Weatherford signs 18-Mth Deal in Iraq

Weatherford International has announced that it has signed an 18-month contract with the Iraqi Drilling Company (IDC) to provide services and project management for the drilling and completion of twenty wells in the Al-Nasiriyah field in the Dhi Qar province in southern Iraq.

Basim M. Khudair, General Director for IDC, said:

"Signing this contract between IDC and Weatherford is a great accomplishment for both parties. It sets the right ground for our mutual and constructive joint cooperation in the future."

IDC will provide rigs, civil works and drilling services; Weatherford will provide project management and all other associated services. The operation will be performed with four rigs provided by IDC.

Frederico Justus, President, International Operations, Weatherford, noted:

"This joint operation with IDC is an honor for Weatherford. Together, IDC and Weatherford will work as one team, providing project management solutions that deliver efficient and effective execution of the contract."

IDC is a leading Iraqi service company focusing on rig services and is a key player in the nationalization program for the country's oil and gas sector.

(Source: Weatherford)

Iraq’s Oil-Rig Count Tumbles

By John Lee.

Iraq's oil-rig count has reportedly fallen by almost two-thirds this year.

Iraqi sources told S&P Global Platts that the total now averages 32 rigs operated by IOCs this month, down from 88 rigs in December 2019.

Federal Iraq is averaging 31 rigs this month, compared with 76 in December, while the Iraqi Kurdistan is averaging only one rig in May compared with 12 in December.

The reductions come after international oil companies were ordered to cut spending because of the oil-price crash.

More here.

(Source: S&P Global Platts)

DNO Guides 2020 Production and Spend

By John Lee.

DNO ASA, the Norwegian oil and gas operator, today provided production and spend guidance for the balance of the year ahead of its Annual General Meeting on Wednesday.

The Company reported that it has implemented the target 35 percent reductions across all spend categories to shrink its 2020 budget by USD 350 million to USD 640 million in response to turbulence and uncertainty in global oil and financial markets triggered by the coronavirus pandemic.

While strengthening its balance sheet, cutbacks in spend will throttle back 2020 Company Working Interest (CWI) production to a projected 88,000 barrels of oil equivalent per day (boepd), of which the Kurdistan region of Iraq will contribute 71,000 barrels of oil per day (bopd) and the North Sea 17,000 boepd. DNO's CWI production averaged 104,800 boepd last year.

In Kurdistan, DNO has reduced the number of rigs deployed in drilling, testing and workovers from five in 2019 and early 2020 to two; these two rigs are believed to be the only ones currently active in Kurdistan, down from an overall count approaching 20 last summer.

Of the two active rigs, one is drilling the Zartik-1 exploration well on the DNO-operated Baeshiqa license and the other is a Tawke license workover rig that will shortly be moved for scheduled maintenance. However, two third-party rigs have been warm stacked at the Tawke and Peshkabir fields and can quickly be mobilized if oil prices climb and export payments are regularized.

"Our cost cutbacks have been thoughtful and deliberate as we moved at warp speed to preserve cash and our balance sheet," said Bijan Mossavar-Rahmani, DNO's Executive Chairman. "The resulting reductions in oil production especially in Kurdistan are reversible with a restart of drilling," he added. "We have not lost reserves but simply parked a portion until the market recovers. And it will."

Gross production at the DNO-operated Tawke license in the Kurdistan region of Iraq containing the Tawke and Peshkabir fields, absent drilling of new infill wells to arrest natural field decline, is expected to average 100,000 bopd in 2020. This reflects a drop from 115,210 bopd in Q1 2020 to 100,000 bopd in Q2 2020 and 90,000 bopd over the balance of the year. The Tawke license exit rate at yearend 2020 is projected at 85,000 bopd absent new wells. Production continues to be split 55-45 between the Tawke and Peshkabir fields.

On a CWI basis, DNO's production in Kurdistan in the second half of the year is projected to average 65,000 bopd (81,220 bopd in Q1 2020 and an estimated 70,000 bopd in Q2 2020). CWI in North Sea operations will contribute another 17,000 boepd in the second half of 2020 (18,640 boepd in Q1 2020 and an estimated 17,000 boepd in Q2 2020).

Budget cuts and the newly announced Norwegian production caps are not expected to make a material change to DNO's 2020 North Sea projections; the majority of the Company's fields subject to the restrictions are not fully utilizing their previous higher production permits.

DNO ASA 2020 Projected Spend
Q1 2020 Q2 2020 Q3+Q4 2020 2020 2019
Actual Projected Projected Projected Actual
USD million USD million USD million USD million USD million
Exploration expenditures 34 36 65 135 187
Capital expenditures 78 37 40 155 339
Operating expenditures 59 49 92 200 237
Abandonment expenditures 17 7 7 31 23
Operational spend 187 129 204 520 786
Other 40 34 46 120 203
TOTAL 227 163 250 640 989

Note: Figures above are pre-tax (i.e., before exploration tax refund in Norway). The category
"Other" includes general and administrative expenditures (G&A), net interest payments and

(Source: DNO)

China’s Zhongman wins $27m Iraqi Drilling Contract

By John Lee.

China’s Zhongman Petroleum and Natural Gas Group Corp., Ltd. (ZPEC) has reportedly announced a new drilling contract with Weatherford in Southern Iraq.

Chinese media reports that the deal is worth approximately $27 million, and follows another contract with Weatherford in Iraq agreed in December.

The oil field was not identified.

(Source: Eastmoney)

New Well at Taq Taq is Close to Production

Genel Energy has announce an update on activity at the Taq Taq field (Genel 44% working interest), as testing of the TT-34 well is nearing completion.

The well has produced from all zones tested, at a maximum combined flow rate of over 3,900 bopd with 28/64″ choke. With the inclusion of test production, gross production from the Taq Taq field is currently c.13,650 bopd.

Individual zone testing is now underway, which will determine the long-term production strategy. Genel expects the well to be placed on production around the middle of January with an initial flow rate of 1,500-2,000 bopd.

The rig has moved to drill the TT-35 well, also on the northern flank of the field, which is now preparing to spud.

(Source: Genel)

Parker Drilling Wins Contract at Qara Dagh

Genel Energy has announced the signing of a contract with Parker Drilling for the drilling of the QD-2 well on the Qara Dagh field (Genel 40% working interest, operator), in the Kurdistan Region of Iraq.

The QD-2 well will test the structural crest 10 km to the north-west of the QD-1 well, which tested sweet, light oil from Cretaceous carbonates. The Parker-269 rig (pictured) has been contracted to drill the well.

Civil construction works for the well pad and camp are now underway, and the well is on track to spud in H1 2020.

Unrisked gross mean resources at Qara Dagh are currently estimated by Genel at c.200 MMbbls.

(Source: Genel Energy)

Parker Drilling Wins Contract at Qara Dagh

Genel Energy has announced the signing of a contract with Parker Drilling for the drilling of the QD-2 well on the Qara Dagh field (Genel 40% working interest, operator), in the Kurdistan Region of Iraq.

The QD-2 well will test the structural crest 10 km to the north-west of the QD-1 well, which tested sweet, light oil from Cretaceous carbonates. The Parker-269 rig (pictured) has been contracted to drill the well.

Civil construction works for the well pad and camp are now underway, and the well is on track to spud in H1 2020.

Unrisked gross mean resources at Qara Dagh are currently estimated by Genel at c.200 MMbbls.

(Source: Genel Energy)

IDC to Drill Oil Wells at Nasiriya

By John Lee.

The Iraqi Drilling Company (IDC) has signed a contract with the Dhi Qar Oil Company to drill 20 wells at Nasiriyah oil field.

Fayyad Hassan Nehmeh, Undersecretary for Extraction Affairs, said the new wells will increase the field’s oil production by 40,000 bpd, in addition to the investment of gas associated with rates up to 20 million standard cubic feet of gas to be used as fuel for power plants.

(Source: Ministry of Oil)

New Drilling Contracts Awarded at Majnoon

By John Lee.

Basra Oil Company (BOC) has signed two contracts for new drilling at the giant Majnoon oil field.

China’s Hilong Oil Service & Engineering Company is to drill 80 oil wells at a cost of $54 million, while the Iraqi Drilling Company (IDC) will drill 43 oil wells at a cost of $255 million.

Oil Minister Thamir al-Ghadhban said the contracts are part of BOC’s plan to increase the production at Majnoon to 400,000 barrels per day by 2022.

(Source: Iraqi Ministry of Oil)

Pearl Petroleum to Raise Funding for Kurdistan Investment

By John Lee.

Pearl Petroleum is reportedly planning to raise additional funding for its drilling and development in Iraqi Kurdistan,

According to Reuters, Patrick Allman-Ward, the chief executive of Dana Gas, which is the majority owner of Pearl Petroleum, told reporters that the funding will “comprise a mix of bank debt, a bond, Exim bank financing as well as contractor and vendor financing.

The company is developing that Khor Mor and Chemchemal gas fields in Iraqi Kurdistan.

(Source: Reuters)