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As part of our strategy and commitment to providing international and regional companies with premium and well-suited accommodation in Iraq, Al Majal Business Park (AMBP) North Rumaila has recently delivered a new accommodation block for an international client.
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Al Majal’s Oil & Gas Market Roundup in Collaboration with Qamar Energy
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Latest in the Iraqi & Global Energy Markets
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Iraq’s government debt as a share of its GDP is set to fall to about 47% in 2022 from 66% in 2021 – the biggest fall of any government in the Middle East and North Africa, according to Fitch Ratings.
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Iraq is stuck in a purgatory of caretaker governance, showcasing an intra-elite fight pitting Sadr and his political supporters against Maliki and his backers.
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Iraq’s government agreed to continue providing Lebanon’s electricity company with heavy fuel for another year to alleviate the pressure on the country’s struggling power grid.
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Federal Iraq’s production accounted for most of the increase, reaching 4.26 Mb/d in July from 4.186 Mb/d.
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Iraq’s countrywide oil exports dipped to 3.701 Mb/d in July, down 45 kb/d from June levels.
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Key Iraq Events – Power / Renewable Energy
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Iraq’s Ministry of Electricity announced a state of emergency for ten days from August 2 as temperatures rose to above 50°C in the south.
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Key Iraq Events – Refinery Updates
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The Karbala refinery is set to begin test runs in October with full 140 kb/d capacity slated for H1 2023. The long-awaited expansion project is expected to reduce 60% of imports when fully operational next year.
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Key Iraq Events – Security
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Following a 10-month political deadlock, Moqtada al-Sadr announced that he’s retiring from political life, prompting his supporters, Saray Al Salam, to storm the presidential palace and International Zone, leading to a new round of violence against the Coordination Front, which seems to have been supported by the Iraqi security forces.
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Top Energy Deals in the Region
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Renew will build a US$ 8 B, 220 ktpa green hydrogen plant in Egypt’s Suez Canal Economic Zone (SCZONE)
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OPEC has reduced its forecast for 2022 world oil demand by 260 kb/d to account for some regional revisions. World oil demand is expected to average 100.03 Mb/d, “still healthy growth” which includes the recently observed trend of burning more oil in power generation. The agency expects recovering gasoline and diesel demand in the US and a steady increase in industrial activity in non-OECD regions will support demand figures above 100 Mb/d. 2023 demand is projected to reach 102.7 Mb/d, due to expected improvements in the containment of CoVid-19 in China.
Middle East oil demand increased by 552 kb/d in June from May levels, with strong demand for diesel and jet fuel being the main drivers. Middle East oil demand in Q3 2022 is expected to reach 8.38 Mb/d on the back of rising demand for fuel oil and diesel in the transport and industrial sectors.
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Regional Rig Count (1): OPEC+ Pressure to Keep Iraq Rig Count Low
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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 has 53 active rigs as of July 2022, all drilling for oil. This number has not increased since the start of 2022, but is up 2 on December 2021, and 11 on April 2021. In 2019, prior to the pandemic, Iraq had 77 active rigs targeting oil. Middle East 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 visit www.qamarenergy.com
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Iraq Oil Market Highlights
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