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By John Lee.
A rocket has hit a residential and oil operations headquarters near Basra city, wounding three workers at an Iraqi drilling company.
The short-range Katyusha missile hit a compound in Burjesia which is used by several international oil companies (IOCs), including ExxonMobil.
Oil production and exports are not expected to be affected.
(Sources: The Guardian, Bloomberg, Xinhua)
By John Lee.
Production at the West Qurna 1 oilfield has reportedly reached 465,000 barrels per day (bpd), following the completion of new crude processing facilities and oil storage tanks.
Officials told Reuters on Monday that the field was previously producing about 440,000 bpd.
Exxon‘s foreign staff were present at a ceremony to launch the new facilities, having returned to the oilfield on 2nd June.
(Source: Reuters)
By John Lee.
Russia’s Gazprom Neft is reported to be interested in expanding its operations in Iraq.
Reuters says boss Alexander Dyukov told the annual general meeting on Friday that the company, which is already developing the Badra oilfield, is also “looking at” the Mansuriyah gas field near the Iranian border.
It says that Iraqi government is expected to launch a tender to develop Mansuriyah later this year. Iraq Business News understands that the field is currently being developed by TPAO (37.5%), Oil Exploration Company (25%), Kuwait Energy (KEC) (22.5%), and Kogas (15%).
(Source: Reuters)
By Ahmed Mousa Jiyad.
Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.
2019 Budget Law: Politics of Appeasement, Non-Compliance and Extortion
Data from different sources indicates that KRG oil exports, so far in this year, ranged between 418.8 and 438 thousand barrels daily-kbd and KRG gross oil export revenues at end of May mounted to $3.681 billion.
Draft of the budget law was debated, amended and approved by the parliament; then endorsed by the President of the Republic and finally promulgated as a law when it was published on the official gazette. KRG, Kurdish politicians, parliamentarians and commentators praised the law as it favors them.
Yet, so far and as it officially confirmed by the Minister of Oil and the Prime Minister, KRG did not deliver a single barrel of oil; this is the usual KRG’ non-compliance extortion practice.
Such practice prompts a wave of criticisms and accusations against the Prime Minister, who is known for his appeasement towards KRG even at the expense of the rest of Iraq. KR leaders know too well how to exploit Prime Minister’s weaknesses and his lack of resolve and leadership; KRG succeeded so far.
Click here to download the full article 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.
JICA to Support Iraq’s Reconstruction and Revitalization through Upgrade of Basrah Refinery
Signing of Japanese ODA Loan Agreement for Iraq
On 16 June, 2019, the Japan International Cooperation Agency (JICA) and the Iraqi Government signed a loan agreement at Ministry of Finance in Baghdad.
The ODA (Official Development Assistance) loan amounting to JPY 110,000 million (approximately USD 1 billion) will be used for Basrah Refinery Upgrading Project. The loan agreement was signed by H.E. Mr. Fuad Mohammed Hussein, Minister of Finance and Masayuki Hirosawa, Chief Representative of JICA Iraq Office, in the presence of H.E. Mr. Hamid Younis Salih, Deputy Minister of Oil and H.E. Mr. Naofumi Hashimoto, Japanese Ambassador to Iraq. This concessional ODA loan aims to support the Government of Iraq in its efforts to reconstruct the country and revitalize its economy.
The loan named “Basrah Refinery Upgrading Project (II)” is the second tranche loan for Basrah Refinery Upgrading Project, one of the mega projects known in the region. For the same project, JICA previously concluded two loan agreements for (i) the engineering services loan in the amount of JPY 2,079 million and (ii) the first tranche loan in the amount of JPY 42,435 million.
The entire project aims to increase the quantity and quality of oil products including gasoline, diesel and kerosene, by installing a new refining plant called Fluid Catalytic Cracking (FCC) Complex in Basrah Refinery, which is one of the biggest oil refineries currently operational in Iraq. It will be implemented by South Refineries Company, Ministry of Oil.
Iraq has the world’s fifth-largest proven oil reserves and is currently OPEC’s second-largest producer. Nevertheless, most of the existing refineries in the country have been shut down or decreased their production capacity, suffered from damages and deterioration in the previous decades of conflicts. Many of the plans to construct new refineries have faced with challenges and delays and are yet to achieve substantial increase of the refining capacity.
On the contrary, the ongoing reconstruction efforts in liberated areas and the revitalization of socio-economic activities across the country have prompted huge demand for fuels, such as gasoline and diesel. As a result, despite being one of the largest oil producers, Iraq has no choice but to import the significant amount of oil products from neighboring countries so as to meet the demand for transport, power generation and industrial production.
Against this backdrop, the project to construct Iraq’s first-ever FCC Complex will increase the volume of the high-value added oil products, promote the transfer of refining technologies from Japan and help save valuable foreign currencies to import huge amount of fuels. The new plant will also reduce sulfur content in the products in accordance with the international environmental standards. Furthermore, the project is expected to pave the way for energizing private sector involvement in the downstream of Iraq’s energy industry and provide economic opportunities for the people of Iraq, especially in Basrah.
The loan is very concessional with the low interest rate and long repayment period: the interest rate of 0.20% and the repayment period of 40 years including 10-year grace period.
(Source: JICA)
By John Lee.
FBM-KNM FZCO, an indirect wholly-owned subsidiary of Malaysia’s KNM Group, has been awarded a contract for the supply and delivery of replacement heat exchangers to the Khor Al Zubair’s gas processing plant in Basrah Province.
According to a regulatory statement, the contract from Basra Gas Company (BGC) is worth USD 2.096 million (equivalent to approximately RM8.739 million based on the exchange rate of USD1.00 : RM4.17).
The project is to be completed by 14th January 2020.
(Source: KNM)
Rosneft’s money might help Iraqi Kurdistan meet its domestic gas demand, but it could also cripple its long-term export ambitions, according to an oil analyst.
In an opinion piece for Energy Reporters, Nick Augusteijn argues that Rosneft’s deals are vehicles for Russia’s “increasingly assertive foreign policy“.
Click here to read the full story.
(Source: Energy Reporters)
By John Lee.
Petrel Resources has announced the appointment of Riadh Hameed as Non-Executive Director with immediate effect.
Riadh Mahmoud Hameed (aged 38) is a quality control engineer working for an aerospace component company based in the USA. Prior experience has included over a decade of working in the oil and gas sector, to include six years working for Petrel as a co-ordinator for its projects in Iraq.
David Horgan, Managing Director writes:
“I am delighted to welcome Riadh to the Board of Petrel Resources, and look forward to working with him again, and to renew our connections on the ground in Iraq.”
Last year, having taken an EUR 4.1-million impairment on its investments in Iraq, the company announced that it was re-establishing operations in Baghdad.
(Source: Petrel Resources)
The President of Lukoil, Vagit Alekperov (pictured), has met with Thamir Abbas Ghadhban Al Ghadhban, Deputy Prime Minister and Minister of Oil of the Republic of Iraq, at the St. Petersburg International Economic Forum.
The parties discussed the progress of West Qurna-2 project and agreed to consider the possibility of early commissioning of Eridu field (Block 10). The Minister of Oil of Iraq expressed the support of Lukoil’s initiatives aiming at development of Iraqi projects, fulfilling obligations under the Service Contracts.
The parties have also expressed their interest to consider gas processing and petrochemical projects in Iraq.
(Source: Lukoil)
Iran Has Taken Invaluable Steps to Cement Ties with Iraq: Envoy
Iran’s Ambassador to Iraq Iraj Masjedi highlighted the importance of bilateral relations between the two neighboring countries and said Tehran has taken major strides to strengthen ties with Baghdad.
“We are trying to boost our relations with Iraq in all areas,” Masjedi said, addressing an appreciation ceremony for the outgoing Iranian consuls in the Iraqi cities of Sulaymaniyah and Karbala.
“The embassy of the Islamic Republic of Iran in Baghdad, as well as the affiliated organizations and consulates and other governmental agencies of Iran in Iraq, have taken invaluable strides and actions at various political, economic and security levels to strengthen relations between the two countries in recent years,” the diplomat noted.
Masjedi further pointed to historical, cultural and ideological commonalities of the two countries and said closer ties in all fields are in line with the interests of both Iran and Iraq.
Iran and Iraq enjoy cordial political, security and cultural ties but due to some internal and regional problems including Daesh (also known as ISIS or ISIL) terrorism in Iraq, they have not been able to increase their trade volume.
Heading a high-ranking delegation, Iranian Foreign Minister Mohammad Javad Zarif recently paid an official visit to Iraq to boost ties with the Arab country in the sanctions era.
US President Donald Trump’s administration announced plans in March to extend a 90-day waiver for the second time to let Iraq continue energy imports from Iran.
(Source: Tasnim, under Creative Commons licence)