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Chinese Consortium wins $594m Iraq Oil Processing Contract

By John Lee.

Kuwait Energy Basra Limited (KE Basra), an indirect wholly-owned subsidiary of Hong Kong-based United Energy Group (UEG), has entered into the EPCC (engineering, procurement, construction and commissioning) contract with a Chinese consortium to provide a central processing facility including oil treatment system and auxiliary systems at Block 9 in Basra.

The contractor is a consortium formed on 31 December 2020 and consisting of China CAMC Engineering and CNOOC Petrochemical Engineering.

According to disclosure documents lodged with the Stock Exchange of Hong Kong, the contract price is US$593,584,975 and the work should be completed within 33 months from the date of commencement. (The foundation stone for the project has just been laid).

The main purpose of this central processing facility project is to increase crude oil production capacity of Block 9 to 100,000 barrels per day (bpd).

In its statement to the Hong Kong Stock Exchange, UEG added:

“Kuwait Energy Basra Limited is a limited liability company incorporated in British Virgin Islands and an indirect wholly-owned subsidiary of the Company.

“KE Basra is the operator of the Block 9 contract area located in the Basra Governorate, Southern Iraq, pursuant to the Exploration, Development and Production Service Contract with the contracting parties of Basra Oil Company (an Iraqi State Oil Company), KE Basra, Dragon Oil (Block 9) Limited and Egyptian General Petroleum Corporation.“

(Source: UEG)

The post Chinese Consortium wins $594m Iraq Oil Processing Contract first appeared on Iraq Business News.

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Production to Increase at Al Faihaa Oilfield

By John Lee.

Oil production in the Al Faihaa area (Block 9) in Basra is reportedly expected to increase in the coming year with increasing investment.

Dragon Oil CEO Ali Al Jarwan told Oil & Gas Middle East that the company plans to increase production in Iraq to 100,000 barrels per day (bpd) by 2025.

(Source: Oil & Gas Middle East)

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Kuwait Energy signs Block 9 Farm-out Agreement

Kuwait Energy Signs Block 9, Iraq Farm-out Agreement with Dragon Oil

Kuwait Energy (KEC) has announced the signing of the Block 9, Iraq Farm-out Agreement with Dragon Oil (a wholly-owned subsidiary of Emirates National Oil Company Ltd, the national oil company of Dubai).

As per the Farm-out Agreement, Kuwait Energy will assign a 15% participating interest in the Block 9, Iraq service contract comprised of 8.57% participating interest in Block 9, Iraq to Dragon Oil in consideration for US$100 million in cash; and 6.43% participating interest in Block 9, Iraq to Dragon Oil in settlement of a dispute with Dragon Oil in relation to a non-controlling interest in Block 9, Iraq.

The agreement was signed on 11 February 2018 by Ali Rashid al Jarwan, Dragon Oil Chief Executive Officer (CEO); and Abby Badwi, the CEO of Kuwait Energy.

Abby Badawi (pictured), Chief Executive Officer of Kuwait Energy, said:

“This is a great moment for Kuwait Energy and Dragon Oil. The extension of our Block 9 partnership with Dragon Oil has meant that both Companies can work as equal equity partners on the concession allowing us to best utilise our joint technical expertise in delivering the submission of the Block 9 full field development plan to the Iraqi government.

“The reduction in future Block 9 capital expenditure exposure coupled with the material cash injection strengthens Kuwait Energy liquidity position going forward.“

The assignment of the 15% participating interest in Block 9, Iraq from Kuwait Energy to Dragon Oil remains subject to Iraqi government and partner approval. Post granting of these approvals, Kuwait Energy will remain the operator with a reduction in participating interest from 60% to 45%,

Dragon Oil participating interest will increase from 30% to 45% with the remaining 10% participating interest being held by Egyptian General Petroleum Company.

(Source: Kuwait Energy)

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New Firms Qualified for next Oil Licensing Round

By John Lee.

Iraq’s Petroleum Contracts and Licensing Directorate (PCLD) has announced the five additional companies have been approved to bid for Iraq’s “borderline onshore & offshore exploration blocks & fields.”

The companies are listed as:

  • Dana Gas (UAE)
  • Dragon Oil (UAE)
  • Geo-Jade Petroleum (China)
  • Schlumberger (USA)
  • Zarubezhneft (Russia)

Eight companies had applied for approval.

The five successful companies will be eligible to compete along with the following companies which are qualified from previous licensing rounds:

The areas to be offered include the onshore exploration blocks of Khudher Al-Mai, Jebel Sanam (Jabal Sanam) and Umm-Qasr on the Kuwaiti border; the Sindbad, Huwaiza, Shihabi, Zurbatia and Naft Khana blocks on the Iranian border; and the offshore exploration blocks in the Iraqi regional waters of the Arab gulf.

The bidding process should commence in May, according to the following schedule:

(Source: Oil Ministry)

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New Firms Qualified for next Oil Licensing Round

By John Lee.

Iraq’s Petroleum Contracts and Licensing Directorate (PCLD) has announced the five additional companies have been approved to bid for Iraq’s “borderline onshore & offshore exploration blocks & fields.”

The companies are listed as:

  • Dana Gas (UAE)
  • Dragon Oil (UAE)
  • Geo-Jade Petroleum (China)
  • Schlumberger (USA)
  • Zarubezhneft (Russia)

Eight companies had applied for approval.

The five successful companies will be eligible to compete along with the following companies which are qualified from previous licensing rounds:

The areas to be offered include the onshore exploration blocks of Khudher Al-Mai, Jebel Sanam (Jabal Sanam) and Umm-Qasr on the Kuwaiti border; the Sindbad, Huwaiza, Shihabi, Zurbatia and Naft Khana blocks on the Iranian border; and the offshore exploration blocks in the Iraqi regional waters of the Arab gulf.

The bidding process should commence in May, according to the following schedule:

(Source: Oil Ministry)