Floating Oil Island for Iraq’s Expected Spurt in Exports

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

Floating Oil Island will handle Iraq’s expected Spurt in Exports

The South Oil Co. (SOC), based in Basra, Iraq, will establish a floating oil island off the coast of al-Faw Peninsula to increase its export capacity by as many as 2 million barrels a day.

The company announced the project June 14 in anticipation of a surge in Iraqi oil exports to reach 5-6 million barrels per day. Indeed, OPEC on June 23 approved an increase in crude oil output to meet growing demand.

Hamzah al-Jawahiri, an Iraqi Oil Ministry consultant, explained that Basra province has five floating terminals overlooking the Arab Gulf for commercial work and two fixed offshore terminals at Khor al-Amiyah and al-Basra dedicated to loading about 80% of Iraq’s oil exports.

He told Al-Monitor, “All of these terminals require technical and administrative staff working around the clock. The ministry noted the need for more flexibility, as work will double in the future with the increase in oil and oil derivatives output. This requires additional technical, logistical and human support that can be provided by the oil island project near the seven Iraqi terminals. The project will facilitate shift work and the delivery of services with no interruption caused by [outside] emergency disruptions, human errors or terminal platforms oil spills.”

Jawahiri revealed that the island will include a spare-parts warehouse for all equipment and pumps, in addition to civil protection and technical services teams, as well as comfortable and modern accommodations for workers. “The floating island will spare Iraq work delays due to possible failures,” he said. “It will save time when it comes to oil export and prevent any emergency crisis caused by the disruption of any of the pumps. Recently, Iraq has paid delay penalties of about 300 million Iraqi dinars [about $252,300].”

He said the island will provide storage capacity for oil derivatives, black oil and refinery waste. “The island is linked to jetties and will provide a ready alternative in the event of disruption of any of the seven terminals.”

A source in the oil company’s media office told Al-Monitor, “The project will … also provide other services, such as anchoring and launching oil tankers and ensuring their technical and logistical support. Tankers will be filled with oil stored on the island in sufficient quantities.”

Jawahiri said a contract has been awarded to a Dutch company regarding the island project, including a preliminary agreement, but he provided no further details other than to say discussions are ongoing about the completion period and expected costs.

However, Alaa al-Yasiri, the director general of the State Organization for Marketing of Oil (SOMO), told Al-Monitor, “The contract is expected to be signed in the first quarter of 2019, with operation at partial capacity set for the first quarter of 2022. All services will be provided in the fourth quarter of 2022.”

He added, “Iraq is in dire need of expanding its export outlets. Its services must be in line with modern technology, and it must be able to cope with the potential oil and oil derivatives increase. SOMO’s new plans include joint projects with Asian companies to invest in the continent’s vast market. The Asian market consumes 60% of Iraqi oil exports. … The Ministry of Oil wants to turn SOMO into a profit-earning company. The floating oil island will help achieve this.”

Oil Ministry spokesman Assem Jihad said the project coincides with plans to build a national tanker fleet to transport oil and oil derivatives. “It is also in line with plans to restore the capabilities of the Iraqi Oil Tankers Co. to transport crude oil and oil derivatives to all parts of the world.”

Jihad said the island will help Iraq transfer oil to consumers via four giant tankers. “Three other tankers will be added at later stages,” he said.

Some experts worry about the coming increase in oil output. Oil projects expert Mohammed Zaki Ibrahim told Al-Monitor, “Experiences proved that sporadic increases in crude oil output offered for sale on global markets does not serve the Iraqi economy. Increasing exports above 3 million or 4 million barrels per day will harm Iraq gravely and deny it any opportunity to develop other resources. This also will deplete oil resources in the south.”

Meanwhile, Iraq urgently needs financial resources, with its deteriorating economy and a suffering agriculture sector. The floating island will provide hundreds of jobs, limit export delays and reduce the cost of transporting oil and derivatives.

Crescent signs Initial Contracts to Develop 3 Blocks

By John Lee.

UAE-based Crescent Petroleum has signed the initial contracts to develop the oil fields of Gilabat-Qumar (in Diyala), Khashim Ahmer-Injana (in Diyala), and Khudher Al-Mai [Khider al-Mai] (in Basra and Muthana).

Mr. Abd Allah Al-Kadhi, the head of exploration and production in the company, said that production will start after three years.

The contracts will now be sent to the Cabinet to be ratified for final signature.

(Source: Ministry of Oil)

KBR Confirms Contract to Develop Majnoon

KBR, Inc. announced today that it has been awarded a contract by the Basra Oil Company (BOC) for the development of the Majnoon Oil Field in Basra, Iraq.

Under the terms of the contract, KBR says it will provide overall project management, multi-discipline engineering support, procurement and construction management services to BOC under a two plus one year extendable service contract.

Jay Ibrahim (pictured), KBR President Europe, Middle East, Africa and Asia-Pacific region, commented:

KBR has a long and rich history in Iraq and we are excited to be able to leverage our broad expertise in onshore oil and gas processing facilities across the project lifecycle as a true partner to BOC.

“This award highlights BOC’s confidence in KBR’s capabilities to deliver in multiple engineering discipline areas across a variety of projects. We look forward to transferring our knowledge and experience to local Iraqis in order to leave a lasting legacy in the country.

A statement from the Ministry of Oil at the end of April put the value of the contracts with KBR and China’s Anton Oilfield Services Group (Antonoil) at $118 million, adding that there would be “other secondary contracts” to follow.

BOC is expected to take over operations at Majnoon from Shell by the end of June.

(Sources: KBR, Ministry of Oil)

Running for the Children of Iraq

Bright and early last Saturday morning, runners in the Washington, DC area took off when the starting gun fired.

It was the sixth annual IN THEIR SHOES 5K for Iraq’s most vulnerable children.  This year, for the first time, the US-based 5K was joined by a “sister” 5K in Basra, Iraq, hosted by BP.

Veterans, Iraqi-Americans, diplomats, businesses, children, and families all joined to raise awareness and support for Iraq’s orphans, street kids, and displaced children.  The result?  A record $59,000 was raised to deliver tutoring, legal protection, nutrition, health care, and childhood fun to some of the most vulnerable and at risk kids in Iraq.

Joined by Iraq’s Ambassador to the United States Fareed Yasseen, the three Youth Ambassadors for the 5K – Humoody, Teeba, and Ala’a – served as the faces and voices of children back in Iraq.

Team Teeba won for the largest 5K team with 33 registered, and the Iraqi-American Young Professionals (IAYP) came in second with 23.  Tim Reilly and Veronica Scott took home trophies for first place in the men and women’s division.

Looking for your race time?  Check here.  Pictures of the event?  Check out recent posts and an album on our ICF Facebook page.

The race was followed by an after party with music by Salaam Band, dancing,  and Iraqi food.  Our friends at Old Town’s Casa Rosada Artisan Gelato provided free gelato for everyone, and there was face painting and balloon animals for the kids.  At a table hosted by Kids Giving Hope to Kids, special drawings were made for Hope Bus kids in Baghdad

To each of you who ran or walked, donated or volunteered, the Iraqi Children Foundation (ICF) expresses its deepest appreciation.  Thanks for being a part of the team to deliver love and hope to Iraq’s children!

(Source: ICF)

(Photo credits: George Banker and BP)

Saudi Arabia looks to Expand its Footprint in Iraq

By Ali Mamouri for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Following Iraqi Prime Minister Haider al-Abadi’s two visits to Saudi Arabia last year, Saudi Crown Prince Mohammed bin Salman is set to visit Iraq soon, according to Iraqi parliamentarian Saadoun al-Dulaimi.

Although neither Riyadh nor Baghdad have officially announced the visit, Dulaimi said in a March 12 tweet that Prince Mohammed will spend two days in Iraq, first meeting with Abadi in Baghdad to “sign agreements,” followed by a visit to Najaf to meet religious leaders.

Saudi Arabia was scheduled to reopen its consulate in the oil-rich city of Basra, which is adjacent to Iran, in March, but this was delayed for administrative reasons. Some reports say that Mohammed may open the consulates in Basra and Najaf, the Shiite religious center that is home to top Shiite clerics, during his upcoming visit to Iraq.

Meanwhile, the Saudi Embassy in Iraq is in the process of setting up the consulate office at the Sheraton Hotel in Basra. The consulate was closed in 1990 in the wake of the Gulf crisis that erupted during the regime of Saddam Hussein, and remained closed as a result of tensions in Saudi-Iraqi relations.

The Saudi kingdom opened a consulate in Erbil, the capital of the semi-autonomous Kurdistan Region of Iraq, in early 2016.

The decisions to expand Saudi Arabia’s diplomatic representation in Iraq come as part of a broader framework to strengthen the official political relations between the two governments. Saudi Arabia is seeking to establish economic and social bridges between the two countries in various fields.

Abdul Rahman al-Shahri, head of the Saudi delegation responsible for the establishment of the consulate in Basra, said that these measures are carried out to “provide services and incentives to both religious pilgrims and economic delegations between the two countries.”

Abdul Aziz al-Shammari, Saudi ambassador to Iraq, said in a statement in January, “Saudi Arabia is mostly interested in developing relations between the two countries in all areas that serve their aspirations.”

In late February, a friendly soccer game was held between Saudi Arabia and Iraq in the city of Basra, the first between the two countries in three decades. The game was attended by Saudi delegations and a large crowd of Iraqi fans.

The media office of Abadi said in a statement March 5 that the prime minister had received a phone call from Saudi King Salman bin Abdulaziz Al Saud, in which the latter pledged to build a soccer stadium in Baghdad for 100,000 spectators. It was later announced that Saudi Arabia would increase the number of seats to 135,000.

The statement said that “King Salman expressed his readiness and commitment to expand the positive relations between Iraq and Saudi Arabia at the economic, commercial, popular and cultural levels, as well as all levels of interest to both countries.”

Saudi companies, most recently the Saudi Basic Industries Corporation, one of the world’s leading petrochemicals companies, have been opening offices in Baghdad and Basra to expand economic exchange between the two countries.

Saudi Arabia is focusing its attention on Basra because it is the richest city in Iraq with the country’s largest oil fields and gateway to the Persian Gulf. It is also the most populous city after Baghdad, is adjacent to the Iranian border and home to an overwhelming majority of Shiites who share the same tribal and ethnic origins with Saudi tribes. In addition, many Saudi and Basra families are linked through marriage.

Saudi Arabia is also receiving Shiite figures who are viewed as independent of Iran. These include Sadrist movement leader Muqtada al-Sadr, who visited Saudi Arabia last year and met with King Salman and Prince Mohammed. He was warmly received amid much fanfare.

Saudi news sites, most notably Al-Arabiya, are refraining from criticizing supreme Shiite cleric Ali al-Sistani, because his views are independent from those of Tehran and has broad influence among Iraqi Shiites.

All this has been a matter of concern for Iran, which has allegedly mobilized parties to raise banners in Basra condemning the opening of the Saudi Consulate and the various economic and sporting activities.

The State of Law Coalition led by former Prime Minister Nouri al-Maliki, who is close to Iran, opposes Saudi Arabia’s opening of a consulate in Najaf.

Iraq is seemingly determined to pursue rapprochement and cooperation with Saudi Arabia, and is organizing regular visits by political, economic and media delegations. These included Abadi’s visit to Saudi Arabia last October, during which the memorandum of establishment of the Saudi-Iraqi Coordination Council was signed to develop relations between the two countries.

Interior Minister Qasim al-Araji also visited Saudi Arabia last year, and Abadi insisted on receiving Saudi delegations even if they were not high level. In February, for instance, he received the Saudi media delegation that visited Iraq at the invitation of the Iraqi Journalists Union.

In October, Saudi Arabia resumed its flights to Iraq after 27 years, and it opened in October 2017 its border crossing in southern Iraq to expand economic travel and increase tourist and religious travel between the two sides.

The first initiatives to expand relations between the two countries were directly sponsored by the United States with Secretary of State Rex Tillerson attending the meeting of the establishment of the Saudi-Iraqi Coordination Council in Riyadh in October.

The Iraqi-Saudi rapprochement appears to take place in the context of the new US policy that followed the support garnered by President Donald Trump from the US allies in the region to form a united front to counter Iran’s rise in the Middle East.

Saudi Arabia has seemingly made great progress in achieving rapprochement with Iraq and expanding its areas of influence within the last year. Such rapprochement is likely to get stronger should Abadi manage to keep his seat for another term in the elections scheduled for May.

Jacobs signs MOU with Iraq Oil Company

US-based Jacobs has signed a Memorandum of Understanding (MOU) with the Iraq Oil Company to explore mutual benefits of cooperation in the region of Basra, Iraq.

The vast majority of Iraqi oil production takes place in Basra. Iraq Oil Company is looking for business partners based in the Kingdom of Saudi Arabia to support economic and social development in the Basra region through investments in upstream, downstream, refining, and other sectors.

David Zelinski, Jacobs Petroleum and Chemicals Senior Vice President and General Manager Middle East, said:

Jacobs was selected as single engineering partner to sign this strategic non-binding agreement.

“We will explore possibilities to deliver our services in support of the Oil & Gas, Refining and Petrochemicals sectors in Iraq, from our Saudi Arabian office – where we have had a presence for more than 40 years – as this aligns well with the Kingdom’s Vision 2030 to increase the export of services.

The signage took place during a business event attended by HH Khalid Al Faleh, Minister of Energy, Industry and Mineral Resources of Saudi Arabia and Chairman of Saudi Aramco; Jabbar al-Luaibi, Iraq Minister of Oil; Asad Al Eidani, the Governor of Basra; and Abdulaziz Al Shammary, the Saudi Ambassador in Iraq.

The governments of Iraq and Saudi Arabia work closely together to establish a clear regulation and warrantees for potential investors in terms of protection, trading and financial transactions.

(Source: Jacobs)

Jereh Enters Iraqi Oil Market with Integrated Solutions

Advertising Feature

Basra Oil, Gas & Infrastructure is held under the high patronage of the Basra Governorate, the Basra Council and Iraq’s Basra Oil Company from October 30 to 31 in Beirut, Lebanon. Government officials, project stakeholders and buyers and suppliers attend to explore the expanding energy projects in the South of Iraq.

Jereh Group made its debut in the panel discussion about investment. It displayed integrated solutions covering investment, financing, manufacturing, EPC to turnkey delivery under the Belt and Road Initiative. The solutions facilitate the development of local infrastructures and boost the economic growth.

Authoritative reports show that Iraq is OPEC’s second-largest crude oil producer and holds the fifth-largest proved crude oil reserves in the world. And Iraq is developing its oil fields and expanding infrastructure capacity in the south to accommodate more production growth. Large-scale increases in oil production would also require large increases in electric power generation. Significant upgrades to the electricity sector would be needed. To achieve this, reliable partnership and excellent investment and financing solutions are needed.

Johnson Jiang, President of Jereh Mid-East Region, made a keynote speech in front of more than 200 participants representing Basra’s thriving industries. He shared Jereh’s best practice in oil & gas, power and environment industry and what it can bring to the local industries, saying that:

“The China-proposed Belt and Road Initiative offers a unique opportunity for development and social progress among B&R countries. Jereh can provide flexible investment and financing mode to help Iraqi customers build a reliable and secure project. We also collaborate with global partners to provide customers with integrated solutions covering investment and financing, turnkey engineering, technical services and equipment manufacturing.”

Jereh is a preferred partner for the energy industry. Based on technology-driven innovation, a deep understanding of customer requirements, and unique expertise, it is committed to offering customers the optimal solutions and project execution. Jereh has been working with industry-leading International Oil Companies (IOCs) and National Oil Companies (NOCs) on turnkey engineering, well service equipment manufacturing, oilfield services and environmental management.

The company has a large number of implementation cases in Iraq and Middle East area in fields such as natural gas boosting and storage, nitrogen pumping, cementing and coiled tubing for oil production, and oily waste treatment. It also has extensive experience in delivering projects worldwide, supported by its local teams and abundant partners in more than 60 countries and regions.

With the support of Belt and Road Initiative, Jereh will leverage its experience to conduct more cooperation in a compliant way in Iraq and provide private-sector investment to assist in developing Basra to provide the infrastructure that’s vital to boost the economic growth,” said Johnson.

(Source: Jereh Group)

Three-year Strategic Plan for Basra Oil and Gas

Provincial Council of Basra formulates strategic plan to contribute to effective management of the oil and gas sector

The southern Governorate of Iraq, Basra, now has a three-year strategic plan for oil and gas.

As a key pillar of Basra’s economy, this industry is supposed to employ thousands of workers and generate billions of dollars of revenue each year. Unfortunately, the industry is falling short of its expected developmental goals.

It has been assessed that the industry’s performance can be boosted through sound management and improved capacity and expertise. The Provincial Council of Basra is seeking to address this issue, in part, with its Committee for Oil and Gas.


  • Starting November 2016, UNDP worked closely with the Committee for Oil and Gas to develop the strategic plan
  • Amongst objectives of the plan is to generate employment, whilst considering related social and environmental impacts
  • The industry’s performance can be boosted through sound management and improved capacity and expertise

To this end, the Committee has formulated a strategic plan with the support of the United Nations Development Programme (UNDP). This support was channeled under the Basra Compact agreement signed between UNDP and the Governorate of Basra in 2015 to provide the Governorate with technical assistance in major thematic areas, including strategic planning.

Starting November 2016, UNDP worked closely with the Committee for Oil and Gas to develop the strategic plan. In July 2017, the Provincial Council of Basra endorsed the first draft, and approved the final version for printing in September 2017. Hundreds of copies were distributed to relevant stakeholders in October 2017.

Chairman of the Committee for Oil and Gas, Mr. Ali Shaddad Al Fares, said:

“We believe in the importance of strategic planning to achieve comprehensive, sustainable development in all aspects of life. Given that oil and gas are the most important sources of Iraq’s national wealth at the present time, the Committee for Oil and Gas had to follow a scientific methodology in planning for the future of Basra.”

Data Portfolios Available for Basra Refinery

The Ministry of Oil has announced the availability of data portfoliso to develop the Basrah refinery.

The closing date of selling data portfolios is at the end of the work hours of Sunday the 19th of November 2017, and the receipt of the documents from the companies which would like to fund and execute the above mentioned project must be to the end of the work hours of Thursday the 4th of January 2018.

More details here.

The presentation of the documents should be to the studies, planning & follow-up directorate directly or via the Emails:   studies.oil@oil.go.iq    or   studies@oil.gov.iq

(Source: Ministry of Oil)