ROMANIA

The ministry signed a contract with the International United Faust Waller company on Tuesday (November 8th) to build four refineries in the cities of Nasiriyah (output capacity of 300,000 barrels per day (bpd)), Amara (150,000 bpd), Kirkuk (150,000 bpd) and Karbala (140,000 bpd).

“These refineries will definitely meet the daily consumption of oil products in the country and after they start operating will nullify the need for imports from neighbouring countries,” said Oil Ministry spokesman Assem Jihad.

According to the contracts, the company should present the final designs for the four refineries by the first of January 2012 at the latest so work on building the foundations can begin.

“The new refineries will be constructed according to the latest international specifications and will reinforce the production capacity of Iraq of various oil products, in addition to providing employment for Iraqi capacities and manpower.”

Hameed Allawi al-Tarf, ministry adviser for production affairs, told Mawtani that work on the new refineries will go on for two and a half years. The company will be responsible for bringing in engineers and experts, while the daily labour will be performed by Iraqis.

Tarf said he expects each refinery will employ more than 2,500 permanent workers, and could possible increase the stated production capacity.

“The expected declared production of the refineries will be their normal capacity, not the maximum output, and surely this number can be increased when there is a need for it.”

Iraq’s oil policy
Hussein al-Shaherstani, deputy prime minister for energy affairs, said, “The Iraqi government’s oil policy is moving on with solid steps and progressing fast — better than the other countries of the region.”

“Iraq will very soon become an oil producing and exporting country that all countries of the world will look up to it. Iraq’s economic power will be the best weapon with which to confront the coming challenges,” he told Mawtani.

Al-Shaherstani said Iraq plans to set up refineries in all Iraqi provinces to meet the provinces’ needs for kerosene, gasoline, gasoil, household cooking gas, and auto engine oil.

He also asserted that Iraq will reach its highest oil production level of 12 million bpd by 2016.

Khalid Abdullah, a member of the Iraqi parliament oil and gas committee, said, “The four new refineries will allow Iraq to overcome its daily problems of poor supplies, and the low quality of the imported fuels, as well as the delays encountered in deliveries, in addition to absorbing a large number of experts and manpower.”

“This is a great project. I might even say that the first seeds of security improvements have sprouted as the international companies started to come to Iraq investing billions of dollars in total trust and security.”

The 25-year project is intended to boost production of badly needed electricity and reduce the environmental damage caused by flaring, as well as opening up the possibility of gas exports.

It will harness more than 700 million cubic feet per day of gas from the oilfields of Rumaila, Zubair and West Qurna, increasing eventually to 2 billion cubic feet per day.

The goal of 2 billion cubic feet per day capacity is linked to peak production at the southern fields, which is expected by 2017, Deputy Oil Minister Ahmed al-Shamma told Reuters.

“This day represents a historic change in the Iraqi oil industry … the best utilisation of (associated) gas to meet the increasing needs for gas in Iraq,” Luaibi said at a signing ceremony attended by Shell Chief Executive Peter Voser.

The Shell deal will involve the creation of the Basra Gas Company joint venture, in which the government will hold 51 percent, Shell 44 percent and Mitsubishi 5 percent.

Existing facilities are currently handling 370 million cubic feet of gas per day from seven southern fields.

The project may include the construction of an LNG export facility with a maximum capacity of 600 million cubic feet per day. Exports are possible once Iraq’s domestic needs are met.

Officials say the project requires investment of $17.2 billion — $12.8 billion to rehabilitate existing facilities and build new ones, and $4.4 billion for the LNG export unit.

The Shell-Mitsubishi partnership expects an internal rate of return on the project of 15 percent on an initial investment of $6.98 billion, while SGC plans to put in $3.7 billion of public funds initially and fund the rest through gas sales.

(Sources: Reuters, Wall Street Journal)

Shaikan-4 Appraisal Well

Gulf Keystone has completed drilling of the Shaikan-4 appraisal well, 6 km to the west of the Shaikan-1 discovery well, to a total depth (TD) of 3,387 metres in the middle Triassic with 2,375 metres of total gross pay interval. The well has been drilled through the Jurassic (Sargelu, Alan, Mus and Butmah formations) and the upper and middle Triassic (Baluti, Kurre Chine A and Kurre Chine B formations) with an indication of potential new Jurassic reservoirs in Sargelu sands and Barsarin carbonates.

The Company is now embarking on a well testing programme for Shaikan-4 which will target several formations in the Jurassic and Triassic, including the Chia Gara/Barsarin, Sargelu, Butmah, Kurre Chine-A, Kurre-Chine-B and Kurre Chine-C formations.

Preliminary results from Shaikan-4 formed part of the new data used by Dynamic Global Advisors (DGA), independent Houston-based exploration consultants, to calculate the most recent significant upgrade of the gross oil-in-place volumes for the Shaikan discovery announced in November 2011.

Shaikan-5 Appraisal Well

The Shaikan-5 appraisal well, 6 km to the north-east of the Shaikan-2 appraisal well, has drilled to a measured depth of 856 metres and 20″ casing is currently being set. The well will then continue drilling to the estimated TD of 3,500 metres subject to technical conditions.

Together, these contracts represent a value of $6.5 million. The equipment provided will be installed at the same early production facility located onshore.

“These contracts awarded by a new customer operating in Iraq bring our year-to-date total orders signed to $46 million, almost twice last year’s orders,” said Jacques L. Drouin, President and CEO.

“By investing in expanding our business development and process engineering teams, we’ve broadened our market reach and depth of offering, and expect to continue capturing market share.”

The produced water treatment package and water deaeration and fuel gas treatment systems will be designed as skid-mounted pre-assembled units for ease of field installation. Delivery of these systems is expected to occur by the third quarter of 2012.

The transaction agreements, which were signed on 27th November, came as Iraq attempts to rebuild its oil and gas industry following years of sanctions and conflict.

The 25-year contract, one of the biggest deals that Iraq has signed in recent times, will see the creation of a new company, the Basra Gas Company (BGC).

The BGC will process gas from three large fields near Basrah in Southern Iraq in order to satisfy domestic consumption requirements, and will also have the right to pursue a Liquefied Natural Gas (LNG) or other gas export project for any remaining gas.

The Vinsons team includes partners Christopher Strong and Ahmed el-Gaili, while the Cleary Gottlieb team includes partners Andrew Bernstein and Gamal Abouali. “We are thrilled to be working with the Ministry on such an innovative and large-scale project,” said Ayman Khaleq, Middle East managing partner at Vinson & Elkins, in a statement.

“The signing… was a key milestone for this deal, which is significant to the overall gas industry in Iraq, and it’s a privilege to be a part of that.” 

(Source: Legal Business Online)