Newsletter – September 2021

On September 21st, 2015, Al Majal Business Park (AMBP) opened its doors in Burjessia, serving local and international clients. Today AMBP is a recognized, leading life support services provider in Iraq.

Al Majal Logistics Services (AMLS) celebrates more than five million accident-free consecutive kilometers. This achievement reflects the firm’s commitment to adhering to safe driving practices.

Al Majal Technical Services AMTS has completed a contract for the provision of Engineering, EPCC Services and Installation of LP Pumps, additional pumping capacity, required for the increased production of an oilfield located on the South of Iraq and operated by an IOC.

Oil exports in August increased slightly to 3.414 Mb/d, and revenues to US$ 6.533 B, up from US$ 6.513 B in July, with the average price of Iraqi crude falling to US$ 69.017/bbl. The 2021 Budget, first presented in December, was finally approved on March 31, preserving the country’s recent currency devaluation (~23% to the US dollar), and projecting a spending budget of US$ 89.7 B and a dinar-denominated deficit equivalent to US$ 19.5 B. Iraq expects to earn oil revenues of US$ 47.5 B[1] based on an oil price of US$ 45/b and ~3.5 Mb/d of exports, which in devalued dinars should significantly improve state earnings.

[1] While not yet disclosed by the Iraqi Parliament, the revenues earned seemed to be calculated by excluding the first two months of 2021, for the remainder of the year

Iraq’s August oil production surged to 4.23 Mb/d, up from July’s 3.886 Mb/d according to Iraq Oil Report, up 169 kb/d above its quota for the month (4.061 Mb/d). Output might

The Iraqi National Oil Co. (INOC) has taken two significant administrative steps to become operational. The newly constituted INOC board of directors approved company

Federal Iraq and the semi-autonomous KRG have reached a notional agreement to implement a revenue-sharing deal that stalled since the ratification of the 2021 budget on March 31. If finalised, the deal could unlock monthly federal budget payments of US$ 138 M to the KRG.

Scottish-based Wood announced that it has been awarded a 5-year contract to deliver specialist engineering solutions at the West Qurna-1 field, without disclosing the value of the contract.

Norway’s DNO announced that the Kurdistan Regional Government approved the company’s acquisition of ExxonMobil’s remaining 32% interest in the Baeshiqa license

Iraq is planning to boost the production capacity of West Qurna-1 by 40% to more than 700 kb/d over the next 5 years at a time when operator ExxonMobil is seeking to exit

Shell has filed an arbitration case claiming over US$ 200 M in compensation for its exit from the 250 kb/d Majnoon oilfield in 2018. The country is already dealing with ExxonMobil’s arbitration case

After five months on the signing of the preliminary agreement, Iraq and TotalEnergies finally signed the US$ 27 B multi-faceted investment deal on September 5

On September 19, Iraq’s South Gas Company (SGC) and Baker Hughes announced the finalization of a contract to build a 200 MMscf/d processing facility

UAE’s Dana Gas secured US$ 250 M in financing from US International Development Finance Corporation (DFC) to fund the expansion of the Khor Mor gas plant in the KRI.

Iraq is seeking to spend US$ 15 B to boost its gas production as it works on reducing reliance on Iranian energy imports. Along with other partners, Iraq intends to use the investment to increase gas production to 4 Bcf/d

The Kurdistan Regional Government (KRG) terminated Genel Energy’s Production Sharing Contracts (PSCs) in Bina Bawi and Miran fields. The two fields, having 14.8 Tcf of raw gas resources, suffered contractual

Iraq signed a preliminary agreement with Swedish SEAB and Turkey’s Limak to build a 70 kb/d refinery near the northern city of Mosul. The facility is expected to use complex and advanced techniques to process Qayarah oilfield’s heavy crude oil into clean products that comply with Euro V standards. The estimated cost of the project was not disclosed. SEAB and Limak are expected

In a meeting between Japan’s Minister for Foreign Affairs, Motegi Toshimitsu, Iraq’s Foreign Minister Fuad Hussein, PM Mustafa Al-Kadhimi and President Barham Salih, Japan announced that it plans to extend the US$ 300 M “Basrah Refinery Upgrading project (Phase 3)” Yen Loan Project, expressing hopes that the project provides reliable and stable supply of energy and creates jobs in the country.

Iraq’s Parliament passed the country’s 2021 budget on March 31, after months of political wrangling, while preserving the country’s recent currency devaluation and projecting a new, dinar-denominated record-setting deficit of US$ 19.5 B. It features a new, but unclearly defined framework for Baghdad-Erbil oil and revenue cooperation, based on 250 kb/d of Kurdish oil transferred to the State Oil and Marketing Organization (SOMO).

On August 8, Ali Allawi, Iraqi Finance Minister, mentioned that despite a relative improvement in Iraq’s finances, the country is seeking a US$ 3-4 B loan from the IMF. Allawi anticipates an agreement with the IMF by end-2021, although October parliamentary elections loom. The latest IMF data shows that the country’s total sovereign debt rose from US$ 108 B in 2019 to US$ 117 B in 2020. However, the dramatic growth in the value of

Kuwait Oil Co. (KOC) awarded two contracts with a combined value of US$ 221 M, one for rig supply for workover operations and the other for onshore 3D seismic survey services.

On September 2, Libya’s NOC subsidiary, Zallaf Oil, signed a US$ 100 M contract with UK engineering firm Petrofac to develop the 16 kb/d Erawin project in the country’s deep southwest.

Oman’s national energy company OQ awarded a package known as “Station C,” part of the Bisat early oil production facility project, to US Exterran Corp.

ADNOC awarded exploration rights for Offshore Block 5 to a consortium of four Pakistani companies – first time the UAE’s biggest energy producer granted a concession to firms from the Asian country.

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