Iraq may finalise gas deal with Halliburton next month in bid to boost output

Opec's second biggest producer aims to increase production to capitalise on higher energy prices

A worker checks and adjusts the valve of an oil pipeline at Majnoon oilfield, near Basra. Iraq is keen to tie up with more international energy companies. Reuters

Iraq may finalise a gas deal with US oil company Halliburton to drill wells in the western gasfield of Akkas next month as Opec’s second-biggest producer seeks to boost production.

Iraq's Cabinet may reactivate the agreement with the company to help the Oil Ministry obtain clear data on the output capacity of Akkas field, Iraq's Oil Minister Ihsan Abdul-Jabbar said in an interview with Al-Forat Network TV channel on Saturday.

The agreement “will depend on the data we get from the exploration and well-drilling operations”, Mr Abdul-Jabbar said.

Iraq is trying to increase its oil and gas output to capitalise on higher energy prices. The country relies heavily on the sale of hydrocarbons for revenue to fuel its economy and benefits from price increases to accelerate growth.

Oil prices, which rose 68 per cent last year amid a faster-than-expected economic rebound, have been extremely volatile this year, rocked by the Russia-Ukraine conflict.

Brent, the global benchmark for two thirds of the world's oil, is up more than 40 per cent since the start of this year after falling from a 14-year high when it nearly touched $140 per barrel last month.

Brent settled 2.68 per cent higher at $111.70 a barrel at the close of trading on Friday. West Texas Intermediate, the gauge that tracks US crude, closed 2.59 per cent higher at $106.95 a barrel.

Iraq is aiming to sell its oil for an average of $106 to $107 per barrel this month if prices remain at current levels, Mr Abdul-Jabbar said.

The country exported $11.07 billion worth of oil in March, the highest level in 50 years, as crude prices soared amid supply concerns due to Russia’s military offensive in Ukraine, the oil ministry said.

Iraq is also keen to tie up with more international energy companies to invest in its energy sector after oil majors such as ExxonMobil and Lukoil considered leaving the country due to political instability and security concerns.

In September, Iraq signed an agreement worth $27bn with France's TotalEnergies for four oil and gas projects.

TotalEnergies will make an initial investment of $10bn, with engineering investment on projects to start “immediately”, the company's chairman and chief executive Patrick Pouyanne said.

South Korea's state-run Korea Gas (Kogas) had signed a deal to develop the Akkas field in Al Anbar province in 2011, but the field was seized by ISIS and recaptured by Baghdad in late 2017. The field is believed to have reserves of 5.6 trillion cubic feet of gas.