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INOC takes over 9 State Oil Companies

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has transferred ownership of nine state-owned oil companies from the Ministry of Oil to the newly-created Iraqi National Oil Company (INOC).

The Minister is also the President of INOC.

The companies transferred to INOC ownership are:

  • Iraqi Oil Exploration Company
  • Iraqi Drilling Company (IDC)
  • State Oil Marketing Organization (SOMO)
  • North Oil Company (NOC)
  • Midland (Middle) Oil Company
  • Basra Oil Company (BOC)
  • Dhi Qar Oil Company (DQOC)
  • Missan Oil Company (MCO)
  • Iraqi Oil Tankers Company (IOTC)

IBN Expert Blogger Ahmed Mousa Jiyad has described the new company as “dysfunctional, unconstitutional and disintegrative“.

(Source: Ministry of Oil)

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Urgent AMAR Appeal for Widows and Orphans

For hundreds of millions of families around the world, the recent Eid celebrations were a time for family, friends, joy and celebration. A time of prayer, exchanging gifts, embracing the wider community and extending to others their religious generosity.

But for millions more, particularly widows and children, there could be no celebration as they continued their battle against war, hunger, disease.

In Iraq alone, there are one million widows and, tragically, more than four million orphans.

AMAR International has been delivering urgent medical and educational support in the Middle East for the last 26 years.

Using a staff comprised almost entirely of national professionals and volunteers, they have treated more than 10 million patients and have opened 46 medical centres across Iraq.

To commemorate this Summer’s Eid al-Fitr and Eid al-Adha, we are launching an urgent appeal for emergency funds to help many more people in desperate need of your support.

Please donate by clicking here, or by using this donation form.

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Oil Production to Start at Block 10 in 2021

By John Lee.

Russia’s Lukoil will start production at Block 10 in 2021, according to a report from Platts.

The Chinese company Bohai has started to drill the 4th well at the block in southern Iraq.

In February 2017 Lukoil announced Iraq’s largest discovery of oil for twenty years at the Eridu field in Block 10, with recoverable reserves in excess of 2.5 billion barrels of crude.

(Source: Platts)

(Picture: Seismic Survey at Block 10)

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Iraq Plans Big Increase in Oil Production

By John Lee.

The Basra Oil Company (BOC) reportedly plans to increase production  from 3.2 to 5 million barrels per day over the next seven years.

According to Platts, BOC directror Ihsan Ismaael told the CWC Basra conference in Istanbul that the increased production would be sustained for at least 20 years after that.

Among the projects being considered are three new subsea pipelines replacing the old pipelines leading to the Khor al-Amaya Oil Terminal (KAAOT) and the al-Basra Oil Terminal (ABOT), adding up to 3 million bpd of new export capacity.

ABOT is currently operating at just under half its capacity of 3.5 million bpd due to the risk of pipeline rupture, while the 350k-bpd KAAOT (pictured) has been offline because of oil leaks when the pipeline is pressurised high enough for loading to be economical.

New pipelines and storage pumping at the Fao terminal would also allow the four installed single point mooring buoys (SPMs) to reach their capacity of 900,000 bpd each — up from about half that now — and potentially add a fifth SPM.

More here from Platts.

(Source: Platts)

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Luiebi named Head of new National Oil Company

Iraq’s Cabinet has named Jabbar al-Luiebi, the current oil minister, to head the new Iraqi National Oil Company (INOC) – giving new momentum to a fundamental restructuring of the country’s oil sector.

“Yes, he is the president of the Iraqi National Oil Company,” said Oil Ministry Spokesperson Assem Jihad, in an interview with Iraq Oil Report on the sidelines of the CWC Basra Mega Projects conference in Istanbul. “The company will be in charge of Basra Oil Company, North Oil Company, all of it – more than the ministry.”

More details here from Iraq Oil Report (subscription required)

(Source: Iraq Oil Report)

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Turkish FM meets New Iraqi Leadership, Discusses Oil

By Amberin Zaman for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Turkish Foreign Minister Mevlut Cavusoglu (pictured) is due to travel to Iraq on Oct. 11 for a two-day official visit to the capital Baghdad and the Iraqi Kurdistan Region’s seat of government, Erbil.

Turkey’s Foreign Ministry said in a statement that Cavusoglu would be received by Iraq’s newly elected ethnic Kurdish President Barham Salih and that he would also meet with Iraqi political leaders and Turkmen representatives.

The trip, Cavusoglu’s first since August 2017, when he traveled to both capitals to lobby against the Iraqi Kurds’ ill fated independence referendum, is seen as an effort to re-assert Turkey’s heft in Iraq amid the receding fortunes of its local Sunni Arab allies.

Click here to read the full story.

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Genel Energy Shares Gain on Trading Update

Shares in Genel Energy were trading up more than 5 percent on Wednesday as the company issued a trading and operations update in respect of Q3 2018. The information contained herein has not been audited and may be subject to further review.

Murat Özgül (pictured), Chief Executive of Genel, said:

“Genel continues to rapidly increase both production and cash, and is now in a net cash position. Peshkabir is once again exceeding expectations, and drilling on the Taq Taq and Tawke fields provides the potential for working interest production to continue to grow.

“This can further increase our already material free cash flow generation. With notable opportunities in the portfolio, Genel is well positioned to generate significant shareholder value.“

FINANCIAL PERFORMANCE

  • $236 million of cash proceeds received as of 30 September 2018, of which $85 million was received in Q3
  • Free cash flow of $119 million in the first nine months of 2018 ($70 million in H1 2018), with capital expenditure of $62 million
  • Cash of $281 million at 30 September 2018 ($233 million at 30 June 2018)
  • Net debt of $16 million at 30 September 2018 ($64 million at 30 June 2018)
  • Post period end, the receipt of $32 million relating to July 2018 exports means that Genel is now in a net cash position

Q3 2018 OPERATING PERFORMANCE

  • 2018 net production averaged 32,600 bopd as at 30 September 2018, with Q3 averaging 33,700 bopd
  • Production and sales by asset during Q3 2018was as follows:
(bopd) Export via pipeline Refinery sales Total      sales Total production Genel net production
Taq Taq 12,240 0 12,240 12,230 5,380
Tawke PSC 113,450 0 113,450 113,090 28,270
Total 125,690 0 125,690 125,320 33,650

Note: Difference between production and sales relates to inventory movements

  • Tawke PSC (Genel 25% working interest)
    • Tawke PSC production averaged 113,100 bopd in Q3 2018, including a contribution of 29,700 bopd from the Peshkabir field
    • Following the successful results of the Peshkabir-7 well, current production from the Peshkabir field is c.50,000 bopd
    • Current production from the Tawke field is just over 80,000 bopd
    • Drilling activity at the Tawke field has recommenced
      • The Tawke-50 shallow Jeribe well has been drilled to a depth of 320 metres will be brought on production within several days
      • The Tawke-49 Cretaceous well is drilling ahead and will be completed later this month
      • Two additional Tawke wells, one each in the Jeribe and the Cretaceous, will be drilled by the end of the year
  • Drilling activity continues at Peshkabir
    • Peshkabir-6 has established a deeper Cretaceous oil/water contact level than previously estimated. Further testing is underway, including test production of multiple producing zones
    • The Peshkabir-8 well, spud in late August, is drilling ahead. Once completed, the rig will move to spud Peshkabir-9 in November
  • A central processing facility at Peshkabir is set to be commissioned by the end of 2018, which will have a capacity of up to 50,000 bopd, ensuring that production remains unconstrained by surface facilities
  • Production from Peshkabir is highly cash-generative to Genel, with every 10,000 bopd increase in gross field production adding over $2 million to the Company’s monthly free cash flow
  • Taq Taq PSC (Genel 44% working interest and joint operator)
    • Taq Taq field production averaged 12,200 bopd in Q3 2018
    • Current production from the Taq Taq field is c.12,000 bopd
    • With production at the field having stabilised, the five well programme, which aims to increase total production, is now underway
      • The TT-32 well, located to the north-west of the successful TT-29w well on the northern flank of the field, has now spud
      • The well is expected to be on production by the end of 2018, and the rig will then move on to drilling locations on the western and southern flanks of the field
  • Bina Bawi and Miran (Genel 100% and operator)
    • Field development plan (‘FDP’) submitted to Ministry of Natural Resources (‘MNR’) regarding the 34 MMbbls of 2C light oil at Bina Bawi, with the FDP for the Bina Bawi gas development well advanced and set to be added to this submission shortly. The submission will enable completion of the discussions with the MNR in relation to the optimisation of value creation from Bina Bawi
    • A field development plan regarding Miran is on track to be submitted to the MNR around the end of the year
  • African exploration
    • Onshore Somaliland, seismic processing is now nearing completion, and preliminary analysis and interpretation is underway. A prospect inventory will then be developed, with the potential to spud a well around the end of 2019
    • On the Sidi Moussa block offshore Morocco (Genel 75% working interest, operator), over 2,000 km2 of 3D seismic has now been acquired, c.60% of the total. Acquisition is set to complete in November, with data processing to follow in 2019

OUTLOOK AND 2018 GUIDANCE

  • Average net production for 2018 expected to be slightly above guidance of c.32,800 bopd, with exit rate production at the end of the yearforecastto be considerably higher than this figure
  • The uplift in production at Peshkabir in Q3 will lead to record cash receipts in Q4, with ongoing strong free cash flow generation
  • Capital expenditure for 2018 is expected to be towards the bottom end of the previously stated $95-125 million guidance range
  • Operating expenditure for 2018 expected to be c.$25 million, lower than previous guidance of c.$30 million
  • The positive results from wells at Peshkabir are expected to lead to a material increase in proven and probable reserves

(Source: Genel Energy)

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Iraq targets major Basra Gulf Expansion

Iraq is pursuing major infrastructure projects to add millions of barrels per day of export capacity, in an effort to keep pace with ambitious plans to raise production.

In the short term, the Oil Ministry is looking to jump-start work on a long-delayed pipeline contract with the Australian company Leighton Offshore.

Beyond that, Iraq is looking to commission new offshore pipelines and to build an artificial island, the latter of which is likely to be contracted to the Dutch firm Boskalis.

More details here from Iraq Oil Report (subscription required)

(Source: Iraq Oil Report)

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Peshkabir Production Pushes 50,000 bpd

DNO ASA, the Norwegian oil and gas operator, today announced production at the Peshkabir field in the Kurdistan region of Iraq has ramped up to 50,000 barrels of oil per day (bopd), meeting the end-2018 target ahead of schedule and below budget.

One of two recently completed wells, Peshkabir-7, is producing over 10,000 bopd from nine Cretaceous zones through temporary test facilities and exported. The other, Peshkabir-6, drilled as a production well, but with the additional objective of appraising deeper formations, has established a deeper Cretaceous oil/water contact level than previously estimated. Further testing is underway, including test production of multiple producing zones.

The Peshkabir-8 well, spud in late August, is drilling ahead at 2,325 meters. Once completed, the rig will move to spud Peshkabir-9 in November.

Four other wells at Peshkabir now produce at a combined rate of close to 40,000 bopd following a workover at Peshkabir-3 which boosted production from that well to 11,000 bopd from 8,000 bopd.

Peshkabir production is processed through temporary test facilities until commissioning of a central processing facility with a capacity of up to 50,000 bopd by end-2018. The Company is also installing a 10-inch pipeline from Peshkabir to Fish Khabur with a capacity of 60,000 bopd. Field production is currently transported to Fish Khabur by tanker truck and a 6-inch pipeline.

At the Company’s flagship Tawke field, the Tawke-50 shallow Jeribe well drilled to a depth of 320 meters will be brought on production within several days. The Tawke-49 Cretaceous well is drilling ahead at 2,245 meters and will be completed later this month. Two additional Tawke wells, one each in the Jeribe and the Cretaceous, will be drilled by the end of the year. Workovers are also underway at two wells. Tawke production currently stands at just over 80,000 bopd.

Elsewhere in Kurdistan, the Company is about to spud its first well at the Baeshiqa license. Baeshiqa contains two undrilled structures with multiple target reservoirs in the Cretaceous, Jurassic and Triassic. The first well will target the Cretaceous and will be followed by a back-to-back well to test the deeper Jurassic and Triassic on the same structure. A third well to test the Jurassic and Triassic on a separate structure will be drilled in 2019.

“We are all in on our Kurdistan operations and delivering,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani (pictured). “Peshkabir continues to exceed expectations and we are eager to probe the promising potential at Baeshiqa,” he added.

In Norway, the Company will participate in two exploration wells to be spud in 2018. DNO currently holds 21 licenses in the country and plans an additional five exploration wells next year. The Company’s growing Norway portfolio is complemented by a 28.22 percent shareholding in UK-listed Faroe Petroleum plc.

“With USD 1 billion in financial assets, including more than USD 600 million in cash and the balance in marketable securities and treasury shares, we are well-positioned to grow our footprint in Kurdistan and Norway with the drill bit and the acquisition of producing assets,” said Mr. Mossavar-Rahmani.

(Source: DNO)

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Petrofac secures $50m Contract Extension in Iraq

Petrofac’s Engineering & Production Services (EPS) East business has secured a four-year renewal of a contract for maintenance management services for an international oil company client in Iraq.

Under the agreement, which is worth approximately US$50 million, Petrofac will continue to provide specialist personnel to support maintenance services for existing mature assets and new production enhancement facilities.

Mani Rajapathy, Managing Director, EPS East, commented:

“The renewal of this important contract further strengthens our position in Iraq and is testament to our teams’ performance and service delivery. We look forward to continuing our focus on safe and efficient delivery and the development of local resources in-country.”

Petrofac has been active in Iraq since 2010 and has developed a significant track record in delivering a range of onshore and offshore greenfield and brownfield projects, project management, engineering and consultancy, operations and maintenance and training services.

(Source: Petrofac)