Iraq and UAE's Crescent Petroleum activate deals to develop oil and gasfields

The contracts, which were signed in February, fall under Iraq's fifth licensing round

Crescent Petroleum signed three 20-year agreements with Iraq's Ministry of Oil to develop and produce oil and gas from two blocks in Diyala province and one in Basra province. Photo: Crescent Petroleum

Sharjah-based energy company Crescent Petroleum and the Iraqi Oil Ministry have put into effect three agreements to develop oil and gasfields in the country as Baghdad seeks international collaboration to boost its energy supply.

Crescent Petroleum, which signed the three 20-year contracts in February, is expected to produce 400 million standard cubic feet per day of natural gas within a period of one and a half years, the Iraqi ministry said on October 15, citing Iraq's Oil Minister Hayan Abdel Ghani.

Activating these contracts will help Iraq to prevent gas flaring and use the processed gas to generate electrical power, the minister said.

The contracts cover the production of natural gas from two oil and gas blocks in northern Diyala province, while a third in Iraq’s main oil-producing region of Basra will be explored and developed to add further supplies.

“These new projects will deliver much-needed gas to generate electricity in Iraq and create thousands of new jobs that will boost the economy and contribute to the country’s economic development, particularly in Diyala and Basra governorates,” Abdulla al Qadi, executive director of exploration and production at Crescent Petroleum, told The National.

“We look forward to a fruitful partnership with our partners in the Midland and Basra Oil companies for the benefit of the people of Iraq in the decades to come.”

The three contracts were awarded as part of Iraq's fifth licensing round for oil and gas projects, with the country attracting international oil companies to help develop its resources.

Iraq, Opec's second-largest producer, last week said it would award 30 new oil and gas projects in its “fifth +” and sixth licensing rounds.

The “fifth +” round comprises 16 new projects, some of which were not awarded in the fifth licensing round, while the sixth licensing round will include 14 projects, an Iraqi Oil Ministry official said.

Major oil companies operating in the Arab country include Exxon Mobil, Royal Dutch Shell, BP, China’s CNPC and Russia’s Lukoil.

Iraq electricity problem makes the summer unbearable.

Iraq's continuing oil and gas project licensing rounds come at a time when it is heavily reliant on gas imports to feed its power grid.

The country's electricity demand in summer exceeds 35 gigawatts but its obsolete plants and grid can produce only about 25 gigawatts, resulting in lengthy power cuts and the use of contaminating and expensive private diesel generators.

Saudi Arabia last week said it had inaugurated the Gulf electricity market project's connection platform with Iraq. This will enable the exchange and trade of electric power between the Gulf bloc and Iraq, helping the latter to meet its growing demands for power.

Iraq's electricity demand is set to double between 2019 and 2030, with its supply shortfall expected to widen as its population grows by more than a million a year, according to the International Energy Agency.

Updated: October 16, 2023, 9:26 AM