Iraq secured energy deals worth $200 billion during Prime Minister Ali Al Zaidi’s visit to Washington this month, which will boost Iraqi crude production and help the country reach gas self-sufficiency targets, the country’s Oil Minister has said.
Iraq is already on the verge of a significant increase in its oil production and export capacity, and is engaged in “serious and constructive talks” with Opec aimed at increasing the country’s crude output quota, Bassem Mohammed Khudair said in interviews with Al Iraqiya News and Iraqi News Agency.
Iraq, Opec’s second-largest producer, signed seven key agreements during Mr Al Zaidi's week-long US tour, which ended on July 19.
Among them was a deal with Halliburton for the integrated management of the Bin Umar and Sindbad oilfields, and an agreement with HKN Energy to develop Iraq’s Himreen oilfield.
Iraq has also signed a contract with Chevron to operate the West Qurna 2 field and to develop the Nasiriyah and Balad oilfields, Mr Khudair said.
Before the outbreak of the Iran war, Chevron said it was entering exclusive talks with the state-run Basra Oil Company over operations at the oilfield in southern Iraq. It has replaced the role of Russian oil company Lukoil, which is under sanctions.
The oilfield produces about 460,000 barrels per day. Nasiriyah, a smaller oilfield in southern Iraq, produces about 90,000 bpd.
Reassuring message
The $200 billion of agreements is a major achievement for the Mr Al Zaidi, a businessman with no political background.
Mr Khudair said the latest deals will help Iraq boost its gas reserves, step up production and create employment opportunities in the country.
Currently, there are 22 international companies operating in Iraq's oilfields, including BP, which manages Rumaila.
However, the latest flare-up of hostilities between the US and Iran has raised safety concerns among those international firms. The UAE's Dana Gas last week shut down operations in the semi-autonomous Kurdistan region's Khor Mor gasfield due to “credible security threats”.
Mr Khudair, however, added that the presence of US companies in Iraq “sends a reassuring message to international firms that the country's investment environment is attractive”.
Opec talks
Iraq has been one of the producers hardest hit by the Iran conflict, with the effective closure of the Strait of Hormuz choking the country's oil production. Iraq's oil exports plunged from about 4.2 million bpd in February to about 1.45 million bpd in May, Opec data shows.
However, the government is pursuing its “strategic vision to develop Iraq's oil and gas sectors”. It remains on track to achieve its target of natural gas self-sufficiency by 2030 through executing new projects in the sector, Mr Khudair said.
The country has already achieved self-sufficiency in diesel and paraffin (or kerosene) and currently produces around 30 million litres of petrol per day. However, “challenges remain in the country's fuel distribution mechanisms”, the minister said.
Talks with Opec to increase production quotas are part of Iraq’s efforts to expand its energy sector.
“The government remains committed to securing the export share Iraq deserves, while taking into account the exceptional circumstances the country has endured as a result of wars and the destruction of its infrastructure,” Mr Khudair said.
Iraq's oil production capacity has exceeded 4.8 million bpd and talks are under way with Turkey to renew the agreement governing oil exports through the Ceyhan pipeline, he added.
Iraq also has no objection to Turkish companies participating in the development of the country's oilfields, he said.
Pipeline projects linking Iraq to Ceyhan and Baniyas in Syria would create several export routes, which would be particularly valuable in the wake of the disruption caused by the closure of the Strait of Hormuz. Iraq already has signed an agreement with Syria for the Haditha–Baniyas oil pipeline, Mr Khudair said.
