Kadhimi “wants US Firm to replace Exxon” at West Qurna 1

By John Lee.

According to a report from Reuters, the Iraqi Prime Minister Mustafa al-Kadhimi has told the press in Washington DC that he wants another American company to replace ExxonMobil when it exits the West Qurna 1 oilfield.

Meanwhile, S&P Global Platts reports that Exxon filed an arbitration case against the state-owned Basra Oil Company (BOC) related to its stalled attempt to sell its stake in the field.

More here and here.

Read also: The Demise of ExxonMobil in the Iraqi Petroleum Sector 

(Sources: Reuters, S&P Global Platts)

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UK’s Proserv Wins Contract at Majnoon Oilfield

By John Lee.

UK-based global controls technology company Proserv Controls has secured a significant contract to manufacture and deliver 22 wellhead control panels (WHCP) to the Basra Oil Company (BOC) for use on the Majnoon Oil Field in southern Iraq.

The deal has been arranged through KBR, the Houston based engineering, procurement and construction management (EPCM) company, which is the EPCM lead on BOC's plans to significantly ramp up production capabilities at the field.

The 22 WHCPs each has the capability of controlling up to four wells and they have been earmarked for use on 70 new wells which are currently in the development phase. At present, Majnoon has a capacity of just over 200,000 barrels per day (bpd) of production, but BOC's strategy is to more than double this to above 400,000 bpd in the next two years.

Proserv will deliver the WHCPs in three lots, with the first due towards the end of Q3 2021, with the second scheduled for Q4 and the final tranche set to arrive in March 2022.

The firm will make use of its well-developed footprint in the Arabian Gulf to deliver this order, with the WHCPs being manufactured at Proserv's dedicated site in Jebel Ali, Dubai.

The value of the contract has not been disclosed.

(Source: Proserv Controls)

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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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Iraq may Buy Exxon stake in West Qurna 1

By John Lee.

Press reports quote Iraq's oil minister as saying that Iraq could buy ExxonMobil's 32.7-percent stake in the West Qurna 1 oil field.

Ihssan Abdul-Jabbar Ismail told a news conference on Monday that the government might purchase the stake via the state-owned Basra Oil Company (BOC).

BOC previously took over the Majnoon field from Shell and Petronas at the end of June 2018.

It had previously been rumoured (see here and here) that China would take over Exxon's holding in West Qurna 1.

Earlier this year, ExxonMobil sold its share in the Baeshiqa license in the Kurdistan region of Iraq to DNO.

(Sources: Reuters, Bloomberg)

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New Contracts for Iraqi Drilling Company (IDC)

By John Lee.

The Iraqi Drilling Company (IDC) has announced its intention to conclude contracts with Chinese and American companies operating in Iraq to drill and rehabilitate dozens of oil wells in the country.

The company indicated it is about to start drilling 20 wells in the Nasiriyah field in Dhi Qar, which are included in a long-term plan with the Dhi Qar Oil Company (DQOC) to advance the oil sector, due to be completed in over two years.

After the relative relaxation of the impacts of the coronavirus, the Iraqi Drilling Company resumed its negotiations with the international companies developing oil fields in the country and their counterparts affiliated with the Ministry of Oil in the provinces, in preparation for signing the postponed contracts with the aim of enhancing Iraq's energy capabilities.

The drilling and rehabilitation contracts, hoped to be concluded soon, include drilling 37 wells in the Zubair field for the Italian company ENI, the main operator of the field, and starting discussions with BP, the main contractor in the Rumaila field, to develop the giant field west of Basra.

This is in addition to the near signing of a contract to drill 43 wells in Majnoon field with the Basra Oil Company (BOC), which is the third largest oil field in the world, with reserves of 6.12 billion barrels.

The Iraqi Drilling Company has completed all its preparations to sign a contract with the Central Oil Company, to drill 27 wells in the East Baghdad field, and it continues its discussions with the Maysan [Missan] Oil Company (MOC) to sign a contract for drilling 22 wells in the Bazargan field as well as rehabilitating another 150 wells and a contract to operate a number of drilling towers and rehabilitation of a large number of wells in the Kirkuk fields with the North Oil Company (NOC).

(Source: Govt of Iraq)

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Cabinet Extends Contracts of KBR and Antonoil at Majnoon

By John Lee.

The Iraqi Cabinet has approved the renewal of two contracts at the Majnoon oil field.

Chinese company Anton Oilfield Services Group (Antonoil) is to continue to provide Integrated Field Management, while the American company KBR will provide Engineering, Procurement and Construction Management (EPCM).

The decision allows for the extension of the contracts for two more years, with an option to increase that to three years.

Both companies were awarded the contract by Basra Oil Company (BOC) in 2018, when BOC took over operations at Majnoon from Shell.

(Source: Office of the Prime Minister)

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Cabinet approves $480m Drilling Deal in Southern Iraq

By John Lee.

The Iraqi Cabinet held its weekly meeting on Tuesday under the chairmanship of Prime Minister Mustafa Al-Kadhimi.

Following discussions, the Cabinet approved a bid from Schlumberger to drill 96 wells for the Basra Oil Company (BOC) and ExxonMobil.

The company has previously worked at ExxonMobil's West Qurna 1 field in southern Iraq.

The deal is valued at more than $480 million.

(Source: Office of the Prime Minister)

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Petrofac Wins Contract Extension in Iraq

By John Lee.

Petrofac has announced that its Engineering & Production Services division ('EPS') has secured a one-year contract extension worth around US$80 million with a key client in Iraq.

While not mentioning the specific project, the company said:

"The award is recognition of Petrofac's successful eight-year track record of safe delivery as the incumbent operations and maintenance service provider.

"The facility which Petrofac will continue to manage, is one of the largest in the Gulf and handles around 55% of Iraq's crude oil exports."

Basra Oil Company (BOC) awarded Petrofac the operations and maintenance (O&M) contract for its Iraq Crude Oil Export Expansion Project (ICOEEP) at Fao [Faw] Terminal in 2012.

Steve Webber, SVP Operations EPS East, commented:

"This contract extension strengthens our long-term client partnership. Since the start of our involvement in 2012, we have supported this facility to export over 4 billion barrels of oil. Our teams in Iraq have an impeccable safety record and the use of innovative solutions have been at the heart of our delivery model. We look forward to supporting our client to maintain the best-in-class operation of this important national asset."

Petrofac has been providing services in Iraq since 2010, involved in a range of greenfield and brownfield projects in the country worth more than US$1 billion.

(Source: Petrofac)

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GE Synchronizes Gas Turbines at Zubair Power Plant

By John Lee.

GE Gas Power has said it has "marked a major milestone" by synchronizing two GT13E2 gas turbines to the national grid at the Zubair Permanent Power Generation Plant.

The facility is owned by the Basra Oil Company (BOC) and located at the Zubair oil field, about 20 kilometers from the city of Basra.

ENI Iraq B.V. is responsible for developing the oil field and had awarded a contract to GE for the engineering, procurement, installation and commissioning of the power plant.

Two other GT13E2 units at the site had previously been synchronized to the grid in summer 2020. The new additions have taken the total generation capacity of the site up to 700 megawatts (MW).

Joseph Anis, President & CEO of GE Gas Power in the Middle East, North Africa and South Asia, said:

"With Iraq's population growing at over 2 percent per year, the demand for reliable, affordable electricity continues to increase. Every megawatt added to the grid can make a significant impact to the quality of life of the Iraqi people. 

"GE is honored to work together with ENI to support the country's socioeconomic development by delivering much-needed electricity to power growth and prosperity for present and future generations."

(Source: GE)

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