finished, according to an analyst quoted in The Wall Street Journal.

Subsequently, the Iraqi govt. is seeking a new contractor to complete the project, and has offered the winning contractor access to the Ibn Omar oil field, a largely undeveloped field with an estimated 6.5 billion in reserves.

(Source: WSJ)

Members of the Iraq Britain Business Council (IBBC), leading political figures and experts gathered in the tranquil setting of Cumberland Lodge, Windsor Great Park, at the weekend for the IBBC's annual retreat.

The weekend was spent holding discussions and talks on different aspects that affect doing business in Iraq.

The event opened on Friday evening with a dinner followed by an address by Simon Pearce, Company Secretary of the Financial Conduct Authority, who spoke about the importance and challenges of financial regulation.

Next day a lecture from Professor Toby Dodge of the London School of Economics (LSE) laid the backdrop of how Iraq has reached the point it is at.

It was followed by discussion between the former UK Security Envoy to Iraq, General Sir Simon Mayall, the Head of the Foreign Office ISIL taskforce, Mr Dan Chugg, Mr Khalid Mahmood MP and Ms Lise Grande, the Deputy Special Representative of the UN Secretary General in Iraq. Members were treated to a frank analysis of the current goings-on in Iraq and how these came about but, more importantly, how these can be addressed.

The theme of the conference turned to vocational education with the Principal of Bedfordshire College Dr Ali Hadawi. The session described ways in which the Further Education has the capacity to empower what he termed a ‘second-chance mechanism’. Dr Hadawi stressed that education is key to investing in human capital as it is fundamental to creating and sustaining livelihoods for individuals and for making a country an attractive business opportunity.

Drawing on Dr Hadawi’s talk, Mr Vikas Handa, MD for EMEA at Weir Group, spoke about his firm’s vocational training initiatives to train and empower Iraqis. Mr Tim Luft, Co-founder of WOOTE, spoke about how rapid technological change was driving a revolution in training programmes. Virtual reality headsets, for example, allow for cheap, efficient and effective immersive training that cuts the time and cost required to create a skilled workforce.

The event continued with a session on ‘Nurturing an Alternative Media Discourse in Iraq’. Mr John Ray, former Middle East Foreign Correspondent for ITN, Mr Nicholas Pelham, Middle East Correspondent for The Economist, and Mr Faheem Ahamed, CEO of Lapis, gave different points of view on the difficulty of covering the news in Iraq, the way in which the dominant media narrative has been dominated by the paradigm of security, and how this neglects other aspects of the society that are key to have a more balanced perception of the reality.

The final panel of the day discussed the practical and thematic considerations for an IBBC conference to be held in Basrah in early October 2015. Members from Shell, HWH Associates, Basrah Engineering Group, ExxonMobil, Moby Group, GardaWorld, Perkins+Will, Stirling Group, G4S, and many others participated in the discussions.

Attendants were treated on Saturday evening to a lecture on Sumerian tablets found in a recent archaeological discovery in Southern Iraq by Professor Eleanor Robson of University College London (UCL) and the British Institute for the Study of Iraq.

(Source: IBBC)

During his visit to Washington this week, Prime Minister Haider al-Abadi received the Chairman and CEO of Occidental Petroleum, Mr. Steve Chazen, and the Chairman and CEO of ExxonMobil, Mr. Rex Tillerson, in separate meetings.

Both chairmen discussed the progress in oil production in Iraq, and thanked the Prime Minister for the security and stability in the Basra region, which has positively affected their operation.

They also discussed the removal of obstacles to achieving higher production volumes.

(Source: Office of the Prime Minister)

By John Lee.

Gulf Keystone's former Chairman Simon Murray (pictured), whose retirement was announced by the company on Tuesday, told Reuters he was effectively forced to quit the company.

Murray said he disagreed with the firm's decision to raise $41 million through an equity issue at a 21 percent discount to the market, a move intended to avoid breaching debt covenants.

He said he had been in communication with several parties about a rescue for the cash-strapped firm before being forced to quit under pressure from investor M&G.

Murray said he had an offer from investment group T5, led by former Tullow Oil chairman Pat Plunkett, and that ExxonMobil and a Chinese company were also interested.

Describing the share placing as a "panic-mode decision", Murray said he had been pushing for a longer-term solution.

(Source: Reuters)

By John Lee.

Reuters cites sources as saying that Basra Heavy crude, with an API gravity of 24 degrees, will be sold from May.

It will be allocated to companies with technical service contracts, such as Lukoil , Petronas, CNPC, CNOOC, BP, ExxonMobil and Shell.

The State Oil Marketing Organization (SOMO) had previously abandoned plans to split its oil shipments into heavy and light grades due to logistical problems.

(Source: Reuters)

By Robert Tollast.

A number of recent reports have suggested the Islamic State is “losing” the fight in Iraq. Does this mean the end of the organization?

It's a topic I wrote about at length for Dubai based consultancy The Brecon Group.

In the long term of course, the answer is no. ISIL (the Islamic State of Iraq and the Levant) may suffer huge losses amounting to the majority of its manpower.

But even if reduced from perhaps 15,000 to a couple of thousand fighters in Iraq (where we are heading at the current rate) that would still be close to Al Qaeda in Iraq's strength during one of their more difficult years, 2008.

In that year, the "Islamic State of Iraq" were diminished but still able to control terrain, prepare devastating VBIED (car bomb) waves and regenerate by taxing and extorting the population in their strongholds. Critically, they depended upon and exploited the collapse of national level politics in Iraq.

So ISIL will menace Iraq and Syria for decades, but a combination of intensive coalition air strikes and massive anti-ISIL force offensives have left the group facing overwhelming odds.

We may be in the last year of ISIL the terrorist army (with tanks and battalions) but ISIL the terrorist group is here to stay: in the absence of a lasting post Baath political settlement in Iraq, the group will always retain a recruitment appeal, while being able to exploit seemingly unending chaos in Syria.

By John Lee.

The Iraqi government has reportedly requested talks with ExxonMobil to restructure oil agreements to help Iraq meet its near-term cash requirements.

CEO Rex Tillerson (pictured) is quoted by Reuters as saying that "by and large we are current in our payments," adding that any change would have to be beneficial to Exxon.

Exxon is the lead contractor on the West Qurna I oilfield development.

(Source: Reuters)

By John Lee.

Islamic State (IS, ISIS, ISIL) militants have attacked Peshmerga forces on the Khazir frontline, north of Mosul, with the aim of seizing equipment and machinery belonging to US oil company ExxonMobil.

A Peshmerga commander told BasNews that the extremist group was forced back from the area, including the key villages of Wardik and Zradik.

Peshmerga forces have been guarding Exxon's equipment since the company pulled its team from the area in June.

(Source: BasNews)

(Terrorism image via Shutterstock)