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New Water Injection Facility at Rumaila

One of the most advanced water pumping facilities in Iraq has been constructed at the Rumaila oilfield to help boost oil production and support the field’s long-term strategy.

Cluster Pump Station Six (CPS-6) is the first CPS facility to be built at Rumaila for around 40 years. It is also the first CPS constructed by the Rumaila Operating Organisation (ROO), the joint venture between the Basra Oil Company (BOC), bp, PetroChina and State Oil Marketing Organisation (SOMO), which operates the field.

Water injection is fundamental for sustaining Rumaila’s high volumes of oil production. After almost 70 years of extracting oil, gas, and water, Rumaila’s mature reservoirs have seen pressure levels fall; injecting water into the subsurface helps to replace this lost pressure and push oil and gas to the surface. Since CPS-6 has become fully operational, 18 formerly producing wells have been reactivated and around 63,000 additional barrels of oil per day are being produced for Iraq.

ROO Deputy General Manager, Hussein Abdul Khadim Hussein, said:

“Rumaila’s daily oil production has increased by around 40% under ROO’s stewardship. Key to this has been the water injection strategy, which rose from around 250 mbds in June 2010 to reach peaks exceeding 1.5 million barrels of water per day (bwpd) in 2021. CPS-6 marks a new chapter as we extend water injection to the south of the field for the first time in more than a decade and will help us to maintain high oil production for years to come.”

Cluster pump stations pressurize treated industrial water to a specified level, which is then sent for injection into water injector wells in the field. With a capacity to inject up to 320,000bwpd, CPS-6’s features include digital monitoring of the site’s key equipment and components to manage pressure levels and ensure performance is maximized from the purpose-built control room.

The site has a pumping house with five powerful Sulzer pumps, each individually capable of pressurizing up to 80,000bwpd; a manifold to direct water to 20 injector wells; 2.5 km of piping inside the facility; 75 km of supporting pipeline infrastructure outside the facility, and an office for staff.

Construction entailed more than a million hours of work, and the installation of 16,700 metres of electrical cabling, 1,721 flanges and 575 valves. Multiple logistical challenges had to be overcome in order to adapt to the pandemic and to create a COVID-safe working environment, which included erecting fences inside the compound to delineate which contractor could operate in each part of the site.

ROO General Manager, Orkhan Guliyev, said:

“The full operation of CPS-6 is a major milestone in our drive to maintain oil production in the south of the field. For the past 11 years, water injection has been focused in North Rumaila – which has seen production increase by more than 150%. Safely injecting water in South Rumaila is a key part of ROO’s strategy for future success.”

Rumaila Special Deputy General Manager, Fan Jianping, added:

“Work has also begun to construct a second new pumping station, CPS-7, which will further our ambitions to ensure the reservoirs in South Rumaila continue to produce effectively and efficiently.”

(Source: ROO)

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China to Snap Up Iraqi Oil Assets?

By John Lee.

Both BP and Lukoil are reported to be considering quitting upstream oil operations in Iraq.

Reuters quotes Iraq’s Oil Minister, Ihssan Abdul-Jabbar Ismail, as making the comments during a parliamentary session last week.

Last month, BP was said to be planning to spin off its Iraqi operations in Iraq into a separate company, which would be jointly owned with its partner in the giant Rumaila project, the China National Petroleum Corporation (CNPC).

Meanwhile, the Minister said Russia’s Lukoil is thought to be trying sell its 75-percent stake in the West Qurna-2 oilfield to Chinese firms.

More here and here.

(Sources: Reuters, Oil Price)

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Rumaila Oilfield “delivers Strong 2020 Performance”

The Rumaila Operating Organisation (ROO) has announced its 2020 performance results.

The field’s oil production rate averaged 1.392 million barrels per day (bpd), despite the impact of COVID-19, a budget reduction and compliance with instructions from BOC to reduce oil production, which reflected OPEC+’s request for Iraq to curtail oil exports.

The year’s strong performance has been attributed to the dedication of the field’s workforce (which is 96% Iraqi) to adapt to and overcome major new challenges. These included a revised and reprioritized production strategy, which benefitted from the strong foundations laid in previous years to modernize facilities, optimize wells and deploy advanced technologies.

Basra Oil Company (BOC) Director General, Mr Khalid Hamza Abbas, said:

“Rumaila’s achievements in 2020 deserve great recognition, not least within the context of the global pandemic. My thanks go to every member of staff who did his or her utmost to ensure the field continued to serve the nation at this most difficult time.”

Rumaila’s 2020 achievements included record-breaking levels of water injection, averaging 1.35 million bpd of water – volumes never previously seen at the field. New digital technologies were deployed to maximize efficiencies; 21 new wells were drilled, 115 wells were optimized or renewed, and almost 7,000 well services jobs were conducted to further maintain production, while preventative maintenance and repairs ensured the continued performance of ageing facilities.

In addition, new projects were initiated to reduce Rumaila’s operational carbon emissions, particularly utilizing electricity from the gas-fired Rumaila Power Plant, rather than diesel generators, to power some key facilities in the field.

Rumaila also continued to support local communities living near or within the field during the pandemic, with ongoing initiatives to help the Al-Khora Primary Health Care Clinic and the North Rumaila Mobile Health Clinic; ROO also oversaw and delivered the procurement, shipping, installation and training on a computed tomography (CT) scanner for the Basra Al-Sadir Teaching Hospital. Major renovation works also took place at Al Sikak, Al Rumaila and Al Nukhaila schools in order to enhance the quality of local education.

With the onset of the pandemic, global oil demand contracted, resulting in the already low international oil price falling further and causing governments and companies around the world to review their plans. Iraq was no exception and resulted in the ROO’s annual budget reduced by around 30%, with adverse impacts on some development projects and well and production-raising activities.

In addition, government-requested curtailments averaged 55,000 bpd over the course of the year, partly in response to Iraq’s compliance with OPEC+’s request to reduce the country’s overall oil exports.

2020 was therefore a year defined by COVID-19. It has always been ROO’s commitment to place the health and safety of staff members above all other considerations. COVID-19 therefore required multiple preventative and responsive activities to limit the transmission of the virus. Field personal protective equipment (PPE) was sourced and distributed, including 300,000 sets of gloves, 20,000 masks, and 1,300 units of hand sanitizing products. Two new clinics were established; additional respiratory and life support equipment were secured; 4,370 diagnostic tests were carried out; contact tracing was instigated after each suspected and confirmed COVID-19 case, and wellbeing initiatives were introduced.

Operationally, the field had to adapt to major disruptions to the way everyday work was delivered. Field staff had to contend with working fewer, yet longer shifts patterns; movement was restricted at Rumaila headquarters which is staffed by a limited number of Iraqi and international colleagues who all adhered to strict quarantining protocols on arrival; hundreds of Iraqi and expatriate staff adapted to working from home. A new IT terminal server enabled staff working remotely in Basra and around the world to securely access emails, files and industry applications, while the number of videoconferencing users increased 960%.

ROO Deputy General Manager, Hussein Abdul Khadim Hussein, said:

“With the virus making its way to Iraq, we knew we had to do everything we could to keep our people as safe as possible while at work. We also had to move quickly, to ensure that the day-to-day operation of the entire field could be maintained, so that Rumaila could continue to deliver for Iraq. The human cost of COVID-19 has been felt by everyone at Rumaila; to everyone affected, we extend our deepest sympathies.”

ROO General Manager, Orkhan Guliyev, said:

“The tremendous co-operation and teamwork between BOC, bp and PetroChina, which in previous years had been key to Rumaila surpassing targets, expressed itself in 2020 through a shared sense of resilience. The determination, dedication, patience and endurance of our people enabled us to continue to make progress during what was an extraordinarily challenging year for everyone.”

Rumaila Special Deputy General Manager, Fan Jianping, added:

“It has been a difficult operating environment for national and international oil companies across the world. At Rumaila, it has been humbling to see such strength of purpose in overcoming complex challenges. 2020 has further illustrated that our partnership has the focus, fortitude and capability to face tough challenges.”

(Source: ROO)

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The Demise of ExxonMobil in the Iraqi Petroleum Sector

By Ahmed Mousa Jiyad.

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

The Demise of ExxonMobil in the Iraqi Petroleum Sector

A recent announcement by the Ministry of Oil (MoO) confirms months of speculation regarding ExxonMobil exiting one of the world’s super-giant oilfields, i.e. West Qurna 1 (WQ1).

Ten years ago this highly recognized IOC had golden opportunity to operate three giant oilfields in the southern Iraq with a combined production plateau of 6.275 million barrels daily (mbd); an opportunity unavailable anywhere in the world, but now this company exiting the country empty-handed!!

Why was that? What went wrong? Who is to blame? Should any lessons be learned from this failed venture and what are the implications for Iraq as well as for ExxonMobil?

This article attempts to answer briefly the above questions and provide background review that could help in understand the complexity of the circumstances that contributed to and led to this eventuality.

ExxonMobil back in Iraq

IOCs comeback to Iraqi upstream petroleum began in earnest immediately after 2003 invasion.

ExxonMobil was one of too many IOCs that concluded Memorandum of Understanding/ Cooperation- MoU/C with MoO in 2004. That MoU/C was signed on 27 October 2004, renewed twice and remained valid until end of 2008; it comprises conducting seven joint studies and training. The joint studies includes: phases 1 &2 for the development of Zubair Oilfield; Seismic and evaluation study for exploration (old) block 12; Database; Model Tender Document  for exploration block 12; Rehabilitating Oil Training Center in Baghdad; Balad Oilfield; Deep drilling program for South Rumaila. Also, ExxonMobil committed to provide training for 129 MoO employees, totaling 1068 working days, during 2005 and 2006.

When MoO decided to hold the first bid round, ExxonMobil was one of seven American companies that were qualified, among 35 IOCs, for participating in the bid round that was held on 29 and 30 June 2009.

ExxonMobil formed three consortia and submitted bids for three oilfields but won nothing during the two days of the competition.

The first consortium with Petronas for Rumaila oilfield; eventually BP/CNPC won when they reduced their remuneration fee to the threshold stated by MoO;

The second consortium with Shell and Petronas for Zubair oilfield competing with three other consortia: Eni/Sinopec/Occidental/Kogas; CNPC/BP; Gazprom/ ONGC/ Turkish Petroleum. The third consortium with Shell for West Qurna1 oilfield competing with four other consortia: CNPC/Petronas/Japex; Lukoil/Conoco; Total; Repsol/StatoilHydro/Maersk.

None won during the biding event.

In October 2009, ENI accepted the MoO’ maximum remuneration fee and agreed to expel Sinopec from its consortium, because Sinopec agreed, days after the biding event, to a C$8.3bn (US$7.2bn) takeover of Addax, which had a stake in the KR TaqTaq field. Hence, ENI consortium secured the Zubair contract.

As for WQ1 it was a totally different story.

Early October 2009 a BBC Monitoring report quoted Lukoil boss Vagit Alekperov had said, “We have let it be known to Iraq’s Oil Ministry that the consortium of Lukoil and ConocoPhillips is ready to enter into direct talks concerning the West Qurna-1 project on the terms that were announced earlier by Iraq’s Oil Ministry,”

Probably, ExxonMobil found itself left behind and empty-handed from the first bid round since BP/CNPC won Rumaila; ENI lead consortium secured Zubair and now Lukoil and ConocoPhillips conceding to MoO terms regarding WQ1. Moreover, ExxonMobil had no intention to participate in the second bid round to be held in December 2010.

All the above prompted ExxonMobil/Shell, four weeks after Lukoil and ConocoPhillips announcement, to present similar acceptance of MoO terms regarding the maximum remuneration fee.

The Ministry favoured ExxonMobil/Shell by not considering Lukoil/ConocoPhillips offer promptly, and when ExxonMobil/Shell made their offer it was selected; presumably due to suggested production plateau target-PPT differential that tilted towards ExxonMobil/Shell!!! The Cabinet approved the award of WQ1 to ExxonMobil/Shell on 25 January 2010.

But ExxonMobil negotiated secretly with KRG after the company secured WQ1 contract with the federal ministry and it had signed the second amendment to the contract on 18 August 2010 adding 500kbd to an already high PPT at a higher remuneration fee of $2/b.

ExxonMobil-KRG secret negotiation led to signing six production sharing agreements on 18 October 2011, though it knows of the blacklisting policy by the federal ministry of oil, i.e, ignoring and disregarding the federal government imposed policy.

Contracts with KRG add insult into injury since three of these contracts are related to exploration blocks and fields that fall within the “disputed territories”; these are Bashiqa, Al Qosh and Qara Hanjeer, the other three are Arbat East, Pirmam and Betwata.

That unwise and puzzling move by ExxonMobil led to excluding it from leading the Common Seawater Supply Project-CSSP; reducing its Participating Interest in WQ1 (through the Third Amendment of the contract dated 28 November 2013) and blacklisting it from any future upstream projects such as Nassiriya Integrated Project-NIP.

That unwise action was writing on the wall that had in fact commenced the demise of this giant IOC in the Iraqi upstream petroleum.

The position of ExxonMobil in WQ1 weekend further when Shell exited WQ1 after it had exited Majnoon oilfield in June 2018.

ExxonMobil attempted a comeback to Iraqi petroleum, by exploiting the naivety and narcissism of a former Minister of Oil, Jabbar Luaibi, through Southern Iraq Integrated Project- SIIP. He and ExxonMobil were close to trap Iraq in an Odious Contract. The Ministry of Oil was cautioned of the detrimental consequences of such a contract and luckily for Iraq that contract was dismissed.

The rise and fall of ExxonMobil in KRI was even more dramatic despite the fact that KRG offered lucrative production sharing agreements. Media sources’ report that ExxonMobil had conducted geological studies that doubted the existence of enough reserves in most of these blocks. Such results prompted Exxon to relinquish three of its six blocks: Betwata in 2015, and Qara Hanjeer and Arbat East in 2016.

Of Exxon’s six blocks, Bashiqa may be the most promising.  However, in 2017, it transferred half of its 80 percent interest in this block – along with operatorship – to DNO and early this year it agreed to sell 32 percent to DNO, which practically and effectively ends ExxonMobil involvement in this block. Finally, ten years on with no much progress in AlQosh and Primam.

ExxonMobil adventure in Kurdistan Iraq ended, mostly, miserably!

To sum up, in that first biding round the company had three valuable opportunities and, analytically and legally, it and its partners could have won all three super-giant oilfields (Rumaila, Zubair and WQ1) with a combined production plateau of 6.275 million barrels daily-mbd against a combined minimum PPT proposed by MoO of 2.758 mbd; it won nothing during the bidding event!!!!!!!!!.

Instead, ExxonMobil sought a divisive course of action in the domestic Iraqi politics by concluding ill-fated PSAs with KRG; was that due to lack of vision, or geopolitical nativity or arrogance that still reflects a “Seven Sisters” mentality, or a hidden political agenda aiming at disintegrating the country; who knows!!!!!

What went wrong with ExxonMobil and its economic model?

Many views argued that the fiscal terms of the Iraqi long term service contract-LTSC for WQ1 are tough enough that eradicate the Internal Rate of Returns-IRR of the economic model which the IOC premised its final investment decision-FID on it.

This might be partially true as the comparative analysis of LTSC with other types of contract, particularly the production sharing contracts-PSCs indicates the “Government take” are higher under the LTSC than the PSCs. This, from international energy political economy perspectives is good for Iraq and, moreover, that corresponds with the Iraqi constitutional provision that calls for “develop the oil and gas wealth in a way that achieves the highest benefit to the Iraqi people” (Article 112, Second)

Nevertheless, contractually and analytically LTSC for WQ1is identical in structure, contents and fiscal terms, except the particularities of WQ1 oilfield,  to all LTSCs for the brown fields offered under the first bid round, i.e, Rumaila, Zubair and the 3 Missan oilfields- Buzurgan, Abu Ghrab and Faqa. This leads one to question why ExxonMobil finds the fiscal terms unfavorable while other IOCs continue in the redevelopment of the oilfields.

It took almost one year to prepare for the first bid round and the final text of the LTSC was thoroughly examined by all qualified IOCs for that bid round. Logically and imperially, all IOCs should have formulated their economic model and bid on what the LTSC offers. It is rather surprising to claim, ten years later, that the offered fiscal terms do not match with the company economic model!!

The economic model of any IOC is its own making; reflecting its vision, its global profile, strategic positioning, strengths, and stakeholder/shareholder’s interests among other things. Accordingly, the level of IRR is the fiscal measure upon which the FID premised. Majors or Big Oil usually have high IRR, due to their international profile , their integrated structure across the value chain of petroleum industry and the “opportunity cost” of a particular investment.

IRR under LTSC fiscal terms depends mostly and directly on: production level, capital cost-investment, cost recovery and remuneration fee; indirectly it depends on oil prices through the term of “deemed revenues” provision that impact the quarterly cost recovery and remuneration fee entitlement.

Oil price fluctuates, and nothing new about that at all; its fluctuation like a “Yu-Yu” is more normal and usual than otherwise. Iraqi oil export price averaged at $53.19 a barrel during the 12 months period November 2008-October 2009; the time that IOCs considered oil prices in their economic model. During the period from July 2008 to March 2021 Iraqi oil export price averaged at $69.55 a barrel; hence the argument that IRR eradication was attributed to oil prices and, accordingly on cost recovery and remuneration fee is not convincing.

What remains is the impact of oil production level on IRR value. Oil production levels have implications and direct impact on capital cost, cost recovery and remuneration fee, and hence on IRR.

For WQ1 the MoO requests a minimum plateau target of 600kbd during the first bid round. ExxonMobil presented 2.325mbd, i.e., nearly four folds what MoO had envisaged!! Moreover, soon after signing the contract ExxonMobil requested adding further 500kbd leading to higher plateau target at 2.825mbd.

ExxonMobil should have known that such unreasonable unattainable plateau target within the contracted timeframe weakens the logical premises of its economic model and the assumed IRR; it was a problem of its own making and shed much doubt about the validity and soundness of its model not the LTSC stringent fiscal terms.

However, Amendment 4, signed on 19 February 2014, to WQ1 contract, provides further relieves from the terms of the contract such as reducing the plateau target, performance factor and R-Factor among others that provide significant fiscal incentives to WQ1 consortium.

All the above refutes the argument that put the blame squarely on the terms of the contract in the deteriorating IRR and ExxonMobil economic model.

Even if one, for the sake of the argument, accepts for a while the tough terms of WQ1 contract, what about ExxonMobil economic model for KRG’ PSCs!!

All commentators and oil experts agree that KRG’ PSCs provide lucrative terms for the benefits of the IOCs. Why then ExxonMobil fails measurably there too?

Was that demise due to wrongly-premised economic model or “inside-misguidedness”!! Media sources revealed that Ali Khedery, a former American diplomatic advisor in Iraq who subsequently joined Exxon as director of public and government affairs for ExxonMobil Kurdistan Region of Iraq Limited (EMKRIL), Exxon’s KRG-focused subsidiary, “had facilitated the negotiations that brought the company to Kurdistan.” Was ExxonMobil victimized by its own staffer!!!!???

ExxonMobil Exit and MoO Options

Contractually, to exit WQ1, ExxonMobil should invoke the termination Article 8 in WQ1 service contract, particularly sub-article (8.2) and, therein, sub-article (8.1 (c)). If ExxonMobil wishes to assign its rights and obligations, as it seems doing so far, it should comply with the provisions of Article 28-Assignment.

Available information indicates that the company launched the contractually exiting process in January by sending a formal letter to notify MoO it had found prospective buyers; ExxonMobil and MoO had three months, until 28 April, to agree on a course of action.

The ministry has three options: the first is to accept the prospective buyers found by ExxonMobil; 20 percent to CNOOC and 12.7 percent to PetroChina-CNPC. This means increasing CNPC participating interest to 45.4% and increase China position in WQ1 to 65.4%.

The second option is to find another American company to acquire ExxonMobil share; this what the Ministry has publically announced and it seems to favour Chevron, but Chevron  was reportedly not hugely encouraged to invest in WQ1. (But again Chevron was blacklisted by the Ministry due to the company’ involvement in KRG oilfields, though such blacklisting was revoked, unofficially, during the time of former minister Jabbar Luaibi. He paving the way for this company to enter the upstream petroleum through direct backdoor. By the way the Iraqi team in MoU/C with Chevron 2004-2008 was chaired by Jabbar Luaibi).

The third option is to acquire ExxonMobil share by the Ministry through Basra Oil Company-BOC or any other national companies affiliated under the Ministry. This option is similar to what was done when Occidental – Oxy relinquished its participating interest in Zubair oilfield

In any of these options, the Ministry should extract a “capital gain tax-CGT” from the total value of the sold share. The Iraqi tax authority decides the CGT rate, the estimation equation and the compounding rate to arrive at the present values taking into consideration three related variables: the value of the sold share (minus) the present value of the invested capital (plus) the present value of the recovered invested capital (cost recovery).

In my article written almost twelve years ago assessing the first bid round I wrote the following: “What is rather surprising is the somewhat weak contribution of the American oil companies. While they topped the 35 qualified IOCs with 7 companies, only three had participated in the bidding. Were they expected to capitalise on the American military presence and political pressure to have guaranteed access to the Iraqi oil? Or they simply have their own capacity, technical and financial limitations? Or Iraq is not on their strategic priority screen? Or they are trapped in a mind-set of own making that centred on production sharing agreements and “reserves booking”? Or they are not used to this type of open bidding and transparency, and they prefer behind closed doors deals? Only time would provide the satisfactory answer.” (MEES 52:33 17 August 2009)

Any lessons learned, Ministry of Oil????????

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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Iraq seeks bids for Iraq-Jordan Oil Pipeline

By John Lee.

Iraq’s Ministry of Oil has invited bids fto build the Iraq-Jordan oil pipeline.

The first phase will be built on the Iraqi side, stretching 700 km from Rumaila to Haditha. This will have a capacity of 2.25 million barrels per day (bpd). This will be built on an engineering, procurement, construction and financing (EPCF) contract model.

The second phase, on the Jordanian side, will run 900 km from Haditha to the port of Aqaba. This section will be built on a Build Own Operate Transfer (BOOT) model.

Bids will be accepted from qualified companies up to the end of May, with a decision to be made by the end of 2020.

(Source: Ministry of Oil)

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Shamara to provide Power for Basra Gas Plant

By John Lee.

The Basrah Gas Company (BGC) and Shamara Holding have reportedly signed a contract under which Shamara will supply electricity to the Basra Natural Gas plant.

According to The National, the contract will enable the plant to process by-product gas that would other wise be flared from the Rumaila, Zubair and West Qurna-1 oilfields for use by Iraq power stations.

The Basra NGL facility will be built in Ar-Ratawi area in west of Basra and is scheduled to complete at the end of 2020.

More here.

(Source: The National)

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Rumaila hit 30-yr High in Oil Production

The Rumaila oilfield produced 1.467 million barrels per day (bpd) in 2018 – the oilfield’s highest annual rate of production for 30 years. 2018 also saw the milestone of four billion barrels of oil produced since the Rumaila Operating Organisation [ROO] began operating in June 2010.

The results were reported in the 2018 Rumaila Annual Report, submitted by the Basra Oil Company (BOC) to the Iraq Ministry of Oil.

In accordance with BOC’s objectives, Rumaila continued its journey to becoming a more advanced oilfield in 2018. New infrastructure played an important part in the year’s success, with three major projects completed that help Rumaila’s capacity to produce its current high production rates, as well as contribute to securing the field’s long-term future.

The new Rumaila Power Plant began operating, providing 150,000kW of electricity to the Iraq National Grid and supporting Rumaila facilities; three new dehydrator and desalter production trains were commissioned – increasing production capacity by 124,000 bpd; and two degassing facilities installed new large-scale ‘free water knock out’ vessels that ensure oil quality remains high by stripping water from the hydrocarbons.

The introduction of new technologies continues to play a vital role in the field’s advancement. In 2018, this included: the further expansion of the ‘digital oilfield’ (with 2,000 digital sensors now providing instant data from wells, facilities and manifolds to guide production performance), the completion of a field-wide TETRA radio communications infrastructure, and new data analytics tools and frameworks that visualize, interpret and reveal meaningful insights to improve day to day working.

Underpinning the 2018 results has been the ongoing programme to drill new wells, optimize existing wells, and the injection of industrial-use water to restore pressure to reservoirs in the north of the field. Thanks to the water injection programme and its supporting operations, Rumaila has been able to produce oil from historically harder to access reservoirs: in 2018, the oil produced from the Mishrif reservoir was more than triple the amount of oil extracted from that reservoir in 2010 and generating results never previously achieved at the oilfield.

The 2018 Annual Report also highlighted:

  • 59 Iraqi contracted companies won 85 contracts worth $650 million
  • 220,181 training hours were delivered to Iraqi staff
  • 31 new wells were drilled
  • 23.5km2 of land was cleared of unexploded ordnance
  • 206,675m2 of land was remediated
  • $5 million spent on supporting Iraq’s oil and gas industry via the Rumaila Education Fund

Rumaila General Manager, Hussein Abdul-Kadhim Hussein, commented:

“2018 was a remarkable 12 months in the 70-year history of this oilfield, as well as another exceptional year for the Rumaila Operating Organisation. The partnership goes from strength to strength: our success derives from the way BOC, BP and PetroChina continues to operate as one integrated team.”

BOC Director General, Ihsan Ismael, said:

“On behalf of BOC, I’d like to thank every single BOC staff member who has ensured that Rumaila continues to deliver successful oil production for Iraq, as well as pay tribute to the support of our partners, BP and PetroChina.”

ROO Deputy General Manager, Julian O’Connell, said:

“Rumaila is in service to Iraq. Our objective is to provide oil to support Iraq today, as well as create a legacy for the future. Our strategy and programme for field rejuvenation and training Iraqi personnel is helping us to achieve these twin goals and to overcome the multitude of challenges Rumaila faces.”

Rumaila Special Deputy General Manager, Fan Jianping, added:

“We are very pleased to report another successful year at Rumaila. Equally important is the fact that we have achieved this within a safe working environment. We of course want to increase production, but we also want Rumaila to be the pride of Iraq, which can only be achieved by having safety as the number one priority.”

(Source: Rumaila Operating Organisation)

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BGC to Increase Gas Output by 16% by end-Dec

By John Lee.

The Basra Gas Company (BGC) is expected to increase production from its current level of 900 million cubic feet per day (mcf/d) to 1,050 mcf/d by the end of this year.

A statement from the Ministry of Oil on Thursday added that the project aims to reach a target of 2,000 mcf/d from the fields of Rumaila, Zubair and West Qurna 1.

Shell has a 44-percent stake in the $17-billion, 25-year BGC project, with Iraq having 51 percent, and Japan’s Mitsubishi 5 percent.

(Source: Ministry of Oil)

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Amarinth secures order for Pumps at Rumaila

UK-based Amarinth has secured its first order from Iraq Gates Contracting Company (IGCC) for $410K of API 610 OH1 pumps on 22-weeks FCA delivery for the Rumaila oil field, Iraq.

This first order for Amarinth from Iraq Gates Contracting Company (IGCC) of $410K is for ten API 610 OH1 condensate transfer pumps with Plan 11 and Plan 52 double seals and seal support systems.

The pumps are destined for the Rumaila oil field, a super-giant oil field located 50km to the west of the city of Basra, southern Iraq. The Rumaila field is estimated to contain 17 billion barrels, the largest oil field ever discovered in Iraq and considered the third largest oil field in the world. It is managed by the Rumaila Operating Organization (ROO), a joint venture between BOC, BP, PetroChina and SOMO.

IGCC approached Amarinth for the ten identical API 610 OH1 pumps as they were required on an extremely short lead time of 22-weeks Free Carriage Aboard (FCA) from the sea-port in the UK.

This is the sort of challenge that Amarinth has successfully delivered against many times in the past for Middle East oil and gas companies and will leave Amarinth just 20 weeks for the design, manufacture and testing of the pumps and seal support systems, including full documentation and NACE certification for all process wetted parts.

Oliver Brigginshaw, Managing Director of Amarinth, commented:

“This latest order from Iraq underlines our on-going commitment and investment in the region and we are delighted that IGCC approached us to supply these pumps recognising that we were the only manufacturer that could deliver bespoke API 610 pumps in the lead time they required.

“In fact, we are seeing that many of the new projects in the Middle East need API 610 pumps on very short lead times as operators start to increase production again, which Amarinth are in a very good position to fulfil.”

(Source: Amarinth)