Category: Oil News

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China’s Zhenhua Oil to develop East Baghdad Oilfield

China’s state-run Zhenhua Oil has agreed to develop the southern part of the East Baghdad oilfield.

Under the agreement, Zhenhua will increase production at the field by 40,000 barrels per day above current production, and provide gas for power stations in the Baghdad area.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] said that this contract is different from previous service contracts, “because the form of the contract was modified to serve the public interest, and to depend on the local employment as 80% of the project staff.”

The contract will also involve the construction of an industrial city and “residential integrated city.”

Jim Bei, the manager of the Chinese company, said his company was keen to cooperate with the Ministry of Oil to develop the field and raise its production.

Zhenhua appears to also be involved in the nearby Ahdab oilfield.

According to Reuters, the East Baghdad fiel is estimated to have around 8 billion barrels of crude reserves, and the potential to produce 120,000 barrels of oil per day.

(Sources: Ministry of Oil, Reuters)

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Int’l Companies Invited to Invest in New Pipeline

Iraq’s Ministry of Oil has invited local and international companies to participate in the execution of the oil export pipeline extension, which extends from the Kirkuk oilfield to the Iraqi-Turkish border, and will run side-by-side with the old strategic pipeline to the Turkish port of Ceyhan (pictured).

Mr. Assim Jihad, the spokesman of the Ministry of Oil, said that the pipeline will run for over 350 kilometers, and will be 48 inches in diameter.

It will be able to transport 1 million barrels per day (bpd) and will be built on a BOOT basis investment method, which includes the construction, property, operation and property transfer.

The government and the ministry does not bare or pay any money or spending over the project at the current time, but after the operation.

The project includes also the construction of a gas pipeline, pumps and reservoirs, in addition to the other completed accessories and services. The contract also commits the winner consortium companies to share with the local companies with 25% or more of the project proportion within the consortium.

Mr. Jihad said also that the oil projects company have determined the 24th of January 2018 as the last date for the companies to present their participation letter.

(Source: Ministry of Oil)

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Oil Ministry Declares its Final Exports for November

By John Lee.

Iraq’s Ministry of Oil has announced final oil exports for November of 105,050,819 barrels, giving an average for the month of 3.502 million barrels per day (bpd), considerably up on the 3.348 bpd exported in October.

These exports were shipped by 40 multinational companies from the ports of Basra, Khor Al-Omaia and the SPM’s on the Arab Gulf, with no exports registered from Kirkuk.

Revenues for the month were $6.021 billion, at an average price of $57.316 per barrel.

October export figures are available here.

(Source: Ministry of Oil)

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Majnoon Development Plan — Important Move in the Right Direction

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Developing Majnoon Oilfield by National Effort — Important Move in the Right Direction

On 21st December, the Ministry of Oil (MoO) approved a set of measures relating to the development of the super giant Majnoon oilfield after Shell relingushed it back to Iraq

In addition to my emphatic strong and absolute support for the Ministry of Oil on this action regarding Majnoon oilfield, I find it timely to highlight some related basic issues that MoO and other authorities, especially the Council of Ministers and the Parliament, should pay attention to and take the necessary action on them.

Please click here to download the full report.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.

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Iraq to use Drones to Protect Pipelines

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has called on his Ministry draw up plans to build a new system to protect Iraq’s pipelines network using new technology including drones.

New monitoring systems and advanced cameras will also feature in the scheme, which is due start in the first quarter of 2018.

(Source: Ministry of Oil)

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Pipeline Network to cover all of Iraq

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has reportedly said that Iraq plans to build a network of pipelines to transport oil products throughout the country, as an alternative to expensive and hazardous road transport.

Reuters quotes him as saying that the network will be part of a strategic plan that includes pipelines to deliver both crude oil and oil products to neighbouring countries.

Earlier this month Iraq announced plans to build a crude-oil pipeline to Iran.

(Source: Reuters)

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Albilal Group joins IBBC

The Iraq Britain Business Council (IBBC) has announced that one of Iraq’s most significant companies, Albilal Group, has joined the trade organization.

Not only is Albilal a major EPC to many IOCs in Iraq, but also to the ministries of Electricity, Oil & Gas, Water and Infrastructure.

ABG was established since 1993 with main offices in Iraq and branch offices in UAE, Jordan and Egypt. As a $309m turnover company, they are now one of the most trusted and largest local companies in Iraq. Akeel Abdul Razzak, President & CEO of Albilal explains:

“The key to our success is the quality and expertise of our core staff, with both expat managerial excellence and over 3000 local Iraqi project deliverers”.

Albilal believes in training and development of personnel and this has seen us through the last difficult years in Iraq, to emerge resilient, sustainable and more capable as an organization.

ABG’s network of clients and partners includes many international and national firms working across the country in numerous several sectors. Albilal has 13 years of experience working in the Oil & Gas sector, with base camps located in all major Oilfields in southern region of the country. in the Power sector, the group earned significant stripes constructing 14 power plants and 71 substations across the country.

ABG is considered a 1st degree civil, mechanical and electrical construction company classified by the Ministry of Planning and Chamber of Commerce, making them one of the top companies in Iraq that is licensed and that has the ability to conduct mid to large scale projects. Albilal Group has received numerous awards over the years, two of which being for Reliability, Quality of Service and High Safety, it’s also ISO certified (ISO 9001, 18001, and 14001).

The group is delighted to be working currently on various essential projects in Iraq, covering Oil & Gas and Power and are set for an expansive 2018 and remains at the forefront of development in the key growth market of Iraq.

Christophe Michels, MD of IBBC says:

“2017 has been an exceptional year for IBBC both in the volume and quality of attendees to our conferences in UK and Dubai, the very well attended and successful trade missions to Baghdad and Basrah and for the number of International and Iraqi companies that have joined our network”.

“Albilal joins new IBBC members Chevron, Al Burhan, Shamara and Ratba groups, Leicester and Northampton University, Serco, Rolls Royce, MenziesAviation and Xreach.

“All in all we are seeing confidence and opportunity return to Iraq, especially across the sectors of Infrastructure, Oil and Gas, Power and Education, with the promise of Tech and Professional services to follow in the coming year.”

(Source: IBBC)

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Shaikan Payment Update

By John Lee.

Gulf Keystone Petroleum (GKP) has confirmed that a gross payment of $15.0 million ($12.0 million net to GKP) has been received from the Kurdistan Regional Government (KRG) for Shaikan crude oil export sales in August 2017.

(Source: GKP)

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Iraq’s Fifth Licensing Round

By Alessandro Bacci.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Ministry of Oil has repeatedly said that it would like to renegotiate the terms of its service contracts with the international oil companies (IOCs) to link the fees the companies receive for developing the fields to the oil prices and to have them share the burden when oil prices decrease.

However, discussions between the federal government and the IOCs have been going on for the past two years with no tangible results until now. Companies affirm that they have submitted some recommendations, but then the process has not moved on.

At this point, it seems that to have a successful fifth licensing round, the federal government must produce in the coming months a new model contract (or at least an amended version of the present technical service contracts) capable of satisfying according to different price levels both the government and the IOCs.

Otherwise, it’s difficult for Iraq to reach the production target of 6 million bpd of crude oil by 2020, especially if other neighboring countries might soon offer better contractual terms.

Please click here to download the full report.

Alessandro Bacci is an independent energy consultant in relation to business strategy and corporate diplomacy (policy, government, and public affairs). Much of his activity is linked to the MENA region, an area where he lived for four years. Alessandro is now based in London, United Kingdom (www.alessandrobacci.com). A multilingual professional, Alessandro holds a Bachelor of Laws and Master of Laws from the University of Florence (Italy), a Master in Public Affairs from Sciences Po (France), and a Master in Public Policy from the Lee Kuan Yew School of Public Policy (Singapore).