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Oil Jumps On Bullish EIA Inventory Report

Oil Jumps On Bullish EIA Inventory Report

Oil prices reversed course on…

Iraq To Boost Majnoon Field Production To 450,000 Bpd

Basra Oil Co,. the state-owned operator of the huge Majnoon field in Iraq, plans to boost production from it to 450,000 bpd by 2021 by drilling 40 new wells, Reuters reports, citing the Iraqi Oil Ministry.

This would be more than double Majnoon’s current rate of production, which averages 240,000 bpd. The 40 new wells will be in addition to another 40, already contracted to Schlumberger last month.

Basra Oil Co. took over Majnoon last year, after Shell, the previous operator of the field, called the project quits. There were reports of other foreign oil companies expressing interest in taking the reins from Shell, but eventually Majnoon ended up in local hands.

Iraq had oil reserves of 153 billion barrels as of 2017, and in 2018 Oil Minister Jabar al-Luaibi said the actual reserves could be twice as large. If the higher estimate proves true, it would make Iraq the largest oil-rich country in the world, ahead of Venezuela, which claims its reserves are just above 300 billion barrels, and also ahead of Saudi Arabia.

Basra Oil Co. pumps most of Iraq’s oil, accounting for 75 percent of the total. Last year, a company executive said Basra Oil Co. planned to increase its output to 5 million barrels daily by 2025. Most of the additional production, the executive said, will come from fields that are operated by international oil companies, but some will come from BOC-operated projects.

The foreign-operated fields will contribute 1.8 million bpd, director general Ihsan Ismaael told S&P Global Platts last October. These include West Qurna-1 operated by Exxon, West Qurna-2 operated by Lukoil, Rumaila with BP as operator, and Zubair, operated by Eni.

However, there is skepticism about Iraq’s ability to boost production so much. A September 2018 report from IHS Markit suggested the country’s oil production will only grow marginally over the next 10 years despite its potential capacity, which stands at as much as 7 million bpd, chiefly because of the still unstable political and economic situation.

By Irina Slav for Oilprice.com

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