Category: Oil News

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DNO boosts Kurdistan Oil Output in Q3

DNO ASA, the Norwegian oil and gas operator, today reported boosting Kurdistan output to 113,700 barrels of oil per day (bopd) in the third quarter, reversing declines triggered by oil market convulsions in the wake of Covid-19.

Production from the DNO-operated Tawke and Peshkabir fields was up 12 percent from the prior quarter following a campaign of quick turnaround, low cost well interventions and the startup of the Kurdistan region of Iraq’s first enhanced oil recovery project.

Both fields have outperformed expectations and DNO projects replacement of a significant share of its reserves produced this year in Kurdistan, even as the Company scaled back drilling of new wells to meet a one-third budget reduction in response to lower oil prices and a four-month payment hiatus in Kurdistan.

The Peshkabir-to-Tawke gas capture and reinjection project, in operation since mid-year, is continuing to cut gas flaring and greenhouse emissions by half at Peshkabir to 7 kilograms CO2 equivalent for each barrel of oil equivalent produced, while unlocking additional oil at Tawke. To date, two billion cubic feet of otherwise flared gas have been reinjected with positive reservoir response, adding up to 5,000 bopd.

“Starting in June, our Kurdistan teams took up the challenge of doing more with less,  launching creative solutions they called Operation Throttle-Up and Operation Afterburner, which delivered the stellar operational results we report today,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman. “Once again, at DNO the oil we produce is conventional; how we do it is not.”

Across the portfolio, third quarter 2020 Company Working Interest (CWI) production increased nine percent from the second quarter to 97,900 barrels of oil equivalent per day (boepd), of which Kurdistan contributed 80,200 bopd and the North Sea 17,700 boepd.

DNO expects to exit the year with Kurdistan and North Sea production at third quarter levels.

Revenues more than doubled to USD 163 million in the third quarter on the back of improved oil prices and higher cargo liftings of previously produced oil in the North Sea. EBITDA climbed to USD 76 million in the third quarter up from USD 13 million in the previous quarter on higher revenues.

However, North Sea non-cash impairments of USD 202 million pre-tax (USD 118 million post-tax) related principally to the South East Tor and Iris/Hades assets led to an operating loss of USD 208 million.

In July 2020, the Company completed the drilling of Zartik-1, the third exploration well on the Baeshiqa license on a separate structure around 15 kilometers southeast of the Baeshiqa-2 discovery well. Testing of the Zartik-1 Upper Jurassic reservoirs continued through the third quarter. Evaluation of the results of the previously reported discoveries in the Baeshiqa-2 well is ongoing to determine commerciality.

Temporary Norwegian petroleum tax incentives are driving investment plans, with the Company maturing development options for the Brasse field (2021 PDO) and evaluating the Iris/Hades, Fogelberg and Trym South discoveries (2022 PDOs). Appraisal of the Bergknapp discovery (DNO 30 percent), among Norway’s largest discoveries this year, is scheduled for 2021.

Two exploration wells are scheduled in the fourth quarter with Polmak already drilling in the Barents Sea (DNO 20 percent) and Røver Nord to spud shortly in the Northern North Sea (DNO 20 percent). These wells will be followed by an active exploration program in 2021 including wildcat wells at Gomez in the Southern North Sea (DNO 85 percent) and Edinburgh cross-border (UK-Norway) in the North Sea (DNO 45 percent).

Following the latest UK licensing round, DNO was awarded four licenses (two operated) all with previous discoveries.

(Source: DNO)

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Recent Data Draws Bleak Prospect for Iraq Next Year

By Ahmed Mousa Jiyad.

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

Recent Data Draws Bleak Prospect for Iraq Next Year

The Iraqi economy has been in a bad shape and, in the short term, it is going to get worse; nothing new about this and there is almost a consensus about it despite differences in the cited material’ verifiable evidence, manifestations and root-causes for such a degenerating situation.

A “multi-whammy” combination, or association, of effective impacting factors and circumstances played their part in what the country has been and is facing. These include political instability and divisions; fragile security conditions; vulnerability of high-dependency economic structure; bad and inefficient management and decision making; kleptocracy governance coupled with hyper corruption, particularly the formalized and institutionalized; and impacting external intrusion, among others.

Data and information on these factors and circumstances are massive, and hardly any day passes without adding new items to the long list of cases and examples reported by the media, formal entities, experts and legal authorities; the apparent outcome of all that is a severely deteriorated economy of Iraq.

Data I compiled from a recent IMF report regarding main macroeconomic indicators are presented in the table, which you can view in this pdf. The table provides the progression of 26 macroeconomic indicators over the last two decades using three different sets of data: the first is the average, of a long and rather up-normal period 2000-2016; the second, annual data for each of the last three years 2017:2019, and the third are projections for 2020 and 2021.

The focus in this brief contribution is on the prospects for the economy in this and next year, in comparison with the last three years.

Click here to download the full report in pdf format.

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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Three Experts offer advice to Iraq

By Padraig O’Hannelly.

A major petroleum conference has heard expert advice on the steps Iraq should take to increase its prosperity and wellbeing.

Addressing delegates at CWC/GFEn‘s Iraq Petroleum conference, held online this week for the first time, Anne-Laure Kiechel, Founding Partner at Global Sovereign Advisory, stressed the importance of fighting illegality in Iraq. She added that the counry needs a well-functioning sovereign wealth fund to preserve the counry’s assets for the benefit of future generations.

Dr Carole Nakhle, Chief Executive Officer at Crystol Energy, emphasised the need to break the link between the economic reforms agenda and oil prices.

Meanwhile, Salem Chalabi, the newly-appointed Chairman and President of the Trade Bank of Iraq (TBI), focussed on the requirement to make long-lasting changes and regulatory reforms (and in particular, reform of the levels of salaries and pensions) before declaring that Iraq is open for business.

 

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Iraq Insider: Q3 2020 Non-Oil Economy Review

From the Iraq Energy Institute (IEI). Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

For Q3 2020, our first non-oil economy part examines Iraq’s current challenges and economic potential at the macro and micro level. With the oil economy review, there two reports provide a detailed overview of developments in oil and gas, agriculture, industry, electricity and health, looking at Iraq’s key vulnerabilities amid the COVID-19 crisis and where Iraq has received substantial international assistance.

Here we examine Iraq’s current policy options, however limited, and prospects for stabilisation, in light of the new white paper on economic reform presented by the Iraqi cabinet on 13 October.

Additionally, we look at Iraq’s continuing policy of trying to balance regional relations during a time of renewed proxy conflict, the regionally shared challenge of collapsed oil prices and the global pandemic.

Iraq’s policy of regional outreach is finally starting to show positive results but remains vulnerable to the rapidly shifting geopolitics of the region. Arising from Baghdad’s regional posture, we examine some of the most interesting developments, particularly in the energy sector.

Click here to read the full story.

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Iraq’s Future Isn’t Oil, It’s Sustainable Electricity

By Luay al-Khatteeb, for Foreign Policy. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

Iraq’s Future Isn’t Oil, It’s Sustainable Electricity

As the country continues to grapple with the aftermath of the Islamic State insurgency, revolutionizing the country’s energy sector could be the key to long-term security.

Click here to read the full story (subscription required).

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Iraq, Jordan, Egypt Economic Partnership gains Momentum

By Muhammed Magdy for Al Monitor. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

Iraq, Jordan, Egypt economic partnership gains momentum

The tripartite meeting between the foreign ministers of Egypt, Jordan and Iraq, and the ensuing agreements to boost cooperation raises questions about a nascent alliance that could confront Iran’s growing influence in the region.

Click here to read the full article.

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Iraq invites Int’l bidders to Mansuriya Gas Field

By Joe Snell for Al Monitor. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

Iraq invites international bidders to Mansuriya gas field

Iraq has invited international bidders to develop its Mansuriya gas field near the Iranian border, Iraqi Oil Minister Ihsan Abdul Jabbar told the state news agency INA last week.

The invitation comes after the termination of a contract with a group led by Turkey’s state-owned Turkish Petroleum Corp. that also included Kuwait Energy PLC and the Korean Gas Corp.

Click here to read the full article.

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Breaking Out of Fragility: Diversification and Growth in Iraq

Breaking Out of Fragility: A Country Economic Memorandum for Diversification and Growth in Iraq

Iraq is at a crossroads. Almost two decades after the 2003 war, the country remains caught in a fragility trap, facing increasing political instability, growing social unrest, and a deepening state-citizen divide.

Amid a multitude of crises (including an oil price shock, the COVID-19 pandemic, and recent protests) as well as a culmination of poor economic policies, a lack of reforms, and an inability to tackle corruption, Iraq is having its worst annual gross domestic product (GDP) growth performance in 2020 since the fall of the Saddam regime.

Instability, a lack of jobs, corruption, and poor service delivery remain among the most important risks to the country’s long-term growth.

With every crisis comes an opportunity to reform. However, Iraq’s path to reform will be challenging and uncertain. Given current oil prices and the persistent drop in global demand for oil because of the COVID-19 pandemic, the country will have a tough time addressing the needs of its people in the short term.

It can, however, embark on a long but much-needed path toward structural transformation and reform, one that could leave its economy less dependent on oil and more driven by private sector activity.

The widespread protests since October 2019, which have called into the question the country’s current political economy, illustrate that such path for reform can no longer be avoided. Nevertheless, as this report shows, this path will demand persistence, and Iraq will face much uncertainty as it tries to address its long-lasting challenges and change the status quo.

This report highlights what Iraq can do to sustain future growth, but it also shows why the country has not yet managed to achieve high levels of diversified growth alongside peace, stability, and a better standard of living for its people.

The report also suggests strategic pathways by which Iraq can break free from this fragility trap, in which peace and stability can create the conditions for people to fulfill their aspirations, find private sector jobs, and thrive.

In this context, the report’s four chapters provide:

  1. an understanding of Iraq’s underlying fragility and political economy challenges and their implications for a diversified growth model;
  2. an analysis of Iraq’s growth characteristics and the country’s potential for and benefits from eco¬nomic diversification;
  3. a trade diagnostic and assessment of Iraq’s potential for trade and regional integration to create growth and stability; and,
  4. a review of Iraq’s agriculture sector, from primary agriculture to agrifood systems, and its potential to support economic diversification, growth, and stability.

Breaking Out of Fragility: A Country Economic Memorandum for Diversification and Growth in Iraq (Full Report in a PDF Format)

(Source: World Bank)

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Minister proposes Joint Company for Iraqi Kurdistan’s Oil

By John Lee.

Iraq’s Minister of Oil, Ihsan Abdul Jabbar Ismael [Ihsan Abduljabbar] (pictured) has reportedly proposed setting up a joint oil company to manage the production and export of oil from Iraqi Kurdistan.

According to Shafaq News, the new company would be “linked technically and administratively to the presidency of the region and the Federal Oil Ministry“.

The Minister is quoted as saying:

“The ongoing talks between Baghdad and Erbil show new visions and ideas for the region.”

(Source: Shafaq News)

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Former Unaoil Exec Jailed over Bribery in Iraq

Former Unaoil executive sentenced for paying bribes to win $1.7-billion worth of contracts

Basil Al Jarah has today been sentenced to three years and four months’ imprisonment for paying in excess of $17m in bribes to dishonestly secure approximately $1.7bn worth of contracts in post-occupation Iraq.

Al Jarah, Unaoil‘s former Iraq partner, conspired with others to pay millions of dollars in bribes to public officials at the South Oil Company and Iraqi Ministry of Oil. These bribes secured contracts for Unaoil and its clients to construct oil pipelines, offshore mooring buoys in the Persian Gulf, and other infrastructure projects, collectively worth just over $1.7bn.

These contracts formed part of the Iraqi Ministry of Oil’s ‘Master Plan’ to rebuild its oil export capacity and revitalise the Iraqi economy after years of war and occupation.

Director of the Serious Fraud Office Lisa Osofsky said:

“Al Jarah and his co-conspirators’ machinations, driven by greed and heartless avarice, compromised the fairness of the bidding process and ultimately drove up the price a war-torn country had to pay for essential infrastructural upgrades, earning Unaoil and its clients vast profits in the process.

“This was a classic case of corruption, where powerful men took advantage of the desperation and vulnerability of others to line their own pockets.  I’m proud that the SFO could bring these men to justice.“

Al Jarah pleaded guilty to five offences of conspiracy to give corrupt payments in July 2019 in relation to two projects; one to install three mooring buoys and one to construct two oil pipelines. Co-conspirators on the mooring buoys bribery, Stephen Whiteley and Ziad Akle, were found guilty of one and two counts, respectively, of conspiracy to give corrupt payments in July 2020. Akle was sentenced to five years’ imprisonment and Whiteley to three years’ imprisonment by HHJ Beddoe in July 2020. A further individual, Paul Bond, faces retrial in January 2021.

At his sentencing hearing on 8 October 2020 Al Jarah asked for further offences to be taken into consideration in relation to two other projects: one to install an oil platform and one to install a third oil pipeline.

(Source: UK SFO)

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