• 2 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 3 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 3 days New Video Game Targets Oil Infrastructure
  • 3 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 3 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 3 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 4 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 4 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 4 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 4 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 4 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 5 days Conflicting News Spurs Doubt On Aramco IPO
  • 5 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 6 days China To Take 5% Of Rosneft’s Output In New Deal
  • 6 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 6 days VW Fails To Secure Critical Commodity For EVs
  • 6 days Enbridge Pipeline Expansion Finally Approved
  • 6 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 6 days OPEC Oil Deal Compliance Falls To 86%
  • 7 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 7 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 7 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 7 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 7 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 7 days Aramco Says No Plans To Shelve IPO
Alt Text

Kurdistan Accuses Baghdad Of Planning Oil Field Seizure

Kurdistan authorities have accused the…

Alt Text

Trump Just Made Iran A Wildcard

The impact of Trump’s decision…

Iraq to Challenge Saudi Arabia for the Position of World's Largest Oil Producer, if...

Iraq to Challenge Saudi Arabia for the Position of World's Largest Oil Producer, if...

Baghdad is coming of age in its own backyard with the awarding of contracts for developing its oil reserves while taking care of its assets as evident from its tough stand with Tehran.

The country’s Oil Minister recently announced that their oil capacity could reach 12 million barrels per day (bpd) in six years.
Hussein al-Shahristani told journalists in Baghdad that oil production would not necessarily operate at full capacity, but would take into account demand. Saudi Arabia, the world's largest oil exporter, has a capacity of 12.5m bpd and has predicted it can go up to 15 bpd.

Shahristani called the result of Iraq's second international oil auction on December 11-12, since 2003 a "major success." "It is a big achievement for Iraq to win such contracts at the current prices," he said.

CONTRACTS GALORE

The latest in the series of such contracts is a preliminary deal with an oil consortium led by European energy giant Royal Dutch Shell PLC and Malaysia's state-run Petronas to develop one of its most prized oil fields.

The Shell-Petronas consortium proposed to raise the crude oil output from the current level of about 45,900 bpd to 1.8 million bpd with a remuneration fee of $1.39 for each barrel produced.

The two companies won the right to develop the oil field with estimated reserves of 12.5 billion barrels during the latest auction, which awarded seven contracts to international oil firms.

Earlier, a joint bid by Russian and Norwegian oil firms won the contract for the "supergiant" West Qurna field, said to have reserves of 13 billion barrels.

Lukoil and Statoil will get $1.15 a barrel and will work to raise output from West Qurna Phase 2, in the Basra region, to 1.8 million bpd.

In June, a winning bid to develop another Iraqi field received $2 a barrel. Rights for the eastern Halfaya field, with 4.1 billion barrels of reserves, went to a consortium led by the Chinese state oil company, CNPC.

The Iraqi Ministry of Oil terms stipulate 25% of the participating interests in all licenses to be held by the Iraqi State.

TOP POSITION

According to oil pundits, Iraq would overtake Russia and challenge Saudi Arabia for the position of the world’s largest oil producer if a daily total of 12 million barrels was achieved.

With Iraq's proven reserves now standing at 115 billion barrels, below Iran's 137 billion and Saudi Arabia's 264 billion, the experts point that Iraq's data dates from the 1970s, before improvements in technology transformed the industry.

According to Shahristani Iraq has "scores" of oilfields, including "supergiants" - fields of 5 billion barrels or more - to offer international companies in the future.

SECURITY FACTOR

The Iraqi oil minister told the state television that, "The terrorists tried to send a message to the companies through the bombings ... that Iraq is unstable and investment will be overshadowed by risks," he added, "but this message was not delivered and never deceived them. They came and submitted competitive offers that surprised the global oil industry.”

The security situation in the country did cast a shadow on the process as the East Baghdad field, part of which lies under the city's Sadr City area, and another in the Diyala province attracted no bids.

A European oil guru told Oilprice.com, on condition of anonymity, “Iraq still has a problem with security. Earlier the Americans hand over the reigns to Iraqis, the better it would be for us to see the real picture of security,” adding, “If Iraqis want to reap the benefits of their natural resources, they must be able to guard them and upgrade their legal regulations to international standards.”

IRANIAN BORDER

On the reported skirmishes with Iran over disputed oil fields, it seems Iraq is holding ground and Iranians have agreed to come to negotiating table to sort out the differences.

According to local media reports, Iran and Iraq plan to set up an arbitration commission to clear up the misunderstanding over the borderline well.

Iranian media reported that Iranian Foreign Minister Manouchehr Mottaki and his Iraqi counterpart Hoshyar Zebari decided in a latest telephone conversation that setting up such a commission would be the best way to approach the problem.

Earlier Iran's armed forces had rejected claims that they have taken control of an oil well within Iraqi borders, stressing that the well in question is on Iranian soil.

"Based on internationally recognized borders, the disputed oil well belongs to Iran as it is on Iranian soil," a spokesman for Iran's Armed Forces Headquarters was quoted by Iranian Press TV.

"As stressed in the statement issued by the Islamic Republic Armed Forces Headquarters, Iranian troops have not crossed over into Iraq," he added.

A day earlier, Iraq's Southern Oil Company (SOC) released a statement claiming that Iranian forces had entered Iraq's oil field, taken control of well No. 4 and raised the Islamic Republic's flag at the site.

By Tejinder Singh




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News