UAE’s Crescent Petroleum signs agreements to develop Iraqi oil and gas fields

Gas from the Diyala operations expected to start supplying nearby power plants within 18 months

Crescent Petroleum says the agreements will create thousands of new jobs and support Iraq's economy. Photo: Crescent Petroleum

Sharjah energy company Crescent Petroleum has signed three 20-year agreements to develop oil and gas fields in Iraq, as the country seeks international collaboration to boost its energy supply.

Crescent Petroleum plans to initially produce 250 million standard cubic feet per day of natural gas from two oil and gas blocks in the country’s northern Diyala province, the company said on Tuesday.

A third exploration block, located in Iraq’s main oil-producing hub Basra, will be explored and developed to add further supplies, Crescent Petroleum said.

“Our new planned investments and operations will create thousands of new jobs and support the local and national economy,” said Abdulla Al Qadi, executive director of exploration and production at Crescent Petroleum.

“Gas and oil supplies from these operations will help improve services and local economic development for the people of Iraq.”

Gas from the Diyala operations is expected to start supplying nearby power plants within 18 months, the company said.

Crescent Petroleum will build a processing plant on site, as well as pipelines and infrastructure to supply gas, it said.

Iraq, Opec’s second-largest producer, depends on oil revenue to meet 90 per cent of government expenditure.

The country exports about 3.3 million barrels of oil per day, while production in the semi-autonomous Kurdish region amounts to more than 450,000 bpd.

Iraq’s Oil Minister Hayan Abdul Ghani on Tuesday said a new crude licensing round would be announced soon.

“The government is making efforts to ensure investing in gas and refining industries, and we are planning a new licensing round aimed at maximising national production of free and associated gas,” he told the Iraqi News Agency.

Iraq has also signed deals with two Chinese companies focusing on gas exploration, Reuters reported on Tuesday, citing an oil ministry source.

In 2018, Iraq held an auction for 11 blocks of land near its borders with Iran and Kuwait, as well as in offshore Gulf waters, but failed to attract many major companies.

Out of the exploration blocks that were up for auction, five of them did not receive any offers. Among the remaining ones, three were awarded to Crescent Petroleum, while two were awarded to China’s Geo-Jade Petroleum and one to Hong Kong-listed United Energy Group.

In 2021, Iraq signed an agreement with TotalEnergies to develop oil and gas and renewable energy projects worth $27 billion.

TotalEnergies said at the time that it would make an initial investment of $10 billion in the country.

The deal ran into problems earlier this month, but the two sides reportedly resolved the issue.

Last week, General Electric also signed an agreement with Iraq to set up new power plants in the country.

The deal also aims to maintain installed power generation and transmission infrastructure, establish new substations to relieve grid congestion and boost the connectivity between the Jordanian and Iraqi power grids.