During the month of March 2022, Al Majal Score, a joint venture company established in Iraq between Al Majal Technical Services and the Score Group, completed a Turnaround for a major International Oil Company.
As part of our CSR activities, Al Majal’s team led an initiative to distribute food parcels to two hundred families in the city of Basra during the holy month of Ramadan.
In line with our commitment to provide best in class services and facilities to accommodate our clients’ specific needs, we have recently expanded our facilities at both AMBP properties, in North Rumaila and Burjessia.
Iraq’s economy is slowly recovering from the twin-shocks of the pandemic and the collapse in oil prices in 2020. The country’s oil and non-oil sector is projected to reach pre-pandemic levels
At the end of March, Muqtada al-Sadr offered his rivals in the coordination framework for Shia parties (CF) 40 days to negotiate with other political blocs and parties to form a government.
Federal Iraq’s exports of the Kirkuk grade through Turkey have declined to 47 kb/d in March according to Ministry of Oil figures. This has been the lowest levels of exports since January 2020 and well below the average levels of 100 kb/d.
In March, Iraq’s total oil production increased by 70 kb/d to 4.591 Mbbl / d. Fields operated by the government of Federal Iraq averaged 4.139 Mbbl / d compared to 4.073 Mbbl / d in February; whereas fields operated by the Kurdistan Regional Government averaged 453 kb/d compared to 448 kb/d in the previous month.
In March, Iraq’s oil export revenues increased to US$ 11.1 billion of which US$ 1.2 billion were attributed to exports from Kurdistan. March’s oil export revenues take the country’s total export revenues for 1Q 2022 to US$ 28 billion. If this trend continues, Iraq could have a record year for oil export revenues since 2012
Malaysia’s Petronas’ upstream arm in Iraq, Petronas Carigali Iraq Holding has announced it will increase its production capacity at the Gharraf oil field to 130 kb/d by 3Q2022 under the company’s planned production target of 230 kb/d by 2024.
China’s United Energy Group is aiming to expand production on its Block 9 licence to 130 kb/d by 2024. Currently, the company has a 60% stake in the block along with Dubai’s Dragon Oil at 30% and Egypt’s EGPC with 10%.
The government of Federal Iraq is looking to reactivate a deal with Halliburton to drill wells in the Akkas gas field in May. An agreement with Halliburton could enable the Ministry of Oil to acquire important data on the production potential of the Akkas field.
In early April, three missiles fell near an oil refinery in Erbil without causing any casualties or damage. The refinery is owned by Kurdistan-based KAR Group, headed by Iraqi-Kurdish businessman Baz Karim Barzinji. This may be related to attempts to intimidate the KDP over government formation talks.
In March, Gulf Cooperation Council Interconnection Authority (GCCIA) secured a US$ 115 million loan from the Kuwait Fund for Arab Economic Development to expand electricity transfers to Kuwait, and interconnect with Iraq.
In 1Q2022, world oil demand averaged 98.95 Mbbl /d after averaging 96.8 Mbbl /d in 2021. At the end of 1Q2022, OECD demand increased by 2.8 Mbbl / d y-o-y, whereas non-OECD demand increased by 2.2 Mbbl / d y-o-y. The robust growth is mainly due to a strong global economic rebound, which is supported by global fiscal stimulus programmes and further easing of COVID-19 containment restrictions. This is threatened, however, by renewed lockdowns in China, high oil prices leading to demand destruction, and rises in interest rates in the US and elsewhere to limit inflation.
OPEC projects oil demand to average 100.5 Mbbl / d in 2022, which is 0.4 Mbbl / d less than previous month’s estimate and 0.3 Mbbl / d higher than demand in 2019. The downward revision is because of quarterly declines in global GDP due to recent geopolitical developments, the Russian invasion of Ukraine, and the resurgence of the Omicron variant in China and its effect on global oil demand. OECD demand is projected to average 45.8 Mbbl / d in the next quarter, and non-OECD demand is projected to average 53.2 Mbbl / d.In 2022, Middle East oil demand is forecasted to increase by 0.3 Mbbl / d y-o-y, with strong demand for diesel and jet fuel being the main drivers. By the end of 1Q2022, Middle East oil demand increased by 0.32 Mbbl / d on the back of rising demand for fuel oil and diesel in the transport and industrial sectors.
Middle East oil drilling has still not fully recovered from the sharp drop induced by the pandemic and the related OPEC+ production cuts. However, it is likely to start expanding as quotas increase and production growth plans in the UAE and Iraq get underway. Iraq added a further three rigs in October for cumulative gains of 16 since beginning-2021. All rigs are onshore targeting oil. This rebound comes as INOC and its subsidiaries signed a series of deals with international service companies.
Gas drilling is starting to show a moderate recovery, supported by the beginning of Qatar’s LNG expansion projects and renewed efforts by Saudi Arabia towards its 2030 gas ambitions.
Note: Iraqi gas rigs are not reported by Baker Hughes, likely because Iraq reports gas rig figures clubbed with oil rigs and/or lack of response from contractors (drilling for non-associated gas is at minimal levels compared to oil, although it should pick up as Sinopec’s development of Mansuriyah and the Pearl Petroleum consortium’s expansion of Khor Mor, and potentially work by Halliburton at Akkas, move forward).
* End of Qamar Energy’s contribution, for more information about Qamar Energy, please visitwww.qamarenergy.com
