Iraq to open 13 oil and gas reserves to foreign developers

Iraq is Opec’s largest producer behind Saudi Arabia and oil revenue makes up nearly 95 per cent its budget

Workers work at Majnoon oil field near Basra, Iraq, in May. Reuters
Powered by automated translation

Iraq plans to open more of its untapped oil and gas resources to foreign developers this year in an effort to increase reserves and revenue.

Iraq, an Opec member, will put 13 sites forward in a bidding round, the Oil Ministry said on Monday.

Of those, eight are oil and gasfields and five are exploration sites.

The sites are across northern, central and southern Iraq.

Companies have until June 15 to express interest and to submit documents for the qualification process, ministry spokesman Assim Jihad said.

No date has been set yet for the bidding round.

The Oil Ministry aims to “boost oil and gas production from this [licensing] round and to encourage investment in the oil sector in co-operation with the specialised international companies”, Iraqi Oil Minister Hayan Abdel Ghani said.

The coming round will be an appendix to the fifth bidding round held in 2018, Mr Abdel Ghani said. Then, 11 blocks and fields were offered, but only seven were awarded.

Encouraged by an improved security situation, Iraq in 2009 began to attract international oil companies to develop its resources.

Top among major oil companies are the US‘s Exxon Mobil, Royal Dutch Shell, the UK’s BP, China’s CNPC and Russia’s Lukoil.

Since then, Iraq has awarded dozens of oil deals to develop major fields that hold more than half of its 145.02 billion barrels of proven reserves. Deals to tap natural gas resources were also awarded.

As a result, Iraq’s daily production and exports have risen to levels not seen since the discovery of oil in first quarter of last century.

The country is now producing around 4.6 million barrels a day from Baghdad-controlled oilfields, up from nearly 2.4 million a day in 2009, and its daily exports averaged 3.28 million barrels a day last month.

Iraq is Opec’s largest producer behind Saudi Arabia. Oil revenue makes up nearly 95 per cent of the country’s budget.

In its struggle to meet the growing demand for electricity, especially during summer, Iraq buys 1,200 megawatts of electricity and enough natural gas to generate 2,800MW from Iran, making up nearly one third of its needs.

To reduce gas imports from Iraq, the country has been hurrying to develop its vast natural gas resources.

Iraq is the final stages of negotiating a deal with French energy major TotalEnergies to develop oil and gas and renewable energy projects worth $27 billion.

Iraq will hold a 30 per cent stake in the joint venture, while 45 per cent stake will go to TotalEnergies and 25 per cent to QatarEnergy, TotalEnergies as announced in April.

The Gas Growth Integrated Project will recover flared gas on three oilfields to supply gas to power generation plants. It will build a seawater treatment plant for providing water injection for pressure maintenance, as an alternative to the use of fresh water from rivers and aquifers.

It will also develop a one-gigawatt solar power plant to supply electricity to the Basra regional grid.

Updated: May 16, 2023, 9:33 AM