Thursday, August 09, 2007
Shahristani in Moscow for talks with oil companies
Oil
(The Moscow Times) - Iraq's oil minister arrived in Moscow late Wednesday for talks with Industry and Energy Minister Viktor Khristenko and senior oil executives and said he would offer new terms for Russian companies seeking to work in the war-torn country. Officials from a consortium of three Russian companies -- LUKoil, Zarubezhneft and Mashinoimport -- are expected to meet on Thursday with Iraqi Oil Minister Hussain al-Shahristani in a bid to regain access to the country's oil fields.
In particular, the companies will be hoping to revive a $4 billion deal to develop the 600,000 barrel-per-day West Qurna field, which was scrapped by dictator Saddam Hussein shortly before the U.S.-led invasion in 2003. "Iraq will cooperate with those companies that will propose the best conditions for Iraq, regardless of what countries these companies come from," Shahristani said on his arrival in Moscow, RIA-Novosti reported. Shahristani said no country would get preferential treatment in the competition for Iraqi oil assets. "LUKoil will be competing with other firms on equal terms in accordance with the new oil laws." If LUKoil proposes projects that are competitive enough, it will get the contracts, Shahristani said. LUKoil will likely be hoping to make use of its 20 percent U.S. shareholder, ConocoPhillips, to ease its way back into the country. LUKoil has offered Conoco a 17.5 percent stake in the West Qurna project.
In May, the Iraqi government said it was not prepared to accept a Russian offer to forgive $10 billion in Hussein-era debt in exchange for giving Russian companies access to another major oil field, in Rumaila, Reuters reported. The visit comes as the Iraqi government readies a new law governing foreign investment in the country's oil industry, which has struggled to recover from underinvestment under Hussein and disruption by terrorist attacks under the U.S.-led occupation.
Semakov said LUKoil would create some 2,000 jobs for Iraqis in one field at West Qurna alone. The company has invested "tens of millions of dollars" in the project but would plow in much more in the future, he said.As the invasion of Iraq began, the Russian firms had to abandon their projects and evacuate staff.
Labels: ConocoPhillips, Hussain al-Shahristani, LUKoil, Mashinoimport, Rumaila field, Russia, Viktor Khristenko, West Qurna, Zarubezhneft
Total and Chevron to work together in Iraq
Oil
(Times online) - Two of the world’s biggest oil companies have signed an agreement to work together on projects in Iraq in the first clear sign that Western energy companies are preparing to enter the country. Reports yesterday revealed that Total had teamed up with Chevron and that they were putting together plans for Majnoon, the fourth-biggest oilfield in Iraq, with estimated potential reserves of 12 billion barrels.
Elf, now part of Total, negotiated a contract to run Majnoon with Saddam Hussein in the late 1990s. Both Total and Chevron refused to comment, but industry sources said that the two companies had met Iraqi officials to discuss a services agreement to develop the field. While less lucrative than a pro-duction-sharing agreement, where companies discover and sell on the oil, experts said that it would give them a vital foothold for other deals.
Iraq holds an estimated 110 billion barrels of oil, with more than half still to be developed, offering huge opportunities to Western companies desperate for new reserves. So far, companies such as Total, BP, Shell and Exxon have limited themselves to helping the Iraqi Oil Ministry to train junior staff and pull together data recorded under Saddam.
BP, however, is understood to have been asked to look into the potential of Kirkuk in the north. Shell is thought to have studied Rumaila, the country’s biggest oilfield. Muhammad-Ali Zainy, a former oil official in the Iraqi Government, said: “Iraq is the last remaining frontier that offers so much potential. International oil companies will be in Iraq, but in what form it is difficult to tell.”
Iraq is expected to ratify a petroleum law that would allow deals with Western companies to take place next month. However, experts believe that it could take years for companies to feel confident in sending contractors to the unstable country. The Irish-owned Petrel Resources is one of four minnows operating in Iraq under a contract to develop the Subba and Luhais field. Dave Horgan, managing director, said: “The big companies will be chomping at the bit to sign a deal. They will then hope they can delay any work for two or three years until the security scares die down.”
Labels: BP, Chevron, Elf, Kirkuk, Majnoon, Muhammad-Ali Zainy, Petrel Resources, Rumaila field, Shell, Subba and Luhais field, Total
Wednesday, June 06, 2007
Iraqi parliament demands Kuwait cancels debts from former regime
Finance
(Iraq Directory) - Vice-Chairman of the Investment Committee in the Iraqi Parliament demanded the Kuwaiti government cancel Iraq debts resulting from policies of the previous government, and confirmed Iraq's need for nearly $200 billion to restore economic infrastructure such as asphalt, petrochemical, cement and other plants.
Abdul Hadi Hassani said, "We call on the Kuwaiti government to cancel its debt on Iraq because it is now investing the oil fields of southern Rumaila wells which are located 94% on Iraqi territory and 6% on Kuwaiti territory." [Ed. Note: this was one of Saddam's excuses for invading Kuwait.]
He pointed out, "Kuwaiti oil production for the southern Rumaila fields is up to 8,500 barrels of oil per day, while Kuwaiti production amounts to 350,000 barrels a day."Hassani explained, "the Kuwaiti side is digging wells for horizontal extraction of oil from Iraqi territory, in particular in the Rumaila oilfields overlapping southern Iraq and northern Kuwait, making it easy to draw oil to the adjacent Kuwaiti wells."
He added, "Shortly Iraq's total debt will fall after the 80% cancellation commitments at the recent Sharm el-Sheikh conference." Hasani said, "Iraqi people and the current government are not responsible for the [odious] debts resulting from the arms purchases of the former regime, used to build military bases and arsenals that burdened and indebted the country." .
He called on Arab countries to cancel these debts and added, "We don't count on Egypt to cancel Iraqi debt because it is not a rich capitalist country, rather a poor one living on external assistance provided by states like the United States of America."
Abdul Hadi Hassani said, "We call on the Kuwaiti government to cancel its debt on Iraq because it is now investing the oil fields of southern Rumaila wells which are located 94% on Iraqi territory and 6% on Kuwaiti territory." [Ed. Note: this was one of Saddam's excuses for invading Kuwait.]
He pointed out, "Kuwaiti oil production for the southern Rumaila fields is up to 8,500 barrels of oil per day, while Kuwaiti production amounts to 350,000 barrels a day."Hassani explained, "the Kuwaiti side is digging wells for horizontal extraction of oil from Iraqi territory, in particular in the Rumaila oilfields overlapping southern Iraq and northern Kuwait, making it easy to draw oil to the adjacent Kuwaiti wells."
He added, "Shortly Iraq's total debt will fall after the 80% cancellation commitments at the recent Sharm el-Sheikh conference." Hasani said, "Iraqi people and the current government are not responsible for the [odious] debts resulting from the arms purchases of the former regime, used to build military bases and arsenals that burdened and indebted the country." .
He called on Arab countries to cancel these debts and added, "We don't count on Egypt to cancel Iraqi debt because it is not a rich capitalist country, rather a poor one living on external assistance provided by states like the United States of America."
Labels: Abdul Hadi Hassani, debt, Kuwait, oil production, Rumaila field
Thursday, May 03, 2007
Iraq wins some debt relief at Sharm el-Sheikh
Conference
(Reuters) - Iraq won a trickle of debt relief pledges at a big international conference in Egypt on Thursday and the United States prepared for the highest-level contact with Syria in more than two years. Egypt and three East European countries agreed to waive debts owed by Iraq as part of an International Compact to support Iraqi institutions in exchange for political and economic reforms by the Baghdad government.
The first day of the two-day conference in the Red Sea resort of Sharm el-Sheikh is dedicated to the International Compact, a five-year plan to restore stability and economic prosperity through national reconciliation. But much of the attention is on whether the United States will abandon its longstanding reluctance to hold high-level talks with the Iranian and Syrian governments, as recommended by the Baker-Hamilton commission on Iraq last year.
In his opening speech to the two days of meetings in Egypt, Iraqi Prime Minister Nouri al-Maliki appealed for debt relief. "We call on everybody participating in this conference to write off the accumulated debts of Iraq," he said. Iraq sits on the world's third-largest proven crude oil reserves but is struggling to rebuild after four years of war.
Iraqi Finance Minister Bayan Jabor said the three Eastern European countries -- Slovenia, Bulgaria and Poland -- would agree to forgive 80 percent of Iraqi debt but did not say how much that would be. He said the European Union would grant Iraq $200 million, and he expected grants from some Asian countries as well. But James Dobbins, an analysts at the RAND Corporation, said debt relief was of secondary importance because the Iraqis are not paying off the money they owed anyway.
"It is a purely paper transaction. It's symbolic but it doesn't have any immediate effect," he said. Jabor said that Iraq had rejected as unacceptable an offer from Russia to forgive the debt it is owed by Baghdad in return for access to a major Iraqi oilfield. "The Russians are hesitant. They want investment in the Rumaila oilfield in return for eliminating the debt," he said. When Saudi Arabia announced last month that it was writing off 80 percent of the more than $15 billion it was owed by Iraq, Jabor estimated his country's debt at $140 billion.
The first day of the two-day conference in the Red Sea resort of Sharm el-Sheikh is dedicated to the International Compact, a five-year plan to restore stability and economic prosperity through national reconciliation. But much of the attention is on whether the United States will abandon its longstanding reluctance to hold high-level talks with the Iranian and Syrian governments, as recommended by the Baker-Hamilton commission on Iraq last year.
In his opening speech to the two days of meetings in Egypt, Iraqi Prime Minister Nouri al-Maliki appealed for debt relief. "We call on everybody participating in this conference to write off the accumulated debts of Iraq," he said. Iraq sits on the world's third-largest proven crude oil reserves but is struggling to rebuild after four years of war.
Iraqi Finance Minister Bayan Jabor said the three Eastern European countries -- Slovenia, Bulgaria and Poland -- would agree to forgive 80 percent of Iraqi debt but did not say how much that would be. He said the European Union would grant Iraq $200 million, and he expected grants from some Asian countries as well. But James Dobbins, an analysts at the RAND Corporation, said debt relief was of secondary importance because the Iraqis are not paying off the money they owed anyway.
"It is a purely paper transaction. It's symbolic but it doesn't have any immediate effect," he said. Jabor said that Iraq had rejected as unacceptable an offer from Russia to forgive the debt it is owed by Baghdad in return for access to a major Iraqi oilfield. "The Russians are hesitant. They want investment in the Rumaila oilfield in return for eliminating the debt," he said. When Saudi Arabia announced last month that it was writing off 80 percent of the more than $15 billion it was owed by Iraq, Jabor estimated his country's debt at $140 billion.
Labels: Bayan Jabor, Bulgaria, debt relief, Egypt, International Compact with Iraq, Poland, Rumaila field, Russia, Sharm al-Sheikh Conference, Slovenia
Thursday, April 19, 2007
Survey - Iraq has reserves to overtake Saudi as top oil producer
Oil
(BBC) - Iraq's oil reserves are significantly untapped and daily production could be doubled within five years, a report has concluded. Iraq is sitting on potential reserves of 100 billion barrels, nearly twice as much as currently estimated, according to a study by energy analysts IHS. If these reserves were exploited, it said, Iraq could overtake Saudi Arabia as the world's top oil producer.
But a major improvement in security and investment was needed, it added. The IHS survey, which examined Iraq's oil reserves both before and after the overthrow of Saddam Hussein, is the most comprehensive conducted since the 2003 invasion. It found that Iraq had known reserves of 116 billion barrels and could be sitting on a further 100 billion barrels.
Current output of two million barrels a day is lower than in early 2003, when three million barrels were being pumped, and almost half that being produced in 1979. However, it said Iraq had the capacity to increase production to four million barrels by 2012 and to further increase that to six million within time. "Iraq's reserves are clearly phenomenal," said Ron Mobed, president and chief operating officer of IHS, adding that they represented a "gold star opportunity".
The report found that Iraq's two main oilfields, at Kirkuk in the north of the country and Rumaila in the south, were operating below capacity. This was partly due to damage caused by the war and previous sanction regimes although Mr Mobed said this was not "irreparable".
Earlier this year, the Iraqi government agreed a draft law for how its oil wealth would be shared among different ethnic groups, seen as crucial to encouraging new investment. The proposed law is due to be considered by the Iraqi parliament shortly, although the Kurdish region rejects some of the proposals.
But a major improvement in security and investment was needed, it added. The IHS survey, which examined Iraq's oil reserves both before and after the overthrow of Saddam Hussein, is the most comprehensive conducted since the 2003 invasion. It found that Iraq had known reserves of 116 billion barrels and could be sitting on a further 100 billion barrels.
Current output of two million barrels a day is lower than in early 2003, when three million barrels were being pumped, and almost half that being produced in 1979. However, it said Iraq had the capacity to increase production to four million barrels by 2012 and to further increase that to six million within time. "Iraq's reserves are clearly phenomenal," said Ron Mobed, president and chief operating officer of IHS, adding that they represented a "gold star opportunity".
The report found that Iraq's two main oilfields, at Kirkuk in the north of the country and Rumaila in the south, were operating below capacity. This was partly due to damage caused by the war and previous sanction regimes although Mr Mobed said this was not "irreparable".
Earlier this year, the Iraqi government agreed a draft law for how its oil wealth would be shared among different ethnic groups, seen as crucial to encouraging new investment. The proposed law is due to be considered by the Iraqi parliament shortly, although the Kurdish region rejects some of the proposals.
Labels: IHS, Iraq, Kirkuk, oil, oil reserves, Ron Mobed, Rumaila field
Tuesday, April 17, 2007
BP will wait for security, oil law before working in Iraq
Oil, Business
(Reuters) - Energy giant BP is interested in working on a range of oil and gas projects in Iraq, but is waiting for the country's parliament to pass an oil law and for security to improve before increasing its role, a senior BP executive said on Monday. International companies have been jostling for position as they look for a potentially lucrative stake in Iraq's oil future. The country holds the world's third largest oil reserves and needs billions of dollars of investment to boost output and overhaul ageing infrastructure.
"Eventually where we get involved will be up to Iraq," Steve Peacock, president of BP's Middle East and South Asia Exploration and Production unit, told reporters at an energy conference in Dubai. "But I think we can help in all areas: enhanced oil recovery from existing fields, in discovered and not developed fields, or in exploration."
A draft oil law that Iraq's cabinet endorsed in February is awaiting parliament's ratification. Peacock said it would take some time after the law is passed for contracts to be negotiated and for BP to send people to work in Iraq because of the security situation in the country. "Physical security on the ground... may be the thing that takes the longest," he said.
BP would also wait for assurance that any contracts would survive changes in government, he said. BP has been providing assistance to Iraq's oil company in the south around the Rumaila field, he said. The North and South Rumaila fields are already partially developed and have combined potential output capacity of 500,000 barrels per day.
BP would not look at involvement in Iraq's Kurdish region in the north until the oil law had been passed, even though security in the region is better than elsewhere in the country, he said. The United Arab Emirates' Dana Gas said on Sunday it had signed agreements with the Kurdish regional government to study development of its gas reserves.
"Eventually where we get involved will be up to Iraq," Steve Peacock, president of BP's Middle East and South Asia Exploration and Production unit, told reporters at an energy conference in Dubai. "But I think we can help in all areas: enhanced oil recovery from existing fields, in discovered and not developed fields, or in exploration."
A draft oil law that Iraq's cabinet endorsed in February is awaiting parliament's ratification. Peacock said it would take some time after the law is passed for contracts to be negotiated and for BP to send people to work in Iraq because of the security situation in the country. "Physical security on the ground... may be the thing that takes the longest," he said.
BP would also wait for assurance that any contracts would survive changes in government, he said. BP has been providing assistance to Iraq's oil company in the south around the Rumaila field, he said. The North and South Rumaila fields are already partially developed and have combined potential output capacity of 500,000 barrels per day.
BP would not look at involvement in Iraq's Kurdish region in the north until the oil law had been passed, even though security in the region is better than elsewhere in the country, he said. The United Arab Emirates' Dana Gas said on Sunday it had signed agreements with the Kurdish regional government to study development of its gas reserves.
Labels: BP, oil, Rumaila field, Steve Peacock
